A recent opinion piece in the British “Daily Telegraph” warned that if Russia controls more of Ukraine’s territory, it would have more natural resources available at hand to strengthen cooperation with China, and the bilateral industrial and technological alliances would be a greater threat.
Andrew Orlowski, the author of the article, cited the example of the semiconductor industry. The manufacturing of semiconductors needs high-grade neon and palladium. Ukraine provides over 90% of the high-grade neon and 35% of the palladium used by US chip companies.
Additionally, half of Intel’s neon sources come from Eastern Europe. As such, the global microchip industry, which underlies many other sectors, very much depends on the goodwill of Vladimir Putin.
Orlowski said, despite being sanctioned by the West, Russia, which has a large amount of raw materials needed by the technology industry, still has ways to counter it. Under the framework of deepening cooperation between Russia and China, China is confident that it can obtain the resources that Western countries urgently need. China will be able to further expand its overall strength by combining its strong productivity, the stable supply of raw materials from Russia, and the intellectual know-how stolen from Western companies.
Orlowski said, in the future, historians may wonder why the West would be so willing to create joint ventures with Chinese partners in exchange for access to the Chinese market and eventually “lose control as part of the Faustian bargain.”
Orlowski cited a striking example of British semiconductor and software design company ARM, which makes its money entirely from licensing its silicon designs.
In 2020, ARM’s parent Softbank fired Allen Wu, China’s ARM CEO. But Wu simply refused to go, and went to work as usual the next day. And as such, the firm effectively unilaterally declared independence. Later, ARM China started developing its own products with its own branding.
Russia, on the other hand, has also found its own armament designs copied by China, including its Shenyang J-11 fighter jet, which is based on the Russian Sukhoi Su-27. However, in today’s international political environment, Russia will have more incentives to cooperate with China. China’s Beidou is already integrated into Russia’s Glonass satellite navigation system.
In addition to raw materials, Orlowski reminded that Russia’s technological talents and strengths would help China accelerate the technological development gap with the West. Russian information software engineers are already in high demand in the West, and Russia and China could successfully export the new TCP/IP Internet protocol suite in the future, making it easier for authoritarian regimes everywhere to restrict civil liberties and rights.
Orlowski pointed out that while the Russia-China alliance may not be sustainable, the scientific, technological, and industrial cooperation with China will help Russia rebuild its economy, and the free and democratic world should not take it lightly.