Will China strangle Russia in a friendly embrace?

2024 Author: Seth Attwood | [email protected]. Last modified: 2023-12-16 15:55

China cannot absorb the Russian economy, President Vladimir Putin said at a press conference following the Belt and Road Forum on Monday, May 15, Lenta.ru reports.

"We are not a country that is afraid of something, and China's actions are not aimed at absorption," Putin said in Beijing.

According to the president, the two countries are making joint decisions that should not harm either of them. The Russian leader also noted that Moscow intends to deepen cooperation with China. In particular, we are talking about joint projects in space.

“We are cooperating in space, quite successfully, and there is every chance that we will increase this cooperation. On the agenda is the delivery of our rocket engines to China,”he added.

Earlier it was reported that Gazprom and China's CNPC signed a contract for pre-design studies to build an underground gas storage facility in China.

However, just because Russia is not one of the official participants in the One Belt - One Road project, it is clear that there is caution in Russian policy towards an economically powerful neighbor. Svobodnaya Pressa wrote about this.

The tenfold demographic imbalance in the population of the Celestial Empire and Russia has not gone anywhere either. So how close do we need to be friends with China economically?

“Even during the premiership of Yevgeny Primakov in the 90s of the last century, the idea of an economic union of Russia, China and India was put forward,” says Dmitry Zhuravlev, Director General of the Institute of Regional Problems. - This alliance, at least in the economic sphere, could create a counterbalance to the US autocracy. Then we had a clear technological superiority that could be combined with the human and technical resources of China and India. I remembered this because in the entire recent history of Russia we have been hesitating between allied relations with China and the danger that a growing neighbor may pose for us.

At the same time, an economic union within the framework of macroeconomics is quite achievable. We have raw materials, rich farmland, and in some areas we are still technologically superior to China. China already has a strong manufacturing base and, just as important, a niche in the global market. Even if tomorrow we start mass production of goods comparable in quality to the best Chinese goods, simply no one will buy them just because they are Russian.

Of course, some barriers are created by the difference in the political systems of the two countries. However, the modern market economy is not limited to macro relations. I think that the residents of Chita listened to Vladimir Vladimirovich with some surprise. Since the vast majority of shops in this city are in fact owned by the Chinese. That is, according to the law, of course, foreign citizens are not allowed to register their small businesses there, but the Chinese have found loopholes and now, under the guise of workers, monitor their shops, while Russian “directors” turn over boxes of goods.

Is that bad, in your opinion?

- There are traditionally two dangers in this situation. First, the main income, of course, goes into the pockets of the owners, that is, they do not work for our economy. And secondly, the Chinese are a very organized nation. And if there is any aggravation in relations between Russia and China, they will massively curtail their enterprises. This has already happened more than once in the history of Chinese civilization, since the Chinese have centuries-old experience of activities in adjacent territories.

This, of course, is not a mortal threat, but still a certain danger. For the sake of objectivity, I must say that there are cases when businessmen from Russia acquired enterprises in the adjacent Chinese territory. But these are still exceptions to the rule. I repeat, this problem is not a global one, but it is better not to run it, but to somehow solve it. As far as macroeconomics is concerned, I believe that there is no danger of a Chinese takeover of us, provided that the Russian government has a somewhat reasonable economic policy.

Why did the economic union with China not work out back in the 90s and is there a chance that something will work out now? There is a feeling that the Chinese, politically, as if supporting Russia, economically still look more at the United States

- The fact is that the Chinese, like the British, have no friends - they have interests. China's relations with the United States are as contradictory as those with Russia. On the one hand, China today is, de facto, a remote plant of the United States. If tomorrow the Chinese stop supplying their consumer goods, the Americans will remain naked. But at the same time, the Americans largely pay with promissory notes and rigidly hold the Chinese as suppliers of consumer goods. And in this connection, the PRC and the United States are interdependent. As we can see, Donald Trump does not even remember his campaign promises to give up Chinese goods. If the United States put pressure on the Chinese and gradually, but purposefully began to abandon Chinese consumer goods, the Celestial Empire would almost certainly enter into a closer economic union with us. However, the United States understands that the cost of their goods will be an order of magnitude higher than the Chinese ones and they will not refuse export from the PRC there. Perhaps for some types of goods.

That is, at the moment, the Chinese are still more interested in being economically “friends” with the United States?

- The fact of the matter is that it is more interesting and profitable for them to be between Russia and the United States. Yes, Russia in the foreseeable future will not be such a profitable market for the sale of goods as the United States. But it is dangerous for the PRC to get too close economically to America. The Chinese are already in a situation where they have a lot of American bills, which it is not clear on what to spend. They cannot give a damn about the United States, because then no one will pay them back huge debts. On the other hand, the continuation of the situation when they pay for goods with cut paper also strains them.

What benefit can we derive today from economic interaction with China?

- We can supply China with technologies and energy resources for production. In this case, the products will be considered either joint or Chinese. In addition, we can find capital in China, of which there is even too much. In most of the developed countries of the world there is an abundance of capital, but we have a shortage. And the third point is cooperation on the "One Belt - One Road" project. The Chinese understand that the New Silk Road can also bypass Russia, but it will be more expensive. Therefore, we must not miss our benefit from this project.

“Today, life itself is pushing Russia to cooperate with China,” said Alexander Shatilov, Dean of the Faculty of Sociology and Political Science of the Financial University under the Government of the Russian Federation. - In the current global geopolitical situation, it is not easy even for the Celestial Empire to survive. China is interested in a Russia that does not recklessly obey the dictates of the United States and the West. At the same time, one must understand that it is more difficult for Russia, since the main blow of the West is directed precisely against it. This means that we are also interested in having a relatively reliable partner in geopolitical terms, at least on the eastern borders.

As for the economy, I believe that we should not openly integrate into China's global projects. Including the project "One Belt - One Road". I believe that we need to focus more on building the Eurasian Union, which has recently kind of faded into the background. It is obvious that our policy of buying the loyalty of the post-Soviet republics has shown its ineffectiveness. We regularly forgive debts, provide other economic assistance, and in return we do not even receive political support from the same Central Asian republics.

Against this background, frank integration of Russia into global projects is risky precisely from the political side. It is unlikely that China will somehow "undermine" the Russian economy, but we can finally lose the initiative in the post-Soviet space, which will even more question the project of the Eurasian Union. And then we will really have to play by the Chinese rules in the economic sphere. There are certain risks in this.

Much has been said before that the population in the Far East and Siberia continues to decline. This process continues. Doesn't this threaten our territorial integrity?

- Of course, this process creates a temptation for external players, including China, to try to somehow "crush" these spaces for themselves. However, not only China is closely following the processes taking place here. In the West, more than once voices have been heard that the Russians, they say, have too much land and resources, they must be forced to share.