Putin’s Prolonged Pivot to China

Russia and China have not made any secret of their seemingly budding romance in recent months. Speaking ahead of a visit to Beijing 3 September commemorating the end of World War II in Asia, Russian President Vladimir Putin described Russian-Chinese ties as having “probably reached a peak in their entire history and [will] continue to develop.”[1] Whilst both Moscow and Beijing possess enough resources to sell strengthening Sino-Russian relations to domestic audiences as well as enough clout on the international stage to precipitate Western fears of a grand Sino-Russian ‘alliance’, a significant gap exists between their rhetoric and reality. In terms of political relations between the two countries, although the increased frequency of bilateral meetings indicates that both Putin and Chinese President Xi Jinping eagerly aim to display a united bloc against an increasingly antagonized West, cooperation between the two countries remains tenuous. Moreover, economic relations between Russia and China largely depend on which data one chooses to interpret: while the Russian government maintains a wholly optimistic outlook, several economic indicators display uncertainty and an imbalance regarding Russia’s reliance on trade with China.

Image courtesy of Russian Presidential Press Service ©2015, some rights reserved.
Image courtesy of Russian Presidential Press Service ©2015, some rights reserved.

Both the Russian and Chinese governments used Beijing’s massive military parade to promote the impression of profound mutual cooperation between the two countries. However, in order to assess the extent to which Russian and Chinese foreign policies are truly aligned, it is necessary to first understand the overlapping geopolitical origins that have prompted the two countries to cooperate. For Russia, the souring of political sentiments with the West over Russia’s role in the Ukraine conflict prompted Moscow to place greater importance on its relationship with China. Meanwhile, China’s aspirations to solidify itself as a regional power, evidenced by recent quarrels with Japan and attempts at expansion into the South China Sea, caused further friction with the United States and its allies.

Russia and China have long held skeptical views of what the two countries see as a US-dominated international system. Even before the Russian annexation of Crimea or Chinese expansion in the South China Sea, the two countries’ foreign policies often aligned to provide a counterweight against perceived US hegemony, ranging from the release of a bilateral document reiterating the common cause of a ‘multi-polar international system’ in 2005 to vetoing the US-proposed UN intervention in Syria in 2011.[2] In this regard, Russian and Chinese expansions in their respective spheres of influence have simply given a greater pretext for the two countries to continue to cultivate a foreign policy alignment that seeks to devolve power away from the US and towards that of a multi-polar system. Thus, despite a recent increase in high-level meetings between Moscow and Beijing, the current aim of Sino-Russian cooperation does not represent a radical departure from the mutual, long-standing, and overarching policy goal of a devolved international power structure. Additionally, fundamental limits to Sino-Russian cooperation reinforce this status-quo and prevent it from shifting further into a fully-fledged alliance. One such limit being that, according to the head of the Council on Foreign and Defense Policy, Fyodor Lukyanov, both countries “view freedom of action and full sovereignty of behavior as the most important value in foreign policy,” and “are not ready to limit or restrict their actions by self-imposed binding agreements […] especially ones with military commitments.”[3] Ultimately, these limits indicate that, despite the use of powerful historical narratives such as World War II to flaunt ostensibly close political relations, Russia and China are unlikely to engage in an unrestrained political alliance.

Putin’s presence in Beijing also marked the continued display of close economic ties that Russian and Chinese leaders have aimed to cultivate in recent years. However, despite a flurry of several large investment deals, largely pertaining to infrastructure and energy projects, the economic dimension of Sino-Russian relations remains far from being an unequivocal success. Stemming from the effect of the loss of Western markets and investment due to the sanctions regime, Russia turned to rely on China to replace the West as the primary market for Russia’s export of oil, gas, and other commodities. For the Russian economy, this strategy worked up until the ruble’s depreciation in December 2014, the fall in oil prices (a core Russian export), and the recent slowdown in Chinese industrial growth.

In fact, ahead of his visit to Beijing, Putin championed the impressive $88.4 billion in trade turnover between Russia and China in 2014 – including deals struck on a $1 billion credit line from the Chinese Development Bank to Russia’s Sberbank and a $400 billion oil and gas agreement to go into effect in 2019 – to the Russian media. Nevertheless, further examination of Russian-Chinese trade statistics offers a more nuanced picture, as bilateral trade between the two countries decreased 29 percent to $30.6 billion in the first half of 2015, making it likely that Putin’s goal of $100 billion in trade turnover for 2015 will not be met.[4] Whilst this decrease can be partly attributed to recent developments, such as the fall in the ruble and China’s lagging demand for oil, it is also important not to neglect the economic imbalance between the two countries, as Russia relies far more heavily on China than vice versa. For example, China is Russia’s top trading partner, but Russia is only China’s tenth-top trading partner, even when ranked using the relatively high 2014 trade turnover of $88.4 billion.[5] Ultimately, this deep structural imbalance is likely to persist as Russia has far less space to maneuver its economic policy direction due to a stubborn overreliance on oil, gas, and raw materials. Constraints in the economic relationship also exist from the Chinese perspective, and revolve around the fear of shunning the more lucrative U.S. market for expanding trade with Russia. As Joseph Nye suggests, “the Chinese Communist Party’s legitimacy depends on strong economic growth, and it will not risk this strategy for some ‘authoritarian alliance’ with Russia.”[6]

Concealed by the extravagant display of power at the victory parade in Beijing, the road from Moscow to Beijing has many more potholes than its leaders would like to admit. Politically, Sino-Russian relations remain largely on the same trajectory in maintaining a moderate level of cooperation without entering a bona-fide alliance. Furthermore, the structural imbalance in trade between the two countries reveals that, for all its show, economic relations between Russia and China remain nebulous. For the West, it is crucial that its leaders recognize these strategic limits to the Sino-Russian relationship, despite the barrage of rhetoric seemingly indicating Russia and China’s increasingly united policy stance. For Russia, the jury is still out on Putin’s pivot to China, although given recent events, the prognosis is not positive. Indeed, only rapprochement with the West will solve Russia’s political and economic woes.

[1] http://tass.ru/en/russia/817796

[2] http://www.europarl.europa.eu/RegData/etudes/note/join/2013/433800/EXPO-SEDE_NT(2013)433800_EN.pdf

[3] http://www.russia-direct.org/qa/should-us-worry-about-closer-russia-china-cooperation

[4] http://www.bloomberg.com/news/articles/2015-09-01/putin-s-china-turn-hits-potholes-as-trade-drops-markets-slide

[5] http://ww.rferl.org/content/russia-putin-statements-belie-china-problem/27223282.html

[6] https://www.project-syndicate.org/commentary/russia-china-alliance-by-joseph-s–nye-2015-01

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