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Monday, 5 January 2015

Russia, China – neither allies nor rivals

There have been some wild theses lately, including among the Indian pundits and think tankers, that consequent upon Russia’ s tensions with the West, Moscow has ‘pivoted’ to China in strategic terms and a Sino-Russian axis is steadily taking shape in world politics and that these two ‘Eastern” powers are all set to challenge the United States.
Some speculators even went to the extent of fancying that the fate of the American dollar is sealed and it is a matter of months before the Bretton Woods system comes crashing down.
This was of course fantasyland and anyone who has followed the trajectory of Russian-Chinese relations through the past decades would know that there are far too many complexities (and contradictions) involved in this relationship and it can never be the case that they would simply decide one day to embrace each other and become allies.
Paradoxically, the US strategy toward Russia and China is itself predicated on the virtual certainty that the latter two can never form an axis in the international system.
Of course, it is in the interests of fostering the tendencies of ‘polycentrism’ in world politics that Russia and China should walk shoulder to shoulder. But then, such a thought will forever remain in the domain of wishful thinking — or a pipe dream.
China is far too self-centred and ‘pragmatic’ a power to think of joining alliances, and as for Russia, it is fiercely independent in foreign policies and, intensely conscious of its proud history, it can never be a junior partner to another power.
President Vladimir Putin asserted only a few weeks ago in his address to the Federal Assembly in Moscow that Russia will never allow itself to be an inferior military power vis-a-vis any country. Which was as much a reference to China as it was to the United States.

Two editorials in the Chinese communist party tabloid Global Times within the week throw much light on how China views the gravity of the crisis facing Russia today, and what should be China’s stance in Russia’s cold war with the United States. Being editorial comments, they surely carry the stamp of official thinking.
An interesting point to be noted here is that the two editorials straddle Russian President Vladimir Putin’s traditional annual yearend press conference in the Kremlin last Thursday.
To be exact, the first GT editorial appeared on Wednesday and the second one today (four days after the Kremlin event.)
And, interestingly, there has been a gentle ‘course correction’ by the Global Times between last Wednesday and today.
The annual yearend Kremlin press conference by Putin was scheduled weeks in advance and Russia’s tensions with the US were expected to dominate the event on Thursday. To be sure, the timing of the GT editorial on Wednesday on the eve of the press conference is also to be duly noted.
The GT editorial on Wednesday, here, drew an alarming picture of the Russian economy, showing it as facing an unprecedented crisis, and assessing that its future is unpredictable.
The crisis was compared to the collapse of the former Soviet Union. The commentary said the crisis posed “new challenges to Russian President Vladimir Putin’s tenure, forcing him to apply a defensive strategy,” while noting at the same time that there are also concerns “about him becoming more aggressive.”
The Chinese commentators have traditionally treated Putin with velvet gloves as if he were an invincible hero, and to suggest that he could be erratic is a marked departure.
The commentary estimated on the whole that Russia will pull through this crisis in the short term and “the threat of collapse is still far away.” But it went on to claim that China is a significant factor in Russia’s strategic environment and, therefore, Putin’s “most realistic option” will be to take China’s support.
But then, it noted, China-Russian cooperation is “no longer ideology-based but driven by common interests” and, therefore, China should not be “proactive’ but instead wait till Moscow puts in a request for help.
The punch line comes toward the end when the commentary assesses that Russia will probably “recalibrate” its national strategies to cope with the crisis, but there is no certainty that it will draw closer to China and on China’s part, therefore, the relations with Russia need to be conducted on a reciprocal basis.
Peking Duck, by RachelGold
The commentary was stunning in its prescience — in a manner of speaking. For, Putin made it absolutely clear during his press conference that Russia intends to tighten its belts and pull through on its own steam through the coming one-year period ahead until the growth of the world economy picks up and in the meanwhile Russia proposes to undertake a much-needed structural reform in terms of reducing the dependence on oil income.
Putin also rebutted the West’s propagandistic reports on the Russian economy. He explained the comfortable position with regard to foreign exchange reserves and stressed that there is going to be no rollback in social sectors or defence expenditure.
With regard to China, he showed no signs of any intention on Moscow’s part to take help from China or even to contemplate such dependence on China.
Significantly, Putin gave a new twist to the recent mega gas deal with China, flatly denying any ‘pivot’ to China in Russia’s energy export strategy as a result of the chill in relations with Europe. This is what Putin said:
“As for energy, the demand for resources is racing in leaps and bounds in China, India, as well as in Japan and South Korea. Everything is developing faster there than in other places. So should we turn down our chance? The projects we are working on were planned long ago, even before the most recent problems occurred in the global or Russian economy. We are simply implementing our long-time plans.”
Now, the western commentators have given the spin that Russia has made ‘concessions’ to China from a position of weakness. But Putin said something entirely different:
“About the Chinese contract – it is not a loss-making project. It enjoys privileges on both sides – on both sides, I must stress… China offered some benefits as well – these benefits aren’t extraordinary or anything; the Chinese government simply decided to provide some support to the project participants. We, in turn, agreed to do the same. So the project definitely became profitable. Definitely.
“Moreover, we have agreed on a pricing formula, which is not much different – if at all – from the one applied to our European contracts, except for the specific regional market coefficients. This is regular practice.
“In addition, it will help Russia, which will receive and accumulate gigantic resources at the project’s initial stage, to begin connecting our Far Eastern regions to the gas distribution grids, not just to export gas through the pipeline. This will allow us to make the next  – a very important – step. We will be able to link together the western and eastern gas pipeline systems and promptly re-channel resources back and forth when needed, depending on the international market. This is very important. Without it, we would never be able to connect Eastern Siberia and the Far East to the gas distribution system.
“So this project holds many potential benefits. Not to mention that it is a huge construction site that will create jobs and generate tax income at every level, and revive Russia’s Far East and the entire region.”
What stood out was that Putin underscored that mutual benefit and commercial considerations alone determined the Russia-China energy cooperation. And, in a subtle way he also flagged that Moscow is by no means diluting its energy ties with Europe but is actually creating a link-up between its western and eastern gas pipeline systems whereby it can “re-channel resources back and forth.”
In political terms, he also told the Xinhua correspondent at the press conference that the cooperation with China in the UN Security Council is “an important element in stabilizing the international situation,” and it is “many common interests on the international stage, such as international stability.” Period.
The unspoken part was that any request to China to bail out Russia was the last thing on Putin’s mind at any point during his 3-hour long press conference. Evidently, without saying so in as many words, he neatly rubbished the Chinese interpretation of Russia’s economic “crisis” in alarmist terms. (Kremlin website)
Interestingly, the second editorial by the Global Times, here, which appeared today (four days after Putin’s press conference) no longer views Russia in apocalyptic terms. It estimates, on the contrary, that when sanctions proved ineffective against Cuba and Iran, how could they he “the straw that breaks the back” of Russia?
It stresses: “Vladimir Putin’s reign can hardly be overturned simply by currency inflation. Russia has experienced many ups and downs, and it has the tenacity to withstand risks and dangers.”
The commentary also dropped the smug patronizing tone earlier to admit, “Russia does not want to be a vassal of the Chinese economy and this red line must be clearly understood by China… China must hold a positive attitude to help Russia out of this crisis… But anything w can do to help will be limited to what Russia asks for.”
An impression becomes unavoidable that the Chinese pundits initially lapped up the West’s doomsday predictions of Russia, but after reading Putin’s mind at Thursday’s press conference, beat a hasty retreat.
On the other hand, today’s GT commentary has also sought a middle ground between the US and Russia and noted, “China must act as an active mediator between Russia and the US, or it will have to face unavoidable geopolitical risks if their conflict spirals out of control.”
Indeed, Moscow would have no such intentions to invite China to mediate its differences with the US. Moscow cannot but be aware that China and the US have just concluded in Chicago a major trade and investment meeting that balances greater market access to US business with the reciprocal move by Washington to open the doors for eliminating restrictions on high-technology exports to China. (China Daily)
 The Chinese vice-premier Wang Yang reportedly told his hosts at the negotiations in Chicago that China and the US have “much more common interests than differences”, and that their economic and trade cooperation will prosper as long as the two countries can “seek common ground while resolving differences” in the spirit of mutual respect, mutual understanding and mutual accommodation. (China Daily).
Come to think of it, the divergence in the Russian and Chinese perspectives regarding the US’s policies is actually rather glaring. Putin repeated his allegation at the press conference that the US has throughout fuelled the insurgency in Chechnya by instigating the rebels and that it has pursued an unfriendly policy toward Russia aimed at encircling and weakening it. To quote Putin,
“Didn’t they tell us after the fall of the Berlin Wall that NATO would not expand eastwards? However, the expansion started immediately. There were two waves of expansion. Is that not a wall? True, it is a virtual wall, but it was coming up. What about the anti-missile defence system next to our borders? Is that not a wall?
“You see, nobody has ever stopped. This is the main issue of current international relations. Our partners never stopped. They decided they were the winners, they were an empire, while all the others were their vassals, and they needed to put the squeeze on them.”
Clearly, China does not share any of this existential predicament. Put differently, the United States that Putin has to deal with and speaks about is not at all the country with which Chinese President Xi Jinping strives to build a new type of relationship.
Unsurprisingly, Putin has extended an invitation to North Korean leader Kim Jong Un to Moscow next May to mark the seventieth anniversary of the Soviet defeat of Nazi Germany.
It comes at a time when China’s relations with North Korea have reached a low point. Xi is yet to visit North Korea and has not yet met Kim as presidents, while in July he actually snubbed Pyongyang by visiting South Korea.

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