China, which relied on Soviet aid during the era of Joseph Stalin and Mao Zedong, has turned the tables as Russian President Vladimir Putin visits Shanghai.
The Russian leader starts a two-day visit to China today, seeking to complete an agreement on natural gas supplies to the world’s second-largest economy, held up for more than a decade because of a debate over the price. The contract is “nearly finalized,” Putin told Chinese media in an interview published yesterday.
Putin is looking to cement ties with China as the conflict in Ukraine alienates him from the U.S. and its European allies. The relationship with China, Russia’s biggest trading partner after the two-way volume surged sevenfold in the past decade to $94 billion last year, is becoming even more important as escalating sanctions threaten to tip the economy into recession.
“As Russia’s relations with the West deteriorate, its ties with China will need to grow stronger,” Dmitri Trenin, director of the Carnegie Moscow Center, said by e-mail. “Beijing, rather than Moscow, will be the senior power.”
That role reversal is underscored by the disparity of the two countries’ economic development during the past 35 years. In 1979, as Deng Xiaoping started an economic overhaul, China’s output was 40 percent of the Soviet Russian Republic’s -- the present-day Russian Federation, according to a study published this year by the Center for European Reform. By 2010, China’s economy had become four times the size of Russia’s, it said.
Russia’s eagerness to do business with China marks yet another turn in the tumultuous history of the relationship between the countries that were once the leading powers of the communist camp. While Mao followed Stalin’s lead, the two sides fell out after the Soviet dictator’s death and even fought a border war in 1969.
The lack of trust between the two sides remained as their ideological paths diverged, until a rapprochement began in the 1990s under late Russian President Boris Yeltsin. Russia is touting the Putin visit to China as a chance to cement the relationship.
Russia and China, two of the five veto-holding nuclear powers in the United Nations Security Council, already cooperate on the world stage, often joining forces to counter what they see as U.S. dominance.
They “need each other more than usual” as China is also embroiled in international debates including the conflict over disputed waters of the South China Sea, said Li Lifan, deputy director at the Center of Russia and Central Asia Studies at the Shanghai Academy of Social Sciences.
“Both sides want to use this relationship as a bargaining chip in their relationship with the U.S.,” said Jian Zhang, a senior lecturer at the Canberra-based Australian Defence Force Academy of the University of New South Wales. “Under the surface, there is still considerable distrust and conflicting interests.”
As a sign of solidarity, Chinese President Xi Jinping was the guest of honor at the Sochi Winter Olympics in February, while U.S. President Barack Obama and most European leaders including German Chancellor Angela Merkel stayed away.
In the escalating standoff over Ukraine, though, China hasn’t taken sides decisively. In March, it abstained in a Security Council vote on a resolution condemning a referendum to endorse the secession of Crimea.
“Diplomacy requires timing and it’s good timing now for China and Russia to be closer,” said Li at the Shanghai Academy of Social Sciences. “Words like alliance or coalition are still excluded from official documents. China and Russia are talking about closer bilateral relations, but not a new group.”
Putin and Xi may leave the sparring over geopolitics aside during their first meeting today, which will focus on the gas contract.
The Russian delegation, which includes the heads of OAO Gazprom and OAO Rosneft, the state gas and oil companies, wants to sign a 30-year contract to supply 38 billion cubic meters of gas a year, or 20 percent of its sales to Europe and pave the way for building its first gas pipeline to China.
Russia already opened an oil pipeline to China in 2011 and the government in Moscow also wants to close a deal to supply 100 million metric tons of crude during 10 years. Russian Prime Minister Dmitry Medvedev valued the potential supplies at $85 billion. Gazprom may agree to ship 1.14 trillion cubic meters of gas to China over 30 years for about $350 per 1,000 cubic meters, the newspaper Izvestia reported yesterday, citing unidentified people.