Dear colleagues. The main objective of our meeting is to consider Russia-China relations, as well as assess their impact on the situation in the world, including the context of global security. This issue is extremely important both in terms of a true understanding of the character of the key geopolitical processes of the global level and their significance for our nation under the conditions of continuing Russia's armed aggression against Ukraine.
Thus, relations between China and Russia to a significant extent determine the strategic balance of forces in the world in the process of forming a new world order with two leading centres of power, namely, the United States and the People's Republic of China. This process is complex and controversial and is determined by two opposing trends in the development of US-China relations. On the one hand, the United States and the People's Republic of China are taking steps to build strategic partnerships as the most powerful nations in the world, and on the other, - they maintain divergences on a number of important issues, which creates the basis for rivalry between them and the conflict of their interests.
On the slide: Fight between the USA and the People’s Republic of China for global leadership is so far of a limited character, but in due course it will be more acute.
The USA and China have some controversies in Asia-Pacific region.
Asia-Pacific region is of a long-standing strategic interest for the USA.
The following task is at the forefront for the USA at Asia-Pacific region: not to allow another dominant nation or coalition in the region. The most real contender for this role is China. Thus, the US policy in the area is subject to strengthening rivalry with China for leadership in Asia-Pacific region and in future – for global leadership.
At the global level, it concerns the struggle between the United States and the People’s Republic of China for the world leadership, which is still limited, but will eventually become more acute. At the same time, the United States and China have a number of controversies over the influence in the Asia-Pacific region, which are periodically revitalizing against the backdrop of exacerbation of sensitive regional issues (in particular around the nuclear-missile programme of the Korean People’s Democratic Republic). In addition, as the potentials of the United States and the People's Republic of China increase, the rivalry for access to the world natural resources and markets will gain strength.
In such a situation, both the United States and the People's Republic of China form their own spheres of geopolitical influence, which should strengthen their position in the new bipolar world.
On the slide: Foreign trade between China and Asia-Pacific region, US and Asia-Pacific region in 2000-2012.
Amount of foreign trade, US$bln. : China – Asia-Pacific region
US – Asia-Pacific region
Share of Asia-Pacific region in foreign trade, %
China – Asia-Pacific region
US – Asia-Pacific region
In this regard, the main vector of Washington's action is to deepen military-political, trade-economic relations with its traditional allies and partners, first of all, the EU, NATO, Japan, and South Korea. In addition, the United States is making efforts to strengthen its influence also in other regions of the world, including the post-Soviet space, the Middle East, Africa, and Southeast Asia.
In its turn, China builds its own sphere of influence in the world by taking a leading role in promoting the processes of globalization of the world economy. The priority of this issue for the People's Republic of China was repeatedly confirmed by the leader of the country Xi Jinping during various international events, including the World Economic Forum in Davos last January and at the G-20 summit in Hamburg last July.
Beijing's main tools for implementing such a policy are the development of ties with potential partners of the People’s Republic of China both bilaterally and within various initiatives and international organizations. First of all, it may concern the strategic initiative of the People's Republic of China "The Belt and the Road" ("Economic Belt of the Silk Road and Sea Silk Road of the 21st Century"), as well as the Shanghai Cooperation Organization (SCO), the BRICS Group, the Asia-Pacific Economic Cooperation (APEC) and the Association of Southeast Asian Nations (ASEAN).
In this context, Russia is of special significance for China, which is connected both with its own Chinese interests and with common interests of the two countries. Thus, the main of such interests of the People's Republic of China is the expansion of access to Russian resources, economy and market, as well as advanced technology in the military sphere, which remained in the Russian Federation from the Soviet Union. In addition, the comparative weakness of Russia and the sparse population of its eastern territories offer broad opportunities for the external northward expansion of China. This issue is of particular importance for the People's Republic of China in the conditions of rapid growth of the population of the country.
In its turn, Russia also has a high level of interest in the development of military political and trade-and-economic cooperation with China as a leading centre of power with an independent from the West foreign policy. At this expense, Moscow hopes to strengthen its capabilities in confronting the USA, NATO, and the EU, as well as to recompense Western sanctions. In this regard, Russia figures on both the contradiction between the USA and the People’s Republic of China due to a number of problems in their relations, as well as on China's growing needs in modern technology, raw materials, and markets for Chinese products.
The favourable ground for deepening the interaction of the parties also creates a common position on important international issues, including strengthening nuclear security in the world and the intensification of the fight against terrorism, as well as principles for the settlement of the situation in the crisis regions of the world and international conflicts. In particular, this applies to Syria, Iran, and North Korea. In addition, Russia and China share common positions on enhancing the role and significance of the SCO, BRICS, APEC, and ASEAN.
However, despite the mutual interest of China and Russia in developing cooperation between them, Beijing's policy fundamentally contradicts to the geopolitical interests of Moscow. The main essence of such interests is the transformation of Russia into a great world power on a par with other centres of power and with its zone of influence. It is precisely in order to achieve this goal, plans are made to restore Russian control over the post-Soviet space by establishing the Eurasian Union and the Russian World.
All this obviously envisages the establishment of equitable relations between Russia and China. However, absolute superiority of the People's Republic of China over the Russian Federation in economic, ethnic, and, to a certain extent, military potential, makes Moscow a minor partner of Beijing.
On the slide. China's GDP is US$ 21.3 trillion against US$3.4 trillion in Russia, while the population is 1.4 billion persons versus 0.14 billion. At the same time, if the territory of Eastern Siberia and the Far East of the Russian Federation is populated with not more than 5 million persons, then the neighbouring provinces of China – with more than 100 million.
At the same time, China gradually establishes control not only over the Russian economy, but also over its territories, in the framework of the development of trade and economic cooperation with Russia.
On the slide. In 2008, Moscow returned to China a number of island territories on the Amur river near the city of Khabarovsk with a total area of 174 thousand hectares. In 2010-2011, Moscow leased about 1.5 million hectares of taiga (for felling forest) and agricultural lands to the People’s Republic of China. In 2014, that practice was legitimized by the Law “On the Territories of Progressive Socio-Economic Development in the Russian Federation”. An agreement was reached on the basis of that law on the transfer to the People’s Republic of China of more than 300 thousand hectares of land in the Trans-Baikal Territory of the Russian Federation for a term of 49 years. At the same time, China received the right to unlimited (and, in fact, uncontrolled) involvement of Chinese citizens in the development of the above-mentioned territories. It is clear that these lands will never return to Russia.
In addition, China has substantially strengthened recently its positions in the economies of the post-Soviet countries within the framework of the implementation of the Belt and the Road strategic initiative, and already prevails over Russia in a number of key indicators. First of all it concerns the countries of Central Asia.
On the slide. In 2017, China's share in foreign trade of Kyrgyzstan reached 57%, while that of Russia - fell to 17%; Tajikistan - 42% and 18%; Uzbekistan - 21% and 20%. The volumes of Chinese investments into the post-Soviet economies, which are also beginning to exceed Russian investment, are also rapidly increasing. The amount of accumulated investments of the People's Republic of China in the economy of Kazakhstan is US$ 12.6 billion, while Russia – US$8.9 billion; Tajikistan US$ 1.16 billion and US$0.986 billion; Uzbekistan – US$ 7.6 billion and US $ 6 billion. At the same time, the inflow of Chinese funds to Kazakhstan during 2016 seven times exceeded this figure for 2015.
Due to this, China virtually nullifies Moscow's plans to build the Eurasian Union as a new form of association of the former Soviet republics headed by Russia. At the same time, Russia loses to the People’s Republic of China in Europe as well.
On the slide. Volume of mutual trade of China with the EU is US$ 560 billion per year, while that of Russia and the European Union – US$ 177 billion.
Thus, while Moscow continues its armed aggression against Ukraine and conflicts with the West, China confidently draws Russia into its sphere of influence and undermines its positions in the vital regions of the world.
The consequence is a highly controversial nature of relations between the People’s Republic of China and Russia, which, on the one hand, are situational partners, and on the other, they have deeper contradictions than China and the USSR in 1960s.
The evidence of such a situation is the nature of bilateral cooperation between the People’s Republic of China and Russia.
Thus, an increase in the mutual interest of Beijing and Moscow in deepening relations between the parties has led to an intensification of contacts between them at all levels. Since the beginning of this year, there have been five personal meetings between Chinese President Xi Jinping and President of Russia Vladimir Putin. In addition, a meeting of the heads of governments was held last November in Beijing, with the participation of Russian Prime Minister D. Medvedev and Prime Minister of the State Council of China Lee Ketsyan. There were also systematic negotiations between representatives of ministries and agencies.
On the slide. Meetings of the President of Russia Vladimir Putin and President of the People’s Republic of China Xi Jinping:
On 14 May, 2017 within the framework of the International Forum "Belt and Road" in Beijing;
On 8 June, 2017 at the SCO summit in Astana;
On 4 July, 2017 in Moscow;
On 2 September, 2017 during the BRICS summit in China;
On 10 November, 2017 within the framework of the APEC summit in Vietnam.
During the above-mentioned events, a wide range of agreements was reached on the development of cooperation between the two countries in the political, economic, security, and humanitarian spheres.
In addition, agreements and contracts were signed on the implementation of joint projects in various fields, including energy, construction of infrastructure, development of production facilities, aviation, astronautics, agriculture, trade, finance, and humanitarian exchanges.
Due to this, a number of practical results have been achieved that have had a positive impact on both countries.
Thus, mutual trade between Russia and China has intensified after a certain period of recession. From last January to September, the total amount of trade between the two countries increased by 22.4% compared to the same period of the previous year to US$ 61.37 billion. At the same time, China has actually compensated Russia for the losses it suffered as a result of a reduction in trade with the EU through mutual sanctions.
Besides, opposite to reducing the amount of Western investment in the Russian economy, China has increased investment cooperation with the Russian Federation. Based on summarized data from various sources, as of 2017, the amount of accumulated Chinese investment in the Russian economy is about US$16 billion with an annual increase of up to US $ 3 billion (data from various sources, including official sources, on the amount of Chinese investments in the Russian economy and their annual growth are considerably differ: from US$ 10 billion to 45 billion and from US$ 450 million to US$ 2.9 billion).
On the slide. The most large-scale projects implemented by Russia and China. The Russia-China gas pipeline "Power of Siberia" and gas liquefication plants in the Amur Province and the Yamal peninsula, as well as the construction of the international transport corridors Primorye 1 and Primorye 2.
In addition, Russia has taken the first place among oil suppliers to China, and Chinese oil companies have actually replaced such western concerns as Statoil, Eni, and ExxonMobil, which have left the Russian Federation as a result of sanctions by the United States and the EU. At the same time, the Chinese side has already acquired about 30% of the shares of the Russian company Rosneft and intends to increase its package.
The development of cooperation between the People's Republic of China and Russia in the military-political, military-technological, and military spheres acquires a qualitatively new level. Thus, China and Russia made joint initiatives during the 53rd Munich Conference on International Security last February to reduce the risk of nuclear weapons use, prevent the possibility for terrorists to receive nuclear and radiological materials, and reduce the risk of military confrontation. Hereat, the general negative attitude of the People's Republic of China and Russia to the US measures to deploy the US missile defence system on the territory of South Korea, as well as the intensification of military exercises in the western Pacific, was expressed.
On the basis of this approach, a plan for the development of relations between Russia and the People’s Republic of China in the military sphere for the period 2017-2020 was developed on the initiative of the Russian Federation. Among other things, it is planned to increase the number and scope of joint military exercises of the two countries.
On the slide. This year, the most ambitious event of military cooperation between Russia and the People's Republic of China was the Marine Interaction - 2017 exercise, which was held last July in the waters of the Baltic Sea and last September in the Sea of Japan in the area of Vladivostok. Interaction between the parties during the counterterrorist and rescue operations was worked out.
Military-technological cooperation is continuing between Russia and China.
On the slide. The sale of the Russian Sukhoy-35 fighter aircraft (since December, 2016) has continued to be implemented, as well as the transfer of new Russian S-400 anti-aircraft missile complex from 2018 to China.
Indicative character had also the summit of the SCO in Kazakhstan last June and the BRICS in the People’s Republic of China last September, which were held at the level of heads of member states of the mentioned organizations.
Thus, the main result of the SCO summit was the accession of India and Pakistan to the organization, which significantly increased its political and economic status. In addition, the parties adopted the SCO Convention on Combating Terrorism, and also agreed on the continuation of work in deepening trade and economic cooperation within the organization.
At the same time, the participants of the BRICS summit agreed to intensify the dialogue in order to increase the level of mutual openness and promote the development of the world economy, as well as increase their contribution to ensuring stability in the world.
On the whole, these achievements have created additional opportunities for China's and Russia's economic growth, their military capabilities, and increased coordination of the parties in the military sphere, as well as the strengthening of their positions at the international arena.
Thus, the growth of trade and mutual investments of the People's Republic of China and Russia contributed to a certain recovery of the Russian economy and the maintenance of a steady trend of China's economic growth. In addition, it stimulated the parties to abandon US dollars in mutual settlements and to transit to rubles and yuan. Thus, conditions were created to reduce their dependence on the US financial system, as well as to weaken the international position of the US currency.
At the same time, deepening cooperation between the People’s Republic of China and Russia in the UN, SCO, BRICS, APEC and other organizations allowed to increase the role and significance of the so-called Third World as an alternative to the West. On the one hand, it contributed to the consolidation of developing economies around China, and on the other hand, it has made it possible for Russia to avoid international isolation owing to political sanctions on the part of the USA and the EU.
Despite the predominantly symbolic nature of the military exercises of the People's Republic of China and Russia, increasing their number and expansion of scale and geography of their holding is an obvious signal of the possibility of coordinated action of the parties against common opponents in various regions of the world. At the same time, due to the military-technological cooperation of the parties, China gets the opportunity to transfer its armed forces to a qualitatively new technological level, while Russia receives funds for the development of its defence industrial complex and the development of new military technologies.
All this shifts the strategic balance of forces in the world in favour of the People's Republic of China, as well as increases Russia's ability to oppose the USA and Europe and to continue armed aggression against Ukraine.
At the same time, China does not intend to build allied relations with Russia at present on the anti-American basis. The reason for this is the mutual interest of the United States and the People's Republic of China as the two leading powers in the world, which makes the United States more important partner for China than the Russian Federation from an economic and geopolitical point of view.
On the slide. The amounts of mutual trade between the People’s Republic of China and the USA make about US$ 520 billion, while those between China and Russia - only about US$ 70 billion. As of 2017, the mutual accumulated investments of the People’s Republic of China and the USA reached more than US$ 60 billion, while those of China and Russia - only about US$ 16 billion.
The strategic nature of the relationship between the United States and the People’s Republic of China was confirmed during the meetings of the leaders of the two countries last year (in April in the United States, in July at the G20 summit in Germany, and in November in China). The main result of the dialogue between the parties was the agreement on putting the US-China relations to a qualitatively new level on the principles of refusing the confrontation of the two countries and resolving all disputed issues on the basis of mutual compromises.
Examples of practical implementation of such an approach were the outcome of talks between US President D. Trump and President of the People’s Republic of China Xi Jinping in November, during which a number of trade and economic contracts worth US $ 253.4 billion were concluded, as well as an agreement on joint economic pressure on the Democratic People’s Republic of Korea.
At the same time, despite the continued negative attitude of China to the intensification of US military operations in the Asia-Pacific region, Beijing has opened the port of Xiang Gang (Hong Kong) for US warships, including aircraft carriers since last October.
This position of China causes negative reaction of Moscow, which sees it as a threat to its own interests. In particular, immediately after the signing the agreement on the implementation of the project on production and liquefaction of gas in Alaska by the People’s Republic of China and the USA last November, which would be competitive with the Russian project of "Power of Siberia", Russian Foreign Minister Sergei Lavrov warned China about "the possibility for it not to have enough gas ".
On the slide. In addition, the direct threat to Russia is the strengthening of the Chinese presence in the east of the Russian Federation, which is accompanied by the intensification of China's military activeness in the border areas of the country. In particular, last August-September, the exercise of the People's Liberation Army of China Fire Force 2017 was held in the northwestern province of Gansu, and the Transition 2017 exercise was conducted in the autonomous region of Inner Mongolia. The issues of transferring troops for a long distance and conducting military operations were worked out. The troops of the 80th Army (headquarters - in Weifang) of the Northern Command and 76th Army (Baoji City) of the Western Command of the People’s Liberation Army of China were involved in the exercises. At the same time, the grouping of the National Liberation Army of China troops in the border regions with Russia in the military districts of the People's Republic of China is almost three times larger than the group of troops of the Eastern and Central military districts of Russia.
As part of the response to the threat from the People’s Republic of China, Russia is increasing its military potential and supports the high level of readiness of its troops in the eastern direction. Yes, measures are being taken to re-equip units of the Eastern Military District of Russia's armed forces, and systematic exercises are conducted to resolve the tasks of expanding troop groupings and conducting defence operations in the neighbouring to China regions. In particular, a complex of exercises of this nature was held last August-October at a single operational background with the West-2017 strategic head-quarter exercise. The troops of the 29th (Chita headquarters) and 36th (Ulan-Ude) combined arms armies at the Trans-Вaikal direction and the 5th (Ussuriysk) and 35th (Belogorsk, Amur Province) combined arms armies at the Primorsky direction.
Despite these problems, China and Russia will continue to actively develop cooperation in all areas that can gain open anti-American character in the event of a confrontation between the People’s Republic of China and the United States and Europe.
In this case, Beijing and Moscow can begin coordinated action to defend their positions against the West, as well as to exert pressure on the United States and Europe and undermine their positions. The forms of such actions may include the use of elements of trade wars, redirection of Russian oil and gas exports from Europe to China, joint cyberattacks on American and European computer networks, support for various types of populist forces in the USA and the EU, etc.
In addition, China and Russia may strengthen military-political, military, and military technological cooperation between the two countries. At the same time, the People’s Republic of China guarantees Russia's security in the Eastern direction, which would allow it to increase its military presence in the West. At the same time, plans of military use of armed forces of the two countries can be agreed, including their strategic nuclear components.
All this will have a significant negative impact on global security in the world in the face of a strong confrontation between China-Russia bloc and the western countries. And Ukraine will be at the crossroad of their interests in Central and Eastern Europe. However, for today, this scenario is mostly hypothetical and is unlikely to be implemented in the near future.
*Information about the author:
Victor Gvozd – President, Borysphen Intel Independent Analytical Centre for Geopolitical Studies, PhD, Military Sciences.
The article is prepared on the basis of address at the International Conference "Russia and China: Current Situation and Development Prospects".