Turning point of great power relations

Putin – Xi video summit, December 15, 2021, during which the two leaders reviewed bilateral relations and cooperation achievements over the year, drew up top-level design for the development of bilateral ties for next year and exchanged views on major international and regional issues of common concern.

This topic was touched somewhat in my article “Ukraine &Taiwan simultaneous escalation, a coincidence?” of November 26, 2021, available here https://greatpowerrelations.com/ukraine-taiwan-simultaneous-escalation-a-coincidence/

Initial setup

Analysts and officials believe that the meeting is significant and timely as it will not only solidify the mutual political trust of the two countries, chart the course for already close communication and cooperation in politics, economy, military and people-to-people exchanges for next year amid growing tension between the US and two close-allies. 

After Russia held leadership meetings with the US and India and is likely to have another with the US, the meeting with China will break rumors aimed at sowing discord between the two countries.

Kremlin press secretary and spokesperson Dmitry Peskov described that “The situation in international affairs, especially on the European continent, is very, very tense right now and requires discussion between allies.”

Dmitry Peskov told journalists it will be an opportunity for “extremely important talks.” Russia expects the discussion to be “a fairly long contact, with a very broad agenda.” Chinese Foreign Ministry Spokesman Wang Wenbin said that Beijing “expects and believes that this video conference will further enhance our high-level mutual trust, vigorously promote China-Russia “back-to-back”strategic coordination and the robust development of all-round practical cooperation.” Defense, economic issues and various cooperation topics will be on the agenda of the video talks.

More recently, both Russia and China have been subject of critical discussion by the US and other G-7 leaders. For all the attempts at isolating both Russia and China – something which began under the Trump administration but has been ratcheted up during Biden – the end result has been to push the two powers, which share a long joint border, into closer cooperation and dialogue, which has lately included regular joint military exercises and extensive military cooperation at all levels and branches. 

Estimated key points of the talks (picked up from various media sources)

The Russian and Chinese Presidents, Vladimir Putin and Xi Jinping, discussed all pressing issues of regional and global agenda during their one-and-a-half-hour call, Russian Presidential Aide for International Affairs Yury Ushakov told journalists on Wednesday following the leaders’ virtual summit.

The talks were described as “highly positive”, it was a conversation of “two friends”, leaders of two great friendly states. The level of ties between Russia and China is much more than simply that of allies.  Ushakov pointed out that both leaders stated that relations have reached an unprecedented high level and are developing very successfully.

Under the strategic guidance of the two heads of state, the China-Russia comprehensive strategic partnership of coordination for a new era has become even closer, stronger and more mature. Among the topics discussed by Xi and Putin were international relations, and security issues as well as trade and numerous economic issues.

Putin hails Russia-China ties as “21st Century Example” in talks with ‘Friend’ Xi

Xi and Putin have met 36 times since the Chinese leader assumed his role in 2013, including another videoconference last June, this time was 37th. Putin said “Our countries have formed a new model of cooperation”, emphasizing “non-interference in internal affairs and respect for each other’s interests, the determination to turn our common border into a belt of eternal peace and good-neighborliness” as foundations of Russian-Chinese ties. Putin, who has accepted Xi’s invitation to attend the Beijing Olympics, expressed hopes to meet the Chinese leader in person in February 2022.

Putin, Xi slam AUKUS for undermining nuclear balance, fueling tensions

The trilateral pact between the United States, the United Kingdom and Australia, dubbed AUKUS, was introduced in September. Putin and Xi Jinping criticized the AUKUS pact, agreeing that it “undermines the foundations of the nuclear nonproliferation regime” and escalates tensions in the region. They expressed a negative assessment about the creation of new alliances such as the Indo-Pacific Quad and the American-Anglo-Australian union AUKUS.

China and Taiwan

Putin said that Russia will be the staunchest supporter of the Chinese government’s legitimate position on Taiwan-related issues, adding that his country will firmly oppose moves by any force to undermine China’s interests using Taiwan-related issues, and moves to form any type of “small groups” in the Asia-Pacific region.

Russia informed China of Moscow-NATO contacts on security guarantees.

The Chinese president was informed by Putin about Russia’s idea on security guarantees. President Xi specifically stated that he supports Russia’s demands for guarantees. He is well aware of this and understands the main thing, what concerns Russia on its Western borders. Aside from this, Putin told Xi about his conversation with US President Joe Biden that took place last week in a bid to relieve tensions around the situation in Ukraine as Kiev accuses Russia of “amassing” troops near the border. Moscow will inform Beijing about the progress, or lack thereof, in negotiations with the US/NATO on security guarantees for Russia.

UN Security Council

The conversation also included a discussion of Moscow’s idea on preparing a summit of the five permanent members of the UN Security Council. The two heads of state consider it necessary to hold it in 2022.

Biden’s Summit for Democracy

They discussed the Biden-hosted “Summit for Democracy,” concluding it was counterproductive and imposed new dividing lines.

Economy & COVID Response

Presidents discussed widely economic issues, particularly the aspiration to increase the share of national currencies in bilateral trade and export of Russian grain to China. Putin and Xi also agreed to strengthen bilateral cooperation on the response to COVID-19. The presidents emphasized the importance of Russian vaccine production in China.  Agreements are in place to produce more than 150 million doses of Sputnik a year at Chinese factories. The Chinese president said the two countries should also strengthen their joint pandemic response, in areas such as COVID-19 testing and vaccine and drug R&D.

Putin and Xi discussed the Power of Siberia-2 pipeline that would bring more natural gas from western Siberia to China, transiting via Mongolia. Incidentally, the Mongolian president Khurelsukh comes to Moscow for talks with Putin on Thursday. Basically, the question is hundreds of billions of dollars deliveries over time and an alternative Chinese market for Siberian gas instead of Europe’s Nord Stream-2. Other energy issues under talks were nuclear power, coal and renewable energy.

China-Russia trade is expected to hit a new high of an estimated $140 billion in 2021 (MOFCOM latest estimate), while experts noting better cross-border links will facilitate close bilateral ties.

Joint Payment Platform System

Russia and China promised to develop new shared financial structures to enable the parties to deepen economic ties in a way that foreign states will be unable to influence. The payment platform underpins the vast majority of international transactions. The development work of substituting SWIFT-system by some joint Sino-Russian system has been going in both countries since 2015 (Russian SPFS and Chinese CIPS).

The move appears to be a response to a series of recent warnings that Western nations could push to disconnect Russia from the Brussels-based SWIFT financial system as a form of sanctions. When this new joint system will be available, no doubt, a large number of other countries will join in as well. The most important banks in both countries will adopt the system – as well as banks across Eurasia doing business with them and then a large number of the Global South banks. SWIFT, in the long run, will be used only in exceptional cases if China and Russia have their way.  

Therefore, particular attention was paid to the need to further intensify efforts to form an independent financial infrastructure to service trade operations between Russia and China, which means creating an infrastructure that cannot be influenced by third countries.

During the talks, Putin and Xi called for increasing the share of national currencies in mutual settlements and expanding cooperation to provide Russian and Chinese investors with access to their stock markets. Both Russia and China are said to be increasingly looking to move away from using the US dollar as the main currency of international trade, instead using their own denominations to underpin the booming volume of Moscow-Beijing trade. This trajectory is now accelerating.

Russia, China and India (RIC-format) a trilateral summit

Russia, China and India may hold a trilateral summit in the near future. The last meeting of leaders of the three countries in the RIC format took place in June 2019 on the sidelines of the G20 summit in Osaka. Putin informed Xi Jinping about his visit to New Delhi on December 6 in this context. Russia may try to play intermediary between Beijing and Delhi.

Other issues

The interconnection of Belt and Road (BRI) with the Eurasia Economic Union (EAEU), the expanded reach of the Shanghai Cooperation Organization (SCO) and the coming Chinese presidency of BRICS in 2022. 

Russia-China alliance at the tipping point

This virtual meeting between President Xi Jinping and President Vladimir Putin on Wednesday seems to transform radically the geopolitical environment regarding both the NATO’s eastward expansion and the Western military deployments on Russia’s borders as well as Taiwan case. 

The announcement of the meeting in Beijing came within a day of a G7 meeting of foreign ministers in Liverpool on Sunday, which echoed Washington’s rhetoric over an alleged Russian military build-up on Ukrainian border and threatened Moscow with “massive consequences and severe sanctions.” The G7 meet itself was intended as a new show of western unity against Russia and China to get the west on the front foot.

Chinese Foreign Ministry Spokesman Wang said that the Xi-Putin talks “will further enhance our high-level mutual trust, vigorously promote China-Russia “back-to-back” strategic coordination and the robust development of all-round practical cooperation.” The Kremlin Spokesman Dmitry Peskov disclosed that “Putin and Xi will address during the talks the NATO’s belligerent rhetoric and the tense situation in Europe and this definitely requires discussion between the allies, between Moscow and Beijing.”

No doubt, this signifies an extraordinary dimension to the Russian-Chinese alliance, which role China is going to play in the evolving scenario as the perfect storm lurking in both Eastern Europe and the Asia-Pacific. Most importantly, the talks of presidents may strengthen the plan for Russia-China military cooperation for 2021-2025, which the two countries signed in November.

While signing the document, Russian Defense Minister Sergei Shoigu said “China and Russia have been strategic partners for many years. Today, in conditions of increasing geopolitical turbulence and growing conflict potential in various parts of the world, the development of our interaction is especially relevant.” 

In a brief statement, China’s defense ministry Wei Fenghe said at that point that the two sides would “continue to deepen strategic cooperation between the two militaries, continue to strengthen cooperation in strategic exercises, joint patrols and other areas and continue to make new contributions to safeguarding the core interests of China and Russia.

The South China Morning Post commented that China and Russia “are edging closer to a de facto military alliance to counter growing pressure from the United States.” The signing of the road map on military cooperation signaled Russia and China’s willingness to resist US pressure by relying on combined military efforts. 

One single detail, to be taken into account, is the notion of Russia-China close cooperation even in the nuclear weapons, since 2019 October (Putin’s speech in the Valdai Club meeting).

As stated at the outset, Putin is going to visit Beijing at Xi Jinping’s personal invitation as the chief guest at the upcoming Winter Olympics (4-20 February.) The two leaders’ face-to-face meeting in Beijing in early February will be an event of great significance for global balance of power and stability and the further consolidation of the strategic partnership between the two countries. It seems quite obvious that “the game-changer pact” will be signed then, a joint substitute system of SWIFT.

As Cui Heng, the Chinese scholar at the Center for Russian Studies of East China Normal University, said “only by joining hands can China and Russia counter the attack from the US-led clique and avoid falling into passivity.” The Treaty of Good-Neighbourliness and Friendly Cooperation signed by China and Russia in 2001 enshrines that “Russia recognizes the government of the People’s Republic of China as the sole legal government representing whole China. Taiwan is a constituent part of China.” The pact is a foundational document on which the Sino-Russian alliance is anchored. Now, it was agreed to renew and strengthen that treaty.

War of two fronts

Washington is making the historic mistake of pushing China and Russia too far at the same time. It is not possible that the US can simultaneously confront both China and Russia militarily and if the latter two were to significantly pool their military power and foreign policy objectives, that would alter the Eurasian balance of power and disadvantage the US. 

The US still has the most capable military in the world and there is no question that the US is more powerful than China or Russia alone but a newfound unity among the latter two can be strategically draining for Washington. 

Lyle Goldstein, an ex-research professor at the Naval War College, told Newsweek on Monday, “I think Moscow and Beijing calculate that they can really keep us (Washington) in a kind of maximum confusion, because the theatres are so distant from each other and the forces involved are quite different. I think they see a gain here in kind of pulling us in two directions at once.”

Goldstein adds that “I don’t think the United States is prepared to go to war in Ukraine. I don’t think the United States is prepared to go to war over Taiwan. I stand by both those points. So, to do both, no, absolutely not.” “China and Russia joining hands in military matters is a nightmare for Washington. Moscow has much more room to maneuver in present crisis, since Beijing has its back”, he adds.

Summary of key conclusions and ramifications

According to J. Caddis (PhD of Yale University), it is absolutely important to recall some basic principles of strategy, which are so basic that when stated they sound like platitudes:

  • treat former enemies magnanimously
  • avoid two-front wars
  • do not take on unnecessary new enemies
  • keep the big picture in view
  • balance ends and means
  • avoid emotion and isolation in making decisions
  • be willing to acknowledge errors

However, the Clinton administration’s single most important foreign-policy initiative – NATO enlargement – somehow manages to violate every one of these principles.

To contain China and Russia simultaneously, by the US, is an ambivalent, even arrogant way of proceeding. Although the US has an advantage in terms of military strength, it cannot crush either China or Russia, not to mention both simultaneously. Having a strategic collision with any of the two countries will bring unbearable costs to the US. It is a nightmare for Washington, when China and Russia join hands and unite their countermeasures as coherent and well-coordinated military operations. 

This development – intensifying tandem of China-Russia military capabilities – will have fundamental and thorough-going impacts in the balance of powers and great power relations at least in the next 2-3 decades, maybe during this whole century. The irreversible point has been passed right now.