SINO-RUSSIAN RELATIONS IN 2018

Over the past two decades, the relationship between China and Russia has evolved from a marriage of convenience into one of enduring strategic value for both countries, one that China describes as a comprehensive strategic partnership of coordination. Chinese policymakers recognize the limitations of the Sino-Russian relationship and do not aspire to transform it into a formal alliance. Nonetheless, China has strong incentives to further enhance its relationship with Russia, covering economic, military, and diplomatic cooperation.

Major drivers include what China perceives as the dangers of U.S. global hegemony, democracy promotion, and attempts to undermine strategic stability or otherwise threaten Chinese security interests in Asia. China also benefits from trade and investment links and energy cooperation with Russia. The sum total of these motivations is substantial, spanning Chinese perceptions, interests, and policies about global security, diplomatic, and economic affairs. China’s incentives to sustain this relationship will remain robust for the foreseeable future, while the costs for China will remain low.

POLICY IMPLICATIONS

• Gone are the days of the Cold War’s strategic triangle. Today both China and Russia view the U.S. as the main potential threat to their interests. In this context, Beijing and Moscow have a stable strategic partnership grounded in a geopolitical reality as well as numerous areas of convergence of economic, diplomatic, and security interests.
• Regardless of the trajectory of the U.S.-Russia and U.S.-China relationships, Beijing and Moscow will very likely become even closer. Additionally, broad policy incoherence or inconsistency on key issues by the Trump administration could create opportunities for China and Russia to find new and different ways to undermine the interests of the U.S. and its allies and partners. The relationship between China and Russia has enjoyed a sustained and substantial convergence over the past twenty years or so, by design from China’s perspective. This stands in sharp contrast to their often tumultuous, and sometimes extremely unstable, relationship during the Cold War. In recent years, the high level operation of China-Russia relations and bilateral all-round cooperation in various fields have not only brought benefits to the two countries and the two peoples, but also injected strong positive impetus into regional stability and world peace. China-Russia strategic coordination has greatly transcended the bilateral category and become an important ballast stone of safeguarding world peace and stability. 

China has a number of strong incentives to further enhance its relationship with Russia, covering economic, military, and diplomatic cooperation and these incentives will remain robust for the foreseeable future, while the costs for China will remain low.

Chinese policymakers are well aware of the limitations of the Sino-Russian relationship. They are keenly aware of both its historical trajectory and the power realities that can (and have) weakened their ties with Moscow in the past. Beijing and Moscow are close, but not allies. Moreover, China does not aspire to transform its relationship with Russia into a formal alliance. Nonetheless, China’s views on the importance of the Sino-Russian relationship, suggest very strongly that the two countries will continue to believe they have compelling reasons to further strengthen their relationship.

There are a diversity of motivations that animate China’s pursuit of a closer and more cooperative relationship with Russia. These motivations include the following:

• countering perceived U.S. hegemony
• countering perceived U.S. spread of democracy and subversion
• opposing U.S. defense policies that undermine strategic stability
• opposing U.S. defense policies in space and cyberspace
• gaining access to military hardware and advanced defense technology
• expanding trade and investment links with Russia
• gaining access to Russian energy supplies

The sum total of these motivations is indeed substantial, spanning Chinese perceptions, interests, and preferences about global security, economic, and diplomatic affairs. In essence, these motivations touch on broad conceptions of the global order as well as specific issues that directly impact Chinese economic and security interests. In particular, the areas of convergence in Chinese and Russian interests are broad and substantive. They cover both Chinese material and nonmaterial interests and encompass Chinese perceptions and interests that are more enduring than ephemeral. This suggests a robust basis for Sino-Russian cooperation for the near term (0–3 years) and medium term (3–5 years).

Counterbalancing U.S. Global Influence

Russian and Chinese interests converge most prominently on the desire to serve as a counterweight to perceived U.S. preponderant influence—to constrain U.S. power . Their cooperation is conducive to balance in the international system and can facilitate the solution of some international problems. China sees Russia as a useful counterweight to U.S. power, and most Chinese believe that Russia values Sino-Russian cooperation for the same reason. An important focus of Sino- Russian diplomatic cooperation is “checking the United States. Cooperation with Russia has offered China advantages on a number of specific issues, such as opposing the expansion of the U.S. military and political alliance system to include countries along the periphery of China and Russia or strengthening of the deployment of military forces, opposing the U.S. launch of the Kosovo War, opposing the U.S. deployment of theater missile systems, opposing the deployment of weapons in outer space, and opposing the unipolarity of the world order and establishing a new international political and economic order. Both Beijing and Moscow believe that the United States has preponderant and excessive power in the international system (exercised in various ways) and that this situation needs to be remedied through episodic and continual cooperation on diplomatic, military, and economic issues. Specifically, they both see the United States and its alliances (the five Asian alliances for China; NATO for Russia) as the most serious threat to their regional security interests and the main obstacle to their respective abilities to shape the regional security environment in their interests. One important dimension to this motivation is that Russia and China have slightly different objectives, which is a function of their differing views of their role in international affairs. Russia sees itself as a global power with multiple regional interests. As such, it seeks to push back against the perceived preponderance of U.S. power in multiple theaters. Russia under Putin is comfortable with very public and continual friction in U.S.-Russia relations. By contrast, China sees itself primarily as a regional power in Asia, albeit one with growing global interests. On balance, Beijing is not yet ready to act as a global power but it is moving in that direction. Thus, it is most focused on pushing back against the United States in Asia. China is less comfortable than Russia with friction in U.S.-China relations and is happy to let Russia take the lead in confronting U.S. power in other parts of the world, such as the Middle East.

There is also an important economic dimension to the Chinese discomfort with perceived U.S. hegemony. Beijing is deeply uncomfortable with the preponderant role of the U.S. dollar in international economic affairs: trade, investment, finance, and development. China’s effort to “internationalize” the renminbi is motivated by this concern. Interestingly, Chinese media is replete with stories about how Sino-Russian trade is settled in renminbi rather than dollars.

If Chinese leaders continue to assess that the United States and the West more generally are indeed in relative decline, or if the United States is seen as increasingly unwilling to play a global leadership role, such changing circumstances would undoubtedly affect how China views its ability to expand its global influence and to resist pressure from the United States, in Asia or globally.

The natural question that arises is whether perceived U.S. and Western decline weakens Chinese and Russian incentives to cooperate closely with one another. If the presence and influence of the United States and the West are diminishing, then this could reduce Chinese and Russian incentives to balance against the United States and its allies, whether cooperatively or individually. At the very least, it could reduce the likelihood that Beijing and Moscow will place areas of disagreement or friction in their relationship on the back burner in the interest of maintaining a cooperative approach to meeting the challenge posed by U.S. global power. On the other hand, it is equally possible that a different causal logic could be at work. Declining U.S. and Western power could instead add to incentives for closer Sino-Russian cooperation, seeking to promote their interests as U.S. influence recedes. Russia and China could perceive greater opportunities to advance their influence and interests against the United States and the West, while the potential costs of doing so appear to be lower.

 Access to Advanced Military Technology and Other Forms of Defense Cooperation

To this day and despite the decades of collaboration and problems, Russia remains an important supplier of advanced military technology to China. This relationship has changed over time, in both its breadth and depth, but remains a pillar of their ties. China also views Russia as a useful partner in other areas of defense cooperation, including professional military education, training exchanges, and joint military exercises.

Trade and Investment Links

Trade and investment ties between China and Russia have grown, albeit gradually, over the past two decades as both sides sought to develop this part of their relationship. Nonetheless, Russia’s importance to China as a trade partner remains extraordinarily limited, especially compared with the latter’s much larger and more consequential economic relationship with the United States. For China, economic cooperation with Russia has yet to live up to expectations, but it is still more than a fig leaf to suggest that their relationship is becoming increasingly comprehensive in nature. China has always seen Russia as a source of energy and advanced technology and is happy to sell its various manufactured goods to Russia. Russian discomfort with this asymmetry has always been a quaint concern for Beijing to manage rather than a structural constraint on better relations. For China, the Western sanctions on Russia following its annexation of Crimea and invasion of Ukraine were a welcome buying opportunity. Russia needed an outlet for its resources and a way to generate compensating economic activity. China happily provided just such an outlet but “requested” friendship prices, of course. Russia eased barriers to Chinese investors, which is leading to new Chinese investments in the Russian railway and telecommunication sectors. Financial cooperation further expanded as Russian banks sought refuge in cooperating with Chinese institutions. The preferential treatment was most visible in Chinese purchases of Russian energy resources. The upshot was that the asymmetry in their economic relationship deepened further as a result of Western sanctions, but Russia could not do much about it. China was gaining more and better access to the Russian market, and at better prices.

Cooperation on Energy Issues

Sino-Russian cooperation on energy has a long history. Russia’s position as a net oil exporter, combined with China’s position since 1993 as a net oil importer, has fostered a lasting and mutually beneficial relationship. Russia has always been among China’s top five suppliers of oil, and in 2016 it dethroned Saudi Arabia as China’s top supplier. A major turning point in the energy relationship occurred following the Ukraine-related sanctions when Russia started negotiating much lower prices with China for investment in Russian oil and gas fields. Chinese investments in major Russian liquefied natural gas (LNG) projects represent a new and thorny dimension to the relationship. Chinese commitments have been robust, but Russian follow-through has been lacking, potentially opening up an area of persistent tension and frustration between the two countries. Nonetheless, such investment comes in the context of substantial and sustained diversification by China of its energy suppliers, thereby lessening the long-term impact of such frustrations on the overall relationship. Chinese policymakers and business leaders are well acquainted with the vagaries of dealing with Russian energy projects, especially ones that require major government coordination and technological expertise.

Chinese Perspectives on Results and Limitations

On balance, Beijing has concluded that its partnership with Moscow yields substantial and enduring benefits for China, and this is not going to change in the short or medium term. In particular, Chinese scholars note the importance of arms sales and defense cooperation. They also highlight that cooperation with Russia has served as a valuable strategic tool for uprooting U.S. hegemony. Some Chinese scholars have even suggested that the Sino-Russian relationship might prove to be a “good model” for Chinese efforts to develop the “new type of major power relationship” it seeks to build with other countries. Nevertheless, some aspects of the Sino-Russian relationship have been disappointing. Perhaps most notably, as a number of Chinese scholars have pointed out, the economic dimension of the relationship has lagged behind its political and security components.

Looking ahead, China has many reasons for continuing to strengthen its relationship with Russia, but it also views the relationship as having a number of limitations or constraints. These include the following:

• the increasingly asymmetric nature of the relationship and Russian suspicion of China’s exploitation of this asymmetry
• China’s declining reliance on Russia as a source of advanced military technology
• divergences over diplomatic issues
• friction over Chinese activities in Central Asia and Russian activities in East Asia

Chinese analysts acknowledge that the Sino-Russian relationship has become more asymmetric in the last decade, and Moscow, as a result, has become somewhat more suspicious about China’s motives and ultimately its leverage. Chinese leaders are well aware of these and other Russian concerns, including worries about Chinese influence in the Russian Far East. Fundamentally, China is comfortable with this emerging asymmetry. The question is how long China can maintain this dynamic without it undermining the long-term basis for closer cooperation. Another limitation is that Russia, though still an important source of technology in some key areas, has less to offer China than it once did as a source of advanced military hardware because of improvements in China’s defense industries. Beijing is also well aware that Moscow has been frustrated and concerned by Chinese reverse engineering of systems sold to China. This pillar of the relationship may be reaching its limits as Russia sells China its most advanced defense platforms, equipment, and technologies. Another limitation is the potential for growing competition between Chinese and Russian arms exporters in some niche areas of the international arms market. Russian defense sales to Vietnam and other countries in Asia are an interesting area to watch, as they suggest some differing views on diplomatic issues of consequence to both countries. That said, the cooperation and coordination between the two militaries is expanding. China is happy to learn from Russian operational capabilities, while both countries enjoy the strategic signals associated with their growing joint military operations all over the world.

Diplomatic Divergences

Chinese and Russian views on global affairs and each other’s role in managing their primary spheres of influence—Eurasia for Russia and the Asia-Pacific for China—converge more than they diverge. This convergence in visions of order and architecture is what provides the basis for continued, albeit episodic, cooperation on sensitive diplomatic issues. Russia’s penchant to take the lead on controversial issues of marginal Chinese influence and relevance, such as Syria, offers a similar point of convergence. Yet there are limits to such cooperation. For example, Russia tends to be more concerned with the regional implications of a nuclear North Korea, whereas China may be coming to the view that it can live with a nuclear North Korea as long as it does not proliferate or cause too much instability. Similarly, Russian and Chinese positions on territorial question are not perfectly aligned. Russia’s annexation of Crimea and invasion of Ukraine clearly violated China’s ironclad commitment to the inviolability of a country’s sovereignty and territorial integrity. Yet China was careful in its public and private diplomacy not to accentuate this tension. Similarly, Russia is agnostic about most of China’s claims in the South China Sea in an effort to avoid alienating China and Vietnam, as well as other claimants such as the Philippines and Malaysia. The latter are both potential recipients of Russian arms. There is little evidence, however, to indicate that these policy differences are a source of any major tension in the relationship. Another limitation could arise from friction or competition in Central Asia. Both sides have failed to coordinate their economic strategies in the region. China simply has much more to offer Central Asian countries than Russia and has gained political influence through its trade and investment activities. The Belt and Road Initiative holds the prospect of orienting these economies more toward China than Russia in the long term. Russia’s relative discomfort with this trend is an open question, but China is dedicated to continuing its engagement with the region, for both security and economic reasons. This situation has de facto produced a rough division of labor between China and Russia in Central Asia, with China as the primary provider of economic goods and Russia as the security provider. A looming question, and potential source of tension, is whether China’s growing economic role will inevitably lead it to play an increased security role—and how Russia might respond. If the Belt and Road Initiative goes ahead as envisioned, China may very well increasingly become a security provider for Central Asia. This would pose new challenges for the Sino-Russian relationship. Chinese analysts, for their part, are well aware of the possibility that greater Chinese involvement with security issues in a region that Russia views as its sphere of influence, at least as far as security matters are concerned, could lead to increased friction. Yet they appear to believe that Beijing can manage this challenge in a way that maintains its interests and influence without gratuitously offending Moscow or unnecessarily exacerbating Russian sensitivities. It is also possible that increasing Russian activities in East Asia could create tension in the bilateral relationship. For example, as mentioned above, Russian military ties with Vietnam, especially arms sales, could become a greater source of friction between Beijing and Moscow. Some Chinese scholars have already criticized Russian defense cooperation with Vietnam as a type of “covert containment” of China inasmuch as Russian arms sales give Hanoi a “stronger hand” to play against Beijing in the South China Sea.

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