Chinese foreign minister Wang Yi said that Russia had the capacity and the wisdom to overcome the existing economic hardship. “If the Russian side needs, we will provide necessary assistance within our capacity” noting that the Russian treasury has “hundreds of billions of US dollars” in a foreign reserve fund and is thus far from collapse. China is ready to provide Russia with loans and investment in infrastructure projects such as a deep-water port in Crimea, railway schemes in Russia’s Far East and the new Russia-China gas pipeline project.
After India, China has become another major economy to promise its help to the Russian tumbling economy. Earlier this month, India bought 12 nuclear reactors from the Russian company Rosatom and started joint production of military helicopters. Interestingly, China and India, were together with the rest of the BRICS group, Brazil and South Africa, among those countries which abstained in a UN-vote on the non-recognition of Russia’s annexation of Crimea.
Abstaining in the UN-vote as well as these further actions of the non-aligned states are a diplomatic failure for the United States and the European Union, which imposed tough sanctions on Russia over its annexation of Crimea. Maja Kocijancic, spokesperson of the EU foreign service, commented “there’s always diplomatic outreach to third countries … explaining what we’re doing, the logic. Part of the outreach is to push for a sustainable political solution to the crisis and, in this respect, to adopt measures that would support such a solution”.
The European Commission noted this week that the EU could potentially suffer knock-on effects due to the falling ruble as the EU still has extensive trade links with Russia. However, Brussels says that “it remains difficult at this stage to assess the spill-over effect of the Russian economic slowdown to the EU economy”. EU foreign ministers are to meet on Russia and sanctions in mid-January.