China and Russia: The Uneasy Partners

Frank Ching (Commentator based in Hong Kong)

Russian President Vladimir Putin's visit to China last weekmarked yet another step in the two countries' move towards closer economic and political relations. It was the latest move in a 10-year-old effort to form a "strategic partnership of co-operation".

During Mr Putin's state visit, Beijing and Moscow signed 22 agreements covering politics, diplomacy, energy, investment, finance and communications. Mr Putin and President Hu Jintao signed a joint statement in which they agreed that "bilateral relations are at an unprecedented level of development". The two countries hold similar positions on major international issues, such as the Iranian and North Korean nuclear crises, the Palestine-Israeli negotiation process and Iraq.

Understandably, the media focused on the Russian agreement to build two large gas pipelines to China - costing up to US$10 billion - within five years. Each pipeline would be capable of delivering 30 billion to 40 billion cubic metres of gas per year. As for the crude oil pipeline from eastern Siberia to the Pacific Ocean, the two sides agreed to proceed with a feasibility study on building a spur line to China.

Still, the relationship is not trouble-free. Mr Putin, addressing a China-Russia business forum, pointedly referred to "serious problems" in their mutual trade structure that could lead to "instabilities". He called on China to increase imports of Russian machinery and equipment, which have been plummeting in the past few years.

"In 2005," Mr Putin said, "Russia's export of mechanical and electronic products to China dropped almost 50 per cent. At the same time, China's exports of the same products to Russia increased remarkably."

Although Russian exports are increasing on the whole, more than 90 per cent consist of raw materials. China is also the leading customer for Russia's defence industry, buying advanced warplanes, warships and missile systems. Overall, bilateral trade is increasing rapidly, from US$20 billion in 2004 to more than US$29 billion last year.

The bilateral relationship is, to a large extent, being driven by geopolitics since neither likes the United States being the only superpower. While Washington seldom reacts publicly to the improving China-Russia relationship, it is observing developments with some concern. The US has moved to improve its relations with Japan, Australia, Vietnam and India.

The Chinese and Russian people have not caught up with their leaders. This was acknowledged by the Russian ambassador in Beijing, Sergey Razov, who said in an interview with the overseas edition of the People's Daily that "the current political trust and mutual understanding between the two peoples exceed their knowledge of each other". Indeed, Chinese and Russians are more interested in the US and Europe than in each other.

In the 1950s, shortly after the establishment of the People's Republic of China, a great many Chinese were sent to study in the Soviet Union. Even today, many older Chinese are still familiar with Russian culture. However, younger people in each country know little about the other's culture.

In part to rectify this situation, China this month began a Year of Russia: its hundreds of activities will include a cultural festival, painting exhibitions, concerts, and scientific and technological seminars. This will be followed by a Year of China in Russia next year.

While on the surface China and Russia seem to be getting along swimmingly, Moscow still views Beijing with a wary eye.

This is largely because the Chinese economy is now much larger than Russia's, and the Chinese population continues to grow, while that of Russia is shrinking.

(Originally appeared in the March 29, 2006 issue of South China Morning Post in Hong Kong, reproduced here with permission.)