Geo-Economic Battle for Russia
REUTERS/Hyungwon Kang
As the world struggles to achieve any semblance of normality amid the developing economic and coronavirus (COVID-19) cries, China is playing towards increasing its influence throughout Eurasia.
In the first quarter of 2020, China bought a record high number of Russian oil (Urals) – 4 million tones. As a comparison, in the fourth quarter of 2019, China received only 2.5 million tones. The previous record of the supplies of Russian oil to China was registered in the third quarter of 2018 – 2.7 million tones. Therefore, China expanded its import of Russian crude by 1.6 times.
This decision of the Chinese leadership could be seen as a politically-motivated move; especially if one takes into the account the declining demand to oil supplies and massive discounts by Saudi Arabia on the Asian market.
Thus, Beijing is choosing to purchase Moscow’s crude oil, as a sort of a “grant” in the conditions of an economic crisis, taking place amid the coronavirus hysteria. How the liberal-controlled economic bloc of the Russian government pushed the country to the brink of the crisis despite years of preparations for the current situation is another question.
Some critics could call the purchase of Russian crude by China a sort of political bribe, which would ensure either Russia’s compliance, or at least Moscow not getting in the way, while Beijing works to realize its geopolitical agenda.
This, however, leads to a bit of eyebrow raising, as Moscow and Beijing have, for a while now, cooperated in various fields of interest, as well as various common regions of interest.
This support from China towards Russia is not unexpected, and it is not surprising, as it also fits into the expected format of new strategic partnerships in Eurasia, that wish to compete with the United States’ ambitions. Purchase of crude oil or not, it is apparent that when it comes to geopolitical activity, China expects that Russia to either support or simply does not stand against the Chinese national security interests.
For example, China formed two administrative units aimed at specifically managing the artificial islands it constructed in the South China Sea.
“The State Council has recently approved the establishment of the Xisha and Nansha districts under Sansha city.”
According to the notice, the Xisha administration will be based in Woody Island, also known as Yongxing Island. Meanwhile, the Nansha administration will be placed in the Fiery Cross Reef, referred to as Yongshu Reef in Chinese.
The US strongly opposes China’s attempt to seize a larger area under its jurisdiction in the South China Sea, not least because it is the region through which the most trade passes year-round.
Meanwhile, the Ministry of Foreign Affairs of the Republic of Kazakhstan hosted a meeting with Chinese Ambassador Zhang Xiao.
Kazakhstan’s side reacted an article published on a Chinese website www.sohu.com titled “Why Kazakhstan is eager to return to China”.
“The meeting pointed out that an article of such content does not correspond to the spirit of eternal comprehensive strategic partnership reflected in the Joint Statement of the Republic of Kazakhstan and the People’s Republic of China, signed by the Heads of State on September 11, 2019. The parties agreed to closely cooperate in the fields of spreading information and mass media.”
Various plans of China’s territorial expansion are actively being discussed in the Chinese society itself. And this appears to be taking place into most directions. Alongside all of this, the intensification in the confrontation between China and the US appears to be all but avoidable.
Another important factor is that the increasing supplies of energy resources from Russia will allow China to be covered in the event of a new military conflict in the Persian Gulf (it will likely involve the US and Iran). In these conditions, Russia, as a key Chinese partner, becomes the apparent and vital supplier of energy resources by contrast with Saudi Arabia and other large oil suppliers.
The COVID-19 crisis has exacerbated the dire situation in which the markets and state economies already were. The crisis deepened the global and inter-regional competition, including those between the two key economic players: Beijing and Washington.
Russia is both an object and a subject of the global geo-economic standoff.
It is an object by virtue of its size – it has a massive market which needs materials (raw and otherwise), but it also produces its fair share of products and energy. It is a subject in terms of the simple fact that it is the world’s second largest military power and is one of the leaders on the international diplomatic scene.
Due to the same reasons, the US might also move towards easing the rhetoric towards Russia, and attempt to expand trade and economic cooperation, something which China would likely also plan to do. Even the media organization of Michael Bloomberg, a key Donald Trump competitor said that it was a possibility.
“Yet a small opening exists to professionalize a segment of bilateral U.S.-Russia ties. Russia has long been interested in pulling the United States into coordinating the global oil market. Although the United States does not need to join OPEC+ and its pledges to mandate production cuts, having regular exchanges about global energy trends could create a niche for constructive discussions between Russian and U.S. officials. It is not crazy to think that a dialogue around common energy interests could evolve into a more meaningful conversation about how to deal with Venezuela’s collapse, for instance,” one of the recent Bloomberg articles says.
However, in the current situation, it is understandable that the Russian leadership is more inclined towards cooperating with China. Beijing has demonstrated itself as a complicated, but also consistent and stable partner. In contrast, the US has spent the last almost 30 years in very apparent attempts to entirely undermine any semblance of Russian strategic power and shake the foundations of the Russian state itself.
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