June 25, 2018 Special Dispatch No. 7537

Russia-China Relations – Russia And China Need Each Other More Than Ever In The Context Of Trade War Against The U.S.

June 25, 2018
Russia | Special Dispatch No. 7537

On June 8, 2018 Russian President Vladimir Putin met with the President of the People’s Republic of China Xi Jinping in Beijing.[1] The two leaders displayed strong friendship, and experts concluded that the very amicable atmosphere during the negotiations demonstrated that Russian-Chinese relations have moved to a new level.

The Russian media outlet reported in an article, titled "Two Against The U.S.: Putin And Xi Jinping Break Bread Together," that Russia and China need each other to face the "trade war" against the U.S.[2]

Indeed, Russia's Economic Development Minister Maxim Oreshkin announced that Russia will side with Europe and China in the global trade war that threatens. Oreshkin said that Russia will raise tariffs on imported U.S. good in response to the protectionist measures taken by Washington regarding imported steel and aluminum.[3] reported that while Russia is not a major economic partner for China, Beijing needs Moscow's political support. The Russian expert Vita Spivak noted that Russia-China trade in 2018 will total 120 billion dollars, surpassing for the first time in five years the 2013 figures (88.8 billion dollars). This figure however is deceptive and reflects high prices for oil and gas. Russia is China's lead supplier in these commodities, but ranks quite low on China's list of trade partners.

China is the major trade partner for Moscow, but good personal relations between the leaders and resounding memorandums aside, Beijing is an exceedingly modest investor in the Russian economy, accounting for around 1% of all foreign investment in Russia..[4]

Below are excerpts from the article on Russia-China relations:


Russian-Chinese Relations Have Moved To A New Level

"Vladimir Putin is in China from 8 to 10 June on his first state visit following his reelection. The President of the PRC, Xi Jinping, awarded him the Order of Friendship, the two politicians together attended a hockey match, cooked and tasted local dishes. Experts say that the friendly atmosphere of these negotiations demonstrates that the Russian-Chinese relations have moved to a new level. Russia and China need each other more than ever — especially in the context of the trade wars started by the U.S.

"… The Russian leader visited the PRC not only in order to participate in the summit of the Shanghai Cooperation Organization, which [took] place in the Chinese city of Qingdao from June 9-10 June, but also to conduct negotiations with the Chinese.

"… Vladimir Putin and Xi Jinping travelled by high-speed train from Beijing to the neighboring port city of Tianjin, where they attended a match between the national junior hockey teams of the two countries. The state leaders also prepared local delicacies, in particular, goubuli (a kind of dumplings). In addition, Putin tasted a dish similar to pancake rolls.

"Putin’s visit to China is his first state visit after the inauguration (his recent visit to Austria had the status of a working trip). Xi Jinping took note of it: 'This fully attests to Russia's strong emphasis upon developing of Russian-Chinese relations,' he said after the talks.

"… Following the talks, over ten agreements, memoranda and framework agreements have been signed, including the memorandum to establish high-speed cross-border freight railway routes linking China, Russia, and Europe.

"It is of extreme importance that the results of this visit reflect a significantly increased interest on the part of the Chinese towards cooperation with Russia, according to Alexander Lomanov, chief researcher at the Institute of Far Eastern Studies, Russian Academy of Sciences. 'China has always been interested in Russia, only we for some reason did not like to talk about it,' notes in turn Alexei Maslov, head of the School of Oriental Studies of the National Research University Higher School of Economics. The expert adds, however, that China’s traditional interest in its northern neighbor was primarily focused on the energy sector.

"Over the past six months, Russian oil deliveries to China have grown by 26%. At the same time, Gazprom reports about the approaching completion of work over the Power of Siberia pipeline — it is 85% finished, and the delivery is planned to start already in December 2019.

"'The structure of the developing partnership lies in the traditional sphere. Russia, however, has begun to diversify its offers to China. We used to offer increased deliveries of oil and gas, which, naturally, would have brought us immediate high profits. Now Russia proposes joint projects in the high tech sphere, tries to push its space program. This gives us various prospects for the future,' says Maslov.

"And indeed, a significant part of the documents signed… concerns not only Russian-Chinese joint projects on traditional economic issues, but also cooperation in digital economy, research and even Moon and outer space exploration. 'China’s interest in strengthening trade and economic, scientific and technological, industrial and other kinds of cooperation with Russia has become more pronounced,' Lomanov comments on these changes.

"As Alexei Maslov notes, another important apparent trend in this visit is the fact that Russia has begun to study the Chinese market and make pinpoint competent offers in the areas that Beijing needs.

"As an example, the expert cites signed agreements concerning the construction of nuclear power units in several Chinese power stations by Russian specialists.

"All these agreements are signed at the time when trade turnover is in any case actively developing: in 2017, its volume was $87 billion. In the first quarter of this year, the trade volume between Russia and China has grown by an additional 31% percent.

"'If we manage to maintain the pace, by the end of the year we will be able to reach an all-time high, a record level we have been talking about for the past few years – $100 billion,' the Russian president shared his hopes at a press conference.

"After the meeting of the two leaders, the brass band of the Chinese People's Liberation Army played China's and Russia's national anthems, and then – the famous Soviet song Katyusha. The entire ceremony was accompanied by artillery salvos. But this was not the end of the official part of Putin’s visit to China.

"A ceremony of awarding the Chinese Order of Friendship to Vladimir Putin took place as part of the visit. The Russian president became the first person honored with this award.

"The order was established as the highest state award by a law that went into force on January 1, 2016. By provision of the law, it is awarded to foreigners who have made outstanding contribution to China’s state-building and modernization, promotion of exchange and cooperation between China and foreign countries, and maintaining peace.

"In a certain sense, this event was the Chinese response to the ceremony that took place a year ago in Moscow, when Xi Jinping was awarded the order of St. Andrew the Apostle the First-Called – the highest state award of Russia. According to the Russian president, the Chinese leader was awarded the order in recognition of his contribution to strengthening the friendship between the peoples of Russia and China.

"As Alexander Lomanov points out, this gesture on the part of the Chinese also testifies to the fact that China is interested in the further development of Russian-Chinese relations. 'The Chinese endow the notion of friendship with very deep symbolism. Therefore, if China says that its relations with Russia are those of very close partnership and are a model of interstate relations, this must have some symbolic affirmation,' says the expert.

"Conferring the Order of Friendship on Putin, Xi Jinping called him 'the founder of modern Chinese-Russian relations' and his 'good and close friend'.

"Putin, too, was not shy about speaking on his close relationship with the Chinese president. In his recently published interview to China Media Group, the Russian president calls Xi Jinping his 'good and steadfast friend.' Putin even told a story about how he once celebrated his birthday with the Chinese president.

"'This positive constructive dynamics did not start with Vladimir Putin and Xi Jinping, but with Boris Yeltsin and Jiang Zemin back in the mid-1990s. In Russian-Chinese relations, the national interests of the two countries predominated over the personal factor. But it is true that under Putin and Xi the relations became deeper and supplemented by the personal trust between the two leaders,' says Alexander Lomanov.

"According to the expert, this positive factor serves as a positive stimulus for more effective and more reliable negotiations.

"The effect of 'personal chemistry' on the relations between the two countries is described by the Russian president himself: 'I can be sure that if president Xi Jinping and I reach an agreement, we will both always strive to meet the obligations we have assumed upon ourselves.'

Political Support On The Part Of Russia Is More Important For China Than Economic Cooperation Between The Two Countries

"During the Primakov Readings that took place recently in Moscow, Yan Chen, Professor of the School of International and Public Relations, Shanghai International Studies University, noted that 'economically, Russia is not a very powerful country.' However, as the professor emphasized, thanks to its military power, its international significance is greater than that of China. 'We treat each other as equal partners,' says the Chinese expert.

"Russia’s political support is especially important for China now, during the implementation of the Silk Road project. As the Chinese 'One Belt One Road' initiative develops, it automatically gains not only friends but enemies as well, because many countries begin to fear China’s 'onslaught', many countries do not want to become economically dependent on China.

"But Russia is one of the few countries that, while not joining the 'belt and road' project, support the vast majority of Chinese initiatives.

"'This political support on the part of Russia is even more important for China than economic cooperation between the two countries,' says Alexei Maslov.

"Alexander Lomanov, in turn, points out another factor that has influenced the increased rapprochement between Russia and China. 'not the only Russia encounters problems in its relations with the West. China, as well, is facing a very serious threat of a trade war with the U.S., as well as frictions in the military and political sphere,' notes the expert.

"Lomanov claims that Donald Trump’s threats of 'trade wars' really exasperate the Chinese leadership. China has developed a very unpleasant feeling that the traditional and familiar system of economic relations, which has taken shape for the past few decades, is beginning to collapse thanks to Trump’s hyperactive economic policy.

"'It is this Trump factor that plays a significant role in the strengthening of the Russian-Chinese relationship that we are observing. As long as Trump stays in the White House, prospects for the further development of Russian-Chinese relations will be unprecedentedly high,' says Lomanov.

"'China does not have many alternatives in confronting the U.S. unilaterally in this economic war,' agrees Alexei Maslov. He cautions: 'It is important not to toss away this situation, but to accelerate and deepen the political alliance.'"



[2], June 9, 2018. The article was written by Alexei Gryazev.

[3], June 20, 2018.

[4], June 13, 2018.

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