Analysis

Sino-American Rift Gives Russia an Opening

Russia is keen to deepen its relationship with China, even if it is the weaker party.

Vladimir Putin Xi Jinping
Presidents Vladimir Putin of Russia and Xi Jinping of China meet on the sidelines of a summit in Benaulim, India, October 15, 2016 (Kremlin)

Aside from causing a global humanitarian crisis, COVID-19 has deepened the rift between China and the United States. President Donald Trump has politicized the pandemic, calling it the “Chinese virus” and ordering the federal government’s main pension fund to stop investing in China.

Military conflict remains unlikely. Escalation is more likely to be economic and political — which is still costly, and gives America’s other nuclear-powered adversary, Russia, a chance to strengthen its ties with Beijing.

Sino-Russian relations

The global geopolitical environment of the last thirty years has been conducive to a Sino-Russian rapprochement. America’s victory in the Cold War prompted China and Russia to align globally. A common interest in stability in Central Asia and burgeoning economic relations have brought the two sides even closer.

There are strains: price disputes, competition in Central Asia and the overrepresentation of raw materials in Russia’s exports to China, among others. But these do not appear to have stood in the way of closer relations. Both China and Russia appreciate the geostrategic and economic value of their partnership.

Economic impact of coronavirus

Commercial relations are likely to intensify in the short term, namely around the energy trade, which accounted for 72 percent of China’s imports from Russia in 2018. Chinese demand for hydrocarbons should increase as the country recovers from the coronavirus. Some reports suggest oil demand has already returned to last year’s level. Russian oil sales to Beijing were up 17.7 percent in April from a year earlier.

This will alleviate the stress COVID-19 has put on Russia’s public finances and — in the long term — make up for a reduction in European demand for Russian oil and gas.

But the pandemic doesn’t significantly change the balance of the relationship, which is hugely in China’s favor. China has a population of 1.4 billion; Russia, 146 million. China’s economic output was projected to be almost $30 trillion this year; Russia’s, $1.6 trillion.

China has exploited Russia’s economic weakness in the past to secure favorable terms, but it will keep Russia’s position in the Chinese energy mix limited for political reasons.

In the event of a radical decoupling between China and the United States, Russia’s domestic market is hardly an alternative. The import product shares of capital goods and machines/electronics from the United States stand at 42 and 23 percent, respectively. The shares of the same goods from Russia stand at a combined 1.5 percent.

But the Chinese market is of interest to Russia. China accounts for 13 percent of Russia’s exports in goods and 20 percent of its imports. If Russia’s relations with Europe continue to deteriorate, it may have little choice but to rely more on China.

Political impact

For China, the significance of the relationship is mainly political.

A friendly Russia allows China to ease security on its northern border, where it fought a small war with the then-Soviet Union in 1969. This gives it more freedom to focus on the Pacific and the United States. The Sino-Russian Friendship Treaty, which is in effect until 2021, calls for immediate “contacts and consultations” if either side is attacked, raising the possibility of Sino-Russian alliance.

The Russians aren’t naive. They know that they are the weaker party, and they know China might one day pose a threat. But for the foreseeable future, we should expect more Sino-Russian cooperation, not less.

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