25. Medvedev's Visit and Strengthening Ties Between Russia and China

Medvedev's Visit and Strengthening Ties Between Russia and China September 24, 2010 | 2132 GMT MISHA JAPARIDZE/AFP/Getty Images Russian President Dmitri Medvedev (R) shakes hands with his Chinese counterpart, Hu Jintao Summary Russian President Dmitri Medvedev will visit China from Sept. 26-28. Russia and China recently have shown the ability to stay out of each other’s way and even cooperate when their interests align, such as in the area of energy development. However, the countries still have vast differences in strategic matters. Russia and China do not fully trust each other, and since neither Moscow nor Beijing wants to be the center of the United States’ attention, each is hoping the other will take that role. Analysis Russian President Dmitri Medvedev will visit Chinese President Hu Jintao in Beijing from Sept. 26-28. The meeting will include discussions on trade, investment, energy, water supply, migration and foreign policy. Both leaders will attend a ribbon-cutting ceremony for the Chinese portion of the East Siberia-Pacific Ocean (ESPO) pipeline, which runs from Skovorodino, Russia, to Daqing in China’s Heilongjiang province. The talks will provide the occasion for warm feelings on both sides. Russia and China have reached agreements on a number of pressing strategic matters in recent months and are making progress in often thorny energy matters. But the states still have deep differences on strategic matters. Historically, Russia and China have had an ambivalent relationship. With Russia focused on Europe and China focused primarily on its maritime borders, they inhabit different worlds, with the vast Central Asian steppes separating them. The two often achieved a degree of understanding because they seldom interfered with each other. But they also lacked a firm foundation for cooperation — the Sino-Soviet alliance was famously short-lived. In the 21st century, the two have maintained a functional relationship, as Russia has focused on rebuilding its sphere of influence in the former Soviet states and tolerated China’s quest for resources in Central Asia as long as Beijing limits its interaction to the economic, and not political or military, spheres. Beijing’s primary concern is to maintain its economic development, so this arrangement is serviceable, providing that Russia does its part in suppressing Central Asian militancy. In the past year especially, the two sides have demonstrated the ability to stay out of each other’s way and cooperate in areas where their interests align. Both states vocally blamed the United States for the global financial crisis and supported changes to the international financial system as a result. Both states supported U.N. sanctions against Iran only after ensuring they would not be devastating in their impact; Russia distanced itself from Iran but did not sever ties, and China has reinforced its relations with Iran despite subsequent sanctions by the United States, Europe, Japan and others. Similarly, after the sinking of the South Korean ChonAn, both states refused to blame North Korea specifically, criticized the resulting show of force by the U.S. alliance and called for moving beyond the incident to resume six-party talks on North Korea’s nuclear program. Even in the most recent spat between China and Japan over the Diaoyutai/Senkaku islands, Russian media weighed in on China’s side of the dispute. Working in tandem is painless on these issues, given Beijing and Moscow’s shared interests in keeping the United States tied down but not militarily dominant in the Middle East, preventing the U.S. alliance from discrediting North Korea (with which they both share borders) and opposing Japanese territorial claims (since they both have island disputes with Japan). But there has also been movement in energy cooperation after years of stagnation, suggesting further correlation of interests at the moment. Russia is attempting to develop its Far East into an energy exporting region serving East Asia, on par with its energy development in the western regions servicing Europe. While this process is only beginning, the intent is there and the investments are pooling together. In 2009 China agreed to lend $25 billion to Russian giants Rosneft and Transneft to develop oil production, and in 2010 Russia has brought its ESPO pipeline to Kozmino on the Pacific coast, from where it exported 300,000 barrels per day in the first quarter of the year. Russia’s point man on energy matters, Igor Sechin, has pointed to agreements that will take shape during Medvedev’s visit, including: Increasing Russian oil exports to China via ESPO. China is already importing ESPO oil via rail and ship, and the Chinese pipeline connection to ESPO is nearing completion. The two sides have not yet established a price for oil to come through the Chinese spur, but claim they will do so by Medvedev’s trip, with exports to begin on Jan. 1, 2011. A new joint venture between a Russian firm and China National Petroleum Corp. (CNPC) to build a $5 billion refinery in Tianjin, supplied 70 percent by Russian oil. Russia is also seeking investment to build refineries along the ESPO line. LUKoil is expected to sign an agreement with CNPC to begin exporting Uzbek natural gas to China through the recently opened Central Asian natural gas pipeline that begins in Turkmenistan. The two sides are expected to take a step closer on settling terms and pricing for Russian exports of natural gas directly to China by 2015, over which they have negotiated to little avail for years. Sechin claims an agreement can be reached in the first half of 2011. Such progress on joint energy projects is not easy to come by. Beijing is hungry for Russian supplies to fuel its economic growth and give it overland supply routes that are not subject to interruption by Middle Eastern wars or foreign naval powers. But knowing that Russia is eager to export energy from its Pacific outposts to any Asian state or other paying customer, Beijing has reason to try to lock down, through infrastructure and contracts, as much of that supply — and at as favorable prices — as possible. At the same time Russia needs Chinese investment and consumption to make its Eastern Siberian energy program possible (given the extremely adverse geography and conditions), it naturally wants to avoid over-dependency on China. Negotiations on outstanding issues will be tough, and the two will continue to struggle over specific arrangements in the future. Furthermore, in the long run, Moscow and Beijing still lack a foundation of trust that would enable them to move beyond temporary or ad hoc agreements. On energy matters, China’s increasing reliance on Russian energy will leave it exposed to Russian political power, since Beijing knows that Moscow has no objection to using energy exports as a geopolitical tool. Russia, despite its tight control of security and political systems in Central Asia, fears that China’s population, trade ties and economic power will undermine Russian power and eventually might give Beijing greater influence over the region. Russia thus maintains levers in the region (and Kazakhstan in particular has a large Uighur community that could be encouraged to create instability in China’s Xinjiang region). More broadly, Russia is suspicious of China’s massive military buildup and increasingly sophisticated capabilities and longer reach, while China is wary of Moscow’s preparation of advanced Borei-class strategic missile-carrying nuclear submarines for deployment in the Vilyuchinsk naval base on the Kamchatka Peninsula in the Sea of Okhotsk, which will rejuvenate Russian naval power in the Pacific region. At the same time, Russia’s cultivation of ties with Vietnam, including selling submarines and fighter jets, threatens to undermine China’s strength in territorial disputes in the South China Sea. And while China and India remain antagonistic, Russia and India maintain cooperation (including Russian arms exports) and both share interests in Afghanistan. Most revealing of their strategic differences, neither Beijing nor Moscow wants to become the United States’ next target after it extricates itself from the Middle East and South Asia, and would prefer for the other to fulfill that role; and neither trusts the other to form a lasting alliance against the United States. Given that the United States is moving in that direction and will have regained much of its ambition and freedom to maneuver in a few short years, tensions between China and Russia could increase relatively soon, despite their current overlap of interests.