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How Close Are China and Russia?

chinarussia.jpgEarlier tonight the Chinese Premier Wen Jiabao concluded his official state visit to Russia, capping off a number of business deals, advances in trade talks, and various big promises over economic and energy integration. The most important agreement between Moscow and Beijing was for the construction of two nuclear reactors – continuing one of Russia’s strongest years in uranium diplomacy. There was notable enthusiasm among both parties to really let the world know just how they like each other – but how much of this was substance and how much was just for show?

The normally “colorless” Russian PM Viktor Zubkov laid down an uncharacteristic charm offensive: “I want to state that the relations of Russia and China have come to an unprecedented level,” said, further noting that the “Russian-Chinese partnership will further strengthen on the basis of the political dialogue, broad economic relations and diverse humanitarian contacts.”The Chinese also issued numerous glowing reports through state-held media on immensely friendly meetings held in Russia, concluding the Year of China: To unswervingly push forward the strategic partnership of coordination, and deepen the good-neighborly friendship and mutual beneficial cooperation is a common aspiration and firm choice of both China and Russia and the two peoples as well, Wen said, noting the two countries are “vital strategic partners.” But apart from the big nuclear deal and some vague “pledges to enhance cooperation“, what is really happening in terms of economic integration? Reports say that with the conclusion of the Russia-China Economic Forum today, agreements will have been reached totaling more than $3 billion in business volume, yet most outward indications show the Chinese are most highly interested in oil, gas, and timber, while sending manufactured goods such as automotive parts into Russia. According to one report, oil products account for 54% of Russian exports to China, and timber comes second. There is of course a sharp difference between the capital inputs with raw material exports – and these deals with China won’t exactly be creating many new jobs for ordinary Russians.So why all the hype for the Sino-Russian lovefest? For one, both countries see their temporary geopolitical interests advanced vis-à-vis the United States and Europe by at least creating the illusion of a deep alliance, and coordinating actions to avoid oversight from rule-based systems. A report in the Australian press summarized it neatly, reporting that Russia and China “are increasingly co-ordinating their efforts within multilateral agencies including the UN, where they both want to curb Western moves to intervene on human rights grounds in countries mired in traumatic conflicts.“Second, the Kremlin wants Europe to sweat over a possible future diversion of their energy supplies to China. We have seen this veiled threat many times from both Gazprom executives as well as the political leadership, most recently in response to the EU’s efforts to pass legislation to increase competition through unbundling. Europe shouldn’t be afraid to call this bluff. Say what you will about the Chinese government, but they sure know how to cut a shrewd deal, and Russia would most certainly prefer not to have to tie their energy supplies to another authoritarian state – democracies are so much easier to disaggregate.Case in point, the quiet news that was drowned out by the celebratory press concerned the deadlock between Moscow and Beijing on an oil pipeline after the Chinese signaled that they weren’t ready to pay nearly as much as the Europeans. It seems that despite having just carried out the world’s largest IPO of PetroChina, giving the state-held firm money to burn, even Beijing has trouble reaching energy agreements with today’s Kremlin.There have also been indications that the Russian-Chinese relationship really isn’t as great as they would like it to look. Despite their use of the Shanghai Cooperation Organization as a rallying point to call for a new global energy grouping, the alliance of this multilateral group is not coherent enough to pose a viable threat. Unlike NATO or the European Union, multilateral groups which were founded on the basis of a security imperative, a grouping of political convenience is much harder to hold together and urge coordinated action. As Andrei Piontkovsky, the same political critic facing an extremism trial for his books, recently wrote in the Guardian: “China will never be interested in Russia’s economic and political modernisation, for it prefers Russia to remain a source of mineral and energy resources and a vast “strategic rear” in its looming challenge with the United States. Likewise, the Shanghai Cooperation Organisation (SCO), which just concluded its annual meeting, is in China’s eyes a tool of regional policy that helps strengthen China’s influence and control over Central Asia’s natural resources at the expense of Russia.“Although Russia and China may share some mutual fears over color revolutions and other threats to their similar models of developmental authoritarianism, this latest public display of affection likely isn’t quite so warm behind closed doors.