Putin visiting China in mid-May
Xi says China and Russia have embarked on a new path of harmonious coexistence and win-win cooperation
We’ll potentially learn more about the China-Russia political ties on Thursday, when China releases its preliminary April trade statistics. Interestingly, Chinese exports to Russia fell almost 16 percent in March 2024 from prior year levels. Chinese exports to Russia are an important trend to track, as these shipments are critical for sustaining the Kremlin’s war effort, and a drawback in PRC exports to Russia would be a constructive step from Beijing. It’s possible that Beijing could dial back its “pro-Russia neutrality,” as China’s economic difficulties and desire to maintain ties with Europe may constrain its willingness to bolster Putin. With Xi Jinping visiting France, Serbia, and Hungary across Europe and hosting Putin in mid-May, a modest recalibration of the Chinese position on the full-scale invasion appears possible.
Still, China is likely to continue its “pro-Russia neutrality” even if it reports on Thursday that bilateral trade declined in April. That’s because other evidence suggests Beijing continues to facilitate the Russian war effort. While top-line bilateral trade totals may decline, the specifics of the shipments matter, and substantial amounts of China-Russia trade since the war started has been conducted via third countries, such as Kyrgyzstan. According to reporting from the AP, U.S. intelligence finds that the PRC continues to provide the Russian defense industrial base with critical inputs, such as machine tools, microelectronics, and more.
Table of Contents:
1) China-Russia security ties
2) Bilateral trade
3) CCP – Putin political ties
4) Moscow laying a predicate for electoral interference
5) Energy Corner and Potpourri
1) China-Russia security ties
US Spies See China, Russia Militaries Working Closer on Taiwan – Bloomberg
US intelligence officials assess that Russia and China are working more closely together on military issues, including a potential invasion of Taiwan, prompting new planning across the government to counter a potential scenario in which the countries fight in coordination.
Russia Hosts China, Iran Security Chiefs to Discuss Cooperation – Bloomberg – April 23
Russia’s Security Council Secretary Nikolai Patrushev and China’s security chief Chen Wenqing discussed strengthening ties between the special services and law enforcement agencies of their two countries at talks.
China Providing Geospatial Intelligence to Russia, US Warns – Bloomberg – April 6
Blinken briefed European allies on scope of Chinese support; China said to have stepped up help for Russian war on Ukraine
Russia’s alleged development of a nuclear anti-satellite weapons capability could upend strategic stability between the three most powerful nuclear-armed states: the United States, China, and Russia.
The Real Motives for China’s Nuclear Expansion – Tong Zhao of Carnegie for Foreign Affairs
A close assessment of the evolving thinking within China’s political leadership and security policy circles reveals that Chinese officials are not simply expanding their nuclear arsenal for military-technical purposes. Rather, Chinese leaders seem to have embraced the untested belief that nuclear weaponry grants them greater geopolitical leverage to counter perceived threats. Beijing’s objections to what it sees as an unfair U.S. nuclear strategy and illegitimate U.S. security interests further solidify its willingness to use unilateral measures to address its security concerns.
2) Bilateral trade
Kyrgyzstan’s trade figures defy economic logic, suggesting that a vast amount of its imports are bound for a third country – namely, Russia. Kyrgyzstan’s trans-shipment to Russia of dual-use goods, including ball bearings, vehicle spare parts, and other items, have had direct military implications for the invasion of Ukraine.
Kyrgyzstan has recently announced that it will stop servicing Russia’s Mir payment system. While this step is constructive, Bishkek’s behaviour throughout the conflict has been disappointing.
Comment: Important to note that even though direct China-Russia bilateral totaled about $240 billion last year, substantial amounts of indirect trade occurred via third countries – Kyrgyzstan being the most notorious example, by far.
The US and EU continue to put the squeeze on China, but this will not hamper the development of relations between Beijing and Moscow, Kremlin spokesman Dmitry Peskov told reporters, commenting on information about alleged reports that a number of Chinese banks were rejecting payments from Russia.
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Earlier, the Izvestia newspaper reported that some Chinese banks were sending back yuan payments received from Russia. Before that, there were problems with dollar transfers. Chinese financial institutions are allegedly tightening their requirements due to the threat of secondary US sanctions.
However, in February, the Bank of China told TASS that they had not stopped accepting payments from Russia, and the related reports were pure speculation.
3) CCP – Putin political ties
Putin Plans to Meet Xi in China Days After His New Term Starts – Bloomberg
Trip planned for May 15-16 signals importance of China ties; Putin may raise Russia-China trade volumes at talks with Xi
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Despite the growing economic ties, China’s exports to Russia fell almost 16% in March from a year earlier, according to Chinese customs data. Putin may raise the need to bolster trade volumes between the two countries during his talks with Xi, a person with knowledge of the matter said in April.
Comment: A decrease in Chinese exports to Russia would be a constructive step from Beijing, assuming that trade isn’t just being re-routed via third parties or deliberately underreported.
Xi meets Russian foreign minister – People’s Daily (April 10)
Chinese President Xi Jinping on Tuesday met with Russian Foreign Minister Sergey Lavrov in Beijing.
Xi asked Lavrov to convey sincere greetings to Russian President Vladimir Putin.
Noting that this year marks the 75th anniversary of the establishment of diplomatic ties between the two countries, Xi said China and Russia have embarked on a new path of harmonious coexistence and win-win cooperation between major countries and neighbors, which has benefited the two countries and their peoples and contributed wisdom and strength to international fairness and justice.
[Bolded by The Report – this framing appears to be new, at least within the context of China-Russia relations]
"President Putin and I have agreed to continue to maintain close exchanges to ensure the smooth and steady development of China-Russia relations. The two sides should take the opportunity of celebrating the 75th anniversary of the establishment of diplomatic ties and the China-Russia Years of Culture to fully implement the important consensus reached by President Putin and me," he said.
Xi stressed that China supports the Russian people in following a development path that suits their national conditions, and supports Russia in combating terrorism and maintaining social security and stability.
China always attaches great importance to the development of China-Russia relations, and stands ready to strengthen bilateral communication with Russia and enhance multilateral strategic coordination in BRICS and the Shanghai Cooperation Organization, Xi said.
He added that the two countries will show more responsibility, unite countries in the Global South in the spirit of equality, openness, transparency and inclusiveness, promote the reform of the global governance system, and vigorously lead the building of a community with a shared future for humanity.
Lavrov conveyed President Putin's cordial greetings and good wishes to President Xi. Lavrov said that under the strong leadership of President Xi, China has made achievements that have attracted global attention and provided important opportunities for other countries to achieve common development, which Russia deeply admires.
Lavrov said the priority of Russia's foreign policy is to comprehensively consolidate and upgrade relations with China, and the smooth reelection of President Putin guarantees the continuity of Russia-China relations.
He added that Russia is willing to earnestly implement the important consensus reached by the two heads of state, strengthen bilateral and multilateral coordination, and work with other countries of the Global South to strengthen solidarity and cooperation in order to contribute to creating a more fair and just international order.
Wang Yi Holds Talks with Russian Foreign Minister Lavrov – People’s Daily [Chinese-language]
Wang Yi said that China once again warmly congratulates President Putin on his re-election with a high vote. Maintaining and developing China-Russia relations is not only an inevitable choice for China and Russia as two major neighbors, but also fully in line with the fundamental interests of the two peoples (两国人民根本利益) [Bolded by The Report]. China is willing to work with Russia to give full play to the unique advantages of the China-Russia high-level exchange mechanism in accordance with the consensus reached by the two heads of state, strengthen the docking of the development plans of the two countries, and promote practical cooperation in various fields.
Lavrov thanked China for its valuable support for the Russian presidential election and said that Russia adheres to the one-China principle and is willing to work with China to maintain close high-level exchanges and deepen practical cooperation in the fields of economy and trade.
Comment: Noteworthy that Wang – but not Xi – said the “fundamental interests of the two people.” Beijing adopted this framing after the Prigozhin mutiny in an apparent attempt to institutionalize/de-personalize bilateral political relations.
王毅表示，中方对普京总统高票当选连任再次表示热烈祝贺。维护好、发展好中俄关系，既是中俄作为两大邻国的必然选择，也完全符合两国人民根本利益。中方愿同俄方一道，按照两国元首达成的共识，发挥好中俄高层交往机制的独特优势，加强两国发展规划对接，推动各领域务实合作。
拉夫罗夫感谢中方对俄总统选举给予宝贵支持，表示俄方恪守一个中国原则，愿同中方一道，保持高层密切交往，深化经贸等领域务实合作。
PRC MFA Press Conference – [Chinese-language] April 29th
Serbia is China's first comprehensive strategic partner in Central and Eastern Europe, and the two countries have a deep ironclad friendship. In recent years, under the strategic guidance of President Xi Jinping and President Vucic, China-Serbia relations have maintained a high level of operation, the two sides firmly support each other's core interests and major concerns, the two countries have strong political mutual trust, high-quality joint construction of the "Belt and Road" has achieved fruitful results, and close coordination in multilateral fields. The in-depth development of China-Serbia relations is in line with the fundamental and long-term interests of the two countries and their peoples, and is conducive to maintaining international fairness and justice and promoting regional and world peace and stability.
Comment: Noteworthy framing, although I don’t have anything to say about Serbia.
Putin and Xi’s Unholy Alliance – Alexander Gabuev of Carnegie for Foreign Affairs
Why the West Won’t Be Able to Drive a Wedge Between Russia and China
Throughout 2023, many senior Russian officials and CEOs of the largest state-owned and private companies shuttled to and from China. Senior Chinese leaders—especially those from the military and security sectors—have also made trips to Russia. Russian Foreign Minister Sergei Lavrov is currently in Beijing for talks with his Chinese counterpart Wang Yi. It is notable that this traffic is mostly one-sided—senior Russian officials and business leaders are going to China much more frequently than their Chinese counterparts go the other way, a clear indication of Russia’s desperate need for China. The one exception is the military-security domain, where the visits of high-ranking officials have tended to be symmetrical and reciprocal.
Comment: This is an important data point. I largely agree with Gabuev’s analysis and, clearly, Beijing and Moscow share certain fundamental objectives and perspectives and have grown closer since the full-scale invasion of Ukraine. Still, Sino-Russia political ties could soften considerably in the post-war period. I’ll have more in about a month or two.
Xi congratulates Putin on reelection as Russian president – People’s Daily
Chinese President Xi Jinping on Monday congratulated Vladimir Putin on his reelection as Russian president.
In recent years, the Russian people have united as one, overcome challenges, and made steady progress towards national development and revitalization, Xi said, adding that the reelection of Putin as Russian president fully reflects the Russian people's support for him.
Russia will surely make greater achievement in national development and construction under Putin's leadership, Xi said.
Noting that China attaches great importance to the development of China-Russia relations, Xi said China stands ready to maintain close communication with Russia to promote the sustained, sound, stable and in-depth development of China-Russia comprehensive strategic partnership of coordination for a new era to benefit the two nations and their people.
4) Moscow laying a predicate for electoral interference
West did everything over year to disrupt Russian presidential election — diplomat – TASS
Maria Zakharova pointed out that the West has organized misinformation campaigns and influence in the cyber sphere: from spreading the corresponding content to blocking the apps of Russian organizations on digital platforms, which is also "a very serious element of influence"
Russian embassy in US prepares for provocations during presidential elections — envoy – TASS
The Russian embassy in the US receives many threats, Ambassador Anatoly Antonov said on the Russian TV, adding that provocations are being prepared for the presidential election days.
"We receive a lot of provocative calls, threats. We know that anti-Russian rallies are being planned near the embassies, consulates general, as well as an attempt to break into the embassy territory and - not to disrupt, that would simply be impossible - but to complicate [the elections], to spoil the mood," he said.
Russian election outcome marks victory over Western meddling — Lukashenko – TASS
He lauded how well-organized the electoral process in Russia was. "Naturally, the president [Vladimir Putin] had to work a lot, you saw this. Tirelessly. He traveled across all of Russia, visited various places, and responded to vital questions from the Russian people," Lukashenko said. "The planning and process of the electoral process was perfect. There is a lot to learn. Everybody was mobilized and consolidated <…>. People were patriotic and the result was perfects. This is a lesson for us."
5) Energy Corner and Potpourri
Bipartisan shipbuilding legislation is politically achievable and necessary. Two previous industrial policy bills, the CHIPS Act and the Infrastructure Investment and Jobs Act, were able to pass with support from both aisles of Congress. To address challenges from China and climate, the United States should embrace a proposal first made by retired U.S. Navy Capt. Jerry Hendrix and pass a bipartisan SHIPS Act that provides funding for both military and civilian shipbuilding. With China-related issues a rare point of bipartisan agreement, and offshore wind potentially galvanizing constituencies that have been lukewarm about the need for military shipbuilding, there is a real chance that Congress could pass legislation that provides significant national security, economic, and climate benefits. It’s time for the United States to start building military and civilian ships to address two critical national security challenges.
China said it “firmly opposes” the U.S. investigation into its maritime, logistics and shipbuilding industries, calling the move a “mistake on top of a mistake.”
In an official statement late Wednesday, China’s ministry of commerce said the U.S. provides hundreds of billions of dollars in “discriminatory” subsidies to its domestic industries, “yet accuses China of adopting so-called ‘non-market practices.’”
EU pushes to curb China’s green tech market lead – Politico Europe
Brussels’ new probe into Chinese wind turbines comes as Beijing grabs dominance over global market for solar panels.
Comment: The EU should prioritize indigenous development of its wind energy capabilities and, like the U.S., probe the Chinese shipbuilding complex. More on this soon.
Russia’s Gazprom posts first annual loss in 20 years as sales to Europe collapse – CNN
Kremlin-owned gas giant Gazprom plunged to a net loss of 629 billion rubles ($6.9 billion) in 2023, its first annual loss in more than 20 years, as sales to Europe plummeted in the wake of Russia’s war in Ukraine.
Comment: Things could go from bad to worse for Gazprom. Chinese solar is increasingly limiting demand for Russian natural gas exports to China (and, to a lesser degree, Central Asia). More interestingly, however, Chinese solar panel exports could begin to pressure natural gas demand within Gazprom’s domestic market. More soon.
Green Industrial Policy: A Holistic Approach - Ilaria Mazzocco for CSIS
In the United States, the rise of the economic-climate agenda and green industrial policy has coincided with growing attention to supply chain resilience, economic security, and a deteriorating U.S.-China relationship. As a consequence, the interaction between trade, geopolitics, domestic economic policy, and climate policy demands a new holistic approach from policymakers and civil society to find more politically sustainable and effective policy solutions. More consideration should be given to the specifics of U.S. climate strategy when it comes to trade and international relations and how to integrate climate strategy with the Inflation Reduction Act and green industrial policy efforts.
China has become a battery electric vehicle (BEV) export behemoth. Europe has become the top destination for Chinese BEV exports, for now, and exports could continue to rise due to cost reductions and synergies with China’s shipbuilding complex. Responding to these dynamics could prove challenging for the United States and Europe, given the competing priorities of decarbonization, economic goals, and the mitigation of security risks.
Working with allies and partners, the United States should adopt a joint, balanced approach to Chinese BEV exports by following pragmatic interim guidance while comprehensively studying the security risks these vehicles could pose.
A low-profile post by the U.S. Department of Energy (DOE) may point to a serious strategic change in U.S. policy in trade, energy, and relations with China. So far, the notice has received little or no public coverage or attention despite its potential ramifications—but, combined with other legislative and political signals, it could be a game-changer in the energy landscape.
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Joseph Webster is a senior fellow at the Atlantic Council and editor of the China-Russia Report. This article represents his own personal opinion: he alone is responsible for the entirety of its contents.
Stephen Bleistine assisted with the compiling of this edition.
The China-Russia Report is an independent, nonpartisan newsletter covering political, economic, and security affairs within and between China and Russia. All articles, comments, op-eds, etc represent only the personal opinion of the author(s) and do not necessarily represent the position(s) of The China-Russia Report.