The visit of Chinese leader Xi Jinping to Moscow for talks and negotiations with Russian President Vladimir Putin is an event of great strategic importance. It was the Chinese leader’s first visit abroad after his third five-year term was unanimously ratified by the 2,952-member Chinese National Assembly.
Similarities and Differences between the two leaders
Xi and Putin have great similarities but also key differences in their strategy. Both became lifelong leaders of their countries. It is characteristic that Xi, having secured a third five-year term as the leader of the Chinese Communist Party, expressed confidence that Russians will trust Putin in the 2024 presidential election as well.
Both leaders see their countries as being tested by a kind of encirclement by competing to rival Western powers. They evaluate particularly negatively the role of the “hegemonic” USA, which they accuse of trying to change the international system to their liking.
Xi and Putin agree that the Global South prevails over the North, which in many peoples’ minds is burdened with political sins, from colonialism to wars of aggression, such as the one in Iraq that began exactly 20 years ago and has had enormous economic and international costs for the West.
The two leaders share the view that the war in Ukraine is mainly due to the actions of Western countries and should not be characterized as a war of aggression by Russia. The Chinese leader used his presence in Moscow to promote China’s “peace plan”. Nowhere in the Chinese proposals is there the word “war”, much less “Russian attack”. Nor is there any mention of the need to withdraw the occupying forces and ensure the territorial integrity of Ukraine.
Agreement on many and basic points does not exclude disagreements. The Chinese approach to international affairs is completely different from the Russian one. China shows the self-confidence of the second superpower that claims the first place by gradually changing the international system over time. By contrast, Putin’s Russia shows the exasperation of a former superpower that finds its capabilities are now quite limited and faces its fall with an attempt to destabilize the international system. China can be characterized as hegemonic, while Russia is quite unstable and dangerous from an international political point of view.
The second difference between China and Russia has to do with their terms of cooperation. The Chinese are tough negotiators and use the obvious Russian weakness to their advantage. The Russians state that they are completely satisfied, at this stage, with the terms of bilateral cooperation, but they realize that they are slipping into a kind of dependence on the Chinese that can, under certain conditions, develop into servitude.
The “boss” in the relationship between them is undoubtedly China, while Putin, based on current data, is developing into a kind of “little brother” of Xi.
The Economic Dimension
Comparative economic power is decisive in shaping bilateral relations. China’s GDP is ten times that of Russia. The Chinese economy is extroverted, competitive and innovative in areas of strategic importance (please alos read the analysis titled “Xi Jinping and his Grand Strategy“).
On the contrary, Russia relies on the export of oil, natural gas, ores, raw materials and has not managed to develop an integrated modern economy.
Russia’s attack on Ukraine may turn out to be a strategic mistake as it deprives Russia of quality European markets. The Russian economy is obliged to turn to China to cover, as far as possible, the European gaps created for it by the invasion of Ukraine.
In 2022, China-Russia bilateral trade developed dynamically. According to some estimates it reached $190 billion with Russian exports to China up 44% to $114 billion and Chinese exports to Russia up 12.8% to $76 billion.
Bilateral trade was extremely dynamic in the first two months of 2023 with Russia’s exports to China increasing by 31.5% to $18 billion and China’s exports to Russia by 19.8% to 15 billion dollars. Russia’s other major trading partners in 2022 were Germany with bilateral trade of $57 billion, down 23%, the Netherlands with $45.4 billion and Belarus with $38.4 billion. Among the gainers in terms of Turkey also has bilateral trade with Russia.
Russian exports to China are mainly based on natural gas and oil. After the crisis caused in 2014 due to the incorporation of Crimea into Russia, Putin agreed with the Chinese leadership on the construction of the “Power of Siberia” natural gas pipeline. It has since been looking for alternative markets for Russian natural gas despite the fact that it has also developed its energy cooperation with Germany.
He knew that at some point his aggressive policy against European states could have economic consequences in the form of sanctions and exclusion of Russia from European markets.
In Moscow, Putin promoted the plan for a second “Power of Siberia No. 2” natural gas pipeline to meet China’s energy needs and provide Russia with some of the revenue it is losing from its gradual exclusion from the European gas market .
China’s president has indicated he agrees with Putin without, for now, committing. He knows that time works in China’s favor since the greater Russia’s need, the more favorable the pricing of Russian gas will be for China. China buys Russian oil and natural gas like India, at deep discounts to international prices. In this way, it puts pressure on other suppliers to give it more competitive offers, while it further strengthens the international competitiveness of its economy.
China reciprocates with exports, for example of microchips, which help sustain the Russian war economy. But in this matter too, Russia is obliged to play a subordinate role. China’s tech giants are avoiding catering to Russian needs to avoid facing US economic sanctions. The supplies that the Russians need are made by subordinate Chinese companies, which in many cases supply them with second-rate products.
And in the financial sector, Russia is accepting China’s dominance in an effort to limit the effects of Western economic sanctions on its banking system. Russians are bowing to China’s national currency in an effort to promote the de-dollarization of their economy. The rules of the economic game are clear and they favor China.
