By George Friedman
Neither country can solve the other’s top economic and strategic problems.
China is holding a weeklong event called the China International Import Expo in Shanghai this week meant to encourage trade, sell China as an import market and send the message that the Chinese economy is open for business. China’s motivation for doing this is obvious: It’s a nation dependent on exports, and American tariffs have decreased demand for its goods. In his opening address, President Xi Jinping stressed that China was prepared to open its markets even further to international trade – with the United States and the rest of the world. His remarks were clearly directed at the U.S., as he looks toward his meeting with U.S. President Donald Trump at the G-20 meeting in Argentina later this month. But the conference has also raised questions about China’s relations with another country that’s experienced its own setbacks in U.S. relations: Russia. Russian Prime Minister Dmitry Medvedev said at the expo that Moscow and Beijing are now closer than ever, and the Chinese emphatically agreed. Indeed, there has been much talk of a Russo-Chinese alliance, and the Shanghai extravaganza is a good opportunity to look closer at what this could mean.
China and Russia both have serious economic problems that have been exacerbated by the United States. Russia’s problems derive from the decline in the price of oil, a resource on which the Russian economy is heavily dependent. The United States, along with the EU, has compounded Moscow’s economic woes by imposing sanctions following Russian incursions in Ukraine and meddling in the 2016 U.S. election. China’s problems derive, at least in part, from its dependency on exports. This year, the U.S. has imposed tariffs on more than $250 billion worth of Chinese imports, and according to Bloomberg, it’s preparing to announce new duties on all remaining Chinese imports by December if trade talks don’t go well.
On the surface, that Russia and China share a common, powerful adversary should be the foundation of a strong alliance. Both countries are significant military powers, and they ought to be able to support each other economically. But appearances can be deceptive.
On the economic front, developing stronger ties with each other wouldn’t fully solve any of their problems. Russia needs to sell raw materials, particularly oil, in massive amounts to keep its economy running. Between January and August 2018, crude oil accounted for 28.8 percent of Russia’s total exports and natural gas accounted for 10.9 percent, according to Russia’s statistics agency. China was its biggest oil importer at 22 percent, though it purchased only 1 percent of Russia’s natural gas exports. (As a whole, however, the European Union imported more Russian oil than China did.) Indeed, China is a big oil importer and overtook the U.S. as the world’s largest crude buyer in 2017, according to the U.S. Energy Information Administration. The problem, however, is that Chinese imports are limited by the lack of energy infrastructure between the two countries. Pipelines are costly and take a long time to build. China, therefore, might be able to ease a bit of Russia’s demand for oil consumers, but it can’t buy enough to keep prices high or ease the risk of further sanctions that could target its energy exports.
China, meanwhile, needs to find buyers for its manufactured goods. In 2017, exports made up nearly 20 percent of its gross domestic product, according to the World Bank. The United States is its largest market, accounting for 19 percent of its goods exports, according to the International Trade Centre. With U.S. tariffs cutting into these exports and intensified competition from other exporters, Beijing needs to find new buyers for its goods. But Russia is in no position to consume enough Chinese exports to make up for these losses – it purchased only 2 percent of China’s total exports in 2017. Neither country, therefore, can provide meaningful economic support to the other.
On the military front, it’s true that the two countries have increased cooperation in recent years. Since the end of the Cold War, China has been Russia’s largest arms purchaser, and according to Russian media, Beijing acquired a Russian-made S-400 air defense system in July of this year. In addition, Russia’s largest military exercises since the Cold War, held in September, were attended by thousands of Chinese troops. This had many speculating that the two countries were on the verge of forging a military alliance. The problem is that alliances are based on shared interests, and Russia and China have a history of mutual distrust. The two have clashed over border issues several times throughout the years and competed for influence in Asia throughout the Cold War.
They also have different strategic priorities. Russia is facing what it sees as intense pressure along its western frontier and, to a lesser extent, in the Middle East. China has little interest in expending its resources to protect Russia’s European buffer. They might share the world’s sixth-longest international border but deploying troops and resources to Russia’s west, where its major population centers are located, would be a logistical nightmare for China, to say the least. (Nor would Moscow welcome or be able to support such a deployment.)
China, on the other hand, faces a challenge from the United States in the South China Sea, where Beijing is trying to prevent any possible future blockade of its access to maritime shipping lanes by stationing military and naval assets on its artificial islands off its southeastern coast. The U.S. often conducts freedom of navigation operations in contested waters there to make the point that the Chinese buildup won’t prevent others from traveling freely through the region and to reassure its allies in Southeast Asia. The Chinese could undoubtedly use naval support there and in the Western Pacific, but the ability of the Russians to project significant naval power in these areas is limited. The Russians do have a naval base at Vladivostok, but it’s blocked from ready access to the Pacific by Japan, as well as U.S. air power. While a blockade of Vladivostok isn’t likely, any military action must take into account the worst-case scenario, and Vladivostok can easily become a trap for Russia’s fleet.
It might be far-fetched, but the only way the Russians and Chinese could coordinate to thwart their major threats would be through a simultaneous attack by Russia toward the west and by China on U.S. naval assets in the east. The problem is that whereas Europe is an army issue, the South China Sea is a naval issue. The U.S. could concentrate its naval forces against China without diverting land forces from Europe. But infinitely more important is the fact that, considering all their economic problems, neither China nor Russia intends to start a world war, which this certainly would do.
Though a Sino-Russian alliance would seem to be a logical counter to their common adversary, it’s just an illusion. All the warm gestures in Shanghai can’t hide the fact that Russia and China can’t help each other get out of their serious economic and strategic problems. It’s an alliance that works only on paper, at best.