Contours Russia-China Ties-I 

- BY Dr. Abdul Ruff  Colachal

 ***

[Membership in the notorious UNSC has attached credibility to both Russia and China and important powers deciding the world affairs. Many countries, colonialist, state terrorist, autocratic and fanatic nations crave for membership of this big terror club, while Germany, the former fascist democracy responsible for all the horrors of WW-II, has already been incorporated into to it. Even while fighting with one another Russia and China have made tremendous progress in military and trade domains.  As members of UNSC-5 none can invade or terror-attack them from outside on human rights or other issues and hence they persecute the Muslims at will inside]

From a hot ideological collaboration to cold antagonism and mutual biting during the cold missile conflicts to profitable mutual understanding to cooperate on anti-Islamic goals, the two UNSC- veto members, two of the largest economies and military giants, Russia and China have enjoyed a multifaceted relationship now with an admixture of open cooperation and silent confrontation. Arch foes of the Coldwar era, both are moving closer not only to forge stronger bond of the time, but also to slowly getting, willingly, into the US-led Western orbits and fight and kill Muslims indoors, have business interests in Afghanistan and hence they don’t oppose NATO terrorism there, but support them in all possible ways. Ongoing US-led NATO terror wars have strengthened the ties between the former communist states, although both have not sent terror troops to Afghanistan.

Positive signals are being constantly sent out from both Beijing and Moscow that these two former ideological allies turned arch foes during the Cold war - but again mended their ways since the onset of Perestroika (Reforms) by Nobel Laureate M. Gorbachev in mid-1980s - are becoming strategic partners in more than one way. During last two decades regular visits from both sides have stabilized their trade relations and also somehow cemented their border claims. As part of strengthening their ties, an official meeting between the two countries’ prime ministers is held annually under the auspices of Russian-Chinese strategic cooperation and as part of efforts to form a permanent bilateral commission. Issues involving trade, military equipment transfer and economic cooperation are usually the main focus of these talks.

Russia's inability to impede the eastward expansion of NATO and its frustration over NATO's unilateral military action in Kosovo has forced it to seek closer strategic understanding with China. Sino-Russian trade is quite robust and is increasing. In 2003-04, the annual trade between China and Russia was to the tune of $5 billion which is a very good share in any country's annual trade. With India having her maximum defence and military trade with Russia which contributes 70 percent of India's defence needs, greater cooperation between the three countries would assume great significance in the future.

It would be too over-simplification to state that both pursue a pragmatic approach. Two former communist bastions, Sino-Russia relations have passed through fluctuations of all sorts and have now, upon removing the key border irritation, almost settled down to do business on mutually beneficial items. A plenty of confidence building measures have been undertaken by both sides over recent years to assure each other of their sincere intent for fruitful ties.  Despite the strenuous efforts by the US led west to split the ever-growing affinity and trade relations between the two, now ideologically depleted, nations, Russia and China have forged comfortable ties in all spheres through various confidence building and reality measures including the mending the order stalemate.  Both are also happy they could subdue the Muslim freedom seekers by using the global terror wars unleashed by US-led notorious NATO. It is this aspect that has brought   them to regional terror power India to some extent. Traditionally both countries emphasized sovereignty in their joint combat against Islamic faith or religious “extremism”, freedom or “secessionism” and American unilateralism. China and Russia have also lent support directly to each other on issues that have riled the West, such as Beijing’s tough position on Tibet and its restive Xinjiang freedom region and Moscow’s involvement in its proxy states in the Caucasus.

                                                     II

Both China and Russia try to behave as independent great powers to restrain the US-led western unilateralism. But Sino-Russia trade relations continue to flourish for years now following the onset of the Gorbachevian era. The two nations are building the strongest ties in the areas of trade and energy. China is Russia's second largest trade partner after the European Union, and despite bilateral trade shrinking by just over 36 percent to $24 billion in the first eight months of this year as a consequence of the global financial crisis, the two countries expect bilateral trade to increase to $60-80 billion by 2010. All powerful Russian Prime Minister Vladimir Putin during his three-day visit to China last week, held talks with his Chinese counterpart, Wen Jiabao, in Beijing on October 13 and has concluded many agreements on Sino-Russian cooperation in development of energy resources. Putin and Wen signed more than 20 agreements on projects involving bilateral cooperation. A joint communiqué was signed announcing the start of cooperation on ballistic missiles and missile delivery vehicles, as well as the establishment of cultural centers. There also were agreements on improving customs controls, developing high-speed train lines in Russia and cooperation between Russian and Chinese special economic zones.

Putin's visit coincides with the 60th anniversary of diplomatic relations between China and Russia. There was positive air in Beijing as Russia’s strongman Putin was greeted with an official welcoming ceremony at the Great Hall of the People on 12 October. The results of this visit are extremely important because it is precisely in the area of trade and economic cooperation that the greatest number of problems exists. The global economic crisis has further aggravated old problems in bilateral trade and economic relations, leading to the current situation. The Shanghai Daily reported that Putin signed a total of nearly three dozen contracts in energy, mining, transportation and infrastructure, worth more than $5.5 billion.

The background of visit to Beijing is the ever growing bilateral trade. The agreements came during the second day of a visit to Beijing by Russian Prime Minister. China and Russia have already signed trade agreements on trade, energy and security deals worth $3.5bn (£2.2bn). About 40 contracts were signed by Russian and Chinese businessmen and officials. The head of Russia’s Gazprom, Alexei Miller, said a preliminary deal had also been struck on supplying 70bn cubic metres a year of gas to China. The deals included two $500m loans from Chinese banks to Russian financial institutions. One was from the China Development Bank to its Russian counterpart Vnesheconombank, while the other was from the Agricultural Bank of China to Russia’s state-run VTB bank. He said other deals included investments by Chinese firms in Russian construction facilities, but gave no details. The Agricultural Bank of China has also agreed to lend $500 million to Russia’s VTB bank. A memorandum of understanding has also been signed on developing a high-speed rail link on Russian territory. Earlier this year, Moscow signed a $25bn agreement to help fund a pipeline to supply oil from Siberia to China. In exchange, China was guaranteed a 20-year supply of crude oil.

As of now, Russia’s most commonly exported products to China are energy and weapons, whereas the most commonly imported products include everything from electronics to clothes. Russia and China have realigned their trade and diplomatic ties, and recent Vladimir Putin's visit to Beijing shows that, despite lingering doubts and distrust, the two sides have more to gain than lose from mutual cooperation. Veto membership in the notorious UNSC has kept the trade ambitions of both on the rise. The joint military exercises by them have assumed a regular feature creating unnecessary worries in the West. It is now clear that the goal set by the leaders of both countries to increase the trade volume to $60 billion to $80 billion by 2010 will not be met. The same is true regarding investment targets.

Progress was also announced on a natural gas pipeline project as well as nuclear energy. The two sides had also signed an agreement to set up a presidential hotline between Moscow and Beijing. More than 20 agreements have been negotiated, including one committing both countries to notify the other when ballistic missiles are launched from their territories.  One deal which could further Russian-Chinese energy cooperation was struck in April when, in return for 300 million tons of Russian oil over 20 years, China agreed to lend Russian oil pipeline monopoly Transneft $10 billion and state-run oil company Rosneft $15 billion. China’s investment in Transneft's East Siberia-Pacific Ocean pipeline will help to aid its slated 2010 completion and could lead to 15 million tons of crude oil being pumped into the insatiable Chinese industry sector.

                                                      III

The Kremlin and Great Wall are engaged in trade, mostly in arms. Russia is keen to bolster its economy by trade, which President Dmitry Medvedev has said will decline by 7.5% in 2009 - far worse than earlier predicted. Russia, the world's ninth-biggest economy, is struggling to regain its footing after a downturn saw GDP plunge from 7 per cent annual growth to an expected 8 percent collapse this year. Beijing also has its reasons for courting Putin, who remains his country's most powerful figure even after leaving the presidency. Trade between Russia and China has risen from less than $10bn to more than $50bn annually over the past six years. The deals would lead to Russia selling more oil and gas to China - the world's second-biggest energy user. However, Moscow is also keen to boost exports of machinery, especially aviation equipment and nuclear power plants - though China's appetite for Russian goods other than energy and raw materials is limited.

China and Russia are also cooperating on railway links and oil pipelines through Central Asia connecting the Caspian Sea with the Middle East and Europe. Russia has also shown keen interest on the India-Iran pipeline project. Chances of the three countries joining hands on such common issues of mutual interest in future can not be ruled out. American presence in Central Asia, Afghanistan and in the former Soviet Republics like Georgia and Ukraine has hastened this process further. The way things are unfolding in Central Asia, the official acknowledgement of the "troika" or its official formation can not be ruled out. Such a "troika" is also required for this region looking into its strategic and economic location.

Russia aims at developing stronger economic cooperation with the Chinese to reduce its reliance on the European consumer market. In the area of economic relations, the pro-China position is often favored by energy producers and military enterprises in search of high-ticket defense contracts in Asia. Kremlin strategists believe that the country would be better off redirecting its oil and gas supplies toward Eurasian countries such as China and India because such a measure would assist the country in developing energy-intensive goods and transforming its current status as a raw materials appendage of Europe. The Kremlin has approved major new pipeline projects to China and is seeking to turn its vast territory in a land bridge between the East and the West. The Arctic Ocean is another trump with which Moscow will seek to step up its economic leverage.

On its part, China is also looking to benefit from Russia's dissatisfaction with Europe as an energy consumer and partner, while Russia is focused on trade in arms, technology and energy and other resources. When still focused on the West, Moscow is keen to find alternative customers for its oil and gas and China has made it clear that it is ready to strike deals over Russia’s huge mineral resources. Russia is highly interested in 'security of demand. Russia is thus very keen to diversify its demand structure and China would be an ideal partner to do so - guaranteeing a high level of demand in the long-run. Similarly, a better cooperation with Russia as a substitution for increasing trade relationships with the Muslim nations, the so-called “rogue states”, may benefit China’s political image in the West.

(To Continue…>)