THE Sino-Russian ‘strategic partnership’ was proclaimed in April 1996 as the mid-1990s marked a watershed in both Russia and China’s foreign policies. Moscow felt bitter disappointment and even anger with the West, and perceived itself being treated as a defeated adversary that could at best be a junior partner in the US-dominated order. At the same time, Beijing was subjected to the humiliation of the 1995-96 Taiwan Strait crisis, which demonstrated China’s impotence vis-à-vis the American superpower.

After Vladimir Putin succeeded Yeltsin in 2000, there was a brief interlude when Russia attempted to strengthen relations with the West and, for a while, partnership with China lowered in importance for the Kremlin. Yet from the mid-2000s Russia’s relations with the U.S. and its western allies began to deteriorate, culminating in the Ukraine crisis of 2014 and the 2016 presidential election meddling scandal. Isolated from the West, Russia pushed for closer ties with China. Beijing was generally receptive. It refused to join the Washington-led campaign of ostracizing Moscow and displayed benevolent neutrality regarding Russian moves in Crimea and eastern Ukraine, but Beijing was cautious in advancing its strategic bonds with Moscow. Although China had its problems with the U.S., they were still deemed manageable and Beijing had no intention to antagonize Washington by associating itself too closely with a combative Russia.

By 2018, Beijing calculations might have begun to change, as the consensus gelled in Washington that China presented the most significant national security threat to America. Russia was still considered a major and dangerous rogue state, but Beijing could no longer hope that the Kremlin’s shenanigans would distract Washington from dealing with China. The metaphorical Eye of Sauron is now firmly on China. Beijing will either have to capitulate to the U.S., renouncing its superpower ambitions, or take a stand. If it chooses the latter, as seems most likely, it needs strong allies to withstand American pressure. Russia is the only available option. This has led to the present situation when both Moscow and Beijing see it worthwhile to significantly upgrade their strategic partnership, possibly elevating their relationship to the level of a de facto or perhaps even de jure alliance.

 

Since 2009, China has ranked as Russia’s top trading partner as an individual country. In 2018, for the first time, Russia-China trade exceeded $100 billion, reaching $107 billion, accounting for 15 per cent of Russian exports and imports.¹ Since the Ukraine crisis in 2014, Russia saw the exports and imports with all of its top ten trade partners decrease – except China.

On the one hand, Russia’s pull into China’s geo-economic orbit was inevitable, driven by the logic of the international marketplace. China needed huge volumes of natural resources and Russia was a major supplier of these. On the other hand, Russia’s embrace of China as the main economic partner was a political decision born of the Ukraine crisis and the ensuing confrontation with the West. In order to withstand western pressure Russia needed a strong external partner.²

Not surprisingly, it was in the area of hydrocarbons that Russia’s economic pivot to China has been the most impressive. Since 2015, Russia has increased oil exports to China by 60 per cent,³ displacing Saudi Arabia as China’s top supplier of crude oil. In December 2019, the Power of Siberia pipeline began delivering natural gas to China. Chinese state-owned companies are stakeholders and major buyers of liquefied natural gas from Russia’s projects in the Arctic. Russia too has been increasing food supplies to China.⁴

Two recently completed bridges across the Amur River – one for rail traffic and the other for vehicles – symbolize Russia’s growing closeness to China. It is remarkable that for centuries the Amur has been the main boundary between Russia and China, but there was not a single permanent bridge across the border river. China’s economic decoupling from the U.S. is likely to increase Beijing’s long-term interest in Russian commodities. Russian supplies, most of which come overland, are also more secure in the light of a possible trade embargo and naval blockade – options the U.S. and its allies may take in a military conflict with China.

 

Russia’s turn to China – and away from the U.S. – is happening in the financial domain too. In 2018 Russia’s Central Bank drastically reduced the share of its assets held in the US from 29.9 to 9.7 per cent. At the same time, the Central Bank increased its Chinese holdings from 2.6 to 14.1 per cent. The share of the Russian Central Bank’s dollar denominated reserves also decreased from 45.8 to 22.7 per cent, while its yuan holdings jumped from 2.8 to 14.2 per cent.⁵ In June 2019, Moscow and Beijing inked an agreement to switch to national currencies in bilateral trade as they ramp up efforts to move away from the US dollar.⁶

The reality of closer economic relations with China, however, turned out to be more complicated than initially expected. The most disappointing for Moscow was the failure to attract Chinese FDI. As Kremlin officials admit, ‘it cannot be said that China invests a lot in the Russian economy.’⁷ So far Chinese investors largely demonstrate a wait and watch approach to Russia. Similar to other foreign companies, they tend to see the risks of entering Russia as high, whereas the profit margins are not substantial enough to offset the risks.

 

To Chinese business, Russia is of interest mainly as a supplier of natural resources such as minerals, hydrocarbons or timber. However, most of these resources are not unique and can be imported from elsewhere, as long as maritime routes remain open. Marine freight is inexpensive, canceling out Russia’s seeming advantage of proximity to the Chinese market. At the same time, the freezing winter temperatures, difficult terrain and lack of transport and energy infrastructure across much of Russia often result in higher costs to extract and deliver its natural riches, compared to competitors in Africa, South America or Southeast Asia.

As Moscow moves into Beijing’s economic orbit, it is still determined to avoid the level of dependency that could pose risks to Russia’s political independence and sovereignty. The Kremlin keeps limits in place that should prevent Russia from being too closely integrated with the Chinese economy and save Russia a significant degree of economic autonomy. In addition to refusing to sell China strategic assets like ports, such limits are manifested in Russia’s reluctance to accept Chinese loans. As one observer points out, ‘the Russian government is careful not to incur sizeable debt to China’,⁸ which is due not only to the Kremlin’s general aversion to accumulating foreign debt, but also guided by the resolution to deny China financial leverage over Russia.

Moscow is also in no hurry to work toward a free trade agreement with China, limiting itself to a non-tariff trade facilitation agreement that became effective in October 2019. Russian officials have repeatedly stated that Russia and its fellow Eurasian Economic Union members are not yet ready to open their markets to China.⁹

 

Russian weapons sales contributed greatly to China’s military modernization in the 1990s and 2000s. However, for a long time, it was India, rather than China, that was the privileged buyer of Russian arms: Moscow was willing to supply New Delhi with some of Russia’s top-notch weapons and related technologies, while generally selling less advanced systems to China. This pattern changed in the mid-2010s, when Moscow agreed to sell China two of its best conventional weapons, the S-400 surface-to-air missile systems and Su-35 fighter jets, making Beijing their first foreign buyer.

Russia’s assistance to China is no longer limited to conventional weapons. In October 2019, Putin made a sensational revelation that Russia is helping China build a ‘missile attack early warning system’ (EWS) that would allow detection of incoming ICBMs. Only the U.S. and Russia currently possess such systems that are crucial components of their strategic deterrence capability. This signifies a qualitative raising of the Russia-China military-political and technological cooperation.

Russian experts expect more joint efforts by Russia and China in areas such as strategic missile defence, hypersonics, and nuclear powered submarines. They note that Russia’s current military collaboration with China is mostly in areas which should not jeopardize Russia’s national security but will significantly complicate the U.S.’s military planning vis-à- vis China.¹⁰ Moreover, Russia-China cooperation in military technology is no longer a one-way street. Even though China still relies heavily on Russia in areas such as high performance aircraft engines, Beijing has outpaced Moscow in AI, shipbuilding and drones.

As one Russian military expert notes: ‘In the not so distant future, China could be the one selling arms to Russia, such as drones or ships… China has a potent shipbuilding industry. They make their frigates and destroyers like hot buns on a stove. It is totally possible to order hulls for our prospective ships from China because the experience of our shipbuilding shows that we build very slowly.’¹¹

 

Another important area of Sino-Russian military cooperation is joint exercises. Although Russian and Chinese forces have been regularly exercising together since 2005, the watershed moment came in September 2018 when China participated in Russia’s Vostok-2018 strategic manoeuvres held in the Russian Far East, allegedly the country’s largest military exercise since 1981. China sent a relatively sizeable contingent of 3,200 troops accompanied by military hardware including 30 aircraft.

In August 2019, Russia again invited China to take part in its main strategic manoeuvres of the year, dubbed Tsentr-2019. Although the exercise’s official focus was on ‘counter-terrorist’ operations, the drill included repelling enemy air strikes and counterattacks against a conventionally armed state. In other words, Russia and China were practicing to jointly deal with a nation-state enemy, if only at a minuscule scale.¹² In May 2015, in a move fraught with symbolism, Russia and China conducted their first naval exercise in the Mediterranean, NATO’s maritime backyard, while in 2016 and 2017 naval manoeuvres were also held in sensitive geopolitical areas – in the South China Sea and the Baltic Sea.

 

In July 2019, Russia and China conducted the first joint air force operation beyond their national borders. Russian and Chinese long-range nuclear-capable bombers accompanied by fighter jets and surveillance aircraft carried out a patrol over the East China Sea and the Sea of Japan. The patrol’s route ran over a sensitive area in the vicinity of the Dokdo (Takeshima) islands, disputed between South Korea and Japan. Seoul claimed that a Russian military plane from the joint patrol group twice violated Dokdo’s airspace, prompting South Korean interceptor jets to fire hundreds of warning shots. China and Russia apparently sought a maximum demonstration effect. Russian defence minister Sergey Shoigu left little doubt that the joint air patrol was a message to Washington and its Asian allies: ‘As two neighbors seeking strategic partnership, Russia and China are thus messaging to everyone that they want to ensure their security.’¹³

The Sino-Russian axis is already beginning to seriously complicate the American military posture. As some American commanders acknowledge, the U.S. does not have the capacity to deal simultaneously with a resurgent Russia in Europe and the Chinese challenge in the Pacific.¹⁴ A scenario in which China and Russia take coordinated military actions in the Pacific and European theaters – for example, China invades Taiwan while Russia launches a large-scale military operation in Europe¹⁵ – no longer looks purely imaginary.

 

The rising levels of diplomatic, geo-economic and military collaboration between Russia and China inevitably leads to the question whether they could be on the verge of forming an alliance. Officially, both Beijing and Moscow have repeatedly denied any intention to create a political-military alliance. For example, in October 2019, Russian minister of foreign affairs Sergey Lavrov emphasized that Russian-Chinese relations ‘have never been at such a high and trusting level in all spheres’, but asserted at the same time that ‘neither Russia nor China are planning to set up a [military] alliance.’¹⁶ That said, Lavrov immediately added some ambiguity to his previous statement, remarking that the two powers are ‘allies’ when it comes to ‘defending international law’ and opposing ‘intervention in domestic affairs.’¹⁷

In the same month, none other than Putin himself called Russia-China ties ‘an allied relationship in the full sense of a multifaceted strategic partnership.’¹⁸ This is not the first time Putin had characterized Russia and China as ‘allies’. In October 2014, meeting with Premier Li Keqiang, the Russian leader referred to the two countries as ‘natural partners and allies.’¹⁹ Russian top officials’ occasional use of the ‘A-word’ with respect to China is hardly a slip of the tongue or a mere figure of speech. The ambiguity in describing the relationship with China is likely deliberate and strategic, designed to signal to the West that Moscow is just one step away from forming a full alliance with Beijing.

One frequently heard objection to the possibility of a Sino-Russian alliance is that Russia would be a dependent and hence resentful partner. There is no denying the growing disparity in economic might between Russia and China. However, economic asymmetry is not equal to political subordination. As long as Russia keeps a great-power mindset and wields nuclear weapons, it will not be junior to China politically. After all, Russia has been Europe’s resource periphery for centuries while acting politically as a great power. Why not repeat the same pattern with China?

 

Furthermore, while highlighting Russia’s growing economic dependence on China, there is probably some underestimation of the degree to which China itself depends on Russia. As long as there is a real – and rising – risk of China clashing with the U.S. (over the South China Sea, Taiwan or on other issues), the strong bond with Russia – the only major power that can provide Beijing with diplomatic support, military technology, and secure access to vital commodities – will be crucial for the PRC.

For a long time, perhaps since 1945, international politics has not seen alliances made up of equal great powers. We have gotten used to the notion of an alliance that consists of the dominant power and its dependent junior partners. This is another reason why it is difficult for many experts and policymakers to imagine a Sino-Russian alliance. However, the return of great power politics, which many admit is now happening, may revive the ‘old-fashioned’ great power alliances between equals, with Russia and China leading the way.

An elegant way to see the Russia-China strategic relationship is to view it as a great power entente, falling short of a formal alliance but having grown much closer than the ‘strategic partnership’ the two countries had established in the 1990s. An entente, as Dmitry Trenin reminds, is a harmonious association of two major powers based on the commonality of some key interests; the perception of common threats; a measure of foreign and security policy coordination; and a degree of empathy between their leaders.²⁰

 

The Sino-Russian entente is helped by the fact that both Russia and China, in their actual foreign policies, adhere to the classic great power logic of spheres of influence, notwithstanding their rhetoric about the primacy of the norm of sovereignty and the need to democratize international relations. There appears to be an understanding between them that Moscow defers to Beijing on East Asian issues while, in return, the Chinese recognize Russia’s leading political role in much of the post-Soviet space and the Middle East.

The Sino-Russian entente may or may not survive long into the future. What can be predicted with greater certainty, however, is that Russia and China will be very reluctant to be drawn into a hostile relationship. Moscow and Beijing understand that the price of confrontation can be extremely high for both of them. History matters – and the past experience of mutual confrontation is still well remembered in both capitals. It is likely that the Russia-China relationship will continue to be guided by rationalism and pragmatism, but, of course, there is no guarantee it will stay that way forever.

 

Footnotes:

1. https://www.rt.com/business/448783-russia-china-trade-turnover/

2. https://carnegie.ru/2016/06/29/friends-with-benefits-russian-chinese-relations-after-ukraine-crisis-pub-63953

3. http://www.ng.ru/economics/2019-10-24/100_193324102019.html

4. https://www.wsj.com/articles/russia-exploits-u-s-china-trade-tensions-to-sell-more-soybeans-11550745001

5. http://www.cbr.ru/Collection/Collection/File/19699/ar_2018.pdf

6. http://www.ved.gov.ru/eng/general/news/19/25081.html

7. https://tass.ru/ekonomika/6500890

8. http://ru.valdaiclub.com/a/highlights/zapad-i-rossiysko-kitayskie-otnosheniya/

9. https://eurasia.expert/biznes-stran-eaes-ne-gotov-k-sozdaniyu-zony-svobodnoy-torgovli-s-kitaem/

10. https://carnegie.ru/commentary/80136

11. https://nationalinterest.org/blog/buzz/russia-worried-about-china%E2%80%99s-military-rise-70201

12. https://www.eastwest.ngo/idea/china-russia-entente-cordiale-21st-century

13. https://www.gazeta.ru/army/2019/08/18/12586165.shtml

14. https://www.nbcnews.com/news/us-news/retired-u-s-general-says-war-china-likely-15-years-n924031

15. http://www.jpolrisk.com/war-in-the-taiwan-strait-is-not-unthinkable-some-will-lose-more-than-others/#_ftnref11

16. https://tass.com/politics/1086654

17. https://tass.com/politics/1086654

18. http://en.kremlin.ru/events/president/news/61719

19. https://www.scmp.com/news/china/article/1616524/china-and-russia-pledge-boost-ties-and-cooperation

20. https://carnegie.ru/2015/04/09/from-greater-europe-to-greater-asia-sino-russian-entente-pub-59728