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The Russian constitutional referendum of July 1, 2020

Giancarlo Elia Valori

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With specific reference to the health situation, Russia is still in a severe situation with over 350,000 Covid-19 cases.

 Brazil, however, has replaced the Russian Federation as the hardest hit country in the world, while the United States is now firmly at the top of the ranking. Nevertheless, what really frightens the Russian decision-makers are the medium and long-term economic consequences of the health crisis.

 Russia’s GDP had already recorded a 1.6% increase in the first quarter of 2020, but all Russian economists expect GDP to fall by at least 16% in the second quarter.

 Two-thirds of this GDP contraction, however, can still be attributed to the lockdown, but only one-third to the related fall in oil prices.

 With specific reference to the quarantine management, Prime Minister Mishustin thinks that 27 regions can now reduce quarantine restrictions, while the leaders of Rospotrebnadzor, the Russian Consumer Protection Agency, have asked the Governors of the Sverdlovsk and Smolensk regions to restore or even tighten quarantine requirements.

 The national average growth rate of viral infections in Russia is currently 3.9%, but a “Plan 2” for the definitive recovery of the Russian economy is already supposed to be in place.

 However, there will be three recovery phases: in the third quarter of 2020, the government will ensure that recession does not spread to the sectors which are still scarcely affected and will then refinance, one by one, the hardest hit economic sectors.

 The real Phase 2 – hence the real recovery – will take place from the fourth quarter of 2020 to the second quarter of 2021, with Russia trying to recover the pre-Covid 19 standards of living for the entire population. In the Phase 3, which will begin in the fourth quarter of 2021, the economy is even expected to start growing again.

 Pursuant to Russia’s current regulations, all proceeds from oil and gas exports are directly deposited into the National Welfare Fund (NWF).

 This Russian Sovereign Fund currently holds 11% of the whole Federation’s GDP. When the oil barrel prices are below 42 U.S. dollars, the Fund directly covers the difference by depositing what is needed directly into the federal budget. Above the threshold of 42 U.S. dollars, everything goes smoothly.

 Regardless of the constitutional referendum, the central government is likely to decide to take the necessary funds for the new economic expansion directly from the NWF.

 In a new crisis situation, the federal budget would directly receive all the oil revenues, which shall be allocated to the reconstruction of the Russian welfare and economy.

 Again with reference to oil, unlike other countries, Russia needs a basic oil barrel price of 40 U.S. dollars to “recover its costs”.

 Furthermore, the high prices reached after the various recent production restrictions within OPEC+ have enabled Russia to increase its reserves, which now stand at approximately 400 billion U.S. dollars.

 The Russian Federation’s current resources, however, would still enable the country to sustain even an oil barrel price of 25 U.S. dollars for ten years.

 Moreover, unlike Saudi Arabia and other OPEC+ countries, Russia depends on oil and gas exports only for approximately two thirds of its revenues, while the rest is made up of raw materials such as uranium, coal, other metals and minerals, and especially the sale of arms abroad, a sector for which the Russian Federation is second only to the United States.

 It is precisely in this geo-economic situation that the forthcoming referendum scheduled for July 1 in Russia will take place.

 As you may remember, the announcement of the constitutional referendum made on January 16, 2020, enabled the then Prime Minister, Dmitri Medvedev, to resign on that day and then take on the role of Vice-President of the Russian Security Council, which is obviously chaired by Vladimir Putin.

 Medvedev was replaced by Michail Mishustin, who is not a “man of force”, i.e. a former director of the Intelligence Services turned politician, but comes from the Federal Tax Service. When Mishustin himself fell ill with Covid-19, from April 30 to May 19 he was replaced by the economist Andrey Belousov.

 Hence what does President Putin want to achieve with his constitutional reform? Not just his mere stay in power, which the leader deems necessary, since he has not yet found his true heir apparent.

 It is a particularly effective sign that the second reading of the constitutional reform, adopted by the State Duma at the beginning of March 2020, was dominated by the presence of Valentina Tereskova, the first cosmonaut, now an 83-year-old member of Parliament.

 In that vote there were 382 in favour, 44 abstained and 0 MPs against.

 Therefore, if approved in the referendum, the current reform will be the real constitutional definition of Putin’s “vertical of power”.

 It should be recalled it is a mechanism made up of centre-periphery relations, but also of now stable electoral systems: the prohibition of presenting “independent” candidates; the registration of regular candidates by parties that are officially recognized and have at least 50,000 members in different regions of the country; the 7% hurdle, whereby the votes of those who do not reach said threshold shall always be distributed among all the other parties that have exceeded it.

 Certainly the Russian Federation cannot be a democracy. If it were so, it would no longer exist as such.

 A great empire, with a surface sixty times the size of Italy, but with a population just below the sum of Italians and Germans, as well as with empty Siberia on the border with the very overpopulated China.

 In an “empty country” – as Baron De Custine defined it at the beginning of the 19th century – the fear of foreigners always recurs: Putin’s old video, in the 2012 election rounds, showed the Chinese arriving in Khabarovsk; NATO taking Kaliningrad; the Islamists raiding in the Caucasus and finally the skinheads – an evident symbol of Western stupidity – moving freely around St. Petersburg.

 The Russian Constitutional Court, however, has already made it clear that Putin’s reform is legal.

 Hence what does Putin want? Firstly, a stronger system of central State controls over the federal and peripheral governments, so as to create the constitutional legislation of the “vertical of power” which is currently based only on Putin’s personal energy.

 Secondly the considerable strengthening of the status and role of the Russian Federation’s State Council, which is at present only an advisory body, not prescribed in the Constitution. It shall also be given the powers of orienting domestic and foreign policies, as well as identifying the main areas of future development in the country.

 Thirdly, Vladimir Putin’s proposal would mean that the regional Governors could automatically be members of the State Council, obviously after having established a pact with the Kremlin.

 Fourthly, the statute of the State Council shall be fully incorporated into the Constitution. The vast “nationalisation of elites” will be strengthened, since those who hold important positions for ensuring the country’ security, such as President, Ministers, members of the State Duma, regional Governors, judges or any other high-ranking State official, shall not have foreign citizenship or even a residence permit in other countries, either at the time of their work in office or, in the case of the President, at any time before.

 A presidential candidate, however, must prove he or she has been permanently living in Russia for at least 25 years (currently 10 years) and cannot serve more than two consecutive terms. Ex post, of course.

 The Constitution shall take precedence over international law and over the provisions of international treaties. Here the Russian concept of “sovereign democracy” is reaffirmed, which sometimes departs from the Western mythology of “human” and hence “universal” rights and states its clear opposition to dealing with the internal affairs of any other country.

 In the proposed constitutional reform, there is also the clear prohibition to transfer and alienate part of the Russian Federation’s territories.

 The Federation Council (the Upper House of Parliament), which now becomes the primary government body, shall also have the right to propose to the President to dismiss federal judges by providing a reasoned assessment and motivated opinion on their activity; in some cases, upon the proposal of the President, the Federation Council shall have the right to remove judges of the Constitutional and Supreme Courts.

 The State Duma (the Lower House of Parliament) shall have the right to approve the Prime Minister’s candidacy (currently it only gives consent to his/her appointment). The State Duma shall also approve the candidates of Deputy-Prime Minister and Federal Ministries; the President cannot refuse their appointment, but in some cases he/she will be able to remove them from office 

Hence the two directives of “United Russia”, Putin’s traditional party, become constitutional rule, i.ederžavnost’ – the ‘great power’ – and gosudarstvenničestvo, the ‘strong State’.

 Moreover, as always happens in current political propaganda, there is the issue of family relations.

 The new Constitution proposed by the President defines marriage as a relationship between a man and a woman – and even the TV propaganda of the referendum underlines this aspect.[

 Furthermore, the State has the explicit duty to “preserve and honour the memory of the Defenders of the Fatherland, as well as honour the pan-Russian cultural identity and show faith in God” as a value sacredly received by ancestors.

Sobianin, the mayor of Moscow, the city which is still the epicentre of the COVID-19 infection, wanted to hold the referendum in September, but Putin wants it now.

 Why? Because Vladimir Putin is aware of the political and personal tensions within the apparata.

 In the Secret Services and in the Armed Forces – which, over the last few months, have been the origin of indirect and veiled attacks on him. A series of events has also revealed how the Military Secret Service (GRU) is no longer entirely in Putin’s hands, as was previously the case.

 Certainly, now that the Covid-19 is in a phase of controlled expansion, Putin has anyway regained popularity.

 Still today, 63% of the Russian population shows strong support for Vladimir Vladimirovic Putin. In the referendum case, however, the voter turnout is estimated at 65%, which is always too little to ensure a real and definitive success to the President. Nevertheless, by paraphrasing Blaise Pascal, it should be recalled that democratic elections have ways “of which reason and the heart know nothing”.

 About 47% of Russians, however, states to be in favour of the reforms proposed by Putin to the Constitution.

 Too few? We shall see what the future has in store. Only 53% of young people is expected to vote, while 77% of elderly people is expected to go to the polls.

 Nevertheless, 41% of young people will always vote against Putin’s amendments to the Russian Constitution, with 45% of them living in Moscow.

 It is currently foreseen that 35% of voters will not go to the polls.

 Is Putin in danger? We do not believe so, considering that – if this happens because of his poor electoral performance – the President will find a way to recover. However, we do not think this will be the case. 

 Hence centralization of true power in Putin’s hands, up to two terms and even beyond but, on the other hand, distribution regulated by the central power to the regional governments.

 A new configuration of power in Russia, until Putin finds his true heir apparent.

 If he ever finds him, of course.

 The State is “a work of art”, as an old and valuable book by Jakob Burkhardt, “The civilization of the Renaissance in Italy”, reads.

 Therefore, every State does not reproduce as a photocopy, but only through the Author, the Artist.

 If voted and adopted, the amendments to the Russian Constitution will enable Putin to be regularly re-elected for over two consecutive terms, but, with the current changes, we can think of additional 12 years and more in power, but only for Vladimir Vladimirovic Putin.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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Eight Principles of the “Greater Eurasian Partnership”

Dr. Andrey KORTUNOV

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Image source: kremlin.ru

It is common knowledge that Eurasia is the largest continent on Earth, spanning over one-third of the planet’s total area. It is also the most populous, with over two-thirds of the global population calling the continent home. Eurasia has tremendous natural resources, from oil and gas to freshwater and fertile lands. The peoples of Eurasia can be rightfully proud of the fact that it was here that the oldest human civilizations first appeared, that they have managed to settle in both scorching deserts and freezing tundra, built huge cities and wonderful architectural monuments, laid extensive networks of railways and motorways, and made an invaluable contribution to human culture in all its aspects.

It would only be natural for the sprawling spaces of Eurasia to become united in a single system, where different geographic components would organically complement each other. It would be natural for customs tariffs and visa restrictions dividing our countries to become a thing of the past, for mutual suspicions, long-standing grievances and endless disputes to give way to mutual understanding, a multilateral balance of interests, and an awareness of our common historical destiny. Such a union would primarily benefit the peoples of the Eurasian continent, who would be able to expand their horizons, shed their old fears and biases, and gain radically new opportunities for economic, social and spiritual prosperity. Eurasian unification would also benefit the rest of the world, which would be the beneficiary of a powerful development engine ready to pull other continents along with it and make a decisive contribution to resolving the global problems facing humanity.

Sadly, the Eurasian continent continues to be disjointed or, rather, split into a host of large and small fragments. This applies to Eurasian security, the Eurasian political space, the Eurasian economy, and science and culture. Right now, the concept of “Eurasian identity” does not even exist, and the numerous attempts to construct one have not brought anything particularly promising.

The current lack of unity in Eurasia can be put down to a number of factors – the continent’s trying history, the tragic mistakes of national leaders, the nefarious activities of external forces, and so on. However, whatever the reasons for the current circumstances might be, it is crystal clear that radically changing the situation will take both strong political will and a generous helping of perseverance, patience and flexibility, as well as a readiness to deal with unexpected failures, irritating reversals of fortune and temporary setbacks. What is more, Eurasia will never be unified if it is something the continent’s inhabitants do not seek. And right now, it is something that only the leaders of certain Eurasian states want. Success here also depends on selecting the right sequence of practical steps that would lead to a single Eurasian space.

The “Greater Eurasian Partnership Concept” first introduced by President of the Russian Federation Vladimir Putin in late 2015 proceeds from the premise that the first steps in this direction should be taken in the economic architecture of the Eurasian continent, rather than in the political or military spheres. The economy forms the base of modern society, even though politics frequently gain the upper hand over economics in terms of imposing priorities and precepts on states. Yet, ultimately, no one can ignore their economic interests. As a rule, these interests are more stable, more rational and less subject to the influence of subjective factors than political precepts. Comparing the two most memorable attempts to unite Eurasia in the past – one by force (the Mongol Empire) and one through trade (the Great Silk Road), we cannot but conclude that trade ties generally proved a more reliable unification tool than armed violence.

Consequently, Eurasian unification today should start with the economy. The Partnership envisions consistent progress towards a network of free trade areas and inter-regional trade and economic alliances, and connecting integration projects throughout the vast Eurasian space. It is crucial that the practice of politicizing economic ties be eliminated and unilateral economic sanctions or other forms of economic pressure as a foreign policy instrument be abandoned.

We are clearly talking about an extremely ambitious project here that will take decades to implement, at the very least. It would not be much of an exaggeration to say that the economic consolidation of Eurasia would be the most ambitious integration project of the 21st century. Nevertheless, we can already identify several basic principles that underlie this initiative and set it apart from other plans of Eurasian unification. Let us list of the most important of these principles.

First, the Partnership is not viewed as a potential competitor for regional integration structures (ASEAN, EAEU, RCEP) or trans-border economic projects (BRI) or organizations (the SCO, APEC, ASEM). On the contrary, all of those structures, projects and organizations are seen as nodes and individual parts of the future single Eurasian economic mechanism. The objective of the Partnership is to assemble these parts and nodes together without detriment to those elements that have already demonstrated their efficiency.

Second, the Partnership is not a union of the Eurasian East against the European West. Ultimately, Europe is a large peninsula in the north-west of the Eurasian continent, and it should not be opposed to Eurasia – rather, it should become an integral part of it. Therefore, the Partnership remains open for the European Union, which could join the activities of the Partnership in the forms and to the extent that it deems appropriate.

Third, when building the Partnership, the parties need to proceed from the understanding that significant differences will remain in the models of their social, political and even economic development. Eurasia has socialist states and liberal democracies, market and planned economies. The Partnership does not set itself the task of eliminating political plurality and imposing some common denominator or a single set of values. The activities of the Partnership should be based on universally recognized norms of international law and offer the best level of comfort for all participants. Equally, the Partnership should not have leaders and outsiders, “pilots” and “wingmen,” a “central nucleus” and a “periphery,” as is the case with many integration projects.

Fourth, unlike the rigid integration structures like the European Union, the Partnership envisages highly flexible forms of involving individual states or their regional groups in its activities. As they are ready, these countries may join individual dimensions of the Partnership (trade, finance, infrastructure, visa, etc.) with due account of their current needs and capabilities.

Fifth, even though the Partnership is focused on the economic unification of the Eurasian continent, the expansion of economic interaction will inevitably influence other areas of cooperation, such as science and education, culture and humanitarian contacts. Eurasian integration will fail if it is reduced to increasing trade and investment. Social interaction between the peoples of Eurasia and the economic cooperation between Eurasian states should supplement and stimulate each other.

Sixth, it is impossible to develop economic integration projects in Eurasia without simultaneously creating a parallel process of bolstering continental security and resolving problems inherited from the 20th century and earlier. These problems include territorial disputes, separatism, the “divided peoples” phenomenon, the arms race, the danger of WMD proliferation, international terrorism and religious extremism. Consequently, the building of the Partnership should go hand in hand with developing mechanisms for military and political cooperation on the continent, such as the Conference on Interaction and Confidence-Building Measures in Asia (CICA).

Seventh, implementing the Partnership project should never mean “Eurasian isolationism,” i.e. closing Eurasian states off from partners in other regions, be it Africa, or North or South America. On the contrary, migration within the Eurasian space should serve as a powerful incentive for further developing economic ties in the basins of the Pacific, Atlantic and Indian oceans, and for achieving progress in resolving such universal human problems as climate change, combating pandemics, ensuring food and energy security, and managing migration.

Eighth, the building of the “Greater Eurasian Partnership” should proceed from the ground up, and not top-down, that is, it should be based on specific, even if very modest agreements between regional integration unions and individual states. Concluding the work on connecting the EAEU and the BRI should be the crucial first stage in building the Partnership. Creating independent Eurasian payment systems and rating agencies, decreasing dependence on the U.S. Dollar, establishing a Eurasian economic information centre like the OECD, etc., are other promising areas of activity.

Even though the idea of the “Greater Eurasian Partnership” was first put forward about five years ago, we are still in the very beginning of a lengthy historical project. At the moment, we can only talk about some very preliminary pencil sketches of the very complex Eurasian structure of the future. These sketches contain more questions about the future of our continent than they do answers. This is why broad international expert interaction to work out individual elements of the future roadmap for this colossal continental project is particularly important today. Bilateral cooperation between Russian and Chinese experts in international relations, economics, sociology and security could play a very important role in this process.

From our partner RIAC

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Development of human capital is the key goal of BRICS: The outcomes of BRICS Civil Forum 2020

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On September 23-25, the international multimedia press center of Russia hosted an online conference in Moscow, focusing on the results of the BRICS Civil Forum 2020.

Speakers listed the cases and measures pertaining to their implementation as part of previous groups, and announced the topics of their upcoming meetings.

Victoria Panova, co-chair of the BRICS Civil Forum and Managing Director of the National Committee on BRICS Research, said that a total of eight working groups were present at the forum, including dedicated groups on ecology, digital economy, culture, science and education. Panova pointed to the development of human capital as the primary goal of the forum.

“We all remember how, during a meeting by world leaders in Brazil, Vladimir Putin laid out measures aimed at boosting the living standards and quality of life of the peoples of the five BRICS countries as the main goal of this organization,” she emphasized.

Each year, the BRICS organization is becoming more independent and cohesive across the board, including through the use of digital technologies.

Victoria Panova also enumerated the main recommendations and measures based on the results of the work done by some groups. For example, recommendations made by the Healthcare group in 2015 on measures to handle a global pandemic have been supplemented. As part of the Education and Science group, the BRICS Network University and the BRICS University League have been created and now start working together. The group on ecology, which faces a host of paramount and urgent tasks, deserved a special mention.

Oleg Zhiganov, co-chairman of the BRICS Civil Forum’s Information Strategies and Society working group, said that they would concentrate on the issue of post-truth in the modern-day media of the BRICS countries.

“During this event, we agreed with our colleagues that we will speak the truth and nothing but the truth,” Zhiganov said, having in mind critical approach and fact-checking in a rapidly developing information society.

“The main thing that we are going to discuss is providing support for educational projects in universities and schools in order to instill a sense of critical thinking in young people and the ability to assess the objectivity of certain facts,” Zhiganov noted.

Natalia Tsaizer, co-chair of the BRICS Civil Forum’s Women and Girls working group, shared the results of her group’s meetings, highlighting the current issue of gender equality in the BRICS countries. She noted that her working group is out to eliminate gender imbalance and equalize men and women when it comes to career growth and their role in decision-making structures, including in the military.

“There are a huge number of areas in the economy, politics, and the social sphere, where women are underestimated in terms of their involvement in the processes, not only as observers, performers and ‘beautifiers’ of the working process, but as actors ready to make decisions, set goals and implement them,” Tsaizer said.

The issue of gender equality is extremely relevant not only in the BRICS countries, but elsewhere in the world. However, while it is imperative to provide equal opportunities for men and women to be involved in various organizations, Natalia Tsaizer still warned against sliding into what she described as “militant feminism.” The participants in the working group’s meeting proposed involving women in the decision-making process in various areas, and setting up anti-crisis committees within BRICS where women would make up at least 50 percent of their membership. 

“On the one hand, this is quotas, but on the other, this is something we just can’t do without because we need to regulate our presence that we could rely on,” Tsaizer argued. She also noted that right now the working group consists of women only, since men are not very actively involved in tackling such issues, even though achieving gender balance is high on the agenda of the Women and Girls group.

Stepan Kanakin, the coordinator of the BRICS Civil Forum, answered questions regarding the technical aspects of organizing the forum in conditions of a pandemic.

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Did Russia-China Relations Successfully Pass the “COVID,” “Hong Kong,” “India” and “Belarus” Tests?

Danil Bochkov

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image credit: kremlin.ru

Russia-China relations have been steadily improving since at least 2013, when the leaders of both countries presented a joint statement calling for deepening bilateral relations of “comprehensive strategic partnership of coordination.” This formula has been modified with an addition of the “new era,” signifying both countries recognising new global challenges and the changing geopolitical environment. COVID-19 has largely contributed to the intensification of certain trends, including antagonism with the U.S. and the pursuit of more robust bilateral ties.

If before both countries would challenge and combat U.S. hostility (economic sanctions, political pressure, adversary rhetoric, etc.) mainly on their own, they are now more inclined to align and coordinate actions to elaborate more coherent voices towards the West. In late July, Russia’s Ministry of Foreign Affairs stressed that the U.S. could not drive a wedge between Russia and China by expecting Moscow to join its anti-China alliance. Rather, Russia views further improvement of relations with China as a major factor that will contribute to stability in global politics.

In May, the Chinese Ministry of Foreign Affairs noted that, amid the virus outbreak, bilateral support between Russia and China became a safe fortress for “political viruses.” During a telephone conversation in July, Putin and Xi stressed that the agenda for the strategic partnership in Russia-China relations was materialised during the pandemic in the form of mutual help provided at a critical moment.

China and Russia have recently demonstrated the historical legacy of their close relations through the publication of a co-authored report by Russian and Chinese ambassadors to the U.S. The report unambiguously states that all countries must combine their efforts to tackle pressing issues such as climate change, terrorism, world pandemics, economic downturns, etc. These concerns are all focal points in which Russia and China have achieved mutual understanding.

Notably, even during the very vague political gridlock of the Belarusian leadership in the aftermath of the August presidential elections, China and Russia immediately demonstrated their support to the re-elected president Lukashenko. While President Putin congratulated the Belarusian president with a telegram, President Xi-Jinping opted for a personal phone call, during which he reassured Mr Lukashenko of China’s strong commitment to “push forward Chinese-Belarusian comprehensive strategic partnership.” Such profound political signals did not go unnoticed in Minsk, which has expressed gratitude to Russia and China for their support during these challenging times. China’s position on Belarus is important for Russia, as Moscow regards Belarus as its closest and most faithful ally. Belarus is now moving towards a higher level of political and economic integration with Russia, becoming a “Union State.”

As a signal of recognition and respect for Chinese core interests, Russia extended its support to China over Hong Kong, which came under the global spotlight following the introduction of the National Security Law in June. In a very crucial moment for China, when it received widespread criticism from all other major powers, Russia bluntly stressed that “the situation in Hong Kong as a purely internal matter of China,” thus fending off all speculation on the city’s juridical status.

China and Russia have recently vowed to strengthen their coordination on international platforms, which was seen in early July in the UN during their opposition to the extension of cross-border aid in Syria. The opposition to the U.S. initiative in June within the UN Security Council to reimpose an arms embargo on Iran following the break-up of the 2015 nuclear deal was another display of harmonised action. Multiple international issues were touched upon during the meeting between the Russian and Chinese foreign ministers on September 11. Both countries reaffirmed the “closeness of their views on effective solutions to them,” and stressed that “the destructive character of Washington’s actions undermines global strategic stability.” Overall, the meeting once again confirmed the shared views of Russia and China in both the multilateral and bilateral dimensions.

The Russia-India-China format has made significant progress after a period of relatively little activity. The latest gathering of the RIC group took place in June. At that time, Moscow highlighted that India-China border conflicts were to be solved based on bilateral agreements only. Recently, Moscow has initiated negotiations between the defence ministers of India and China in order to find conflict mitigation solutions. As a result, Chinese and Indian officials met for the first time since the border dispute in May.

By organising peace talks involving China and India, Russia is playing a critical role in regional affairs. The upcoming meeting of the respective ministers of foreign affairs reinforces this statement. Meanwhile, the U.S. has repeatedly pitched its own candidacy as an intermediary, with the most recent attempt in early September. Russian media positioned the Moscow-hosted China-India meeting on September 10 as a rare foreign policy success. During their “frank and constructive” discussion in Moscow, India and China reached an important agreement to deescalate border tensions which are not in “the interest of either side.”

Economically, Sino-Russian cooperation experienced a COVID-19 blow, with trade volume falling by 5,6 per cent in June, amounting to USD 50 billion. Although it may have a tangible impact on the annual statistics, moving the 2019-set milestone for 2024 away from the predicted USD 200 billion in trade follows the global trend of economic contraction, with consumer demand in free fall. For example, the overall volume of Chinese foreign trade from January to June dropped by 6,6 per cent. However, this trade contraction reflects more about global trade dynamics at the moment than changes in Russia-China relations.

As a recent sign of combined efforts to contain U.S. global ambitions, Russia and China were able to decrease U.S. dollar transaction for trade to its historical minimum – from 51 per cent in 2019 to 46 per cent in 2020. The same trend for intensified bilateral cooperation can also be seen in the energy sphere. Following the successful launch of “Power of Siberia” last December, the Russian state energy giant “Gazprom” is embracing a new audacious initiative, the “Power of Siberia-2” gas pipeline. The project will connect Russia, China and Mongolia. On behalf of the President of Russia, Gazprom started the design and survey work on the project in May.

Energy cooperation remains a crucial element of bilateral relations. Fresh statistics show that in July, Russia once again secured its position as the largest importer of oil to China, with a 30 per cent spike. This amounted to 7.38 million tons (compared to 2019). In April, Russia took over Saudi Arabia as the biggest crude oil supplier, delivering 7.2 million tons. This is 18 per cent more than in 2019.

Russia-China relations represent a “strategic partnership,” which means that the two countries view themselves as partners on strategic issues. Indeed, on a majority of topics, be it global governance, world economic structure, geopolitics or security, Russia and China are on the same page. Many of them are of strategic significance pertaining to both sides. Both countries enjoy fruitful cooperation on multilateral platforms such as BRICS, SCO and the UN.

Nevertheless, despite their flawless facade, Russia-China relations have a weak spot – their difference in strategic and national interests. This is normal for global powers. For example, Beijing can never compromise its core national interests such as the South China Sea (SCS), Xinjiang, Taiwan, and Tibet, even to please its tried and tested partner, Moscow. This explains why China has repeatedly pressured Vietnam to halt all oil extraction activities in the SCS over the last two years. This has resulted in Vietnam suspending business cooperation in the SCS with the Russian state oil giant, Rosneft. On the other hand, Russia will never put its core interests at risk (especially concerning territorial integrity), irrespective of Beijing’s rhetoric concerning Russian Far East territories.

As long as Russia and China base their partnership on coinciding strategic interests and avoid any ubiquitous and provocative moves – their relations are likely to remain in the current burgeoning state or under the best circumstances can even be elevated to a higher level. Overall, during the first half of the year, relations between China and Russia were challenged several times. Despite some small cracks, like decreasing trade and frictions regarding energy projects in the South China Sea, their flawless mutual propaganda remains untarnished. As long as they can maintain a close and mutually beneficial bilateral tie, they should be able to endure any future challenges with ease.

From our partner RIAC

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