The UN General Assembly recently called once again for ending the war in Ukraine and demanded Russia's immediate withdrawal from the country, in line with the UN Charter. To say the least, this obviously fell on totally deaf ears as Xi Jinping put on display in Moscow the limitless friendship and bonding with Putin, all while missiles continued to be fired into Ukraine in the scheduled daily barrage. Keep in mind, China's trade with the U.S. and E.U. is 10x that of Russia @ $1.62 trillion vs $190 million annually, making this recent visit a true head scratcher economically speaking on the surface.
At the UN Assembly, regarding ending the war, it's worth noting the results were 141 Member States in favor and seven against, which were Belarus, the Democratic People's Republic of Korea, Eritrea, Mali, Nicaragua, Russia and Syria. Most notable among the 32 abstentions were China, India, Pakistan and Vietnam. My last article covered the tightrope that both India and China are walking with the U.S. regarding Russian war assistance, but let's take a look at a few of the remaining 30 abstentions and those, other than Russia, (six countries) who blessed the killing of Ukrainian citizens.
Regarding abstentions..well, Vietnam comes to mind for me, first and foremost. Granted Russia and Vietnam have a long history to the sharing in military equipment and logistics. the main imports to Vietnam from Russia include coal (US$52.8 million), iron (US$20.3 million), chemical fertilizers (US$19.7 million), pig meat (US$8.61million), and chemical compounds (US$6.92 million). Vietnam has extensive trade relations with various countries around the world, with special partnerships with China, the United States, Korea, Japan, EU, ASEAN, but the fact is, Russia still accounts for 74 percent of Vietnam's imported weaponry. Mic drop here. Exit Vietnam from the world stage in front of a primarily democratic contingency who would not care to listen.
India, Pakistan & Africa. India has been buying the cheap oil and setting records in trade with Russia (see my article from February 2023 rather than hitting the repeat button on the topic) India's Commerce Ministry data shows imports from Russia have surged nearly 400% this fiscal year, via discounted crude oil. Pakistan, this one is interesting. Although the U.S. is Pakistan's number one trading partner in both imports and exports, China and Chinese commercial banks held about 30% of Pakistan's total external debt of about $100 billion, according to a report by the IMF. Much of that debt has come under the China-Pakistan Economic Corridor, part of Beijing's Belt and Road Initiative, so as China goes, so goes Pakistan. The continent of Africa represents the majority of the 32 abstentions, as in, Angola, Bangladesh, Burundi, Central Africa, Congo, Ethiopia, Gabon, Mozambique, South Africa, Zimbabwe, etc. Over the years Russia has been able to take full advantage of the turmoil and instability propping up its military aid and subsequent grip on power. China is also heavily invested with its Belt and Road initiative (which has been running out of money as of late to finish many projects), but I do not see the "best friends" disagreeing any time soon on territory, as long as the new world order is in play vs the west, and these countries need a great deal of assistance.
Moving on, as far as those still in favor of the invasion, let's take Mali for example. Why take sides with Russia? Well.fighters from the Wagner Group, the now infamous Kremlin-linked private military company led by Putin's ex-chef, have been supporting the Malian army in its fight since late last year, in addition to the Kremlin promising $100M in fuel, food, and fertilizer. Also of note, when the French military pulled out, the Wagner Group moved in. This dominant Russian influence stands despite USAID's Country Development Cooperation Strategy for 2022-2026 representing the United States' continued support for the Malian people. However, it's really a moot point, as Mali is ruled by the military. Enough said, but French President Emmanuel Macron added that the Russian mercenary Wagner Group is the "life insurance of failing regimes in Africa", in comments made before he visited the continent. He said that African nations would eventually stop turning to the Wagner Group as they would see that it only sows misery. Wasn't it Russia who blocked the Black Sea port and prevented Ukrainian grain shipments from getting to African nations? Does it matter (food) if Russia is providing all of your military aid and logistics? Weapons apparently trump grain imports (food).
And Nicaragua? The United States remains Nicaragua's top economic partner, buying 60 percent of Nicaraguan exports and supplying 27 percent of its imports. Total (two-way) goods traded between the two countries was a record $8.3 billion in 2022, an increase of 22% from the previous year. Trade overall between the U.S. and Nicaragua grew by 67% from 2021-2022. Amazingly enough, even though 60% off Nicaragua's exports are destined for the U.S., we still have little influence over the government. (Ortega and his wife) Fact is Russian support became more important to Nicaragua following withdrawal in late 2008 of U.S. and European aid due to concerns about electoral fraud and handling of human rights and democracy. During the 1980s, the Soviet Union was the main provider of political, economic, military, and diplomatic support to the government of Nicaragua. Not much has changed with this authoritarian government.
Eritria.who? The United States and Eritrea have relatively little bilateral trade, though the United States has a modest trade surplus with Eritrea. Eritrea's natural mineral resources are copper, potash, zinc, oil, natural gas, cement, gypsum, granite, marble, ceramics, limestone, and iron ore. Mining contributes significantly to the GDP of the country, after trading. This is driven primarily by natural gas, oil, gold, zinc, and potash.
Syria. This goes without much debate as Basher Al Assad has been Putin's ally for decades and would do little if anything to go against Putin's wishes regarding any matter politically or militarily. Iraq, Italy, Germany, and Turkey are Syria's biggest trading partners, but in the mix is around $600 million U.S. annually in commodities unspecified from Russia.
Belarus? Russia is Belarus's largest trading partner, but China is in the process of developing several trade initiatives with Belarus. In the new world order, China calls the shots in this trifecta, so Lukashenko will therefore allow Putin to move strategic nuclear weapons on to its soil in July, as well as anything else he may choose to do, without debate, as China would very much like to see the response by the U.S.
Republic of North Korea. Kim Jung Un is doing his best to prop up his nuclear capability and military to beat the drum of protecting the country from the western demons as a way of distracting them from the incredible daily hardships the majority face by simply being trapped living in the country (who could possibly give a damn about nuclear capability when basic daily food is hard to come by for the majority). Firing missiles into the ocean, parading ones military might through the streets, telling the world that 800,000 recruits have joined the war effort, and providing weapons to Russia is expected. I am curious as to what percent of the military toys N. Korea displays actually function given the fact that they get their microchips from China. And now, an underwater drone that creates a radioactive tsunami has been developed. We think, maybe. The distractions grow while the torture and executions in the N. Korean prisons are front and center. In the meantime, it's no secret that N. Korea has been supplying Wagner Group with weapons and ammunition.
Back to the UN Assembly, all of this fence sitting and blatant cheering on of the war from various countries does take a back seat to what China may do, or not, regarding sending weapons to Russia. In the public display of affection for one another Putin and Xi Jinping did sign a declaration of continued support for one another. Putin is desperate for a bail out, and the possible upcoming bullet points in China's peace proposal will be nothing more than a piece of paper worth nothing more than a match lit to it, if it has no mention of Russia leaving the country first. In the meantime, all smoke and mirrors aside, the question is, could the U.S. actually know if China was secretly sending weapons into the country? There are more than 160 land border crossings between Russia and China, all of these crossings are open for business 24/7. Granted, most of the major freight lines have suspended all Russian operations regarding loads and deliveries, but there is still air freight as well. How can that be inspected? It can't. How can all of these land border crossings be inspected? They can't. What will the U.S. do, not if, but when, it's discovered that China has in fact crossed this dark red line? Economic sanctions on China may do as much harm to U.S. businesses as it would Chinese. As previously mentioned, according to trade statistics, from 2022, the trade volume between China and Russia was US$190 billion, which was a record high of 35% over 2021. Was there lethal aid in the supply chain in the last half of the year? At a minimum, within that increase are several dual use items such as hunting rifles, body armor, and drone parts that can be used in military applications. China is also supplying microchips to Russia, but they are faulty at a rate of around 40%. Not good if a weapon needs to fire, and can't, at a critical time of need.
If there is a will, there is a way. Getting the "goods" needed for success "to Russia, with love," from China in my opinion was the priority agreed upon in the recent meeting of the minds in Moscow. Air freight, rail, and truck are the best options, as ocean freight has become more of a challenge due to many of the largest shipping companies having backed off of transporting anything to do with Russia. Of note, the international longshore and warehouse union have also agreed not to touch anything with a Russian backing regarding cargo. Therefore, as mentioned in a previous article of mine, the Amur River separating the two countries in the Far East has been bridged and is going to become a key import-export route for the two countries. Actually, it probably already is.
Given the accessibility of various trade routes and preference of defiance, the U.S. is "confident" China is considering providing lethal aid to Russia to support Moscow's war against Ukraine. NATO allies have repeatedly warned that any nation - including China - will see swift and severe economic sanctions if they are found aiding Russia's war effort. The million-dollar question is, does Xi feel confident enough in partnership with Russia that they can stand up to the west over time? Over $750 billion in two-way annual trade with the U.S. is at stake, not to mention the E.U. Canada, Japan, S. Korea, and Australia..who will stand with the U.S. As mentioned, time will tell, but this recent visit with a leader now indicted on the world stage for war crimes does not look good long term economically for China. As the power struggle takes shape, I am curious as to which way India may go..sitting the fence..not condemning the invasion. In the meantime, via Turkey, Finland is "in" with NATO.and Sweden may not be far behind.
And now this from my favorite correspondent: Fareed Zakaria. "Russian President Vladimir Putin's announcement this week, alongside Chinese leader Xi Jinping in Moscow, is that Russia supports "using the Chinese yuan for settlements between Russia and the countries of Asia, Africa and Latin America." That won't unseat the dollar, but it's notable that the world's second-largest economy and largest energy exporter are trying." Will they be successful? The proposed new world order depends on it. Brazil and China have reportedly struck a deal to ditch the U.S. dollar in favor of their own currencies in trade transactions. The deal, announced recently, will enable China and Brazil to carry out trade and financial transactions directly, exchanging yuan for reais - or vice versa - rather than first converting their currencies to the U.S. dollar.
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