IT'S AN EVER MORE UNIPOLAR WORLD:

The conflict has left Beijing in an exceptionally awkward position. A short, sharp war that toppled the pro-Western Ukrainian government -- i.e. what Putin appears to have originally expected -- would undoubtedly have been a big win for China, severely undermining the unity and influence of the Western liberal order that it also seeks to overturn. It's possible this was the bright future Xi was told to expect when, just before the war, Putin met him in February and the two leaders signed a joint statement declaring there were now "no limits" to the China-Russia partnership. Fast forward to today, however, and the protracted conflict, and the exposure of the Russian army's simultaneous weakness and brutality, has turned into a serious headache for China.

Diplomatically, Beijing has attempted to straddle the fence on the war by supporting Russia rhetorically and morally even as it refrains from providing it with any of the material support Moscow has begged for with growing desperation. Russia has had to settle for shoddy, second-hand armaments from North Korea and Iran instead of the high-tech kit from China that it probably expected to receive. Even Washington has, almost grudgingly, admitted that China has so far complied with its sanctions on Russia.

The distinctly materialist Marxist-Leninist Chinese Communist Party (CCP) probably assumed its response would be appreciated around the world. Instead, no one is happy: the West has reacted with moral outrage that China hasn't openly denounced Russia, while the Russians doubtless privately seethe with a sense of betrayal, having discovered that "our Chinese friends are tough bargainers", as Putin let slip.

Overall, the war is increasingly turning into a diplomatic disaster for Beijing, helping to drive perceptions of China to record lows around the world. In particular, it has shattered previously close ties with Europe. The European Union is now preparing a series of measures targeting forced labour and "economic coercion" that are likely to limit the EU-China trade relationship. Even the once reliably friendly -- some might say naïve -- Germans are now rapidly rethinking their tight economic relationship with China. The newly elected Giorgia Meloni, soon-to-be prime minister of Europe's third-largest economy, is also a ferocious China hawk who has pledged to reconsider Italian support for China's Belt and Road Initiative and make Taiwan "an essential concern for Italy". Meanwhile, once-enthusiastic countries in Eastern and Central Europe, led by the Baltic States, have begun to drop out of diplomatic and economic arrangements with Beijing. And with the advent of the war worsening existing concerns about Xi's draconian zero-Covid policies, China has, as EU Chamber of Commerce president Jörg Wuttke recently pointed out, begun to rapidly lose "its allure as an investment destination" for European companies overall.

For Xi, this could not come at a worse time. China is facing an exceptionally challenging economic outlook, including a worsening real-estate crisis, a debt bubble totalling at least 300% of GDP, an unprecedented level of capital flight, and a youth unemployment rate already over 20% -- not to mention the damage inflicted by rolling Covid lockdowns. China simply cannot afford to lose additional trade and investment right now, especially from an economic partner as large as Europe. Meanwhile, the broader inflationary and recessionary pressures unleashed by the war and Western energy sanctions threaten to badly limit the market for worldwide exports at the very moment they are most needed by China's struggling economy.

Worst of all, China is only two weeks away from the 20th Party Congress, the defining event of the Chinese Communist Party's cutthroat internal politics.

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