On March 16, the Russian-Ukrainian conflict entered its 21st day, and the "firefight" was still being staged in many fields at the same time. On the one hand, the Russian military is still advancing special military operations in Ukraine. On the other hand, Russia is also engaged in fierce confrontation with the West in the fields of economy, trade and diplomacy. Just yesterday, the Russian Foreign Ministry announced the initiation of the withdrawal procedure from the Council of Europe and announced the imposition of sanctions on 13 US dignitaries and individuals, including US President Biden. What far-reaching impact will this sanction and counter-sanctions have on the world economy and relations among major powers?
Sanctions and counter-sanctions
Since Russia launched a special military operation in Ukraine on February 24, many Western countries have announced a series of sanctions against Russia, involving many fields such as economy, trade, diplomacy and so on. Compared with the sanctions imposed by Russia after the Crimean crisis in 2014, the sanctions are broader, more tactical and escalated. Russian President Vladimir Putin bluntly said that the sanctions imposed by the West on Russia are "no different from war."
In the economic and trade field, Western sanctions against Russia mainly include: freezing the assets of russia's large state-owned financial institutions in the United States, restricting Russia's ability to use dollars, euros, pounds and yen for commercial transactions, excluding some Russian banks from the payment system of the Global Interbank Financial Communications Association (SWIFT), freezing the assets of the Russian central bank and prohibiting transactions with the Russian central bank, and embargoing Russian oil.
In the diplomatic field, the Council of Europe said on February 25 that it decided to suspend Russia's representation in the Council of Ministers and parliamentary assemblies of the Council of Europe from now on due to Russia's military operations against Ukraine. A few days ago, the United States, the European Union, and the United Kingdom successively announced sanctions against Russian President Putin and Foreign Minister Lavrov.
In addition, Russian Foreign Ministry spokeswoman Zakharova also said that the "discriminatory anti-Russian measures" in the West have affected the humanities: the performances of some Russian cultural and artistic activists abroad have been cancelled, some college students studying in Western universities have been withdrawn, and athletes have been banned, which is "unacceptable".
In response to such "unfriendly acts," the Russian side decided to take corresponding measures, including approving the list of countries and regions that are "unfriendly" to Russia and taking special measures in the field of domestic and foreign economic activities.
Yesterday, the Russian Foreign Ministry announced the initiation of the withdrawal procedure from the Council of Europe and announced the imposition of sanctions on 13 US dignitaries and individuals, including US President Biden, Secretary of State Blinken, and Defense Secretary Austin. Shortly before that, Russian Deputy Foreign Minister Ryabkov said that Russia had prepared a list of counter-sanctions against the United States and the West.
Zhang Jun, dean of the School of Economics at Fudan University, pointed out that in recent years, the United States and Europe have not been uncommon in sanctions against Russia, and this one is more severe. However, in general, the current attitude of the United States and Europe to Russia's sanctions is still relatively rational and the intensity is relatively mild, and it has not yet come to the step of comprehensive sanctions and embargoes. Even if SWIFT, known as a "financial nuclear bomb", is used against Russia, the United States and Europe still have reservations - by selecting some Russian banks, to ensure that the country's energy industry is not too affected by sanctions. It can be said that "the tone is relatively high, but the intensity is moderate." ”
Jin Canrong, a professor at the School of International Relations of Chinese Min university, said that Russia used military means to challenge NATO's eastward expansion, while the West did not intervene directly in the military, mainly through sanctions, especially economic sanctions, and continued to provide arms support and economic assistance to Ukraine.
"But at the moment, it seems that the sanctions are not going to have the desired effect, which has exacerbated the Sense of Urgency in the West, leading to its increased sanctions." Jin Canrong said that we can see that the West has offered "fancy sanctions" against Russia, affecting soft power fields such as culture. At the same time, the Russian side also countered sanctions. "The economic and political confrontation between the two sides has escalated, and relations between Russia and the West have cooled."
The economic wounds are already there
As we all know, Russia is an important supplier of oil, gas, food, metal minerals in the world, and cooperates closely with European countries in the field of energy and trade. In the past 21 days, this "sanctions war" has brought a huge impact on the global market.
In terms of stock markets, affected by the tension between Russia and Ukraine, major global markets have experienced major fluctuations one after another, and major stock indexes in European and Asia-Pacific stock markets have fallen sharply. There have also been sharp swings in Russia's internal financial markets. However, due to the decline in oil prices and the possible interest rate hike of the Federal Reserve, the New York stock market and the European stock market have seen an upward momentum in recent days.
On the energy side, international oil prices have risen significantly recently due to concerns about tighter market supply, and European natural gas futures prices have risen to their highest levels in history. However, due to multiple factors in supply and demand, international oil prices have fallen in recent days.
On the grain side, wheat futures prices, corn and soybean futures prices continued to rise and climbed to multi-year highs. Some analysts believe that if the conflict between Russia and Ukraine continues or even intensifies, global agricultural prices may continue to rise, and even trigger a food supply crisis.
In terms of metals and minerals, the price of a variety of metals continues to rise, including aluminum, palladium and nickel used in automobile manufacturing. The international supply of raw materials may be blocked, or it will exacerbate the global shortage of "core" crisis.
The international air and shipping industry is also one of the "victims", with the embargo restrictions resulting from sanctions and counter-sanctions driving up the cost of sea and air freight...
Zhang Jun said that the US and Eu sanctions positions on Russia's energy sector are worthy of attention. Once the relevant sanctions are implemented, the global oil and gas supply may be greatly affected. "Unless the United States and Europe have a complete alternative, sanctions will have a greater impact on the energy market."
At present, the United States and Europe are already anxious for high inflation, and sanctions on the Russian energy industry may "add fuel to the fire". Zhang Jun said that the United States and Europe are currently in a "stalemate state" - looking for energy alternatives while sanctioning Russia, but it seems difficult to get a proper solution in the short term.
The continued rise in commodity prices will push up production and the cost of living, and eventually make ordinary consumers pay. A few days ago, biden announced that he would stop importing oil, gas and coal from Russia, saying that sanctions can hurt Russia, but "the United States has to pay the same price."
Eurogroup President Donoghoe also noted that EU sanctions on Russia will entail "economic costs" that will manifest themselves in the coming weeks to months.
At present, the world economy has just been hit hard by the epidemic and is still recovering, facing a situation of supply chain chaos and demand to be restored. As multiple variables in the global market stack up, the International Monetary Fund (IMF) has warned that the Russian-Ukrainian conflict is driving up world energy and food prices, and that conflicts and related sanctions will have a serious impact on the global economy. In the long run, the Ukraine crisis may fundamentally change the global economic and geopolitical order.
The Economist believes that the Western financial and economic and trade crackdown on Russia will not immediately lead to a global economic crisis, "but will change the way the world economy works in the coming decades."
"At present, it seems that the uncertainty caused by the Ukraine crisis may be the biggest impact on the world economy," Zhang Jun said, "when the war will end, whether it will last for a long time, how long the US and European sanctions against Russia will last, to what extent, no one knows." ”
Zhang Jun said that at the end of the year and the beginning of the year, people are still cautiously optimistic about the global economic prospects. "At present, the smog of the epidemic has not yet dissipated, and the Crisis in Ukraine has cast a new shadow." The outside world is pessimistic about the global economic trend this year, and many parties have lowered their economic growth expectations.
Analysts believe that in the long run, the impact of increasing sanctions on Russia cannot be ignored. IMF President Georgieva has previously said the longer the conflict lasts, the more severe the economic impact will be. So, will the "sanctions war" between Russia and the West intensify?
In view of the current global economic situation and the economic situation of the United States and Europe, Zhang Jun expects that the sanctions imposed by the United States and Europe on Russia in the short term will not be too aggressive, but will be selective and moderate sanctions, so as not to cause unbearable losses. "The United States and Europe are also considering sanctions against Russia and their impact from a longer-term perspective."
How the game evolves
At a time when the geopolitical situation continues to be tense, some analysts believe that with the launch of sanctions and counter-sanctions between Russia and the West, the game between the two sides will enter a more complex stage.
Jin Canrong expects that the direction of the next game between Russia and the West will depend to a large extent on the progress of the war. At present, the war is slightly stale, but overall, the Russian army is still dominant. "When the military operation is over, the battlefield situation becomes clearer, the relevant parties return to the negotiating track, and the sanctions confrontation between Russia and the West may come to an end."
Since the Russian-Ukrainian conflict, representatives of the two sides have held three rounds of face-to-face negotiations in Belarus, and on March 14, the fourth round of negotiations began in the form of video. Ukrainian President Zelenskiy said the positions of the negotiating sides "sound more realistic" but that it will take time to reach an agreement.
But Zhang expects the Ukraine crisis to have far-reaching implications for Russia's relations with the West. Due to their geographical proximity to Russia and Ukraine, European countries feel the crisis more strongly. At present, many European countries have adjusted their defense policies: Germany has significantly increased its defense budget for the first time since German reunification. German Chancellor Schoelz also said Germany wants to reduce its dependence on Russian energy. At the same time, countries such as Sweden, Finland, Switzerland, and Austria, which have long remained neutral in geopolitical relations, have also undergone a significant shift in their defense stances.
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Column Editor-in-Chief: Yang Liqun Text Editor: Yang Liqun Title Image Source: Visual China Picture Editor: Zi Xi
Source: Author: Lu Yifei
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