Russia–China Economic Relations in the 21st Century: Unrealized Potential or Predetermined Outcome?

Abstract

In the first decade of the 21st century, Moscow and Beijing made two strategic decisions to expand and deepen bilateral economic relations. The first one was to endorse diversified energy partnership. The second was centered on cross-border area and has been offered in the program of regional cooperation between Russian and Chinese border regions. However, basic methodological illogicality between estimations and expectations in Russia–China economic relations has smashed the good intentions of both sides. Recommendations for the governments to develop economic relations were theoretically correct, but mostly generalized and abstract in nature. Subsequently, these relations had not found a stable ground and were undermined by numerous internal and outside factors, positive and negative. A narrow range of trade articles made Russian–Chinese exchange dependent on the demand and prices for these goods, and small mutual investments slightly influenced an economic exchange between two countries. In spite of a number of decisions related to cross-border and inter-regional relations accepted at the top level, these relations are still the weakest link in bilateral ties. Mutual investments and modern forms of economic cooperation did not flourish along the border also. Moreover, economic troubles in Russia of 2014–2016 have hampered the cross-border relations seriously, while Heilongjiang Province being the intermediary between many Chinese territories and Russia has become the biggest loser on the Chinese side. In spite of all problems in economic cooperation between Russia and China, today, China is the no. 1 trade partner of Russia and Russia is the no. 1 supplier of oil to China. Their energy alliance has strengthened both countries’ statuses in their economic interaction: the position of raw material supplier for Russia and the exporter of manufactured goods to Russia for the People’s Republic of China (PRC). Western sanctions amplified the Chinese high-tech goods export to Russia; China’s share in Pacific Russia’s foreign trade increased from 29.2% in 2014 to 33.4% in 2017 and the peoples’ mood in this region moved in favor of China. However, by the end of second decade of the 21st century, Russia’s and China’s favorable “economic complementarities” and geographic proximity happened to remain a virtual product of academic’s intellectual exercises and have not transformed into the genuine economic cooperation. This is because, on the one hand, the philosophy, political and cultural infrastructures of Russia–China economic relations did not change much since 1990s, and, on the other hand, of some domestic and international factors that prevented this transformation.

Reconciling National Security Review Over Cross-Border Investment Bilaterally

“…E.g., the Yamal Liquefied Natural Gas Project, in which the Chinese interests amount to 29.9%with CNPC (20%) and Silk Road Fund (9.9%). Inter-regional cooperation in the far-east region is another pillar underpinning the Sion-Russian partnership concerning food and agriculture security 130 . The sub-national cooperation between China's Heilongjiang province and the Russian Far East region ("RFE") has thrived sincethe end of the Cold War.…”

The security dilemma in Russia’s new national security strategy: between militarism and being a geographical pivot

“…Grande parte dos investimentos russos tem como destino a venda para terceiros, sacrificando por vezes o reforço das capacidades militares das suas Forças Armadas. Atualmente, existe armamento e tecnologia vendida pelas empresas estatais russas que não está disponível para os 5 Para além das empresas estatais, ligadas sobretudo ao setor da energia e do armamento (Luzin, 2021), destaca-se o papel que a empresa militar de segurança privada russa Wagner presta à política externa do Estado russo, reforçando, cada vez mais, em diversos países, designadamente na Líbia (Stronski, 2020), na Ucrânia, no Iraque, no Afeganistão, no Iémen, no Chade, no Sudão e no Sudão do Sul e em Moçambique (Katz, B., et al, 2020 (Larin, 2020). Do lado russo, as exportações estão sobretudo relacionadas com o setor da energia, da tecnologia e da agricultura, enquanto a China se constitui como parceiro relevante no fornecimento de produtos manufaturados, bem como no setor dos investimentos (Hill, 2021).…”