The Chinese Communist Party’s (CCP) greatest fear is what happened to the Soviet Union in 1989. Their top leadership wakes up every day pondering how the great Soviet Union failed so spectacularly, and whether China will one day meet the same fate.
Indeed, the fall of the USSR was perhaps the most significant political event of the 20th century. In the span of 30 years, the Soviet Union went from launching the first artificial satellite into space, launching the first human into space, and launching the first probe to ever land on another planet (Venus), AND having the world’s second-largest economy, all to one day completely collapsing politically.
China’s CCP views Soviet Union liberalization - and particularly, the split between reformers and conservatives within the inner circle - as what brought down the empire. More liberal policies tolerated by Gorbechav and his reform-minded supporters were linked to excessive tolerance of calls for sovereignty in the USSR’s constituent republics. By 1990, all 15 of the USSR constituent republics were allowed to hold competitive elections. And in nearly every one, reformers or ethnic nationalists won.
Given that China is currently facing somewhat similar issues today - a populous not thrilled with their autocratic ruler, youth that dare protest covid policy, simmering unrest in more remote ethnic regions such as Xinjiang and Tibet, crushing economic sanctions from the West - it is no wonder that the Soviet fall haunts Chinese leaders today. What happened to Russia is China’s nightmare scenario. It’s not something China looks up to.
So what exactly is behind this newly professed “no limits” relationship between China’s Xi and Russia’s Putin?
It helps to remember that Russia - China relations have rarely been smooth, particularly during the Cold War. Back in the 1950s when the Soviet Union’s new leader Krushchev took the path of de-Stalinization and wanted peaceful coexistence with the West, Chinese leader Mao Zedong was reportedly disgusted with the idea and wanted to stick to Stalin’s plans for global revolution. Mao was also distrustful of Russia’s territory intentions due to its imperialist activities in China decades previous (Russia invaded Manchuria in 1900 and at times controlled concessions in China’s Tianjin and Dalian).
Mao decided to humiliate the Soviet Union’s Khrushchev by inviting him to his swimming pool on August 1, 1958. It seemed an odd request to meet at a pool until we learn Krushchev actually couldn’t swim. He was forced to wear water wings to talk to Mao in the pool, and Khrushchev ended up looking foolish next to Mao’s mastery of water. Khrushchev admitted Mao’s tactics in a recollection years later:
"It was Mao's way of putting himself in an advantageous position. Well, I got sick of it.... I crawled out, sat on the edge, and dangled my legs in the pool. Now I was on top and he was swimming below." [source]
The Soviet Union then tightened its relationship with India, which Beijing resented due to the Sino-Indian border war occurring in 1962.
Soviet-China problems only worsened in 1969 when the two countries fought their own border war that lasted seven months near Zhenbao Island. The border along China’s northeast corner was always a contested issue, partly because it wasn’t very populated. The Russian Empire and Qing dynasty back in 1892 waved their hand and simply agreed the border would consist of a ridge along the Sarikol Range. Be damned the details. The border remained contentious through the 20th century.
The biggest Sino-Soviet clash was perhaps over nuclear weapons. As China developed its own nuclear arsenal in the 60s, Soviet leadership was convinced that China did not understand the existential threat it posed. In fact, Moscow was so concerned that by the early 1960s, some high-level Soviet leaders reportedly probed U.S. interest in potentially taking joint action against Chinese nuclear facilities (!).
Mao eventually got wind of this and ordered Beijing to actually make an entire system of underground tunnels under Beijing as a massive fallout shelter. Ironically, it was the schism between the Soviet Union and China in the 60s that gave America’s Nixon the green light to re-establish relations with Mao in the 70s as a counterweight to USSR, which in turn helped to isolate the USSR in the 80s.
In short, while the two countries may have appeared to be ideological allies, their divisions were just too stark to promote a genuine friendship. Instead, it was marked by distrust, resentment, and even humiliation.
Today, I believe we see a similar dynamic emerging. Once again, both countries have a common enemy: the West. Both countries have “lost” territory they feel is necessary to obtain to make themselves whole again. Both countries face economic sanctions by Western powers. And both countries’ leaders dislike being berated for not utilizing democratic processes and adhering to universal human rights.
Most important, both perceive the U.S. as becoming more hostile towards their interests, all while firmly believing America’s relative power is declining. Additionally, their economies complement: China’s economy is generally resource poor but labor and capital rich, while Russia’s economy is resource rich but labor poor. This means theoretically they would be ideal trading partners. But dig into the nuances and details of this complex relationship and it all looks messy.
Perhaps most critical, siding with Russia will push China’s neighbors towards the West. In China’s recently revealed 12-point deal, China objects to accountability for Russia’s war crimes or any guarantees against another attack. This makes China look it is blatantly siding with an aggressor. It also goes against China’s traditional vote for the underdog. This suggests China may be planning to engage in its own aggression in the years ahead (i.e. Taiwan), and are looking for the few quid pro quo “friends” they can grasp before this fateful day arrives.
As the Economist pointed out in a recent article, countries that face a direct security threat from China, such as India, South Korea, Australia, and Japan, will only grow warier from China’s support for Russia’s invasion. Indeed, the Indian and Japanese armed forces conducted their first joint fighter-jet drills in early 2023. A sure loss for China.
Furthermore, Chinese businesses don’t see huge opportunities in Russia. Russia’s economy is littered with protectionism done to shelter its domestic industries. The country’s business environment still remains challenging and its investment potential is poor due to poor infrastructure and its declining population. Russia ranks 137 on Transparency International’s Corruption Perception Index, and the score only trends downward. Additionally, Chinese banks routinely complain of Russian bureaucratic obstacles as well as corruption and rent-seeking, particularly in border regions bordering China (Gabuev, 2017). And many Russian businesses perceive China’s Belt and Road Initiatives as simply a strategy for China to increase its power and influence in Central Asia (source).
Meanwhile for Russia, exporting oil and agriculture to China will simply increase its dependency on China. Russia has been cut off from international markets, so any natural resource deal would tend to strengthen China’s position vis-a-vis Russia. An agreement for Russia to export oil to China gives China more energy security optionality. But Russia’s dependency on China only increases, weakening Russia’s overall trading position.
The body language said it all. Just observing the two leaders in the clips below (in Mandarin), Putin seems also resentful for having to praise Xi so openly. The relationship looked one-sided from the get go. Putin admits China’s rise as “envious” - not something Putin does uhm … ever. Putin’s traditional power games when meeting world leaders - i.e. showing up late for meetings - were glaringly absent this time around. Putin also escorted Xi to his car at the conclusion of the meeting, a gesture Putin has reportedly never done.
Although the two countries participate in defense cooperation, Moscow reportedly is more enthusiastic than China. Some Russian leaders have pressed Chinese counterparts to raise the “partnership” to an actual bilateral military alliance (like NATO). China has rebuffed these efforts so as not to be tied down. Scholars have stated Russia in recent years has been more willing to sell to China, perhaps as a way to gain foreign currency, but China so far has not reciprocated.
Moreover, attempts to increase yuan usage in trade will likely not make a massive dent in the internationalization of the yuan. Putin recently announced his desire for Russian companies to use the Chinese yuan in foreign trade. Yuan use abroad is indeed increasing, and its use as a reserve currency is also increasing slowly, but the Chinese yuan is pegged to the U.S. dollar and thereby offers little diversification value for its holders. Meanwhile, China made no mention of using rubles at all.
China did get some clear wins: oil and gas pipelines from Russia to China at prices China can determine (!), new opportunities for Chinese companies to take over left vacant by Western companies, opportunities for investment in Russia’s eastern regions. But the costs to its reputation were higher.
And for Russia? Well, it was just damn humiliating. Once again.
All this suggests that China is using Russia as - at best - a pawn. Beyond some great energy deals and stakes in a corrupt economy few Chinese want to touch, China got was some geopolitical capital to counter the U.S. Was it worth it?
Perhaps if you are preparing for a decade or two of stormy relations with the West.
In short, having Russia in your camp won’t hurt when trying to retake Taiwan. But if that’s all you got, it won’t get you over the finish line.
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