70 THE CHINESE ECONOMY The Chinese Economy, vol. 47, no. 3, May–June 2014, pp. 70–87. © 2014 M.E. Sharpe, Inc. All rights reserved. Permissions: www.copyright.com ISSN 1097–1475 (print)/ISSN 1558–0954 (online) DOI: 10.2753/CES1097-1475470305 JING -YUN HSU AND JENN -JAW SOONG Development of China-Russia Relations (1949–2011) Limits, Opportunities, and Economic Ties Abstract: Since 1996, China and Russia have been united in what both call a “stra- tegic partnership.” Although the relationship is currently strong, the future is quite uncertain, because the relationship has never been as solid as it seemed, nor as dangerous. Some scholars strongly doubt the strategic nature of the China-Russia partnership and take a gloomy view of the future of this bilateral relationship, but it would be dangerous to conclude that the Sino-Russian strategic partnership is purely tactical, impulsive, and baseless. This article provides a roughly chronologi- cal historical overview of China’s bilateral relations with Russia from 1949 to 2011, discusses the major foreign and domestic elements of China’s current relations with Russia, offers case studies of incidents that illustrate these elements, and indicates the likely trajectory of China’s future bilateral relations with Russia and the kind of foreign development pattern that will unfold. Sino-Russian relations have rapidly strengthened since the end of the cold war, but it was not until 1996 that China and Russia developed friendly relations, becoming diplomatically united in a so-called strategic partnership. During the Putin admin- istration, Moscow has demonstrated a far more vivid interest in playing a positive role in Northeast Asia. At the same time, contemporary Russian diplomatic strategy is enhancing its geopolitical understanding of international relations, particularly in its eastern dimension. Russia considers oil and natural gas to be the paramount strategic tools of its diplomacy and hopes to exploit new opportunities for its natural Jing-Yun Hsu is a post-doctoral researcher in the Department of Political Science at National Cheng Kung University, Taiwan; email: [email protected]. Jenn-Jaw Soong is a professor in the Graduate Institute of Political Economy at National Cheng Kung University, Taiwan; email: [email protected]. 70 MAy–june 2014 71 resources in the Asia-Pacific market in order to maximize its present role as the most important supplier in the region. Although the relationship between China and Russia is currently strong, the future is quite uncertain, because the relationship has never been as solid as it seemed, nor as dangerous. Some scholars strongly doubt the strategic nature of the China-Russia partnership, and take a gloomy view of the future of this bilateral relationship. Bearing this in mind, it is nevertheless more difficult to conclude that the Sino-Russian strategic partnership is purely tactical, impulsive, and baseless. This article provides an historical overview of China’s bilateral relations with Russia from 1949 to pre2011, discusses major foreign and domestic elements of China’s current bilateral relations with Russia, and indicates some likely trajecto- ries of China’s future bilateral relations with Russia, focusing especially on energy cooperation. Two important factors have led to the strategic alliance between China and Rus- sia. First is the improved political and diplomatic environment between the two countries, which recently were able to resolve a number of contentious problems, including border disputes and arms reduction that plagued their relationship over the past few decades. As both countries now tend to cooperate at the international level, and in some cases share similar goals or even the same position on international issues, many scholars and political players view their growing strategic alliance as a threat to regional and world order. Ultimately, the strength of the alliance and its likelihood to pose a significant challenge to the future world order will be defined by its confrontation with the hegemonic role of the United States. The second factor affecting the mutual relationship is the growing bilateral trade between the two nations, especially in the energy sector, which will be a determinant of future trade. Although many difficulties were encountered in the oil and gas sectors over the last two decades, especially in the construction of pipelines from Russia to China, the future is more promising and encouraging for the development of trade in energy. The recent launching of an oil pipeline from Russia to China via the East Siberia link, and the agreement whereby Russia will supply 70 billion cubic meters (bcm) of gas per year for the next decade are huge projects, which could bring the two states even closer than ever. Relations with the USSR During the Cold War (1949–90) From the end of World War II to the collapse of the Soviet Union, Sino-Soviet re- lations were governed by ideological, military, and economic factors. For China’s leadership, the strong desire to achieve self-reliance and independence of action outweighed the benefits Beijing received as Moscow’s junior partner. On October 1, 1949, Mao Zedong proclaimed the Chinese People’s Republic in Peking and announced that Communist China would lean to the side of the Soviet Union. Soon afterward, Mao traveled to Moscow to negotiate the 1950 Sino-Soviet Treaty of Friendship, Alliance, and Mutual Assistance. Later he recognized the 72 THE CHINESE ECONOMY independence of Outer Mongolia. In return, the Soviet government promised to restore the Manchurian railways to China when peace was concluded with Japan, but not later than the end of 1952. In the 1950s, Stalin allowed China to take a prominent role in the Asian Communist movement. Until the death of Stalin, there were no noticeable cracks in the Sino-Soviet alliance, and the Soviet Union provided indispensable military cover and technological assistance of many kinds to the new Communist state, even during the Korean War. As relations between China and the United States worsened, Washington began to give greater military support to Taiwan. Not long after Stalin’s death (1953), some divergence in Soviet and Chinese policies became apparent, especially in foreign affairs, and disagreements began to emerge over questions of ideology, security, and economic development. China tried to win friends in Asia by proclaiming the Five Principles of Peaceful Coexistence in 1954, and this soon brought it into rivalry with the Soviet Union. On September 16, 1959, Khrushchev had an historic Camp David meeting with President Dwight Eisenhower, thus presenting to the Chinese the classic example of collusion with their worst enemy, the United States. From then on, Chinese leaders became more and more hostile toward Moscow. Relative to China’s disaffection with Khrushchev, Mao planned to free his coun- try from Soviet tutelage and convert it at high speed into a great industrial power, launching the Commune movement and the Great Leap Forward from 1958 to 1960. This, in turn, challenged the patience of the leaders of the Soviet Union. Moscow viewed developments in China with barely concealed dismay and withdrew all Soviet advisers from China in 1960, marking the end of the Sino-Soviet alliance. In 1962, the border crisis in Xinjiang again exacerbated Sino-Soviet relations. The Soviet Union began to build up its armed forces on the borders with China, and frontier incidents multiplied, such as the conflict over Zhenbao (or Damanskiy) Island and the Tielieketi Incident in 1969. The ideological cleavage between China and the Soviet Union on the core prin- ciples of Communism began with the Soviet Twentieth Party Congress in April 1956. Khrushchev’s denunciation of Stalin and announcement that the Soviet Union would no longer try to enforce its will on other Communist parties set the stage for much more liberal measures in domestic as well as foreign affairs, such as the Partial Nuclear Test Ban Treaty with the United States in 1963. None of these was acceptable to Mao’s theory of contradictions, his adherence to the old Leninist line on revolution, and his certainty of war between the socialist and capitalist states. By the spring of 1964, the ideological dispute was full-blown and two completely different interpretations of Marxism-Leninism were being offered to the world, one by the Soviet Union and the other by China. Under the impact of this, the world Communist movement began to break up, culminating in Khrushchev’s downfall from power in 1964. Under Brezhnev, Khrushchev’s successor, Soviet ruling circles presented a pic- ture of unity and tight secrecy about policy debates. This was in stark contrast to the MAy–june 2014 73 ever-continuing arguments and maneuvers for power in China, where Mao’s Great Cultural Revolution commenced in 1965 and led China into chaos. This further aggravated the ideological dispute between China and the Soviet Union. China was especially alarmed by the Brezhnev doctrine of proletarian internationalism—the right of one socialist country (i.e., the Soviet Union) to intervene in other socialist countries, announced on November 13, 1968 after the Soviet invasion of Czecho- slovakia (Zagoria 1962). In the 1970s, the United States/Soviet Union/China strategic triangle and the world balance of power became the focal point in the analysis of Sino-Soviet rela- tions. Beijing began a radical realignment of its foreign policy designed to obtain world recognition as a great power and obtain Western technological, diplomatic, and financial support to counter the powerful threat it perceived from Moscow.1 In July 1971, U.S. Secretary of State Henry Kissinger secretly flew to Beijing, and President Richard Nixon’s visit to China took place soon after in 1972. The new rapprochement with the United States demonstrated that China was no longer an isolated revolutionary state or a Soviet semi-satellite, but was emerging onto the stage of world politics as an important actor.