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Putin's China Syndrome

Putin's new best friend?
Putin's new best friend?

Vladimir Putin looked so eager to show off his new best friend.

Greeting Xi Jinping earlier this week, the beaming Kremlin leader said he was "especially happy to see" the Chinese president and suggested that together Moscow and Beijing were prepared to take on the world.

Putin has been basking in the glow that comes with hosting back-to-back international summits.

And he was clearly hoping to use gatherings of the BRICS group and the Shanghai Cooperation Organization (SCO) this week to demonstrate that attempts to isolate Russia are doomed to fail; and that, despite sanctions and a faltering economy, Moscow is busy building a Eurasia-centric international order as an alternative to Western institutions.

The fledgling Sino-Russian partnership is, of course, the key to this effort. And BRICS, a loose grouping of Brazil, Russia, India, China, and South Africa, and the SCO, which includes Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, form the institutional glue of the Moscow-Beijing alliance.

"The only problem," wrote Aleksandr Gabuev of the Moscow Carnegie Center, "is that Russia’s growing fascination with BRICS and the SCO coincides with diminishing Chinese interest in both projects."

And this illustrates the fundamental asymmetry in the Sino-Russian relationship.

China views BRICS and the SCO as two of many vehicles to elevate its status as a rising world power. Russia is clinging to them to slow down its decline.

Beijing is pursuing a multivectored foreign policy, keeping its doors open to the West while building up its power in Asia. Having burned its bridges with the West, Moscow only has one place to turn.

The Chinese are playing a long game and thinking strategically. A confident and rising power, they feel no need to confront the West head on at this point. The Russians are reacting to short-term needs and thinking tactically.

It Ain't Bretton Woods

The last time BRICS and SCO summits took place back-to-back in Russia, in 2009 in Yekaterinburg, came in the wake of Russia's war with Georgia and in the aftermath of the global financial crisis.

Moscow used that gathering to call for an overhaul of the Bretton Woods system of Western-dominated global financial institutions, claiming they were no longer adequate to address the world's economic problems.

At this week's BRICS gathering, Moscow is hyping the unveiling of the New Development Bank, which will finance infrastructure and other projects, and a $100 billion currency reserve fund to protect member countries from global liquidity risks.

Listening to Kremlin officials, one would think these fledgling institutions are already ready-to-use alternatives to the IMF and the World Bank.

There were even suggestions that the New Development Bank could step in and bail out Greece, should talks with the IMF and European Union fail.

Beijing, however, sees things differently. It is less interested in the New Development Bank than it is in promoting its own pet project, the Asian Infrastructure Investment Bank.

"In private conversations, Chinese experts and officials speak quite frankly about what they see as the limited capacity of BRICS," Gabuev wrote. "In China's global strategy, BRICS plays an important but clearly defined role."

China, he argues, seeks to use the BRICS institutions to leverage the West into giving it more influence in the IMF and World Bank, and to Chinese officials experience managing international financial institutions.

And Beijing is also souring on the SCO.

Beijing "initially saw the project as a way to extend Chinese influence in Central Asia while accommodating Moscow's interests," Gabuev wrote. "But the Kremlin’s fears that China would push too far into Russia’s backyard using tools like the SCO Development Bank meant that economic cooperation among SCO countries never took off."

China, he added, was frustrated by Russia lobbying to invite India into the SCO. Beijing conceded that, but insisted on Pakistan joining, as well.

"More than a year after the two countries initiated most of their bilateral projects, there has been no significant progress, and some projects have been abandoned altogether," Björn Düben, author of a forthcoming report Banking On Beijing: What The Ukraine Crisis Means For The Future Of China-Russia Relations, wrote in a column for Reuters. "Even in the energy sector, the two countries have struggled to carry out their plans."

An Expensive Friend

Despite all this, the Kremlin appears serious about its embrace of China.

"It would be wrong to discount Russia's swing toward China as just a PR campaign to convince Russians their country can do without the West," political analyst Leonid Bershidsky wrote in Bloomberg View. "Russia is a big ship and turning it around is not a quick exercise, but the trend toward closer economic ties with China is real."

And this comes with a large cost. Bershidsky notes that "the Russian government has become willing to contemplate deals with China that would have been unthinkable before the sanctions."

For example, Russia's Transbaikal Krai is negotiating a deal with a Chinese company to rent 300,000 acres of land -- an area roughly the size of the city of Los Angeles -- for 49 years. It is one of 10 such areas in Siberia and the Russian Far East.

Moreover, China clearly got the better end of the $400 billion energy deal it signed with Russia, amidst much fanfare, in May 2014.

And in case anybody is still wondering who will have the upper hand in this relationship, here's one final data point to consider.

"Beijing has refused to provide diplomatic support to Moscow where it matters most," Duben wrote. "The Chinese leadership has not formally recognized the annexation of Crimea. It did not vote with Russia on Ukraine-related resolutions in the UN Security Council and General Assembly, and it was quick to develop good relations with the new authorities in Ukraine."

Not exactly how you would expect to be treated by your new best friend.

About This Blog

The Power Vertical
The Power Vertical

The Power Vertical is a blog written especially for Russia wonks and obsessive Kremlin watchers by Brian Whitmore. It offers Brian's personal take on emerging and developing trends in Russian politics, shining a spotlight on the high-stakes power struggles, machinations, and clashing interests that shape Kremlin policy today. Check out The Power Vertical Facebook page or


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