Russia’s Putin Seeks to Upgrade Ties to China

Russian Prime Minister Vladimir Putin has chosen China for his first foreign trip after unveiling his political plan to rule Russia for the next decade.

China has overtaken Germany to become Russia’s top trading partner. Trade is up by 45 percent this year, and could triple by the end of this decade to $200 billion. So Prime Minister Putin visited Beijing to strengthen his nation’s most important bilateral tie.

The Russian leader spoke in Beijing about growing trade and investment. At every chance, he spoke of the opportunities for joint ventures in such high-tech fields as space, medicine, airplane construction and biotechnology. But at the end of the two-day trip, the biggest deal was for a $1.5 billion Chinese investment in an aluminum smelter in Siberia.

Russians' increasing fear is that they are fated to become to China what Canada is to the United States - a convenient source of oil, gas, minerals, timber and other raw materials.

Anatol Lieven, a professor at King’s College London, is studying the impact of the rise of China on Russia.

“Russia, as a whole, would be reduced to something like being the Canada to a Chinese United States," said Lieven. "That’s a prospect that the Russian elites find absolutely unacceptable.”

For the first decade, after the collapse of the Soviet Union, a major portion of Russia’s exports to China was high-tech - largely fighter jets and missile systems. But, increasingly, Russia complains that China is copying its Sukhoi fighter jets and other advanced military technologies. Last week, the successor agency to the KGB arrested a Chinese national in Moscow on suspicion of trying to buy blueprints for Russia’s prized S-300 long-range surface-to-air missile system.

“Arms sales in the last five years have plummeted," said Linda Jakobson, the lead author of a new report on China-Russia relations for the Stockholm International Peace Research Institute. "The reason is the Chinese have bought pretty much everything that the Russians are willing or able to sell.

The other leg of the Russia-China relationship was energy sales. But here Russia also has lost its edge.

For 16 years, Russia and China have been negotiating the construction of two gas lines from Siberia to China. While the Russians bargained on and on over price, the Chinese built a gas line from the Central Asian nation of Turkmenistan to China.

On Tuesday, a British auditing company ranked a gas field in Turkmenistan as the second largest in the world. Now, Turkmenistan, once a Russian colony, plans to ship 60 billion cubic meters of gas a year to China - nearly the same volume that Russia has been talking about since the 1990s.

“The potential for a really substantial gas partnership existed when they started to negotiate the building of two natural gas pipelines from Russia to China 16 years ago," Linda Jakobson said from Sydney, Australia, where she directs the East Asia Department of the Lowy Institute. "In the meantime, in the gas sector, as also in oil, China has made tremendous efforts to diversify," she said.

Russia, the largest oil producer in the world, long assumed that it had China over a barrel - a captive market. But while the Russians negotiated endlessly about price formulas, China diversified.

“Russia has not become a major energy provider to China," said Anatol Lieven. "It is a significant provider. But Russia still provides the same amount of energy as Iran and only the same amount as Angola.”

If sea lanes to China become vulnerable, Russia will regain its competitive edge. But, for now, Jakobson says:

“Russia is only the fifth largest supplier of crude oil to China today. Because China has very successfully diversified its supplies of crude oil.”

Lieven says that China has grown so powerful so fast that Russia would not dare to join an alliance with NATO or the United States. Instead, he predicts, that Russia will preserve its autonomy from China by avoiding needless conflicts with Washington.

He predicts that in the next Putin decade, the Kremlin will avoid:

“A diminuition of gratuitious Russian troublemaking, probably in the Baltics, in relations with Venezuela, that kind of thing."

Jakobson, who recently completed a 20-year stay in Beijing, said she was struck by how many Chinese have become condescending toward Russia. She recalled an interview she conducted earlier this year with a Chinese political scientist. He grudgingly admitted that China may not like the United States and Japan, but there are things that China can learn from both societies. But he was disdainful of Russia.

“'But Russia? What do we have to learn from Russia? This nonchalance, nearly overbearing view, that is on the rise in China towards Russia is very telling of the change in perceptions on the Chinese side of Russia," she said.

As Prime Minister Putin maps out his decade ahead, he clearly identifies China’s rapid rise as a big challenge for Russia.