Why Russia And China Have Cultivated Such Close Relations

Vladimir Putin Xi Jinping

The president of China, Xi Jinping, visited Sochi last week for the start of the Winter Olympics and for talks with his Russian counterpart, Vladimir Putin. Russia was the destination for Mr Xi’s first foreign visit as the leader of China-a conscious decision that signals the importance China attaches to relations with Russia. Mr Putin has been keen to cultivate the Chinese leadership.
Politically, the two countries form a counterweight to the Western states among the permanent membership of the UN Security Council. Invariably, they vote in lockstep in the Council, and seek to uphold the principle of non-interference in the domestic affairs of sovereign states.

Since the anomaly of Russia’s abstention on UN Security Council Resolution 1973 (authorising air strikes in Libya), Russia and China have blocked any resolution to authorise intervention in Syria, put undue pressure on the Syrian government or to tighten sanctions against Iran over its nuclear programme. Although it is tempting to wonder when China might stop following Russia’s lead at the Security Council, the similarity of outlook on matters of international security suggests that the Sino-Russian axis at the UN will be lasting. Both states also share a common sensitivity towards Western criticism of their domestic politics.

Energy synergy

In the economic sphere, Russia runs a large trade deficit with China but wishes to narrow that gap through an increase in exports. If this is achieved, it is likely to boost the development of eastern Siberia and the Russian Far East, the underdevelopment of which is a prominent concern for the Russian government.

For the past year or so Russia has been delivering 300,000 barrels/day (b/d) of crude oil to China via a direct pipeline, with additional volumes reaching China’s Pacific coast by sea from Kozmino. Under existing agreements, deliveries could rise to over 1m b/d by the end of this decade. This will contribute to China’s security of supply, and help Russia to lessen its heavy reliance on European markets for its crude oil.

A similar pattern may yet emerge in the gas sector, despite years of negotiations that are still to reach a conclusion. China’s imports have risen appreciably in recent years, reaching 43bn cu metres in 2012, but they are likely to grow even further if US Energy Information Administration forecasts of total consumption of 500bn cu metres by 2040 are correct.

In that case, even allowing for increased exports to China from Australia and South‑east Asia, there is scope for the Russian energy companies Gazprom, Rosneft and Novatek to establish lucrative footholds in the Chinese market. Progress towards the elusive agreement on price has been made in 2014. Rosatom, the state nuclear-energy company, is building nuclear reactors in China and hopes for more orders as China seeks to meet its rising power needs without making its pollution problems worse.

Security issues

In the security sphere, the two states have a common interest in ensuring the security of Central Asia once the International Security Assistance Force (ISAF) departs Afghanistan at the end of this year. Both countries have investments and trade corridors in Central Asia, and the region is a conduit for troubled parts of China (Xinjiang) and Russia (the North Caucasus). Arms sales from Russia to China are picking up once again.

Trade was vigorous in the 1990s and early 2000s, but this was not maintained as China satisfied its immediate needs and Russia became more protective of its intellectual property. However, the two sides are now preparing an agreement for the purchase of advanced Su‑35 aircraft; Russia is reportedly willing to supply them with all the sensitive technologies included. There is scope for further co-operation, despite the advances in China’s indigenous capability, because Russia’s defence industry remains more advanced than China’s.

Some of the most interesting issues concern security in the Asia-Pacific region. Russia and China have a common interest in challenging Japan’s territorial ambitions, although their positions are different because Russia has sovereignty over the Southern Kurils (or the Northern Territories, as Japan calls them) while China claims the Senkaku islands (known as the Diaoyu islands in China), which are under Japanese control.

For China-facing encirclement by the US and its allies and having testy relations with India to the south-it is strategically important to avoid a rupture in relations with Russia and the Central Asian states on its northern and eastern land borders. Potentially, Russia’s sales of diesel-electric stealth submarines to Vietnam-which contests China’s claims in the South China Sea-are an irritant in relations. Russia delivered the first project 06361 submarine in 2013; it is due to deliver two more in 2014 and a further three thereafter. The submarines pose an appreciable threat to China’s surface fleet and, more than other sea or land platforms, threaten to destabilise the regional balance.

Putin’s pivot

The most interesting question regarding the future of the Russia-China relationship in Asia is whether Russia will be able to reverse its 20‑year decline as an Asia-Pacific power and, if so, how it will position itself within the region as security structures evolve. At present the US is maintaining a security guarantee to Japan and Taiwan, while insisting that it is not opposed to China’s rise.

Many of China’s neighbours are wary of its growing power and intentions, but do not wish to act in a way that would contribute to the emergence of competing blocs in the region; thus, they are hedging. Russia desires productive relations with a range of Asian states, even though China looms largest, and so it would prefer not to see a cold war in north-east Asia. Whether Russia will have a role to play in determining that will prompt deliberation in Moscow, Beijing and other capitals in the coming years.

Click here to subscribe to The Economist

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.