Despite Wariness, China-Russia Relations Warming

They share a border running 4,300 kilometers, but have long been divided by mistrust.

However, if the past several months are any indication, China and Russia are enjoying a distinct warming in relations. A historic oil deal in June and a major joint military exercise in July are the clearest signs of a deepening partnership. Analysts say suspicions are likely to linger, along with outright competition in Central Asia. But economic and geopolitical considerations -- including the urge to counterbalance the United States -- are bringing the countries increasingly in line.

In March, a mere eight days after he was installed as China's new president, Xi Jinping visited Moscow. Russian President Vladimir Putin, who has increasingly turned his country away from the West since returning to the Kremlin in 2012, signed on to a slew of bilateral agreements. He declared that relations between the countries were "the best in their history." Some analysts said the Russian leader was enjoying the images of aligning himself with an economically booming and increasingly assertive power.

But it was the prize fruit of that summit, which ripened in June, that truly caught observers' attention. Rosneft, Russia's state-controlled energy giant, inked a $270 billion agreement to double oil supplies to China. The deal was one of the biggest in the history of the global oil industry.

Disagreement over pricing had constrained past oil deals between the countries. Aleksei Maslov, head of the School of Asian Studies at the Higher School of Economics in Moscow, says the most significant element of the new agreement was how that roadblock was overcome.

"I think that maybe the most striking point is not just [that there was] a new agreement with Rosneft, but first of all, it is the price of this oil, which is much lower than average world prices," Maslov explains. "In this way, Russia tries to keep China as a very good and very, say, polite and flexible partner. Russia is ready to give up some economic interest to gain a new friend."

With Russia well-aware of European efforts to become less dependent on its oil and natural gas, as well as a predicted energy boom in the United States, stronger energy ties with Beijing have become all the more important, experts say. China, in turn, is expected to remain energy-thirsty for decades to come.

The oil deal also included some $60 billion-$70 billion in prepayments from Beijing -- funds that would be a significant boost to the indebted Rosneft. The company had used a $6 billion prepayment from China in 2005 to take over a key branch of Yukos, the oil company formerly controlled by the now-imprisoned Mikhail Khodorkovsky.

Pushing Back Against The U.S.

China has its own reasons for cozying up to Russia, and they increasingly extend beyond energy and trade. Last month, China conducted its largest-ever military exercise with a foreign country, as warships from Beijing and Moscow joined forces in the Sea of Japan. Expanding on exercises last year, the latest war games included fleet air defense and antisubmarine and surface warfare.

Many read the display of force in part as a signal to the United States, which has repositioned military assets eastward and made new overtures to Pacific allies.

Zhao Huasheng, the director of the Center for Russia and Central Asia Studies at Fudan University in Shanghai, says the drills were "not aimed at a specific threat," but acknowledges their importance for the bilateral relationship. "Trust between China and Russia is getting deeper and deeper with time," he says. "I think [the recent naval exercises] are a continuation of military cooperation. This cooperation is one of the most important [areas of] cooperation [between the countries]."



Reports appeared in the Chinese state-owned press following the March summit that the sides had agreed to a deal in which Beijing would purchase 24 Sukhoi Su-35 fighter jets from Russia. Russian officials said a deal had not yet been reached. The outcome could be a key sign of just how much the countries are willing to cooperate militarily. Russian arms supplies to China have dropped off in recent years amid concerns over Chinese intellectual-property infringement.

While most analysts say Chinese and Russian interests in the West will prevent the formation of a full-fledged anti-Western axis, both have been comfortable with playing the foil. The countries have seen eye-to-eye at the UN in recent years, citing a policy of noninterference in blocking or weakening the international body's action on Syria, Iran, and North Korea. A recent op-ed in "The New York Times" said that the countries' UN records, their recent display of military unity, and their coordination on the travel of accused U.S. leaker Edward Snowden, together suggest that they have conspired to "knock Washington down a peg."

Both countries have also expressed skepticism about the presence of U.S. missile interceptors in Alaska and have floated the idea of establishing a new international lending institution to rival the Western-led International Monetary Fund and World Bank.

"This is a Russian search for new self-identity -- a new position in the world," Maslov says. "I think that Russia [now] regards China as a strategic partner. Both sides never speak about some kind of anti-U.S. alliance, but we can see that a lot of steps that were taken by both sides could be regarded as, say, anti-Western or, strictly speaking, anti-U.S. measures."

From the Chinese side, Zhao says he believes that "Russia and China reinforcing each other's opinions in the international arena can benefit China a lot."

Not Allies Just Yet

Just how deep ties can become remains to be seen. Skeptics say energy and arms deals could fall apart before being implemented. Moscow fears Chinese demographic pressure on the sparsely populated Russian Far East. Despite the bold show of military cooperation in July, Moscow is also wary of Beijing's might. Russia has not backed Chinese claims to territory in the South China Sea. China, in turn, has refused to recognize the pro-Moscow breakaway Georgian regions of Abkhazia and South Ossetia.

Likely their greatest point of divergence is on Central Asia -- a region that Russia continues to consider its "near abroad," but one that China is fast integrating into its economic orbit. In 2012, all Central Asian states except for Uzbekistan traded more with Beijing than Moscow. Analysts say Putin's efforts to establish a Eurasian Economic Union is largely an attempt to limit Chinese economic dominance of the region.

Writing in "The New York Times" last month, American analyst Jeffrey Mankoff emphasized the limits to Chinese-Russian relations. He described their cooperation as "tactical" and not a true "strategic partnership."

But tactics, he conceded, can still have big consequences.