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Russia and China: the Potential of Their Partnership CSS Analyses in Security Policy CSS ETH Zurich No. 250, October 2019, Editors: Fabien Merz and Lisa Watanabe Russia and China: The Potential of Their Partnership Russia and China are celebrating their “strategic partnership”, and have been vastly expanding their cooperation since 2014. Their close alliance is based on economic and geopolitical considerations. While it is mutually beneficial, it also has its limitations. However, in the mid- term, both China and Russia appear to be willing to overlook potential fields of tension, for instance in Central Asia. By Jeronim Perović and Benno Zogg Russia is increasingly orienting itself toward Asia. President Vladimir Putin’s vision of a “Greater Europe”, which pictured a free-trade zone from Lisbon to Vladivostok, has given way – at least since the Ukrainian crisis of 2014 and the subsequent Western sanctions and Russian counter-sanctions – to the idea of a “Greater Eurasia”. Moscow now tends to highlight its position of power at the center of the Eurasian landmass and the new importance of Asia for Russian foreign policy. China plays a crucial role in this context. There is no other head of state whom Putin has met more often than President Xi Jinping. Pro-government media outlets in Russia depict China in a very positive light, and public perceptions of the neighboring country have also improved. Vladimir Putin and Xi Jinping discussed their cooperation and made bliny, Russian pancakes, at the Eastern Economic Forum in Vladivostok in September 2018. Anadolu Agency / kremlin.ru With their “strategic partnership”, Putin and Xi are demonstrating more than just symbolic unity. Trade between the two countries has rapidly increased in the past after long hesitation, Russia has begun partnerships with the respective other veto years. The two national economies appear selling latest-generation arms to China, and nuclear power. At the international to be mutually complementary: Russia and in 2018, for the first time ever, a level, the two states are united by their supplies energy and raw material, while Chinese troop contingent participated in opposition to the influence of the US and China exports technology, industrial goods, Russia’s large-scale Vostok (“East”) military its allies in international bodies such as the and consumer goods. There is potential for maneuvers. UN. Russia and China both reject further expansion in the areas of agriculture “interference” by the West in the internal and tourism. Russian farming produce is in This intensification of their cooperation is affairs of sovereign states. They favor the increasingly high demand in China, and based on a wide range of common interests. notion of a “multipolar global order” and Russia has become a popular travel At a fundamental level, the fact that both the coexistence of multiple value systems as destination for Chinese tourists. Moreover, powers lack other allies favors their an alternative to the emphasis on a “liberal” © 2019 Center for Security Studies (CSS), ETH Zurich 1 CSS Analyses in Security Policy No. 250, October 2019 order and universal values by the democratic territories of China, the demographic im- tic extraction, Russia is likely to gain im- countries of the West. balance remains striking. To be sure, in a portance as an energy supplier in the 2018 survey, three quarters of the Russian coming decades. Their partnership may have far-reaching respondents perceived China in a positive effects on the global balance of power. light, and Russia is trying to position itself For Russia, China as a consumer is an Experts disagree, however, over the sus- geopolitically as a Eurasian great power. important alternative market to Europe. It tainability of this close relationship. Both Nevertheless, despite its anti-Western rhet- was no coincidence that Putin traveled to powers seem to be willing, however, to oric, Russia views itself as linked to Europe China just weeks after the annexation of deepen their relations, even though their in cultural terms and as partaking in a Crimea to sign a gigantic trade agreement relationship is to some extent asymmetric shared pan-European past. on Russian gas exports to China worth and they have certain divergent interests. USD 400 billion over the next 30 years, Trade and Energy following nearly 20 years of unsuccessful From Hostility to Cooperation It is in the economic sphere that the closer negotiations. The very fact that Russia and China are relations, but also the asymmetry between even celebrating such a close strategic part- the two powers are most prominent. Over However, the increased trade volume nership today is remarkable, considering the past decades, Russia and China have carries different weight for the two sides. that they were engaged in a hostile standoff continuously reinforced their trade rela- Apart from the EU as a whole, there is no from the late 1950s onwards and actually tions. Not only did the volume of trade in single country with which Russia does fought an armed conflict in 1969 on the 2018 increase by 25 per cent compared to more business than with China. Although Ussuri River, which marked the border be- the previous year, to over USD 100 billion, the two countries were roughly on par in tween the two states. Geopolitically, the but an increasing share of the bilateral terms of economic performance when the Soviet-Chinese conflict served the interests trade was conducted in yuan and rubles, Soviet Union collapsed, China’s GDP of the US. However, already shortly before rather than US dollars. Already, more than today is six times larger, and nominally the demise of the Soviet Union, their rela- one sixth of the Russian central bank’s for- even eight times larger than Russia’s. tions began to improve, gradually and in- eign currency reserves are held in yuan. crementally. In 1996, the two sides empha- There is therefore still a degree of reticence sized their “strategic partnership” for the Bilateral trade has increased not only in on the Russian side that manifests itself in first time, and the border dispute along the quantitative, but also in qualitative terms. the gas trade. Russia does not want to be- Ussuri was finally resolved in 2005. China is a major customer of Russia’s de- come dependent on a single buyer. Plans fense industry. Before 2014, Russia had re- have long been underway for an “Altai Pipe- Thus, the rapprochement between the two fused to export its latest-generation weap- line” that would link gas fields in Eastern powers had already begun long before the ons technology, fearing that China might and Western Siberia, providing access to latest tensions between Russia and the copy it. These concerns must have been as- markets in China or Europe, depending on West. Russia realized early on supply and demand. However, such projects that Asia was gaining economic It is in the economic sphere that require enormous investment. The degree of weight, and was intent on in- the closer relations, but also the involvement of Chinese companies here tensifying its relations with the will be an important indicator for the future Asian states, including with the asymmetry between the two of Russian-Chinese energy relations. ascendant economic power of powers are most prominent. China. From 2014 onward, if BRI Without Russia not before, geopolitical interests The emerging shape of the Belt and Road came to the fore. By emphasizing the stra- suaged since: For instance, Russia sold the Initiative (BRI) underlines China’s status tegic partnership with China, Putin intro- Chinese armed forces its S-400 air defense as a dominant economic power. The duced an ostensible alternative to the West. system in 2018 and its Su-35 fighter in initiative, a geo-economic megaproject 2019. Then again, in many other areas, promoted by China, comprises ongoing Since then, Xi and Putin have used every Chinese technology is superior to Russia’s, and future development and infrastructure occasion to affirm their close friendship. and it can therefore fill the gap left by projects worth approximately USD 1 tril- The two heads of state have so far met 28 Western companies. Chinese telecom giant lion in more than 60 countries. Russia has times and have signed many communiqués Huawei is building a 5G cellular network lobbied for BRI trade corridors to transit and treaties – most recently, on the occa- in Russia, and Chinese face recognition its territory and hopes that this will help sion of Xi’s extended state visit to Moscow technology is used in Russian cities such as develop a high-tech industry. From the in June 2019, confirming a “comprehensive Moscow. Russian perspective, as spelled out in a strategic partnership of coordination for a memorandum of understanding between new era”. The energy sector accounts for a significant the two countries in 2016, strengthening share of Russian exports to China. Since production and infrastructure in the Despite their rapprochement, cultural dif- 2016, Russia has been China’s main oil underdeveloped and thinly settled Far East ferences and reservations remain. The two supplier ahead of Saudi Arabia. State- would be especially desirable. cultural spheres remain alien to one anoth- owned Chinese energy corporations al- er. In the 1990s, Russia had feared that its ready own one fifth of Russia’s Arctic liq- However, Russia only plays a minor part in territory would by overrun by Chinese mi- uefied natural gas projects and supply half the BRI. As described above, the energy grants – a specter that has not materialized. of the equipment needed for oil drilling in sector is the only business sector where Nevertheless, in the Russian Far East, bor- Russia. Given the increasing energy con- China has invested significantly in Russia. dering on the population-rich neighboring sumption and China’s diminishing domes- Kazakhstan, which is one-tenth the size of © 2019 Center for Security Studies (CSS), ETH Zurich 2 CSS Analyses in Security Policy No.
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