Image courtesy: The New York Times
Article: 22/ 2024
On May 16th, President Xi Jinping and President Vladmir Putin held a summit on the 75th anniversary of Russia and China’s diplomatic relations. This was the first foreign meeting for both world leaders since their most recent election, a fact that symbolized the importance of their relationship as well as a ‘synchronized move forward’, according to Putin. After the summit, the 2 nations released the Joint Statement on deepening the comprehensive strategic partnership of Coordination for the New Era. The 7000-word statement outlines their plan to move forward on a variety of issues which includes strengthening military ties, improving trade and pushing for a speedy resolution to the conflict in Ukraine.
The two countries also outlined multiple investment projects, and stated that there are around 80 projects valued at over $200 Billion that are in progress. These include the development of international transport and logistics corridors by harnessing the potential of the Trans-Siberian and Baikal-Amur railways, as well as the Northern Sea Route. There was a specific focus on high tech industries such as space exploration, nuclear energy and biotechnology. Russian state media outlet TASS reported that 10 agreements were signed as an initiative to develop the Bolshoy Ussuriysky Island, a memorandum on holding a BRICS expert forum as well as agreements on information exchange and business cooperation.
In a media statement, President Xi Jingpin stated that trade between the two countries had reached $240 billion, after which President Putin noted that 90% of that trade took place using the Chinese Yuan or Russian Ruble. The trade between the countries significantly increased since 2021, when Russia was sanctioned by the US and multiple countries in the EU for invading Ukraine.. China stepped in to fill this gap, by providing Russia with manufacturing equipment such as machine tools, microelectronics and optics, and increasing its imports of oil and gas. In 2023, Russia became the top supplier of China’s crude oil, making up 19% of its imports, which also accounts for around 45-50% of Russia’s exports of the same, according to Russian Deputy PM Alexander Novak. Furthermore, China has also found a huge market in the face of increasing tariffs and trade barriers from the US. Russia acknowledged the significance of Chinese automobile exports just 2 days after the US imposed tariffs on Chinese Electric Vehicles. However, experts claim that the relationship is lopsided, where Russia relies on China much more than the other way around.
The trade relationship between the two countries is extremely important in the context of the Russia Ukraine war. In 2021, the two countries agreed to a ‘no limits’ partnership just before the Russian Invasion of Ukraine. China has so far maintained a neutral stance on the matter and called for a political resolution to the issue in accordance with the UN charter, and has not supplied any weapons to Russia. However, the US claims that although they do not provide arms, China is fuelling the war in Ukraine by providing manufacturing and electronic equipment to Russia. China exports over $300 million of ‘dual use’ equipment to Russia which could be used for both civilian and military applications. The aid PRC provides Russia is an integral part of their relationship, and without it Russia could be crippled by western powers and China could lose a huge ally against the US. Indeed, one of the key features of the joint statement included a condemnation of the US for their interference in foreign affairs, stating that they were still being driven by ‘Cold War’ logic and putting narrow interests over regional security.
However, in the face of increasing sanctions and trade barriers, China is facing pressure to cut ties with Russia completely. This may explain why China has refrained from taking a firm stance on the Ukraine invasion. China could also be trying to ensure that Russia stays dependent on it for the near future.
The growing relationship between Russia and China signals concern for the rest of the world. Russia and China both provide sufficient markets for sale and purchase of important goods such as oil and industrial equipment as their relationship with the US and European markets slowly degrades. This reduces the effectiveness of sanctions placed on them. Since the two countries can replenish each other’s stock of vital resources, it could lead to prolonging conflicts such as the invasion of Ukraine. Russia has also reaffirmed its support for the ‘One China Policy’ at the summit. It could also signal concern for India, since Russia is the top supplier of oil, and could face higher prices or reduced imports if forced to compete with China for resources. India has made an effort to scale back defense ties with Russia, but could still be vulnerable especially as the Indo-China border conflict escalates. Thus, it would be in the best of interests of various world powers to re-evaluate their foreign policy in light of the Russia China summit and ensure that they are protected against the combined strength of the two nuclear powers.
(Mr. Deepak Srinivasan is an intern at C3S. The view expressed are those of the author and do not reflect the view of C3S.)
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