February 27, 2022
As Russia’s invasion of Ukraine ended its fourth day, Vladimir Putin has doubled down on his geopolitical commitment to become a willing puppet of Xi Jinping’s Communist China.
While recent sanctions imposed by President Joe Biden and other Western leaders target only the personal finances of Putin and his oligarch cronies, along with a few Kremlin-controlled banks, as the war drags on so will the extent and severity of economic penalties. Unless Putin calls back his troops and ends the war very soon, the eventual total economic isolation of Russia will become an unavoidable consequence. Russian banks will be shut out of the international system. Russian oil and gas exports to the West will stop.
A total economic blockade of Russia by the free world—especially of their oil and natural gas exports—will send the Russian economy into freefall, especially since 69% of Russia’s roughly $400 billion in exports, according to the OECD, fall within the energy sector. As a heavily export-oriented economy, Russia’s will suffer badly if denied access to foreign markets.
Russia has a relatively small economy of $1.7 trillion; compared to the US economy of $22.8 trillion, the German economy of $3.8 trillion and the Chinese economy of $18 trillion. Denied market access to the free world, the authoritarian government of ex-KGB disinformation specialist Putin will have only one place to turn: the Red Communist government of Xi Jinping.
It will of course take time for the Chinese government to build the additional pipelines necessary to receive the oil and gas exports that would have gone to Western Europe, as only 6.9% of Russian natural gas was exported to China in 2021 via the Power of Siberia pipeline and by sea. Russia is also a major exporter of metals—especially nickel, aluminum and palladium—which will help supply China’s growing industrial demand. It will also take time for new rail and highway links from China into the Russian interior to enable the conversion of Russia into a new hinterland of Chinese resource production.
If Russia does not quickly—within days or weeks—unilaterally declare a ceasefire in Ukraine and withdraw its forces, the sanctions imposed by President Biden and other free world leaders will escalate to a full trade and economic embargo. Many European Union multinational corporations, with factories, bank branches, supermarkets and other assets inside Russia could lose these investments—or be forced to sell them to Putin’s cronies for pennies on the dollar—if Putin chooses to implement retaliative economic measures. The NYT reported today that roughly 95% of German and French corporations that trade on their respective national stock exchanges, including giant automakers like Renault and BMW, have significant assets inside Russia. If these assets are expropriated or lost, it will only accelerate anti-Russia sentiment in the West.
Putin, in other words, has firmly started Russia and her 165 million people down a path of economic and diplomatic divergence from Europe and the West into the arms of the world’s greatest dictatorship: Communist China.
The invasion of Ukraine, a democratic nation merely wishing for closer ties to the European Union, will probably go down in history as a gross miscalculation by Vladimir Putin, who has no doubt been emboldened by the past unwavering support given him by the Trump Administration, its GOP allies, and its prime enabler FOX News. Like America’s GOP, virtually every other ultra-right party within the EU has endlessly parroted Kremlin talking points rationalizing a Russian attack.
Until now.
The sheer savagery of the Russian invasion has changed everything. Even unabashed Kremlin supporters like FOX’s Tucker Carlson are beginning to disavow ever having been Putin fanboys.
While President Putin and Russian leadership in general have historically portrayed Russia as a Christian nation fully aligned with Western values, that cherishes its’ role as a greatly diminished but still potent nuclear-armed power, she will be reduced to nothing but a client-state of atheist China and her nearly 1.5 billion people. The irony is that in trying to rebuild the glories of the former Soviet empire via a military subjugation of Ukraine, Vladimir Putin has only succeeded in making himself China’s tool.