Relationship Between Russia and China

The new era of Russia and China

– Tension in Ukraine, Natural Gas Contract and the future

Chuqing Hu chuqing.hu@hec.edu

The recent history

The relationship between China and Russia has always been complicated. In early 1960s, also Russia (the formerSovietUnion) had been support China to rebuild the country after war diminished, friendship between the two countries diminished mainly due to the dissension on the war between China and India. During the war, the SovietUnion made public its stand to support India which significantly deteriorated its relationship with China.

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The incompatibility wasn’t softened until 1980s when MikhailGorbachev became the president of SU and started to remedy the relationship with China. Since then, China and Russia has been on their way to a new era of competitive cooperation, or we can also call it “cooperative competition.”^[1]

Year 2014, a new era evolved after the tension of Ukraine

In the past few months, as stated by U.S. president Barack Obama, “Russia’s aggression towards former Soviet states unnerves capitals in Europe while China’s economic rise and military reach worries its neighbors.”^[2]

From March 2014, the issue in Ukraine treaded on sensitive ground for China, and it has contorted itself to find a neutral diplomatic position.China has long been holding the position of not to interfere in the internal affairsof other countries. However, this belief was kind of dimmed when China failed to state its position to the referendum in Crimea, Ukraine. China’s action was viewed as a silent support to Vladimir V.Putin as other western countries all clearly stated their opposition against the referendum. ^[3]

China’s silence brought new harmony to its relationship with Russia and this has been viewed as the turning point of the strategic alliance between two of the most powerful countries in the world.

Two months later, on May 20th, 2014, Russia clinched a US$400-billion deal to feed China around 38 billion cubic meters of natural gas via pipelines at a chummy price of $350-$400 per thousand cubic meters(TCM), shaking up an industry that is used to fetching $500-$600 per TCM from Asian markets. The deal prompted much commentary on the agreement’s potential to reshape global energy markets and tilt the balance of influence in Ukraine and, more broadly, inEurope. [4]

Apart for the contract, Putin’s visit to China in May also brought about various strategic business alliances between the two countries, which include mining, electricity, border trade, automobile, etc.

A formal alliance or a double jeopardy

Some people would imply that China and Russia are forming a formal alliance in order to compete with the U.S. and Europe. However, although the two countries are in honeymoon in the past few months, uncertainties still exist and I assume it’s too early to call it a formal alliance.

Foremost, since the two countries have different visions regarding their future, both economically and politically, the discrepancy of the visions of two countries will make the alliance not as strong as some people imagined.

What matters most to China? Growth, growth and growth. China has been struggling with the slowdown of its GDP growth in the past year and the promise of 8% annual growth was broken due to the slackness of industrial manufacture and the rising cost of capital. At this moment, a long-term energy contract with a quite favorable price will a good stimulator to its economics. At the same time, Chinese government is also concerned with the destabilization aroused with its own borders. An alliance will also enhance the protection of its national interests since Russia is a neighbor as well as a friend.

What matter most to Russia? Recovery, recovery and recovery. After deep recession, Russia has been long for a recovery in both its economics and international political status. Russia was known for its aggression when it was once on its greatest prosperity. In the recent years, as the financial recovery was on its way, Russia again started to strive for more political interests, especially towards former Soviet states. However, it’s also crystal clear that because of tension between Russia and the U.S., the western world will be never on Russia’s side regarding international affairs. The only and most power ally Russia can rely on has to be China. Putin’s visit and the multi-billion contract showed Russia’s generosity and its high expectation for the relationship.

However, if Russia keeps raising its aggression after the tension in Crimea, this will put China in a very awkward situation – to keep supporting Russia with equivocatory and to risk its future to be sanctioned by the western or to break its friendship with Russia and risk what happened in the 1950s to happen again?

It’s a double jeopardy for China. “China’s leaders can’t afford to side with Russia, and they cannot side with Russia’s forceful policy.” According to Titus C. Chen, a research fellow at the Institute of International Relations at National Chengchi University in Taiwan.^[5]

Neither of them is an ideal choice for the Chinese authority since China definitely doesn’t want to be friend with Russia and be enemy with rest of the world.

Envisioning the future

There are mutual strategic needs as both China and Russia want to create a multipolar world which is not dominated by the U.S., particularly as China is now facing threats from the US-led alliance in Asia

These two powerful countries although holding different goals in the alliance, are a formidable pair and can alter the international system. China knows that, Russia knows that, and the rest of the world is more or less afraid of that.

The pair will accelerate the economic growth in both Russia and China, which is favorable for both of the countries. This suggests that, as long as Russia doesn’t get outrageous in its foreign policy, the friendship will be very well maintained in the near future. However, due to the historical mistrust, the lack of a common threat and conflicting interests in Central Asia, the sustainability of the partnership is questioned.^[6]

Besides China and Russia, U.S. is also playing and important part in the relationship. If U.S. keeps pushing China or Russia aggressively to the corner, this will certainly reinforce the China-Russia Alliance. If U.S. changed its position in order to drive a wedge between the two countries, the situation will become more unpredictable but also more interesting.

1.  The tough road between Russia and China, multiple contributors, Voice of Russia, 2014
2. China-russia-and-the-outlook-for-the-liberal-international-system, Ali Wyne , www.warontherocks.com, Jun 2nd 2014
3. China Torn Between Policies and Partnership, Andrew Jacobs and Somini Sengupta, New York Times, March 12th, 2014
4. Russia-China Gas Deal Narrows Window for U.S.Exports, Richard Martin,Forbes, May 30th, 2014
5. China Torn Between Policies and Partnership, Andrew Jacobs and Somini Sengupta, New York Times, March 12th, 2014
6. Are China and Russia Moving toward a Formal Alliance?, Dingding Chen, The Diplomat, May 30th, 2014