TheMarketForIdeas

Sino-Russian relations are never easy to categorise neatly. Marked in equal measures by common interests and a mutual distrust, by a tendency to cooperate as well as the pressure of the competition that their geopolitical profiles consign them to, China and Russia have not had any significant clashes since the end of the Cold War, when a Sino-American alliance was forged as part of the US strategy to contain the USSR. Over the years, there have been various efforts on both camps to capitalise on their mutual interests and solidify their collaboration. Both countries are part of the Shanghai Cooperation Organisation, and China has resumed importing Russian military gear following a European Union-enforced arms embargo in the wake of the Tiananmen Square protests. The NATO presence in Central Asia and the Middle East has also driven Russia and China to seek common ground in order to avert the expansion of American influence in the region. Moreover, in 2014, China and Russia signed a 30-year deal to sell energy to China and to build the ambitiously named Power of Siberia, a pipeline which would transport Russian gas to the Far East. 

A difficult relationship 

Nevertheless, despite these steps, a rivalrous undertone has persisted in the interactions between the two neighbouring powers. In the early 2000s, for instance, there were concerns about the growing Chinese economic influence in the Russian Far East. As Moscow planned to build energy infrastructure in this region, it was only grudgingly that Russian companies accepted to work together with Chinese firms after acknowledging that there was no other, better way. The deal mentioned above was signed under Russian duress caused by Western sanctions, and opened up heretofore closed areas of the Russian economy to Chinese investment and potential influence. Neither could Russia impose an advantageous price for energy on China, who had Central Asian suppliers as benchmarks and would, in effect, have monopsony power over Russian energy exploitation in Siberia because of how the transport infrastructure is laid out.

Central Asia is another battleground between Chinese and Russian influence, with China’s increasing interest in the rich energy resources and trade potential of the region on the one hand, and Russia’s attempts to maintain the Central Asian countries in its sphere, on the other. In addition, although the Power of Siberia deal was signed in 2014, construction operations have been quite slow to begin. More prominently, Russia has spearheaded the Eurasian Economic Union alongside Belarus and Kazakhstan (since then, joined by Armenia and Kyrgyzstan), with plans to include several other Asian countries, whereas China seeks to increase its investments abroad owing to its Belt and Road Initiative to create a network of sea and land-based commercial routes to reach European and African countries. Russia is of two minds on the Belt and Road, welcoming the trade and investment through its territory and the influence that comes with playing middleman in the Eurasian land trade, but also wary of the geopolitical undertones of what the Chinese leadership has called “the project of the 21^st century” and others have, incorrectly but tellingly, described as a Chinese Marshall Plan.

Yet, Russia is well aware that it does not have the political and economic power to challenge China’s position. That the energy-rich Central Asian countries, for example, have committed themselves to diversifying their energy partnerships and modernise their infrastructure is one example where Russia is at a disadvantage against China, whose pragmatic approach based primarily on mutual interests and non-interferences in their partners’ internal politics is extremely attractive, compared to Russia’s long-standing monopoly on Central Asian energy pipelines and tendency to use energy as political leverage, which is reflected within the policies of the Eurasian Economic Union as well. Over the years, it has sought mainly to live alongside its rival so, rather than face it head-on and risk a defeat, Russia has generally attempted to maintain a position that grants it a say in regional affairs, especially with regards to Central Asia. In May 2015, China and Russia agreed on a project to integrate the development of the EEU and the BRI, merely four months after the EEU officially came into existence. The benefit for China would be further international support for its BRI, while Russia could potentially safeguard the EEU’s role in the region and bestow upon it legitimacy as an economic project, in light of criticisms dubbing the EEU merely a tool that Russia uses to renew its sphere of influence. 

Chess on another board 

An apparently surprising move on Russia’s part took place in the first half of 2017, when Russia and the Philippines signed a defence cooperation deal covering a range of security-related topics. During talks between the two parties, Russian warships were seen in the Philippines as early as January 2017. Though analysts have cautioned as to the limits of the agreement, its significance should also be examined through the lens of the ongoing territorial disputes in the South China Sea involving both China and the Philippines. The specific area in the South China Sea being disputed is one of the world’s most important hotspots, geopolitically and geoeconomically. It is traversed by the world’s busiest shipping lanes, with over $5 trillion worth of global trade passing through the South China Sea annually and over 50% of the containerized transport. A third of the global crude oil trade transits its waterways, as do half of the vessels carrying liquid natural gas. On top of that, the South China Sea is known to contain vast proven oil reserves in the vicinity of 11 billion barrels and an additional 17 billion barrels counting unconfirmed deposits, raising the figure to about 28 billion barrels. Estimates by the US Energy Information Administration indicate that the South China Sea is very rich in natural gas resources, with over 5.3 trillion cubic metres believed to be contained in its seabed. Last but not least, the South China Sea is home to a rich marine biodiversity and a highly productive area for fishing, accounting for over 10% of the world’s fishing catch, thus being an important source of food and trade goods for the countries in the region.

The strategic importance of the SCS is clear, given all these aspects. Control over it would provide a distinct advantage in terms of satisfying internal demands for energy and food, changing the scene of energy diplomacy and dominating one of the world’s most important trade routes. The SCS is currently the subject of several overlapping territorial claims, with China deeming almost all of it as its own, while the other parties, namely Vietnam, Malaysia, Cambodia, Thailand, Singapore, Taiwan and the Philippines claim various parts of it, competing with China as well as among themselves. The Philippines took the case to court and in 2016, the arbitration tribunal ruled against China’s requests under UNCLOS (United Nations Convention on the Law of the Sea). The latter, however, refused to acknowledge both the court and the decision and has been proactively taking steps to enforce its claim. China has built an artificial island on the Subi Reef which it populated with military personnel. It has built an oil rig near the Paracelsus Islands, within the disputed territory with Vietnam, and over the years, there have been various clashes in the SCS between vessels of the parties involved.

Unsurprisingly, the United States is one notable non-claimant who has taken a stance in the region. Well aware of the severe disadvantage it would face should China prevail (for instance, it would gain the ability to blockade trade routes as a means of retaliation in case of difficult diplomatic disputes), it has frequently sent ships to the SCS and contested the Chinese claim over nearly the entire territory. These actions have generally caused tensions between China and the US. Now that Russia has signed a new partnership with the Philippines we may enquire into its implications. The defence deal is supposed to be a first step towards more complex relations between Russia and the Philippines in military and security-related aspects, and is part of Filipino President Rodrigo Duterte’s broader initiative to cultivate positive relationships with Russia and pursue a more independent foreign policy, as opposed to the Philippines’ traditional alliance with and reliance on the United States. In keeping with his stated desire for an independent foreign policy, Duterte needs a balanced system of alliances, instead of relying on one sole provider of security and support. The Philippines already has a Mutual Defence Treaty with the US, but has also sought rapprochement with Russia and China.

On the surface, the agreement would seem to bear relevance to Duterte’s hardline approach to crack down on terrorism and drug trafficking in his country. This collaboration with Russia would benefit both parties, as Russia gains a new client for arms sales, and the Philippines revamps its forces to be better able to cope with security threats. Russia’s support is also a means for Duterte to legitimise his otherwise controversial stance during the Filipino drug war, where his tough policies employing considerable use of extrajudicial violence have been both harshly criticised and praised by international observers. Yet, his aim to modernise the Filipino military is not at all surprising when we consider the Chinese efforts to militarise key points in the SCS. Having rejected a court ruling by an international tribunal invalidating its position, China seeks to bolster its claim with military might. In May this year, Duterte stated that China threatened military action against the Philippines if the latter began drilling oil in the disputed areas. Therefore, it follows that the security collaboration with Russia can be meant to help the Philippines maintain its bargaining power in a volatile context and ensure its claim will not rendered irrelevant by a sharp disparity of military power. 

Stirring the hornet’s nest 

While not directly challenging or undermining Chinese interests in the SCS, Russia’s agreement to deepen security ties with the Philippines should also be viewed in terms of its rivalry with China. To begin with, Russia, like the United States, is well aware of the consequences of China gaining the upper hand in the SCS, especially in terms of energy geopolitics. With a heavy presence in Central Asia as far as trade and energy links go, and with control over the energy resources of the SCS, Russia’s position as an energy superpower would be greatly threatened by China, so while not opting for confrontation with Beijing, Moscow would provide military aid to one of China’s opponents in the region which in the future could balance talks and prevent China from using its military strength to muscle other claimants into backing down. Consequently, instead of most of the SCS’ resources being controlled by China, this balance entertains the hopes that the parties involved would need to solve the issues by negotiations – either bilateral or multilateral.

Another point of view that can be applied to this move is that of the regional initiatives that revolve around the South-East Asian region. One such initiative is or rather was the Transpacific Trade Partnership, involving signatories from East Asia, SE Asia, Oceania, as well as North and South America. The agreement is known for purposely not including China at the outset, despite it being part of the Pacific Rim. It has been considered that the TTP also bears a geopolitical meaning, namely to reduce China’s economic influence on the states that have signed the agreement and to serve as an alternative to China’s Belt and Road Initiative. With the apparent foundering of the TPP, China launched its own regional economic cooperation scheme in the Asia-Pacific region to potentially marginalize the US, which it probably considers in the context of the BRI project. That said, Russia too has expressed an interest to expand the Eurasian Economic Union towards South-East Asian countries and the ASEAN bloc. We may recall the deleterious effect of Western economic sanctions against Russia following its military actions in Ukraine. The increase of trading partners thanks to the enlargement of the EEU can help Russia gain more commercial independence, increase its strength and improve its tenuous hold on superpower status. The Philippines is notable in this context as one of the countries that are part of both the EEU’s expansion plans and of China’s maritime half of the BRI network of trade routes; it had previously also voiced its interest in joining the TTP. From this, we can infer several aspects: that the economic center of gravity is expected to continue gradually shifting towards the Pacific; that Chinese dominance of strategic points of the SCS can act as an incentive to the countries in its vicinity to reject the EEU or the TTP and its successors and thus allow Chinese influence to endure, and that Russia’s ties with the Philippines may pave the way for the latter as well as other SE Asian states to join the EEU. As a result, Russia’s choice to collaborate on military topics with one of China’s opponents in the South China Sea is as much a matter of promoting diplomatic and economic links as it is a clash between the mega-regional projects that China and Russia have heralded.

Lastly, with such moves by Russia, and the United States’ vocal opposition to China’s actions in the SCS, it appears that we may be witnessing a slight shift of the Cold War-era containment strategy: whereas before 1991, China and the US maintained an alliance to prevent the expansion of Soviet influence, now Russia and the US are seemingly independently seeking to prevent China from gaining too strong a geostrategic advantage. China, though, is unlikely to accept this state of affairs. It has maintained its claim of sovereignty over the Spratly Islands in the South China Sea and has very recently criticised the US and its allies of threatening its security and freedom. While China is unlikely to react negatively to the agreement between Russia and the Philippines in its current state, it is clear that the South-East Asian region is important for Russia’s geostrategy and is likely to remain in Russia’s crosshairs in the future. We should not discount the very close ties between Russia and Vietnam, including cooperation on military issues such as arms sales and the past use of the Cam Rhan Bay port. Or, for instance, the cooperation in proximity of the SCS between Russia and India on military matters. Because of the preponderance of Soviet and Russian military equipment in the region, continued Russian arms trade cements one possible avenue for cooperation to contain China’s rise, that of military diplomacy, training and logistics, with Vietnamese submariners and pilots training in India, alongside counterparts from Malaysia and elsewhere, all on the basis of compatibilities of military equipment. 

Conclusion? 

As regards Russia and China, their silent geopolitical race will in all probability continue to manifest in the same pattern of indirect moves, of acts of overt collaboration interwoven with subtle incursions in the territory of the other, avoiding direct confrontation as much as the context allows. This was apparent a few years ago, when Russia, testing the strength of its arguments for a future Arctic claim, closed the Okhotsk Sea to international access for fishing and research, prompting China to send various civilian and military vessels through the area, and Russia to organize anti-naval games just as they were passing through. Just as in a game of go, the players alternate between building stable territories for themselves and incursions into those of their opponents. For instance, Russia has supported China in its plea to de-escalate tensions between the US and North Korea, whom China currently supports in the region, though less so than in the past, and China has, in turn, vetoed a UN resolution that would have sanctioned Syria for its alleged use of chemical weapons against Syrian citizens. Their common interests and power asymmetries would stop them from taking strong actions against one another in case of dispute, but their conflicting interests and ambitions maintain the competition between them alive. Ultimately, as a Carnegie Moscow report noted, Russia does not intend to become a junior partner in its relationship with China, regardless of whatever benefits may be on the table.