Russo-Chinese Relations in Strategic Perspective

Russian and Chinese leaders regularly profess an ever-growing congruence of interests and ever-increasing economic, political, and even military cooperation. According to Prime Minister Dmitry Medvedev in October 2013, “Bilateral relations have never reached such high levels.”¹ Yet, arguably there is much less harmony here—although what harmony there is remains quite real—than is publicly professed. While the strong, shared identity of anti-liberal ideological perspectives is undeniable—particularly directed against the United States on issues like proliferation, missile defense, democracy promotion, regime change, and America’s presence in Central Asia and the Middle East—on other issues we see substantial and even in some cases growing discord. Indeed, on the crucial issue of regional security in Asia there is, arguably, mounting friction, and Russia’s invasion of Ukraine has added to the tension. Yet, Moscow’s continuing failure to undertake economic reform ensures its rising dependence on Chinese support on some critical issues; thereby undermining its overall strategy towards China. The Crimean crisis in March 2014 impels us to reconsider Sino-Russian relations and ask how different views of self-determination at the expense of sovereignty may strain them or how East-West polarization in Europe may strengthen them.

Russia’s strategy comprises military, ideological, economic, and political dimensions. First, no Russian regime, whatever its orientation, can afford a hostile China on its most exposed border. Normalization, if not amity, is a non-negotiable necessity unless China’s pressure on Russia becomes intolerable and Russia has allies to counter it. Russia’s quest to develop its Far East and Siberia and overall military build-up aims to redress the regional balance that favors China. Therefore, Russia aims to encourage other Asian states, like Japan, to invest in Russian Asia to forestall excessive Russian reliance on China. But Moscow’s failure to modernize its economy impedes its ability to gain two cherished objectives: the restoration of great power status equal to that of the United States at the global level; and resurgence as a great, independent, Asian power capable of contributing to an equilibrium at the regional level.

Despite the significant global ideological consensus against US liberalism and power, the asymmetry of interests and capabilities between Russia and China is widening, making it ever harder for Russia to restrain the growth of Chinese power by itself. Russian strategy has long aimed at the fundamental goal of inducing or compelling Washington to give it “equal” status or what might be called “an equal partnership of unequals.”² Washington has not, cannot, and will not deliver that partnership, especially as long as Russia equates respect with fear.³ Indeed, the terms of such an accord, silence on democracy issues in Russia, acquiescence to an exclusive Russian sphere of influence in the CIS, and a veto on US military actions abroad, even before Ukraine, is unacceptable either to Washington or to its allies and contradicts their interests. Moreover, those terms are also unacceptable, not only to the members of the CIS but also because Russia cannot afford them. Despite Moscow’s invasion of Ukraine and annexation of Crimea, the Crimean Tatars are already warning about a potential jihad if Russia disregards their interests.⁴ Indeed, Russia’s domination of Central Asia in many spheres may no longer be acceptable to China, given its growing interest and presence in Central Asia and its commercial profile there. Xi Jinping and Kazakh President Nazarbayev’s refusal to support Moscow on Ukraine implies as much.⁵

Russian strategy seeks partnership with China to leverage greater standing globally vis-a-vis the United States. For years it subordinated its standing in Asia to its quest for a global role equal to that of the United States, leveraging its presence, influence, and capabilities in Europe, Eurasia, and the Middle East to compel US acknowledgement of its status and demands. Until about 2008-2009, this meant subordinating, or even neglecting, Russia’s Asian policy to global imperatives, relying on China as a gateway to Asia.⁶ To some extent, this strategy continues. Current joint Russo-Chinese naval patrols in the Eastern Mediterranean have this clear purpose.⁷ Yet, this strategy highlights weakness because Russia needs China to give it a semblance of credibility in an area of its vital interests. Arguably, Moscow could not enforce its stance on Syria and the Middle East in general without this Chinese support. Meanwhile China happily watches Moscow distract Washington with minimal Chinese participation in an area of relative strategic unimportance to China, while it continues intensifying pressure against Japan and ASEAN.

By 2008-2009 Moscow must have realized that while it needed Chinese support against Washington, and China needs a quiet northern frontier while it emphasizes other geographical sectors, growing Chinese power could obstruct or even threaten Russia. China’s ability to thwart Moscow in Central Asian diplomacy and energy emerged when the SCO refused to give unequivocal support to its amputation of Georgian territorial integrity and China’s gas deal with Turkmenistan struck at Russian energy leverage there.⁸ In 2009, Russian military leaders for the first time publicly intimated a Chinese military threat and in 2010 the Vostok military exercises ended with a simulated tactical nuclear strike on foreign invaders, clearly though not overtly directed at the PLA.⁹ The leaked foreign policy blueprint of 2010 overtly called for “anchoring China” to Russia through combined economic, military, and foreign means.¹⁰ Arms sales to China fell precipitously, energy talks bogged down, and in 2010-2011 Moscow, alarmed at the prospect of a ruinous Korean War, where it might be dragged into other people’s conflicts, launched its own initiative towards the DPRK.¹¹

Moscow launched a campaign of vigorous diplomacy throughout East Asia, an increasingly intense search for sources of foreign investment in Russian Asia, and a heightened effort to regain the status of an independent regional great power in East Asia beyond ties with China. In tandem these moves represented a hedging strategy towards China, resembling those of other Asian powers.¹² In parallel with the accelerating disintegration of the “reset” policy with Washington, this strategy comprised a mix of policies. Russia sought to engage China on a much broader economic scale than before with Putin claiming that Russia hoped “to catch the wind from China’s sails” to the point where China became its number one trading partner. It sought more investment opportunities in China (particularly in energy) and more Chinese investments in Russian Asia and energy, especially the Arctic. Geopolitically, however, Russia sought new and greater military bases in Central Asia and launched the Eurasian Economic Union, whose Customs Union clearly aimed to divert Central Asia’s trade from China to Russia.¹³

Moscow also responded to growing Chinese demand for Russian weapons and defense technologies as the Western embargo continued, selling weapons systems hitherto not sold that reversed past policy because these weapons outclassed comparable systems that were sold to India. Russia engaged China in growing joint exercises, particularly naval ones in 2012-2013, and Moscow and Beijing continued their mutual support against Washington on Iran and Syria. Yet for balance Moscow sought Indian, Southeast Asian, South Korean, and Japanese investment in Russian Asia, limits to China’s growing Arctic presence, a rapprochement with Japan, elevated ties to Vietnam to the level of a strategic partnership, and increased arms sales there while refusing to vacate energy projects in the South China Sea as China requested.¹⁴

Arguably, this policy line has failed. China continues to pocket its gains: access to Russian oil, leverage over Rosneft, deterioration of East-West ties, and new arms sales. Moscow has signally failed to anchor China to anything; predictably, given the failure to modernize the Russian political-economic system, Russia is increasingly anchored to China as energy and arms sales policies suggest. In addition, North Korea seems to have ignored Kim Jung-il’s 2011 agreement with Russia, leaving Russia with no options.¹⁵ Russia has also not dented China’s intensified determination and ability to build its silk road projects in Asia. Chinese officials and businesses are not bothered by Russia’s moves, whose intent they fully grasp,¹⁶ as Chinese policy in East Asia, driven by a growing strategic autism, has, become more aggressive toward Japan and Southeast Asia. Perhaps, the isolation inspired by this growing aggressiveness led Xi Jinping to invite Russia to join China “in guaranteeing security and stability in the Asia-Pacific Region.”¹⁷

Signs of Discord

Aggressive Chinese moves aggravate regional security tensions, endangering vital Russian interests. This explains the widening gap with China over Japan and the continuing expansion of Russian military power in the Eastern strategic direction.¹⁸ It is not surprising that this aggressiveness has inspired states such as India and Australia to generate new avenues of strategic cooperation.¹⁹ However, Russia seeks not formal but tactical cooperation with other Asian states in order to retain a “free hand.” Russia seeks to gain partners, boost its ability to hedge against China, conduct an independent security policy in Asia, and, thus, strengthen a regional equilibrium. Beijing has repeatedly demanded that it terminate energy explorations in the South China Sea. But in 2012, Russia announced its interest in regaining a naval base at Cam Ranh Bay, a step probably connected to joint Russo-Vietnamese energy projects off Vietnam’s coast, and a means of checking China. Gazprom also signed a deal to explore two licensed blocks in Vietnam’s continental shelf in the South China Sea, taking a 49 percent stake in the offshore blocks, which hold an estimated 1.9 trillion cubic feet of natural gas and more than 25 million tons of gas condensate. Those actions precipitated Beijing’s demand that Moscow leave the area. Despite its silence, presumably to avoid antagonizing China, Moscow stayed put. Since then it has increased support for Vietnam through energy exploration in the South China Sea and, perhaps more ominously from China’s standpoint, in arms sales and defense cooperation.²⁰

Russia and Vietnam have been “strategic partners” since 2001, and they upgraded the relationship to a comprehensive strategic partnership in 2012.²¹ Defense Minister General Phung Quang Thanh called Russia “Vietnam’s primary strategic military partner in the sphere of military and technical cooperation.”²² Russia helps Vietnam build a submarine base and repair a dockyard to provide maintenance for other naval platforms. The submarine base will host the Kilo-class subs that Vietnam bought from Russia and will almost certainly deploy to protect its interests in the South China Sea.²³ Recently both sides have begun discussing regular Russian port visits to Vietnam for maintenance and rest and relaxation, although Cam Ranh Bay will not become a Russian base.²⁴ Meanwhile increasing Russian arms sales embody Vietnam’s defense modernization against threats to its offshore energy interests and deterrence against growing Chinese aggressiveness.²⁵ These sales emulate other ASEAN members’ efforts to modernize aging defense inventories and defend against new threats.²⁶ Even more striking is the fact that Prime Minister Medvedev approved a draft Russo-Vietnamese military cooperation pact to formalize bilateral defense cooperation, stipulating exchanges of opinion and information confidence-building measures and cooperation to enhance international security and ensure more effective action against terrorism and better arms control.²⁷ Allegedly nothing in the relationship is intended to target a third country.²⁸

This relationship clearly intends to curb China’s aggressive intentions and behavior in the South China Sea. Notably, most announcements come from Vietnam, which has every reason to impress China with its ability to garner support for its military buildup and political resistance to Chinese claims. This is part of Moscow’s overall “pivot” to Asia that actually preceded the US “rebalancing” in Asia and aims to invigorate Moscow’s economic-military-political position as an independent major Asian power. Recently Moscow announced its intention to develop bases at Singapore and in the Seychelles islands, moves that will likely irritate China.²⁹

Russian ties to Japan also express these “hedging trends.” Efforts to normalize their relations, sign a formal peace treaty, and settle the territorial issue, coincide with acute Sino-Japanese tensions over the Senkaku (Diaoyu) Islands, exposing serious differences with China. At the Sochi Olympics Putin’s meetings with Xi failed to reach agreement concerning Japan, while his meetings with Abe showed both sides’ determination to achieve normalization.³⁰ Russian media revealed that since 2010, despite a formal agreement between Hu Jintao and Medvedev to recognize each other’s post-1945 claims against Japan, Moscow has steadfastly rebuffed repeated Chinese offers of support on this issue.³¹ Instead, officials frequently have stated Russia’s neutrality on the Senkaku Islands and hope for peaceful resolution.³²

Even as Russia and China expand their military collaboration, Russo-Japanese defense and security cooperation is also expanding, as announced at bilateral 2+2 talks in Tokyo in 2013.³³ Increased Russian efforts to elicit Japanese investments in the Russian Far East display wariness about excessive dependence upon China,³⁴ as Japanese analysts claim to see increased signs of Russo-Chinese discord.³⁵ According to Foreign Minister Sergei Lavrov, Russia is generally never friends with someone against anyone else, and he indicated that it would not support China against Japan.³⁶ Virtually every assessment of Russo-Japanese relations and the current normalization contends that both increasingly fear China’s truculent rhetoric and military moves.³⁷ After the Russo-Chinese naval exercises in July 2013, the PLAN circumnavigated Japan, angering Russia and Japan, which regard the Sea of Japan as their sea. A Chinese naval report justified this effort to intimidate Japan, saying “the Chinese Navy not only has a manifest right to accomplish a complete breakthrough of the so-called ‘first island chain,’ but also an inescapable obligation to ensure national security.”³⁸ Despite the author’s belligerence towards the United States and Japan, no Russian could read it with equanimity or complacency. The author also stated:

“In terms of the relationship between naval capabilities and intentions the logic that China presents should be that it is in keeping with common sense that China is working hard to address the issue of capabilities and is not qualified yet to discuss its intentions. If anything, it is that more powerful maritime force and its system of allies and minions that should take the initiative to explain their intentions to China because their capabilities are obviously making China nervous. China will interpret as malicious any move that ignores its security concerns or even any move that takes “island chains” which are based on an exceedingly arrogant concept for granted. The Chinese Navy is already capable of crossing the Soya Strait and any strait that passes through a so-called “island chain” on a regular basis. What it should address next is to complete the regularization of its presence. This is an irreversible trend. If someone does not like what he sees, he should adjust his focus, and do so quickly.” ³⁹

This is not an isolated case. Rear Admiral Yang Yi recently wrote that China’s navy must be stronger than Japan’s navy and that Japan must accept this. Presumably, China needs this to prevail in a local war.⁴⁰ We have also seen cases where Chinese analysts sought to co-opt Russia into China’s aggressively anti-Japanese policies.⁴¹ China’s 2013 announcement, of an Air Defense Identification Zone (ADIZ) is merely the latest provocation whose implications probably unsettled Moscow, which has been noticeably silent about the move.

Economics

We also see the limits of Russia’s ability to resist Chinese power in economic issues, e.g. energy and arms sales. Increasingly China is Russia’s only partner regarding East Asian energy projects. Rosneft’s heavily touted deals with CNPC may actually represent cases where Moscow has no other viable choice, and the preferences of Igor Sechin, its chairman, demonstrate how the pursuit of personal and sectoral interests disfigures policy and subordinates the national to particular interests.⁴² Despite innumerable Russian claims of a forthcoming bilateral gas pipeline agreement, nothing has happened.⁴³ Now Gazprom says that it and CNPC are drafting a contract and vow to reach agreement by the end of 2014.⁴⁴ Alternatively, Russian sources report Gazprom’s hopes to finalize a deal when Putin visits China in May 2014 but concede that no accord exists on prices for this gas.⁴⁵ Disseminating such vague, contradictory, but positive reports is a classic Russian tactic to hide bilateral discord. Neither can we report progress regarding Russian oil or gas sales to Japan or South Korea.

The only relatively positive area in energy sales to Asia is oil sales to China. While the East-Siberia Pacific Ocean Pipeline (ESPO) opened in 2011, China is effectively buying Russian oil at prices below global market levels when one counts payments on the USD 25 billion it lent to Russia to build ESPO. It has also advanced Rosneft billions in loans. In one deal it lent USD 12 billion to Rosneft in 2013.⁴⁶ Rosneft also agreed to supply CNPC with 365 million tons of oil for 25 years worth USD 270 billion in return for a pre-payment of USD 60-70 billion. This amounts to 15 million metric tons of crude oil annually for 25 years at just over USD 10 billion that will probably traverse the ESPO pipeline to Daqing, China.⁴⁷ A deal with CNPC to drill in the Pechora and Barents seas in the Arctic also highlights CNPC’s growing clout. China got better terms than Europe.

In subsequent deals during 2013, Rosneft won a contract to triple oil deliveries to China to 900,000 BPD, equaling Saudi deliveries to China,⁴⁸ but it did so by obtaining further huge loans of USD 25-30 billion and agreeing to facilitate Sinopec’s acquisition of oil and gas assets in Russia. Rosneft would consider Sinopec’s participation in its large-scale project in the Russian Far East, the Eastern Petrochemical Refinery, jointly established in 2007 by Rosneft and CNPC.⁴⁹ While China will loan Rosneft USD 2 billion backed by 25 years of oil supply for this, Rosneft will boost oil exports to China by 800,000 metric tons this year, and annual exports may reach 31 million tons annually or 620,000 barrels a day, more than doubling present exports. Igor Sechin even hinted at going to 50 million tons annually. A vulnerable Gazprom too may have hope for advance payments by China when it announced its intention to conclude the long-awaited gas deal.⁵⁰

Moscow depends excessively on exports to China through those leveraged pipelines for lack of other Asian consumers for this oil. Arguably, these deals come at the expense of Russia’s national interest and have strings attached as China gains leverage over Russia’s crown jewel, its energy sector. Absent a direct oil pipeline to Japan or South Korea and because a pipeline to one customer is owned by the customer, not the producer, this outcome is incompatible with Russia’s avowed energy objectives in Asia. Indeed, since 2012 Rosneft has had to make concessions to China over their disagreement on the pricing formula for pumping oil through ESPO. China’s monopoly on Russian energy investments in the Far East is because Russia has failed to diversify its customer base.⁵¹

I have previously noted China’s ability to gain what it wants from Russian arms sellers.⁵² China needs Russian technology and weapons it cannot get due to Western boycotts, and Russia needs these sales for revenue and geopolitical purposes. Thus, the sale of the SU-35 is reportedly still on track,⁵³ but Russian arms sellers cannot counter China’s piracy beyond hoping that it fulfills recent anti-pirating agreements.⁵⁴ Reports suggest that the government overrode arms sellers’ disinclination to sell superior wepaons to China,⁵⁵ a decision that highlights its leverage even though it must exert itself to get what it wants. Given Russian awareness that China’s increasing military capability could threaten it, the sales reflect Russia’s unresolved ambivalence that Beijing exploits.

Ukraine

Russia’s February 27 invasion, occupation and annexation of Crimea revealed serious divergence on fundamental issues of world politics and international order. Consistent with its longstanding “principled stand” on sovereignty and territorial integrity and its opposition to any state’s intevention in another state’s internal affairs, China has refused to endorse Moscow’s actions, equivocating, opposing sanctions but clearly wanting to uphold Ukriane’s sovereignty and integrity.⁵⁶ Moscow’s assertion that alleged threats to Russians in Ukraine justify an unlimited right to intervene there or elsewhere to defend them strikes at the heart of China’s justifications for its own untrammeled sovereignty and freedom to conduct its own policies in Tibet, Xinjiang, and Taiwan and represents a second case—Georgia in 2008 being the first—of Russia invading and annexing neighboring territory, thereby setting precedents that unhinge security in Central Asia and, potentially, within China. In Georgia, as here, Russia worked in advance with separatists, as Putin has admitted.⁵⁷

This suggests an ingrained Russian trend towards recklessness and aggrandizement on issues of war and peace and disregard for basic Chinese interests and principles.⁵⁸ China may welcome further East-West estrangement that drives Russia closer to it, but that is not the whole story. If economic sanctions continue to increase and intensify, as is likely, Russia might have to turn to China for economic and political support. Beijing might welcome and exploit that outcome, but it cannot be happy about destruction of China’s beneficial economic and military ties to Ukraine and disegard for China’s foreign policy principles.⁵⁹ Xi’s recent reaffirmation of great power relations of a new type with Obama suggests China’s unhappiness with Russia.⁶⁰ China has equivocated and even offered a three-point solution to the crisis: establishing “an international coordinating mechanism … to explore means to a political settlement,” having all parties refrain from taking escalatory actions, and asking international financial institutions “to explore how to help maintain economic and financial stability in Ukraine.”⁶¹ Simultaneously China announced its opposition to sanctions.

Western diplomats assumed that Russia was isolated and lacked China’s support. This is emphatically not how Russia saw it. Early in the crisis, and quite unjustifiably, Moscow announced that it had Beijing’s support. Then at his March 18, 2014 speech justifying the annexation of Crimea, Putin stated openly his gratitude to China and India for supporting Russia’s actions.⁶² From Russia’s perspective all that matters is that China—its largest trading partner and the primary hope for future investments—opposed sanctions and would not formally oppose Moscow at the Security Council. Lavrov expressed Moscow’s satisfaction with this stance, saying, “We do not need to ask for solidarity from our economic and strategic partners in the East. They are not going to follow the lead [of those callng for sanctions] and our interaction with them will have an upward trend. I have no doubt of that.”⁶³

This crisis plainly divided the Chinese government and expert community as Chinese reporting of this crisis shows.⁶⁴ Hawkish Global Times admitted that some fear a revival of Russian imperialism and arrogance, making it difficult for China in the future, but concluded that, on balance, China gains more than it loses from this crisis.⁶⁵ The most pressure on China will come from the United States, not Russia, and a multipolar world benefits from a powerful (and implicitly anti-American) Russia.⁶⁶ In contrast, Phoenix TV complained that Russia took advantage of China by thanking it for its support, which was not actually given,⁶⁷ implying that Russia could, for reasons of its own, lead China into a crisis on an issue of little importance to China. Putin’s adventurism has caused other problems for China. Phillip Bowring noted that Putin’s threats regarding ethnic minorities also apply to Kazakhstan, a major Chinese partner in Central Asia, and could lead to secession from Russia, as in Dagestan and Chechnya. If it emphasized the ethnic feature of its identitty and diplomacy, it could forget about resolving the vexing problems of Tibet and Xinjiang, internal isues having international repercussions.⁶⁸ Thus, Russia’s actions prevent China from adopting a clear-cut position, while posing issues for its relationship with Russia. Undoubtedly, it might make equally serious strategic gains, but it could also sow and reap the whirlwind given Russia’s strategic recklessness.

Conclusion

Russia simultaneously asserts itself against or in defiance of China and bandwagons with China. It pursues strategic independence in regional security through “partnerships” with Asian governments that display growing wariness about China while needing global strategic cooperation with China against US power and values. Concurrently, in critical economic sectors Moscow’s refusal to reform entails acquiescing to China’s demands. That ultimately redounds to China’s advantage if it can refrain from aggressive policies that bring Asian states and the United States closer together. China’s strongest and seemingly least threatening suit is its economic power, which it deployed deftly to highly positive effect in Asia in the 1997-1998 economic crisis.⁶⁹ Here it can increasingly get what it wants from Russia and construction of a gas pipeline will ratify this trend even more.

Moscow’s aggressive and single-mindedly self-serving policies prevent lasting coalitions with anyone to restrain China and will merely further polarize East-West relations in Europe, the former Soviet Union, and the Middle East. This East-West hostility leaves Russia no option but Asia where it is also distrusted, and less able to compete due to its weak economic and energy leverage. It might gain points of tactical independence from China, but strategically and economically it is becoming China’s junior partner. Xi’s offer of cooperation in Asian security and stability, magnanimously proposing to link the Trans-Siberian Railway to the Chinese Silk Road, which Putin welcomed, indicates China’s readiness to convert Russia into its economic and strategic junior partner.⁷⁰

China has punctured Russia’s Eurasian and great power pretensions graciously but decisively. Given the expansive geostrategic benefits that realization of China’s Silk Road vision will bring to it, this could entail a massive and decisive Russian strategic defeat in Eurasia, rendering it as China’s raw materials appendage.⁷¹ We see similar trends in energy and arms sales. China’s winning strategy is restraint, not militarism, unlike Russia’s strategy in Europe.⁷² If China can revive that course in Asia, as in 1978-2009, it stands to gain in both Asia and Eurasia. If Russia spurns this strategy, it will gain an unrelenting enemy on its eastern frontier and may find itself sleeping alone next to a dragon.