Why did China bet against Europe?

Iran didn't really have a choice. Neither does North Korea. But China had a choice. In other words, did China make the right bet in supporting Vladimir Putin and the Russian invasion of Ukraine?

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Formally, that is, rhetorically, China does not support the invasion. But from a practical point of view, it has evolved to become Russia's most important trading partner and its main supplier of military equipment.

Neither Iran nor North Korea had much of a choice because they had no special economic relationship with Europe, nor any prospect of developing one. They were both subject to a series of economic sanctions that limited their options, in addition to their own economic mismanagement that made their commitment of limited value to Europe. So why not offer all possible support to Russia, one of the few countries that does business with it and shares its resentment towards the democratic West?

China's situation was very different, however, with a thriving (albeit slowing) economy and a wide range of trade and investment relationships with Europe. EU estimates EU-China trade at nearly €740 billion in 2023 (around $790 billion), more than four times Russian-Chinese trade. And Europe has long lost its geopolitical connectivity with Asia, so China's assertiveness in Asia, which clashes with the United States, has much less impact in Europe.

In summary, relations between Europe and China were of value to both participants and worth nurturing, especially as relations between the United States and China have deteriorated.

Why then has China gone all out against Putin?

One theory is that China's support for Putin grew through incremental mistakes. China supported Putin before the war began, without imagining that Russia would undertake a full-scale invasion. They also did not consider the length or damage of the war, but once the war started, there was no easy way out for them. Even today, there remains an open possibility of a Putin victory or, at least, a total Putin defeat. In other words, it was more or less a miscalculation.

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A second theory is that Europe made this free. China has managed to maintain, and even strengthen, its economic relations with Europe, even as it supports Putin's invasion. The EU could start attaching an economic cost to China's gamble, by joining the Trans-Pacific Partnership trade deal (as the UK has already done) or pursuing a free trade deal with Taiwan. How about a mini-FTA between the EU and the US in which all products subject to, say, tariffs below 2% would immediately become duty-free? Even the adoption of a simple agreement between the United States and the European Union on automobiles or electric vehicles would improve Europe's competitiveness. But Europe seems dead in the water and oblivious to the need to attach a price to China's behavior.

So ignore the morality of this decision, ignore the human cost of this war and just look at it in terms of Realpolitics. China sees this as an opportunity to reduce the credibility of the United States and its allies.

The message from a Putin victory, or even a draw, would be: be careful about any security agreements with the United States, because those commitments don't mean much. The United States has little appetite for long-term engagement and American policy means it will eventually tire after a few years. Perhaps it is time to think about an accommodation with China.

I had the chance to meet a high-level EU delegation visiting San Francisco and they vigorously disputed the fact that China was getting away with it. We complain about their actions every time we meet them, an official said.

This is a self-denying statement. If the EU's response is limited to a series of complaints, then China's actions are effectively gratuitous. More reassuring, I then had lunch with two visiting members of the German Bundestag, both of whom called the Russian invasion a serious concern for Germany and that a political response was necessary. So, even if Brussels has no ideas or tools to react, Berlin apparently does. Because if formal complaints constitute the main response to China, then, from his point of view, China's bet against Europe was the right bet. By not giving China a red light, the EU is in fact giving it a green light.