When China Rules the World

The fact that Russia is rich in oil, gas and many other commodities – as well as being its major supplier of weapons – clearly makes it a very attractive partner for China. But Russia has proved a difficult collaborator, loath to meet its needs, certainly on the terms desired by China. In a long-running saga over the route of a new Russian east-west oil pipeline, with Russia reluctant to concede that it should go to China, as proposed by the Chinese, an agreement was finally reached in February 2009 that there would indeed be a branch to China, in return for Chinese loans to Russian firms. [1113] The Russians are wary of becoming trapped in a relationship with China where they are reduced to being the provider of raw materials for their economic powerhouse neighbour. [1114] Since the turn of the century, indeed, the Russians have become increasingly protective of their oil and natural gas interests, aware that, in its weakened state, these are hugely their country’s most valuable assets, especially in a global market where prices, until the credit crunch, were moving rapidly in their favour. Having rolled back American, European and Japanese stakes in its oil industry, Russia is hardly likely to grant Chinese oil companies a similar interest in the future. Moreover, having embraced resource nationalism under Vladimir Putin, Russia is now driving very hard bargains over its oil and gas with both Europe and its former territories. The Russian suspicion of Chinese intentions extends to the Central Asian nations that previously formed part of the Soviet Union. Russian sources, it has been reported, revealed in August 2005 that one reason for Moscow’s haste in seeking to enter the former American base at Karshi Khanabad in Uzbekistan is that China had made discreet expressions of interest in acquiring it themselves. [1115] China has found itself confronted with many obstacles in its desire to acquire oil interests in Central Asia, even in Kazakhstan, where it has its only major oil stake in the region; the considerable resistance and suspicion would seem to have been encouraged by Russia, which regards Central Asia as its rightful sphere of influence. [1116]

None of this is to suggest that the relationship between China and Russia is likely to deteriorate, though that is not inconceivable should Russian fears about the rise of China become acute, perhaps even persuading Russia, in extremis, to turn westwards and seek some kind of solace with the European Union or NATO. It does, however, indicate that serious tensions arising from the major imbalance of power between them are likely to constrain the potential for the relationship becoming anything more than an arrangement for maintaining their bilateral relations in good order, which, given their troubled history, would in itself be no mean achievement. [1117] For the time being, at least, a strong mutual concern about US power is likely to bind the two countries together, as it has already, in a limited but significant way, on issues like Iraq and Iran. At the same time trade between the two has been increasing very rapidly, with a five-fold rise between 2000 and 2007. Russia ’s intervention in Georgia and subsequent recognition of South Ossetia and Abkhazia as independent states in 2008 were not well received in Beijing although there was no official criticism, simply an expression of concern. It was a further reminder that relations between the two powers are far from simple. [1118]

INDIA AND SOUTH ASIA