China peace plan is aimed at deepening Western divisions

This is Iain Martin’s weekly newsletter, exclusively for Reaction subscribers. 

On Friday when China unveiled its twelve point so-called peace plan for Ukraine, President Zelensky said in a press conference in Kyiv he would like to meet Xi Jinping to discuss the proposals.

There’s a sentence, an intro, that would have looked implausible or unimaginable a year ago this weekend, when it was day two of the full invasion of Ukraine by Russia. Then the Ukrainians were given a few days at best, even by their friends. The US, Britain and Canada, governments that tried to warn Germany, France and Italy, and were not believed, thought the capital would be overrun in a few days. Zelensky would have to flee and his country would be left fighting a partisan war of resistance against the mighty Russian occupier.

Instead, a year on, Zelensky is still in power in Kyiv and it is President Putin, the Russian tyrant, who has been humiliated.

Ukraine has not won yet, though. Russia has almost 20% of Ukrainian territory and it continues to batter and brutalise its smaller, brave neighbour. While allies have poured in more than $100bn of military aid already, this spring is another dangerous moment in the conflict. Soviet-style, Russia continues to throw tens of thousands of conscripts and mercenaries into battle. Ukraine is short of ammunition and at some point there may be more Russian breakthroughs. Weight of numbers has worked for Russia before.

Casualty figures are difficult to divine, say Ukraine’s allies. Several recent estimates, from US officials and others, suggest Russia has sustained casualties, fatalities and injuried, of more than 180,000, maybe even 200,000. If the mooted estimate of a 3:1 ratio, injured to killed, is correct then somewhere between 40,000 and 50,000 Russians have lost their lives. The Ukrainians claim it is above 100,000, but they would say that for obvious reasons. If the ratio is wrong, and Russia has lost 20,000 or so dead, that is still in just one year nearly ten times the total of US deaths in Afghanistan sustained over twenty years of fighting the Taliban.

Even at the lower end those are staggering numbers for an army outside the context of the First and Second World Wars. Modern military doctrine and improved medical practice in the field means advanced armies can fight and lose fewer people.

Ukraine has also sustained heavy losses. Military casualties seem to be lower (perhaps around 100,000) and the ratio of injured to dead is reported to be much higher for the Ukrainian side  They are defending their home territory and have better medical facilities behind the front line than the Russian conscripts and mercenaries being chucked into the meat-grinder by the madman in Moscow.

With this level of loss and misery, it is hardly surprising that there is a discussion among policymakers about whether and how peace talks or discussions on freezing the conflict might begin. The Wall Street Journal reported on Friday that allies of Ukraine, among them Germany and France, are urging Zelensky to consider peace talks.

Right on cue, up popped the Chinese government. After having had the red carpet rolled out for him at the Munich Security Conference, China’s top diplomat, Wang Yi, met Putin last week in Moscow. On Friday, China published a plan for a ceasefire.

As President Biden put it: “Putin’s applauding it, so how could it be any good? I’ve seen nothing in the plan that would indicate that there is something that would be beneficial to anyone other than Russia, if the Chinese plan were followed.”

China’s plan to set itself up as the peace broker won’t work, clearly. How could it when Russia is its ally? But the manoeuvre is deeply revealing because it shows an uncomfortable China struggling to square several circles. Its leadership is trying to stick close to Russia, while trying to look conciliatory on Ukraine in a bid to divide the West. There are reports Beijing is considering extending its help for Russia to delivering arms or drones. 

As James Kynge of the FT reported this week, China is in an economic bind. After the Zero-Covid policy disaster it needs to get the show back on the road and wants to restore better relations with its trading partners, the largest of which is Germany. Germany has been China’s biggest trading partner since 2016.

Indeed, Germany’s economic problems are the backdrop to China’s peace offer. The country is on the brink of recession, with German GDP shrinking  by 0.4% in the final three months of last year, according to the latest data from Destatis, the official statistics agency. Consumers and investment have been hit by high energy prices. This is bad news for Chinese exporters selling to Germany, as there will be less demand in a recession, and for German companies selling to China the struggle with energy prices makes it more difficult to stay competitive. 

The question of what to do about German reliance on China surfaced last autumn. The Foreign Ministry pushed for tougher rules on trade and foreign minister Annalena Baerbock spoke out on human rights and fair competition. There was unease when Chancellor Scholz visited Beijing in November.

Talk of a peace plan, however implausible, is perfect cover for any German industrialist or investor saying self-interestedly that more trade with China is essential for European prosperity. Look, they can say, China is trying to engineer peace, the Ukrainians are being a bit stubborn and America always looks out for its own industrial base, doesn’t it? Let’s all be nice to the Chinese Communist Party, look out for Europe, don’t take the American line, and so on.

This when America is determined to shift even greater focus to countering and deterring the threat from China. It, quite sensibly, wants countries to choose a side in the coming struggle between US and Chinese spheres of interest, between freedom and authoritarianism.

How unfortunate then that at precisely this moment the US administration has chosen to embark, perhaps by accident, on a campaign of economic warfare against Europe. I wrote a few weeks ago about the potential effects of the Inflation Reduction Act, how $400bn-$500bn of subsidies and tax breaks to US industry will be leveraged by America’s deep capital markets, creating perhaps another $4trillion of private investment in the years ahead.

The risk is European deindustrialisation, leading to unemployment, social unrest and a further burst of populism later this decade.  

What is a global investor deploying billions of capital going to do? Invest in European industry, defence or energy, with lower margins and higher taxes? Or target it at the US where it will, thanks to those subsidies and tax breaks, make vastly better returns? And the subsidies are aimed in part at green technology, which means investors can say they are investing piously and ethically (ESG is the term).

This complaint mystifies Americans. Europe is always subsidising itself and it is a bit rich to complain when the US does it, no?

Amusingly, for a British audience, the EU plea to the US seems to rest on wanting carve outs that allow it to be treated like Mexico and Canada, so European companies can get US subsidies. But the EU doesn’t have, and didn’t want, a trade deal with the US. The attempt to improvise such arrangements sounds like cherry-picking of the kind the EU used to dismiss grandly when it was the UK attempting it during the Brexit negotiations.

As I’ve said before, any British amusement on this will be short-lived. Stuck between two power blocs the UK government had better get inventive, and quick, or we will suffer just as much in this great sucking away of capital. It will be interesting to see if the Treasury has woken up to this in the Budget. To raise corporation tax in this environment is beyond bonkers. The Chancellor should be setting up other incentives too that might encourage the City to generate and process investment to help Europe, including the UK.

So, China is in a bind. But thanks to thoughtless American policy, so is the West. It’s just that not many politicians or voters have woken up to it yet. 

Go wild in the country

To the English countryside this week for 36 hours, visiting friends in the Cotswolds. Arriving towards the end of the afternoon, I decided to take a walk round the lake at dusk. The weather was so perfect and the air so clear and still. At 5.30pm it was light. Spring is coming.

Strolling down the path from the house I was presented with the perfect scene, an example of the sublime, something to warm the heart of even this urbanite. Two swans were in the lake close to the water’s edge. On the grass stood a pair of geese. And standing straight and tall in the reeds, a heron.

As I approached on the path, hoping to pass leaving them undisturbed, the geese became agitated. A great squawking and honking went up as they prepared to defend their territory. The geese flew away down the lake. The swans bustled and bristled before swimming off.

Only the heron stayed there, unmoved, unflappable. Look at that remarkable creature, I thought. What a cool customer. He or she knows I’m no threat. This burgeoning connection prompted a crazy thought. Visions of my new career as an author of books on wildlife and the countryside flashed through my brain. The insights I could bring. Notes on Nature: an urbanite’s guide to the country, that sort of thing. And as I got closer the heron remained totally still. This was because it was a decoy plastic model of a heron. Time to go back to London.

What I’m reading

Road Dahl stories. Actually, that’s not quite true. I’m not reading them yet. This weekend I’ll be hunting for my uncensored childhood editions of Dahl’s stories to read since it emerged that publishers (Puffin/Penguin/Randomamericanculturalvandalism) had agreed to doctor the author’s novels in order to minimise distress to today’s younger audience. This week it was revealed dastardly editors had changed colourful passages in Dahl’s novels for children.

I find this one of the most shocking stories of our time. How did it happen? How did a group of editors get together in a meeting room and have the “we need to change this famous author’s words” discussion and no adult step in to stop it? Apparently, the Netflix crowd had signed a serialisation deal and the books were altered with the family estate’s approval. This episode is quite mindbending.

Just as Shakespeare is Shakespeare and Austen is Austen, Dahl is Dahl. What he wrote, what he put in the texts, is what he put in the texts. Those are the books. Leave… them… alone. Anyone who is offended can either read them and suck it up or stop half way through, or not read them at all. Why should a committee of publishing folk and “sensitivity readers” go through his words and anticipate the objections of others?

There are numerous legitimate reasons to object to Dahl, if dismissing human complexity and cancelling writers is your thing. He was an anti-semite and according to numerous accounts a complete shit. There is no way to avoid the reality that the work is great, though. He’s the quintessential flawed but important artist.

It’s a dilemma, but not much of one in the grand scheme of things. The stories – story after story – are as good as anything produced in the 19th or 20th centuries. Dahl was on the side of children against authority and petty tyranny. That’s the glorious, elementary point of his novels. I cannot understand how any adult, other than one driven round the twist by the woke virus, would think rewriting him, depriving children of his true work, was anything other than a crime against literature.

At dinner, in the Cotswolds, our conversation turned to whether we could each nominate a favourite Road Dahl children’s story. Much discussion ensued.

I struggled to pick one book from so many childhood Dahl favourites. Several of them centre on bereavement and isolation and they are deeply affecting, especially Danny, Champion of the World featuring a boy who has lost his mother. 

Earlier, we had been discussing contemporary American culture, both the downsides (excessive technology, wokery, hysteria, a puritan pursuit of heretics) and the upsides of America (intense dynamism, innovation, excitement).

I chose James and the Giant Peach, a novel with a traumatic opening, as my favourite. There are horrible relatives. There is abandonment and escape when the child hero is rescued by a gang of misfits. They float across the Atlantic and, spoiler alert, the giant peach lands atop the spike on the, I think, Empire State Building. What do those who travelled on the peach find in New York? They find fame (how American) and freedom from tyranny (how American).

On Friday, the publisher, presumably having been inundated with complaints, announced it will republish a “classic collection” of Dahl’s children’s books. Strip away the Orwellian Newspeak and “classic” edition means the books, the text, as the actual writer wrote it. What a thought, that the republishing of these books as written needed a special edition produced in a panic and a press release. Terrifying. Though the u-turn may also be an encouraging sign the tide is going out on wokery.

What I’m watching

France v Scotland in the Six Nations on Sunday afternoon (kick-off 3pm). We, that is Scotland, have never before won our first two games in the competition. Having been present at both games so far, at Twickenham and then Murrayfield, and been swept along in the enthusiasm as a Scotland fan, I can see how this ends now we must travel to Paris. Hubris incoming. Could it be, might it be, Scotland’s year for a Six Nations triumph, for a win or even the Grand Slam? Probably not. Still, it’s a nice idea for 24 hours or so. We can dream.