#7 - JRL 6586
Asia Times
December 3, 2002
Sino-Russian summit: The missing link
By Francesco Sisci

BEIJING - It was the post-Soviet summit, because both countries have opted out of the rigid communist system. It was the summit of the grand neighbors, as both hold many keys to the stability of the whole Eurasian continent. But perhaps it was mostly the summit of the loveless lovers, as they met but kept thinking of the one who was absent: the United States.

The Sino-Russian summit in fact was a grand opportunity for Russian President Vladimir Putin to meet the new Chinese leadership. Russia was honored by being the first country to have a first-hand account of the just-ended 16th Party Congress. However, this honor pales in comparison with the fact that the US was informally briefed on the congress just days before it started (see Jiang in Crawford: The interregnum summit, October 29).

More than a year after the Treaty of Good-Neighborliness and Friendly Cooperation signed by the two countries in July 2001, and the September 11 attack, Russia and China have separately hurried to the woo the US. This year in Rome Russia inked a political agreement with the North Atlantic Treaty Organization and last month China followed suit, starting a dialogue with NATO with the same aim.

It is no small sign that the joint Sino-Russian statement omitted any reference to hegemonism, a code-word that in the past decade has hinted at US foreign policy. In contrast, terrorism, America's present nightmare, had a high profile in the statement, mentioning the attacks in New York, in Bali as well as in Moscow. It is clear that the fight against terrorism will dominate global politics for a long time and while this will distract the Americans' attention away from any confrontation with Moscow or Beijing, it is helping the US redraw the world map.

The forthcoming war against Iraq should eliminate the most dangerous member of the so-called "axis of evil", but it should also give the United States definite control over Persian Gulf oil. This plus the new enhanced US presence in gas-rich Central Asia, thanks to the recent war in Afghanistan, provides the United States with unprecedented and unchallenged control over energy and its global prices. This new situation draws China and Russia together, as the former is hungry for energy because of its fast-growing economy, and the latter wants long-term sale contracts for its oil and gas reserves, whose value and importance could drop after the war. The US hold on energy in fact could have a stabilizing effect on global energy prices by annihilating decades of threats of price hikes manipulated by the Organization of Petroleum Exporting Countries (OPEC). But it could well put China under American check for many years with Beijing's growing dependency on energy imports.

This plight is speeding the deal of a 2,400-kilometer oil pipeline from Angarsk in Siberia to Daqing in northeastern China, which may involve an investment of about US$2.5 billion over 25 years, and possibly also that of gas pipeline from in Irkutsk, Siberia. However, the new fast development of car sales in China could give priority to oil over gas.

The war in Iraq and against terrorism in general is not simply about energy, however important that might be; it is about a new world order where economic growth will give an effective voice to each country. China and Russia must therefore boost bilateral trade, which hasn't grown as fast as they hoped. For the first time the joint statement stresses the importance of cooperation in "banking resolution, credit and insurance". These are new areas added to the old cooperation in technology and raw materials, and these are the weak points of bilateral trade. The banking, insurance and credit system between the two countries has been dominated by northern Europeans and the two governments have given little concrete support to such exchanges, which have been plagued by a wave of small controversies. Standardization of business practices and full government support to banking and insurance should help bilateral trade, although a big question mark remains over the management abilities of the Chinese and Russian banking systems.

This small but concrete weakness enhances the two countries' bigger weaknesses in the new world order, which the US could redraw without needing to bargain with anyone. Even if, as it appears at present, the United States will want to discuss the future world with China or Russia, these two countries need effective and stable economies to help manage the future world. Here Russia fares poorly, whereas China does better. But there is more. Washington believes that a common management of the world needs similar political standards, to guarantee a similar degree of transparency in each other's decision making. Bluntly put, Washington would like to see into Chinese politicking as clearly as Beijing can see into American politicking. Here Moscow looks better than Beijing.

Can China and Russia help each other improving their respective shortcomings in view of a future participation in the new world order? In theory they are better positioned than any other for the purpose, as none else can better understand their predicament as both come out of decades of communism. Yet while the ideological legacy draws them together, the old geopolitical suspicion sets them apart. The Russians ask: Will the new Chinese economic might squeeze Russia out of Asia? The Chinese wonder: Will Russian oil sales dominate Chinese markets?

Centuries of suspicion and confrontation weigh on Sino-Russian relations, and for this China and Russia are now trying to appease each other, pledging to strengthen the Shanghai cooperation agreement and even possibly to favor Russia's accession into what is now ASEAN+3. Yet it is an uphill walk, while both, though smiling at each other, turn their heads to see the reaction of their true love - the United States.