China can tolerate occupation of the Donbass because this is a grey area. Yet, the invasion of Ukraine could be very problematic because it undermines the idea of sovereignty, the most important political principle for China. It also challenges a joint statement released during the opening ceremony of Beijing’s Winter Olympics, in which Russia and China called for “a new kind of relationships between world powers on the basis of mutual respect, peaceful coexistence and mutually beneficial cooperation”.
This led China's Foreign Minister Wang Yi in response to the Ukraine conflict to call on “all parties to exercise restraint”. Although this is a neutral position, it unveils China’s disappointment towards Russia, which in all likelihood it is being manifested in private communications with Moscow. However, publicly, China will continue to provide Russia with a get-out-of-jail-free card not to break their marriage of convenience. Beijing tends to operate by pursuing long-term political objectives; it may reluctantly continue to support Russia because its needs Moscow on its side to erode the US hegemony and the Liberal International Order – which is China long-term goal. This may come at a cost of prestige and also at a short-term economic cost. China’s commercial ties to Ukraine are modest, although have been fast-growing.
Meanwhile, Ukraine for Putin is a priority, and until this invasion does not escalate beyond a local conflict, there will be very little that China can do to stop it. Because of this, I am sceptical about Moscow stopping an invasion because Xi Jinping tells Putin to do so. Nevertheless, should tensions escalate, for instance, into the Mediterranean – where there are both NATO and Russian naval assets – this is something the China would not tolerate because it would affect the bulk of its trade with Europe.
We recently saw China tolerating the military junta who conducted a coup in Myanmar. Although China was opposed the coup due to its positive relationship with Aung San Suu Kyi government, by that point it had to accept that the Tatmadaw – Myanmar's military – as the ruler to provide stability in the country.
As similar logic might play out in Ukraine. If Putin can have an easy military win, then China will have to accept this, at least publicly. But if Ukraine becomes a quagmire, China will have greater leverage and could escalate pressure on Russia.