An Olympic win-win

Putin met Xi as tension over Ukraine rises [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( Russian President Vladimir Putin went to Beijing to do more than watch a glitzy Winter Olympics opening ceremony. Putin also held his first face-to-face meeting with Chinese President Xi Jinping in more than two years. It comes as he tests the U.S. and its allies with a massive troop buildup near the Ukrainian border. Key reading: - [Putin Courts China’s Xi for Help in Showdown With the West]( - [Putin Could Burst Xi’s Olympic Dream With a War in Ukraine]( - [Winter Olympics Opening Gives China a Chance to Spin Its Image]( - Keep up to date with our [rolling coverage]( of the tensions with Russia over Ukraine The Russian leader insists he does not plan to invade, but he is being highly provocative. His antics have ensured he has the full attention of U.S. President Joe Biden and a retinue of other leaders lining up to seek calls and meetings. Xi knows a fair bit himself about the dance with the West. He has sought to expand China’s strategic and economic reach in the face of pushback from America and others. In alignment, Russia and China can be a powerful combination. So the fact their foreign ministers “coordinated their stances” on Ukraine in talks yesterday (as per a Chinese statement) is sure to cause unease. Make no mistake — despite Xi calling Putin an “old friend,” this is a very transactional relationship, in which it’s clear China views itself as the senior partner. But right now they have reason to collaborate. Putin may have sought an assurance from Xi that Beijing would stay neutral, whatever happens with Ukraine. If Western nations were to enact heavy sanctions, China could expand its energy purchases from Russia. No doubt it suits Xi to have Biden preoccupied with Putin rather than focusing his glare on China. The Beijing Olympics’ motto is “Together for a Shared Future.” That perhaps sums up the way it works for Russia and China, too, when it suits.— [Rosalind Mathieson]( Putin and Xi at the Group of 20 summit in Osaka, Japan, in 2019. Photographer: Kim Kyung-Hoon/Pool via Bloomberg Click [here]( for this week’s most compelling political images. And share this newsletter with others too. They can sign up [here](. Global Headlines Devastating departures | The crisis engulfing the British government deepened as four of Prime Minister Boris Johnson’s top aides — including his chief of staff — [quit]( yesterday. Perhaps the most damaging was the exit of Munira Mirza, one of his longest-standing allies, who accompanied her resignation as head of the policy unit with a devastating attack on Johnson’s judgment. - In the prime minister’s post-Brexit vision, Britain was to be the U.S.’s firmest ally in defense of liberal values around the world, but as [Kitty Donaldson]( explains, he’s been left on the [sidelines]( of the Ukraine crisis, exposing the limitations of that idea. Fake film | Moscow has considered staging a propaganda video — including scenes of an explosion and corpses — that would purport to show an attack on Russia or Russian speakers as a [pretense]( to invade Ukraine, according to a U.S. intelligence assessment. Washington says it’s publicizing the possibility to undermine the effort after U.S. officials repeatedly said Russia would falsify a rationale to attack. Russian Foreign Minister Sergei Lavrov rejected the claim. Biden says planned sanctions if Russia invades Ukraine would have “a devastating impact” on its economy. But the Kremlin has spent the last eight years [preparing]( by building up currency reserves and reducing foreign debt. Combined with rising oil prices, that may temper the pain of any potential penalties, [Anya Andrianova]( reports. Reagan remix | With Biden unable to even get Democrats to back his $2 trillion Build Back Better package, his administration appears to have [seized]( on a new way to clarify its aims. One little phrase — “modern supply-side economics” — is causing a stir, in part because it borrows from the conservative dogma popularized by Ronald Reagan. Explainers you can use - [What We Know About Omicron and Its Subvariant BA.2]( - [How India Plans to Develop Crypto on Its Own Terms]( - [To Save Western U.S. Forests, Cut Them Way Back, Study Suggests]( Welfare cuts | Prime Minister Narendra Modi’s government is holding back on [social safety]( nets in its latest budget and betting on a world-beating economic rebound to create jobs and plug some of India’s inequalities as the latest virus wave recedes. It’s an unusual move for the ruling party as it heads to several state elections next week, amid simmering anger over unemployment and inflation. Best of Bloomberg Opinion - [U.S. Must Fix Talent Recession to Beat China: Adrian Wooldridge]( - [China and Russia Are Frenemies With Benefits: Clara F. Marques]( - [Returning to Normal After Covid Will Take Vigilance: Editorial]( Contentious cabinet | Peruvian President Pedro Castillo is facing protests and [losing]( support he needs to fend off impeachment over a group of controversial cabinet picks. They include Prime Minister Hector Valer, who has denied allegations of domestic violence against his wife and daughter, as well as a minister of women who has spoken against gender equality and an environment chief with no public management experience. Bloomberg TV and Radio air Balance of Power with [David Westin]( weekdays from 12 to 1pm ET, with a second hour on Bloomberg Radio from 1 to 2pm ET. You can watch and listen on Bloomberg channels and online [here]( or check out prior episodes and guest clips [here](. News to Note - Biden said a “major terrorist threat” was [eliminated]( during a U.S. raid in northwest Syria in which Islamic State leader Abu Ibrahim al-Hashimi al-Qurayshi was killed. - The European Union wants its upcoming Chips Act to [rival]( that of the U.S., but there are increasing doubts from member states and European lawmakers over how to make existing funds available, sources say. - Northern Ireland First Minister Paul Givan [quit]( yesterday, triggering a political crisis as the U.K. and the EU struggle to resolve the region’s post-Brexit trading arrangements. - Spain’s parliament approved a labor reform that will [unlock]( billions of euros in European pandemic aid, with Prime Minister Pedro Sanchez having to rely on the opposition to get the law passed. - Nigeria announced birth-control measures including expanded access to family planning to [address]( high fertility rates in Africa’s most populous country. Pop quiz, readers (no cheating!). In which African country was there an attempted military coup this week? Send your answers to balancepower@bloomberg.net. And finally ... India’s top diplomat in Beijing [boycotted]( the Winter Olympics ceremonies after Chinese media reported that a People’s Liberation Army soldier who took part in deadly clashes on the countries’ Himalayan border had participated in the torch relay. It comes as the U.S. leads a separate stay away from the games over alleged human rights abuses in the Xinjiang region and the crackdown in Hong Kong, making official attendance by heads of state and diplomats very political. The soldier, Qi Fabao, during the Beijing 2022 Olympic torch relay. Photographer: China News Service/Getty Images Like Balance of Power? [Get unlimited access to Bloomberg.com](, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters. 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