May 12, 2014

Will the “Russia-China" Roll Over Bar Get Bent?

What does Russia want?

“Russia should be considered as a unique and distinctive civilization belonging neither to the West nor to the East. It should give up the principles of multiculturalism and tolerance and reject cultural projects, “imposing alien to the society value norms,” reads the “Basis of the State Cultural Policy”. How do you like it? What does this mean?

Since the beginning of the Russian aggression against Ukraine and after the annexation of the Crimea, with some degree of certainty one can state that we all went into a sharp geopolitical turn. Russian President Vladimir Putin led Russia into a campaign not only against Ukraine and Eastern Europe. And even, most possibly not only against the USA's positions in the world. He went against the whole world! Is he trying on the mantle of the “collector of lands?” Is he uniting around himself the Russian nation divided by borders after the collapse of the USSR?

What is spurring Putin? NATO's coming nearer to Russia's borders? The Ukrainian Maidan and the Ukrainian people's desire to put an end to dependence on a “big brother” and to build a new Ukraine and live like Europeans in peace and tranquility? Or maybe a rapid growth of China's influence in the Asia-Pacific Region (APR), and fear not “to have time to become a great power from the taiga to the British seas?” Perhaps all the above-mentioned taken together is.

The rapid rise in oil prices as a result of campaigns in Afghanistan and Iraq, the “Arab Spring”, and many other factors have provided a powerful stream of gold resources into the Russian treasury, allowing to invest a lot of money into the economy and defense.

Today, V. Putin states that Russia is ready to head “a new ideological struggle between the rotten hearted West led by the USA and the traditionalist world”, and his new doctrine, under which “any territory with the Russian population should become part of Russia”, makes us think hard about the future of our world.

Russia, having started the struggle against the world law and order is looking for allies in the East to create a “roll over bar”

So, Russia, having started the struggle against the world law and order and actively using gas as weapon against the states of Europe, is looking for allies in the East to create a “roll over bar”. Allies may well be Iran, India and China.

Here against this background is unfolding the struggle for China, on whose position depends so much, if not everything. For May 2014 is scheduled V. Putin's visit to China and signing of the agreement on supplies of Russian gas to China. It is known that negotiations about this had been conducted for a long time, but the main stumbling block was the price of the fuel. With all the caution and care approaches, this agreement is equally beneficial to both parties. China, of course, is interested in reliable energy supplies for its economy. Besides, to ensure the safety of such supplies from the continent will be much easier.

Russia and China: key indexes of the countries
Russia and China: key indexes of the countries

For Russia to attract a reliable consumer of its hydrocarbons in the face of China is more than urgent, especially after the introduction of sanctions and U.S. President Barack Obama's statements about the possibility of supplying Europe with the American shale gas. And although, as experts say, for purely technical reasons, the West will be able to fully realize such projects not earlier than 2020, Russia is already worried about the implications of these projects for its economy.

Within the framework of the BRICS, Moscow and Beijing also are feeling the pulse of each other's positions on the subject of agreements on the common bank of the development.

Russia and China are activating their military cooperation
Russia and China are activating their military cooperation

Besides, as it has become known, now they are preparing an agreement on military cooperation, going much further than the signed in 2001 by V.Putin and Jiang Zemin Agreement on good-neighborliness, friendship and cooperation. Today, China is the market for almost a quarter of Russian arms exports. In practice this will mean that the years-long negotiations on the Russian-Chinese economic and military-technical projects probably will finally be completed very quickly. It is possible that for Putin's upcoming visit to Beijing will be prepared not only contracts on the supply of Russian gas to China, but of destroyers Su-35S.

However, these common interests have their limits. First of all — competition, working as a brake in the development of relations.


What does China want?

In the days when the tension in relations between the USA and Western Europe, on the one hand, and the Russians — on the other, with the annexation of the Crimea reached its climax, the leader of the PRC Xi Jinping goes on a tour to Europe. Certainly, economic and trade relations, and not the situation in Ukraine were the main issue in Xi Jinping's talks in Paris, Berlin, the Hague and Brussels. Now, when Russia is threatened with new Western sanctions, Beijing is trying to deepen its relations with European countries and the European Union, to whose leadership Xi Jinping made ​​his first visit since taking office. That says a lot. The new leader of China has demonstrated his priorities.

It is no secret that the Chinese leadership perceives anxiously violation of sovereignty and territorial integrity of states. Beijing's behavior is very reserved, especially since in 2008 Russia attacked Georgia and cut off from it Abkhazia and South Ossetia. “The right of peoples to self-determination”, which Moscow shamelessly used to justify the annexation of the Crimea, sounds to China as a very dangerous precedent, because in the future this right may be used in Tibet or Xinjiang Uyghur Autonomous Region. In this situation, one should not forget about the problem with Taiwan. Although relations between Beijing and Taipei have been notably improved, the leadership of the mainland China still officially considers Taiwan the 21st province of the PRC.

China has never recognized independence of Taiwan, and insists on the status of this territory as a breakaway province
China has never recognized independence of Taiwan, and insists on the status of this territory as a breakaway province

For fear of this, Beijing did not support the Russian Federation in the vote on Ukraine in the Security Council and the General Assembly of the United Nations. The representative of China chose to abstain from voting. And Russia was supported only by two of its former Soviet vassal devotees — Belarus and Armenia. The rest of the so-called members of the Commonwealth of Independent States, created by Russia after the Soviet Union's collapse, chose to follow the example of China.

China's leadership today, not without pleasure, points out that Russia is challenging the ideological hegemony of the West. At the same time, it is well aware that it was the existing today globalized system whose rules had been established by the West, that let China's economy grow so significantly over the past two decades, allowing it to become the second economic power in the world. Besides, China intends to continue to use such favorable conditions, especially because Russia has so far failed to do so.

China has always been extremely cautious in its statements about the revision of the international economic system. Suffice it to recall the financial crisis of 2007-2008, when the Chinese official propaganda was criticizing bankruptcy of capitalism and at the same time, the authorities of the country were carrying out anti-crisis policy which helped them to save the needed by them international financial system.

Conflicts in the Asia-Pacific region
Conflicts in the Asia-Pacific region

In the short term all China's attention now is focused on the Pacific Region, where Chinese interests get increasingly in conflict with the interests of Washington and its allies. In case of an open crisis, Beijing will need a serious support, and this explains its desire to appease Russia, but not to join in international disputes for its sake.

At this, China has used events in Ukraine with maximum benefit for itself. On the one hand, refusing to officially support Russia, Beijing was still able to conduct its affairs with both, Western partners, and the new Kiev authorities. On the other hand, the unofficial support to Moscow has strengthened the already close relations with Russia.


What is the EU interested in?

Today, China is the second largest trading partner of the EU. EU countries whose economies are in a state of recession, are very much interested in Chinese investments, and China, as always, needs markets for its products. But, apart from all this, Beijing hopes to get access to advanced Western technologies for the transition to an innovative model of economic development, as a pledge of future well-being and prosperity.

Commodity structure of exports from China to the EU
Commodity structure of exports from China to the EU

Another important issue for China is to increase the role of the Yuan in international transactions, which in the future would allow its free conversion. Now it is done mainly through bilateral currency swap agreements, but Great Britain's position on this issue could significantly change the state of affairs in Beijing's favor. According to the British Finance Minister George Osborne, London is going to become a global center for trade and investment in the Chinese currency, as evidenced by the results of Cameron and Osborne's visits to China in the autumn — winter 2013.

In general, China's European policy in its long-term perspective aims at creating a China-Europe free trade area, which will be the basis for the joint development and mutual stimulation. A key role in this process Beijing gives to London. Deputy Director of the Research Center of the EU, Professor at the Institute of International Relations of the People's University of China Wang Yiwei has said on this subject as follows, “If it is possible to combine efforts, the China-Europe cooperation will bring Eurasian integration and will add new content to globalization”.

It is highly unlikely that the Eurasian integration in Chinese format will suit the interests of Russia, for which this direction of the foreign policy is most important. The alternative project linking together the East and West with huge potentials of China and the EU leaves Russia on the margins.


What does the USA want?

To date, the conflict of China's interests with Washington in all key issues for the PRC, from the territorial dispute with Japan and to the state of affairs in Tibet (in February, Barack Obama met with Dalai Lama, in connection with which Beijing has expressed its official protest), clearly does not help the convergence of their foreign policy positions.

Barack Obama met with the Dalai Lama XIV at the White House
Barack Obama met with the Dalai Lama XIV at the White House

With this in mind, Washington in building its relationship with China has chosen the tactics of “soft” diplomacy. The United States is pursuing a well-defined goal — to enlist sympathy of the Chinese people. To do this, they try to use all available means, and this -despite the fact that Beijing and Washington see each other as the main rival. America is seriously concerned that the PRC has challenged the USA in the struggle for world domination. It is in this perspective that is considered the USA’s position on the priority of its interests in the Asia Pacific Region.

China, in its turn, accuses the USA of leading the policy of containment against itself and is extremely concerned about the strengthening of Washington's positions, primarily in Southeast Asia (SEA), as this region is a kind of “neck” of the PRC, through which go transport corridors for imports of goods and resources and exported goods.

Unlike Great Britain, Washington did not welcome the idea of ​​strengthening the role of the Yuan in international trade, seeing in it a very real threat to the dollar. Despite the close relationship of the two leading economies of the world, America continues to jealously protect its advanced technologies, which are one of its major advantages in the modern world. This is reflected in particular in establishing stringent trade barriers and a number of restrictions on the export of high-tech products to China.


Conclusions and forecasts

In today's situation in the world, China, supporting the idea of ​​a multi-polar world, is interested in strengthening of Russia as it could weaken Washington's positions on the world stage. But China will hardly dare to make an open alliance with Russia against the West. Why will Beijing not dare?

Firstly, because China will not risk the already established economic relations with the European Union and the United States.

Secondly, China's choice in favor of Russia or the West would finally destroy the world in geopolitical terms.

The matter is that, by joining any of these parties of the present confrontation, China will form the basis for the military-political alliance under the “China — Russia” against the USA and the EU, or “China — USA — EU” against Russia, which will throw the whole geopolitical balance of forces in the world into 75 years ago.

Chinese chronicles interpret datong “great unity” as  society of ideal state, and  xiaokang “little prosperity” as society of acceptable state
Chinese chronicles interpret datong “great unity” as  society of ideal state, and  xiaokang “little prosperity” as society of acceptable state

At this stage China does not need a war at all. Nor does it need any international sanctions against it. Don't forget that the top leadership of China has announced the policy of building a moderately prosperous society by 2020 (Xiaokang). Besides, China is entering a period of economic and political reforms and stability in the world for it is extremely important. That is why Beijing is insisting on a peaceful political settlement of the situation around Ukraine and the Crimea. At this, for Beijing it does not matter in whose favor the conflict will be resolved. The main thing is to prevent military actions and to minimize sanctions, complicating trade and economic ties and bringing losses to the Chinese economy.

China will continue to develop mutually beneficial trade with all international players, supporting the existing geopolitical balance of forces

Today's globalization, primarily economic, is more profitable for China even more than for the West, who was promoting it to its advantage.


Based on this, we can assume that China will continue to develop mutually beneficial trade with all international players, supporting the existing geopolitical balance of forces and directing its efforts to gradual reducing the role of the United States and strengthening of Russia and the EU.