Xi Makes Deal With Putin – But It Could Lead to China's Downfall

Xi Jinping is maintaining his firm support for Russia's war against Ukraine, according to an agreement between him and Kremlin dictator Vladimir Putin, recently reported by Reuters news agency.

Both want to work even more closely to avoid Western sanctions against Moscow and to consolidate economic and military cooperation between the two terrorist regimes.

The new plan stipulates that the two countries will no longer trade for money, but will exchange goods for each other. From the point of view of the two potentates, this barter economy has the advantage of being able to bypass the international banking system.

Beijing tried to avoid sanctions

The Moscow regime has lost access to the Swift payment system, through which international financial transactions are processed, since the start of the war of aggression against Ukraine in February 2022.

Beijing has always tried to avoid such sanctions and has therefore kept its support for Putin's war, which violates international law, below the sanctions limit.

Chinese companies have transported masses of so-called “dual-use” goods to Russia and the war front in Ukraine: trucks, drones, ball bearings.

But because of the sanctions, payments had to be made in small installments through insignificant banks in China, through underground organizations or via cryptocurrencies.

This is also evident from the Reuters report. The resulting payment delays have been and remain such a major problem for Chinese companies that Xi and Putin had to discuss them in detail during their meeting in May.

More and more skilled people are emigrating

The disloyal behavior of their president could have serious consequences for the people of the People's Republic of China. Due to the failure of the Communist Party's economic policies, youth unemployment is at a record high.

More and more skilled people are emigrating, and on the internet, many of Xi's police states simply call it “West Korea” – an allusion to the Stone Age dictatorship of neighboring North Korea, in which Kim Jung-un, Xi's friend and Putin's munitions supplier, tortures his subjects.

The Chinese are risking their health, their lives and those of their families because of their criticism. In Iran, another close friend of Xi, one can see where criticism of a supposedly heaven-sent leadership leads: first to the torture chamber and finally to the gallows.

Banking sector could face further pressure

Of course, the US and its allies cannot simply sit back and watch this happen and are now considering sanctions against Chinese banks complicit in Xi's law-breaking.

This could further harm the already struggling banking sector. From April to May 2022, violent protests took place in China’s Henan province against banks that had wasted their depositors’ money on risky investments.

The Communist Party has been getting peaceful protesters off the streets, Xi Jinping style. Of course, Beijing is not solving its banks.

It is unclear when trade could begin.

By the way, barter between Russia and China would not be entirely new. Moscow and Beijing already exchanged agricultural products in this way in Soviet times.

After the collapse of the Soviet Union, these barter arrangements continued sporadically, but eventually the entire economy was converted to bank payments.

Today, the Russian Ministry of Economy, on the other hand, has taught businesses, with the help of a 15-page document, how to calculate and carry out the valuation and trade of goods on the basis of barter.

At present, it is not yet clear exactly when and with what goods the barter trade could begin. Some suspect that agricultural products could be a start.

Xi uses Putin for his own ends

For the free world, this ever closer cooperation between the two extremely dangerous dictatorships means it must be more careful than ever.

Beijing and Moscow are at least preparing for the systemic battle with America and its allies to be a long one.

Beijing is trying to disassociate itself from trade with the West in order to have a free hand in its military projects in Asia. Sanctions should not be able to affect Xi and his military if he launches an attack on India, the Philippines or Taiwan.

Xi is using Putin for his own ends; from Beijing's perspective, the two are not in agreement. Such an alliance could break down at any time due to the vanity of the two men who form it.

But the West should not rely on this. Xi wants to decide the war against Ukraine in favor of his friend Putin. Anyone who does this cannot really be interested in a just peace in Europe. It is time for everyone in the free world to understand this.