Russian President Vladimir Putin and Chinese President Xi Jingping attend a welcoming ceremony on May 20, 2014 in Shanghai, China.
Sasha Mordovets | Getty Images
Russia and China appear to be intent on strengthening their alliance and fostering deeper cooperation in the face of increased political and economic hostility from the U.S.
The bid to strengthen bilateral ties will continue this week as Chinese President Xi Jinping heads to Russia on Wednesday for top-level talks and a three-day state visit.
On Wednesday evening, Putin and Xi will attend an event to mark the 70th anniversary of diplomatic relations between the two countries. A number of trade and investment deals are expected to be signed, although a Kremlin spokesperson was unable to give more detail when contacted by CNBC, and Xi will also attend and speak at Russia’s annual St. Petersburg International Economic Forum (SPIEF).
A new chapter
Ahead of the visit, Xi remarked on the blossoming relationship between the countries and the need to foster stronger ties. “I look forward to charting the course of our future relationship together with President (Vladimir) Putin and to seeing that our comprehensive strategic partnership of coordination will stride into a new era,” he told Russia’s TASS news agency on Tuesday.
“Our two countries enjoy strong political trust and can always count on each other’s firm support on issues concerning our respective core interests and major concerns,” he noted.
Xi said the countries now had new opportunities for growth and “we have the confidence and capability to bring our relations to a new era of greater development at a higher level.”
Chinese Vice Foreign Minister Zhang Hanhui noted at a press briefing Tuesday that the visit will “be of milestone significance in the development of bilateral relations,” and “surely promote greater development … under the new situation,” Xinhua news agency reported.
Strong political trust
The meeting of the two prominent global powers comes as Russia’s relations with the U.S. are at a low ebb amid continuing sanctions on the country, and China’s relationship with the U.S. is fraught with trade war tensions.
Their traditional economic models — for Russia the export of energy products and for China the export of goods — looks increasingly uncertain. Both Putin and Xi have vowed to fight protectionist policies, an accusation leveled at their U.S. counterpart. Remarking on the trade relationship, Xi told RIA Novosti this week that trade between the two nations is “especially valuable given the current complex environment of sluggish global trade and investment and surging protectionism in the world.”
The international economic forum in St. Petersburg may be one way that Putin and Russia look to showcase the country’s potential, but it has already developed strong ties to China. Russia is a partner nation in Chinese economic initiatives such as the Belt and Road infrastructure project and their cooperation in the energy sector has also increased. The partners have also been promoting settlements in ruble and yuan in an attempt to reduce a reliance on the U.S. dollar and other Western currencies, due to Washington’s sanctions on Russia and trade pressures on Beijing.
China has become one of Russia’s largest trading partners and in 2018, the trade turnover between Russia and China increased by 27.1% from the previous year to $107 billion, according to Russia’s Ministry of Economic Development, and trade figures released already for this year show that number increasing.
The chief executive of the Russian Export Center, Andrey Slepnev, said in November that the $100 billion or so worth of mutual Russia-China trade could double in the years ahead. Crude oil, coal, fertilizers and frozen fish are some of the more substantial exports Russia makes to China, according to trade data from the Observatory of Economic Complexity.
Russia, meanwhile, is an important trading partner of China but 2017 data shows it only accounts for 1.8% of China’s exports (worth almost $44 billion), compared to the U.S. which accounts for 20%, worth $477 billion in 2017.
