In their bilateral economic dealings, China is treating Russia like a colony – using it as a convenient source of natural resources and raw materials to keep the Chinese economy going. Geopolitical considerations are prompting Moscow to look the other way as its economic imbalance with Beijing deepens.
Speaking recently at Columbia University’s Harriman Institute, Alexander Lukin, one of Russia’s leading experts on China, downplayed the unequal nature of Russian-Chinese economic relations. He suggested that convergent geopolitical interests between the two states – namely a shared desire to keep the United States’ global influence in check – more than compensates for any economic imbalance, from Moscow's viewpoint. He contended that bilateral relations had reached the stage of “strategic partnership.”
China is Russia’s largest trading partner. But from China’s trade perspective, Russia is almost an economic afterthought. Lukin characterized the economic disparity as “unpleasant,” but added that it was an “internal problem” for Russia.
Moscow accounts for roughly 2 percent of Beijing’s annual global trade, according to Lukin. Most of China’s imports from Russia are natural resources, especially energy. Arms comprise the bulk of manufactured goods that Russia sends to China.
“We’ve sold a lot of weapons [to China] and we have no competition,” Lukin said.
Russia clearly is in a subordinate economic position, even if the two countries choose to view themselves as geopolitical equals for now. Lukin insisted that the Kremlin was comfortable with the status quo. At the same time, he tacitly acknowledged that the economic imbalance could potentially create a domestic headache for Russian leader Vladimir Putin, if Russian-Chinese relations were ever to hit another rough patch.
Putin has derived much of his authority from his ability to restore Russia’s image as a major international actor. If Russia’s economic weakness vis-à-vis China were fully exposed, thus denting Moscow’s “great power” image, Putin’s popularity would take a serious hit – a development that could have unsettling effects on domestic politics.
“Right now, their [Russians’] psychology would not allow them to be a junior partner to anybody," Lukin said.
China’s ambitious $1 trillion Belt and Road Initiative (BRI) has the potential to become a source of friction in Russian-Chinese relations. The BRI currently is pursuing a multi-pronged approach as it strives to achieve its goal of carving out new overland trade routes to expand Chinese exports to Europe. One of the main routes relies heavily on Russia’s trans-Siberian railway system; the other chief option is an expanded and improved rail network traversing China’s western Xinjiang Province and the Central Asian states, bypassing Russia.
Some experts believe that, ultimately, the BRI will have to settle on a single route to be economically viable. That could bode ill for Russia.
While Moscow would clearly prefer the “northern” route to emerge victorious, preliminary studies show that a Central Asian route is likely to be considerably more time- and cost-effective than the trans-Siberian route.
There could come a day, then, in the not too distant future when China is ready to take action that could drastically alter the geopolitical and economic balance in Eurasia, and, because of the economic disparity, Russia would have few, if any items in its diplomatic toolkit to influence the Chinese decision.
Lukin ostensibly was visiting the United States to promote his new book – titled China and Russia: The New Rapprochement (Polity, April 2018). The work traces the history of Russian-Chinese relations. He spent a good portion of his Harriman Institute talk on September 25 taking swipes at the United States. He derided recent Western scholarship on China as “not that authentic,” and described the United States as “unpredictable” and acting as a “revolutionary” force bent on disrupting the existing system of international law.
“The West is not a model [for development] anymore,” Lukin said. “Shanghai looks more modern than New York.”
Editor’s note: Eurasianet is based at the Harriman Institute.