Sunday October 20, 2019

CHINA AND RUSSIA TAKE STEPS TO STRENGTHEN TIES

October 17, 2014

China and Russia appear to be working harder to strengthen bilateral ties, if this week’s round of meetings are anything to go by. Chinese Premier Li Keqiang’s three-day visit to Russia, the first leg of a European tour, culminated in the signing of a series of 38 separate agreements between China and Russia. The signed deals include a 150 billion yuan currency exchange, enabling the countries to increasingly use their own currencies in trade instead of relying on U.S. dollars. Additionally, they agreed on forging cooperative ventures in mining, agriculture, and construction, and developing educational exchanges between the two countries. Also discussed was the gradual construction of a high-speed railway linking Beijing and Moscow and issues of territorial integrity.

In the current international climate, the two nations seem like natural strategic and economic allies. Valentina Matviyenko, Chairman of the Federation Council of the Russian Federation, stated, “Both countries stand for multi-polarity of the world democratization of international relations.” China and Russia have historically tense relations with the major western powers and hold a major interest in shifting world power away from these nations. As developing countries that share a long border, possibilities for cooperation seem endless. Increased trade, heightened access to resources, and support for a balance against western power – an obvious win-win scenario for both China and Russia.

Chinese media has many positive words to say about the deals, insisting they will benefit “world peace, regional stability, and global cooperation.” There are also signals suggesting these deals may benefit China much more than is immediately clear. The deals, concluded at a time when the United States and much of the European Union has imposed sanctions on Russia, serve as a gesture of defiance from China to the West. Beijing has traditionally opposed sanctions as a political strategy. By increasing trade with Russia, China poses a challenge to European and American assumptions of global leadership. More importantly, the sanctions have put Russia on the prowl for new sources of trade. In particular, Russia’s energy sector has caught the brunt of these bans. As The Washington Post explains, “Russia, which has bountiful oil, natural gas and coal supplies, and China, a voracious energy consumer, are a geopolitical match made in heaven.”

In previous years, the two have balked at concluding agreements, each eager to strike the hardest bargain. This year, however, China has proved a willing partner in the absence of other markets for Russia. The two countries finalized agreements for $400 billion in Russian natural gas sales to China, and are in the process of building a pipeline to transport the gas. Neither party has revealed the price per volume of natural gas, but there is no doubt that Russia got the short end of the stick in this deal.  For Russia, this is much needed trade, but China knows it has the upper hand, and this advantage will only grow as sanctions continue. Russia needs to tread carefully in relying on China, but it might find that it has no other option.

The same cannot be said for China. The Asian power is doing its best to ensure it is not excluded from opportunities elsewhere in the world. After signing these deals in Moscow, Li Keqiang traveled to Italy, and will continue on to Germany before returning home. China wants, as much as possible, to keeps its options open. Thus far, this strategy appears to be working.

For more information, consult the following sources:

BBC – “China media: Strong Moscow-Beijing ties”

Business Insider – “China is Cashing in on Russia’s Lack of Economic Options”

CCTV – “China, Russia sign deals on energy, high-speed railways”

Christian Science Monitor – “China cashes in on Russia’s shrinking economic options”

Reuters – “Russia signs deal with China to help weather sanctions”

Southern China Morning Post – “China and Russia pledge to boost ties and cooperation”

The Diplomat – “The EU and Russia: China’s Balancing Act”

The Diplomat – “The Kremlin Turns to China”

The Washington Post – “China leader signs trade deals with Russia in visit to sanction-squeezed Moscow”

Xinhua – “China, Russia cement partnership with new cooperative blueprint”

Xinhua – “With right approach, two giants can coexist”

东北网 – “中俄之间合作需要平衡多方利益”

中国经济网 – “为中俄经贸合作再添新动力“

Compiled and edited by Molly Bradtke