Russia’s Vladimir Putin and China’s Xi Jinping have announced they will work together more closely to offset US pressure as part of Putin’s two-day state visit to China.
Putin is seeking to firm up his relationship with Xi, to send a signal to the rest of the world about Russia’s status, and to offset economic and political pressure from the west over the Ukraine war. And he has been partly successful, on the political front at least.
Russia has become increasingly reliant on China because of western sanctions imposed since the reinvasion of Ukraine in 2022, so Putin desperately needs to reinforce economic relations, and overcome any fears Xi may have about the risks of taking the relationship to a stronger footing.
The two countries “intend to increase interaction and tighten co-ordination in order to counter Washington’s destructive and hostile course”, they said in a joint statement.
The state visit, Putin’s first international trip since his re-election, provided sufficient pomp to maintain the illusion of equality between the two states, regardless of the growing power imbalance. China’s economy is six times larger than Russia’s. Russia remains a power in long-term decline, while China is a superpower in waiting.
China reaffirmed its stance on the war in Ukraine, calling for a peaceful resolution (rather than openly supporting Moscow). However, there were indications that they would expand their military ties, something that already concerns the west.
On the other hand, Beijing has not agreed to any major deal that would signal open defiance of western sanctions. There was no agreement on the Russia-promoted gas pipeline, Power of Siberia 2, which would allow the export of gas from Russia to north-east China. That’s despite both leaders underlining their willingness to strengthen cooperation in the energy sector. Russia’s energy exports to Europe have fallen dramatically since the Ukraine invasion, and it is looking to expand into other markets to offset that loss.
For a leader who cannot travel even to some other relatively friendly nations, such as South Africa, due to his International Criminal Court arrest warrant, this trip is a huge symbolic win. China, unlike South Africa, is not a member of the ICC, so doesn’t have to implement the ICC warrant.
Russia needs to be reassured that it does not face the US alone, and the summit confirmed Chinese support, with Xi stressing his concern that “the politics of force still threaten peace and security”. Putin and Xi agreed they would work together against “destructive and hostile” US pressure.
China also confirmed its opposition to western nations seizing Russian assets. European countries and the US have discussed using profits from frozen assets to finance the rebuilding of Ukraine.
China is expected to continue to provide Russia with goods that can be used to bolster Russia’s arms production, in particular machine tools. The Russian machine tool industry is almost wholly reliant on such imports, as well as diggers and heavy trucks which can be used as military vehicles.
Silicon chips used in drones, artillery and missiles are also imported from China, while some components reach Russia via central Asia, thus evading sanctions.
Day two of the summit saw the two leaders visit the city of Harbin near the joint border. It’s nicknamed “Little Moscow”, and was the home of many Russians until the 1960s. But also, significantly, it’s the current home of an institute of technology that has previously been used for joint defence research projects, as well as a defence laboratory that is the subject of US sanctions.
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Earlier this year, Russia’s foreign minister Sergei Lavrov said that nearly 90% of Russian trade was now conducted in yuan. Both Russia and China are keen to reduce the power of the US dollar as the world’s global currency. The use of other currencies, such as Chinese yuan, for international transactions reduces the US’s international economic dominance.
Moving away from transactions in dollars has helped Russia to mitigate the pain of sanctions. As Putin put it: “We are protected from the influence of third countries and negative tendencies on the global financial markets.”
In a move aimed at improving Russia’s struggling economy, Putin invited Chinese car makers to move to Russia. The two countries also apparently agreed to cooperate on the joint production of automobiles – clearly US tariffs on Chinese car manufacturers make this an attractive option.
Russia in Ukraine
Russia currently appears to be in a much stronger position in the Ukraine war with a new offensive making gains in territory. So this is an opportune moment for Putin to negotiate with Xi. It gives Putin the chance to reverse the impression of a weak Russia pinned down by Ukraine, an impression that Xi may have had in autumn 2022 when he told Putin he had “concerns” , as Russia’s claim of a quick victory over Ukraine had failed to materialise.
The new team that Putin assembled as a result of his reshuffle only a few days ago brought extra ballast to the Russian delegation. Andrei Belousov, the new defence minister, (formerly economics minister) has significant prior experience dealing with China, and the trip to China will help cement his authority.
The summit demonstrated that, in responding to Putin’s overtures, Xi has to walk a fine line. Russia is a necessary political ally and no other major power can play this role. Economically, however, Russia cannot replace either the US or European markets, and China is already facing significant US tariffs on its goods.
Moreover, in geopolitical terms, China needs European countries as trade and investment partners, especially as the US is seeking to reduce purchases of Chinese goods. Any major deal with Russia – for instance on natural gas – would ramp up western concerns about growing Chinese power, but also Russia’s ability to win the Ukraine war, by circumventing western sanctions.