Russia, China, Propose Global Trade and Cooperation ‘New Era’
Joint statement proposes a multi-polar world: existing allies may have the collective means to globally instigate this.
Now the dust has begun to settle concerning the Moscow summit held between Russian President Putin and Chinese President Xi Jinping, we can examine the strategic trade issues both sides commented on in their Joint Comprehensive Strategic Statement, referring to it as a plan for a ‘new era’.
In this article I concentrate on the geopolitical strategic and trade aspects, based upon the complete statement, which is in Chinese and significantly more detailed than the truncated English-language version published here. It is not the complete statement as in this article I concentrate on the trade aspects. For a complete analysis of their full statement, including security and energy issues, please click here.
This follows, with my comments in italics. Subject headings in bold are for subject guidance only and were not part of the statement.
Joint Russia-China Statement
With the unremitting efforts of both sides, the China-Russia Comprehensive Strategic Partnership of Coordination for a New Era has reached the highest level in history and continues to move forward.
China and Russia regard each other as priority cooperative partners, always respect each other and treat each other as equals, which has become a model of major power relations today. Under the guidance of the Heads of State, the two sides have maintained close exchanges at all levels, conducted in-depth communication on major issues of mutual concern, enhanced mutual trust, and ensured that bilateral relations run at a high level. Both sides are willing to further deepen bilateral relations and develop dialogue mechanisms in various fields.
During the visit, numerous documents were signed on bilateral trade and economic cooperation, in particular on soybeans, forestry, trade shows, the supply of frozen products and infrastructure facilities.
The two sides pointed out that the current world changes are accelerating, and the international pattern is undergoing profound adjustments, including peace, development, cooperation, and win-win results are an irresistible historical trend. The formation of a multi-polar international pattern is accelerating. There are increasing numbers of regional powers that are strong and determined to defend their legitimate rights and interests.
CDE: The West has often used the United Nations General Assembly Resolution ES‑11/1 vote condemning Russia’s involvement in the Ukraine conflict on March 2, 2022, which was passed by 141 voting in favour, 5 against, and 35 abstentions in order to express global support for an ‘anti-Russian’ movement. However, it should be pointed out that this vote carried no actual weight, UN members were not committing to any specific action, merely indicating they disapproved.
Should that vote be held today, the results may be somewhat different. This is due to a number of factors, not least because the conflict has now impacted nearly all UN members and especially among its developing nations. They have seen energy prices skyrocket, food supplies and prices both disrupted and increasing, and consequently wish for the conflict to be over. The EU especially has been seen as culpable in the unfair distribution of grains and responsible for pushing energy process up by buying everything available on the market – without thought to other nations being priced out of the market.
Today, the main barrier to peace is shifting to being seen as the responsibility of the collective West itself – with the United States and EU dismissing China’s peace plans out of hand and the United States in particular stating that any proposed ceasefire would play into Russia’s hands by ‘freezing’ the conflict, therefore allowing Russia gains it has made. That is seen as a Western issue – and doesn’t deal with other global nations concerns. They want the conflict stopped and see any pushback against that by the West to imply greater Western desire to continue the conflict, and not Russian, or Chinese culpability in doing so.
At the same time, hegemonism, unilateralism, and protectionism are still rampant, and it is unacceptable to replace recognized principles and norms of international law with a ‘rule-based order’.
CDE: This is a reference to the various bypassing of international laws and global institutions, largely in terms of unilaterally declaring sanctions upon Russia. The United States and EU acted to suspend Russia from SWIFT – where it is supposed to be a global payments system. That impacted many other countries who do conduct legitimate trade and damaged their own economies and supply chains without any recourse. Other trade sanctions include the imposition of following US laws in this regard or face punitive actions from the US, without any reference to the World Trade Organization or similar trade bodies.
All countries affected by sanctions have no recourse or dialogue in this, which is increasingly seen elsewhere as a minimizing of their sovereignty and a disruption of, rather than upholding of the international rule of law. Russia and China have stated they wish for a return to systematic order in the global marketplace and not just arbitrary US or EU decision-making impacting everyone else without thought of the consequences beyond their own borders.
A Comprehensive Strategic Partnership
The two sides emphasized that consolidating and deepening the China-Russia Comprehensive Strategic Partnership of coordination for a new era is a strategic choice made by both sides based on their respective national conditions, which is in line with the fundamental interests of the two countries and their peoples, in line with the development trend of the times, and is not subject to external influence.
To advance the multi-polarization of the world, economic globalization, and the democratization of international relations, and promote the development of global governance in a more just and reasonable direction.
CDE: The agreement rightly discusses Chinese and Russian cooperation as its remit; but does so framing it as taking place in a ‘New Era’. This can be presumed, in part, to reference the desire by both in order to create a ‘multi-polar’ world community rather than the perceived ‘unipolar’ (ie: US lead) global community currently in situ.
That is also reflected in the final point in this section which confirms that status as a goal. It also means that the Chinese-Russian Comprehensive Strategic Partnership can be expected to have worldwide implications. Also of interest are the use of the terms “democratization of international relations” and “global governance”. That implies both – and possibly numerous other countries – are dissatisfied with the structure of the existing world order and want change. There is a growing awareness that the United Nations needs reform, as do global institutions such as the World Bank, IMF, the WTO and WHO.
Generating a groundswell of opinion behind them to instigate such change will require a massive diplomatic effort. But both are engaging in this already. China has its soft loans and development assistance programmes via the Belt & Road Initiative, while Russia has promised African and other poorer developing nations that it will provide them with free grain should the next Ukraine grains shipment deal be terminated. (It expires in May, with Russia unhappy that the bulk of grain shipped from Ukrainian ports is being sent to the EU rather than where it is most needed).
This aspect of the Comprehensive Strategic Partnership for a ‘New Era’ is therefore the section that carries the most weight in terms of global geopolitics.
The two sides will strengthen coordination, implement precise policies, and proceed from a strategic perspective to effectively improve the level of practical cooperation between the two countries in various fields.
The two parties will jointly maintain international energy security including key cross-border infrastructure, maintain the stability of the supply chain of the energy product industry chain, promote fair energy transition and low-carbon development based on the principle of technology neutrality, and jointly contribute to the long-term healthy and stable development of the global energy market make a contribution.
The two sides will continue to carry out practical cooperation in civil aviation manufacturing, automobile manufacturing, shipbuilding, metallurgy and other fields of common interest.
CDE: China and Russia have long collaborated on civil aviation aircraft and have a joint venture in place, the China-Russia Commercial Aircraft International Corporation (CRAIC) a JV between Comac and Russia’s UAC, with a new wide body jet, the CR929 now in production. That aircraft is expected to be ready by 2025-26 and will carry up to 280 passengers.
Meanwhile, China, Russia, India and Iran have formed an aircraft maintenance venture in Iran which is intended to be a regional maintenance hub. While much is made of Russia’s current aircraft maintenance problems in lieu of sanctions, this issue appears likely to be resolved in the short term.
Russia highly appreciates China’s successful hosting of the 14th BRICS Summit. The two sides are willing to work together with other BRICS members to implement the consensus reached at previous BRICS leaders’ meetings, deepen practical cooperation in various fields, actively promote discussions on the expansion of BRICS countries and the New Development Bank, and actively carry out “BRICS+” cooperation and cooperation. BRICS peripheral dialogues safeguard the common interests of emerging markets and developing countries.
CDE: Numerous countries have officially applied to join an expanded BRICS. While not a trade bloc in its own right, members are encouraged to pursue trade amongst each other and to follow similar trade policies. This includes the use of sovereign currencies instead of the US dollar or Euro and the development of digital financial payment platforms to do away with the need to exclusively use SWIFT. I identified the proposed new BRICS members here.
In essence this can be seen on a geopolitical base as a group of significant countries who appear unsatisfied with completely aligning themselves with the West and United States trade policies and are reaching out to create an alternative. How this morphs into a viable trade platform will have been discussed with further talks needed to clarify development. However, such a trade bloc diminishes the West’s claims that they have ‘global support’ for sanctions against Russia when clearly in terms of actual trade and commerce they do not.
On the basic level, China and Russia have laid out a basic platform for the creation of a new World Order and have stated in part, their push to see this succeed. Much is already underway, with the Shanghai Cooperation Organisation already discussing mutual cooperation and development with the Eurasian Economic Union. Add in a BRICS+ and the Belt and Road Initiative and the world starts to look rather different than it did pre-Covid. At that time, President Putin stated that the world would never be as it was. It appears that President Xi agrees. He was sheard stating that ‘Great changes are coming’ to Vladimir Putin as he departed back to Beijing on Tuesday evening, indicating that China and Russia do have the basis for enacting reforms. That means we can expect:
- Increased China and Russian diplomatic and trade efforts in Africa, the Middle East and South America;
- The gradual emergence of a mutual trade bloc to accommodate these;
- Increasing diplomatic and political pressure being put on existing global institutions, backed up by developing nation support in terms of reforms;
- The emergence of various types of financial settlement systems to act as an alternative to SWIFT;
- Continuing development of Russian energy resources flowing east and south east to ASEAN and India;
- Increasing coordination with the Middle East energy plays in their role as a regional energy hub, with special attention on Africa supplies;
- Increasing trade and aid being directed at influential yet poorer nations in Asia and Africa.
Not all has been revealed at this summit of course. However, the key points appear to have been made, what China likes to call ‘pillars’ of reform. With a revised combination of Russia’s Eurasian Economic Union, the Shanghai Cooperation Organisation, the BRICS+ and countries onside with China’s Belt and Road Initiative, the world may start moving away from a US-EU axis and towards a more evenly spread, truly globally effective regime – with both Beijing and Moscow retaining their position as key players. Such a map would resemble the following:
This shows countries that have signed up to China’s Belt & Road Initiative, but there are some anomalies, Brazil and India are both part of BRICS and have extensive trade interests with Russia for example. If anything, the grouping of countries prepared to take part and contribute towards a China-Russia proposed global bloc could potentially be larger than shown. That is a challenge to the West.
Finally, Western analysts enjoy preparing reports suggesting Vladimir Putin is obsolete – the China-Russia Comprehensive Strategic Partnership suggests that is not actually the case. Further developments, diplomatic pushes and the promoting of economic attractiveness can all be expected to be part of a common China-Russia strategic plan for the coming few years, with adjustments as necessary being made on the way. The next Xi-Putin Summit, to be held in Beijing probably in Autumn, promises to be an interesting yardstick as concerns progression and what is yet to come in terms of global realignment.
Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates; and has had a 30 year foreign investment advisory career in China, India, ASEAN, the Middle East and Russia. with 30 regional offices and several hundred professional staff throughout Asia. He can be reached via email@example.com
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