Russia-China: Axis of Convenience

About the author
Bobo Lo is Director of the Russia and China programmes at the Centre for European Reform.

oD: Russia's relations with China were surprisingly good under President Putin...

Bobo Lo: It is probably the major success of Russian foreign policy in the post-Soviet period, both under Yeltsin and Putin. Putin, in particular, has committed himself to improving Russia-China relations. And he has done very well.

oD: So will the Chinese worry now that he's going?

Bobo Lo: They will a bit.

oD:But when Putin came to power there were some setbacks.

Bobo Lo: Yes. The first was Putin's decision to endorse the US force presence in Central Asia after 9/11. He did not tell the Chinese he was going to do this and they felt let down. China was unhappy, too, about Russia's tame reaction when Bush announced the US withdrawal from the Anti- Ballistic Missile (ABM) treaty in December 2001. Putin took the American decision very well - too well in Chinese eyes. Beijing was also frustrated that the Kremlin cancelled an agreement to build an oil pipeline to China in favour of a Japanese-backed route to the Pacific Ocean.

oD: But this didn't spoil the relationship?

Bobo Lo: No, because the Chinese have few illusions about Russia. They know that normatively, historically and strategically it is overwhelmingly Western-centric. That doesn't mean pro-Western, just that Russia looks to the West for its main strategic points of reference. Russia is a European civilisation. Most of its population lives in the European part of Russia. The centres of political and economic power have been always there. Even under the Soviet Union the Far East was a European outpost, not part of Asia.

You can argue that Russia should have a more balanced foreign policy. But people are what they are. The Russian elite's interests are in the West. They want a good relationship with China. But this is not the main game and won't be in the future - not if Russia can help it.

The Chinese Threat

oD: Traditionally, the Russians have felt acutely threatened by China. Is that diminishing in the light of the new economic opportunities opening up in the Russian Far East?

Bobo Lo: I wish I could say yes. The threat perception is changing, rather than disappearing. First, let's define what we mean by the China threat. In its most primeval form it is the idea of millions of Chinese flooding across the border to fill the empty spaces in the Russian Far East and seizing Russia's natural resources. An alternative interpretation views the China threat in terms of historical grievance: the Chinese want to regain land they lost as a result of the "unequal treaties" of the 1860s. But all this is rubbish.

The real threat is this: China's rise will lead to Russia's steady marginalisation from regional and global decision making. The Chinese do not intend to invade Russia militarily, because they would lose. The consequences would be too horrific to be contemplated. They are not going to fill the Russian Far East with lots of Chinese. Those northern regions have always been considered a barbarian outland. The Chinese who go there want to make a quick buck before returning home. Although they receive half the salary of local Russians, it is still much more than they would get in northeastern China or in the countryside. But very few Chinese go to the Russian Far East to live there.

oD: In the nineties local markets in the Russian Far East were flooded with Chinese...

Bobo Lo: Not anymore. The numbers are actually going down. One reason is the Russian market trading law that denies foreigners the right to undertake cash transactions in markets. Today, most of the traders who go back and forth across the border selling goods are Russians. The Chinese have also tightened up their passport laws. The third reason for the fall in numbers is that the Chinese economy is developing so quickly that Chinese businessmen are becoming more ambitious. They want to invest in European Russia - in projects such as the Baltic Pearl residential complex in St. Petersburg. By comparison, the Russian Far East is a backwater.

oD: From the Russian point of view the demographic imbalance between the countries looks pretty scary.

Bobo Lo: The reality is that there are 110 million people in northern China (this is the most common figure, but it is probably more) compared to fewer than 7 million Russians east of Lake Baikal. More generally, we are speaking about a total population of 1.3 billion and rising as against one of 142 million and falling. This clearly plays on the Russian mind.

If you ask Russians how they view the Chinese, well, they view them much more favourably than a few years ago. China now is number one among countries with whom Russia is said to have friendly relations. On the other hand, if you asked people whether they are in favour of Chinese workers coming in to alleviate Russia's labour shortage, they would say absolutely not. If you asked them whether they minded having a Chinese neighbour, the answer would be predictable. At the street level, attitudes towards the Chinese remain unreconstructed.

The Chinese game in Central Asia

oD: Can we talk about Central Asia? And the Shanghai Cooperation Organisation

Bobo Lo: Russia and China have very different objectives in Central Asia. Russia wants to reassert its regional leadership there. China, however, wants to be one of three strategic principals in the region, along with the United States and Russia. Moscow and Beijing are keen to douse any notion of Sino-Russian rivalry in Central Asia. But this rivalry exists.

China has done nothing in Central Asia for two hundred years and is keen to get back in the game. But it wants to do this in such way that it doesn't offend others, particularly key states such as Kazakhstan and Uzbekistan. How, then, to package its re-entry so that others do not combine to stop it? The answer is to act under the cloak of pan-regionalism. Here the Shanghai Cooperation Agreement fits in beautifully. It makes China look like a good regional citizen.

The Russians understand the Chinese game, so they're lukewarm about the SCO. The SCO does for China what the Collective Security Treaty Organization (CSTO) does for Russia. The CSTO, which Russia established in 2002, has one crowning virtue from Moscow's point of view: China is not a member. The CSTO helps Russia to reassert its influence in Central Asia. The SCO and CSTO are effectively competing organizations.

China's main interest is not Central Asia, but the United States and the Asia-Pacific region. Its major objective in Central Asia is peace and stability. To achieve this, it is developing its connections with regional elites. Beijing believes that authoritarian or semi-authoritarian regimes are more stable than democratic ones, and that they are strongly committed to stamping out separatism. A quiet Central Asia helps to hose down separatist sentiments in China. We are not talking about Tibet here so much as the Uighurs in the far western province of Xinjiang.

oD: How important is energy for China's relationship with Central Asia?

Bobo Lo: From the Chinese point of view, greater economic interdependence creates a more stable environment, and energy is the spearhead of this. China worries about the security of sea-lanes. Currently, it gets about 50% of its oil from the Middle East, another 25% from Africa, and the rest from various other countries. It would like to diversify, not just globally but also at the regional level. The Chinese have found it very difficult to develop an energy relationship with the Russians, and they are therefore looking to develop new sources in Central Asia - which is why energy ties with Kazakhstan, Uzbekistan and Turkmenistan are so important.

oD: Is there a climax coming up in 2011, when the Baku-Tbilisi-Ceyhan pipeline either does or doesn't manage to start getting oil from Kazakhstan? This would reduce Russia's leverage on Europe and presumably make it more inclined to supply China at all costs?

Bobo Lo: I don't think the Russians are going to supply China at all costs. Russia's energy leverage over Europe is vastly exaggerated. Moscow has no "China option" on the table. It pretends that this exists, but it doesn't.

There are at least five reasons why this is so. First, the Russians like doing business with people they know. They have done gas deals with various European countries since 1967. By contrast, they have little understanding of how the Chinese operate. Second, there is the issue of price. The Europeans pay top dollar, whereas the Chinese are always looking for a discount. Third, most of the deposits are in western Siberia, much closer to Europe than to China. Fourth, the pipeline network is overwhelmingly directed towards Europe.

Russia needs to develop new oil and gas pipelines. But its focus is still very much on satisfying the needs of the expanding European market. That's where the money is. Incidentally, oil and gas make up 60% of Russia's total exports and more than half of federal budget revenue. Moscow does not have an alternative market just sitting there. Russia and Europe need each other.

At the same time, Russian companies are more interested in buying downstream assets than investing in uncertain fields with uncertain outcomes. You might say that they should show some vision. But Russian political and business leaders have always been influenced by the thought that they might not be here tomorrow. They consequently have a very short-term mentality.

oD: And the fifth reason?

Bobo Lo: Right now Chinese gas demand is very soft - only 3% of Chinese primary energy consumption. Gas's share is set to increase to 12% by 2030. But 2030 is a long way off and 12% is still low. That is why the Chinese are building nuclear stations, coal stations, trying to develop clean coal technology, looking for other renewable sources, thinking about energy conservation, building up a strategic petroleum reserve. They are doing all sorts of things to make sure they never become dependent on Russian oil and gas.

Military Priorities

oD: At the moment Russia is stronger than China in military terms. Do you foresee a time when China will be able to compete with Russia militarily?

Bobo Lo:Not really. But the Russians worry about the military balance for two reasons. Chinese increases in military spending have been in double digits over the last fifteen years. Also, unlike Russia China has had a thoroughgoing revolution in military affairs since the Gulf War in 1991. That war shocked the Chinese. They realized how far they had to catch up. But the thrust of their military planning is towards the south, not the north. They've focused on acquiring Kilo submarines, Sovremennyy destroyers. In theory, these might lead not only to the recovery of Taiwan, but also enable the Chinese to protect the sea-lanes through which 80% of their oil imports pass, and to project power in the South China Sea and the Pacific.

oD: Russians were quite worried last year when People' Liberation Army, conducted big military exercises in the north.

Bobo Lo: The obsession with the security of the Russian Far East reflects paranoia, not reality. The RFE scarcely features on the list of Chinese military priorities.

Regarding Taiwan, the PLA still has no capability to take the island, even without U.S intervention. The longer-term PLA strategy is to raise the costs of a possible American intervention. But this is a very long shot.

In the meantime one should not forget that there are one million Taiwanese in Shanghai and that Taiwan is a major investor in China. Taiwanese businessmen drive the booming economy of southeastern China. It is possible that one day we will see the peaceful integration of Taiwan into mainland China.

More generally, Beijing understands that the best way of becoming the next global superpower is through peaceful means. If it resorted to armed action, it could lose badly and that might bring about the collapse of the communist regime. The risks are enormous.

People have a somewhat hysterical view of the Chinese. But actually they're quite pragmatic. They do want to engage, not because they are "nice", but because constructive engagement is the most effective way to achieve their objectives.

Axis of Convenience

oD: Do you see any possible destabilising factors in the Chinese-Russian relations?

Bobo Lo: The fact that China has a much more dynamic economy than Russia will, in time, lead to growing tension between them. For example, the Russians will not take kindly to the Chinese becoming increasingly influential in Central Asia. However, such tensions will fall short of confrontation. I think the Russians will react to China's rise by gravitating towards the West - in ten years or so, maybe earlier. It will be interesting to see how the leadership in Beijing responds to this. Beijing is smart enough not to overreact but some kind of froideur in its relations with Russia will be unavoidable.

In my forthcoming book I call their relationship an ‘axis of convenience'. Both countries have become closer because of selected common interests, rather than ideas. But interests change.

oD: When you look at these two big communist empires of the 20th century what parallels do you see? What parallels are there between China's managed pluralism and Russia's sovereign democracy?

Bobo Lo: It's misleading to see some sort of authoritarian consensus. China and Russia are very different from each other, although they both reject external interference by supranational regimes. Why? Not just because they believe in the Westphalian notion of the primacy of the nation-state, but because it's the best way of realizing certain objectives. The Chinese leadership does not want the West to interfere, to make judgements about human rights, because this could erode the regime's legitimacy. The Chinese feel uncomfortable about this prospect, as do the Russians.

Given this, it makes sense to make common tactical cause with other countries who think more or less along the same lines. But that doesn't mean that Russia and China are like-minded in the larger, strategic sense of the word. Wealthy Russians send their kids to schools in London, not to China. The children of the Chinese leadership study in the United States, not Russia. So when people talk about Sino-Russian normative convergence - yes, this exists to a point, to achieve certain specific objectives. But there is no sense of innate like-mindedness. Ultimately, it's about interests, not values.

oD: Fantasising for a moment: what are we going to see first, a democratic China or a democratic Russia?

Bobo Lo: This is so difficult to predict. For all the authoritarian tendencies that we've seen in Russia in recent years, it still remains a more democratic and pluralist society than China. While China's economy will continue to liberalise, its political and social development will be a very slow process. I do not think the western media give the Chinese leadership enough credit for the progress of recent years. But this is understandable. By western standards, China appears a repressive and closed system, whereas Russia seems comparatively open. Coming back to your fantasy, although I do not imagine either country becoming democratic in the sense we understand it anytime soon, I'd put my money on Russia, not China, becoming the first to democratize.

oD: Will Russia have the same PR problem before the Sochi Winter Olympic Games in 2014 that China is having with Tibet at the moment?

Bobo Lo: Russia doesn't have an issue like Tibet. Although instability in the northern Caucasus is an ongoing problem, Chechnya as a public issue has completely faded from view. The beauty of Chechnya from Moscow's perspective is that in the post 9/11 environment the Chechen rebels became equated with terrorists. By contrast, the perception of Tibetans is of a freedom-loving people, spiritual, who would not hurt a fly. In fact, by Chinese standards, the authorities have been very restrained in their response to the Tibetan demonstrations. But even the best PR in the world cannot counter Richard Gere, Brad Pitt and the Dalai Lama. The Chechens have no-one like that.

oD: Finally, can we return to the issue of the new Russian president. Will he be a political heavyweight like Vladimir Putin?

Bobo Lo: I think it is wrong to see it in terms of Putin versus Medvedev. They both need each other badly. Putin left the presidency because he likes the appearance of legalism. Even if he doesn't practise the rule of law as we understand it, he wants to observe the legal proprieties. That way he can claim to be the defender of the constitution. At the same time Putin intends to remain the dominant political figure in Russia. And that will be possible since he has chosen the weakest possible candidate as his successor. Medvedev needs Putin to stay for at least a couple of years, if he is to have any real role. Putin needs Medvedev in order to create the illusion of law and democracy. This is a relationship that could work well.

How long will it last? For a surprisingly long time. I can see Medvedev serving out not just one, but maybe two presidential terms. Putin is not necessarily going to come back in 2012 as president. His recent political manoeuvring has given him a kind of legitimacy, which is what he needs. As leader of the ruling party and prime minister he will be able to argue that he is moving Russia in a more democratic direction, away from an overtly presidential system. He can package it in those terms. A lot of us will reject this pretence. But it will also keep a lot of people onside. Already in the West you have huge range of opinion on Russia: journalists tend to be fairly cynical and ambivalent; policymakers deplore much of what is happening; but business is overwhelmingly positive. Yes, he screws the foreign energy companies on deals - but they're still making lots of money.