As the largest country in Eurasia, Russia is an economic corridor connecting Europe and Asia. As partners with the highest mutual trust, highest level of cooperation, and highest strategic value in the world, trade cooperation between China and Russia will drive Russia into the Eurasian flow of trade between China, the EU and ASEAN, injecting strong impetus into Eurasian trade circulation, writes Zhang Tingting, Research Assistant and Project Director of International Department, Chongyang Institute for Financial Studies, Renmin University of China.
On December 28, China’s President Xi Jinping had a telephone conversation with Russia’s President Putin. The two heads of state exchanged New Year’s greetings. Xi Jinping pointed out: “China-Russia relations have strong endogenous power and independent value, which are not affected by changes in the international situation and are not interfered with by any other factors.” Indeed, the endogenous power of China-Russia relations stems from the common external threats faced by the two countries as well as the complementary nature of their internal development.
Sino-Russian trade cooperation, connecting the flow of trade in Eurasia
Based on the current international situation, global trade circulation has been changing quietly while the international political powers have been playing their game. The most direct manifestation of this is that the “supply chain” and “purchasing chain” in the international industrial chain are experiencing a new round of “decoupling” and “reorganisation”; the world trade structure is also undergoing substantial changes.
As the world’s second-largest consumer market, economy and “the world’s factory”, China is the “engine” of global trade circulation, driving the cycles of the global trade “supply chain” and “purchasing chain”. The trade war against China started by the US has intensified the decoupling of the market between China and US, and has pushed the centre of world trade circulation back to Eurasia.
According to the data released by the General Administration of Customs of China on January 4, 2020, in 2019, China’s largest trade partner is still the EU, with imports and exports to the EU at 4.86 trillion yuan, an increase of 8%. ASEAN has become China’s second largest trade partner, with imports and exports to China at 4.43 trillion yuan, an increase of 14.1%. At the same time, China’s imports and exports to the United States were 3.73 trillion yuan, a decrease of 10.7%.
In addition, according to the data released by the General Administration of Customs of China on July 14, in the first half of 2020, ASEAN became China’s largest trade partner, accounting for 14.7% of China’s total trade, and the EU has become China’s second largest trade partner.
Obviously, whether it was affected by the trade war against China or the epidemic, ASEAN and the EU quickly replaced the US in China’s external trade as the two major Eurasian economies, during the “decoupling” of the US and China.
As the largest country in Eurasia, Russia is an economic corridor connecting Europe and Asia. As partners with the highest mutual trust, highest level of cooperation, and highest strategic value in the world, trade cooperation between China and Russia will drive Russia into the Eurasian flow of trade between China, the EU and ASEAN, injecting strong impetus into Eurasian trade circulation.
Sino-Russian strategic cooperation is a stabilising factor for regional governance in Eurasia
Before the outbreak of the epidemic, the world had undergone global changes unseen in a century. The new round of technological and industrial revolutions further intensified the re-adjustment of the world order. At the beginning of 2020, the new epidemic that swept the world further aggravated global change.
At present, the world political structure and the world trade structure are in a state of joint development. The political structure is also undergoing changes and reorganisation.
For China and Russia, as two large political powers, changes to the world political landscape can often be transmitted to the domestic level, triggering domestic changes, and the trend of “internationalisation” of domestic issues and “domesticisation” of international issues is becoming more and more obvious.
In recent years, China and Russia have actively participated in the regional governance of the Eurasian region. Specifically, China and Russia have played a role in preventing and controlling risks and leading cooperation in the Eurasian region. For example, they have successfully played the role of mediators in Eurasian hotspots, such as the Iranian nuclear issue, the North Korean nuclear issue, and the conflict between India and Pakistan.
With the continuous development of IT and globalisation, the world is facing a new stage of industrial revolution. Artificial intelligence, digitalisation, bioengineering and the Internet will inject a strong impetus into future social and economic development.
Within the framework of the Silk Road Economic Belt and the Eurasian Economic Union (EEU), China and Russia are carrying out a series of cooperative measures in infrastructure construction, financial investment, and trade facilitation, which bring new opportunities for the Eurasian countries to “fill in the gaps” in the development of the previous stages of industrial revolution and to pursue the next industrial revolution.
For example, Russian-Chinese cooperation in the field of 5G will facilitate a technological revolution within the Eurasian region. Therefore, the strategic cooperation between Russia and China will push Eurasia to stay abreast of the technological revolution and remain at the forefront of global development trends.
Sino-Russian focuses in breaking the geo-dilemma
From a strategic perspective, the connection of the construction of the Silk Road Economic Belt to the EEU is an important way for China and Russia to jointly promote the development of Eurasian integration. On May 8, 2015, the two heads of states issued “the Joint Statement on Cooperation of Connection between the Silk Road Economic Belt and Eurasian Economic Union (EEU)” in Moscow. The two countries have started to explore more opportunities for cooperation within the framework of the connection. In the past few years, the connection of the two initiatives has yielded fruitful results, and China is the largest trade partner of the EEU. In the future, the connection of the two initiatives will play an important role in dealing with the political, economic and security order changes brought about by geopolitical changes, as a regional “stabiliser”.
From a tactical perspective, mutual support is an important way for China and Russia to meet geopolitical changes and create development opportunities. Both the China-Europe Railway Express and Arctic routes connecting China and Europe require transit through Russia. For China, cooperation with Russia will bring both transit costs for Russia and time savings for the transport of Chinese goods. The strengthening of cooperation with Russia on natural gas has also promoted China’s green development and urbanisation.
For Russia, it is an opportunity to catch up with the latest technological and industrial revolution, brought about by 5G, and promote promising development opportunities at home. China’s mechanical and electronic products, as well as its high-tech manufacturing industry can bring vitality to the Russian market. The support of public opinion in relations between China and Russia will help relieve the pressure exerted by public opinion from the international community.
As Chinese Foreign Minister Wang Yi has stressed on many occasions, “China-Russia strategic cooperation has no end, no forbidden zone and no upper limit.” It fully expresses China’s confidence and determination regarding the development of Russian-Chinese relations. In the post-pandemic era, China and Russia will face unprecedented development opportunities as well as unprecedented brutal competition. The two countries need to cherish the advantage brought by political mutual trust, find their places in the trade circulation of Eurasia and the reorganisation of the world political structure through win-win cooperation, and promote the development of Eurasia.