Why Beijing and Moscow are close and getting closer

Why Beijing and Moscow are close and getting closer

Russian Prime Minister Dmitry Medvedev arrived in China on Monday for a three-day visit and talks with President Xi Jinping and Premier Li Keqiang. The visit, just before US President Donald Trump’s trip to Asia and following last week’s significant Chinese Communist Party congress, underlines the growing ties between Beijing and Moscow.
The two nations, whose 3,645km land border is the world’s sixth largest, have had a complex relationship often shaped by competition and rivalry. There was a significant split in the late 1980s, when Deng Xiaoping opposed what he viewed as Mikhail Gorbachev’s dangerous reforms, which he considered a key driver of the collapse of the Soviet Union and a potential danger to Chinese Communist rule too.
Under Vladimir Putin, ties have warmed; the Russian president hosted Xi in Moscow for a state visit this year, and was a key guest at May’s landmark Belt and Road Forum for International Cooperation in Beijing.  Medvedev’s trip this week focused on deepening the political and economic partnership further, on key regional and global issues such as the Korean nuclear stand-off and the Syrian conflict. On the economic front, the two already enjoy extensive cooperation which has warmed in several areas since the crisis in Ukraine, when Russia was suspended from the G8.
Russia has announced numerous cooperation projects with China, including a new method of inter-bank transfers, and a joint credit agency to create a shared financial and economic infrastructure that will allow them to function independently of Western-dominated financial institutions. Moreover, the joint China-Russia Investment Fund, established in 2012, has become a key channel for Russia — under Western sanctions — to secure financial support from Beijing, and it was announced this week that the fund will double in size.
China and Russia are also among the states involved in creating alternatives to the World Bank and International Monetary Fund, such as 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, they have signed a $400 billion natural gas supply deal with a 3,200km gas pipeline from eastern Siberia to northeast China, and they have agreed to build a second gas pipeline from western Siberia to Xinjiang province.
Moscow has also opened parts of its upstream oil and gas sector to direct investment from Beijing, Chinese companies are providing Russian counterparts with technology, and Chinese banks have become an important source of loans for Russian businesses affected by Western sanctions.
While the warming in ties since the Ukraine crisis is sometimes overstated, with little substantial progress made so far on the array of economic and financial projects announced in recent years, the boost in cooperation agenda has paid off in numerous areas, including working toward stronger common positions on key regional and global issues.

As Russia seeks to escape the grip of Western sanctions and China begins to flex its muscles on the world stage, the benefits to both countries of closer ties are obvious.

Andrew Hammond

Both parties used the Beijing meetings this week to enhance their strategic coordination from the Middle East to Asia Pacific and the Americas. One of the key items on the agenda was North Korea.  Both China and Russia know that the security problems on the Korean peninsula have no easy resolution: Both are grappling with how best to respond to not just the regular missile launches by Pyongyang, but also its nuclear tests.
Recent US rhetoric has given Beijing, in particular, heightened concerns that Washington might now be thinking more seriously about a pre-emptive strike on Pyongyang’s nuclear capabilities. President Trump recently asserted that North Korea “is causing tremendous problems and is something that has to be dealt with, and probably dealt with rapidly.”
This builds on his comments several months ago — before his meeting with Xi in Florida — that if Beijing “is not going to solve North Korea, we will.”  This upped the ante from Secretary of State Rex Tillerson’s striking announcement that the two decades long US policy of “strategic patience” toward Pyongyang was now over and “all options” were on the table.
This US rhetoric is one reason Chinese Foreign Minister Wang Li has asserted that “China’s priority now is to flash the red light and apply the break to both trains” to avoid a collision.  Beijing and Moscow are concerned that the tensions on the peninsula could spiral out of control and have previously indicated support for a UN Security Council initiative that would build on recent sanctions.
The UN measure favored by Russia and China would require the US and South Korea to halt military drills and deployment of the controversial Terminal High Altitude Area Defense missile system (THAAD).  China vehemently opposes THAAD, which it fears could be used for US espionage as much as for targeting North Korean missiles.
Russia shares this concern and Deputy Foreign Minister Gennady Gatilov asserts that THAAD “is a destabilizing factor … in line with the vicious logic of creating a global missile shield.”  He said it undermined “the existing military balance in the region.”
The proposed UN initiative would also put further pressure on North Korea to stop its missile and nuclear testing. It is feared that Pyongyang is already preparing for new nuclear and missile tests, timed to embarrass Trump when he visits the region for 12 days this month.
Taken overall, Medvedev's visit has highlighted the growing cooperation agenda between the countries, with new economic and financial deals, including the doubling of the China-Russia Investment Fund.  Given the warming of ties under Xi and Putin, and the positive mood music this week, the two countries will now seek to make further progress on a wider array of projects, for example in the energy sector, announced in recent years.
• Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics.
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