Market Data 
Russian President Vladimir Putin is on a two-day visit to China, and he’s bringing along a large trade delegation. It’s his first official trip overseas following his reelection for a fifth term, and it comes days after he appointed a civilian economist to helm Russia’s defense ministry, showing his country’s wartime economy is here to stay.
But while China is Russia’s most important market, Putin is not just courting his Xi — who has called Putin his “old friend” — for economic support. The Russian leader is also forging a strategic relationship.
“The two states are allies not because they share any particular cultural or ideological affinity; rather, they have come together on account of the old adage that the ‘enemy of my enemy is my friend,'” Chels Michta, a non-resident fellow at the Center for European Policy Analysis, or CEPA, wrote on Wednesday.
“Their partnership is largely practical — anchored in hard power principles bereft of ideological pretense or posturing,” added Michta.
It’s realpolitik — “both parties believe they have more to gain from continuing to work together than they risk losing,” wrote Michta.
Putin needs to balance out China’s hold over Russia’s economy
Russia’s economy has remained resilient in the face of more than two years of Western sanctions, partly thanks to boosts from state subsidies and wartime production.
An economist went as far as to say that Russia’s economy is so driven by the war that it cannot afford to win or lose in the conflict.
But Russia has also become increasingly reliant on China since it started the war in Ukraine. Bilateral trade reached a record level of $240 billion last year — a 26% jump from $190 billion a year earlier.
“It is fair to say that without China’s economic support, Russia would not have been able to brave the economic sanctions imposed on it by the West in the wake of Putin’s all-out invasion of Ukraine,” wrote Michta.
However, the boom in trade has served China’s interests more than Russia’s, putting Moscow in an increasingly subordinate position. For instance, Russia is now “exporting raw materials to China while China sends finished goods, especially cars, to Russia — the latter at the expense of Russia’s indigenous auto industry,” she added.
So, a key item on Putin’s agenda in China would be to get the Chinese to endorse a proposed new natural gas pipeline from Siberia to China, since Russia has lost its market to Europe — previously its single largest market — due to sanctions.
“By selling large volumes of cheap gas to China, Russia can potentially tie Beijing into a closer geopolitical alliance,” analysts at the Center on Global Energy Policy at Columbia University wrote on Wednesday.
“Convincing China to commit to such a large project during the war would be a geopolitical coup for Moscow, demonstrating to the West and the Global South that it is able to deepen its energy relationship with China despite the war,” the energy analysts added.
But China doesn’t actually need more gas before the mid-2030s, so time is on Beijing’s side.
China says it wants peace, but has more to gain from continued war
Beijing has called for peace in Ukraine and put forth a proposal — which some analysts say is vague — to that end last year.
However, some analysts say China has more to gain from a continuing war.
“America’s continued support for Kyiv — and hence Russia’s inability to secure its gains in short order — is actually in Beijing’s interest,” wrote CEPA’s Michta.
“The termination of US aid would work against China since the implosion of Ukraine would halt — or at least slow — Moscow’s slide toward vassal-like dependency on Beijing,” she added.
Beijing appears to have decided that backing Russia is worth any retaliation from the West, added Michta, who is also a military intelligence officer serving in the US Army.
This is because an increasingly dependent Russia may be able to offer Beijing key military technology it has developed in the post-Soviet era, thus helping China make huge strides in the sector.
Moscow and Beijing want to upend the West’s dominance in the global order
Despite their attempts to one-up each other, Russia and China’s ever-closer relationship is a problem for the West.
“Currently, a unity of purpose between the autocratic powers has created the closest relationship in decades. China and Russia are forging a partnership increasingly reminiscent of a great power alliance,” wrote Michta.
In particular, Beijing has set its sights further than Russia — which is more interested in changing power relationships in Europe.
“Beijing is pursuing a far more ambitious project aimed at changing the foundations of the global order, ending once and for all the era of worldwide Western dominion,” she added.
