China-Russia is a match made in heaven, and that’s scary

May 22, 2014



As Russian President Vladimir Putin signed Russia’s historic $400 billion gas-supply agreement with China, he must have felt the satisfaction of a chess grandmaster revealing the inexorable outcome of a complicated endgame.

In theory, the next phase of the chess match between Russia and the West in Ukraine will only begin with the Ukrainian presidential election on Sunday. But Putin’s positioning of the pieces means the outcome is pre-ordained, no matter who emerges as the next president in Kiev.

putin & troopsNo wonder the Russian stock market and ruble have both rebounded — with the MSCI Russia index gaining 20 percent in dollar terms since its low point on March 14.


Having secured the territorial windfall of Crimea in March, Putin went on to achieve his main tactical objective in April. This was to destabilize Ukraine to the point where nobody could seriously contemplate the country joining the European Union, much less the North Atlantic Treaty Organization.

Just as important, from Putin’s standpoint, the combination of internal chaos and improvised plebiscites and Russian military exercises being conducted on the Ukrainian border, distracted Western attention from the Crimean issue. He deflected the threat of additional sanctions from the legality of Russia’s annexation to the feasibility of Ukraine’s presidential election.

Now that analysts are predicting no major violence at Sunday’s election, it is hard to see what arguments the West could offer for tightening sanctions — or how they would find the unity to do it if they tried. The incorporation of Crimea into Russian national territory has, in effect, been accepted by the world as irreversible.

Given Sevastopol’s priceless strategic significance as a naval base, not to mention the Russian people’s affection for Crimea as a vacation, retirement and cultural destination, the restoration of Crimea would, on its own, likely guarantee Putin’s political popularity for many years to come. But this week the news for Putin got even better.

putin si  militaryRussia’s strategic gains in Crimea and Ukraine were already apparent by early May, when the Moscow stock market and the ruble started rapidly rising. But now the United States and Europe have delivered Putin another — even bigger — economic and geopolitical windfall: the prospect of a Sino-Russian partnership to balance NATO and the U.S. alliances in Asia.

A few months ago, neither Moscow nor Beijing would have imagined a Eurasian partnership possible — or even desirable. Against a different diplomatic background, Wednesday’s Sino-Russian gas agreement might have been just another trade deal. It would seemingly have had no great geopolitical significance apart from its impact on energy prices in different parts of the world.

But things look very different in the light of recent global confrontations, not only between the West and Russia over Ukraine, but also between the United States and China — over Japan, Vietnam, the Philippines and, most recently, cyber-espionage.

When we consider the Western diplomatic ineptitude responsible for these events, culminating in Washington’s decision to issue arrest warrants for leading Chinese military figures the very day that Putin arrived in Shanghai, the 30-year energy deal between Russia and China becomes key.

Perhaps Putin’s trip to Shanghai could even mark the start of a strategic realignment between nuclear superpowers comparable to the tectonic shifts that began with President Richard M. Nixon’s visit to China in 1972. This suggestion may seem far-fetched and grandiose, but there are five reasons why Western leaders are over-optimistic and short-sighted simply to dismiss this idea — as they have done in the past.


China is obviously a rising superpower while Russia is a declining one. This means that both will inevitably experience frictions with the United States and Europe, the hegemonic powers that now dominate global politics and economics. Since Russia is declining, its frictions will mainly involve encroachments on what Russia sees as its economic or territorial prerogatives by U.S. allies in Europe. That is how Russians see the current confrontation over Ukraine. Since China is rising, it will create frictions by encroaching on U.S. allies in the Pacific. In both cases, Moscow and Beijing will be opposed by the United States.


U.S. dominance is on the decline — not because the United States is becoming economically or technologically weaker but because the American public is disillusioned with foreign adventures. They are no longer willing to act as global policemen. This means that U.S. allies can no longer realistically rely on Washington to deter Russia and China, especially in minor territorial disputes. Even if U.S. protection is theoretically “guaranteed” by treaties on mutual defense.


A Sino-Russian axis is a natural fit. The two countries’ economies, military capabilities and even demographics complement each other. Russia has excess resources but a shortage of manpower. China faces the opposite problems. Russia is strong in advanced military technologies, aeronautics and software — but weak in mass production of consumer goods and electronic hardware. China has the converse strengths and weaknesses.


A strategic partnership between the world’s second largest and sixth largest economies (by purchasing power parity exchange rates) could attract other countries, especially in Asia, that were unable or unwilling to commit themselves to Western standards of political democracy, corporate governance, trade and financial openness or quality and safety of consumer products.


Perhaps most important, a new element has suddenly been injected into super-power relationships by the events in Ukraine, combined with U.S. President Barack Obama’s unexpected belligerence to China during his trip to Asia last month. While Chinese and Russian leaders have historically distrusted, and even disliked, one another, they are starting to dislike the United States even more.

Russia’s reasons are obvious. In the case of China, there was less distrust until Washington suddenly turned up the heat on cyber-espionage and territorial disputes in the China Seas.

Perhaps this confrontational behavior is just a brief aberration. But if Obama continues to needle and provoke China, he will not just be making an historic blunder — he will be playing straight into Putin’s strategy.


PHOTO (TOP): Russia’s President Vladimir Putin (R) and his Chinese counterpart Xi Jinping leave after shaking hands before the opening ceremony of the fourth Conference on Interaction and Confidence Building Measures in Asia summit in Shanghai May 21, 2014. REUTERS/Mark Ralston/Pool

PHOTO (INSERT 1): Russian President Vladimir Putin (R) meets military personnel during events marking Victory Day in Sevastopol, May 9, 2014. REUTERS/Maxim Shemetov

PHOTO (INSERT 2): China’s President Xi Jinping and his Russian counterpart Vladimir Putin attend a ceremony to open the Chinese-Russian joint naval drills in Shanghai May 20, 2014. REUTERS/Alexei Druzhinin/RIA Novosti/Kremlin


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Dear Mr Kaletsky,

Are you trying to scare us with the might of rising China and the military power of Russia?

I was born in Bulgaria , lived under the communism, saw the idiocies of our very own Bulgarian dictator and his regime in the 80s, but I also saw the first steps of the democracy coming into the country in the 90s. Unfortunately, more recently I am witnessing the triumph of the shady foreign businessmen (russian to be more specific) taking over my country by bribing the local corrupt politicians and funding well chosen local political parties. I saw how those foreign businessmen funded Bulgarian neo-fascist and xenophobic groups, fomenting ethnic hatred and unrest, being guided be the same principles used by the clique which rules Russia now. They successfully applied the ‘divide and conquer’ principle in Bulgaria and now I witness the results which those businessmen are harvesting – divided country with 3 distrusting and hating each other ethnic groups, completely dependent judicial system on the whims of local feodals, marionette government proxy of Kremlin’s will, lack of middle class, impoverished and angry at the west people.

I follow the events in eastern Europe and Russia for quite long time and judging to what Russia is doing into my country recently, the current Russian government is as close to the neo-fascist one as it gets.

If China is becoming ally to such government this speaks volumes about the mentality and the value system of the chinese leaders. I would say that the last thing the western countries need at this very moment is a policy of appeasement toward these countries.

Do not overestimate the military power of Russia, the threats and the intimidating presence of China – the rest of the world is not guided by the same principles and whatever those two try to achieve by intimidation, coercion, bribery or brute force will not stick and will fall apart on its own. It will fall apart for the very reasons the communism fell apart – the threats, intimidation, forcing people to do things, or banning them to reading cannot survive for extended period of time.

Posted by FromBulgaria | Report as abusive

The argument here seems to be that the US should acquiesce to Chinese territorial demands against its Asian neighbors, and do nothing about cyber industrial espionage; all so that it does not further enable Putin’s grand strategy. This is nonsense. Regardless of what the U.S. does, Russia will still attempt to expand its energy exports, and China will still attempt to solve its energy problems. These issues have little to do with U.S. relations, or bilateral US-Russia or US-China relations. The U.S. has a defense treaty with South Korea and Japan and the Philippines, so China wisely has backed off its aggressive behavior in those directions and started to pick on weaker parties such as Vietnam and Indonesia. The sanctions imposed on Russia due to the Ukrainian crisis apparently have stopped the Russian advance, and severely hurt the Russian economy. Russia’s violation of international law will not be redressed and the Crimea is lost forever from the Ukraine, but its reputation has suffered a blemish that can be cleared up only when Putin leaves power. The Russian military would be unable to cope with a conflict with NATO. It is not strong enough. Although China has been “rising” as the author writes, it now has thrown away all good will it had enjoyed, and now is viewed by surrounding countries as a dangerous threat. China’s military is still weak. Neither country, nor both combined are a match for the US. This article is nothing but appeasement and its ideas should be rejected.

Posted by WestFlorida | Report as abusive

I believe this match is rather made in hell, and THAT’s scary. But we need just one awesome breakthrough in solar/alternative power in order to break it… and save the planet. :)

Posted by UauS | Report as abusive

The next match made in Washington hell would be to allow Japan to breakout from the post WW2 pax pacifica and become a nuclear godzilla.
Japan is said to have the space/missile and scientific/engineering/computing capabilities to do so quite quickly, and has lots and lots of plutonium and uranium enrichment.
That would certainly unite China and Russia, especially the militaries.
“Remember Pearl Harbor”

Posted by Neurochuck | Report as abusive

The next match made in Washington hell would be to allow Japan to breakout from the post WW2 pax pacifica and become a nuclear godzilla.
Japan is said to have the space/missile and scientific/engineering/computing capabilities to do so quite quickly, and has lots and lots of plutonium and uranium enrichment.
That would certainly unite China and Russia, especially the militaries.
“Remember Pearl Harbor”

Posted by Neurochuck | Report as abusive

Russian Siberia and the Far East will overrun by the chinese when they become strong. I guess who will come to their rescue again, that right its America. Remember who help the Russian push back the Nazi Germany?

Posted by Temujin | Report as abusive

Russian Siberia and the Far East will overrun by the chinese when they become strong. I guess who will come to their rescue again, that right its America. Remember who help the Russian pushed back the Nazi Germany?

Posted by Temujin | Report as abusive

Enough is enough – the repeatative but stale and worn-out news that US is the good guy whereas Russia and China are evils or that US is god send whilst the other two are from hell. Basically we can see that Russia and China came together as a direct result of US encirclement. Why should US embarked on this evil path which it should not have done had it live up to its self-created moral beacon? The common man like us would like to live in a world free from US hypocrisy, deception and make to feel that US is always number 1. We know that Russia and China are not any better but they don’t do what US does.

Posted by waryobserver | Report as abusive

“A few months ago, neither Moscow nor Beijing would have imagined a Eurasian partnership possible — or even desirable.”

Except, of course, for the fact that Russia has spent over a decade planning and building pipelines to sell China natural gas. Selling China natural gas is hardly a new development. Further, the Shanghai Cooperation Organisation (SCO) has been in existence for almost a decade, showing an acknowledgement of shared military interests (and cooperation) in Asia.

To say this development was “unimaginable” is to ignore the facts and is frankly ludicrous.

Posted by gonethesun | Report as abusive

Several points for this Russian apologist.

1) If Russia wants to be China’s vassal so be it. The Chinese will take eastern siberian energy fields eventually. It is not that great a deal. Gazprom has to come up with about $60B to get the pipelines built and extract the gas. Comes on line in 2020. This or Putin will be all over by then.
2) Japan is capable of going nuclear with the flip of a switch. Japan can take China now on its own. Doesn’t need USA, but I’m sure they’d pile on. By take I don’t mean occupy I mean neuter.
3) The Russian military is a joke. NATO would smoke ’em.
4)A fight won’t happen because they will be kicked out of SWIFT eventually, which will bring them to their knees. Think Iran.
5) Say goodbye to the Tartus facility in Syria. And adios Assad.
6) Say hello to Georgia, the newest member of NATO.
7) Finally, the Americans have been raised and trained to fight Russia. NATO is geared to fight the Soviets / Russia. Anyone over 30 remembers the Soviet behavior and has never liked the USSR, NewUSSR, Russia, or the PRC. The American “public” loves to kick ass. They just like to see the enemy, something difficult with terrorists and low intensity conflicts.
8) Them coming together supposedly would be the single stupidest thing they could have ever done.
9) What should we call the new alliance between China Russia North Korea and Iran? Confederacy of dunces sounds appropriate.
10) How long before a Russian oligarch gets tired of this and double taps KGB Putin? Any wagers? I say three months.

Russian should have joined NATO a long time ago and shared in the prosperity of the EU. But their inferiority complex and general insecurity prevented it. Too bad for them.

Posted by rtyz34ty69 | Report as abusive

We are witnessing the decline of US power and influence.
This trade agreement is just the beginning……

Posted by KyleDexter | Report as abusive

USA made numerous errors in foreign policy. The worst error was not continually reforming East European style Kissinger-Brzezinski dictated foreign policy objectives just after the fall of the Soviet Union.

Initially, Russians were eager to join with the West in mutually beneficial projects, but hardcore “crush the competition” capitalism moved into Russia like a flock of vultures, with little rational planning or reasonable guidance from Washington. The result was a free-for-all.

Reagan set the stage by promoting the idea that USA beat Russia, and Russia was there for US interests to divide up the spoils of victory. Reagan promoting this idea was a huge mistake.

Bright-eyed and hopeful Post-Soviet Russia became much like the innocent girl who initially trusts everything her boyfriend says, but is taken advantage of by him, became disillusioned with the program being sold so vigorously by the West.

The arrogant US attitude quickly changed Russian and Chinese minds about fully cooperating with USA. They quickly saw that they must always quietly preserve themselves as nations against the uncontrolled desire of the USA to dominate them completely.

In other words, USA’s initial lack of self-control bungled a historical opportunity to create global mutual cooperation of the global superpowers for the betterment of all concerned.

The second great mistake was believing that the USA won the Cold War. The USSR fell from the weight of its own top heavy corruption seeping down to every village and town, and for no other reason alone.

The Soviet authoritarian system refined and re-refined itself into a totally non-functioning entity. We can see many similar analogies occurring in the USA these days.

At the heart of USA’s foreign policy mistakes lies the idea that USA must endlessly drive forward with force at all times, or defeat will follow. This notion, and the many destructive actions that are based on this notion, are at the heart of our present day difficulties. Torture of prisoners, endless wars, ever more paranoid fear of the world and even of US citizens. Random killing of foreigners in their own nations, supporting increasingly brutal puppet leaders in allied nations. And less and less concern for the needs of main street Americans.

In the eyes of many foreigners, USA is no longer seen as the world’s shining beacon of hope, but as the global bad guy, and this is not good.

USA, and its leaders need to take a long, quiet break,and carefully reevaluate the US position in relation to the world that has grown up around them. Current outdated US policy of attempting to dominate the world’s resources with 1950s style “brushfire wars” and bringing down foreign governments with coups is not nearly as effective as it once was.

We need to take a break and reconsider our relationships with the world, and then move forward as a some sort of “honest broker,”

Rebuilding global trust of USA will take some policy changes and that will take some time and a lot more diplomatic finesse than USA has displayed in recent years.

Posted by Dave66 | Report as abusive

The arguments presented have some logic in it even though not flawless.
1)The deal will be signed just a matter of time. The demand of energy from China has been so high that anyone who can sell them will be welcomed.
2)Putin’s visit and his willingness to go ahead definitely help the pact to be signed. For a seller, one more customer is always better, simple economics. For Putin one more leverage is always better to counter the Western hostility.
3)The recent US turning up the hostility of China in Asian arena, of course, has facilitated China to find a second supplier of energy and market for domestic goods in case more serious arguing with US and US Arab allies decide to stop supplying oil and such. Basic safety measures for any state security measures.

Posted by ClearMind | Report as abusive

” This means that U.S. allies can no longer realistically rely on Washington to deter Russia and China”

U.S. allies (e.g., Germany and Japan) need to step out to the plate more frequently and vigorously on military/foreign policy issues.

Posted by Leftcoastrocky | Report as abusive

Dear Mr. Kaletsky:

You are absolutely right that “A long and complex diplomatic negotiation about rewriting the Ukrainian constitution might well have produced a compromise reluctantly accepted by all parties.” However, nobody in Washington or Brussels is interested in Ukrainians a wee bit. For the mega-bureaucracies of NATO, tensions and bad relations with Russia are a goal in itself justifying their existence and multi-billion dollar budgets,

Sincerely, Peter Lerner

Posted by pblerner | Report as abusive

Inane comments from the ignorant americans

Posted by Benny27 | Report as abusive

[…] China-Russia is a match made in heaven, and that’s scary Anatole Kaletsky, Reuters […]

Posted by Links 5/23/14 | naked capitalism | Report as abusive