China is holding a weeklong event called the China International Import Expo in Shanghai this week meant to encourage trade, sell China as an import market and send the message that the Chinese economy is open for business. China’s motivation for doing this is obvious: It’s a nation dependent on exports, and American tariffs have decreased demand for its goods. In his opening address, President Xi Jinping stressed that China was prepared to open its markets even further to international trade – with the United States and the rest of the world. His remarks were clearly directed at the U.S., as he looks toward his meeting with U.S. President Donald Trump at the G-20 meeting in Argentina later this month. But the conference has also raised questions about China’s relations with another country that’s experienced its own setbacks in U.S. relations: Russia. Russian Prime Minister Dmitry Medvedev said at the expo that Moscow and Beijing are now closer than ever, and the Chinese emphatically agreed. Indeed, there has been much talk of a Russo-Chinese alliance, and the Shanghai extravaganza is a good opportunity to look closer at what this could mean.
China and Russia both have serious economic problems that have been exacerbated by the United States. Russia’s problems derive from the decline in the price of oil, a resource on which the Russian economy is heavily dependent. The United States, along with the EU, has compounded Moscow’s economic woes by imposing sanctions following Russian incursions in Ukraine and meddling in the 2016 U.S. election. China’s problems derive, at least in part, from its dependency on exports. This year, the U.S. has imposed tariffs on more than $250 billion worth of Chinese imports, and according to Bloomberg, it’s preparing to announce new duties on all remaining Chinese imports by December if trade talks don’t go well.
On the surface, that Russia and China share a common, powerful adversary should be the foundation of a strong alliance. Both countries are significant military powers, and they ought to be able to support each other economically. But appearances can be deceptive.
On the economic front, developing stronger ties with each other wouldn’t fully solve any of their problems. Russia needs to sell raw materials, particularly oil, in massive amounts to keep its economy running. Between January and August 2018, crude oil accounted for 28.8 percent of Russia’s total exports and natural gas accounted for 10.9 percent, according to Russia’s statistics agency. China was its biggest oil importer at 22 percent, though it purchased only 1 percent of Russia’s natural gas exports. (As a whole, however, the European Union imported more Russian oil than China did.) Indeed, China is a big oil importer and overtook the U.S. as the world’s largest crude buyer in 2017, according to the U.S. Energy Information Administration. The problem, however, is that Chinese imports are limited by the lack of energy infrastructure between the two countries. Pipelines are costly and take a long time to build. China, therefore, might be able to ease a bit of Russia’s demand for oil consumers, but it can’t buy enough to keep prices high or ease the risk of further sanctions that could target its energy exports.
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