China and Russia’s carefully curated relationship is increasingly having a global impact.
The rise of a more politically and militarily assertive Russia and an economically and institutionally ascendant China may be characterized as the two principal forces challenging the United States in global policymaking.
China’s and Russia’s strategies for international expansion, in each of their respective areas of policy specialization, are not necessarily mutually exclusive. Arguably, both countries’ intensified involvement on the world stage is not only complementary but to a growing extent directly and indirectly supportive of each other’s increasingly commonly-defined interests.
The growing international significance of China and Russia’s key political and economic partnership must be considered a major factor in global policymaking going forward.
China-Russia Relations Before 2014
China and Russia have largely formulated their economic and political relations based on an evolving series of strategic partnerships. While there is no “model” strategic partnership, in the sense that the terms are negotiated individually with a partner state, both countries have incorporated certain core principles into each partnership.
Following two partnership agreements in 1994 and 1996 and a Treaty of Friendship and Cooperation in 2001, the 2012 comprehensive strategic partnership of cooperation (the 2012 Strategic Partnership), underlined the principles of mutual benefit, mutual trust, and equality in addition to setting specific economic targets in China-Russia bilateral relations.
Notably, although the 2012 Strategic Partnership, signed by President Hu Jintao, China’s president at the time, and Russian President Vladimir Putin, was intended to provide the basis for implementation of relations over a ten-year period, it was prematurely superseded by the 2014 agreement calling for a new stage in the comprehensive strategic partnership of cooperation, the 2014 Strategic Partnership.
In this case, China’s President Xi Jinping, was the co-signatory. The involvement of Xi, who came to power in 2013, a year after Putin’s re-election as Russian president, has become a key driver in the intensification of bilateral relations.
After the Ukraine Crisis
The 2014 Strategic Partnership, ratified shortly after Russia’s annexation of Crimea, amid the launch of U.S. and EU sanctions against Russia, is widely regarded as the most enhanced in terms of depth and breadth of economic, political, and security relations of any one of China’s or Russia’s network of strategic partnerships.
Some of the much-publicized and high-profile deals emerging from the 2014 Strategic Partnership included a 40-year gas supply agreement between Gazprom and China National Petroleum Corporation (CNPC). The landmark gas supply deal, including plans to build the “Power of Siberia” gas pipeline, was indirectly referred to in the 2014 Strategic Partnership as a measure aiming to “strengthen the Sino-Russian energy partnership.”
A further deal with Russia’s largest oil company, state-owned Rosneft, involving financing deals with CNPC to supply oil worth up to $500 billion from Russia’s largest oil field, was also established shortly after, prospectively enabling Russia to surpass Saudi Arabia as China’s main supplier of oil.
Also in 2014, the People’s Bank of China (PBOC) and the Central Bank of Russia signed an arrangement for a currency swap worth 150 billion yuan and 815 billion rubles ($24 billion at the time). The first such Chinese currency swap to be announced for any country outside of Asia, the deal was meant to facilitate settlement in national currencies and boost bilateral trade.
Since 2014, and particularly in 2015, Russia has become one of the five largest recipients of Chinese outbound direct investment in relation to the Chinese government’s Belt and Road Initiative (BRI) connecting Asia with Europe. Meanwhile, China was Russia’s largest bilateral trade partner, in 2015; in spite of declining overall bilateral trade in U.S. dollar terms (mainly due to sharp declines in the ruble as well as the yuan), relative to 2014, trade flows continued to expand in terms of volume.
In this context, it was significant that Russia’s exports of mechanical and technical products to China rose by about 45 percent over the course of 2015 possibly signifying an important trend in the diversification and competitiveness of Russia’s non-energy sector in terms of bilateral trade prospects with China.
Importantly, the economic relationship between China and Russia has been driven by a variety of bilateral intergovernmental commissions, including 26 subcommissions. According to Putin, in spite of often slow progress in reaching agreements, both sides invariably maintain a common goal of cooperation to eventually find a solution on a wide range of complex issues.
Integrating of High-Level Political Interests
Since the 2014 Strategic Partnership, amid a strengthening of personal ties in the Putin-Xi relationship, there has been an extensive broadening of bilateral relations beyond merely focusing on economic interests. This has centered on mutual support concerning each country’s “core interests,” including “strengthening close coordination in foreign policy.” They have also jointly advocated for reform of the international financial and economic architecture to accord with the rapidly-changing global real economy.
The relationship between China and Russia has, therefore, evolved into intensified cooperation in political areas in the last couple of years. Chief among those developments was the announcement on May 8, 2015 in Moscow, on the occasion of the annual parade commemorating the end of World War II, of the planned integration of the Chinese-led BRI with Russia’s Eurasian Economic Union (EEU)....MORE
