We are currently witnessing an expansion of the Sino-Russian cooperative axis, notably within their mutual economic cooperation. Indeed, both countries have recently confirmed their willingness to further the already existing partnership in the energy field. Over the past month Gazprom CEO and Chinese Vice Premier Zhang Gaoli have been cosying up over a deal to establish a new gas pipeline and reinforce bilateral cooperation in oil-gas operations. Other major companies on both sides have followed suit.
Emerging estimations point to the fact that trade between the two countries has grown new roots in 2017. Moscow and Beijing have extended collaboration in nuclear energy, space and civil aviation, aircraft construction, arctic exploration, digital economy cooperation and agriculture. Chinese Commerce Ministry spokesman Shen Danyang predicted in May of this year that breakneck trade will eclipse $80 Billion before the year is out – a rise from $69.5Bn in 2016. Russian exports to China rose 33 per cent in January-April, while the reverse up 22 per cent.
The precedent has been set as additional efforts are afforded to see bilateral trade reach $200 Billion within the coming 3-7 years, according to Russian Prime Minister Dimitry Medvedev. Preferential trade ruling will enable the yuan renminbi and rouble to be used in settlements, so reducing transaction costs.
This comes as Russia accepted Beijing’s formal invitation to take part in the One Belt, One Road initiative (OBOR). The purpose behind the $900 Billion project is to integrate the Asiatic countries in a regional bloc market structure that, in turn, aspires to closely resemble that of the European Union.
In the wake of Donald Trump following up on his announcement to withdraw this January in signing a presidential memorandum formally withdrawing the US from the Trans Pacific Partnership Deal (TPP); China and South-East Asia had to look elsewhere.
This elsewhere led to the reenacted interest in reviving the ancient Silk Road – a cross-continental route. While the remaining 11 signatories pursue TPP without American assistance, China casts her eyes westwards.
The OBOR project may offer effective and temporary relief to Russian-European tensions, reviving a country plagued by sanctions. There are, however, inflection points between the two super states.
On such point of divergence is their personal relationship with the West, wherein future confluence seems highly unlikely. China entertains a more proactive and favourable liaison with its modicum of liberal free market interactions.
Russia, meanwhile, appears supportive of the conservative versus liberal tensions endemic to current US and European politics.
Such divergences appear to leave unchanged Sino-Russian relations. Just this week, payment versus payment (PVP) was established - a system that promises to aid facilitation of rouble-yuan transactions by easing business affairs and remove the collateralised economic risk of doing business is non- transparent regions.
Russia would be the first country to see the realised benefits of China’s master-plan OBOR coming into fruition. Despite leaving the door open to further inclusion of new members in future, PVP was created with the sole intention of undermining the greenback’s de facto status as the world’s reserve currency.
A relaxation of economic sanctions may bring Russia more into the fold of US shores and prevent a financial and trade takeover. Furthermore, such a move could facilitate North Korea talks and allow the matter of Kim Jong-Un’s nuclear arsenal to be brought to bear.
However, this state of affairs is not on the table for Capitol Hill at present. To pardon the Kremlin for the annexation of the Crimean peninsula in 2014 would mean that Russia can do whatever it feels like on the international stage. And that would bring chaos to the European continent, sparking fears amongst several nations.
Riccardo Scroppo is a third year Politics and International Relations Student at The University of Manchester
Edited 16/11/2017 08:44 GMT.