Kremlinology is back in vogue. Experts and analysts have come out of the
woodwork to run a fine-tooth comb through Kremlin events, searching for clues
on the direction of Russian policies under new President Dmitry Medvedev.
Often in the Soviet era, during feverish over-analyses by foreign experts, the
obvious would get elbowed out in favor of tantalizing interpretations over men
and mice. Could history be repeating itself?
Much has been made of Medvedev's choice of Kazakhstan and
China as his first destinations after assuming office from Vladimir Putin on
May 7. Was it a deliberate signal to Western capitals? Moscow pooh-poohed the
suggestion. A prominent Moscow commentator pointed out, "It would be best to go
to the East and West at the same time, but that is impossible."
But the disarming explanation overlooked the fact that Medvedev after all did
make a choice in traveling to Beijing via Astana last weekend. Eight years ago,
in 2000, when Putin went abroad as Russia's president for the first time, he
travelled to London via Belarus. At that time, Moscow let it be known there was
rich symbolism in Putin's choice, which was intended to convey that Russia
wanted closer ties to the West.
Equally, in May 2003, Chinese President Hu Jintao's first foreign visit took
him to Moscow. The government-owned China Daily newspaper aptly commented on
the day of Medvedev's arrival in Beijing on Friday: "The first foreign trip of
any head of state should be a carefully calculated move. The country he or she
visits is supposed to be important to his or her own country's foreign
relations. Little wonder that Medvedev's two-day China visit has generated much
interest ... Clearly, new leaders of the two countries have put their bilateral
relations on top of their foreign policy agenda."
Pragmatic cooperation
The Chinese comment stated the obvious to emphasize the bilateral content of
Medvedev's visit. In fact, Chinese Assistant Foreign Minister Li Hui told the
media at a briefing that Medvedev's visit would have four "goals": one, to
establish a "working relationship and personal friendship" at the leadership
level; two, to oversee the fulfillment of bilateral cooperation in practical
terms; three, to increase political trust and extend mutual support on "issues
concerning sovereignty, security and territorial integrity"; and, four, to
deepen "pragmatic cooperation".
The fourth "goal" - pragmatic cooperation - captures the quintessence of the
so-called strategic partnership between the two countries. China would have no
difficulty to know that Russia has been and will remain essentially
Western-centric (as distinct from "pro-West"). Over two-thirds of Russia's
population live in its European part and the locus of economic and political
power lies there.
But that does not detract from Russia's abiding interest in China, which is
natural and historical as a neighboring country, and combines pragmatically in
the present day with the imperatives of China's phenomenal rise. At the same
time, Russia realizes that it is only one among many big players seriously
engaging China and cannot hope to claim a privileged partnership with it.
No sooner had Medvedev concluded his two-day China visit on Saturday, South
Korea's newly elected "pro-American" President Lee Myung-bak arrived in Beijing
on a four-day trip. China followed the United States and Japan in Lee's
itinerary. South Korea's trade volume with China is four times that of
Russia's.
A free trade agreement between the two countries is under negotiation. China
hopes to collaborate with South Korea in finessing a regional security
mechanism for the Asia-Pacific region. Similarly, by Monday, Moscow's attention
had already began drifting westerly toward Brussels, where European Union (EU)
foreign ministers finally announced plans to commence negotiations with Russia
over a new strategic partnership and cooperation agreement.
The talks are expected to begin at the EU-Russia summit meeting in the town of
Khanty-Mansiysk in Russia's Siberia on June 26-27. Moscow is keenly listening
to the new voice of realism ringing in Brussels, with both Old and New Europe
alike advocating a new partnership with Russia. As noted Russia hand Jonathan
Steele of the Guardian newspaper of London wrote, "The reality is that
interaction between Russia and the EU is bound to develop in all these areas,
however they are labeled."
Frictions in cooperation
Moscow would have reason to worry that frictions have appeared in two areas of
its ties with China, which are critical to sustaining the momentum and verve of
the strategic partnership. First is the energy relationship. The implementation
of the multi-billion contracts signed in 2006 for Russian energy supplies to
China has run into difficulty. Russia's Rosneft oil company is threatening to
terminate the contract unless China agrees on a price increase.
This may also complicate the signing of a new agreement for the supply of 50
million tons of Russian oil to China in 2010-2015. In turn, this puts a
question mark on the efficacy of the Chinese branch to the East-Siberia Pacific
Ocean (ESPO) oil pipeline, which Russia is constructing. In an interview with
Chinese journalists in Beijing prior to his departure for Moscow, Medvedev said
Russia and China have reached a "basic agreement" on the ESPO and that the
negotiations on oil price are "nearly complete". Expressing willingness to set
up new oil refineries in China, he said natural gas cooperation with China is
also "under discussion". But there was no concrete outcome during the visit.
The root of the problem in energy cooperation lies in Russia's focus on
expanding its European market, which is where the money lies. Unlike the
Europeans, China constantly seeks discount prices. Also, Russia's deposits are
mostly in western Siberia, which is closer to Europe than China. The existing
pipeline system is also orientated heavily toward supplying the European
market. Russia's priority lies in buying downstream assets in Europe. All in
all, China is quite a long way from becoming an alternative market for Russian
energy exports, which in turn acts as a disincentive on Russia committing
investments on projects geared for China. Medvedev mentioned in China that the
Shanghai Cooperation Organization (SCO) should develop "new directions of
cooperation" in the field of energy. China and Russia are the lead nations in
the SCO, which also includes Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.
The second fault line in Russia-China cooperation concerns military
cooperation. The stark reality is that the Russia-China bilateral commission on
military cooperation hasn't even had a meeting during the past two years.
Russian Defense Minister Anatoly Serdyukov's visit to China has been repeatedly
postponed. At present, Russian companies have nothing on their order book from
China. Simply put, China has stopped buying weapons from Russia.
Post-Soviet Russia supplied more than 90% of China's imports of weapons and
China accounted for 39% of all Russian exports. In 2007, China was the
single-biggest recipient of Russian weapons. Yet, as of today, there are no
outstanding Chinese orders with Russia for big-ticket items. It seems China is
signaling its displeasure. The point is that for a variety of reasons, Russia
is reluctant to supply China with state-of-the-art weapons systems such as
rocket-launched flame-throwers, long-range bombers, nuclear-powered submarines,
etc. China would have noted that Russia has no such misgivings about supplying
sophisticated weapons systems to India.
A Russian commentator argued, "Such [Russian] caution is not pleasant for
China, which has suggested that Russia think about the future of bilateral
military technical cooperation. Bilateral military ties would have been rolled
back to zero very quickly, if not for a European ban on the supply of weapons
and combat control systems to China."
Curiously, Russia doesn't seem to be unduly perturbed by this decline in
deliveries and orders. Arguably, Russia has already begun securing orders from
other countries to make up for the "loss" of the Chinese market. The head of
Russia's Federal Service for Military and Technical cooperation, Mikhail
Dmitriev, was on record last December that Russia had secured orders worth
US$32 billion from several countries, including new markets such as Algeria,
Indonesia and Venezuela. There are no clear indications of Medvedev's talks in
Beijing having resolved the differences impeding Russia-China military
cooperation.
Russia woos China
By far the most impressive outcome of Medvedev's visit to China concerns a
nuclear agreement. Russia secured contracts in excess of $1.5 billion. This
includes the construction of two VVER (Vodo-Vodyanoi Energetichesky Reactor)
1,000 reactors and a gas centrifuge plant in China, apart from Russia providing
uranium-enrichment services and implementing a high-capacity fast-breeder
reactor.
Significantly, Russia agreed to share with China for the first time the high
technology behind gas centrifuges produced in secrecy at the Kovrov mechanical
plant in the Vladimir region. The contract provides for Russia supplying 6
million SWUs (separation work units) of low-enriched uranium to China, which is
very substantial quantity. (The entire uranium-enrichment capacities in the
world amount to 36 million SWUs currently.)
Medvedev's visit to China underscores Russia's wooing of China. Moscow extended
a strong show of support to China in countering Western pressure on Tibet.
Moscow has generously come to the aid of earthquake victims in China. Against
the backdrop of the growing chill in Russia's ties with the West, Moscow
estimates the need to strengthen its strategic understanding with Beijing. The
joint statement issued after Medvedev's visit strongly affirms a common
position between the two countries regarding the US's missile defense system,
the US's pressure tactics on human rights and related issues, the problem over
Iran's nuclear program, the militarization of outer space, etc. In a speech at
Beijing University, Medvedev said, "Russian-Chinese cooperation is now becoming
a key factor in international security - a factor without which it would be
impossible to take fundamental decisions through international cooperation."
All the same, the fact remains that the normative convergence in the
Russian-Chinese strategic partnership aims at achieving certain specific
objectives and shared interests and is not about values. Attention now turns to
the annual meeting of the SCO in August in Dushanbe, Tajikistan.
So far so good. But the massive imbalance in bilateral trade (Russia
increasingly supplying raw materials and China exporting engineering products);
the drop in Russian military sales; and the impasse in energy cooperation -
these negative developments have undoubtedly introduced an element of chill in
bilateral ties. As the political commentator of Russia's Novosti news agency
put it rather sardonically, "It is difficult to understand what to do next -
invest more in each other's economies, continue cooperation in space (we have
programs to develop the moon, Mars and Phobos), make movies together, or
translate more books? Shall we do all of that at the same time?"
M K Bhadrakumar served as a career diplomat in the Indian Foreign Service
for over 29 years, with postings including India's ambassador to Uzbekistan
(1995-1998) and to Turkey (1998-2001).
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