The Grandest Wager

Donald Trump kissed Vladimir Putin on the lips, at least in a Saturday Night Live skit in November.

Whether romance or bromance, Trump’s embrace of the Russian leader looks to be especially tight. During the American presidential campaign, Putin could commit no hostile or dangerous act that Trump did not explain away. After November 8, the president-elect staunchly defended the Russian from, among other things, hacking charges made by the American intelligence community. Trump famously compared the Kremlin strongman favourably to President Barack Obama.

What explains Trump’s Russia-friendly views? Some think he is compromised by a video taken in a Moscow hotel room monitored by the FSB, the Russian security agency, as a shadowy dossier publicized by BuzzFeed in January suggests. Maybe he is merely grateful for Russia leaking material damaging to Hillary Clinton during the bruising campaign. Others say Putin, who has reportedly courted Trump for at least five years, has simply managed to appeal to his famous vanity. Perhaps, despite fresh denials, the American president, once more famous for being a tycoon, depends on indirect Russian financing for his businesses.

Or it is possible Trump could have an overarching strategic vision of enlisting Russia to contain what he perceives to be the greatest challenger to America, the People’s Republic of China. In a world Gerald Seib of the Wall Street Journal calls “tripolar,” “a rising China” and “a newly re-assertive Russia” have taken on America.

“Trump doesn’t want to waste time or focus facing down small-timers-by-comparison like Putin,” Robert Blohm, just back in the Toronto area after a decade-long stint as an economic policy advisor in Beijing, told the Literary Review of Canada. “He wants to prepare for the big-mama showdown, to be the historical hero beast-slayer.” If Blohm is right, Trump is making a grand wager and beginning what could be a multi-decade effort to separate Russia from China.

The Cold War started with China, ruled by Chiang Kai-shek’s Nationalist Party, on America’s side. But after the Communist Party under Mao Zedong drove Chiang to Taiwan in 1949, effectively ending the long-running Chinese civil war, China switched, signing a treaty of friendship, alliance and mutual assistance with Moscow in early 1950. Fraternal communist unity soon broke down, however, as Mao, the founder of the People’s Republic, became disaffected with Nikita Khrushchev and his “revisionism.” The Soviets and Chinese even fought an undeclared border war in 1969.

Enter President Richard Nixon. In 1972, the fervent anti-communist travelled to the Chinese capital with Henry Kissinger and met Mao, leading to the establishment of diplomatic relations in 1979 during Jimmy Carter’s presidency. The Cold War ended with the break-up of the Soviet Union and China, informally, on America’s side.

Although America no longer needed China’s help, President George H.W. Bush cultivated Beijing, even going so far as supporting the regime after the horrific slaughter in the Chinese capital in June 1989. American policy was to “engage” China and bring it into the international system, hoping to enmesh Beijing in the world’s system of rules, laws, conventions and treaties.

For a time, Washington’s policy looked like a success. China prospered inside the American-led international order, and as a consequence Chinese leaders talked about their country’s “peaceful rise,” accepting the world as it was. For the first time in more than four decades, the People’s Republic was working inside the international system. China’s diplomacy lost its ideological edge and become deft and subtle. It was, as American analyst Marvin Ott called it, “a thing of beauty.” In 2005, Robert Zoellick, then deputy secretary of state, could talk about China becoming “a responsible stakeholder” in the international system.

At the time, Beijing and Moscow competed to maintain good relations with America. As observers then noted, China and Russia valued their ties with the United States more than their relations with one another. Then, both wanted and needed to be on good terms with the American colossus.

The world is never static, of course. As America faltered in wars in the Middle East and Central Asia and as the 2008 downturn weakened the economic underpinnings of the superpower, China and Russia drew close, seeing each other as the preferred partner.

The two countries signed a comprehensive “friendship and cooperation” treaty in 2001 and then delineated their border, the fifth longest in the world at about 4,300 kilometres, in a series of agreements, the most significant signed in 2008. From there, they strengthened their relationship.

Now they coordinate their foreign policies in opposition to the West, particularly Washington. For instance, at the height of the Syrian civil war in 2013, the Russian and Chinese navies sortied together in the Eastern Mediterranean, apparently to warn the North Atlantic Treaty Organization to stay away from the conflict. In September 2016, ships of the two states, in an especially provocative move, practised “joint island-seizing missions” in the highly contested South China Sea.

Even where their interests conflict, such as in Central Asia, China and Russia work together under a veneer of cooperation, demonstrating more than words can how far they have come in building a partnership. The Russians and the Chinese, from all appearances, are closer than they have been at any time since the early 1950s.

In simple terms, Putin and China’s Xi Jinping stand together. They refer to the “uniqueness of China-Russia relations.”

Their relations, as both now perceive them, are one of a kind. The two autocrats are likeminded, and, viewing themselves in the same terms, they see their interests converging. As Putin said in April 2012 about China, “We do not have a single irritating element in our ties.”

But perhaps, despite everything, they can be broken apart. Xi last June said that he hoped his country and Russia could be “friends forever,” but there are several reasons why their bond might dissolve in the face of strengthened ties between the United States and Russia.

First, Trump has expressed a willingness to end sanctions against Moscow. “If you get along and if Russia is really helping us, why would anybody have sanctions if somebody’s doing some really great things?” he asked in a mid-January Wall Street Journal interview. Undoubtedly, Putin’s posture toward Beijing could change rapidly if he thinks he has a friend in the White House willing to support his faltering economy, especially because the Russian leader has lost popularity due to his pro-China policies.

This is, in fact, what Chinese analysts fear. “If the economic sanctions were lifted, Russia would not have to depend on China, strategically and economically,” said Wu Xinbo of Fudan University to Hong Kong’s South China Morning Post in December. “And from Russia’s perspective, the incentive to develop its ties with China could decrease.”

The American president, therefore, can change Moscow’s calculus overnight. China and Russia did not come together because of the western measures imposed on Moscow for breaking apart Ukraine—their friendship began well before the annexation of Crimea in March 2014—but those penalties, as mild as they are, tended to drive Putin further into the embrace of his Chinese counterpart. For instance, in September of that year Putin offered China a slice of Rosneft’s Vankor oil field in East Siberia. As Eurasia Group noted, the offer suggested “a major change” in Russian thinking. The sale of a mature field, where it did not need technical or financial assistance, showed that Moscow’s bargaining position had been eroded by sanctions.

And in general it has been Russia’s economic weakness that cemented the partnership between the Dragon and the Bear. It is no coincidence that Putin’s best relations with Beijing have coincided with the continuing downturn in the Russian economy. Gross domestic product, according to the official Russian Federal Statistics Service, fell 3.7 percent in 2015. Last year, the economy again contracted, perhaps 0.5 percent, as estimated by the Economic Development Ministry, or 0.6 percent, the International Monetary Fund’s number.

When prices for hydrocarbons were high, Putin did not think he needed his “Chinese friends.” Then, what made him such a challenge to the western democracies also kept him apart from China, which he viewed—and treated—as merely a power at one geographical end of a world that centred on the Kremlin. Yet the long-term decline in the prices for oil and gas and his loss of foreign customers made him realize he needed Chinese buyers for the product flowing from Siberian wells.

Putin’s outreach to China has focused on signing a series of long-term supply contracts with Chinese state-owned enterprises for oil and gas, but he has been trying to extend into other commercial areas as well. For instance, during his visit to Beijing last June, the Russian president said his country and China were in discussion on 58 deals worth about $50 billion, including, most notably, a 770-­kilometre high-speed rail line to be built by China, connecting Moscow with Kazan. “We are pursuing economic cooperation, as China is the first trade partner of Russia” said Putin at the time.

The 58 deals followed the signing of 21 cooperation agreements by Prime Minister Dmitry Medvedev and his counterpart, Premier Li Keqiang, in October 2013. “Bilateral relations have never reached such high levels,” said Medvedev while in Beijing. When Russian and Chinese leaders meet, they always seem to ink dozens of pacts.

Despite all the announced deals, Russia and China have not been successful in building their “common economic space.” For instance, their most fundamental economic relationship—commerce across their common border—is faltering. Xi’s predecessor Hu Jintao and Russia’s Medvedev in 2011 had set goals of $100 billion of annual two-way trade by 2015 and $200 billion by 2020.

In 2014, trade between the two giants came near the first target, hitting $95.3 billion, but it plunged in 2015, falling 27.8 percent to $68.8 billion. The recovery since then has been unimpressive. By the end of last year, such trade reached only $69.5 billion. The countries, still far away from their 2015 goal, are certainly not on track to achieve the 2020 target.

The drop in the price of oil was the primary factor for the decline in two-way trade, but the size of the downward movement was surprising nonetheless, showing that the pair has not moved far beyond commerce in hydrocarbons.

Unfortunately for the Kremlin, the stagnation of China-Russia trade has to be seen in the context of China’s weak demand for energy due in large measure to the troubles plaguing its manufacturing sector. Last year, Chinese energy consumption increased by only 1.4 percent. China’s total imports, the important metric for Moscow in this regard, fell 5.5 percent.

And for all the talk of cooperation, there are few transportation links between the two countries. Moscow, surprisingly, seems to be in no hurry to build them. China, for example, has completed its part of a rail crossing over the Amur River at Nizhneleninskoye, but the Russians have yet to begin work on their portion, even though Moscow and Beijing agreed to the project a decade ago. At the end of December, Chinese state media announced the beginning of the construction of a 20-kilometre link connecting China’s Heihe, in Heilongjiang province, to Russia’s Blagoveshchensk. The much-needed project was first proposed more than 28 years ago.

Second, just as Trump may try to pull Putin in, the Chinese leadership, increasingly bellicose, is capable of pushing him out. The biggest irritant in Sino-Russian ties has been territory. Russia’s Far East, a continent-sized area from Lake Baikal to the Pacific Ocean, is an area in decline.

It is largely without people and, not taking into account Chinese migrants, it is depopulating faster than the other parts of the shrinking country. Russia’s population in its areas bordering China is 4.3 million, and on the other side of the boundary are three provinces with 109.5 million people in 2010.

Naturally, ambitious Chinese have left their overcrowded homeland for wide-open Russian plains. Suspicious Russians believe Beijing will one day use the settlers as shock troops to annex their Far East.

Although discourse on the issue is often blatantly racist—“yellow peril” is often heard when Russians forget to use the more polite “sinification”—Moscow’s concerns are not without foundation. Irredentist Chinese officials, after all, from time to time speak out loud about “lost territory.” Portions of Russia’s Far East, including Vladivostok, were in fact ruled by the Manchus, who had conquered China but whom Beijing now considers “Chinese.” The Manchu Qing dynasty, then in a long period of decline, ceded the area to the czars in two “unequal treaties,” China’s term for the agreements, in 1858 and 1860.

The agreement delineating the border in 2008, supplemented by Russia’s November 2015 agreement to give up a small parcel to China, should have put Russian fears to rest, but Moscow knows no deal is ever really final, especially given the expanding territorial ambitions of Beijing. So Putin will always look for support in places other than China.

Third, if Trump can make good his promise to engineer another boom with lower taxes and less regulation, America will become even more attractive to Putin as a partner.

China, on the other hand, could lose its allure to the Russian leader. The economy is slowing fast, the financial system looks to be on the edge of a debt crisis, and money is leaving the country in unprecedented amounts, perhaps $1 trillion in 2015 and $1.1 trillion last year. Beijing has yet to unwind underlying imbalances caused by its spending spree started to avoid the 2008 downturn, and the ultimate reckoning will be especially painful as it has been delayed so long. All this means Beijing, preoccupied by internal problems, may not be able to aid its large and increasingly needy northern neighbour.

Putin, however, may not want to count on Trump just yet. Even if he has incriminating video of the 45th president, Trump will not have an entirely free hand in reorienting Washington policy. For one thing, the American security establishment, led by Senator John McCain, now believes Russia is an adversary and will remain so for as long as Putin exercises power. Mitt Romney in 2012 was widely mocked for identifying Russia as America’s “number one geopolitical foe,” but that view is widely heard in the American capital these days.

And there are reasons why Americans think that way. George W. Bush, for all his efforts to “get a sense” of Putin’s soul, was never able to develop stable relations with Moscow. Obama’s Russian “reset” is widely viewed as a failure. Perhaps the willful Trump is the one figure who can make the risky pro-Kremlin tilt work.

In any event, the use-Moscow-to-contain-­Beijing strategy has a long pedigree. In the early 1970s, Kissinger, who viewed the Chinese as “more dangerous over a historical period” than the Russians, thought a reorientation toward Moscow would eventually be necessary. As he said to Nixon then, “in 20 years your successor, if he’s as wise as you, will wind up leaning towards the Russians against the Chinese.”

More than two decades have passed, but Kissinger looks correct in his assessment of the relative dangers posed by the Russian and Chinese states. And perhaps Trump to the astonishment of many will emerge as the clear-eyed grand strategist of our era.