In an interview with Sputnik, Russian political analyst Sergey Sanakoyev focused on the current level of the Moscow-Beijing ties which he said is already starting to look like an alliance
Russian Ambassador to China Andrey Denisov said that Russia’s President Vladimir Putin will take an active part in the international One Belt, One Road forum which will be held in Beijing on May 14-15.
For his part, Chinese President Xi Jinping plans to pay an official visit to Russia in early July, according to media reports.
Speaking to Sputnik, Sergey Sanakoyev, head of the Russian-Chinese analytical center, specifically pointed to an “unprecedented level” of relations between Beijing and Moscow which he said is confirmed by regular meetings of the two countries’ Presidents.
“It is hardly possible to give an example of another two countries that would have such a strategic partnership like Russia and China. The meetings of the two countries’ heads of state take place several times a year at a variety of venues. In the coming days, another meeting will be held,” Sanakoyev said referring to Putin’s participation in the One Belt, One Way forum.
Mentioning an upcoming visit by the Chinese President to Russia, Sanakoev said that traditionally, similar visits come amid large-scale bilateral interaction on an intergovernmental basis.
“Russia and China have the most extensive mechanism of intergovernmental contacts. The two have five intergovernmental commissions: on trade and economic cooperation, energy, social issues, as well as investment and regional cooperation,” Sanakoyev said.
He added that bilateral collaboration is actively developing in a wide array of sectors.
“In April, the trade turnover between the two countries increased by 15 percent, according to statistical data. We have diversified energy trade routes and we are also expanding ties in non-energy sectors, such as aviation, space, communications and construction,” Sanakoyev added.
“Moscow and Beijing clinched a huge range of contracts that cannot be described in a few words. Relations between the two countries can be called a mature strategic partnership. Taking into account the existing tension in the world, this partnership is starting to look like an alliance,” he concluded.
Putin and Xi’s relationship seems strong. In November 2016, they held a meeting on the sidelines of the Asia- Pacific Economic Cooperation (APEC) summit in Peru’s capital Lima, during which they discussed the development of bilateral ties.
In March 2017, new Chinese Commerce Minister Zhong Shan heaped praise on “a very successful cooperation” between China and Russia which he said will continue to develop in a similar manner in the future.
“Bilateral cooperation between Russia and China is developing very successfully at the moment and both sides are very pleased. It will be equally auspicious in the future as well,” Zhong said.
He added that the two countries have a variety of tools at their disposal, which have played in important role in developing bilateral ties.
China and Russia’s carefully curated relationship is increasingly having a global impact
The rise of a more politically and militarily assertive Russia and an economically and institutionally ascendant China may be characterized as the two principal forces challenging the United States in global policymaking.
China’s and Russia’s strategies for international expansion, in each of their respective areas of policy specialization, are not necessarily mutually exclusive. Arguably, both countries’ intensified involvement on the world stage is not only complementary but to a growing extent directly and indirectly supportive of each other’s increasingly commonly-defined interests.
The growing international significance of China and Russia’s key political and economic partnership must be considered a major factor in global policymaking going forward.
After the Ukraine Crisis
The 2014 Strategic Partnership, ratified shortly after Russia’s annexation of Crimea, amid the launch of U.S. and EU sanctions against Russia, is widely regarded as the most enhanced in terms of depth and breadth of economic, political, and security relations of any one of China’s or Russia’s network of strategic partnerships.
Some of the much-publicized and high-profile deals emerging from the 2014 Strategic Partnership included a 40-year gas supply agreement between Gazprom and China National Petroleum Corporation (CNPC). The landmark gas supply deal, including plans to build the “Power of Siberia” gas pipeline, was indirectly referred to in the 2014 Strategic Partnership as a measure aiming to “strengthen the Sino-Russian energy partnership.”
A further deal with Russia’s largest oil company, state-owned Rosneft, involving financing deals with CNPC to supply oil worth up to $500 billion from Russia’s largest oil field, was also established shortly after, prospectively enabling Russia to surpass Saudi Arabia as China’s main supplier of oil.
Also in 2014, the People’s Bank of China (PBOC) and the Central Bank of Russia signed an arrangement for a currency swap worth 150 billion yuan and 815 billion rubles ($24 billion at the time). The first such Chinese currency swap to be announced for any country outside of Asia, the deal was meant to facilitate settlement in national currencies and boost bilateral trade.
Since 2014, and particularly in 2015, Russia has become one of the five largest recipients of Chinese outbound direct investment in relation to the Chinese government’s Belt and Road Initiative (BRI) connecting Asia with Europe. Meanwhile, China was Russia’s largest bilateral trade partner, in 2015; in spite of declining overall bilateral trade in U.S. dollar terms (mainly due to sharp declines in the ruble as well as the yuan), relative to 2014, trade flows continued to expand in terms of volume.
In this context, it was significant that Russia’s exports of mechanical and technical products to China rose by about 45 percent over the course of 2015 possibly signifying an important trend in the diversification and competitiveness of Russia’s non-energy sector in terms of bilateral trade prospects with China.
Importantly, the economic relationship between China and Russia has been driven by a variety of bilateral intergovernmental commissions, including 26 subcommissions. According to Putin, in spite of often slow progress in reaching agreements, both sides invariably maintain a common goal of cooperation to eventually find a solution on a wide range of complex issues.
Integrating of High-Level Political Interests
Since the 2014 Strategic Partnership, amid a strengthening of personal ties in the Putin-Xi relationship, there has been an extensive broadening of bilateral relations beyond merely focusing on economic interests. This has centered on mutual support concerning each country’s “core interests,” including “strengthening close coordination in foreign policy.” They have also jointly advocated for reform of the international financial and economic architecture to accord with the rapidly-changing global real economy.
The relationship between China and Russia has, therefore, evolved into intensified cooperation in political areas in the last couple of years. Chief among those developments was the announcement on May 8, 2015 in Moscow, on the occasion of the annual parade commemorating the end of World War II, of the planned integration of the Chinese-led BRI with Russia’s Eurasian Economic Union (EEU).
The BRI comprises the Silk Road Economic Belt and the 21st Century Maritime Silk Road, with the objective of developing a trade and infrastructure network connecting Asia with Europe and Africa along the ancient Silk Road routes. The EEU groups Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia in an inward-focused trading network.
Beijing’s policy of integrating the BRI, its flagship international development program, with Moscow’s EEU stood in sharp contrast to the European Union’s Eastern Partnership program with former Soviet states. The latter program required these countries to sign up to EU economic and political associations and to relinquish their trade agreements and political affiliations with Russia.
Further evidence of the growing high-level political relations between China and Russia was manifested in the international financial markets under the co-arrangement of up to 6 billion yuan in “Baikalbonds” (a yuan-denominated Russian government bond issued in Russia). The co-arrangers were China’s ICBC and state-owned Gazprombank — Russia’s third-largest bank, which has been under U.S. sanctions since July 2014. This issuance of offshore yuan foreign sovereign bonds was the largest ever undertaken, exceeding the U.K. government’s earlier 3 billion yuan sovereign bond issue.
Both Putin and Xi reiterated the significance of their growing bilateral political relations at the BRICS development summit in Goa, India, in October 2015, where they noted that China and Russia should strengthen coordination and cooperation within global and regional multilateral institutions.
Joint Military and Security Cooperation
A major feature of China’s and Russia’s defense and geostrategic interests has been rising levels of official support for each other’s security, increasingly pitched as common defense concerns. The most prominent recent affirmation of this position came in the form of China’s and Russia’s stated opposition to the deployment of the U.S. Terminal High Altitude Air Defense (THAAD) missile defense system in South Korea, a decision made in mid-2016. Both governments have warned that THAAD risks igniting an arms race in the Asia-Pacific that could potentially destabilize the region.
In this vein, China and Russia have been accelerating their joint military drills including holding their first joint naval drills conducted in the South China Sea this year. According to senior officers at China’s Central Military Commission and Russia’s Defense Ministry, since both sides are faced with a more complex international security environment, closer mutual cooperation has been widely considered a necessity.
The Russian government has also voiced its support for the Chinese government’s position in the South China Sea, backing Beijing’s call opposing interference by powers outside the region. In turn, China has increasingly provided verbal support intimating its sympathy with Russia’s annexation of Crimea (mainly attributing the move to Crimea’s historical links as part of Russia), in addition to backing Russia’s intervention in Syria, while calling for a political settlement to the war.
Driven by strengthening personal ties between Putin and Xi, the breadth and depth of China-Russia relations have spilled over into multiple spheres of governmental and institutional policymaking. This has included both countries’ central governments, as well as regional and municipal governments, in addition to the increasing role played by state and private companies and various sectors of civil society.