China and Russia – what will Putin get?

Stock markets may be crashing on inflation fears, but watch the Putin Xi summit in Samarkand tomorrow as the critical event this week. Is China prepared to reinforce Putin’s failure – and what does that mean in terms of risk?

Blain’s Morning Porridge, September 14th 2022: China and Russia – what will Putin get?

“Our glorious forces are advancing swiftly in a rearwards direction!”

This morningStock markets may be crashing on inflation fears, but watch the Putin Xi summit in Samarkand tomorrow as the critical event this week. Is China prepared to reinforce Putin’s failure – and what does that mean in terms of risk?

Yesterday was a dismal day across Global Markets. Worst stock market performance since 2020. A stronger than expected US inflation print has reawakened a host of fears. Across the Occidental West we are fixated on the market risks from the inflation battle, avoiding (or minimising) recession risks, austerity budgets, dollar strength and currency weakness, plus the trajectory of interest rates.

In the UK – where the new Truss Government’s first act was to sack the top Treasury official, but still hasn’t revealed any joined up-plan or numbers for its’ hyped energy cap bailout – the workings of the nation have ground to a halt as we approach Her Majesty’s funeral on Monday. (I managed to do a day’s work in London y’day – but government can’t?)

As usual, we might be watching and worrying about all the wrong things. 

The critical event occurs tomorrow at the Shanghai Cooperation Organisation summit in Uzbekistan – where Putin and Chinese Premier Xi will meet.

What will the supplicant, Putin, ask of the Red Emperor?

Ukraine has proved anything but the 4-day triumphant procession into Kyiv we were led to expect. Putin failed a 21st Century repeat of easy Soviet wins in Hungry and Czechoslovakia. He utterly misjudged the mood and people of Ukraine. 8 months of brutal reverses later, Russia, the ultimate bully, has been punched and skewered where it hurts. 53,000 casualties (no official figures are available), massive equipment losses (the Ukraine now has more vehicles than before the war from the numbers they have captured), and swathes of Russia’s professional army units left ineffective.

If you don’t believe what the Western Press is writing about the battles round Kharkiv, try Aljazeera: “How are pro-Kremlin Russian Media portraying Ukraine’s victories?”

For all the Kremlin rhetorical BS about how it’s the west that is losing – Putin desperately needs help to avoid humiliation – and replacement with prejudice. Mass mobilisation may prove a circuit breaker. Russia needs support. Putin needs to minimise just how badly Russia is going to lose, and lose badly. Today, tomorrow or next year – defeat in Ukraine looks nailed on. Long term, the forces of Demographics, GDP and production all point to Russia being wiped from the significant threat board.  Check out this Porridge from August: “Why are we so scared of Putin and Russia?”

Therefore… the meeting tomorrow in Samarkand is critical for Putin to avoid the foundations of his kleptocracy and his personal fortune collapsing. Will XI help him out?

Difficult decision for the Red Emperor. The Middle Kingdom is unwilling to finance and reinforce failure. The calculus for Xi is what does he potentially gain from supporting Putin?

It’s in Xi’s interest for Europe to remain roiled by energy instability, the uncertainty of a Russian Mad Dog in the Kremlin, while dangling the threat to global supply chains of China invading Taiwan. Xi is not stupid. He knows doing nothing while apearing willing to do anything, is a winning tactic. Simply being seen to nod in a sympathetic and supportive manner to Putin tomorrow will likely convince the West a mighty Chino/Soviet steam-roller is set to crush us all.

Xi may throw in some desperately need high-tech supplies like Chips to further ferment the battle. Will he offer Russia the kind of war-winning HIMARs type support the West has given to Ukraine? Even if they exist, he won’t want to risk Chinese arms being discredited by an already beaten Red Army.

In what is a geopolitical Game of Go, Xi’s goal is to encircle and diminish the American threat. That can be done politically by encouraging US isolationism and breach with Europe. The West fears Xi will use the Mad Dog Putin opportunity to sort out the embarrassment of a Chinese province, Taiwan, wanting to be anything except part of China – by using the distractions of Ukraine and a new Western financial crisis to invade Taiwan. It would force the US into a costly, Fabian defence of the Island. Wargames suggest the US may win, but at the cost of hundreds of aircraft and its carrier groups. While defeat could destabilise China – it would also weaken the US across Asia/Pacific, maybe allowing China to fill any power vacuum – a lose to win attritional strategy. War in the South China seas won’t help Russia much, except turning Europe’s Energy Cold War into a Global Hot War.

Will Xi risk it?

Russia is losing the war. Xi’s position is not so secure he can further exhaust the Covid fearful, ailing Chinese economy ahead of his confirmation as Glorious Leader for the next 5 years later this year. He certainly can’t risk the People’s Liberation Army – which shares top-down tactical doctrines with the now utterly discredited Red Army – being exposed as an equally hollow sham.

China has the much feared hypersonic D-21 and D-26 Carrier killer missiles but the US has a highly trained and motivated navy on the other side of that potential bluff. If, and it’s a big if, the missile’s capabilities are hype, and they prove about as effective as all the Russian wonder weapons in Ukraine, then just why would Xi risk it being discovered?

Hypersonic missiles have the potential to be a fascinating game changer – the speed of a ballistic missile with the accuracy of a cruise weapon. They make slow strategic bombers obsolete. The Russians have squandered limited numbers to no real strategic effect in Ukraine. The Chinese have played up their use as a force defence shield if they invade. The American’s are scrabbling to develop their own – which I suspect will actually work, and demonstrate just how effective they could be at both strategic and tactical level.

Xi will carefully weigh the current opportunity. To strike while the West is distracted by Ukraine and a worsening economic situation is an enticing opportunity but raises all kinds of end-game risks. Doing nothing may precipitate regime change in Russia, pushing it back into closer alliance with Europe, therefore cutting off the cheap Energy Xi hopes to acquire as Russia’s partner, and the Siberian resources he needs to drive the Chinese economy.

The Chinese are a cautious patient people. Ultimately, I expect Xi will make some encouraging noises, assure Putin of his support, and then do the square root of diddley squat. He will let the moment pass – why poke the American hornet?

Putin knows this dance. He staked everything on Ukraine. Without clear China support, the mad-dog risk becomes unquantifiable. If Russian armies continue to run, don’t discount Vlad lobbying off some tactical nukes to avoid an outright strategic defeat in Ukraine. Don’t discount it happening. Idiots do stupid things. Cornered liars about to be exposed as absolute failures can be even stupider.

In the next few days and weeks we might get lucky and some globally minded Russian functionary stops Putin triggering World War 3. Or we might not.

Ukraine’s success across the Kharkiv region has clearly rocked Moscow. There are signs, albeit small signs, of rising internal dissent and dissatisfaction with the way the war has been run. For all the Russian trollbots attempting to shape the narrative; initially as a police action to put down a Nazi infestation, but now the brave and invincible Red Army fighting not Ukraine but the industrialised might of Nato – the reality is Putin’s Ukraine War has exposed Russia as a flaccid paper tiger, its intelligence services as hopelessly corrupt, and its Army as comically incompetent.

Russia’s one advantage – its energy blackmail of the West is looking less effective by the day as Gas prices fall, Europe prepares for a tough winter, and energy storage facilities look sufficient for an average winter. Europe can win, but has to hang tough – make it through the winter, and Russian’s energy grip is broken.

The military consensus is Russia has been beaten in the field – and that leads us to this incredibly dangerous moment – the cornered animal. Russia’s armies have been beaten. There is no prospect of resupply with modern weapons – because Russia lacks access to the multiple advanced chips to make a modern fighter jet or tank work. They are short of troops – and to impose conscription or the call out of the 5 mm strong reserve forces would make Putin look weaker, and what is he going to arm them with?

Ukraine is now fielding a 1 million strong army of increasingly well-armed, confident, motivated, and partially western-trained men and women. Its 4 light brigades have proved resilient and effective against thin crust Russian lines. It will need more equipment to win, unless the Russian’s crack first. In contrast, 5 million untrained Russian reservists armed with 1970’s scrap yard Soviet tanks, fighting an unpopular war on hostile soil as their domestic economy collapses, will literally bleed Russia dry, and could end up in a 1917 scenario – where Russian armies walked away from the battlefield and stirred the revolution. (Thanks to David Murrin for that observation.)

The brutal reality for Russia is simple. In two years Europe will be energy secure and free of Russia. Russia will become nothing but an economic adjunct to the Greater Chinese Co-Prosperity Sphere – and Russians won’t like it much as China pays them a fraction of global prices. That is the future Putin has doomed Russia to – accepting whatever price China is willing to drop in their begging cap for their resources and energy.

Ukraine may not be perfect, but it will be rebuilt in terms of political and economic infrastructure.

Five things to read this morning

FT – Wall St suffers worst sell-off since 2020 after inflation data

Thunderer – They ran but couldn’t hide: the story of a Russian retreat

BBerg – China is winning the post-Ukraine Game, at Russia’s Expense

WSJ – Ukraine’s Economy Stabilizes, a Boost Alongside Rapid Military Gains

Torygraph – Prepare for Russia itself to disintegrate

Out of time, and back to the day job..

Bill Blain

Shard Capital


  1. Another excellent article. Agree that Russia is a busted flush. Very sad for a clever and long suffering nation. Again. As to what we should look for? Climate. Climate. Climate. Food shortages this year and into eternity will reshape the world. The stock market is in a bubble.

  2. Do you actually think Russia would launch a tactical nuclear weapon? If they did what do you think the west’s response would/could be ?
    Frankly all a bit worrying Bill!!

    • I am told by folk who know these things it is a distinct possibility – not a zero chance. If it happens – probably an airburst series of strikes against Ukrainian mobile forces – it will be limited fallout and ground destruction, but still halt Ukraine advances. Putin will justify as a strike against Nato forces.
      Nato faces a quandry.
      Do they wait, hoping Russian revulsion to the use of Nukes topples Putin – this is thought unlikely, intelligence souces fear its more likely Putin could suffer a coup by even more hard line Russians determined to take on Nato.
      If they go to UN it will be blocked by Russia and China, and much of Asia, Gulf and Lat Am, is sympathetic to Moscow.
      If they intervene, Russia will quickly be bundled out of Ukraine, but the risk of further escalation rockets.

      THe most likely outcome is stalemate. The use of Nukes leaves The West unable to respond in any meaningful way except to pour arms into a disillusioned Ukraine.

      • Just to add a little more uncertainty to the mix, here’s another wild card. Bear in mind that the Russian planes that the Ukraine flies have the range to attack Moscow from Kiev should they become obsessed with doing so. Think of Doolittle’s raid on Tokyo. Then the question becomes, are the Russian defenses up to snuff enough prevent that? What happens next? Nothing good I expect.

      • As Murrin said, best to warn of a response in kind to any nuclear detonation. The deterrant therein is enought to preclude use. Although, I suspect via back channels, the message has already been conveyed to Moscow.

    • I’m not sure a tactical nuclear weapon would be effective. Might have been against, e.g. a Mariupol Steel plant where you had a sizable element of the Ukrainian Army holed up but they were already surrounded and unable to be resupplied so what would have changed except the number killed?

      Russian and NATO armored vehicles were built to ”zip up”, i.e., be able to cross radioactive terrain and Ukraine doesn’t provide a target rich environment of concentrated armor or artillery. Trying to hunt down 16 HIMARS and their rockets with small tactical nuclear weapons doesn’t look promising either. To the extent that Hiroshima ”worked” it was because the US got a direct hit on the central city with a 15 kiloton bomb that leveled about 4 square miles and killed many tens of thousands. Russia would be crossing the nuclear threshold but couldn’t expect those kind of results against a dispersed and dug in Ukrainian army with a smaller device so the question might be would the Russian military let Putin use a medium sized atomic bomb ( or a thermonuclear one) to go after the Ukrainian regime or a major city?

  3. From Reader:
    “The only way Xi can really help Putin is by providing troops….and that ain’t going to happen
    A fragmented Russia greatly helps Xi as China then has one less rival to dominate Central Asia with all their resources
    I think Xi says nice things publicly but behind Putin’s back he’s a few moves ahead on the chess board and talking to Chechens, Georgians etc about post Putin world….”

  4. I have blocked a post by a Russian Shill who tells me:

    “You are being totally mislead by western media about events in Ukraine.”
    The last 2 weeks of “success” have been a disaster in terms of massive Ukraine casualties.
    By contrast there have been few Russian casualties – the Kharkov gains were in very lightly defended areas (LPR/DPR and national guard forces) who mostly withdrew quickly.
    Ukraine’s troops are now exposed, their advance stopped several days ago, the impact of all that training abroad, the huge numbers of foreign “mercenaries” at NCO and officer level has been observed.
    The last 6 months have seen Russia take apart strong defences dug in over 8 years by Ukraine piece by piece. Traditionally this requires 5x as many men as defending and 5x as many casualties. Russia has done this with <1x men and about 1/4 casualties.
    What ever you are reading about Russia's motivation, skills, leadership or equipment – it is nonsense. To the real military Russia's achievement has been quite staggering. Ditto their complete air control.
    Ukraine is in a considerable weaker position than it was 2 weeks ago.

    The only upside would from a rational approach by Western leaders that pushes Kiev in some kind of re-organisation or internal coup (the current lot cannot pretend to negotiate with Russia after Minsk 1&2). Russia needs a neighbour that is not determined to play Suicide by Superpower.

    Its is the west that threatens the Nuclear option. Lis Truss should be arrested as a war criminal after she threatened Russia with nukes earlier in the year."

    `I am blocking the ignorant tool from further comments.

  5. This is fast getting out of control. Just to remind everyone, Russia’s demands in Jan, before the conflict started, were for a neutral Ukraine and for the Minsk 2 agreement to be implemented by Ukraine. Someone tell me why these two requests were unreasonable.

    The conclusion I make is that it was never about Ukraine. It was about regime change in Russia and for the control of Russian resources. Sorry Bill but I disagree with you, China will not allow Russian resources to fall into the hands of the US and its allies. If Russia falls then the next US target for regime change will be China herself.

    The best outcome to avoid WW3 is for regime change in Russia to fail and for Ukraine to become neutral.

  6. Morning Bill,
    sometimes there is a few pearls of wisdom in your articles, but this one you should frame and every time your arrogance rears its head, re-read it.
    One of your commenters, Eduardo Martinez, nails it which demonstrates that not all of your subscribers are misinformed.
    This is twaddle masquerading as drivel.
    kind regards.

  7. Keep in mind that Putin’s rant at the outset of this conflict in February clearly stated he was focused on re-establishing not only the former Soviet Borders, but potentially the Russian Imperial Borders (that would include Finland, part of Poland, and the Baltic States).


    At the time he was making decisions based on the assumption he had the 3rd most powerful military machine in the world. Eight months later to his rude, and the world’s, surprise, the Russian MoD is the modern definition of a Potemkin Village. If he was actually interested in the Minsk 2 agreement and a neutral Ukraine, Russian armor would have never gone on its ignorant field trip to that country (and been handed their head).

    Internally, the Blame Game is going on, with fatal results so far for many, and potentially a few more, including Putin. If you are Russian Energy Executive, life expectancy is lower than the statistical norm (that being said, accurate statistics internal to Russia are meaningless…Thank You Joseph Stalin), indicating casualties from this war aren’t just on the front lines.

    A Kleptocracy is unsustainable…the question here is whether Putin can be contained, or he takes all of us with him.

    “Never fight with Russian. On your every stratagem they answer unpredictable stupidity.”
    Supposedly from Otto Von Bismark, but seems to be on the mark in this conflict.

    • Well Tripp Collins, we’ll never know shall we. The US and Western Europe told Russia to get lost on any suggestion that Ukraine become neutral or that the Minsk 2 agreement be implemented.

      Interestingly I come from biophysical economics perspective so I think WW3 is unavoidable. As the world goes into energy descent while population is yet to peak, the human race isn’t going to de-grow in a peaceful manner. There is no good or evil, no right or wrong, no winners or losers, just human nature. We will fight (to the death) for the resources that are left. We won’t let our opponents win whatever the cost to ourselves. Petty much the situation we are in now.

  8. Blain, This is rather long, definitive analysis of war situation in Ukraine which is interesting to say the least. It is at odds with many other bloggers with diplomatic/Military backgrounds like Larry Johnson, M. K. Bhadrakumar, Col. Douglas Macgregor etc. Though I do understand that you are covering the war from economic fallouts perspective. There are few aspects which have not been covered in your articles which I would be interested in knowing your views.
    1. The sanction strategy which has been unleashed against Russia seems like a double edged sword, given the current inflationary situation in UK and Europe. Given the counter measures suggested by Lagarde and Truss, how do you feel it will pan out? In short in this war of attrition do you feel time is on Russia side or combined Europe/UK?
    2. Ukraine war is costing a lot both in terms of weapons as well as economic support, UK/Europe needs to curtail energy usage and at same time support the war efforts plus subsidizes citizens and energy companies and also margin calls etc. Meanwhile Russia is generating a surplus. Will this have an impact on the final outcomes of the war?
    3. Do you have any thoughts on how people like Alastair Crooke or Michael Hudson see the economic fall outs as they may happen?
    4. Lastly, could you please point me to the source which confirms the million strong Ukraine army?

  9. Ultimately, the senior partner (China) would never give the nod to nuclear escalation. Putin just would not be able to keep Xi on side in this endeavour. Neutral India too would object, another behemoth of the Shanghai council.

    And furthermore, as Putin attempts to crawl back into the G8 one day, he would find the door closed for good.

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