While trade between Russia and China grew rapidly in 2009-2011, it then levelled off and is now shrinking rapidly as a result of the economic slow-down in both countries and the fall in oil and gas prices. There are limits, however, to how far they can take their relationship.įirst, their economic ties are not developing as well as Putin likes to claim. In addition, Xi and Putin agreed a joint declaration in May 2015 on harmonising the development of the Russian-dominated Eurasian Economic Union (EEU) and China's Silk Road Economic Belt, an ambitious infrastructure programme to develop a variety of transport and trade links from Western China via Russia and Central Asia to Europe.īefore the Ukraine crisis, Russia's attitude to China's plans was frosty, but now the Kremlin's priority is to keep China friendly so the Russian side proposed linking the Silk Road Economic Belt and the EEU - a proposal which China welcomed (even if neither side can yet explain what it would mean to link two such different projects). What changed? Russia wanted to scare Europe with the thought that its gas might be shipped east and China saw the opportunity to bargain for much better terms. A 30-year gas deal, signed when Putin and Xi met in Shanghai in May 2014, had been under negotiation for more than ten years. The Chinese economy dwarfs the Russian, however: $10.3 trillion versus $1.8 trillion in 2014.Īfter the West imposed sanctions on Russia last year, Russia had a stronger incentive to develop its economic ties with China quickly.
But are Russia and China really the bosom friends they like to claim? Is Russia's 'pivot to Asia' more than a piece of theatre for Western benefit?Įconomically, the countries seem a good fit: China imports raw materials and exports finished goods Russia mostly exports raw materials (especially oil and gas, which made up over 70 per cent of its exports in 2013) and imports finished goods.
The two men are happy to use the 70th anniversary of the end of the Second World War to celebrate old triumphs and to hint (none too subtly) that they are still fighting today's fascists - whether in Ukraine or Japan. Russian President Vladimir Putin will be the guest of honour at China's Victory Day parade in Beijing on 3 September, just as President Xi Jinping was the guest of honour for Russia's parade in May.
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