Putin’s new best friend is in Beijing
Russian President Vladimir Putin and Chinese President Xi Jinping asserted on Friday that relations are at an “all time high.” Putin is in China for a state visit until Sunday, and will also attend the Shanghai Cooperation Organisation (SCO) summit. The two countries signed a series of deals, including nuclear cooperation projects of about $3 billion and a $1 billion industrial investment fund.
Coming in the shadow of the G7, the emphasis of Putin’s visit is to deepen the political and economic partnership, and this trip has the bonus of meeting fellow SCO leaders from Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Uzbekistan, India and Pakistan, and the observer states of Afghanistan, Belarus, Iran, and Mongolia.
China and Russia already enjoy a relatively extensive economic dialogue, which has warmed in several areas since the crisis in Ukraine that contributed to Moscow’s suspension from the G8. Russia has announced cooperation projects with China including a new method of inter-bank transfers, and a joint credit agency that seeks to create a shared financial and economic infrastructure that will allow them to function independently of Western-dominated financial institutions.
China and Russia are also involved in creating alternative forums to the World Bank and International Monetary Fund, including the New Development Bank. This will finance infrastructure and other projects in the BRICS states, and a related $100 billion special currency reserve fund.
In the energy sector, the two states have signed a $400 billion natural gas supply deal for an approximately 3,200km gas pipeline from eastern Siberia to northeast China. And they have agreed to build a second major gas pipeline from western Siberia to China’s Xinjiang province.
Moscow has also opened parts of its upstream oil and gas sector to direct investment from Beijing. Chinese companies have also stepped in to provide Russian companies with technology, and Chinese banks have become an important source of loans for Russian businesses, in the wake of Western sanctions.
Putin's latest trip has emphasised the positive mood music between the Russian and Chinese presidents which is underpinning the wider warming of ties.
In the context of this week’s Singapore summit between Donald Trump and Kim Jong Un, North Korea has been a significant theme of Putin’s dialogue with Xi this weekend. On Friday, Putin said both nations “are interested in establishing peace and stability on the Korean Peninsula.”
China and Russia grappled in 2017 with how best to respond to not just the regular missile launches by Pyongyang, but also its nuclear tests. And Trump’s rhetoric in 2017 gave Beijing, in particular, heightened concerns that Washington might be thinking, much more seriously, about a pre-emptive strike on North Korea’s nuclear capabilities.
Given that both Beijing and Moscow last year had been so concerned that the tensions on the peninsula could spiral out of control, they have cautiously welcomed the Singapore summit. However, both are concerned that they don’t become passive bystanders in unfolding events, and want to instead reinforce their roles as key players in the grand geopolitical game that is now being played out on the peninsula.
Putin’s visit highlights the growing willingness of both sides to develop a significant cooperation agenda. Despite limited progress so far on an array of projects in recent years, this latest trip has emphasised the positive mood music between the Russian and Chinese presidents which is underpinning the wider warming of ties.
• Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics