China profits from Russia's isolation

Beijing could have done without the Ukraine crisis. It's on good terms with all the parties involved and would rather not be put on the spot and have to take a side.

China is friendly with Germany, France and Britain - in that order - while its ties to the US are tense but steady. Russia, with whom China shares a border of over 4000 kilometers, might not be a close ally, but the relationship is at least improving.

But most significantly, Beijing has close ties to Ukraine. The Chinese government loaned Kyiv $3 billion to modernize its agricultural sector. The loan was to be paid back over a period of 15 years in grain supplies.

But Ukraine hasn't been keeping up its end of the bargain and Beijing is seeking compensation. China's military cooperation with Ukraine is now in jeopardy. Beijing would be hard hit were it to break down altogether.

Not only has Kyiv sold the Chinese hundreds of airplane engines and the world's largest military-purposed air-cushioned landing craft - which it manufactured under license - but also an aircraft carrier, China's very first, now in operation as ‘Liaoning.'

A price Putin must pay

Beijing is therefore now caught in the crosshairs of a conflict that could have far-reaching repercussions for China. Behind the scenes, the Chinese are urging Ukraine to remain as neutral as possible, without ruffling anyone's feathers. So far they've been successful.

As yet, China's relations with Ukraine and the West have suffered no notable damage, while Beijing has even managed to deepen its relations with Russia now that Western sanctions have forced Moscow to cast around for new partners or revive old friendships. This is especially apparent when it comes to economic cooperation.

Earlier this week, President Vladimir Putin was in eastern Siberia to break ground on a 4000 kilometer pipeline that in 2019 will start pumping gas to China. The deal sealed in May was 10 years in the making.

Now, in light of its tensions with the West, Russia welcomes the pipeline more than ever. But Putin is paying a high price for it. China took advantage of the current situation to push through conditions that would have been unthinkable before the Ukraine crisis.

Further cooperation ahead

With the West threatening to impose even heavier sanctions, China can look forward to further deals with Russia. The Chinese and the Russians are planning to spend $1.3 billion on a bridge, a tunnel and a rail network across the Kerch Strait between Russia and Crimea. Plans are also afoot for a canal in Nicaragua to rival the US-built Panama Canal.

At this week's ceremony to launch construction on the new gas pipeline, Chinese Vice-Premier Zhang Gaoli listed around a dozen areas - from energy, transport and high-tech to air and space travel - in which Moscow and Beijing could further build on their partnership.

But it is clear that whatever economic cooperation the two countries might embark on in future, Beijing will not allow itself to be drawn into the crisis. Its stance is unlikely to change, despite the sort of joint military exercises that took place in late August, when Russian and Chinese fighter jets conducted military drills together in northern China.

Needless to say, Beijing is well aware that Putin needs that sort of publicity right now. But Beijing can always maintain that for its part, it is simply conducting business as usual - these joint exercises have been taking place for years, after all. That's what a Beijing-style neutral position looks like.

DW columnist Frank Sieren has been living in Beijing for 20 years.