Ukraine has Crushed Putin’s Imperial Fantasy

There is no escape hatch

Shankar Narayan
7 min readMar 23, 2023
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To counter Vladimir Putin, the west has taken two approaches after he invaded Ukraine last year. One is to provide monetary and lethal support for Ukraine. The other is to impose economic sanctions to deplete Putin’s ability to sustain the war. Neither one can be counted as a victory for the west. It was a mixed bag.

The incremental supply of weapons did not allow Ukraine the liberty it needed to crush the enemy. Nick of time deliveries forced Ukraine to yield crucial windows of opportunities. Because Ukraine lacked the offensive weapons needed to attack an enemy hiding behind defensive structures, they were unable to press forward following their victory in Kherson.

As a result of the west’s economic sanctions, Russia is already on a path to long term economic doom. Due to 47 small to mega-sized holes in the sanctions blanket, Russia did not experience the economic collapse many predicted.

It was last year’s UN vote calling for Russia’s unconditional withdrawal from Ukraine that first demonstrated the fragmented nature of global response. A total of 141 countries voted for the measure, four countries supported Russia, and 47 countries abstained.

You pick a side when you choose a neutral stance in the battle between the devil and human. The 47 countries that abstained from voting are what caused the sanctions regime to fail. There was little effort made by the west to break that alliance into multiple pieces and tighten financial sanctions on Putin’s regime.

Russian imports that fell immediately after the Ukraine invasion have slowly picked up speed and it is very close to pre-war levels. Among the entire list of countries that assisted Russia to escape the economic noose, China carved itself a special place — no one sells more goods to Russia and no one buys more goods from Russia.

The trade appears to be mutually beneficial at first glance, but it is more of a one-way street with all the benefits flowing to Beijing while a small amount goes to Moscow. Regardless of the outcome of the Ukrainian conflict, China has positioned itself to be a winner.

The Creation of a Vassal

A vassal state is secondary to a dominant state. It is subordinate in nature. In this case, the term vassal refers to the ruler and not the state itself. The vassal has authority on the subordinate state in many aspects: military, political and economic.

As west slowly weaned itself from Russian products, China stepped in and redirected the trade flow towards itself. European exports to Russia decreased by $3,795 million between November 2019 and November 2022. Meanwhile, Chinese exports to Russia increased by $3,125 million during that time period.

Due to western sanctions, China is purchasing large quantities of oil products from Russia at below market prices, while selling Chinese goods to Russia at market prices by replacing western sellers.

Is there anything not to like?

  • Putin invaded Ukraine.
  • The west slapped sanctions.
  • Global trade became imbalanced.
  • China has filled the gap, reduced its oil import costs, and increased its exports.

Chinese leader Xi Jinping has another reason to support Putin in addition to the obvious trade benefits. China does not wish for Putin to lose the war so badly that his regime collapses and a pro-western leader replaces him in the Kremlin. A pro-western regime is not something China wishes for.

The Ukrainian war gives Xi Jinping both his dreams, a significantly weakened Putin and an exhausted America. China may not have supplied Russia with lethal weapons, but it is China that is holding the Russian economy together, underwriting half of the Russian war machine.

Russia’s invasion of the Ukraine has done exactly the opposite of what Putin intended. He envisioned an imperial Russia with European countries serving as vassals. He wanted to break down international borders, savor economic resources and steadily expand Kremlin’s arc of influence.

Putin has done the exact opposite of what he envisioned.

NATO is about to become the largest it has ever been since its formation. Ukraine certainly has a strong chance of becoming a member of the EU soon. After four decades building bilateral trading ties with the west, Russia has to begin again without any means to work with the west. It is likely that Russia will become a vassal to China because it is becoming increasingly dependent on it, economically and militarily.

This week marked the completion of Russia’s economic surrender.

Xi Jinping has given Putin a huge boost at a time of distress by visiting him in Moscow.

It appears that Putin is in a struggle between two opposing factions inside Russia. The ultranationalists in Russia are pushing for Putin to win the war no matter what. The Russian public isn't protesting, but they do not want to take part in the war. Ultranationalists demand full mobilization, Putin knows that it will create chaos, and lead to his ouster.

In exchange for the domestic lifeboat, Xi took control of Russia’s economic future. It was brutally calculative, but Xi did not create this situation. Putin created it, Xi took advantage of it.

Xi-Putin’s summit in Moscow was so one-sided that I cannot recall a bilateral meeting where one side got everything and the other side got hardly anything.

Putin so badly wanted to expand the Siberia 2 pipeline to deliver oil and gas to China. The Nord Stream pipelines that supplied oil and gas to Europe are going to rust and wither. Nobody in Europe is going to buy Russian oil and gas products in the future. From many customers, Putin has quickly degenerated to few customers.

Putin was desperate to reach an agreement with Xi Jinping and his desperation was taken full advantage of by the Chinese delegation. Putin did not secure the pipeline deal. The details were extremely vague to call it anything closer to an agreement.

“But Xi’s failure to give Russia the additional symbolic boost of a giant gas pipeline deal showed that he would not sacrifice China’s economic self-interest, and it highlighted Putin’s weakness and growing dependence on his “dear friend.”

Xi’s trip offered Putin important moral support, and Chinese trade has bolstered Russia’s economy, but the lack of a deal on Power of Siberia 2 showed the limits of what Xi is willing to do, said Janis Kluge, an expert on Russia’s economy with the German Institute for International and Security Affairs”.

China was extremely smart and brutally calculative. They were simply not ready to let Russia off the hook. They want to keep Russia under pressure to sell their products.

China as the single largest buyer of Russian products, owns dominating control over pricing. China can buy from anyone, but Russia cannot sell to anyone. I wouldn’t be surprised if Xi some day forces Russia to export oil at or barely above cost to China.

Putin also announced that he will expand manufacturing, agricultural and energy trade with China. This will give Chinese companies unprecedented access to Russian markets, while offering Russian companies very little in return.

In exchange for going above and beyond to impress Xi, Putin has only the photographs of him and Xi in Moscow to show. China has not even mentioned the possibility of supplying weapons to Russia. Last year, both men promised the world a limitless friendship. However, Xi Jinping extracted a lot of benefits for China while offering next to nothing in return.

The Russian dictator finally realized that such friendships had their limits after years of cultivating his relationship with Premier Xi. It is hard to do business with China. But it is even harder to do business directly with Xi. Due to Putin’s mindless invasion, Russia has been driven into China and cut off from the west.

After all, Russia is a $1.5 trillion economy whose leaders have made it seem like it’s a super power. It has tried to punch above its weight for decades, and generations of Russians have suffered as a result. When was the last time Russia ranked among the world’s top five economies?

Honestly, I don’t know.

Then why build such a huge army that drains so much economic resources? And what is the result of such an army? Nothing but pain, death, and suffering. Why bother getting into the game of global power projections when domestic economic projections refuse to qualify you as a fully developed economy?

West Has Some More Work to Do

As I noted in the early part of this article, the west did little to break up the 47 countries hiding behind the cloak of neutrality.

“Since the introduction of sanctions, the volumes of crude oil Russia is exporting have remained more or less steady,” said Saad Rahim, chief economist at global commodities trading firm Trafigura. “It’s possible that Russian oil is still being sold on to the EU and Western nations via middlemen.”

A simple graph will prove the truth of the above statement without extensive research.

Original Image from IEA, Text added by author

It is unclear who these unknown buyers are, but I suspect Russian oil is heading west. We can’t continue talking about oil sold to China and India, while ignoring the secret routes through which it travels to the west.

The west needs to do a lot more. Enforcement is lax, and filling those loopholes will put enormous strain on Russia’s economy.



Shankar Narayan

He didn't care what he had or what he had left, he cared only about what he must do.