China and Russia Strengthen Their Relations

China and Russia Strengthen Their Relations

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.

As US President Donald J. Trump’s first year in office drew to a close, his administration increasingly pointed to the national security challenges posed by China and Russia. The new National Security Strategy of the United States, issued in December 2017, named China and Russia as “revisionist powers” that “challenge American power, influence, and interests, attempting to erode American security and prosperity.” The summary of the 2018 National Defense Strategy, unveiled in January 2018, identified the “central challenge to U.S. prosperity and security as the reemergence of long-term, strategic competition” by these revisionist powers.

These policy declarations represented a shift from one year earlier, when Trump entered office amid speculation that he would pursue a rapprochement with Russia. One of the purported goals of such a policy was to wrest Russia away from China’s embrace, using a strengthened US-Russia relationship as leverage over China. Such an attempt at triangular diplomacy would have been straight out of the playbook of former secretary of state Henry Kissinger, with the roles of Moscow and Beijing reversed this time.

Bipartisan domestic opposition, based partly on concerns about Russia’s interference in the 2016 presidential election, hindered Trump’s ability to conduct diplomatic outreach toward Russia. Regardless of domestic political constraints, however, attempts to pry Russia away from China were never likely to succeed. The Cold War context that gave rise to Kissinger’s strategy is long gone. Russian leaders, having absorbed the painful lessons of the Sino-Soviet split, recognize that their country’s security and prosperity depend on maintaining friendly relations with their increasingly powerful neighbor, regardless of the state of relations with the US. For its part, China needs friendly relations with Russia in order to assure itself of a “strategic rear” to the north, given its tense relations with several other neighboring countries. Moreover, the common positions that China and Russia hold on many international issues, including their discomfort with US power, objections to an international order reflecting liberal norms and values, and shared desire to resist perceived threats to their forms of domestic governance, provide ample reason for them to maintain close relations.

A series of factors both foreign and domestic are placing US foreign policy under stress. In the coming years, the challenge that China and Russia pose to the liberal international order will be one such factor. For both the US and Europe, the extent of coordination between China and Russia deserves close watching. In recent years, this coordination has grown stronger. A think tank report published in 2016, co-authored by Russian and Chinese experts, argued that “Russia-China rapprochement in security is special in that the two countries have come close to the line that distinguishes partnership from a military and political alliance,” though neither state wished to cross this line. That same year, in an article aimed at Western audiences, a former vice foreign minister of China argued that the two countries, despite having no intention to form an alliance, nevertheless shared sufficiently close interests and values to ensure that their partnership would remain durable.

China and Russia have gradually strengthened their relationship over the past quarter-century. Vladimir Putin’s return to the Russian presidency in 2012 and Xi Jinping’s accession to power in China that same year were important stimulants to the bilateral relationship. The onset of the Ukraine crisis strengthened relations further by driving Russia into China’s arms. Facing Western sanctions for its annexation of Crimea and its support for insurgents in eastern Ukraine, Russia sought both an economic lifeline and a diplomatic partner to reduce its isolation. China was the obvious candidate. Subsequent developments, including the continued stalemate in Ukraine, Russia’s intervention in the Syrian civil war, and allegations of Russian meddling in US and European elections have ensured continued friction in relations between Russia and the West. China, meanwhile, perceives growing pressure from the US as its rise to power gathers force. These tensions, in turn, lay the groundwork for sustained cooperation between China and Russia.

The growing strength of the China- Russia relationship has belied the expectations of many Western analysts. The two countries remain unlikely to form an alliance, partly because neither wishes to be dragged into the other’s regional conflicts. Moreover, the balance of power within the relationship is shifting rapidly in China’s favor, which could eventually become a major concern for Russia. To date, however, the two countries have set aside their differences in order to pursue common interests. Their “strategic partnership”, though subject to limitations, is not likely to break down in the near future. Under this arrangement, which is looser than an alliance, the two countries offer each other a measure of diplomatic support on a range of issues and at least “friendly neutrality” in each other’s regional disputes. In 2018 and beyond, the China-Russia relationship will continue to exert significant influence on issues of international concern, unfolding at the bilateral, regional, and global levels.

In the face of Western sanctions following the onset of the Ukraine crisis, Russia attempted a pivot to China in order to compensate, at least partially, for the resulting economic losses. The chief result, however, was that China increased its bargaining leverage in the two strongest sectors of the bilateral economic relationship, namely energy and arms sales. In both sectors, negotiations on important deals had begun before the Ukraine crisis but had failed to reach conclusion. After the outbreak of the crisis, the two countries achieved important breakthroughs in these negotiations, with results that were especially advantageous for China.

The benefits that Russia hoped to achieve from its economic outreach to China have been slow to materialize. This should not have been surprising, considering that bilateral economic ties have been a weak link in the China-Russia relationship throughout the post-Soviet era. The volume of bilateral trade consistently pales in comparison to China-US, China-EU, and Russia-EU bilateral trade volumes. Russia has also relied primarily on Western financial markets for access to credit.

In 2014, the year that the West began to impose sanctions, the volume of China-Russia bilateral trade reached an all-time high of 95 billion USD. However, this figure fell to 68 billion USD in 2015, largely because of a sharp drop in energy prices. The trade volume remained flat in 2016 and remains well short of the 2014 peak. Some Russian critics concluded that Russia’s attempted pivot to Asia, which in practice focused heavily on China, had been largely a failure in economic terms. The most significant results of bilateral economic diplomacy have been major agreements on natural gas and weapons sales.

During Putin’s visit to China in May 2014, China and Russia struck a 400 billion USD gas supply deal, with Russia’s Gazprom agreeing to supply the China National Petroleum Corporation (CNPC) with up to 38 billion cubic meters of gas per year for 30 years, starting in 2018. Analysts estimated that the price China would pay for the gas, which was not disclosed publicly, would be comparable to the price that European customers were paying for supplies from Gazprom. Initially, Gazprom expected that China would invest 25 billion USD in the construction of the pipeline, known as Power of Siberia. However, this arrangement fell apart, and Gazprom is now financing the pipeline’s construction by itself. In July 2017, CNPC announced that it would receive the first supplies from the Power of Siberia pipeline in December 2019, about one year behind schedule. The gas deal allowed Putin to demonstrate that Russia enjoyed alternative economic and diplomatic options in the face of Western sanctions. However, the terms of the negotiations largely favored China. The gas supplies for the Power of Siberia pipeline will come from fields in Eastern Siberia, which Russia can supply only to Asian countries because they remain unconnected by pipeline to European markets. The western Altai route remains Russia’s preferred option for a gas pipeline to China. This proposed pipeline, which would pass through the two countries’ short western border between Kazakhstan and Mongolia, would draw its supplies from gas fields in Western Siberia that are already connected by pipeline to Europe. Under this option, Russia would be able to play China off against its European customers, thereby gaining bargaining leverage. China has expressed little interest in the Altai pipeline, however, largely because it has a multitude of other options for gas supply, including imports of gas by pipeline from Central Asia and of liquefied natural gas (LNG) from a variety of suppliers. Despite such lingering concerns, the two countries have formed a close partnership that is likely to prove resilient for the immediate future. The last quarter-century of interactions has revealed some inherent limitations in the China-Russia relationship, but this partnership has also proven more resilient than many predicted. Similarities in the two countries’ national identities, especially their discomfort with US primacy, opposition to an international order dominated by liberal values, and sensitivity to criticism of their own domestic governance and human rights records, are crucial factors. Some Russian analysts, while acknowledging that the initial economic benefits of Russia’s pivot to China had been disappointing, nevertheless argued that a convergence of political interests, not economics, provided the essential foundation for the China-Russia relationship. The current arrangement offers both China and Russia some strategic room for maneuver, but China is the main beneficiary. A report by US analysts in 2017 argued that the US position in the “strategic triangle” had deteriorated because of tension in US relations with both China and Russia, allowing China to occupy the “hinge”. This advantageous position gives a further boost to the rise of China, which already poses a major challenge to US foreign policy. The rise of China, in turn, will divert US attention to Asia, heightening the challenges of ensuring European security.