Russia-China

A Brittle Axis That Suits Merkel

  • Why it matters

    Why it matters

    • Shunned by the West for its involvement in the Ukraine and Syrian, Russia is reaching out to China. A common call for free trade could further isolate Donald Trump at the G20 summit.
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  • Facts

    Facts

    • Russian President Vladimir Putin and Chinese President Xi Jinping agreed deeper cooperation at a two-day summit in Moscow.
    • Their joint call for open trade was a swipe at the “America First” isolationism of US President Donald Trump.
    • The show of unity between China and Russia masks lingering divisions between the two countries.
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    Audio

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84690148 china russia dpa
A friendly encounter. Source: DPA

At face value, Chancellor Angela Merkel – dubbed the new leader of the free world since Donald Trump came to power – may not welcome a strengthening alliance between two nations as undemocratic as Russia and China. But as she prepares to host the G20 summit in Hamburg, the joint pledge to free trade made by the leaders of Russia and China at their two-day meeting in Moscow is in keeping with her message of a multilateral world – and will underline Mr. Trump’s isolation on the world stage.

Both Mr. Putin and Chinese President Xi Jinping echoed each other in their call for less protectionism and more cooperation.

In a further swipe at Mr. Trump’s threat to put up trade barriers under his “America first” policy, China’s G20 sherpa, Li Baodong, wrote to Handelsblatt that the summit in Hamburg “could make new progress by upholding openness, inclusiveness and multilateralism.”

Days before leaders and protesters converge on Hamburg, Russia and China pledged to deepen their cooperation. On Tuesday, Mr. Putin handed Mr. Xi Russia’s highest state award, the Order of St. Andrew, at a ceremony in the Kremlin for “outstanding services towards strengthening the friendship between the peoples of Russia and China.”

It was, of course, a political statement. Russia has moved closer to China in economic and security policy in recent years while its relations with the West have soured over the Ukraine conflict and the Syrian civil war.

The two-day meeting amounted to a synchronizing of watches ahead of the G20, said Andrei Sidorov, dean of the international politics department of the Lomonosov Moscow State University. “China’s support is very important to us in our relationship with the West,” he said. The rapprochement also suits Beijing because it strengthens its hand against the US.

In reality, though, China hasn’t always delivered the political and economic support Russia hoped for. To be sure, Beijing usually backs Moscow’s UN resolutions in the Security Council, but China has not recognized the Crimea as a Russian territory since it was annexed in 2014, and most of China’s banks adhere to international sanctions against Russia. China has also taken a wait-and-see stance over Syria. So the axis between Moscow and Beijing is not always a stable one.

The axis between Moscow and Beijing is not always a stable one.

During his visit to Moscow, Mr. Xi pledged to work more closely with Russia in international politics not just in the UN but in the Shanghai Cooperation Organisation and in China’s new Silk Road project.

The countries want to find a common stance on Syria and particular on the North Korea crisis, which threatened to escalate further on Tuesday when the country said it had successfully test-launched an intercontinental ballistic missile for the first time, capable of reaching the US.

Mr. Putin called North Korea a “priority” and both Russia and China said they were “concerned” about the missile launch, but they ruled out sanctions for the time being.

The issue could only be solved through dialogue and negotiations, the two countries said in a joint statement that put them squarely at odds with the tougher stance being threatened by Mr. Trump. Moscow and Beijing also oppose US plans for a missile shield, whether it be in South Korea or eastern Europe.

They also plan to cooperate more closely in fighting terrorism with increased intelligence sharing. They face similar problems with separatist movements in Muslim-dominated provinces. Part of that includes increasing surveillance of the internet. “Terrorist ideology is spreading via the internet and social networks,” said Mr. Xi.

But many open questions remain in trade and economics despite the $10 billion in deals that were signed at the meeting. They are still far off their target of increasing their trade to $200 billion by 2020. At present, it totals $66.1 billion. And despite their shared commitment to free trade, their project of a free trade zone between China and the Russian-led Eurasian Economic Union has stalled due to bureaucratic hurdles.

Mr. Xi arrived in Berlin on Tuesday for a meeting with Ms. Merkel, who views him as an ally because he supports her stance on free trade and global warming. “Germany and China are trying to close ranks especially in trade and climate policy as a reaction to major changes in US foreign policy,” said Sebastian Heilmann, director of the Mercator Institute for China Studies in Berlin.

At a short, five-minute joint press statement at the Chancellory, both leaders emphasized the further economic cooperation. Ms. Merkel stated she is looking for more open markets from China, while Mr. Xi said that German-Chinese relations have entered a new phase. The short statement was surely due to the fact that the chancellor and the president have another very important appointment in Berlin.

This afternoon, Mr. Xi and Ms. Merkel will head to the Berlin zoo to unveil two pandas loaned by China, Jiao Qing (Little Darling) and Meng Meng (Little Dream), in a grand ceremony that is in keeping with the best traditions of panda diplomacy. But behind all the friendly rhetoric, there is plenty of friction in their relationship too. German firms complain that Chinese authorities are obstructing their access to the Chinese market. “Even large companies can often only operate in niche areas because of curbs in public tenders for projects such as expanding infrastructure or the health sector,” said Mr. Heilmann.

A particular bone of contention is China’s planned imposition of quotas for electric cars. German automakers face stiff penalties if they can’t meet the quotas next year. Meanwhile Chinese rivals are getting preferential treatment in the form of purchase subsidies and foreign manufactures are being put under pressure to use batteries made in China.

Beijing and the EU are also arguing about China’s demand to be recognized as a market economy, which would make it easier for Beijing to export into the bloc. Brussels is dragging its feet because it wants to preserve its ability to defend itself against cheap Chinese imports. The EU is particularly concerned about Chinese exports of low-priced steel.

 

André Ballin writes for Handelsblatt from Moscow. Torsten Riecke is Handelsblatt’s international correspondent. to contact the authors: ballin@handelsblatt.com, riecke@handelsblatt.com.

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