Russia-China Gas Deal a Sign of Russian Weakness, Not New Alliance

June 4, 2014

 

 

Russian President Vladimir Putin’s May 20-21 visit to China, which culminated in the signing of a 30-year, $400 billion gas deal, offered Russia an opportunity to reduce its international isolation resulting from the crisis in Ukraine. As during previous periods of post-Cold War tension with the West, Russia aims to use its “strategic partnership” with China to gain leverage over the United States and its Western partners. Some commentators argue that the deal represents a new level of Russia-China cooperation directed against the United States. Both the terms of the gas deal and overall geopolitical trends, however, indicate that the balance of power in Russia-China relations is tilting rapidly in China’s favor. As this power imbalance grows, Russia’s growing dependence on China is likely to become a source of increasing concern in Moscow.

The U.S. factor clearly plays an important role in Russia-China relations. Although both countries’ relations with the United States are of paramount importance, Russia and China remain dissatisfied with the existing international order. They regularly express their opposition to U.S. unipolarity and their desire to create a multipolar order. In recent years, both Russia and China have engaged in behavior that has unsettled their respective regions: Russia through its 2008 war in Georgia and its recent actions in Ukraine; China through its increasing assertiveness in territorial disputes in the South China Sea and East China Sea. In effect, Russia and China have poked and prodded, testing the limits of the existing order within their immediate regions and mounting limited, calculated challenges to U.S. leadership.

 

U.S. foreign policy is not the only driving force in Russia-China relations, however. Despite some common interests between the two, signs of discord persist, serving as reminders of the relationship’s apparent limits. For example, news reports on the gas deal suggested that its terms are highly favorable to China. During more than a decade of negotiations, China drove a hard bargain. Even before the Ukraine crisis, Russia faced a narrowing window of opportunity to enter China’s market for natural gas, as China’s options expanded rapidly. In 2009, China opened a gas pipeline originating in Turkmenistan and passing through Uzbekistan and Kazakhstan, thus breaking Russia’s monopoly on Central Asian gas exports. Liquefied natural gas imports are increasingly available from the Middle East, North Africa, and Australia via maritime trade to LNG terminals in China, and potentially transported from LNG terminals in Myanmar to China by way of an overland pipeline. China also possesses potentially large domestic reserves of shale gas. The crisis in Ukraine, which is likely to spur European countries to reduce their dependence on Russian gas, merely added to the pressure on Russia to strike a deal. The protracted talks that led to the gas deal, like the similarly tortuous negotiations to build a Russia-China oil pipeline spur that opened in 2011, partly reflected Russia’s concerns about becoming an energy appendage of China.

 

Russia’s arms sales to China remained robust from the early 1990s until about 2005, when China decided to focus on its own domestic production. In the coming years, Russia may face renewed pressure to provide China with advanced weapons systems. Russia is reportedly considering sales of Su-35 fighters, S-400 air defense systems, and Amur-class submarines. Russia takes comfort knowing that China would use such systems primarily to advance its interests in the South and East China seas, but such proposed sales arouse concern among those in Russia who fear a possible future military threat from China. Russia is also concerned about Chinese copying of Russian military technology.

 

Signs of diverging interests are clearly apparent at the regional level. Although both Russia and China are mounting challenges to the existing order within their respective regions, neither country fully supports the actions of each other. In March, China abstained from a UN Security Council resolution that would have urged countries not to recognize the legitimacy of the referendum in Crimea that preceded Russia’s annexation of the region. China agreed with Russia that the West was to blame for supporting the revolution that toppled Ukraine’s government, but it feared that recognizing the referendum in Crimea could set a dangerous precedent for Taiwan, Tibet, and Xinjiang. Russia has maintained strict neutrality on China’s territorial disputes with its Asian neighbors, wishing to avoid involvement in potential regional conflicts.

 

Of greater concern from Russia’s perspective is the prospect of regional rivalry with China. In Central Asia, which Russia considers its backyard, China has made impressive inroads, most dramatically by building oil and gas pipelines from former Soviet republics into Chinese territory. China’s plans for an overland “New Silk Road” through Central Asia, along with a corresponding sea route, potentially threaten both Russian interests in the region and the economic vibrancy of Russia’s Trans-Siberian Railroad. Russia has not raised public objections to China’s growing role, largely because China has not sought to establish political and security control in the region. The Shanghai Cooperation Organization also provides a forum for smoothing over potential differences. Russia’s concerns could increase over time, however. Part of the rationale for Putin’s Eurasian Economic Union is to counter China’s presence.

 

In the Asia-Pacific, Russia’s position remains weak, largely because its Siberian and Far Eastern regions are underdeveloped and sparsely populated. These regions could be vulnerable to economic and demographic pressure from China over the long term. Therefore, while striving to maintain friendly relations with China, Russia has sought to strengthen its position in Asia by developing ties with other Asian countries. These relations could lay the groundwork for a future hedging strategy against China’s rise. Russia has strengthened military-technical cooperation with Vietnam. Much to China’s dismay, Russian energy companies have also engaged in joint offshore exploration with Vietnam in the South China Sea. Russia sells more-advanced weapons systems to India than to China and encourages India’s involvement in organizations such as BRICS, largely as a way to dilute China’s influence. Russia and Japan have recently improved ties, raising hopes for a possible settlement to their territorial dispute, though the crisis in Ukraine has put this process on hold. Russia also seeks to build a gas pipeline and a railroad extension from its own territory through North Korea to South Korea. From Russia’s perspective, a unified Korean peninsula could serve as a counterweight to China. Russia is far more comfortable with the U.S. security role in Asia than in Europe.

 

Bilateral and regional tensions are likely to limit Russia-China relations at the global level. Both countries regularly stress that they have no desire to build an anti-Western political-military alliance. For China, an alliance would harm its crucial relationship with the United States, thus threatening the economic basis of its continued rise. For Russia, an alliance would risk making it a junior partner to an increasingly powerful and potentially threatening China. The Sino-Soviet split left a legacy of mistrust that has not entirely disappeared, despite the steady development of relations since the 1980s. Only a complete breakdown of U.S. relations with both Russia and China simultaneously, far graver than recent tensions, could lead to a Russia-China alliance directed against the West.

 

The gas deal is neither a sign of a nascent Russia-China alliance, nor even primarily a response to U.S. foreign policy. Rather, it underscores China’s growing power and Russia’s resulting dependence on China. For now, the crisis in Ukraine and European security will continue to dominate U.S.-Russian relations. In the coming years, however, Russia will face pressure to devote increased strategic attention to Asia, where it will find more common ground with the United States than in Europe.

 

Brian G. Carlson is a Ph.D. candidate at SAIS. He is currently conducting dissertation research in Moscow on an American Councils for International Education fellowship. During the 2014-15 academic year, he will conduct dissertation research in China on a Fulbright-Hays Doctoral Dissertation Research Abroad Fellowship.

(Photo Credit: scmp.com)

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