Russian President Vladimir Putin visited China last week to kick off “the Year of Russia in China.” The festivities, which Russia will reciprocate next year with “the Year of China,” are sure to trigger the usual excited speculation about ties between the two continental giants.
No doubt the two countries put considerable stock in their “strategic partnership,” but there is no need to hyperventilate. There are very real limits to their bilateral cooperation.
Ten years ago, Beijing and Moscow agreed on a strategic partnership that called for the settlement of all remaining border disputes as well as an intensified political and economic relationship. Borders have been agreed, the two countries cooperate in the Shanghai Cooperation Organization to settle affairs in Central Asia, they consult whenever possible on U.S. hegemony and on key international issues through a variety of working-level mechanisms, and the two countries’ leaders meet often — Mr. Putin has met Chinese President Hu Jintao five times in the last year alone.
Most important for the two countries, their economic relationship has also taken off. China has become Russia’s fourth-largest trading partner, while Russia is China’s eighth-largest partner. Chinese statistics show bilateral trade between Russia and China reached $29.1 billion last year, a 37.1 percent increase, and 14 percentage points higher than the growth of overall Chinese trade. Both countries expect to reach the 2010 target of $60 billion to $80 billion in two-way trade.
The most significant outcome of Mr. Putin’s visit was agreement to build two natural gas pipelines from Siberia to China, which will make Russia, holder of the world’s largest gas reserves, one of China’s biggest gas suppliers within a decade. At present, China gets none of its gas from Russia. When complete, the pipelines would supply 60 billion to 80 billion cubic meters of gas, twice China’s total gas consumption in 2004.
The deal and agreement between two state-owned companies to build a refinery and jointly search for oil would be expected to silence Chinese complaints about Russian reluctance to commit to specific projects with China. Moscow has skillfully played Beijing and Tokyo off each other to get the highest bids to build oil pipelines from other parts of Siberia.
At the same time, however, the deal has set off alarms in Europe, which gets 70 percent of its natural gas from Russia. The gas fields to be tapped for China are already pumping supplies to Europe. The Russians say they will develop new sources, but Europeans ask where Russia will get the tens of billions of dollars needed to finance new pipelines and maintain old ones. Chinese investments will help, but they are unlikely to be enough.
Beijing is also eager to procure oil supplies, but Russia continues to flirt with Japan over the construction of a pipeline. In China, Mr. Putin spoke of building a branch line, but made no promises and committed to no completion date for feasibility studies, much less the pipeline itself.
China seeks a broader relationship that would go beyond trade. President Hu called on the two countries to “shift cooperation from the current trade-centered mode to one focusing on production and processing.” China wants to accelerate the transfer of skills and knowhow so that it can move up the production ladder. This complaint is especially heard regarding one of the most successful sectors of Russia-China economic relations — military-related sales. China says that despite rapid growth in the weapons trade, Moscow has been reluctant to sell its top-line military hardware or to set up production lines in China.
Russian hesitation reflects deep concerns about long-term relations with China. Even when the two countries were fraternal communist allies, their relationship was marked by spikes. Profound distrust between Moscow and Beijing gave the U.S. the opening to pursue detente and play either communist government off another. Today, both governments worry about U.S. power and prefer a multipolar structure of international power. But they also both need good relations with the U.S. and the West more than they need each other.
There is competition for leadership in Central Asia, and Russia worries about Chinese encroachments — both in terms of people and business — in the sparsely populated Russian Far East. Local politicians there speak openly of “a yellow peril.”
One inhibition against selling more advanced weapons systems to China is Russia’s fear that they might be used against it. There appear to be very real limits to how far the Russia-China “strategic partnership” can go. But given the tensions that have long simmered in that relationship — and their 4,200-km shared border — it is far better that cooperation prevail over competition.
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