China may produce drones for Russia

Beijing may soon back Moscow more openly and forcefully. Chinese soldiers conducted combined exercises with Belarusian forces on July 6, two days after Minsk joined the Shanghai Cooperation Organization. While these exercises are not unprecedented and their implications shouldn’t be overstated, the timing and context are nevertheless striking.

While Beijing has shied from technically violating sanctions, it has nevertheless provided substantial material and informational assistance to Moscow throughout the conflict. Beijing is reportedly ratcheting up this assistance by developing attack drones for Russia, in partnership with Iran. Beijing appears more and more likely to back the Kremlin’s aggression in Ukraine overtly, possibly even by providing lethal assistance, a threshold it previously has not crossed.

Turning to energy markets, Beijing is reportedly stockpiling significant amounts of crude oil, according to Reuters reporting from the Vortexa commodity firm. Beijing seems to be hedging against – or possibly attempting to influence – the outcome of the upcoming US election.

There are more signs that developments in Chinese gasoline and electric vehicles (EV) markets will gradually impact bilateral ties. CNPC released an interesting note on QQ about declining gasoline demand on stronger EV uptake and improving fuel economy across the vehicle fleet.

The interplay between EVs and gasoline demand will increasingly impact Sino-Russian ties. On a personal note, I moved from my hometown (Salisbury, MD) to Houston in early 2018 to work in energy largely because I anticipated that the sector would gradually but increasingly shape bilateral ties between Russia and China, and geopolitics more broadly. Six years later, there is more evidence to support that thesis. In another six years’ time Beijing and Moscow may find it increasingly difficult to manage contradictions between their respective interests in EVs and oil, although incentives for bilateral convergence and alignment will likely continue to persist.  

Finally, there is growing alarm about the health of Vladimir Kara-Murza, the Russian dissident. In an ominous development, Kara-Murza has been moved to a prison hospital while his lawyers say they are being denied access to him. The situation is especially alarming since Kara-Murza was poisoned in 2015 and 2017, almost certainly by agents of the Kremlin. There are also parallels between his confinement in the Russian prison system and the treatment of Alexei Navalny, who was almost certainly murdered while in custody.

It’s possible that Putin has already ordered the execution of Kara-Murza, but the Russian force structures ...