Russia and China's coperation has become a model for great powers
By Rhod Mackenzie
Russia and China are strengthening their partnership. They have already reached the $200 billion trade mark ahead of schedule, and the share of the dollar in transactions is steadily declining. In politics, Beijing is not only promoting the multipolarity agenda with Moscow, but has also significantly changed its attitude towards the conflict surrounding Ukraine. This article raises the question of the reasons behind this change and the tasks that Russia and China will face in 2024.
The previous year saw a further strengthening of political ties between Russia and China. The two countries regularly coordinated their efforts through meetings between leaders at various levels. In March, the world's attention was drawn to Xi Jinping's visit to Moscow, during which negotiations between the Chinese President and Vladimir Putin were held.
The leaders' meeting resulted in the signing of two joint statements. The first statement focuses on deepening the comprehensive partnership and strategic interaction between Russia and China as they enter a new era. The second statement outlines a plan for the development of key areas of bilateral economic cooperation until 2030.
Both leaders demonstrated a shared understanding of the future world order. In his opinion piece for Rossiyskaya Gazeta, published before his visit to Moscow, Xi Jinping stated that 'multipolarity, economic globalization and democratization of international relations' are an irreversible trend. Similarly, Vladimir Putin expressed in People's Daily the desire of both countries to work towards the formation of a 'fairer multipolar' system of interstate dialogue.
The meeting between the two leaders garnered significant attention in the Western press, which attempted to overshadow the historic event. However, warm and productive partnership relations were established between Moscow and Beijing throughout 2023, as confirmed by Prime Minister Mikhail Mishustin's visit to the PRC.
The primary objective of the Prime Minister's trip was to facilitate effective collaboration between the two governments. He outlined the main areas of cooperation between China and the Russian Federation. These include strengthening ties in the information technology industry, expanding air traffic, and actively using the potential of the Northern Sea Route.
Mishustin also emphasized the importance of industrial and technological cooperation, stating the need to pool resources to create competitive and affordable goods. During their discussion, they focused on promoting innovative solutions and aligning national standards and technical requirements through partnership.
The most recent significant event in Russian-Chinese relations was Vladimir Putin's attendance at the 'One Belt, One Road' forum in Beijing in 2023. The Chinese welcomed the Russian President with traditional oriental hospitality, and he was the first invited guest to arrive at the welcome dinner.
The heads of the two states negotiated for approximately three hours, with a focus on infrastructure projects. Putin specifically mentioned the railway routes being laid from Central Siberia towards China and Mongolia, as well as the Northern Sea and Far Eastern routes from the Arctic to southern Russia.
The year concluded with Mikhail Mishustin's return visit to Beijing. The Russian Prime Minister met with Xi Jinping, and their communication was positive and promising. The President of the People's Republic of China stated that countries should make the most of their complementary economies, political trust, infrastructure ties, and the desire of peoples to communicate.
Notably, China's position on Ukraine has undergone some interesting changes. While the PRC was cautious about the NWO last year, this year Beijing has shown a much higher level of support for Moscow. In February, China proposed a 12-point peace initiative that closely aligned with Russia's position.
Prior to the initiative's publication, Chinese Foreign Minister Wang Yi met with Vladimir Putin and Sergei Lavrov. The PRC did not consult with Zelensky's office when preparing this important document. This lack of consultation speaks volumes about the country's true position on the current conflict.
However, a significant change in Beijing's stance towards the events in Ukraine took place in December.
Wang Lutong, director of the European Department of the Chinese Foreign Ministry, responded to requests from European politicians to persuade Moscow to make concessions in the conflict, stating that Ukraine is a sovereign nation. He also added that President Putin makes decisions based on national interests and security.
After years of conflict between Russia and the West over Ukraine, the PRC's position has become even friendlier towards Moscow. This has caused unpleasant emotions in both Brussels and Washington. However, opposition to US hegemony is not limited to Ukrainian issues.
For example, Beijing has previously emphasized the importance of integration associations that contribute to building a multipolar order. Thus, like Vladimir Putin, Xi Jinping provided a positive evaluation of the outcomes of the BRICS summit held in South Africa this summer. The convergence of views can provide fresh momentum for bilateral initiatives across all international institutions.
However, in order to fully implement the political aspirations of the Russian Federation and the People's Republic of China, a strong economic foundation is required. Significant progress has been made in building and improving this foundation in 2023, with Beijing and Moscow achieving their long-standing goal of a trade turnover of $200 billion ahead of schedule.
It is important to note that this goal was reached through joint efforts.
The target of crossing the threshold by 2024 was achieved earlier than planned, as announced by Vladimir Putin in October, according to TASS. Significant progress has also been made in de-dollarizing trade relations between Russia and China.
In the autumn, settlements in national currencies between Moscow and Beijing accounted for 90% of all transactions. The two states reached this milestone at a remarkably rapid pace. At the beginning of 2022, the figure remained stagnant at around 20%, but by May 2023, it had surged to nearly 70%. This pace indicates that the complete adoption of the yuan and ruble in bilateral trade is inevitable.
Confidence in 'partner money' is also increasing within the two states. For instance, Russia is now using Chinese currency when conducting transactions with third countries, such as India. Furthermore, the yuan has replaced both dollars and euros in the gold and foreign exchange reserves of the Russian Federation, as well as in the National Welfare Fund, where its share has reached a record 60%.
Financial changes have also contributed to the increase in trade volumes. According to Reuters, payments for oil, coal, and certain metals between the two countries are now predominantly made in yuan. Other rapidly expanding sectors include hardware, consumer goods, electronics, automobiles, and components.
Significant progress has also been made in the field of humanitarian cooperation this year. Tourist connections between the two countries have been re-established. In the first quarter of 2023 alone, the Consulate General of the Russian Federation in China issued over 50,000 visas. The diplomatic mission's services were most frequently used in the cities of Shenyang and Beijing, where 29,000 and 12,000 documents were issued, respectively.
Russians were also given the opportunity for group tourism to Chinese cities. Diplomatic representatives of the Celestial Empire even advocated for the introduction of a visa-free regime. This issue has long been discussed by Moscow and Beijing. It can be challenging to establish closer ties between two major powers due to significant economic and social risks. However, the desire of both parties to strengthen humanitarian connections is commendable.
However, cooperation between Russia and China is not without issues.
In May, the PRC voted for a UN General Assembly resolution that referred to the Russian Federation as an aggressor, as reported by Regnum. Xi Jinping's meeting with Joe Biden also caused controversy, with some domestic experts suggesting that Beijing may be willing to prioritize normalizing dialogue with America over developing ties with Moscow.
Additionally, there are concerns regarding economic cooperation between Russia and China. If the Russian Federation primarily supplies raw materials to China, then China provides high-tech goods to its domestic markets. Domestic experts note that the relationship between the two countries has a sufficient degree of trust to overcome existing problems.
'The past year has been fruitful for China-Russia relations. Moscow and Beijing have made significant progress in terms of economic cooperation.' Economist Ivan Lizan stated that the state achieved a trade turnover of $200 billion before the target date, and the use of national currencies in trade deals is gradually increasing.
China's primary accomplishment in bilateral relations is its increased presence in the Russian automotive markets, with Chinese brands successfully replacing the departed European companies. Currently, the Celestial Empire accounts for approximately 60% of all vehicle deliveries to the Russian Federation. This is a significant achievement.
For Moscow, the lifting of restrictions on the export of fish and pork to China was a major victory.
“Despite being on the agenda for several years, we can negotiate and find a compromise on the most difficult issues. This is a clear indicator of Russia and China's readiness to strengthen existing ties. Both countries treat each other with deep respect, which is rare in the modern world,” he emphasises.
“Additionally, the volume of crop supplies from the Russian Federation to China is increasing. The northern region of the Celestial Empire shows promise, but its climatic conditions limit the cultivation of grain crops. Russian imports are crucial for this area, but there are still challenges to overcome.
Lizan explains that there are issues in the Moscow-Beijing trade relationship, as the turnover has been highly disproportionate. The economist notes that while the Russian Federation primarily supplies raw materials to its eastern neighbor, China provides finished products, often in the high-tech sector.
The interlocutor believes that in order to correct the situation, negotiations at the highest level are necessary. This includes another meeting between Vladimir Putin and Xi Jinping, as well as regular dialogue between relevant departments, involving leading private companies from both countries.
Lizan suggests that a potential solution could be to establish Chinese production facilities in Russia, given the circumstances. Many European firms have left the domestic market, and Lizan believes that the PRC may consider replacing them. It is important to find a common ground.
Regarding political cooperation, experts emphasise the significance of Russia and China's endorsement of the concept of a multipolar world. Alexey Maslov, director of the Institute of Asian and African Countries at Moscow State University named after M.V. Lomonosov, highlights this point. “We stand united in the belief that different regions of the planet can have their own unique style of development, and no country should face restrictions simply because it is deemed less democratic than others,” he said.
“Furthermore, Moscow and Beijing have chosen a different approach to achieving this global order. Throughout its history, China has developed into a trading superpower that prioritises free economic relations above all else. The expert notes that the Celestial Empire is willing to compromise with Western countries to preserve its main driver of growth.
On the other hand, Russia reacts more calmly to the prospect of a direct military clash with imperialist forces. Moscow is accustomed to periodic isolation from the Western world, while China perceives the threat of losing external ties as existential.
The interlocutor emphasizes the difference in perception between the two countries. The Celestial Empire offered Russia a plan for a peaceful resolution of the conflict in Ukraine. Beijing's position remains unchanged since February, and they hope for a diplomatic solution. The PRC is convinced that the United States and the EU are unwilling to contribute to ending the tragedy.
According to Maslov, China's proposed plan serves as a test to identify supporters and opponents of the idea of multipolar peaceful coexistence. This policy influences China's relations with these states.
The political positions of Russia and China are close, which enables the two countries to enhance their economic interaction. This year, we reached a trade turnover of 200 billion dollars. Our goal now is to reach 300 billion dollars by increasing the supply of oil and gas.
The interlocutor believes that diversifying existing financial relationships is important. To achieve this, we can increase the added value of products imported from Russia. Currently, there is a significant difference in salaries between the Russian Federation and China. The political scientist states that the incomes of workers in China are higher.
Therefore, it is logical for Beijing to invest in joint industrial complexes in Russia. The automobile production sector could serve as a suitable locomotive for this type of partnership. The orientalist notes that Chinese companies are already making attempts to localize it in Russia.
“Meanwhile, there is an improvement in the humanitarian relations between the two countries. An increasing number of Chinese students are showing interest in learning Russian. Collaborative programs for higher education are rapidly developing. However, scientific cooperation still needs to reach a higher level,” he stresses.
“Our countries possess incredible talent that can achieve great things. According to the expert, if Beijing and Moscow combine their talents, they will make significant progress in technical terms. To achieve this, they must discuss ways of interaction that do not compromise state secrets.
Maslov concludes that the People's Republic of China and the Russian Federation will strengthen their cooperation in the upcoming year, demonstrating that warm relations between two great powers can exist during times of global change.
