What the China-Russia Alliance Means for the World Transcript

This Mazda dealership highlights important fallout from the war in Ukraine because it’s not a Mazda dealership anymore. The site on the outskirts of Moscow now sells vehicles made by Chery, the Chinese car maker. The same with this one in St. Petersburg. It used to sell only Audis. Now it has cars from Geely, another Chinese brand. And this one and this one. In fact, Russia is now the biggest buyer of Chinese cars. Imports have jumped fivefold as foreign automakers exit the Russian market, and cars are just part of the picture. There’s oil, gas, electronics, clothing, and plenty more besides.

China is Russia’s largest trading partner, made up about 20% of total imports back last year.

Underpinning it all is the relationship between these two men. But this is not an alliance of equals.

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The relationship with China is now by far the most important that Putin has.

In short, Russia needs China more than China needs Russia. The way that tie-up evolves will have major implications for the global balance of power.

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The relationship between Vladimir Putin and Xi Jinping may be the single most important dynamic in global affairs. They were born around the same time to fathers who fought in the Second World War, but their mutual distrust of the US may be their strongest bond.

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Following alleged war crimes and genocide perpetrated by Russian forces invading Ukraine, Putin is the subject of an international arrest warrant. So it’s significant that he decided to attend the Belt and Road Forum in Beijing, the tent pole event of China’s trillion dollar infrastructure investment program.

He’s been able to travel almost nowhere since the beginning of this war for fear of being arrested. He obviously feels very comfortable going to this event, which in itself is quite important for Russia, which has been a recipient of significant amounts of investment.

Putin’s presence at the forum also helps counter this image that Russia is isolated on the world stage and in a way helps legitimize his role as a world leader. That’s actually quite a new dynamic in the relationship between Putin and Xi that has emerged really directly as a result of his invasion of Ukraine.

The last time Russia and China were this close was in the years after the Second World War. The power dynamic was different.

The Soviet Union was richer, more technologically advanced, and it was very much the sort of elder brother in the partnership.

The two giants of the communist world signed a 30-year treaty of friendship, alliance, and assistance.

It gave joint collective security, promises that if one was attacked then the other would support it.

That close relationship proved relatively short-lived. After Joseph Stalin’s death in 1953, tensions mounted between the two nations, culminating in a border conflict in 1969. There was no real [inaudible 00:03:41] until the collapse of the Soviet Union.

The relationship really started to move in 2014 after President Putin annexed Crimea and essentially began to break his relationship with the west.

Vladimir Putin was the first world leader that Xi Jinping sat down with after he took the first job, and they’ve met 40 times. They’ve even celebrated their birthdays together.

Just weeks before President Putin invaded Ukraine, you had a meeting with Xi in which they put out a 5,000 word statement on the relationship.

Vladimir Putin and Xi Jinping have closed ranks against the US and its allies on key security issues. The two met in Beijing. They declared there are no limits and no forbidden zones in the friendship.

Russia’s invasion of Ukraine started tilting the balance of power in China’s favor.

The result of the war is that China has become by far Russia’s most important partner, diplomatically, economically. It really provides him the protection he needs from the isolation that the west is trying to impose.

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The trading relationship has just exploded. We’ve reached $190 billion last year. It grew another 40% towards the beginning of this year.

Chinese cars, televisions, and smartphones are all helping fill a shortfall in Russia as foreign firms flee, and the auto making industry is a particularly good example.

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China is benefiting from the relationship to securing access to Russia’s plentiful natural resources.

The result of the war has been that Russia has been shipping a lot of oil, in particular, toward China, that it can’t now export to Europe and elsewhere.

And there’s a major opportunity for Xi to pursue his own longterm goals.

Beijing has long tried to push the use and the global use of the UN, essentially to challenge the dominance of the dollar. The war in Ukraine has probably done more to advance that cause than decades of policymaking in Beijing. The UN’s use in Russia’s export payments surged 32 times last year. China’s exports to Russia have jumped 62% in the first eight months of 2023.

There are still limits to China’s support for Russia. Although Xi has failed to condemn the war explicitly, he has also said he supports Ukraine’s sovereignty.

It’s pretty clear that the war, as it unfolded, is not something that President Xi or the Chinese would’ve chosen. China remains very interlinked with the global economy, and this war was mainly a problem for them.

China’s failure to explicitly condemn Russia’s war in Ukraine is not just damaging China’s global image, but is really directly damaging the appetite of European businesses to invest in China and to engage in China at all.

On the current trajectory, the relationship only appears to be getting more symbiotic.

For China, it’s trying to strike this very careful balance, on the one hand, benefiting economically from closer ties to Russia, but on the other hand also trying to still figure itself as a neutral mediator that is a responsible actor on the world stage.

For the US, for the west in general, having China and Russia allied is obviously makes for a pretty powerful opponent in the race to redraw the international order.