STUART LAU
When Chairman Mao Zedong visited Soviet dictator Joseph Stalin in the winter of 1949, he was very much the junior supplicant. Stalin packed him off to wait for weeks in his snow-bound No. 2 dacha, 27 kilometers outside Moscow, where the humiliated and constipated Chinese leader grumbled about everything from the quality of the fish to his uncomfortable mattress.
When the two Communist leaders did get to business, Stalin bullied his way to a very favorable deal that put Mao on the hook to buy Russian arms and heavy machinery with a loan on which Beijing would have to pay interest.
Seven decades later, the power dynamics reveal a radical reset. Shortly before invading Ukraine, Russian President Vladimir Putin traveled to the Winter Olympics in Beijing to proclaim the “no limits” friendship with China’s Xi Jinping, but there’s no doubting who the real superpower is in that duo these days. China’s $18-trillion economy is now 10 times mightier than Russia’s. Beijing will hold nearly all the good cards in setting the terms of any financial lifelines from big brother.
As Russia faces a sharply contracting economy under sanctions and an impending oil embargo from Europe, China is the obvious potential benefactor for Putin to turn toward.
Xi shares Putin’s hostility to the West and NATO, but that doesn’t mean he will be offering unalloyed charity. Xi’s overriding strategic concern is China’s prosperity and security, not saving Russia. Beijing is likely to buy at least some oil diverted from Europe, but only at a hefty discount from global benchmarks. China will only help Russia to the extent that it doesn’t attract sanctions and imperil its own ability to sell goods to rich countries in North America and the EU.
A very public partnership
Publicly, China is making a big show of political solidarity with Moscow. It has increased overall trade with Russia, essentially abandoned Ukraine, expanded financial transactions without the use of dollars or euros, and doubled down on future cooperation to develop military technology while carrying out joint exercises in the Pacific region.
Sergey Lavrov, Russia’s foreign minister, has acknowledged that his country’s future lies with China, saying: “Now that the West has taken a ‘dictator’s position,’ our economic ties with China will grow even faster.”
Xi himself also appears to be a strong admirer of Putin on a personal level. Yun Sun, director of the China Program at the Stimson Center, calls this his “Russia complex.” (Since the war broke out, Xi has only spoken by phone with Putin, not his Ukrainian counterpart Volodymyr Zelenskyy.)
There are very serious limits to these “no limits” relations, however. For now, at least, China is stressing to Western nations that it is not selling weapons or plane parts to Russia. Beijing doesn’t want to fall victim to sanctions itself, so it sets boundaries to the relationship. Even more worryingly for Putin, China is also out to set a high price for support. Beijing, for example, wants to restrict Russia’s highly lucrative arms sales to India, China’s arch-foe across the Himalayas.
“In a reverse from the Cold War pattern, Russia will be the junior partner to a more powerful China. That will irritate Putin,” said Matthew Kroenig, deputy director of the Atlantic Council’s Scowcroft Center for Strategy and Security.
That second-fiddle role is not a scenario Putin would have envisioned when the Russian president decided to invade Ukraine in February, propelled by a desire to rebuild a bygone glory for his nation.
But all in all, he should have seen it coming. China is a country obsessed by correcting historical humiliations and regaining its position of global leadership. The time when the Soviet Union was ideologically — and economically — superior to Communist China is long gone. Huawei Technologies builds Russia’s 5G networks, while Russia requires Chinese cooperation on everything from aircraft parts to currency swaps. Importantly, it’s also not just the U.S. and Europe imposing sanctions on Moscow, but also three other major Asian economies: Japan, South Korea and Singapore.
Andrey Kortunov, director general of the Kremlin-backed Russian International Affairs Council, doubts that Russia’s elites have much appetite to serve as China’s junior partner. But he sees few alternatives for Moscow. “Since the conflict began, Russia started needing China more than earlier because China remains in many ways the only game in town, with economic ties between Russia and the West curtailed and with sanctions imposed on Russia.”
Crude calculations
Perhaps the single biggest calculation for China is how far it will go to help Putin beat an impending EU embargo on Russian oil. This European ban will drill a significant hole in Russia’s budget unless other big buyers step in.
In deciding how much it will buy, Beijing has massive leverage over Moscow.
Russia and Saudi Arabia are already the two leading suppliers of oil to China. In May, seaborne imports of Russian crude to China reached a two-year high with 1.14 million barrels per day, up from 800,000 barrels per day in 2021, according to data from Vortexa Analytics shared with POLITICO.
Much of the explanation for this is pure hard-headed economics from the Chinese more than a show of political solidarity, however. International sanctions mean traders have been wary of handling Russian crude, creating a mini glut that sees Russia’s oil trading $20 to $30 cheaper than international benchmark prices.
Given that China imports more than 10 million barrels per day, there’s certainly room to buy more, especially when the economy restarts and lockdown measures are gradually removed in key cities like Shanghai. But Russian sales to the EU have been about 2.4 million bpd. Given China’s own security concerns about overdependence on individual suppliers, it would be highly unlikely for China to suddenly start buying all of Russia’s now-surplus oil.
Similarly, China holds the cards when it comes to gas. Just before he invaded Ukraine, Putin signed a deal with Xi agreeing to increase natural gas exports to 48 billion cubic metres per year in future, from a humble 4.1 billion cubic meters in 2020. Russia is also planning a new pipeline, Power of Siberia 2, which could see Russian gas exports to Europe more easily switched to China.
“The problem, however, is that China holds all the cards in the negotiations,” Nikos Tsafos, chief energy advisor to the Greek prime minister, wrote in a think tank report in May. “And like the first Power of Siberia line, China will drive a hard bargain. What is unknowable at this point is whether China is ready to make a deal. Russia is likely to offer very attractive terms — if nothing else, due to its desperation. But will China accept them? Will they be tempted by the price, or will they think twice about expanding their dependence on Russia at this moment?”
Watching the weapons
Russia’s need for an ally coincides with China’s growth in assertiveness. The more isolated Moscow becomes, the more it may have to help China further its geopolitical ambition.
For years, Chinese officials have been quietly lobbying their Russian counterparts to cut arms sales to India, which has had a sometimes bloody border dispute with Beijing.
Between 2017 and 2022, India was the largest arms export market for Russia, followed by China, according to statistics from the Stockholm International Peace Research Institute. Fighting Indian soldiers armed with Russian equipment may not be fun for China, but it’s certainly a lucrative business for Russia.
Before the war, “Russia was very stubborn and [would] say, ‘Oh, you’re not in a position, China, to dictate us our choices to whom we sell weapons. But I think that China will be in this position probably five years down the road,” said Alexander Gabuev, an expert on Russia-China relations with the Carnegie Endowment for International Peace, a think tank.
India, for its part, is trying to keep an open relationship with Putin. New Delhi, like Beijing, is snapping up cheap oil, even though it’s also eager to maintain strong ties with the U.S.
“A Russia weakened by war and sanctions but not chaotic and unstable suits China’s long-term interests,” said Bobo Lo, a former deputy head of the Australian mission in Moscow who now works at the Lowy Institute. “Russia’s isolation will further push it into a position of a junior partner in the relationship, while increasing its economic and strategic dependency on China.”
Commanding position
Today’s power reversal would have looked highly peculiar to those singing L’Internationale in Moscow in the post-war era.
After all, the USSR and the People’s Republic were on difficult terms for decades, despite their supposed ideological proximity.
“In the 1950s, it absolutely was the case that the fact that China was the junior partner was very grating, because there was a view in Beijing that Moscow too often as a status quo power cared too much about its relations with the West at the expense of its relations with China,” said Joseph Torigian, author of Prestige, Manipulation, and Coercion, a new book about Stalin and Mao. “When it was Stalin and Mao, Stalin was a teacher, he was the titan of the communist movement. When Stalin died, Mao looked down on Khrushchev, as someone who didn’t understand ideology. When Deng Xiaoping met Gorbachev, Deng by all accounts thought Gorbachev was an idiot.”
While Xi and Putin share a better personal rapport than their predecessors, they also have very different considerations for the future of their countries’ role in the world.
Xi’s full focus is on securing the presidency for a third time, armed with an appeal to make China — a market deeply embedded with the West — more prosperous, eventually overtaking the U.S. to become the world’s No 1 economy. Sanctions would wreck that playbook.
Putin, meanwhile, is in a tougher bind. He would be happy to take whatever he can from China given his country’s current distress — even if that means Russia is seen as a junior partner to China.
“The problem is that he sees the conflict in Ukraine as really central to his struggle to keep his regime,” Gabuev said. “There is so much emotional tunnel vision on the importance of the war in Ukraine and sticking it back to the Americans, particularly since the American military’s help, provision of weapons, sharing of sensitive intelligence data … helps to kill a lot of Russian soldiers.”
“Being in China’s pocket is kind of less feared, because the focus is really on fighting the U.S.,” he said. “If China provides the necessary resources — and at the same time doesn’t seem to interfere in Russia’s domestic affairs — that’s the price that he’s accepting to pay in order to continue his fight with the U.S.”
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