China, Europe, Politics, Russia, United States

The strengthening partnership between Russia and China?

GEOPOLITICS

Intro: Relations between China and Russia have been growing closer since the end of the cold war. But while the crisis in Ukraine has drawn Russia closer to China, the relationship is far from equal

The commemorations in Moscow to celebrate the capitulation of Nazi Germany 70 years ago speak volumes about today’s geopolitics. On May 9th, Western leaders stayed away in protest against Russia’s aggression in Ukraine, an important proclamation as this was the first annexation of sovereign territory in Europe since the second world war. China’s president, Xi Jinping, was the guest of honour of his friend, Vladimir Putin. Western sanctions over Ukraine, and what looks set to be a long-term chilling of relations with America and Europe, has given Russia no other option than to embrace China as tightly as it can.

In the coming days, in a further symbol of the growing strategic partnership between the two countries, up to four Chinese and six Russian naval vessels will rendezvous to conduct live-firing drills in the eastern Mediterranean. The exercise, which follows several similar ones in 2013, is aimed at sending a clear message to America and its allies. For Russia the manoeuvres send a strong signal that it has a powerful friend and a bonding military relationship with a country that has growing geographic reach and influence. For China, such an exercise of this kind speaks of increasing global ambition that is line with Mr Xi’s slogan about a ‘Chinese dream’, one which he says includes a ‘dream of a strong armed-forces’. In taking part, China is sending its ships from anti-piracy duty in the Gulf of Aden.

But this also provides an opportunity for China to display its Type 054A guided-missile frigate, which it would like to sell to the Russians. It also brings with it operational experience in an unstable region in which it has an expanding economic presence. In 2011, China organised the evacuation of more than 38,000 Chinese from Libya during that country’s upheaval. And just last month its navy disembarked several hundred of its citizens out of Yemen, which is being torn apart by civil war. There are believed to be at least 40,000 Chinese working in Algeria and more than 1m across Africa.

Relations between China and Russia have been growing closer since the end of the cold war. For different reasons both countries resent America’s ‘hegemony’ and share a desire for a more multipolar world order. Russia, for all its bravado, is a declining great power, and is looking for ways to recover at least some of its lost status; whereas China, a rising power on the world stage, bridles at what it perceives as American attempts to constrain it. As fellow permanent members of the UN Security Council, both with autocratic governments, Russia and China find common cause in expressing grievance at Western liberal interventionism. The two countries settled all of their long-standing border disputes in 2008, just prior to the Russian-choreographed war in Georgia. This provided the onset for Russia in concentrating more of its military forces in the west as a deterrent against the further expansion of NATO.

Despite the strengthening partnership there have been the occasional tensions. For example, Russia played a key role during the 1990s in helping China to reform and modernise its military forces. Russia was able to preserve a defence-industrial base that would otherwise have withered from lack of domestic orders. But since the middle of the last decade, irked by China’s pilferage of its military technology and its consequent emergence as a rival in the arms market, Russia’s weapons sales to its neighbour have slowed.

Moscow’s wariness of becoming little more than a supplier of natural resources to China’s industrial machine speaks volumes of Russia’s humiliating position that until recently saw China as backward. As long as Russia could sell to Europe all the gas required to keep the Russian economy growing, it could arbitrarily put deals with China on hold. These included plans for two gas pipelines from Siberia into China that were announced in 2006 and then quietly dropped as the two sides argued and bickered over prices.

All that has changed. The continuing crisis in Ukraine has forced Russia to ‘pivot’ its economy towards Asia in an effort to lessen the impact of Western sanctions by finding alternative markets and new sources of capital. For China it is a golden opportunity to gain greater access to Russia’s natural resources, at favourable prices, as well as being in a better position to secure access to big infrastructure contracts that might have gone to Western competitors and to provide financing for projects that will directly benefit Chinese firms.

Russia’s incursions into Ukraine and its seizure of Crimea violated two of China’s most consistently held foreign-policy tenets: non-interference in other states and separatism of any kind. Yet, while China abstained from voting on the UN Security Council resolutions condemning Russia (with the Chinese media giving Russia strong support) it has quietly welcomed a new cold war in Europe that might distract America from its declared ‘rebalancing’ towards Asia.

Additional and striking new evidence of the new closeness between China and Russia was a $400 billion gas deal signed in May last year under which Russia will supply China with 38 billion cubic metres (bcm) of gas annually from 2018 for 30 years. China has insisted that the gas comes from new fields in eastern Siberia by passing through as yet an unbuilt pipeline, a plan that will ensure supplies are not diverted elsewhere. Other deals have followed too. The biggest was a preliminary agreement signed in November for Russia to sell an additional 30 bcm a year through a proposed pipeline from Western Siberia. In every such new instance it is probable that China was able to drive a hard bargain on price.

Other clear signs of Russia’s weakness have also become clear. Its recent decision to resume high-tech arms exports to China most noticeable. In April it agreed to sell China an air-defence system, the S-400, for around $3 billion. This will help give China air dominance over Taiwan and the Senkaku islands (Diaoyu to the Chinese), who dispute Japan’s claim to them. In November, too, Russia said it was prepared to sell China its latest Sukhoi-35S combat aircraft. Initially it had refused to sell any fewer than 48, in order to make up for losses it suffered as a result of China’s purloining of the designs. Now it has agreed to sell only 24.

Looking ahead problems seem discernibly clear. One is that both countries are competing for influence in Central Asia, once Russia’s backyard. Mr Putin wants to establish his Eurasian Economic Union partly to counter growing economic power in Central Asia, through which China wants to develop what it calls a Silk Road Economic Belt. China is using the Shanghai Co-operation Organisation (SCO), of which Russia and Central Asian nations are also members, to boost its security ties in the region as well. Another difficulty is Russia’s military and energy links with countries such as India and Vietnam, both of which are rivals of China. But the biggest problem of all seems likely to be Russia’s irritation with being forced into an increasingly subservient role in its relations with China.

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Britain, Defence, Europe, European Union, Government, Islamic State, Military, National Security, NATO, Politics, Russia, Society, United States

NATO requires direction and purpose…

NATO

The two-day NATO summit in Newport, Wales, represents a key and defining moment in the organisation’s 65-year history. More recently it has become apt to question whether the post-war transatlantic alliance even has a future, particularly when NATO ends combat operations in Afghanistan at the end of the year. Defence budgets among the leading European powers have been severely cut and, coupled with the crippling lack of political will to reach consensus on vital security issues, critics of this Western alliance have been able to make a convincing case that the organisation is in real danger of becoming obsolete.

NATO’s future continuity and preservation as a global entity for good will now depend to a large extent on how leaders of the 28-nation alliance respond to the alarming array of new challenges that threaten not only the security of Europe, but the wider world.

The horrific and gruesome murders of two American journalists by Islamic State terrorists in Iraq, and the imminent possibility that a British hostage could soon suffer a similar fate, has highlighted in graphic and disturbing detail the very serious threat to Western security posed by radical militants associated with the self-proclaimed Islamic State – one that has taken root in lawless areas of northern Syria and Iraq. Then there is Russian President Vladimir Putin’s blatant and ruthless military intervention in Ukraine, actions which have led to Russia brazenly supporting rebel and pro-militia groups loyal to the Kremlin in maintaining the tempo over the challenge to Ukraine’s territorial integrity and encroachment of a sovereign state. The true extent of the rebel support was realised earlier this week when a Russian tank column was identified as being in support of capturing Luhansk airport. As if to confirm his disregard for Western attempts to rein in Mr Putin’s new-found spirit of adventurism, Moscow even boasted that it could take Kiev in just two weeks if it wanted to.

When considering too the continuing threats posed by al-Qaeda, the uncertain fate that awaits Afghanistan when the US-led NATO mission completes its withdrawal later this year, and the endemic lawlessness in other parts of the Middle East and North Africa, it is clear that the West is facing its most difficult period since the end of the Cold War.

NATO’s ability to provide an effective response to these multifarious threats will depend ultimately on whether it can summon the collective political will and leadership to take decisive action against its enemies. For an organisation whose decision-making process requires consensual agreement, attempts to find a common policy amongst all the nations of the alliance have all too often been hampered by deep political divisions. Most recently these have surfaced in the way the major European powers have sought to respond to Russian aggression in Ukraine, with countries such as Germany and Italy unwilling to back the more robust stance favoured by Britain and the U.S. But neither has the NATO cause been helped by President Barack Obama’s reluctance to become involved in overseas conflicts. Mr Obama’s detached approach was evidentially confirmed in the last few days when the president admitted ‘we don’t have a strategy yet’ for dealing with Islamic State militants: this, despite their murderous assaults on American citizens.

There are some encouraging signs that NATO is preparing to rise to Mr Putin’s bellicosity in eastern Europe. Anders Fogh Rasmussen, the outgoing NATO secretary-general, has already announced the establishment of a new, 4,000-strong rapid-reaction force capable of reacting to any future crisis in eastern Europe with just 48 hours’ notice. Many European member states will also come under pressure to honour the NATO commitment of spending 2 per cent of their GDP on defence. The decision to establish new logistics centres along the Russian border to enable the rapid provision and requisition of military equipment in the event of a crisis is also another welcome indication that NATO’s members are not prepared to tolerate any further territorial incursions by the Kremlin. Whilst encouraging that there are signs the alliance has rediscovered a real sense of purpose, effective political leadership is now urgently needed.

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Economic, Europe, European Union, Financial Markets, Government, Russia, Society, United States

Tough Western sanctions hit Russia…

RUSSIA

Europe has imposed the toughest sanctions against Russia since the Cold War, sending the rouble into a tailspin and prompting warnings that British firms will be hit hard.

EU leaders have agreed to embargoes against vast sectors of the Russian economy, designed to cripple its banks, energy firms and defence capabilities.

The most drastic measure will prevent Russia’s banks from issuing stocks or bonds in Europe, potentially forcing them into the arms of the Russian state for support.

Nearly half of the bonds issued by big state-run Russian lenders are in European markets. There will also be a blanket ban on all future arms sales to Moscow.

Another eight names of individuals and three firms will be added to an EU blacklist, meaning they will be subject to asset freezes and travel bans. Of those, four are described as personal ‘cronies’ of President Vladimir Putin.

President Barack Obama said the US has also expanded sanctions against Russia. He added: ‘If Russia continues on this current path, the costs on Russia will continue to grow.’ EU leaders said Russia would be shown that ‘destabilising Ukraine, or any other Eastern European neighbouring state, will bring heavy costs to its economy’.

‘Russia will find itself increasingly isolated by its own actions,’ they added. ‘Illegal annexation of territory and deliberate destabilisation of a neighbouring sovereign country cannot be accepted in 21st-century Europe.

‘Furthermore, when the violence created spirals out of control and leads to the killing of almost 300 innocent civilians in their flight from the Netherlands to Malaysia, the situation requires and urgent and determined response.’

The rouble crashed to its lowest level since early May against the dollar as leaders prepared to implement the new sanctions.

Downing Street conceded that the British economy, particularly financial services, would suffer.

BP warned sanctions could ‘adversely impact our business.’ BP has a 20 per cent stake in Russian energy giant Rosneft.

Moscow is likely to retaliate , with one group of Russian lawmakers suggesting banning international accounting firms and consulting groups from the country. Targets were said to be Deloitte, KPMG, Ernst & Young, PwC, Boston Consulting Group and McKinsey. David Cameron said: ‘We want to make it clear that Russia’s behaviour in destabilising another country – Ukraine – is unacceptable.’

In another dramatic escalation of tensions between Russia and the West, Mr Obama has accused Putin of conducting tests in violation of a 1987 nuclear missile treaty.

Mr Obama wrote to the Russian leader protesting about a breach US officials described as ‘a very serious matter’.

 

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