War in Ukraine: How the Asian Economy Is Divided Over Russian Sanctions

After invading Ukraine, Russia became the most sanctioned country in the world. But few governments in Asia have cracked down on Moscow. For example, China steadfastly refuses to condemn the invasion of Ukraine and has not imposed sanctions on Russia.

India, Pakistan, Vietnam, Bangladesh, Sri Lanka, Laos, and Mongolia also declined to vote on a UN resolution calling for an end to Russia's military operations in Ukraine. Moreover, while western allies such as Australia, Japan, South Korea, and Taiwan have imposed sanctions, and Tokyo and Seoul have blocked several Russian banks from Swift's global payments system, the impact has been limited.

After all, Asian countries that have joined the Western sanctions account for only 8% of Russia's world trade. 

And President Putin has prepared for it. Moscow has been subject to Western sanctions since Russia annexed Crimea eight years ago. "After 2014, Russia began to reduce its dependence on the US dollar as part of its foreign exchange reserves, turning to gold and the Chinese yuan," he added.

For Beijing, it's about weighing the benefits and costs of not taking action against Russia. China is already Russia's biggest trading partner, and in the weeks leading up to the invasion, Beijing lifted restrictions on wheat imports and signed a 30-year deal to buy more Russian gas.

Meanwhile, a growing number of Russian companies and banks, including the oil arm of Russian gas giant Gazprom, have started using the Chinese currency, the yuan, for payments.

China has three goals, according to Bilhari Kausikan, Singapore's former ambassador to the United Nations and Russia. First, because of Tibet, Xinjiang, and Taiwan, China is very sensitive to certain principles in international relations, such as sovereignty, territorial integrity, and non-intervention.

"Russia's invasion of Ukraine was a direct and grave violation of these norms, but there was a secondary purpose. "China has no other partner that comes close to Russia's strategic weight," he said.

They also shared the discomfort of the Western-dominated international order. Still, Kausikan added that "China is investing more in that order" and "the US, Europe, and Japan are more important markets than Russia," which is why Beijing wants the situation to be too stable to not become guaranteed damages from Russian sanctions.