China emerging as a winner in Ukraine crisis

PUBLISHED : Saturday, 19 April, 2014, 3:17am
UPDATED : Saturday, 19 April, 2014, 3:17am

The agreement to "de-escalate" the crisis in eastern Ukraine may be the best chance to head off a rapid slide into a more worrying phase. The US has warned of tougher economic sanctions, and Russia of military intervention if political and diplomatic efforts do not now result in solutions acceptable to their conflicting interests. At talks in Geneva, the Russian and Ukrainian foreign ministers Sergey Lavrov and Andriy Deshchitsya, US Secretary of State John Kerry and European Union foreign policy chief Catherine Ashton agreed to the disbanding of all illegal military formations and the removal and disarming of occupiers of government buildings. The agreement includes an amnesty and "inclusivity" for all protesters against the Western-leaning government that replaced a pro-Moscow regime. This holds out the prospect of concessions to disaffected Russian-speaking areas.

The de-escalation is to be overseen by monitors from the Organisation for Security and Co-operation in Europe. The stakes are high. In a nationally televised phone-in, Russian President Vladimir Putin made a thinly veiled military threat if he was not satisfied with the outcome, saying he hoped not to have to exercise Russia's right to send in troops. US President Barack Obama described the outcome as promising, but nonetheless the US had put in place additional consequences if Russia continued using its influence disruptively.

Such confrontation could come at a heavy price, inflaming the struggle between the West and Russia for influence across eastern Europe and putting at risk co-operation on Iran's nuclear development, Syria and Afghanistan. Hopefully the new agreement will forestall it. This would come as a relief to Europe, which would struggle for consensus given dependence on Russian gas and the fear of Russian retaliation against Western corporations.

Meanwhile, China continues to emerge as a winner across the board from the Ukraine crisis. Putin used the phone-in to hail an all-time high in relations with Beijing, where he is due to meet President Xi Jinping next month to discuss a 30-year gas supply contract, mired so far in differences over pricing. China is now in a position to seize on Russia's growing alienation from Western markets to negotiate aggressively. At the same time, the EU's fear of lost trade from its rift with Russia over Ukraine will do no harm to China's push for a free-trade agreement with its biggest trading partner.