Not to Disappear One by One

20 june 2018

Alexander Lomanov is Chief Researcher at the Institute of Far Eastern Studies, Russian Academy of Sciences; he holds a Doctorate in History.

Resume: Vladimir Putin’s visit to China and the simultaneous G7 summit in Canada created an unprecedentedly hard background for comparison. The US president’s public denunciation of his Western allies and his refusal to sign the G7 summit’s final statement have only emphasized the stability and promise of Russian-Chinese cooperation.

The most notable and symbolic event was the conferral of the PRC Order of Friendship on Vladimir Putin. For China, this is a historic moment that characterizes not only the high level of bilateral relations but also China’s new global status as a major influential country with reliable friends.

The world has changed not only for Russia whose erstwhile dreams of joining a common “European Home” proved unrealizable. At the start of reforms four decades back, Chinese leaders proceeded from the assumption that all-round cooperation with the United States was the key to success. They were not mistaken: the country has succeeded in joining the group of world economic leaders.

But that era is in the past even for China. Shortly before Xi Jinping took over in China, the local political elite rose to the understanding that reliance on the United States would make it impossible to guarantee China’s future as a world power. Beijing has decided that its neighbors, even if poor and underdeveloped, are as important as its powerful overseas partner. Chinese diplomats rushed to establish firm ties with the region in order to ensure a favorable environment for the further development of their country. The initiative to include several partners in China’s One Belt, One Road project emerged in 2013, when no one could foresee Donald Trump in the White House.

The hope that the huge economic interdependence of China and the United States will keep Washington from verbal attacks against Beijing has been dashed. Trump regularly threatens China with increased duties and sanctions unless it reduces the bilateral trade deficit. The example of China’s ZTE telecommunications company has shown that the US government can paralyze a major hi-tech company with the stroke of the pen by cutting off US component supply.

At first sight, this appears contrary to logic. The US is urging China to increase purchases of US products and simultaneously bans ZTE to purchase several billion dollars’ worth of electronic components per year. Clearly, this decision will not lead to a trade deficit cut. Its true aim is to prevent China from emerging as a technological world leader. To save ZTE, China agreed to pay over $1 billion in fines, change the company’s leadership, and even allow US inspections to monitor how the company is complying with sanctions introduced against Iran and North Korea.

The humiliating ZTE story was a shock for the Chinese elite and made it take a sober look at their relations with the West. China is experiencing a “moment of truth” similar to what Russia felt in 2014, when large-scale sanctions were introduced against it. After Moscow, Beijing has realized that its chances to achieve modernization through cooperation with the West were not unlimited.

The US is urging China to make structural changes in the economy and cease providing government support to high-technology industries. By acquiescing to these demands China will give up its chances to achieve world leadership. But by rejecting them it will face a long and excruciating standoff with the West. In the geopolitical sphere, a similar dilemma is facing Russia.

It will not be easy to adapt to the new reality. During the visit, China’s Global Times published a notable admission: “Some Chinese people criticize China for being too close with Russia and they seem to believe that cozying up to the West is more ‘noble.’ We will not be surprised to see similar comments in Russia. This rhetoric showed that a small group of people in both countries have been brainwashed by Western values and cannot see clearly on national interests.”

The West’s transition to a sanctions and containment discourse is forcing Russia and China to put their own interests first. Moscow and Beijing have repeatedly declared that their cooperation is not aimed against any third country. But this “third country” has unequivocally proclaimed Russia and China its rivals and is using a wide range of economic, political, military and propaganda pressure approaches against them. This compels Russia and China to develop a joint “counter-containment” strategy aimed at protecting their legitimate interests.

As before, they do not intend to create a military-political alliance. Their response could be described by a line from a well-known song by Bulat Okudzhava: “Let’s join hands, friends, so as not to disappear one by one.” Specifically, Russia and China must learn how to jointly defend their banks and businesses against US sanctions. This is of particular importance in situations where multilateral regional projects are implemented.

Neither country intends to cave in to Western pressure and accept a status as a second-rate buyer of advanced foreign technology. Invigorating national programs for scientific and technological development are a stepping stone to wider cooperation in this area. Contracts on cooperation in the nuclear power industry signed during the Putin visit show that there is the necessary trust between the two countries.

The Valdai Discussion Club

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