China, Russia shaking economic
status quo By Nikolas K Gvosdev
It is a truism in US foreign-policy
circles that China would never risk its profitable
economic ties with the United States by working
more closely with Russia to frustrate US
initiatives around the world. But the recovery of
the Russian economy has led to reinvigorated
commercial ties between Moscow and Beijing. In
2006, China became Russia's fourth-largest trading
partner, while Russia moved up to become China's
eighth-largest partner.
Chinese Vice
Premier Wu Yi and Russian Deputy Prime Minister
Alexander Zhukov have called
for bilateral trade between the two states to
reach US$60 billion by 2010. Yes, this will still
only amount to one-fifth of the value of Sino-US
trade at current levels. But China is clearly
going to diversify its trading options so as to
reduce its dependency on US markets. (On a
separate note, the European Union has surpassed
the United States as China's leading trading
partner.)
And Beijing wants to build on
the foundation of improved political ties with
Russia as a way to deepen commercial ties.
Speaking recently in Moscow, Wu said, "The Chinese
government attaches importance to such relations
with Russia and has striven to create a sound
platform for cooperation between companies from
the two countries."
Many American analysts
take comfort in the scenario of growing conflict
between a depopulating Russia (especially in its
Far Eastern regions) and a China "bursting at the
seams" disrupting any rapprochement between
Beijing and Moscow. China's former foreign
minister (and current state councilor) Tang
Jiaxuan sees increased economic ties between
Russia's regions and China's provinces along the
common border as the way to forestall conflict -
in particular by linking the revitalization of
China's "red rust belt" of its northeastern
provinces, which have participated less in China's
prosperity, with Russia's Far Eastern regions in a
type of common economic space.
Further
developing China's northern and western regions,
away from the booming south coast, is also driving
its renewed efforts to push for stronger economic
ties among Shanghai Cooperation Organization (SCO)
member states. Alongside the St Petersburg
International Economic Forum last month, an SCO
Business Forum was convened. Wu laid out a Chinese
vision for a new round of regional infrastructure
projects that would link roads, railways,
telecommunication networks and power grids to
"promote the common prosperity of all countries in
the region". And while the overall numbers may
still be small potatoes, China's trade with other
SCO states tripled over the past six years to
reach US$45.2 billion.
One proposal
advanced last month by the Experts' Forum of the
SCO that met in Almaty, Kazakhstan, was for an
Asian energy grouping - combining such producers
as Russia and Kazakhstan with consumers such as
China and SCO observers such as India and
Pakistan. One benefit would be that under such a
system hydrocarbons would not have to be exported
through non-SCO countries, in essence creating a
closed and secure system. Unmentioned in that
conclusion was the realization that a Eurasian
land network would reduce China's vulnerability to
disruption of its energy supplies - which the US
currently transports by sea - in the event of any
clash.
No one should be going into
hysterics any time soon - no new Warsaw Pact is in
the making and we are not returning to having two
distinct world blocs. But we should also realize
that the days of unquestioned US - or even Western
- dominance of the global economic system is
coming to an end, and adjust accordingly.
Nikolas K Gvosdev is editor of
The National Interest.
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