Cooperation Instead of Conflict: Russia and China Thwart American Expectations

25.04.2018

Although the United States counted on conflict between Russia and China, cooperation between the two is growing. Participants in the closed sessions of the Valdai Club Russian-Chinese conference, which takes place in Shanghai on April 25-26, discussed the most significant areas of cooperation between Russia and China against the background of international pressure, the consequences of transformation of the Chinese economy, and the common tasks of the two countries in the construction of Greater Eurasia.

In particular, participants concentrated on the problem of adapting state systems to the challenges, both internal and external. The urgent need of each country for clear self-identification on the global arena was noted. Russia now plays a special role in the entire world and Eurasia; it does not seek hegemony, but acts as a reliable partner for China and other regional players.

In the spring of 2018, both Vladimir Putin and Xi Jinping established their status as national leaders. They emphasize the importance of using the concept of strong state as a vehicle for development and providing security.

The three most important directions for Russia and China are the key role of the state in economic modernization and development, the preservation of human resources (i.e. prominent social function of the state), and, finally, the strategic direction – the state’s role in ensuring internal and external security.

Some speakers stressed that the paths of Russia and China in the field of construction and transformation of the state were similar in many regards. The main conclusion is that one can live without freedom, but not without order. The participants dwelled on the latest processes in the Chinese public administrative development, aimed at improving the ability of the state apparatus to ensure the quality of life of the population. China has a well-functioning system of long-term planning, and Russia should learn from it. Moreover, due to some fundamental changes on the world arena, Moscow and Beijing need to compare their views of the future and the trajectory of their own development, harmonizing the two, if possible.

It was noted that Russian-Chinese economic relations have already reached a high level, which raises questions about the next stage and the exchange of the best practices of cooperation.

The Chinese side also criticized Russian foreign economic relations strategy and doubted stability of the chosen economic model. Chinese exports to Russia are on decline, while Russian exports to China are increasing. Companies in both countries face challenges due to the US sanctions.

The new state of relations and the new environment make us see differently the possibilities of economic cooperation and exchange of technologies and products. Large Russian and Chinese companies should cooperate more actively in overcoming sanctions. There remains the problem of insufficient awareness of businesses about the real working conditions in Russia and China.

It was noted that the transformation of the Chinese economy would play a role in the world economy comparable to the one played by the Chinese economic growth as such. These changes, however, reduce the Russian-Chinese economic complementarity, which was based on a combination of Russian resources and Chinese labour. Now we need to rely on a new complementarity, with China as a consumer, and Russia as a producer of goods. The participants agreed that it is necessary to move to settlements in national currencies, to increase joint investments and reduce non-tariff barriers, which are abundant in China.

The topic of Greater Eurasia also sparked an intense discussion. The strategic approaches of Russian and Chinese participants were similar in most part, while the tactical decisions differed.

At the same time, it is becoming increasingly common that American pressure creates a new context for cooperation in Central Eurasia – although the United States counted on conflict between Russia and China, cooperation between the two is growing. The panelists unanimously agreed that the two countries’ interaction in Eurasia is extremely necessary and important.

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