At the annual plenary session of the National People's Assembly held in early March 2022, Foreign Minister Wang Yi announced that China will work with the international community to provide "the necessary mediation" for a diplomatic solution between Russia and Ukraine.
While China is in favor of a cessation of hostilities and armed conflict, it has never yet explicitly condemned Russia. Furthermore, China has abstained from the UN Security Council in its decision to impose financial sanctions on Russia. In this regard, Guo Shuqing, president of the China Banking and Insurance Regulatory Commission had declared to the international media: "We disapprove financial sanctions, especially those launched unilaterally, because they do not have many legal grounds and will not have good effects".
China's neutrality can be traced back to the need to mediate between various factors.
On the one hand, it must be considered that Chinese foreign policy has always been based on the principles of non-interference in internal affairs, mutual respect for sovereignty and territorial integrity and peaceful coexistence.
Secondly, it is useful to underline that since 2013 China has become Ukraine's main economic partner with trade in 2021 equal to 19 billion dollars. Ukraine was also becoming an important part of the Belt and Road initiative, thanks to its strategic location, and a destination for Chinese investments in the transport and critical infrastructure sectors.
On the other hand, China also has significant relations with Russia to which it is linked by a twenty-year "Treaty of good neighborliness and friendly cooperation". In 2021, the trade between China and Russia amounts to 140 billion dollars, of which more than half relates to the export of gas and other natural resources from Russia to China. Russia is also an important stop on the railway route that connects China and Europe and offers China various lands for cereal and soybean production and for pig farms. During the Beijing Olympics, Russian President Vladimir Putin and President of the People's Republic of China Xi Jinping signed a joint declaration entitled "New Era of International Relations" and of important political value. In the aforementioned declaration, Russia and China reiterated their respective opposition to attempts by "external forces" to undermine security and stability in their common adjacent regions (referring to Ukraine and Taiwan), underlining the willingness to work for the strengthening of Shanghai Cooperation Organization to define a new world order based on multilateralism and finally declared their opposition to a possible eastward enlargement of NATO.
China has repeatedly reiterated, in various international fora, the need to overcome the cold war mentality and the division of the world into two opposing blocks of influence that no longer reflect the reality of global geopolitical balances. Therefore, President Xi Jinping has repeatedly stressed the urgency of rethinking global governance in a multilateralist key.
Finally, as regards the repercussions that the Russian-Ukrainian conflict could have on China, some analysts have pointed out the following.
Russia's isolation from the financial system due to international sanctions and its adhesion to the Cross-border Interbank Payment System - CIPS (an alternative system to the Swift of Chinese initiative and operating within the New Silk Road) could have the effect to strengthen the Chinese Reminbi as a currency for international trade against the us dollar.
Rising oil prices could represent an opportunity for China to increase sales of components for the production of renewable energy (solar panels, wind turbines and batteries for electric vehicles) and to recover relations with the United States and the European Union in terms of energy transition.