China is tying itself in knots over Ukraine

A few hours after Vladimir Putin sent his tanks into Ukraine, Beijing announced that Russian wheat, previously barred because of fungal contamination, was now disease-free and large scale imports to China would begin. It was a first tangible sign of Xi Jinping’s willingness to cushion the blow of western sanctions on the Russian economy, and in effect underwrite Putin’s Ukrainian aggression.

Russia is one of the world’s biggest wheat producers, and trade is highly vulnerable to western restrictions. China’s wheat lifeline followed the signing last month of a 30-year contract for Russia to supply natural gas to China’s north east and a commitment to far greater energy cooperation. Significantly, the gas deal was in euros rather than US dollars, the usual currency of the resource markets.

China said its ultimate aim was to expand the use of its own currency, the yuan, in trade settlements between the two countries – a move that would further protect Russia from international financial sanctions.