Feeling bearish

Russia seeks to boost ties with China


15 Jun 2012
Week in China

George W Bush recalls that when he first met Vladimir Putin twelve years ago, the Russian leader was strangely transfixed by the presence of Bush's terrier, Barney. Amid anxious conversation about debt and the oil price, Putin stared as Bush patted his diminutive dog.

Eight years later, the Russian leader invited Bush to his dacha. Author Ruchir Sharma narrates what happened next in his book Breakout Nations. A cockier Putin – buoyed by higher oil prices – asked Bush if he'd like to see his own dog, whereupon a black Labrador appeared. Putin then patted his own canine, saying "Bigger, stronger, faster".

The story reveals a strange mix of arrogance and insecurity – two traits that have long defined Russian relations with America. And it perhaps explains a little about Putin's trip to Beijing last week, and the message he sought to send with it.

Since 1949 these three powers have always sought to pair up to isolate the other. After Mao's victory in China's civil war there was an alliance between Moscow and Beijing. That relationship, however, went sour, culminating in a 1969 skirmish in the Zhenbao mudflats that almost triggered war. Mao then used Nixon's 1972 visit to 'isolate' the Russian bear.

Putin's visit last week also looked like a renewed attempt to cosy up to China. Meeting his opposite number Hu Jintao, he claimed that ties between the neighbours had reached "new heights", with political trust between the two "especially high". The China Daily also played ball. It ran a front page photo of Hu and Putin under the headline: "Working for a better world."

Both sides have reason to play up their alliance. Russia has been keen to stop international action in Syria, and has found China a willing partner in blocking attempts at Libya-style regime change.

"China and Russia's cooperation and coordination in a series of international affairs, such as Syria and Iran, have helped lower the risk of major wars," blogged Sun Changhong, the vice-director of the State Council's Euro-Asian Social Development Research Institute.

What China wants most
from Russia is oil.

From China's vantage point, closer ties with Russia send a signal to the US, which it sees as building up its military presence in Asia, as well as interfering in regional disputes in the South China Sea.

But Putin's eighth visit to China had an economic rationale too. Last year Sino-Russian trade volumes rose 40% and Hu set a target of growing cross-border commerce to $200 billion by 2020. A spate of commercial deals were signed during the visit and the Russian delegation included the heads of Russia's energy giants Gazprom, Rosneft and Transneft, as well as "all the major names of Russian business", according to a Kremlin spokesmen.

And what China wants most from Russia is oil. And in the wake of Putin's trip speculation grew about whether one of the Chinese oil majors might purchase BP's 50% stake in TNK-BP, which the British firm has put up for sale.

"I am optimistic about Sinopec and CNOOC acquiring BP's Russian assets," Wu Mouyuan, a deputy director at CNPC Economic and Research Centre, told CBN, as "current good momentum" in relations was making a deal more likely. If so, it would be the largest overseas acquisition by a Chinese energy company.

Other media were less bullish. 21CN Business Herald was typical in quoting an informed source from the oil industry who rated the possibility as "very slim". Instead Moscow will be keener to see the assets pass into Russian hands.

That's less surprising when Russian anxiety about China's rise is also taken into account. As alliances go, this one definitely falls into the 'uneasy' category, regardless of Putin's rhetoric in Beijing.

And as political analyst Bobo Lo also pointed out in the New York Times last week, China continues to see the United States as its "one truly indispensable partner", with the EU also its largest source of foreign trade.

And amidst all the talk about "partnerships for modernisation" on the latest trip, when it comes to advanced technology Beijing (just like Moscow) looks first to the West, Lo suggests.

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