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A Grain of Contention for China in the Black Sea?


Image: BIMCO


This article was originally published by InDepth.

China’s response to Russia’s cancellation of the Black Sea Grain Initiative has been remarkably muted considering its own agricultural interests and food security are at stake. China remains willing to support Russia's war on Ukraine even at the expense of China’s own losses of agricultural imports and potential costs to its diplomatic clout in the Global South.

Although Chinese officials never played a role in negotiating the Black Sea Grain Initiative—the United Nations and Turkey were the key dealmakers—Beijing’s support was clear. Just prior to the announcement of the deal on July 22, 2022, Chinese Foreign Minister Wang Yi outlined a food security initiative that encouraged the international community to “facilitate the entry of Russian, Ukrainian and Belarusian agricultural products and inputs into the international market.” Subsequently, China’s February 2023 position paper on Ukraine urged all parties to implement the Black Sea Grain Initiative “fully and effectively and in a balanced manner.” The “balanced manner” refers to acceding to Russian demands to adjust sanctions to facilitate its own agricultural exports, a position that would later lead to its withdrawal from the deal.

CHINA’S APPETITE FOR UKRAINIAN GRAIN

Despite Russian criticism that the grain exported under the deal was mostly headed to Western countries, China was actually the top recipient of all grains (24%), particularly corn (34%), via the initiative. Nevertheless, Ukraine’s share of Chinese grain imports is relatively small—just 8.9% in 2022, compared to 40.8% for US grain. In the same year, a quarter of China’s corn came from Ukraine and three-quarters from the United States.

On July 18, 2023, the day after the grain initiative was canceled, the Russian news agency TASS rather provocatively asked People’s Republic of China Foreign Ministry spokeswoman Mao Ning about China’s response. Mao blandly replied that she hoped “that parties concerned will properly resolve the international food security issue through dialogue and consultation” and that China was prepared to help facilitate the process and contribute to global food security. Given China’s personal stake, European policymakers and Black Sea agricultural exporters tried in vain to encourage China to use its leverage over Russia to extend the deal.

The issue also arose at the August 5 talks on Ukraine that Saudi Arabia held. China attended along with 40 other countries (though not Russia), including many from the Global South that have been hardest hit by rising food prices. Participants made plans for a working group on food security in a future iteration of the meeting. Since there was no final statement, it is unclear what they agreed to beyond general support for Ukraine’s sovereignty and territorial integrity, though this alone was seen as a win for Kyiv.


CHINA’S SILENT REPLY TO LOSING UKRAINIAN GRAIN

Beijing’s reluctance to criticize its strategic partner has been notable as Russia continues to attack Ukraine’s ports and grain terminals. In one such attack, 60,000 tons of grain bound for China were destroyed at an Odesa grain terminal. Remarkably, this did not warrant an official response from Beijing. Some Chinese netizens noticed, however, and one pointed out on a military news site that the attack on Chinese grain would prompt Beijing to urge Moscow to change its position on the grain deal. Another wrote that the attack was “a blow to China” because of the potential impact on world food markets. But the attack did not lead Chinese officials to pressure Russia to resume the Black Sea Grain Initiative. Instead, China has been diversifying its agricultural imports, purchasing more corn from Brazil as Black Sea imports became less reliable.

Is Russia concerned about the potential impact of the collapse of the grain initiative on its strategic partner? It has shown few signs of such worries. Instead, Russian media have doubled down on the claim that European countries were the largest recipients, which has “truthiness” only if European countries are viewed as a group. Russia may even be seeking to benefit from China’s loss of access to Ukrainian grain by boosting sales of Russian agricultural products to China, a key item on Putin’s agenda for Sino-Russian economic cooperation. A new grain transshipment hub in Zabaikalsk, on the border between Eastern Siberia and Inner Mongolia, will facilitate the development of a Russian grain corridor to China. This will enable China to reduce its exposure to Black Sea shipping risk while relieving some sanctions pressure on Russia.

Despite its own interests in the Black Sea Grain Initiative, China is taking a geopolitical perspective on Russia’s withdrawal from the deal. It is tacitly siding with Russia’s position demanding sanctions relief for Russian agricultural exports in exchange for renewal. This is the solution envisaged by the People’s Daily. But the mouthpiece of the Chinese Communist Party also acknowledged that the collapse of the grain deal would lead to increases in global food prices, potentially contributing to unrest in the Global South. For all of the overtures China has made to the Global South of late, partnership with Russia remains a priority at a time of geopolitical tensions with the West. We are unlikely to see Beijing use its leverage with Moscow over the fate of the Black Sea Grain Initiative.

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