The Chinese President Xi Jinping had made some highly significant remarks regarding the future directions of the Sino-Russian strategic cooperation while receiving President Vladimir Putin in Beijing ten days ago on the eve of the APEC summit. The exceptional warmth of the meeting was noticeable — taking “good care of the evergreen tree of Chinese-Russian friendship”, Xi remarked.

He said the two countries have “lately enhanced our strategic management and planning in bilateral relations” and envisaged “a time for new achievements.” Xi estimated that the strengthening of the cooperation “complies with the spirit of the times” and no matter the “changes… on the world arena”, cooperation with Russia is a priority area” for Chinese foreign policy.
He envisaged the two countries having “to jointly protect the post-cold war world order.” (Kremlin readout). Indeed, the remarks were made against the backdrop of the rising tensions in Russia’s relations with the United States.
Taking stock of Xi’s latest meeting with Putin, a scholar at the China Institute of International Studies noted,
“Geopolitical conditions and strategic security concerns have impelled China and Russia to strengthen cooperation… In a sense, cooperation… can help them protect their core interests and maintain the balance of world power. But their efforts have focused more on short-term cooperation and coordinated emergency responses than strategic and long-term cooperation projects… Now (after Putin’s visit) the bilateral ties have been pushed to new heights as practical cooperative efforts have been introduced.”
The scholar took note of the West’s sanctions against Russia and argued that beyond trade and energy cooperation, the two countries can also help each other to transform their “economic growth modes… Russia is a world leader in aerospace and defence technology and heavy equipment manufacturing; China excels in agriculture, light industry and information technology. The two countries can complement each other…” (Beijing Review)
Meanwhile, another prominent scholar attached to the State Council in Beijing forcefully argued in an opinion-pice in the communist party tabloid Global Times that it is in China’s vital interests to help Russia as the latter grapples with the Western sanctions.
He concluded, “China can only stay stable with stability in Russia ensured… What will China encounter on the international stage if it lets Western countries heighten sanctions on Russia and drag the country into chaos?… On the other hand, if China’s help earns Russia’s trust and makes it a reliable and resource supplier as well as a military strategic partner, how much would such a deal worth?” (Global Times).
The two commentaries bring out some important vectors. One, the two mega gas deals signed between the two countries during the past six months worth a total of $700 billion would signify a big statement by Moscow that Putin’s ‘pivot’ to China is a strategic decision. This is for many reasons.
For one thing, Russia has diversified its energy exports and there is every likelihood that China will replace Europe in the medium term as Russia’s principal market.
Ironically, Russia’s increased exports to the Chinese market are threatening to kill the dream harbored by the US natural gas exporters to export to China, the largest and most profitable market for LNG exporters at present. This is a body blow because Russia is literally making it difficult for the US to compete on the world market. (The US LNG is no longer competitive in Europe.) See an excellent analysis by the Oil Price magazine.
By the way, Russia has made some unprecedented gestures to China in the field of energy cooperation. Putin disclosed In an interview with the TASS news agency last week that: a) Rosneft is offering to China a 10 percent stake in the massive Vankor oil field project in Eastern Siberia b) Alongside, China will be given representation in the board of directors of the Vankor project. c) Russia has offered to sell the oil from Vankor to China for the yuans.
To quote Putin, “we’re moving away from the diktat of the market that denominates all commercial flows in US dollars. We’re encouraging in every way the use of national currencies.” The Russian move amounts to a direct challenge to the status of the US dollar as the reserve currency globally.
Two. Beijing proposes to help Moscow to counter the deleterious effect of the Western sanctions on the Russian financial system. In essence, China can continue to help by investing in Russian bonds and exchangeable monetary assets, apart from making direct investments, thereby strengthening Moscow’s hands to withstand the effect of the Western sanctions. China is uniquely placed to do that because the manner in which it deploys its foreign exchange reserves (exceeding $4 trillion currently) cannot but make a critical difference.
On its part, Russia also is showing signs of shedding its traditional reserve in military-technical cooperation with China involving high technology products. Beijing will see this as yet another definite signal by Moscow that it is willing to expand the perimeters of cooperation in the defence field. Thus, the 3-day visit by the Russian defence minister Sergey Shoigu to Beijing this week, which concluded on Wednesday, merits close attention.
Shoigu is indeed a close confidante of Putin. While announcing the visit, Russian defence ministry spokesman said Shoigu’s agenda will include discussions on “current issues of international and regional security and bilateral military and military-technical cooperation” and that Shoigu would “determine priority tasks” for further cooperation.
The Xinhua reports on Shoigu’s meetings with the Chinese prime minister and military leaders(here,here and here) underscore unmistakably that the two militaries have a shared interest in strengthening the cooperation and have drawn very close to each other.
Evidently, Shoigu carried a much bigger brief than merely negotiating a road map of Russian- Chinese military-technical cooperation for the year ahead. He held discussions with the Chinese military leadership on the current trends in the international system and the imperatives for the two countries to join ranks to meet common challenges.
Shoigu disclosed to the media that the defence ministries of the two countries have decided to form a regional collective security system in the Asia-Pacific. He said both Russia and China are concerned about the US’ ‘pivot’ to Asia, translating as attempts by Washington to strengthen its military and political clout in the Asia-Pacific.
Quite obviously, this comes as a riposte to the tripartite meeting  between the US president and the Japanese and Australian prime ministers on the sidelines of the G20 summit in Brisbane, which targeted Russia directly and China by implication.
Shoigu said, “We [Russia and China] believe that the main goal of pooling our effort is to shape a collective security system.” Interestingly, he announced that Russia and China will hold joint naval drills in 2015 not only in the Pacific but also in the Mediterranean. He expressed satisfaction that the spectrum of joint activities between the two countries “has visibly expanded and gained a systematic character… We have vast potential of cooperation in the defence sphere and the Russian side is ready to develop it in a wide range of areas.”
Shoigu added: “Amid a highly volatile world situation, it becomes particularly important to strengthen reliable good-neighborly relations between our countries. This is not only an important factor for security of states but also a contribution to peace and stability on the Eurasian continent and beyond.”
In effect, Shoigu cited China’s understanding and support for Russia’s stance in the Ukraine situation while affirming Russia’s shared concerns with China with regard to the Asia-Pacific theatre. (TASS)
Interestingly, Shoigu’s talks in Beijing touched on the protests in Hong Kong as an example of the US-sponsored ‘color revolutions’, which only goes to show that, as a senior Russian official accompanying Shoigu put it, here, “Russia and China should work together to withstand this new security challenge to our countries.”
The Russian reports also mentioned an intriguing new salient in the Sino-Russian strategic understanding with the two countries agreeing to use the format of the Geneva disarmament conference to explain their “peaceful approaches… in order to make it clear where we are moving to, what we want and what we must do together to live in peace” — to quote Russian deputy defence minister Anatoly Antonov.
To be sure, the Russia-China strategic ties have reached a defining moment. Neither country has desired an alliance. On the other hand, neither country is also under any illusion that their respective rivalry with the United States trumps everything.
The fact remains that despite the bonhomie over the US-China climate change accord, the power rivalry between the two big powers still threatens the Pacific.
Equally, the G20 in Brisbane saw an unprecedented spectacle of the US and its Anglo-Saxon allies — Britain and Australia — berating Russian leadership in a manner that has no parallel even in the high noon of the Cold War.
Therefore, with the US breeding insecurity in the Eurasian and Asia-Pacific regions, Moscow and Beijing may be seeing the need to draw closer to each other and form an axis between them. Shoigu’s mission to China aimed at taking the first steps in that direction.
Of course, Russia’s search for collective security has a long history and has taken a tortuous course over the past decade. (See my article Russia’s search for collective security in Asia Times dated May 31, 2006). However, it is for the first time in the Cold War era that Moscow has dusted up the Soviet-era doctrine of collective security in Asia and discussed it in Beijing as a template of the Sino-Russian strategic partnership. And, the crucial thing is that Beijing warmed up to it.
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