Vladimir Putin’s Summit Was a Dud
Author: Greg Valliere
March 22, 2023
DESPITE THE WARM AND FUZZY RHETORIC between the two self-described “dear friends,” there wasn’t much to show. Russia did not get a pledge of arms shipments, while China withheld its support for the invasion of Ukraine.
XI CLEARLY REALIZES that his top priority is making global trade deals and growing the Chinese economy. A strong tilt toward Russia would strain many of his goals. So Xi offered a show of solidarity but nothing substantive — no pledge of arms, no deal on a pipeline to export Russian gas to China.
CHINA WANTS TO BE THE PEACEMAKER: Once the initial shock wore off in Washington after Beijing won a treaty between Iran and Saudi Arabia, the consensus in this town is that if Xi can win a truce in Ukraine, that’s fine. “Anything that pushes Volodymr Zelensky toward negotiating is a plus,” our source says.
XI IS EXPECTED to hold a call with President Zelensky some time after he returns from Moscow today. China once was a major trading partner with Ukraine, so there’s a positive history between the two countries. Xi surely must appreciate the economic stakes involved in re-building postwar Ukraine.
AS FOR PUTIN, HE WON some moral support, but little else. The visit focused attention on Putin’s health, which continues to raise questions, and Ukrainian troops stepped up their drone attacks this week on Russian troops in Crimea.
AS FOR THE U.S., fears that Xi would cross a “red line” with military sales to Moscow have eased. China is playing this high-stakes game very adroitly. Xi is the peacekeeper — the U.S. and its allies will not discourage that — and Zelensky at least will talk with Xi. And Putin is losing the war.
THE KEY, OBVIOUSLY, IS THE BATTLEFIELD: Tanks and other weapons from the West are streaming into Ukraine, as its key eastern cities refuse to surrender. Russia clearly needs help, as its arms dwindle and casualties mount, but there wasn’t much help from China this week.
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A HUGE DAY FOR THE FED: Everyone has a forecast, so here’s ours: a 25 basis point rate hike, with a statement and press conference that will encourage a belief that the Fed may be about finished with its tightening. As for a rate cut, that won’t be on the table for months to come.
WHAT WE’LL BE WATCHING FOR: Jerome Powell’s take on inflation, which has been stubborn and sticky, and his comments on the San Francisco Fed’s embarrassing lack of bank oversight.
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