Sino-Russian relations: More rhetoric than substance?

By Robert Bedeski & Niklas Swanström

Despite some re-engagement between China and Russia since Putin’s initial embrace of the West, the positive rhetoric of today often does not reflect reality. There has been significant internal competition and tension that continues to negatively affect Sino-Russian relations that is looked at more closely in the article. The vivid statements on the flourishing partnership are often clearly more declaratory than substantive.

While world attention focuses on the economies of the US and European Union, the rest of Eurasia is undergoing significant post-communist transformation–changes bound to affect security and economic developments in the Second Millennium. Sino-Russian relations have oscillated between cooperation and conflict over the past century. During the Yeltsin era, China-Russia relations were still strong, but this changed abruptly after Putin’s accession to the Presidency in 2000 with his initial pro-Western ventures – including Russia’s involvement in the war on terror. This project saw Russian complicity in US military presence in Central Asia and did not sit well in Beijing. Putin’s domestic constituency found his swing into Washington’s gravitational pull equally awkward, and it also created considerable criticism in Russia. Several quarters–including the Duma, Russian public opinion, and Beijing to a lesser extent – expressed concern at Putin’s acceptance of North Atlantic Treaty Organization (NATO)’s expansion into the Baltic region, his approval of US withdrawal from the Anti-Ballistic Missile (ABM)-treaty, and his acquiescence to the American military presence in Georgia.

Today, China and Russia have settled most of their outstanding border disputes, and are enjoying a booming bilateral trade, which in 2007 topped $48 billion.

 

Between 2003 and 2004, Russian foreign policy appeared to shift attention from the West to China. Instead of following the lead of the US, the Kremlin chose to place more emphasis on a Russo-Chinese balance in order to counter US advances in the region. This was manifested within the framework of the Shanghai Cooperation Organization (SCO), consisting of China, Russia, Kyrgyzstan, Kazakhstan, Tajikistan, and Uzbekistan, although its direction of military security and economic development remains unclear. A primary factor in this strategic shift was the fact that Russia gained few tangible benefits from engagement with Washington, yet was forced to make numerous uncomfortable concessions, which were highly unpopular among those sectors where Soviet nostalgia still arouses nationalist sentiment and loss of superpower prestige.[ppw id=”82520760″ description=”” price=”0.70″]

 

China has not been a passive bystander in this new trend. Earlier, with the US/NATO 1999 bombing of the Chinese embassy in Belgrade and the EP-3 incident in 2001, China became interested in broadening its international engagement against what they considered to be a strong tendency of uni-polarity (in favor of the US) in world politics and a neglect of their increased political and economic power. Russia, because of historic interaction, territorial adjacency and relative declining economic and military strength, was a most attractive partner for a rising China. As a result, the Chinese government was supportive of improved relations with Russia and invested considerable political prestige and financial resources into a new partnership with Russia.

Today, China and Russia have settled most of their outstanding border disputes, are enjoying a booming bilateral trade, and have held large-scale joint military exercises such as Peace Mission 2005 and Peace Mission 2007. Bilateral trade in 2007 topped $48 billion, while a high-level mechanism devoted to bilateral security talks between Russia’s Security Council and the Chinese Communist Party’s Politburo has been formed. (Trade dropped to $38.3 billion in 2009, a decline attributed to the decline of Russian imports and a decrease in Chinese weapons imports from Russia.) Looking at these factors, the bilateral relations are largely cooperative and even warm at times, and a shared long-term vision may be emerging. However, government relations do not always transfer over to people-to-people relations and there is fear of Chinese expansion into the Russian Far East as well as a decline of Chinese interest in Russia’s greatest export success – the weapons industry. Is the close relation really so close as claimed?

 

China-Russia relations: More rhetoric than substance?
Despite major re-engagement between China and Russia since Putin’s initial embrace of the West, the rhetoric often does not reflect reality. There has been significant internal competition and tension that continues to negatively affect Sino-Russian relations. The vivid statements on the flourishing partnership are often more declaratory than substantive. A case in point is the SCO and Sino-Russian competition in Central Asia. Both Russia and China know that they can increase their bargaining power vis-à-vis the US and the post-Soviet successor states (as well as Taiwan) by speaking in concert or at least cooperatively. But this is inhibited by decades of deep distrust and fierce bargaining that is a harsh reality in the bilateral relationship.

Both China and Russia suspect that either would betray the other for a healthy and long-lasting relationship with the United States (and possibly the EU) should such an opportunity arise—Yeltsin, Putin as well as Jiang Zemin and Hu Jintao may be facing the classic “prisoner’s dilemma” in their calculations. However, so far the bilateral relationship with the US remains a somewhat fragile phenomenon and despite its shortcomings, the Sino-Russian relationship has a historical legacy of interaction and consistency of interests. US and EU suspicions of China and Russian intentions and authoritarianism often act as a brake on better relations, and in the case of the EU, an inherent weakness may have further inhibited it from deeper engagement with China and Russia. In cross-border perceptions, Russia fears that it will be used as a subordinate provider of natural resources to China, while China’s rise confirms that Russia has declined in importance.

Despite significant improvement of relations since the Soviet collapse, both China and Russia are dissatisfied with the current state of mutual engagement. Russia is disappointed in the type of commodities traded; it would rather be an exporter of technology, and machinery than the current concentration on raw materials and energy. The latter category comprised almost 90 percent of Russia’s total exports to China in 2005. From the Chinese perspective there is clear frustration with Moscow’s hesitancy in permitting Beijing to pursue and conclude gas and oil deals, as well as the tendency for settled agreements to be more of a “framework nature” that are rarely put into practice. This was also revealed by the Vice-Director of China’s National Development and Reform Commission, Zhang Guobao, who stated that Russia had complied with commitments on oil exports by rail to China, but as for cooperation in other areas, there had been much contact and communication but “little actual progress” (although as he mentioned that this had improved in 2010).

The large-scale immigration of Chinese into the Russian Far East is another source of tension. Russia annexed the territory from China from 1858 to 1860, and China has since been eager to restore this loss, albeit not officially. At the grassroots level and privately there is much more dissatisfaction with the loss than what the government would like to acknowledge. On the Russian side there is a fear of a Chinese “invasion” of immigrants. In the Russian Far East there are only approximately 6.7 million Russians with more than 110 million Chinese (almost equal to the total Russian population) in the three Northeast (Dongbei) provinces nearest the Russian Far East. There has been a flow of immigrants across the border and Russia has expressed concern over “Sinicization” of the area with even a vision of Chinese tanks rolling up to Siberia in a reprise of events of 1969 on the Ussuri River. The likelihood of a Chinese military invasion is very low, but with an increased flow of Chinese immigrants, Russia’s Far East could easily turn into a Chinese “Near North”.

Relations between China and Russia necessarily involve Central Asia as one of the more important factors. The Shanghai Cooperation Organization has turned out to be a significant player and barometer in Sino-Russian relations. SCO can be described as a cooperation conduit for Sino-Russian relations as interactions in SCO reflect the status, characteristics and trends in Sino-Russian relations. The rise of SCO as a regional organization has been inhibited by issuing too many declarations, agreements and statements, with little real impact on policy. It could be argued that SCO provides an international framework and “Rules of the Game,” even if these rules and this game are not very well defined. Although China and Russia have achieved a degree of cooperation within the SCO, the likelihood that the form of cooperation will move beyond anti-terrorism is limited. Besides disagreement in the trade sector, tensions are frequent within other areas of potential cooperation. China is reluctant to let SCO become a military bloc that could be directed against an outside actor, but Russia has taken a more aggressive policy in its cooperation strategy, so military matters have taken a preeminent position. In 2007 there was a joint Collective Security Treaty Organization (CSTO)-SCO exercise under Russian leadership that made it clear that Russia views the region from a military perspective, a trend that has been apparent since 2005. China has viewed the SCO with a broader vision where economic development and anti-terrorism are the most prevalent policy issues. The fundamental difference in the perception of SCO and how it should be used is a stepping-stone for furthering the utilization of SCO in regional and international affairs.

 

Economic interest and challenges
In Central Asia, infrastructure has become a crucial issue. A symptom of Sino-Russia mismatch is that there are few infrastructure projects that inspire cooperative efforts. Both are competing for a share of overland continental trade from East Asia to Europe, either via the Trans-Siberian Railway or on the second Euro-Asia land bridge running via Xinjiang and Central Asia—the former heavily promoted by Russia, the latter by China. Russia and China view this as a zero-sum game, where any infrastructure investment in a competing corridor will equal a corresponding loss in transit on its own promoted corridor. Currently the bulk of the trade to Europe, China’s largest trading partner, travels a 26,000 kilometer sea route, but by crossing Central Asia the transit would be reduced to a modest 6,379 kilometers, a shrinkage that could decrease transit time from up to 45 days to 11 days, and resulting in a 30 percent cost saving for forwarders. The economic benefits for China, Europe and the transit states in Central Asia and Caucasus are attractive, but negative effect on Russia would be considerable. There would be some economic loss to Russia but the most significant loss would be in bypassing Russia, with further political and economic shrinkage.

Energy is another sector where cooperation and positive trade patterns will be difficult to achieve. China needs more oil and gas to fuel economic growth, and Russia, a primary exporter, should be a logical partner due to both geographical propinquity and its problems with other major exporters and importers. However, Russia is reluctant to expand exports to the Chinese market, and seems to have little enthusiasm for government investments in Russian energy, forcing China to expand energy imports from other regions, notably the Middle East, Iran, Africa and Central Asia. Moreover, Russia has tried to influence exports from states on their borders, including SCO members and also Iran and other exporters. Even though Russia has expressed a wish to set up an SCO energy club coordinating the energy policies of the SCO, China and the Central Asian States have opposed any effort to allow their energy security to be subject to multilateralism, especially when controlled by Russia. This applies to pipeline construction both underway and planned, connecting consumers and producers. Russia has been reluctant to let pipelines only transit China as it fears that it would control sales and further transit. This failure for China and Russia to cooperate over what could be perceived as their mutual interest is an indication of the distrust that exists between them. China’s intensified effort to find alternative sources of energy has led them to Latin America, the Middle East and Africa where they have out-competed much of the traditional Russian influence – in possible payback for past Soviet outbidding Maoist China in the Third World.

In the past, there was an extended relationship where the Soviet Union was the older brother and mentor for a developing China (both politically and economically). On the other hand, there has existed tension over decades, where both viewed each other as a traitor to the communist cause (now both have abandoned that ideology in all but occasional rhetoric). Since the beginnings of state bolshevism in 1917, there were more stormy years than a solid comradeship between the two communist nations. There is a traditional tendency in Russia to view the Chinese as the weaker partner and requiring support from the advanced and stronger Russian state. China’s rise and Russia’s decline produced a reversal of roles, and the Chinese have started to view their former mentors as a poor and weak neighbor who now needs Chinese assistance.

 

Security challenges and diverging interests
The greatest problem might not be those non-quantifiable factors of distrust and insecurity – which from anecdote and document we recognize as high – but rather is found in quantifiable variables that are relatively easy to judge. For example, the power imbalance is measurable between China and Russia, and is growing rapidly, expressed in economic and military terms and statistics. Nonetheless, Russia remains ahead of China in nuclear forces. From the late 1970s to 2001 the economic size ratio, i.e. the relative size of the economies, between the Soviet Union and China reversed from being 4 to 1 in favor of the Soviets to a Chinese advantage of 4 to 1 over Russia. If China continues its rapid growth, its economy will equal that of the US today by 2015, while Russia, on the other hand, is falling behind, although in 2011 high oil prices and energy exports injected the Russian economy with valuable profits, enabling increase in currency reserves. In times of high energy prices Russia will still play a role, despite an economy in near-havoc, but as prices decrease, the Russian economy will suffer significantly.

If China continues its rapid growth, its economy will equal that of the US today by 2015, while Russia, on the other hand, is falling behind. 

China has traditionally been an important customer for Russia’s weapons industry with purchases totaling more than US $25 billion from 1990 through 2007 (reaching approximately 40 percent of Russia’s total sales in 2007), but even this is in jeopardy. There is a need for the People’s Liberation Army (PLA) to improve its technological level but the Russian arms industry cannot provide the technology needed, nor have the Russians been able to meet their production quota for export. China has therefore been eager to find alternative suppliers of high-tech weapons but has been forced to continue its reliance to a significant degree on Russian weapons sales in the face of international boycotts. However, China has also become a seller of arms, (with much of the weapons also based on Russian design), the domestic industry has improved significantly and imports from Russia have decreased significantly – trends expected to continue over the next few years.

Russia finds the current situation rather awkward. The current dilemma for Moscow is that it is being forced to play second fiddle to China by provisioning the growing economy and military with arms and, to a lesser extent, energy, in order to maintain Russian state income. Russia’s rulers will find it necessary to make these concessions to keep China’s support in balancing the United States over the long run and to retain China’s cooperation. Russia leverage over China is its energy resources. Russia has delayed construction of pipeline infrastructure, does not fulfill concluded agreements, and is obstructive in energy engagement with China to reap advantages from leverage. Some of this could be seen in Russia’s direct obstruction of China’s cooperation with Turkmenistan as well as its re-routing of the RFE pipeline to avoid China.


 

China-Russia relations: What to expect in the coming years?
Formal relations between China and Russia show stability, but underlying reality differs and a clouded future belies diplomatic niceties. Geopolitics and a perceived Russian strategy of resisting China’s inroads is a likely scenario. This was evident with the possible sale of the energy corporation Slavneft to CNPC in 2002 – which Putin largely favored, but was forced to reconsider because of parliamentary opposition. China’s influence is declining in the energy sector, which has been the most important area for China in relations with Russia. However, a strategy of denying or diminishing energy resources to China is not likely to have benefits for Russia in the long run. The policy limiting access to energy resources to an adjacent, somewhat eager, and prospering customer will probably hurt Russia more than other states, unless oil and gas prices skyrocket due to increased instability in the Middle East and Iran at the same time as tension between China and the West increases. The Chinese government will not accept the Russian random denial of energy resources for much longer and discontent has been expressed in China regarding the Russian discrimination, as seen from Beijing, against Chinese businesses.

The most important non-energy sector for Russia is military weaponry. Continued sales of low and mid-level advanced weapon systems to China have been crucial for the economy. The sales trend has been negative and the Chinese domestic development of new systems and other points of import have significantly decreased their reliance on Russia. A lifting of the US/EU weapon sales ban would create difficulties for Russian weapons manufacturers and the Russian economy more broadly. Moreover, patterns of troop deployment and organization may also indicate potential for conflict. In the past few years, reorganization of the PLA appears to enhance the capability of projecting those forces deep into enemy territory. The PLA has also redoubled military equipment deployed in its far-western province of Xinjiang and modernized it substantially. These developments indicate a growing Chinese readiness to prepare forces to protect its energy assets in Central Asia should that be required, and also to defend partners and allies. The Russian army is concerned about this strengthening of Chinese military forces along Central Asian borders since they realize that they might not be able to repulse a Chinese military intrusion in the future.

From the Chinese viewpoint, Russia must eventually open up its energy resources, and the major triggers for this would be: 1. China’s economic power becomes an overwhelming phenomenon or, 2. a stagnating Russian economy forces it to make unpalatable and concessionary agreements. Russia will, in the opinion of the authors, continue to favor a Chinese engagement in Central Asia over a US presence, as China does not make any demands on democratization and does not pose an immediate threat to the current Kremlin-friendly regimes.

 

Reflections
The fundamentals of Sino-Russian relations include numerous areas of friction, which could ignite conflicts in the future. The bedrock of the relationship, constituted of energy and military cooperation, is in danger of slippage due to conflicting national interests. Other issues such as cultural cooperation, education exchanges, and cross-border trade and tourism are marginally positive in terms of mutual benefit. Demographics – especially the migration of large numbers of Chinese (legally and otherwise) into Siberia and the Russian Far East – have been a continuing aggravation. Still, the two nations have a similar outlook in limiting international interventions in places such as Syria and Iran, and trimming American influence where possible. Ideology, once of paramount importance during the Cold War, has receded to a vanishing point, and hardheaded pragmatism is primary. It is not fanciful to envision a scramble for more influence in the Middle East as US involvement recedes, and a new order/disorder prevails in the Islamic world. China has already established a zone of influence over Southeast Asia with soft power, and claims sovereignty over South China Sea territory. Taiwan comfortably drifts into the Chinese gravitational field, drawn by economic opportunity on the mainland and benign cooperation with Beijing. Russian leaders are still recovering from Soviet collapse and can be expected to devote attention to the ‘near abroad’ – those new republics formed out of the former Soviet Union. Between them, a delicate Sino-Russian condominium could emerge in Eurasia that will affect the rimland in unforeseen ways. Nonetheless, there are few immediate possibilities for China and Russia to find new issues for joint cooperation, leading to consolidation of their potential.

China will continue cooperation with Russia in order to have access to natural resources. Russian weapons sales will suffer decline as the Chinese weapons industry develops. If the US/EU embargo of weapon sales to China is discontinued this will have a further negative effect on Moscow’s sales, reducing the trade to focus on spare parts for existing systems. With current or expanded restrictions on developing the Russian energy industry, China will turn to other providers in Central Asia, Iran and Africa at Russia’s expense. In addition, China has invested heavily in alternative energy resources and greater efficiency in coal consumption, resulting in an improved natural environment. Russia has little to offer the international economy apart from lower-cost energy, and may face internal crises unless the government deals with challenges of government corruption and demographic decline that Russia is facing, especially in the Russian Far East.

The Central Asian states’ resistance to Chinese or Russian domination of the region might paradoxically force China and Russia to cooperate in an effort to minimize American and European interests inside the region. China has been less aggressive in its efforts to limit other states involvement in Central Asia and might welcome substantial economic investments, as these would not only stabilize the region by expediting economic development but also have a positive effect on Xinjiang. In general, China has taken a more multilateral approach and has a better track record than Russia in regards to improvement of its soft power in the regions, no doubt reflecting its minimal presence, especially in the last century.


 

The article is derived from “Eurasia’s Ascent in Energy and Geopolitics: Rivalry or Partnership for China, Russia, and Central Asia?” Edited by Robert Bedeski and Niklas Swanström (Routledge 2012).

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About the Authors

Robert Bedeski is Professor Emeritus, University of Victoria, Canada, and was awarded an Honorary Doctorate by the Mongolia Academy of Sciences in 2008, as well as the Friendship (Naraimdal) Medal by decree of the President of Mongolia, is also Honorary Professor, University of British Columbia; Member Emeritus, Board of Directors, Asia Pacific Foundation of Canada; Affiliate Professor, Jackson School of International Studies, University of Washington; Research Scholar, Institute for Security and Development Policy, Stockholm; and Honorary Kentucky Colonel. He has written numerous books and articles on Chinese, Korean, Japanese and Mongolian affairs.

Dr. Niklas Swanström is Executive Director of the Institute for Security and Development Policy and is one of its co-founders. He is a Research Fellow at the Johns Hopkins University’s Paul H. Nitze School of Advanced International Studies. His main areas of expertise are conflict prevention, conflict management and regional cooperation; Chinese foreign policy and security in Northeast Asia; narcotics trafficking and its effect on regional and national security as well as negotiations. His focus is mainly on Northeast Asia, Central Asia and Southeast Asia, and has authored, co-authored or edited a number of books on these areas.