A $400 billion deal to export gas to China, a $24.5 billion currency swap agreement, opening up to Chinese participation in infrastructure projects: from an initially apprehensive reaction to China’s economic rise, Putin’s Russia has made a dramatic turn toward China after sanctions were imposed last year.
In “A ‘Soft Alliance’? Russia-China Relations After the Ukraine Crisis,” Alexander Gabuev discusses how Putin sees in its Asian pivot a way to strengthen the most vulnerable parts of its economy: dependence on the European energy market, dependence on Western capital markets, and dependence on technologies.
Gabuev further explores the change in the relationship between the two powers. According to the brief, the danger for the EU in this Eastern rapprochement lies in the fortification of the Russian economy against sanctions and in an increased assertiveness for China.
Gabuev sees two possible options for an EU response:
- Seek to isolate Russia further by developing sanctions with the US against third-country companies that do business with sanctioned Russian entities.
- Create other options for Russia by allowing Japan and South Korea not to uphold the sanctions regime.
Gabuev writes: “The longer Russia is forced to orient itself toward China, the more important the consequences will be. Some key elements such as arms deals and Chinese control over key resource deposits may become irreversible and have a lasting effect on Russia, European interests, and global security—even after Putin has left office.”