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China’s Support of Russia/Ukraine War and the New Trade Bloc: The Plan All Along?

China’s Support of Russia/Ukraine War and the New Trade Bloc: The Plan All Along?

In the shadow of the Ukraine crisis, a new geopolitical and economic narrative is unfolding, one that significantly involves China and Russia forging a stronger alliance. This development, underscored by a staggering surge in Sino-Russian trade that has exceeded $200 billion this year, is more than just a reaction to the current geopolitical turmoil. It’s a strategic realignment that is reshaping the global order.

The bustling border town of Heihe stands as a testament to this burgeoning economic relationship. Here, Chinese exports to Russia have dramatically increased, covering a wide spectrum from vehicles to consumer electronics. The tangible signs of this partnership are evident in the recent construction boom along the border, where Chinese workers have erected warehouses and towering office buildings. This infrastructural expansion is not just about facilitating trade; it’s a physical manifestation of a deepening economic and political bond.

The economic windfall for China in this alliance is substantial. As Western sanctions have isolated Russia from Europe and America, China has emerged as a key economic partner. This shift has been particularly beneficial for the Chinese vehicle manufacturing sector. With European automotive giants like Mercedes-Benz and BMW withdrawing from Russia in response to the sanctions, Chinese carmakers have swiftly filled the vacuum. In a striking turnaround, Chinese brands have now seized a majority share of the Russian market, a scenario that was almost unthinkable just a few years ago.

But the implications of this alliance go beyond mere trade statistics. Russia has been supplying China with oil and natural gas at deeply discounted rates, which has been a boon for the Chinese manufacturing sector, especially during times of global energy shortages. While there is no concrete evidence of China directly supplying military equipment to Russia, the sale of dual-use technologies, such as drones and trucks, could indirectly support Russia’s military capabilities.

The leaders of both nations, Xi Jinping of China and Vladimir Putin of Russia, have made several public appearances together, signaling a united front. These interactions are not mere diplomatic formalities but a clear indication of a shared political vision and mutual interests. Both nations, it seems, are intent on challenging Western influence and are finding common ground in their respective aspirations for global repositioning.

One of the most significant aspects of this alliance is the near-complete phase-out of the US dollar in their bilateral trade. Now, over 90% of trade between the two countries is conducted in either the yuan or the ruble. This move towards de-dollarization is a clear indicator of the strategic economic realignment underway, reflecting a broader aspiration within the BRICS nations to reduce their dependency on the US dollar. While the dominance of the dollar in global markets remains largely unchallenged, this shift is indicative of the growing economic confidence and sovereignty aspirations of both China and Russia.

Amidst these developments, China is playing a complex diplomatic game. On one hand, it insists on maintaining its trade relationships with both Europe and Russia, but on the other, this balancing act is becoming increasingly challenging. China’s deepening economic and political ties with Russia, especially in the context of the latter’s international isolation following the invasion of Ukraine, place China in a delicate position.

This leads to intriguing speculation about the role that China may have played in the lead-up to the Ukraine crisis. Could it be that China, foreseeing the potential economic and strategic benefits, encouraged or tacitly supported Russia’s aggressive stance? While there is no direct evidence to support this theory, the timing and subsequent benefits accruing to China from the crisis suggest a potentially well-orchestrated shift in the global power dynamic.

The evolving China-Russia alliance, significantly bolstered by the war in Ukraine, represents more than just an economic partnership; it’s indicative of a strategic realignment with profound implications. As China enjoys the economic benefits and Russia finds a crucial ally, the rest of the world watches with a mix of caution and concern. This new bloc, with its vast economic and political implications, could significantly alter the global geopolitical landscape in the years to come.

We have predicted this with respect to oil and gas as well, it may soon be the case that oil trades at two different prices in a bifurcated market.

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  1. Tom

    It is obvious that a new financial system/model is emerging in BRICS and that the future will hold a world that has two major financial systems competing with each other. There is nothing new here. China and Russia have been trying to accomplish this for a couple decades! Much of this has been brought on by US sanctions and foreign policy, and China-USA trade war under Trump, as well as sanctions on China and Russia and the Ukraine War. Right now its just internal between China and Russia. China is also coercing other trade partners to use yuan instead of the American dollar. But in the end, if China or Russia wants to do anything with that money, they still have to go through the US dollar.

    Recently, within the last year, BRICS needed a bail out using the US Dollar. The big problem is two fold: 1) Right now and for the future, trading in BRICS currency is only good for trading between BRICS countries. They still need to go through the US Dollar for anything else. 2) Saudi Arabia and many other countries do not have any use for the Yuan. So this will be a real steep uphill climb for BRICS and China to de-dollarize the world economy. For the most part, the world is satisfied with the US Dollar being the world currency for trade equalization. See more about survivability of BRICS at ** China could incentivize other countries to use the Yuan by creating economic development and trade incentives, but many countries are worried about this after they see what is happening to BRI countries (Belt and Road Initiatives of China). Italy just pulled out of BRI last month. Three other countries have pulled out of BRI in the past few years. Several others are deeply indebt and not able to pay back their Chinese loans – thus China is grabbing cheap land deals to establish military bases. Other world countries are seeing this and getting scared of China – which will not help China’s efforts.

    India is to me the most interesting BRICS member. In the second half of 2023 they first went to the US to increase trade and get more dollar support (capital investment) for their industry. Then the week after they went to BRICS. India is playing both sides of this game. The key question is “What incentives could the US bring to India that would cause them to walk away from BRICS?” It is also possible that BRICS will just muttle along and then eventually collapse due to some crisis somewhere in one of its member countries, you know like the Ukraine War.

    Russia is slowly becoming more and more a lap dog of China. Its economy is no where near as big as China. China will use all of this to get back Mongolia and other regions that the U.S.S.R. took years ago. Eventually we will probably see more Chinese in Russia and Chinese influence over Russian policy than Russians in Russia and authentic Russian policy. What seems to be happening is as Russia bleeds down its national treasure on killing Ukrainians in order to take their resources and corner grain and fertilizer markets not to mention the twelve oil pipelines that run from Russia through Ukraine to Western Europe, China is emerging as the victor in taking over Russia! In the end, China will attempt to establish the old emperor tribute system upgraded for 21st century where every country under China’s tribute umbrella will pay some form of tribute, perhaps oil prices, maybe trade agreements, etc to China in exchange for protection and favoritism from China. Each umbrella government will act semi-autonomously with its own ability to make and shape policy, but that policy will have Chinese input and enforcement. I believe this is where Xi really wants to take China. And it needs a financial system to do it!

    I believe by the mid 21st century we will see two world order systems. There will be the older more established Democratic World Order that will include and be centered on the West; and, there will be the newer more Authoritarian World Order that will include China, Russia, BRICS aligned countries such as South Africa, possibly Iran, Argentina, etc. that will be centered out of Beijing. We are already seeing the birth pangs of the newer order right now. The two questions in my mind are: 1) Will the baby live? 2) How ugly will it be?

    • Tom

      And by the way, this is why China is courting South American and Central American countries – to gain influence for the support of their new world order. This is why the USA and other Western countries have formed a union of incentives to stay with the dollar and let Western countries invest in these emerging Central and South American countries. Brazil is a big question mark right now. They are part of BRICS but not so happy with it, nor happy with Chinese and Russian expansion ideas for BRICS. Read more at **

  2. frank Stetson

    Tom, informative posts, thanks. Unions, trade unions, co-ops, economic unions all part of life as smaller entities combine together to become bigger entities without giving up sovereignties .

    On PBP, we have a number who fear the NWO, globalists conspiracy theories, and recently, China, China, China…. Fact is there is no NWO, no globalist cabal, just people and countries doing what they do. In the current case, China needs oil, Russia needs to get rid of it, will do so at a deep discount, close to 20% off. They use the Yuan which Russia can trade back to China, so it works with only Russia losing over 10% of it’s total profit. IOW —- this deal drains Russia of 10% of it’s economic power from oil. It may be sustainable, but certainly a loss from pre-war Russian trade. Russia would have sold it’s oil somewhere, that’s a certainty. The only question is where and how deep the discount. 20% off is steep. Very steep.

    Meanwhile, in general, China continues to try to expand the Yuan, it’s only natural. Everyone knows that he who controls the money supply basically controls the world. Or said another way, if magically we could only have a single money supply, pick one, I don”t care, that many of the world’s issues would disappear overnight. In God We Trust that it’s the dollar.

  3. Tom

    Frank, many news agencies and business news agencies have commented extensively on this topic. There IS a new world order emerging according to them. Funny thing is, I have been talking about this for a few years now! I am having trouble posting my response, not sure why. You know how PBP can be! I will try to post later. Here is my response without the links.

    China New World Order
    Based on what I have read in “The Economist”, seen on news programs like Blumberg Business, I will have to respectfully disagree with you. There is a new world order and it is the dream of Xi Jinping and Vlad Putin. See: CNN, NBC news, Financial Times, Japanese Times. Lots on this.

    • Tom

      Frank, I will try to post my original response to you tomorrow.

  4. Tom

    Frank, I found this article interesting:

    China, Russia Think About Starting World War III: Gordon Chang
    China and Russia believe that the United States ‘must be taken down,’ Mr. Chang says.
    China, Russia Think About Starting World War III: Gordon Chang
    Gordon Chang, China analyst and author of “The Coming Collapse of China,” in New York City on Jan. 3, 2023.(Samira Bouaou/The Epoch Times)
    Frank Fang
    By Frank Fang

    Chinese Communist Party (CCP) leader Xi Jinping and Russian President Vladimir Putin are contemplating starting World War III, driven by their shared vision for the future world order, according to renowned China expert Gordon Chang.
    Mr. Chang, a senior fellow at the New York-based think tank Gatestone Institute, made an appearance on 77 WABC Radio on Dec. 25 to talk about his new article on China and Russia. In his article, he writes that the two regimes “are forming the core of a new axis,” and around this core “are proxies and proxies of proxies, such as Iran, North Korea, Algeria, and a host of terrorist groups.”

    Xi and Mr. Putin “are cooperating across the world,” Mr. Chang said during the interview. “They’ve basically divided the international system into two. They want to take over the other half. They’re actually thinking of starting World War III because they talk about using nuclear weapons all the time.”
    Story continues below advertisement
    Concerns about the relationship between the Kremlin and the CCP have elevated since February 2022, when Russia invaded Ukraine and the two neighbors enhanced their ties to a “no limits” partnership. China’s nuclear capabilities came under scrutiny in October when the Pentagon revealed in a report that the communist regime has more than 500 operational nuclear warheads in its arsenal, with the number expected to increase to 1,000 by 2030. Meanwhile, Russia has a stockpile of about 4,489 nuclear warheads, according to the Federation of American Scientists.

    “And what they’re doing is we see them cooperating in Ukraine, they’re cooperating in Gaza, and they’re cooperating in North Africa. They’re setting the world [on] fire. And we have a Biden administration that’s oblivious to what’s going on,” Mr. Chang said.
    The China expert said China and Russia are watching the Biden administration’s response to Yemen’s Islamist Houthi rebel group, which has launched dozens of drone and missile attacks in the Red Sea since Hamas terrorists attacked Israel on Oct. 7. The Iran-backed Houthis have aligned themselves with Hamas in Gaza.
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    “We should be hitting the Houthi ports. And we should also be hitting the Iranian ones, as well. We do that, we show that we are willing to defend ourselves,” Mr. Chang said. “And I think that is going to make the Chinese and Russians sit up and take notice, because right now, they have been fueling Iran’s attack on Israel and Iran’s attack on shipping.”

    He said that because of the Biden administration’s lack of action on his recommendations, the Chinese, Russians, and Iranians are likely thinking, “Well, let’s go out and do some more.”
    The White House has said that Tehran was “deeply involved” in the Houthis’ attacks, a claim denied by Iran’s foreign ministry. Shipping companies have rerouted their cargo ships around Africa to avoid the Suez Canal and the Red Sea.
    China Maintains Support for Russia Despite Mutiny

    In his article, which was published on Dec. 25, Mr. Chang explains that Xi and Mr. Putin believe that the United States “is in a terminal decline,” pointing to their conversation in March when the CCP leader told his Russian counterpart that the two neighbors “are driving” changes not seen “in 100 years.”

    The two leaders also believe that the United States “must be taken down,” hence the creation of their new axis, according to Mr. Chang’s article.

  5. Tom

    Based on what I have read in “The Economist”, seen on news programs like Blumberg Business, I will have to respectfully disagree with you. There is a new world order and it is the dream of Xi Jinping and Vlad Putin. Look up, “China BRI Forum Opening Ceremony International” This is just one of many articles easy to find.

    Check out the Japan Times where they write: “After all, the emerging consensus among Western policymakers follows from several assumptions that may lead them to act in counterproductive ways. Specifically, Western leaders believe that they are defending the rules-based order from revisionist powers such as Russia and China; that the world is polarizing between rule-bound democracies and aggressive autocracies, with swing states in the middle; and that we need better narratives to convince others that Russia’s attack on Ukraine has significant implications for them. But each of these claims is problematic and speaks to a misunderstanding of the challenge China represents.” Look up Japan Times article titled xi-world-order . This is easy to find too.

    NBC News summary in an article says, “Putin said on the Kremlin’s website: “We are working in solidarity on the formation of a more just and democratic multipolar world order, which should be based on the central role of the U.N., its Security Council, international law, the purposes and principles of the U.N. Charter.”” Look up “Xi and Putin pledge new world order” Xi and Vlad are up to no good!

    Lastly, since they will need a financial system, the Financial Times says, “With China’s political class arrayed before him this month, Xi Jinping summed up his robust foreign policy to delegates with one vivid refrain: “dare to fight”. The declaration at the National People’s Congress captured a new ethos for Beijing, spurred by the Chinese leader’s conclusion that the US-led world order is now in decline and ready to be replaced with a system that better suits China’s interests. ” Google the Financial Times, Xi new world order”. Very interesting article.

    Frank, it will not be long, maybe still in our lifetime that you will look back on this and say, “Damn, Tom was a profit!” I have been talking about this for a number of years. The news and other agencies are just starting to believe it now! And by the way, there are US liberals who are also cheering on Xi’s new order.

  6. Tom

    Frank, sorry I could not manage to post the links. I tried several times but PBP just would not let me. You are correct that China wants to further increase the use of its Yuan, but it is much deeper and less innocent than that. We have been involved in an economic/territorial war for some time now, and our government still is not as awake as it should be. China and Russia intend on spreading their new world order by conquest. The more conquests the more spreading and use of their new economic system. And at the top will be China and Russia making the rules. China has been wanting to do this for the past 20 years but could not find a strong partner and needed to build social capital/soft power. Putin needed to strengthen its people and properly program them with anti-west propaganda. Well now that preparation phase is over and the conquest is a’foot!

    China and Russia want to ban proxy countries together and create a new world order under the UN where China and Russia can garner enough votes to defeat the US. We have been seeing this for some time now.

    One last article from Al Jazeer

    Russia says US will not be at the centre of ‘new world order’

    Kremlin backs US President Joe Biden’s call for a new order but says any new system should not revolve around the US.
    Kremlin spokesman Dmitry Peskov attends Russian President Vladimir Putin’s annual end-of-year news conference, held online in a video conference mode, in Moscow, Russia December 17, 2020. REUTERS/Maxim Shemetov
    Kremlin spokesperson Dmitry Peskov (Maxim Shemetov/Reuters)
    Published On 23 Oct 202323 Oct 2023

    Russia has criticised the United States president’s assertion that Washington must be the driving force in a new “world order”, saying such an “American-centric” vision is outdated.

    Kremlin spokesperson Dmitry Peskov told reporters on Monday that while he agrees on the need for a “new world order”, he does not believe the US should be at the helm. Any new system should be “free from the concentration of all mechanisms of world governance in the hands of one state”, he said.
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    Peskov was responding to a speech US President Joe Biden delivered on Friday in which he addressed the US engagement in foreign crises from Ukraine and Taiwan to Israel.

    During his remarks, Biden said the “world order” of the past half-century was “running out of steam” and America needed to “unite the world” in a new order to forge peace.

    “I think we have a real opportunity to unite the world in a way it hasn’t been in a long time and enhance the prospect of peace, not diminish the prospect of peace,” Biden said.

    Peskov responded: “In this part we disagree because the United States, … no matter what world order they talk about, they mean an American-centric world order, that is, a world that revolves around the United States. It won’t be that way anymore.”
    Deepening chasm

    The clash of words reflects a deepening chasm between the two global superpowers, which are bitterly opposed over Russia’s war in Ukraine and Moscow’s blooming alliances with American archrivals such as Iran and North Korea.

    Since Russia invaded Ukraine in February 2022, the US has imposed wide-reaching sanctions on Kremlin-linked individuals and entities, and supplied Ukraine with tens of billions of dollars in humanitarian, financial and military aid.

    Video Duration 01 minutes 40 seconds 01:40

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    Biden in recent remarks has also frequently drawn comparisons between Russian President Vladimir Putin and Hamas, the Palestinian group governing the Gaza Strip that the US has designated a “terrorist” organisation, saying they both pose threats to neighbouring democracies.

    “Hamas and Putin represent different threats, but they share this in common: They both want to annihilate a neighbouring democracy,” Biden said in an Oval Office address on Thursday.


    Tom, first —- don’t think you will be my “profit.” Must be AI acting up again!

    Thanks for the info; my NWO is the one I know as in the conspiracy theory version. I did not realize there’s a more legitimate version out there that The Economist has a zillion stories about, often different flavors, but legit. Now I know, would love to read The Economist, but a bit expensive.

    I guess my point is sure —- the World Order is us and our friends, a thingee we began post WWII. Of course, anyone feeling oppressed by us, either ideology wise or economically, would join together to stop that. Further, some may desire expansion, and that gets in the mix too. But is it protecting themselves from us, wanting to govern the world, wanting to be tops in the world economy, or wanting to exterminate us and steal our cheese? Probably more the economy, a few in the expansion mode, and governing the world would be a gift from those.

    China is the 800 lb gorilla because they are an economic superman. Russia has bombs but not much else. It’s like fighting Italy, if Italy invested everything into it’s military. One step scarier than North Korea, but really — afraid of NK? Really?

    They may partner, where it’s convenient, but I really don’t see even an AXIS as of yet. Most of these marriages, ourselves included, like business partnerships, end up in divorce.

    So, I agree China is the one to watch. At the current time, my take is STILL —- bring to the table, negotiate, sign treaties, accords, whatever, and then stomp em hard IF they violate their own agreements.

    At this point, I don’t fear their yuan; I do respect their economic strength, but we have met these challenges a number of times in the past. One thing going in our favor is that with great economic wealth comes the citizenries desire for greater freedoms, benefits, even vacations. Sometimes that can turn the tide. At one point, Japan was going to take over, and then they had to turn inward to satisfy their own people.

    So, I hear ya, I don’t disagree, and my NWO was the fake one, not the description used by the sources you are citing.

    Thanks for the info, again. Twas illuminating.


    Tom, I had a huff post link blocked. once I took out the huff post reference, it took.

    apparently, extreme free speech does have limits :>)

    • Tom

      Yeah I think PBP does not like it when we post links that take us out of PBP. We must be posting their competitors or something. LOL

      Yeah my feelings are kind of mixed on the whole thing. I have read doomsday articles about how when or if the world goes off of the US Dollar that it will be very bad for our 401K’s. It will take away the advantage the US has to print money. Somehow they say all of this will cause our economy to constrict due to shifts in the financial system which will harm our retirements.

      This article in Business Insider is interesting at ** where it quotes JPMorgan strategists Alexander Wise and Jan Loeys told clients they only expect marginal de-dollarization over the next decade. If the dollar’s status does wane beyond that, it’s possible US assets could see a hit — lower stocks, higher bond yields, pricier imports. The biggest threat, Wise and Loeys said, is if the US’s geopolitical standing takes a hit.

      My problem with China’s Yuan taking over is that much of financial systems and use of an international currency is all about trust. And I do not trust the Communist Party of China to offer the consistent regulations and monitoring that the US offers the world. I see how quickly the CPC can implement new rules and carelessly plough forward with rules and regulations that hurt their own population and economy and I do not trust them or their Yuan as a world currency.

      With regard to two world orders, I am ambivalent. I really do not see any harm in it but do not have a large enough head to fit the brains required to fully understand the implications. It will be authority type order versus democracy type order where both will find ways of justifying their deeds. But I do view the authority type order as being less caring about populations and more caring about ensuring its own existence while democracies have an inherent elasticity and resilience to survive without harsh rules, censorship, coercion, etc.

      The big concern of China and Russia is that the US has weaponized the US Dollar and that thwarts them from their conquest goals – and don’t think for a minute that Russia does not want free Eastern Europe back under its umbrella, and do not think that China does not want its empire back to where it once was under the Feudal Tribute System. I do however think their concerns should be heard and that Biden has a point about a new order that still has the dollar as the stable world currency but rules set up to be more fair to other world emerging countries and economies. But to do this properly and belay the concerns of other world economies, we have to stop spending and pay down national debt and stop always borrowing to afford our federal budget. Our spending is one of the roots of de-dollarization. Another root is sanctions and weaponizing the US Dollar. If we address these issues it would help the whole world and reduce the pain felt by other economies when we cause ripples in our economy. Its not fair to them.

      Then I look at competition to the US Dollar and competition is generally a good thing. But I am not sure on this one.

      Like the article says, “The panic is overdone, but the threat is real.” And this is the reason BRICS was formed, to get around or at least minimize the effect of sanctions during times of political disagreement. This is what Putin prepared for ten years before invading Ukraine. He needed China on his side to do it, and now he has that. This to me is an indicator of how Xi and Putin wish to operate – they will take what they want if they have the financial system to do it. The only thing that stops China now is the threat of sanctions when their economy is already struggling.

      Well, I have said about all I can on the subject. You will see me as a prophet one day! You will say, Damn, ole Tom was right! LOL :>)