A classified assessment by UK foreign policy analysts, leaked to this newspaper, dissects the strategic glue binding Beijing and Moscow. The answer, as ever, comes down to the bottom line: mutual opposition to the dollar-denominated world order. The alliance is less a marriage of convenience and more a joint venture in de-dollarisation, with each party bringing complementary assets to the balance sheet.
Russia supplies raw materials and military hard power; China offers manufacturing capacity and financial firepower. The assessment notes that their partnership is asymmetrical: China is the senior partner economically, with its $17 trillion GDP dwarfing Russia's $1.7 trillion.
Yet Russia's veto at the UN Security Council and its nuclear arsenal provide valuable political leverage. The glue is not ideological kinship but shared resentment of US-led sanctions and the weaponisation of the SWIFT system. The analysts warn that this coalition is unstable: over time, China's economic dominance will strain the relationship, much like a leveraged buyout where one partner controls the cash flow.
For now, however, the market prices in their continued cooperation. The risk to the West is clear: a coordinated shift away from dollar reserves and into gold or yuan-denominated assets could trigger gilt yield volatility and capital flight from emerging markets. The assessment concludes that the UK Treasury should stress-test its portfolio for a scenario in which the Sino-Russian axis accelerates de-dollarisation.
The market never sleeps, and neither does this alliance.
