Grigory Dukor/Reuters/File
Russian President Vladimir Putin (c.) and Prime Minister Dmitry Medvedev (5th r.) watch the Victory Day parade in Moscow's Red Square, May 9, 2014.

Xi stands with Putin on 'Victory Day.' Can Russia play a China card?

President Xi Jinping is the only major head of state attending Saturday's WWII anniversary celebration in Moscow. And Russia and China increasingly share commercial interests and perspectives. Yet is Xi bringing what Putin wants?

When Vladimir Putin and Xi Jinping stand together on the Red Square reviewing stand at tomorrow’s military parade marking the 70th anniversary of the end of World War II, the two leaders will doubtless share warm smiles and fraternal handshakes.

Today in Moscow ahead of the parade, Mr. Putin sat next to Mr. Xi amid a flurry of deal-singing to say, “Today, China is our key strategic partner.” 

The Chinese president’s attendance is providing consolation for the absence of leaders from the West at Moscow's celebration. But Xi is not bringing Putin what he most wants: solidarity against the West. 

Locked in a bitter dispute with the West over Ukraine’s future, Putin “would like China to support Russia against the United States,” says Sergey Lukonin, a China expert at the Institute of World Economy and International Relations, a government-linked think tank in Moscow.

For Beijing, however, whose interests in Russia are more coldly commercial and focused on oil and gas, that would be a step too far.

“Chinese-Russian relations are not a military or political alliance targeting a third party,” says Li Xing, who teaches international relations at Beijing Normal University. “The purpose is not to team up with Russia against any other country but to serve national interests.”

In the run-up to Xi’s visit to Moscow, Chinese officials have trumpeted the warmth of Beijing’s feelings for Russia. Putin and Xi appear to get on well personally. The strategic partnership of the two giant neighbors has deepened in recent years.

Shared interests

Russia and China have dropped territorial and ideological differences that once threatened war. They share many common interests.

Russia is China’s largest source of military equipment and its third largest source of oil and gas. Their two navies plan their first joint maneuvers in the Mediterranean later this month. They are both members of the BRICS group of emerging economies. Their shared international outlooks include resentment at the scale of US influence in world affairs.

Yet on the Ukraine crisis, Beijing has been cautious, careful not to complicate relations with Washington unnecessarily while at the same time not angering Moscow, points out David Zweig, who teaches Chinese transnational relations at Hong Kong University.

“They did not support Russia’s position but they have not challenged it either,” he says. Beijing has mostly stayed out of the diplomatic and sanctions battles between Russia and the US and Europe that followed Moscow’s annexation of Crimea last year.

China is ready for “some kind of general relationship of a strategic nature” with Russia “that suggests Russia and China have closer relations than they actually do, in the hope this might concern the US and other western powers,” says Michael Swaine, a China analyst at the Carnegie Endowment for International Peace in Washington.

“But Beijing does not regard Russia as that significant a strategic player,” Mr. Swaine adds.

Behind the friendly smiles, China's state-owned firms are striking hard bargains for Russian oil and gas that have not favored Moscow as oil prices have plummeted.

Special treatment for Chinese friends

“Our trade relations are based on market principles,” says Li Ziguo, an analyst of Russian affairs at the China Institute of International Studies. “China and Russia have different interests and it is not as if [Chinese] companies do what political leaders tell them to do.”

Last September, Putin went out of his way to solicit Chinese investment in one of state-owned Rosneft’s most lucrative oilfields, Vankor.

“In general we are very careful about letting in our foreign partners,” Putin said at the time. “But of course for our Chinese friends there are no restrictions.”

Eight months later, Rosneft and the China National Petroleum Corporation have still not been able to agree terms.

Nor has China come up with a $25 billion loan that Russia had expected to help start up a giant $400 billion, 30- year gas pipeline deal signed last May amid much global attention. That deal took 10 years to finalize.

Energy is nevertheless expected to be the key pillar of future Sino-Russian relations. A recent report by British oil company BP predicts that by 2035 Russia will be the world’s largest exporter of energy and China will be the world’s largest importer of oil.

“Russia is looking at the prospects of exports to Asian markets,” says Dmitry Orlov, who heads an independent think tank in Moscow. “The rapprochement with China is governed by concrete projects and intentions.”

The two countries’ ties, though, are “a complex tangle of interests and competition that is far from being ideal,” he adds.

Along the new Silk Road

That complexity is clear in Central Asia, where Beijing is seeking to woo former Soviet states, and challenging Moscow’s traditional influence.

China is holding out the prospect of trade and aid deals built around its “One Belt, One Road” project to develop infrastructure that will link Asia and Europe.

Chinese funding will be forthcoming for projects that use Chinese firms and technology, predicts Mr. Lukonin, undermining the dominant position that Russian firms are accustomed to enjoying in the region.

But Moscow has little choice but to deal with China on the best terms it can negotiate, Lukonin says. “When China was a developing country, we could dictate some things,” he recalls. “Now we cannot dictate to China what to do. China has money. Russia hasn’t money.”

Olga Podolskaya contributed reporting from Moscow.

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