STRATEGIC TRENDS 2018 Key Developments in Global Affairs
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Center for Security Studies STRATEGIC TRENDS 2018 Key Developments in Global Affairs Editors: Oliver Thränert, Martin Zapfe Series Editor: Andreas Wenger Authors: Brian Carlson, Severin Fischer, Tim Prior, Jack Thompson CSS ETH Zurich STRATEGIC TRENDS 2018 is also electronically available at: www.css.ethz.ch/publications/strategic-trends Editors STRATEGIC TRENDS 2018: Oliver Thränert, Martin Zapfe Series Editor STRATEGIC TRENDS: Andreas Wenger Contact: Center for Security Studies ETH Zurich Haldeneggsteig 4, IFW CH-8092 Zurich Switzerland This publication covers events up to 5 March 2018. © 2018, Center for Security Studies, ETH Zurich Images © by Reuters ISSN 1664-0667 ISBN 978-3-905696-62-2 CHAPTER 2 Room for Maneuver: China and Russia Strengthen Their Relations Brian G. Carlson At a time of turmoil in the West, China and Russia pose growing challenges to the liberal international order. The China-Russia relationship has grown stronger in recent years, as the two countries have increased coordination on North Korea and other issues. China and Russia are not about to form an alliance, but neither are they likely to drift apart in the near future. Their shared concerns about US power and resistance to liberal norms provide a strong basis for a continued close relationship, albeit one increasingly tilted in China’s favor. Russian President Vladimir Putin and Chinese President Xi Jinping shake hands during a meeting in Danang, Vietnam, 10 November 2017. Sputnik, Konstantin; Zavrazhin, Kremlin / Reuters 29 STRATEGIC TRENDS 2018 As US President Donald J. Trump’s interference in the 2016 presidential first year in office drew to a close, his election, hindered Trump’s ability to administration increasingly pointed to conduct diplomatic outreach toward the national security challenges posed Russia. Regardless of domestic po- by China and Russia. The new Na- litical constraints, however, attempts tional Security Strategy of the Unit- to pry Russia away from China were ed States, issued in December 2017, never likely to succeed. The Cold War named China and Russia as “revision- context that gave rise to Kissinger’s ist powers” that “challenge American strategy is long gone. Russian leaders, power, influence, and interests, at- having absorbed the painful lessons of tempting to erode American security the Sino-Soviet split, recognize that and prosperity.”1 The summary of the their country’s security and prosper- 2018 National Defense Strategy, un- ity depend on maintaining friendly veiled in January 2018, identified the relations with their increasingly pow- “central challenge to U.S. prosperity erful neighbor, regardless of the state and security as the reemergence of long- of relations with the US. For its part, term, strategic competition” by these re- China needs friendly relations with visionist powers.2 Russia in order to assure itself of a “strategic rear” to the north, given These policy declarations represented its tense relations with several other a shift from one year earlier, when neighboring countries. Moreover, the Trump entered office amid specu- common positions that China and lation that he would pursue a rap- Russia hold on many international is- prochement with Russia. One of the sues, including their discomfort with purported goals of such a policy was US power, objections to an interna- to wrest Russia away from China’s em- tional order reflecting liberal norms brace, using a strengthened US-Russia and values, and shared desire to resist relationship as leverage over China. perceived threats to their forms of Such an attempt at triangular diplo- domestic governance, provide ample macy would have been straight out reason for them to maintain close of the playbook of former secretary of relations. state Henry Kissinger, with the roles of Moscow and Beijing reversed this As Jack Thompson argues in this vol- time.3 ume, a series of factors both foreign and domestic are placing US foreign Bipartisan domestic opposition, based policy under stress. In the coming partly on concerns about Russia’s years, the challenge that China and 30 ROOM FOR MANEUVER Russia pose to the liberal interna- Russia sought both an economic tional order will be one such factor. lifeline and a diplomatic partner to For both the US and Europe, the ex- reduce its isolation. China was the tent of coordination between China obvious candidate. Subsequent de- and Russia deserves close watching. velopments, including the contin- In recent years, this coordination has ued stalemate in Ukraine, Russia’s grown stronger. A think tank report intervention in the Syrian civil war, published in 2016, co-authored by and allegations of Russian meddling Russian and Chinese experts, argued in US and European elections have that “Russia-China rapprochement ensured continued friction in rela- in security is special in that the two tions between Russia and the West. countries have come close to the line China, meanwhile, perceives grow- that distinguishes partnership from a ing pressure from the US as its rise to military and political alliance,” though power gathers force. These tensions, neither state wished to cross this line.4 in turn, lay the groundwork for sus- That same year, in an article aimed at tained cooperation between China Western audiences, a former vice for- and Russia. eign minister of China argued that the two countries, despite having no in- The growing strength of the China- tention to form an alliance, neverthe- Russia relationship has belied the ex- less shared sufficiently close interests pectations of many Western analysts. and values to ensure that their partner- The two countries remain unlikely to ship would remain durable.5 form an alliance, partly because nei- ther wishes to be dragged into the China and Russia have gradually other’s regional conflicts. Moreover, strengthened their relationship over the balance of power within the rela- the past quarter-century. Vladimir tionship is shifting rapidly in China’s Putin’s return to the Russian presi- favor, which could eventually become dency in 2012 and Xi Jinping’s ac- a major concern for Russia. To date, cession to power in China that same however, the two countries have set year were important stimulants to the aside their differences in order to bilateral relationship. The onset of the pursue common interests. Their “stra- Ukraine crisis strengthened relations tegic partnership”, though subject further by driving Russia into China’s to limitations, is not likely to break arms. Facing Western sanctions for its down in the near future. Under this annexation of Crimea and its support arrangement, which is looser than an for insurgents in eastern Ukraine, alliance, the two countries offer each 31 STRATEGIC TRENDS 2018 other a measure of diplomatic sup- China-Russia relationship through- port on a range of issues and at least out the post-Soviet era. The volume “friendly neutrality” in each other’s re- of bilateral trade consistently pales in gional disputes. In 2018 and beyond, comparison to China-US, China-EU, the China-Russia relationship will and Russia-EU bilateral trade vol- continue to exert significant influence umes. Russia has also relied primarily on issues of international concern, un- on Western financial markets for ac- folding at the bilateral, regional, and cess to credit. global levels. In 2014, the year that the West began The Bilateral Level: Economics, to impose sanctions, the volume of Energy, and Arms China-Russia bilateral trade reached In the face of Western sanctions fol- an all-time high of 95 billion USD. lowing the onset of the Ukraine crisis, However, this figure fell to 68 bil- Russia attempted a pivot to China in lion USD in 2015, largely because of order to compensate, at least partially, a sharp drop in energy prices.6 The for the resulting economic losses. The trade volume remained flat in 2016 chief result, however, was that China and remains well short of the 2014 increased its bargaining leverage in the peak. Some Russian critics concluded two strongest sectors of the bilateral that Russia’s attempted pivot to Asia, economic relationship, namely energy which in practice focused heavily on and arms sales. In both sectors, nego- China, had been largely a failure in tiations on important deals had begun economic terms.7 The most signifi- before the Ukraine crisis but had failed cant results of bilateral economic di- to reach conclusion. After the out- plomacy have been major agreements break of the crisis, the two countries on natural gas and weapons sales. achieved important breakthroughs in these negotiations, with results During Putin’s visit to China in May that were especially advantageous for 2014, China and Russia struck a 400 China. billion USD gas supply deal, with Russia’s Gazprom agreeing to supply The benefits that Russia hoped to the China National Petroleum Cor- achieve from its economic outreach to poration (CNPC) with up to 38 bil- China have been slow to materialize. lion cubic meters of gas per year for 30 This should not have been surprising, years, starting in 2018. Analysts esti- considering that bilateral economic mated that the price China would pay ties have been a weak link in the for the gas, which was not disclosed 32 ROOM FOR MANEUVER Economic Ties between Russia, China, the US and the EU in 2016 Volume of trade (in billion USD) Russian Federation 8.4 30.1 12 37.9 131 125.8 United China States 426.3 (Mainland) 74.8 274.6 198.1 409.5 362.5 European Union Note: When a disparity existed between data reporting the same movement of trade in a different way – for example, US exports to China versus Chinese imports from the US – this graphic uses the average of the two figures. Source: IMF Data, Direction of Trade Statistics (DOTS) publicly, would be comparable to the The gas deal allowed Putin to demon- price that European customers were strate that Russia enjoyed alternative paying for supplies from Gazprom.8 economic and diplomatic options in Initially, Gazprom expected that Chi- the face of Western sanctions.