China and Russia: Dialog in the Face of External Challenges

When talking about external challenges for China–Russia relations, we should first clarify what they mean given the current political situation. These challenges can be considered from different perspectives.

At the macro-level, the main obstacles to China–Russia relations appear in a wide range of areas. Politically, it is visible in the polarization of the international community, which is increasingly moving towards opposing camps; economically, by global fragmentation, sanctions, and regionalization of the global economy; security-wise, by the highly dangerous slide from a “cold” to a “hot” war; in international relations, by re-ideologization. As for global governance, matters have become even more complicated; now, it is even difficult to gather everyone around a table for consulting matters in international affairs, let alone make a breakthrough.

Looking at these challenges from China’s perspective, we see that they too are divided in various areas. The conflict between Russia and Ukraine has become the most pressing international conflict in the history of China–Russia relations since the two states proclaimed their strategic partnership in 1996. This conflict constitutes the most radical change in international politics and brought about the most difficult political choice China has faced. To clarify, what I mean by this is that China has specific political options for dealing with Moscow in difficult situations, rather than new strategic goals regarding overall China-Russia relations.

Amid the Russia-Ukraine conflict, China is being subjected to unprecedented political pressure from the US regarding its relations with Russia. Such pressure is different from its previous policy of “driving a wedge” between China and Russia, which the US conducted prior to the Russia–Ukraine conflict. If the “driving a wedge” policy involved separating China from Russia by tempting the latter, now the US uses direct pressure and threats. Washington attempts to force Beijing to join the anti-Russian side and join the US and the EU’s sanctions against Russia.

Relations with the United States are of great political, economic and security importance to China. At the same time, Washington views Beijing as its main competitor. There are already many problems in their bilateral relations; China wants to develop its China–Russia relations, but also wants to avoid deteriorating its relations with the US. Balancing these two goals is incredibly difficult.

A similar situation appears in China’s relations with Europe. Following the outbreak of the Russia–Ukraine conflict, European political circles have been demanding that China condemn Russia’s actions. This generated many negative opinions about China, and its image has suffered greatly in the eyes of European public. Clearly, the Russia–Ukraine conflict negatively affects China–Europe relations since China does not Russia, contrary to what the European Union demands, putting China in a more difficult situation.

Beijing greatly values its relations with Europe not only because of its significant economic interests in the region, but also because it wants to see Europe as an autonomous pole in a multipolar international structure.

China also needs to consider its relations with Ukraine, which holds an important place in building China’s Belt and Road Initiative and serves as part of the Eurasian transportation corridor. China has major projects and investments in Ukraine. When Moscow and Kyiv are locked in a state of large-scale military conflict, it is difficult for Beijing to balance between the two countries.

On the one hand, the new US and European large-scale economic sanctions imposed on Russia after the outbreak of the Russia–Ukraine conflict have opened more opportunities for developing China–Russia economic cooperation. On the other hand, they have created severe restrictions and risks for Beijing. Given American and European anti-Russian sanctions, Beijing-Moscow cooperation may result in secondary sanctions against Chinese financial institutions and companies, which would limit their subsequent global operations, including their activities in America and Europe. It will also raise questions regarding the advancement of their economic and commercial interests.

The European Union and the United States are China’s major trade partners. Despite the continuing deterioration of political relations, trade between them continues to grow. In 2021, China’s trade with the EU increased 19% to $820 billion, and trade with the US increased 20% to more than $750 billion. The EU and the US account for more than 25% of China’s foreign trade. Additionally, China, the United States, and the EU are investing enormously in one another. Clearly, relations with the US and the EU hold an important place in China’s economic policy. Therefore, China’s financial institutions and large companies cannot ignore this.

It is also impossible to ignore the split in China’s public opinion over the Russia–Ukraine conflict. Having different positions on the matter is normal and inevitable, but this case is special in that differences are also visible within China’s elite. Never before has China taken matters regarding the development of China–Russia relations so seriously and conspicuously. Generally, pro-Russian sentiments dominate viewpoints. However, negative perceptions of the Russia–Ukraine conflict among part of China’s establishment poses a challenge for China.

At the same time, China intends to develop China-Russia relations, even in the face of the current foreign and domestic challenges. Foundations have been laid for the further development of comprehensive cooperation with Russia in the political, economic, energy, scientific and technical, and humanitarian spheres. China is trying to improve its relations with the US, but do so without sacrificing its relations with Russia, taking an approach that surely would not “untie the knot” it has with Russia. No bilateral relations should be determined by demands to sacrifice other bilateral relations, especially since China–Russia relations are not aimed against other countries, which would be inefficient for them both.

Preserving the UN as the foundation for international relations and building a more fair and democratic international order based on international law remains a priority in international cooperation between Russia and China. In these matters, China’s and Russia’s stances coincide.

Though I understand the opinions of many Russian academics concerning the destruction of the old world order, I also understand that they do not mean the international order described above; they refer to unipolar hegemony. Minister Sergey Lavrov also indicated this in his speech at the Primakov grammar school in May of this year when he said that Russia is not trying to invent new international relations and new rules. Russia wants to return to democratic international relations envisaged in the UN Charter.

However, both Moscow’s and Beijing’s approaches have their own unique features. It appears to me that Russia leans more towards the revolutionary approach, while China, influenced by its traditional cultural practice of moderation, leans more towards reforms; Russia prefers quick and radical results, while China prefers gradual evolution.

Facing external economic challenges, China and Russia need to consider more forms and areas of cooperation in order to effectively respond and adapt to new conditions. In a way, this is a solution for the difficulties caused by the Western sanctions policy, and it also means protecting and developing both countries’ economic interests, rather than creating economic-relation problems for the West. It is also important to note that Russian-Chinese cooperation in the economy and other areas is quite normal. However, following the Russia–Ukraine conflict, people have started to see Russian-Chinese economic cooperation only through the lens of the conflict, interpreting it only as support or lack of support for Russia. Such an understanding is too subjective. China–Russia economic cooperation is not directly tied to the Russia–Ukraine conflict; this conflict did not create this cooperation and it will not stop because of it.

At the same time, China’s economic conduct should not be automatically interpreted as political. For instance, larger Chinese investment in Russia does not mean more support for the country, just as a lack of rapid growth in investment does not mean a lack of support. In fact, it largely depends on economic factors and economic logic and is not tied to China’s political position. Economic cooperation is based on mutual profits; China cannot refuse to participate in projects that could benefit both China and Russia economically.

Both countries should continue their current bilateral economic cooperation and focus on developing major medium-term and long-term projects to structurally modify China–Russia economic cooperation, thereby improving its level and quality. China and Russia should step up their efforts in regional economic cooperation so that connecting the Belt and Road initiative with the Eurasian Economic Union, and the Greater Eurasian Partnership would bring more tangible results. China and Russia must also reach a breakthrough in advancing regional economic integration. In this respect, the SCO is the most fitting platform as this organization has the largest regional representation and is fully open for cooperation.

As the US purses its policy of “economic decoupling”, China and Russia should not take this as a counterattack, nor should they separate themselves from a developed economy, much less close themselves off from it. They should be more open, maximally expand spheres of cooperation, and assert themselves as the driving force behind global economic cooperation. Speaking at the first Eurasian Economic Forum in May of this year, President Vladimir Putin also said that Russia is not going to cut itself off from global economy; Russia will remain open.

As the world’s second-largest economy, China is widely and deeply integrated into the global economic chain, has great influence on the global economy, and is highly influenced by global markets.

Some academics have proposed a “dual circulation” concept, or an idea like it, in which the creation of two parallel global markets helps explain the current market situation. This, of course, is not what China means by “dual circulation”. China’s take on the concept implies but two markets: internal (domestic) and external (international). Global market chains will inevitably be restructured amid new conditions, especially in the energy sector. If we consider each regional integration mechanism as a separate circulation, we can say that currently, the world has quite a few circulations. This is a natural process which will only intensify over time. Key integration mechanisms should not be fragmented, closed off, locked in rigid competition with each other, or become instruments of geopolitical confrontation. China will continue to promote economic globalization and oppose being closed off or conducting exclusionary policies in the global economy.

Given the current situation, there are no opportunities to improve Russia–Europe relations at this time. The trend towards deteriorating relations between the two is evident. However, Russia and the European Union are geographical neighbors, and as the phrase goes, neighbors cannot simply “leave,”; they will always live side by side whether they want to or not. China, Russia, and the EU are located on the same Eurasian continent. Beijing and Moscow should do everything possible to transform relations with the EU in a positive way, maintain a common economic and security space in Greater Eurasia, and to the best extent, avoid divisions and confrontation on the Eurasian continent. Now, it is vital to avoid escalating and prolonging the Russia–Ukraine conflict. While the military conflict is ongoing, escalation is still possible; while military hostilities continue, talking about cooperation is impossible.

Why do Russia–China relations remain stable amid such a radically changing situation? I think the most important reason is that these relations are based on extensive and profound common interests and on strategic thinking, rather than on narrow interests and opportunism. The chosen model of bilateral relations between the two states could play an important role and it appears to be the best option. This model is a strategic partnership, not an alliance. It aids to preserve stability in China–Russia relations, particularly in complex foreign and domestic conditions, and gives the full space for China–Russia cooperation. At the same time, each side preserves its own diplomatic space, and no one loses their independence. China and Russia are great powers, so political equality and diplomatic independence are of primary importance to them.

Additionally, mutual trust, mutual respect for chosen policies, mutual understanding of interests and concerns are all defining features of China–Russia relations and continue to be significant. This is entirely unlike America’s Manichean way of thinking of “those who are not with me are against me.” In this regard, we can summarize that China–Russia relations remain stable in the face of external challenges.

From our partner RIAC

Zhao Huasheng
Zhao Huasheng
Professor, Institute of International Studies, Fudan University, Shanghai, Expert of the China Forum