Budding allies: Russia and China

A new agreement expands cooperation on energy, arms, regional security, and space.

From Siberia and the Russian Far East, China looks like the threat it has historically seemed: A million illegal Chinese immigrants have crossed the Russian border, working as laborers, farmers, and traders - and fanning old Russian fears of being overwhelmed.

But the Kremlin has a different view: China offers economic opportunity. The old suspicions are being trumped by the bottom line.

For its part, Beijing is looking to Russia for deals that fuel Chinese superpower ambitions, including a drive, literally, toward the stars.

On his first official trip abroad, new Chinese leader Hu Jintao stopped first in Russia, where he and Russian President Vladimir Putin last week endorsed far-reaching cooperation between China and Russia in energy, space engineering, arms supplies, and regional security. Some experts believe the two seemingly mismatched giants are drifting into an embrace that could dramatically reshape world relations in coming decades - and present a possible counterweight to US global hegemony.

"Relations with China constitute the most important factor in Russian foreign policy strategy today," says Gennady Chuffrin, deputy director of the Institute for World Economy and International Relations, which trains many Russian diplomats. "In some ways, our relations with China are even more important than those with the US."

The two neighbors would seem an unlikely pair. Historical antagonists, their armies fought savage battles across the far-eastern frontier in the 1960s, and they only settled their territorial disputes three years ago. But today, with China's trillion-dollar economy racing - thanks in part to massive investment from the West - the Asian giant hungers for Russian imports, such as industrial and engineering products, civilian nuclear expertise - and oil. Trade turnover between the two countries hit $12 billion last year, not counting the lucrative black-market "shuttle" trading along the 2,300-mile Sino-Russian border.

During Mr. Hu's visit, he and Mr. Putin inked a deal to build a $2.5 billion oil pipeline from Siberia to the Chinese industrial center of Daqing, including a 25-year Chinese pledge to buy at least 5 billion barrels of Russian crude. The deal appears to have squeezed out, at least for now, a rival Japanese-backed proposal that would have sent Siberian oil to Japan and to North America's west coast. "This is more than just a commercial deal; it is a strategic choice," says Sergei Lusyanin, an expert with the Institute of Far Eastern Studies in Moscow. "Russia and China are being tied together by bonds of gas and oil."

"Russia and China supplement each other," says Boris Titov, vice president of the Russian Union of Manufacturers and Entrepreneurs. "It is no secret that, in spite of all the [US] investments [in China], the US wants to hold China back. So, Russia's decision to work with China has a strategic character."

Last year China accounted for 55 percent of Russia's nearly $5 billion in arms exports. Russian and Chinese defense ministers met in Moscow last week and vowed to step up cooperation. Russian experts say the Russian military needs the money that China - and India - spend on weapons to keep Russia's arms research, development, and production running.

Many experts say that Russia's interests with China are commercial, rather than political, but some fear that Moscow is nonetheless helping fuel a growing arms race in East Asia - in which Russia backs China, while the US supplies Japan, South Korea and Taiwan. "China's armed forces are still far below the threshold where they could present a serious challenge to its neighbors or the US," says Mr. Chuffrin. "But with Russian sales, they will catch up. In fact, the arms race has begun. The East Asian region is already the biggest importer of weapons in the world, and Russia and the US are heavily involved."

Beijing's shopping list includes some of Russia's most advanced inventory, such as Sukhoi-30MKK jet fighters and X-31 supersonic antiship missiles.But even with Russian help, the Chinese cannot build a world-class military, some experts say.

"China is wise to try to persuade the US that it presents no threat," says Alexander Konovalov, president of the Institute of Strategic Assessments in Moscow. "After watching the successful US military operation in Iraq, they understand that more access to Western technologies will be needed to modernize their military."

Russia has also been quietly aiding China in its bid to become a "spacefaring" power. The Shenzou space vehicle, expected to carry the first Chinese astronaut into orbit in October, is a modified and larger version of Russia's perennial Soyuz spacecraft.

Spurred by their shared opposition to the US-led war in Iraq, China and Russia have also moved to beef up the Shanghai Cooperation Organization, which includes Russia, China, and four ex-Soviet Central Asian nations, in hopes of turning it into a full-fledged security alliance in the future.

"To some extent this is aimed at blocking the expansion of US influence in Central Asia," says Mr. Lusyanin. "Russia and China are worried that the US will not stop in Iraq, and attempts to resist are driving them closer together."

Hu told Russia's independent Interfax news agency last week that "China is ready to intensify its relations with Russia in order to accelerate the formation of a multipolar world order," not dominated by a single superpower.

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