US Snubs Russia, China Doesn’t
Image Credit: The Presidential Press and Information Office (Russia)

US Snubs Russia, China Doesn’t

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On August 7, the White House announced the cancellation of a September G20 summit meeting between Barack Obama and Vladimir Putin, citing a “lack of progress on issues such as missile defense and arms control, trade and commercial relations, global security issues, and human rights and civil society in the last twelve months,” as well as Russia’s granting of asylum to Edward Snowden – essentially, the failure of Obama’s “reset.” While the U.S. secretaries of State and Defense have both since hosted their Russian counterparts in Washington and worked to smooth bilateral relations, the noted cooling will likely decrease cooperation on arms control, Iran, Syria, and other pressing international issues.

Though many in the U.S. and abroad have supported Obama’s decision as the correct move, as Richard Falk noted, what if the roles had been reversed? If a Russian whistleblower had arrived in the U.S. with information about a secret Russian surveillance system, the individual would have been celebrated and undoubtedly granted asylum.

Meanwhile, preparations for a meeting between Putin and Chinese President Xi Jinping at the G20 Summit continue apace, an event which has been “hailed as a major event for the latter half of the year in the course of Sino-Russian relations,” according to Chinese state media – which also quoted Putin as “eagerly expecting” Xi’s visit.

Spurred in part by the U.S. rebalance to Asia, strategic cooperation between Russia and China has increased noticeably over the past several years, while the two countries have held similar positions in the UN on issues like Iran and Syria. Just as Putin’s first foreign trip after assuming the Russian presidency in 2012 was to China, Xi’s first official state visit was to Moscow on March 22-24, 2013.

During their summit, Xi and Putin discussed forming a comprehensive strategic partnership to advance the interests of both countries, affirming support for each other’s territorial and strategic interests. The two leaders also agreed that the U.S. intercontinental ballistic missile defense system was a concern to both and could perhaps undermine regional deterrence and the balance of power. Xi was the first foreign leader to be allowed to visit Russia’s strategic defense command headquarters and war room.

Xi told Putin that Beijing and Moscow should "resolutely support each other in efforts to protect national sovereignty, security and development interests," while promising to "closely coordinate" on international and regional issues. Putin noted, "The strategic partnership between us is of great importance on both a bilateral and global scale."

At the same time, Russian and Chinese officials ratified the 2013-2016 implementation guidelines of the China-Russia Treaty of Good-Neighborliness and Friendly Cooperation and also signed 30 agreements on cooperation in military exchanges, technology, energy and trade. It was also announced that China would give Gazprom a $2 billion line of credit to expedite a long-term natural gas supply contract. In June 2013, a $270 billion deal with Rosneft to more than double oil shipments to China for the next 25 years was announced, with Russia receiving a $70 billion immediate payment.

China is Russia’s largest trading partner, while Russia is China’s ninth largest. Year-on-year, Sino-Russian trade increased by 11.2% in 2012 to reach $88.2 billion, compared with 6.2% growth in trade for China overall. Xi and Putin announced that bilateral trade was expected to reach $100 billion by 2015 and $200 billion before 2020. According to Wu Hongwei, a researcher with the Institute of Russian, Eastern European and Central Asian Studies under the Chinese Academy of Social Sciences, "Sino-Russian cooperation, which is currently over-reliant on energy, has huge potential in agriculture, new energy, aviation and the military, which will likely become a new impetus for future development.”

Vice Premier Zhang Gaoli conducted a follow-up visit to Russia in late June to, according to Xinhua, “give a new impetus to the unprecedented high level of relations between the two neighboring giants.” He also met with Putin, Russian First Deputy Prime Minister Igor Shuvalov, and Deputy Prime Minister Arkady Dvorkovich, and gave a keynote speech at the St. Petersburg International Economic Forum. On August 16, Chinese State Councelor Yang Jiechi met Putin in Sochi as part of the ninth round of bilateral strategic security consultations, with both pledging to deepen strategic ties.

On August 20, during the Joint Commission for the Regular Meetings of Heads of Government of China and Russia – at which Chinese Vice Premier Wang Yang said on August 20 that China was willing to cooperate with Russia in a variety of areas, including joint research on jets and helicopters, nuclear projects, faster cross-boarder infrastructure construction, and support for Chinese investment in Russia – especially Russia’s Far East.

While sales of Russian military equipment to China have decreased in recent years as China has increased domestic production and export, they do continue. In June, it was reported that Russia would sell 100 of its latest SU-35 fighters to China. And cooperation between the two countries’ militaries has been increasing. On July 8-10, China joined Russia for its largest-ever naval drills with a foreign partner, the “Joint Sea-2013 exercises,” to which China reportedly sent four destroyers, two guided missile frigates, and a support ship. Russia dispatched 11 surface ships, including a guided-missile cruiser, and one submarine. The exercise coincided with a U.S.-Japanese joint air exercise several hundred kilometers away. China and Russia also conduct joint anti-terrorism drills, the most recent of which, “Peace Mission-2013,” was held July 27–August 15 in the Russian Ural Mountains. Of the drill, Xinhua quoted Russian Rear Admiral Leonid Sukhanov as saying, “China and Russia as two big powers in the Asian-Pacific region can strengthen cooperation to face security threat together. I think the joint drill is held to safeguard our own interests and maintain regional stability.“

Despite the visibility of growing Sino-Russian ties, it is likely that actual bilateral strategic and economic cooperation will be weaker than has been proclaimed in various news reports. There has also been increasing U.S.-Chinese military cooperation. Chinese Defense Minister Chang Wanquan visited the Pentagon and U.S. Defense Secretary Chuck Hagel on August 19. The two sides agreed to increase high-level visits, joint exercises, and training programs – admittedly a far cry from the cooperation currently underway or planned between China and Russia; one Xinhua editorial noted, “The journey toward a new type of China-U.S. military relations is not going to be easy.” In the increasingly complex regional and global context, and with the Obama-Putin summit cancelled and the Putin-Xi summit still on track, the U.S. needs to recognize and better take into account the expanding Chinese-Russian relationship.

Ashley Hess is a Kelly Korean Studies Fellow at Pacific Forum CSIS.

Comments
26
Bob
August 27, 2013 at 00:46

Even if  China is lucky not to collapse economically or sink into the lost decades like Japan before in the years to come, Yuan ,at the time, may be just one of the many global reserve currencies such as dollar, yen, euros, sterling etc. in which dollar still being the dominant. The US' economy is recovering & growing again thanks to its traditional entrepreneurship, its resilience, especially its shale gas & oil boom & perhaps the most important, its innovation & creativity,  while China is still heavily reliant on 'labor-intensive,export-oriented & fixed-asset investment'  model for growth.  China must accept the painful economic restructures, if any,  to rebalance its long distorted economy to avoid the possible crash landing &  the dreaded 'middle-income trap' in the coming years . Bear in mind even when China becomes the world's largest economy , its GDP per capita is still too low vis-a-vis the US' & a number of nations, & still belonging to the third world countries , not  the developed!

Bill888
August 26, 2013 at 01:27

I doubted that the US dollars is still the reserve currency through to the end of 21st century.  Perhaps it will last until 2030 the most, when the Yuan will  become fully convertible in 2020  and develop into a reserve currency for other countries by 2030 along with the US dollar.

Bob
August 25, 2013 at 04:00

Just a gentle reminder that China accounts for half of the world’s new money supply  (printing money out of thin air! ) since the global financial crisis in 2008. Currently, the Yuan remains inconvertible; so, it's still a long way for it to go  to become a global reserve currency like the US Dollar, Euros, Yen, Sterling etc. The US has, indeed abandoned the gold standard in 1971. Yet, up till now,  the US dollar has still been & will still be  the most reliable global reserve currency for the whole world at least through this 21st century. In fact, China's economy currently  has been in really bad shape and could collapse any time  if there were no serious economic restructing. And the rest of BRICS are not doing any better, also in very bad shape. As for BRICS, it's indeed,  just an acronym coined by Jim O'Neill in 2001 for Brazil, Russia, India, China & South Africa : all are developing countries. It's not yet an alliance or an organization as you've mistakenly thought.  Among these so-called 'BRICS',  there have been also a lot of frictions. It's China’s manipulation of its currency resulting in significant problems for manufacturing sectors of other emerging powers. India, Brazil and South Africa all have expressed disenchantment with Chinese economic policies at various times. India has even imposed anti-dumping duties on a range of Chinese goods.  Brazilian manufacturers accusing China of dumping Chinese cheap goods into their domestic market, even as Brazilian manufacturers face steep non-tariff barriers in trying to export to China. And Brazil is also wary of China’s growing economic profile in South America, which Brazil considers its own sphere of influence. Even former South African President Thabo Mbeki has warned that S.Africa risked becoming an economic colony of China if the growing trade imbalance between the two was not rectified (as the flood of Chinese finished goods to Africa has created a large trade imbalance). Thus far, most of textile mills in South Africa have closed down under the onslaught of inexpensive Chinese imports! In sum, , the "alliance" you've just mentioned above in reality is just a "coalition of parties with conflicting interests" more divisive & firecely competitive than cooperative & collaborative. And  BRICS remains  just an acronym coined by Jim O'Neill ,an investment banking analyst at least for the time being!

Tony theJ
August 24, 2013 at 08:49

Russia has as much chance of compromising on the Kurils with Japan as the UK has of comprimising with Spain over Gibralta or comprimising with Argentina over the Falklands! Zilch chance. Russia has battalions of S400 on the Kurils and did a massive military excercise  around the Pacific, warning Japan of the consequences too come if it chooses military adventurism.

Bower
August 24, 2013 at 08:08

@ Alex,

Don't you know that the Fed is getting ready to come to China's rescue in the coming months when the latter's economy collapses? ( Buy back all China's USTbonds!). Just wait & see,dude.

Tony theJ
August 24, 2013 at 07:38

They have the alliance. It is called BRICS. We in the west do not hear too much about it but it is getting stronger every day. First and foremost is the new world currency they are working on called 'new yuan'. China guarantees this currency. At the moment it's a line of credit. Examples being US dollars no longer change hands on deliver on oil/ energy. Example being Iran, super tankers from Iran deliver the oil too China. The Iranians get a line to of credit to purchase ANY product from China AND Russia. Russia and China have got the Iranians in the palm of their hand voting for enough sanctions to put them in this position. They both will not allow the UN to put any extra sanctions even it gets the N bomb.

Another example is gold buying. Why are the Chinese and Russians buying all the worlds gold at a staggering pace? Why do the Germans want all their gold back from overseas vaults? Why can't the US fed give back the German gold? Gold was the guarantee for a countries currency. The new system is 'print as you go'. The new Yuan will be an alternative currency and will have a pretty powerful punch when it is floated.

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