Among other things, there is one major obstacle to the West's "costs" imposition on Vladimir Putin and his Russian economy – China. So far, a Xi Jinping has described, China has been a "sleeping lion" but today "the lion is awake" and with the Chinese President's first trip to Europe, as WSJ reports, western leaders are hoping to enlist his support over the crisis in Ukraine. However, privately, European diplomats concede that China's relationship with Russia remains solid and that was evidenced by their most recent investment in Russia's $10bn state-backed Direct Investment Fund (which just happens to be run by a former Goldman Sachs banker. It seems "money talks" once again and China will likely continue to play the middle ground.
US and European leaders, as the Wall Street Journal notes, will try to bring Xi to the other side of the red line…
European leaders are seizing on Chinese President Xi Jinping's inaugural trip to Europe to enlist his support over the crisis in Ukraine, but so far the Chinese leader has given no sign the diplomacy will succeed in driving a wedge between China and its strategic partner Russia.
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In a Thursday address commemorating the 50th anniversary of China's diplomatic ties with France, Mr. Xi conveyed his views of foreign policy through grand pronouncements, quoting Napoleon Bonaparte's warning that China was a "sleeping lion" that would shake the world if awakened.
"Today, the lion is awake, and it's peaceful, nice and civilized," Mr. Xi said.
From the start, however, the Ukraine crisis has loomed large over Mr. Xi's closely watched visit.
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European policy makers have sought to cast as a diplomatic victory China's decision to abstain from a United Nations Security Council vote condemning a referendum that cleared the way for Crimea to break away from Ukraine and join Russia.
But that is just spin as even they know that is unlikely China will take up support 'against' Russia…
Privately, European diplomats concede that China's relationship with Russia remains solid. China has often joined Russia in vetoing Security Council resolutions on issues like the civil war in Syria. In addition, Beijing's abstention vote on Crimea was less a departure from Moscow than a move consistent with Beijing's long-standing rejection of any meddling by foreign countries in its own domestic affairs, said a senior French diplomat.
Mr. Xi is walking a tightrope as he weighs China's partnership with Russia against its growing economic ties with the West.
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"China will try to steer a middle course" on Ukraine, said Gudrun Wacker, an Asia specialist at the German Institute for International and Security Affairs in Berlin. "The conversation will be about what has to happen to make sure that Russia doesn't become an obstacle in these other negotiations."
While the three-day trip to Germany is unlikely to produce diplomatic breakthroughs, it could strengthen economic ties.
But, as The FT reports, it is always about "follow the money" and China is not pulling back from Russian investment at all…
Russia’s $10bn state-backed fund has tapped Chinese and Middle Eastern sovereign wealth fund money in a bid to show it can attract foreign capital into the country even if US and European investors turn away following the annexation of Crimea.
Russian Direct Investment Fund (RDIF), which was set up by President Vladimir Putin three years ago and which counts Blackstone chief executive Stephen Schwarzman, Apollo’s co-founder Leon Black and Apax’s boss Martin Halusa on its international advisory board, is leading the purchase of a $200m stake in Sodrugestvo, a large oilseed processor and trader, alongside sovereign wealth funds including China Investment Corp.
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“Obviously, what we see now, is that US and European investors are slowing down their investment pace. I expect we’ll do many more deals with Chinese and Middle Eastern investors going forward,” Mr Dmitriev said. “But we have significant hope of de-escalation going forward.”
But it's not just China…
In July, Mr Dmitriev, a former Goldman Sachs banker, announced the appointment of Ahmad Mohamed Al-Sayed, the chief executive of the Qatar Investment Authority, to RDIF’s international advisory board, heralding a possible collaboration with Qatar.
So Stephen Schwarzmann, Leon Black, Martin Halusa, the Qatar Investment authorirty, and Dominique Strauss Kahn are all on the advisory board of the RDIF and it's run by this guy:
Kirill A. Dmitriev, Chief Executive Officer, Russian Direct Investment Fund
Kirill Dmitriev is the Chief Executive Officer of the Russian Direct Investment Fund. Before being asked by the Russian government to run the fund, Mr. Dmitriev was President of Icon Private Equity, a leading private equity fund in the CIS with over $1 billion under management. Prior to establishing Icon, he was Co-Managing Partner of Delta Private Equity Partners, a leading private equity fund in Russia with over $500 million under management. Prior to joining Delta Private Equity in 2002, Mr. Dmitriev was Deputy General Director at IBS, the top Russian IT services provider.
He also worked as an investment banker with Goldman Sachs in New York and as a consultant with McKinsey & Company in Los Angeles, Moscow and Prague. Mr. Dmitriev is a Young Global Leader of the World Economic Forum in Davos and past Chairman of the Russian Venture Capital and Private Equity Association. He holds a BA in Economics with Honors and Distinction from Stanford University and an MBA with High Distinction (Baker Scholar) from the Harvard Business School.
Once again, Goldman's tentacles are embroiled…
via Zero Hedge http://ift.tt/1jFngjl Tyler Durden