The Ukraine War Will Be Settled in Beijing, Not Moscow

Gazprom Neft’s Moscow oil refinery on the outskirts of Moscow. China is the second largest buyer of Russian refined oil, behind Turkey. (Natalia Kolesnikova / AFP / Getty Images)

About the author: Ram Charan is an Indian-American business consultant and best-selling author. His latest book, The U.S.-China Clash, will be released in January.

Chinese President Xi Jinping is keeping Russia’s war in Ukraine going. Simply put, Xi’s purchases of Russian oil are preventing Russian President Vladimir Putin’s economy from collapsing. Oil, in this war as in others, is leverage.

Seen in the larger context of Xi’s global ambitions, this means the Ukraine war has become a proxy conflict between the U.S. and China. It isn’t clear President Donald Trump recognizes that.

Having failed to persuade Putin to end the war at a meeting in Alaska in August, Trump pivoted. While he is still trying to negotiate with Putin—the two leaders talked over the phone yesterday and might meet in Hungary soon—he is also supporting Ukraine in new ways and starting to embrace its president, Volodymyr Zelensky.

Zelensky arrived for a White House visit today with hopes that Trump would agree to send long-range Tomahawk missiles to Ukraine. Trump is reluctant to do so: He believes that his negotiating skills, applied to Putin and Zelensky alike, can end the war without a military escalation.

But Trump fails to realize that the trajectory of Putin’s war is so heavily constrained by Xi and Xi’s oil purchases. Any decision to continue the war, escalate it, or seek a pause will depend on whether the Chinese leader decides to twist Putin’s arm by cutting back the order—or not. Trump’s leverage pales in comparison.

Trump’s strategy also requires Zelensky and his European allies to intensify pressure on Russia. The Europeans, under this plan, would freeze Russian assets and take broader actions to weaken the Russian economy. Washington would supply some weapons, money, and intelligence—but wouldn’t engage Russia militarily. This would mark a new and potentially prolonged phase of the conflict.

As part of the plan, Trump’s advisors may also employ one of the central tools of Western pressure, the global financial network named the Society for Worldwide Interbank Financial Telecommunications, or Swift. Swift is an essential communications system for international banks, enabling them to send and receive financial information like orders and payments, among other things.

Cutting Russia off from Swift was one of the key elements of former President Joe Biden’s strategy to weaken the Russian economy. But Biden’s sanctions, though extensive, exempted Russian oil exports. That allowed the Kremlin’s central bank to keep the money coming in through energy sales and keep the economy functioning, despite its isolation.

Trump’s administration seems intent on closing that loophole. In fact, its next sanctions regime will likely be broader than Swift, targeting the full range of Russia’s financial and logistical vulnerabilities.

But that doesn’t mean the U.S. will quickly prevail. Washington must be ready for a long struggle and full recognition that China’s objective in backing Putin is to weaken the West’s industrial capacity, deplete its resources, and measure its readiness for a larger conflict.

Beijing has expended limited resources to aid Russia’s war efforts. Meanwhile, the U.S. and its allies continue to commit vast financial and military assets to keep the Ukrainians in the fight. More than three years into the war, Western reserves are headed toward depletion, and the Western industrial base that underpins Russian and Chinese deterrence is slowly eroding. Xi knows this.

If Trump’s new plan takes hold, it will test not only America’s capacity for endurance—but also whether it can recognize and accept this reality.

The Ukraine war is a contest of systems in which China sets the boundaries, Russia carries out the fight, and the West must decide how far it is willing to go in counteracting Beijing to prevail.

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