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Insights into Editorial: China-Russia ties as a major determinant

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Introduction:

In June 2019, Chinese President Xi Jinping described Russian President Vladimir Putin, as “my best friend and colleague”.

At no time since the founding of the China in 1949 has such public bonhomie been seen between leaders of Russia and China.

It has sparked intense discussion on whether they are moving in the direction of a formal alliance, and what that could mean for the rest of the world.

The key triangle:

The triangular relationship between America, China and Russia has, for the most part, shaped global politics since 1950.

For the American Cold Warriors, the road to victory lay through Peking; today, the Kremlin seems to believe that the road to revival of Russian power and prestige similarly runs through it.

India is not a part of this triangle; yet they represent our three most consequential relationships.

Hence, a proper appraisal of the Sino-Russian relationship will be critical to our foreign policy calculus.

Second, the disintegration of the Soviet Union essentially negated the Russian threat in Chinese eyes. Both these trends will likely continue despite the recent tensions in Sino-U.S. relations.

Columns of the partnership:

The three pillars on which the Sino-Russian partnership currently rests are a peaceful boundary, expanding trade and a shared distrust of American intentions.

Western sanctions have tended to push the Russians closer to China.

Falling oil prices and fears of new sanctions on Russian gas supplies (Nord Stream 2) are demolishing the core of Russian exports to Europe, thus compelling them to depend to an even greater degree on the Chinese.

Ironically, even though it is in neither Russia’s nor the European Union’s interest to hasten a bi-polar world, western actions to punish Russia have served to strengthen China’s position in the strategic triangle.

India and Russia ties:

In recent, there is a case for India to re-calculate its relationship with Russia.

The politically reliable, trustworthy defence supplier with shared misgivings about the China, that was the Soviet Union of yore, has long been replaced by a politically agnostic, commercially motivated Russia that no longer shares our concerns about China.

This might be valid if China is the principal factor in our relations with Russia, but that is not the case.

It never was even in the 1960s and the 1970s. A strategic partnership with Russia based on the absence of fundamental conflicts of interest and a shared belief that some form of multipolarity is better than any sort of Sino-U.S. condominium, is important for India, and this relationship deserves more attention from both sides.

China-Russia Trade:

  1. After the western sanctions, China-Russia trade has more than doubled to $108 billion.
  2. Russia’s central bank has increased its Chinese currency reserves from less than 1% to over 13%.
  3. China has surpassed Germany as the principal supplier of industrial plant and technology.
  4. Russia presently enjoys a nominal trade surplus but China has a clear advantage going forward.
  5. Most of its exports to Russia are now at a higher technology level while the share of labour-intensive goods has declined.
  6. The Russian exports have continued to focus on raw materials, especially oil and gas.
  7. The investment relationship is done where it suits China’s core energy interests, such as the Power of Siberia (a $400 billion deal over 30 years to supply gas to China from Russian far east along 1,800 miles long pipeline).

 Advantage China in trade:

  1. As for the economic pillar, while Russia presently enjoys a nominal trade surplus, going beyond gross trade to value-added trade, China has a clear advantage going forward.
  2. Most of its exports to Russia are now at a higher technology level while the share of labour-intensive goods has declined.
  3. At the other end of the spectrum, Russian exports have continued to focus on raw materials, especially oil and gas.
  4. Despite Chinese promises, the investment relationship remains subdued except where it has suited China’s core energy interests, such as the $400 billion deal over 30 years to supply gas to China along the 1,800 miles long pipeline known as the Power of Siberia.
  5. Russia remains wary about allowing any dominating role for China in oil and gas. In fact, over the long term, their economic interests are divergent.
  6. Russia presumably thinks to control China through its energy dependency, a situation that the Chinese will not accept; and
  7. China feels that it can integrate Russia into its economy by re-directing Russian oil and gas eastwards but, while Russia needs financing, it is unlikely to give up its economic independence or sovereignty.

China’s rise, Russia’s unease:

The growing power-gap is threatening to further reduce Russian influence in their ‘near-abroad’ and to confine Russia to the periphery of global power.

  1. Russia still regards itself as a world power and hopes to be at the centre of a Eurasian arrangement that stretches from the Pacific to the Atlantic.
  2. It considers U.S.-led hegemony as the primary threat to this vision, and this leads them on to make common cause with China.
  3. This does not make Russian concerns about China disappear.
  4. Russia is concerned about growing asymmetry and China’s pre-eminence even in Central Asia and Arctic regions, and Chinese migration in the Russian Far East.
  5. Russia is in real danger of permanently becoming the ‘junior partner’.
  6. The policymakers in Russia must be concerned about the possibility of China becoming a threat to Russia’s territorial integrity.

Conclusion:

In the words of Prime Minister Indira Gandhi in Moscow on September 20, 1982, “the garden of friendship like all gardens must be consistently tended”.

Some form of multi-polarity is better than completely cutting off diplomatic channels.

The future course of India’s foreign policy will largely depend on the upcoming regime in the U.S. and the level of engagement of China and Russia.

The new reality of Sino-Russian relations is thus one where substantial expansion of bilateral cooperation is accompanied by growing asymmetry and China’s pre-eminence, including in Russian ‘backyards’ such as Central Asia and the Arctic regions.