Russia: From China’s Big Brother to Vassal

While the flurry over Vladimir Putin’s visit with Xi Jinping last May caused a gush among many media outlets, the public declarations of an enduring alliance is more of the same old bluster rather than a serious démarche. A longer view of Sino-Russo relations tells a far more serpentine story.

Future historians will be amused by the irony of how quickly, in world historical time, China and Russia changed places. In 1949, China was the Soviet Russian empire’s vassal, a victorious Communist state that tried to emulate all things Soviet. By 2024, a mere 75 years later, Russia had become China’s vassal, a stale dictatorship hoping to survive a pointless war it had initiated a year before.

Rising from the misery of World War II and its own civil war, China entered the succeeding era adrift. Its economy was in ruins, its military vulnerable. As leader of the Communist bloc, the USSR appeared as the natural strategic big brother. The mutual benefits were obvious. China was in desperate need of assistance. The USSR required access to Chinese rail links and ports in the Far East. Moscow felt it needed to defend its interests against potential armed attacks from Japan, while China was wheeling toward international isolation. Both countries feared the growing dominance of the United States.

Since that time, relations between Soviet Union/Russia and China have undergone a unique push and pull. The interplay has shift from patron/client state to a formal military alliance (1950-59), schism (1960s), open conflict (1969), détente (1970s), rapprochement (1980s) and, normalisation (after the collapse of the Soviet Union). Now, the war in Ukraine has set loose a new politesse between Russia and the People’s Republic of China (PRC)—a “no limits” partnership. Or so the Russians would like to believe. The Chinese disagree: their  EU ambassador Fu Cong characterised the partnership in 2023 as “nothing but rhetoric.”

To be sure, Russia’s need of a market for its natural resource wealth and China’s energy intensive growth have certainly impelled them to seek a mutually beneficial arrangement. Xi Jinping and Vladimir Putin have met 40 times since 2012. Both men share a similar family story as well as similar views about civilisational wars, the decline of the West, color revolutions, and the threat posed by the United States and NATO. However, despite these personal, philosophical, and trade complementarities, the PRC and Russia are moving on diverse tracks. Fu Cong’s dismissive attitude is on the mark.

To start, the economic synergy is exaggerated. Russia is fourteenth among China’s largest trading partners. Its trade with Russia is relatively inconsequential.  Each is more dependent on third countries than on the other.  Russia needs the EU. China relies on other Asian countries and the United States. Further, despite its economic heft, China cannot match Europe’s potential as a driver of industrial and commercial modernisation for Russia.

Secondly, due to its monopsonistic position, China forces Russia to sell oil, natural gas, and coal at heavily discounted prices. These discounts are so deep that Russian gas exports to China often do not cover the operational costs of their extraction and transportation. Additionally, the PRC makes payments to Russia in Chinese renminbi and uses these transactions to leverage its position over non-Russian suppliers.

Unsurprisingly, direct Chinese investment in Russia has almost exclusively focused on the energy and other extraction industries. Sectors with the greatest potential for productivity gains, such as high-tech manufacturing, utilities, construction, financial services et al, go undeveloped. In addition to trade priorities, another reason for this neglect is that the Chinese have found that doing business in Russia is as daunting for them as it is for western investors. The infrastructure in Russia’s Far East is so underdeveloped that the PRC has had to make substantial investments to get access to the resources it wants. By all reports, these investments have underperformed. Further, the lack of rule of law and the absence of a business-friendly ecosystem leave even the Chinese frustrated and grumbling. Russia wants investments but not investors—a common refrain often directed at the PRC.

The Russian economy has long been beset by structural problems: low diversification, a faltering industrial base, uncontrolled corruption, the absence of an entrepreneurial class and now, inflation. The mounting costs of the war in Ukraine exacerbates existing matters and will probably prolong the economic dysfunctionality far into the future. In short, Putin’s hunger to reconstitute the Soviet empire is “making Russia a smaller, worse-educated and poorer country.”

China’s own economy has its challenges, too. Rising corporate debt, labour shortages and, poor investment efficiency are driving it into stagnation. In 2012, the PRC launched its Belt and Road Initiative (BRI) in order to link its economy with under-developed regions from Central Asia, Africa, and Europe. The dream was to provide its export-oriented economy with markets. There have been several major defaults, and recipients of Chinese loans are subject to falling into debt traps. In light of the current pressures on the economy, the risk is even more intense. By most analyses, the PRC will need cooperation from the West if the scheme has any hope of success.

In Central Asia, a confrontation with Russia may be percolating. China’s Belt and Road could compete with Russia’s Eurasian Economic Union (EEU). From the beginning, the Eurasian Union was a token attempt at economic regionalism and a veiled instrument of Russian geopolitics. Many contend it survives as merely another façade to reconstitute the Soviet Union. While it offers little incentive in the way of any real political or market institutions, it represents Russia’s bid to bolster its influence in the region and beyond. Although its threat to the BRI is not significant, it has prompted one regional expert to conclude China may fear a Russian victory in Ukraine because it could strengthen Moscow’s influence in Central Asia.

In a move that diminishes Russian energy policy as a source of political influence, Chinese companies have taken stakes in Central Asian oil and gas fields and have built a network of pipelines. Beijing also abandoned its interest in investing in the Power of Siberia II pipeline. Additionally, the China-based Asian Infrastructure Investment Bank (AIIB) froze lending to Russia and Belarus in 2023.

As a vassal state, there is little Moscow can offer Beijing except for its agency as a counterbalance against the United States. The fundamental difference is that Xi wants to reform the global economy, while Putin wants to upend it. As one Chinese analyst puts it, “Russia is seeking to subvert the existing international and regional order by means of war, whereas China wants to resolve disputes peacefully.”

Russia’s war against Ukraine has troubled the Chinese. The global economy on which China depends so greatly is being disrupted. Indeed, Beijing may be preparing for a Russian defeat. A recent analysis by Beijing University’s Feng Yujun is worth quoting at length for what it surely reveals about the current Chinese leadership’s views of Moscow:

“Russia’s eventual defeat [is] inevitable. In time it will be forced to withdraw from all occupied Ukrainian territories, including Crimea…. Ukraine may yet rise from the ashes. When the war ends, it can look forward to the possibility of joining the European Union and NATO.

“The war is a turning-point for Russia. It has consigned Mr. Putin’s regime to broad international isolation. He has also had to deal with difficult domestic political undercurrents, … Mr. Putin may recently have been re-elected, but he faces all kinds of possible black-swan events.”

At some point the Kremlin will become a liability for Beijing. Putin and his circle can bray at the moon about the constant state of siege between nations and societies, invoke other nuggets of Leninist doctrine, and even claim how Poland attacked Nazi Germany and, thus, began World War II. But when the time comes, Xi, rather than conjure up Lenin, will take counsel from another source – Sun Tzu: “There is no instance of a nation benefitting from prolonged warfare.”  When that moment finally arrives is uncertain. However, the sway China holds over Russia and the tide of events suggest it is approaching.

Jack A. Jarmon is a visiting scholar at the Harriman Institute at Columbia University. He was USAID technical advisor for the Russian Federation during its transition period in the 1990s. He has taught international relations at the University of Pennsylvania and Rutgers University, where he led a Department of Homeland Security Center for Excellence research center (Command Control and Interoperability Center for Advanced Data Analysis).

Alexander J. Motyl is professor of political science at Rutgers University-Newark. He served as associate director of the Harriman Institute at Columbia University in 1992-1998. A specialist on Ukraine, Russia, and the USSR, he is the author of six academic books and the editor or co-editor of over fifteen volumes, including The Encyclopedia of Nationalism and The Holodomor Reader: A Sourcebook on the Famine of 1932–1933 in Ukraine.

This article is published under a Creative Commons License and may be republished with attribution.