Will Russia Be the Real Loser in the New U.S.-China Cold War?
Dimitri Alexander Simes
The National Interest, May 2, 2020
China found itself in the international wilderness after its suppression of the 1989 Tiananmen Square student protests. The violent crackdown elicited widespread condemnation from the West and, shortly thereafter, the United States and the European Union imposed an arms embargo on China that remains in place to this day.
In the subsequent years, Beijing found an unexpected partner in post-communist Russia. The collapse of the Soviet Union had financially devastated the Russian arms industry, making it very eager to do business with an economically-ascendant China. Over the following decade, China bought up Russian fighter jets and missile systems as part of its quest for military modernization, emerging as Russia’s largest arms customer in the process.
More than thirty years later, a new crisis could once again bring China and Russia closer together. An outbreak of a novel strain of coronavirus in the Chinese industrial center of Wuhan has over the past few months spiraled into a global pandemic and economic depression, inciting an international backlash against China along the way.
Amidst the recent turbulence, Russia was among the few nations that sided with China against its critics. With the current global health crisis taking an increasingly geopolitical turn, Moscow and Beijing are looking to each other for support.
The coronavirus pandemic has battered China’s global image in recent months, as well as its business interests overseas. The United States has led the charge against Beijing, with the Trump administration blaming China for the outbreak and a growing number of Republican senators threatening to adopt punitive legislation against the People’s Republic. Numerous European governments have accused China of seeking to exploit the crisis for political gain and of sending them faulty testing equipment.
Even several of China’s close African partners have lashed out at Beijing for reportedly discriminating against their citizens as part of its public health restrictions.
Several key Asian economic heavyweights, on the other hand, have moved to lessen their reliance on China. Japan announced earlier this month that it would offer financial incentives for domestic companies to move their production in China back home. India introduced new restrictions on foreign investment to prevent “opportunistic takeovers” of its companies by Chinese buyers.
In this context, Russia has emerged as one of China’s few and most vocal defenders on the global stage. Russian foreign minister Sergei Lavrov denounced calls for China to pay compensation for damages caused by the coronavirus pandemic as “unacceptable” and shocking. “My hair stands on end when I hear such things,” Russia’s top diplomat stated. … [To read the full article, click the following LINK – Ed.]
Russia: Pandemic Tests Putin’s Grip on Power
Financial Times, May 4, 2020The May 9 military parade was to have been an event of pure pomp and spectacle: a moment for Vladimir Putin to stand in the centre of Moscow’s Red Square and bask in his unchallenged authority. Flanked on either side by his Chinese and French counterparts, Xi Jinping and Emmanuel Macron, the Russian president would have watched proudly as Russian soldiers marched past in the spring sunshine, their arms locked in salute and their faces turned to their commander-in-chief.
Instead, Mr Putin will lay flowers at a war memorial in the centre of an otherwise deserted Moscow, and make a video address to a quarantined, concerned and increasingly restless nation.
The postponed parade to mark the 75th anniversary of the Soviet Union’s role in the second world war victory over Nazi Germany was envisaged as the most public event of a heavily-orchestrated spring schedule designed to cement the longevity of Mr. Putin’s 20-year reign. Mr. Xi would have shown the world the strength of Russia’s new friendship with the world’s pre-eminent rising superpower; Mr. Macron’s attendance would have demonstrated that despite sanctions against Moscow for its 2014 annexation of Crimea, Europe still needs its troublesome eastern partner.
The parade of tanks, missile launchers and soldiers was intended to be much more than just a historical commemoration. It was scheduled 17 days after a national ballot where Mr Putin had banked on winning widespread public support for constitutional changes that would allow him to extend his rule beyond 2024. That vote, too, has been postponed.
In the space of two months Covid-19 has laid waste to both his political agenda and the economic model that underpins his regime, turning 2020 from a year scripted to usher in another decade of Putin rule into one that could undermine his supremacy.
“It is pretty clear that this year has not gone to plan at all as far as Putin is concerned,” says one foreign ambassador in Moscow. “The pandemic has had far more of an impact than he had hoped, and the economic fallout from all of this is going to be even bigger.”
The virus has infected almost 135,000 Russians and killed close to 1,300, making the country the world’s seventh most affected, according to data from Johns Hopkins University. Mr Putin’s own prime minister, Mikhail Mishustin, stepped down temporarily on Thursday after contracting the virus.
It has also sparked a two-pronged economic shock that is expected to shrink Russia’s gross domestic product by as much as 6 per cent this year, according to central bank forecasts. In addition to a six-week national lockdown and crippling quarantine measures that have suffocated domestic industry, the pandemic has contributed to a more than halving of the price of oil, imperilling the country’s financial lifeblood. … [To read the full article, click the following LINK – Ed.]
_____The Pandemic Could Tighten China’s Grip on Eurasia
Foreign Policy, Apr. 23, 2020 The first phase of the coronavirus outbreak delivered a blow to Russian President Vladimir Putin’s vision of a China-Russia quasi-alliance. Following a schism in the Kremlin’s relations with the United States, Putin has touted ties to Beijing as an antidote to Western sanctions. In October 2019, the Russian president admitted that Moscow was helping Beijing to create a missile attack early warning system and characterized Sino-Russian ties as “an allied relationship in the full sense of a multifaceted strategic partnership.”
The pandemic is putting a spotlight on the lingering mistrust at both the general public and senior official levels between Moscow and Beijing that has long coexisted with the made-for-TV camaraderie between Putin and Chinese President Xi Jinping. The recent closure of the northern Chinese city of Harbin, in the wake of a fresh mini-outbreak imported from across the Russian border, has highlighted similar suspicions among Chinese leaders. But the hopes of some U.S. and European officials to hasten a new Sino-Russian split are bound to be disappointed. If anything, relations will deepen in the wake of the pandemic. Beijing’s inroads in Russia and across the vast landmass of post-Soviet Eurasia could have global ramifications as the global competition between the United States and China accelerates.
After the annexation of Crimea and the dramatic breakdown in the U.S.-China relationship under President Donald Trump, the Kremlin’s policy has been rooted in the rapid expansion of security, economic and energy ties with Beijing. Since 2014, Moscow and Beijing have regularly touted their joint military exercises, high-profile energy exploration and pipeline deals, and a good cop-bad cop routine to constrain U.S. power on issues like the Syrian civil war, the North Korea nuclear crisis, and the future of internet governance.
Then along came the new coronavirus, which exposed the deep level of suspicion that still exists between the two giant neighbors. On the Chinese side, Russia is not viewed as a real superpower that can compete with China or the United States for global leadership. Although it’s rarely pronounced officially, the most frank Chinese Russia watchers privately characterize the country as being in long-term decline amid a shrinking population, mounting corruption, and a one-sided dependency on exports of oil and gas. … [To read the full article, click the following LINK – Ed.]
Russia, Saudi Arabia, and the USA: Slippery Oil Triangle
BESA, May 6, 2020
On February 6, 2020, OPEC held a meeting in Vienna to try and reach agreement on oil prices and production levels. The meeting ended without agreement following Russia’s refusal to slash production, even if this meant a further drop in prices already depressed by the beginning of the coronavirus crisis. Russia’s obstinacy was curious, as energy exports make up the lion’s share of its budget. But given Putin’s adventurist foreign policy, which includes costly military interventions in Syria and Ukraine and extensive cyberwarfare operations against the US and other major western political systems, as well as growing discontent within Russia over the deteriorating standard of living, he felt he could not afford to lower production levels, even if that meant no increase in prices that were already relatively low.
A few days after the meeting, Saudi Arabia detonated an even bigger bombshell when it announced that it would not only increase production but would reduce prices via discounts. The result was a decrease of $24 per barrel in a single day (March 9, 2020), the biggest single day oil price plummet in almost three decades. This dropped prices to around the $30/barrel mark.
On the surface, this made as little sense as the Russian refusal to slash production. Riyadh is involved in a costly proxy war with Iran in Yemen, and its budget is even more oil dependent than that of Russia. It is already running an unprecedentedly large deficit, and despite foreign currency reserves of approximately half a trillion dollars, it cannot cushion its economy indefinitely from the impact of such low prices.
Why would two major producers so dependent on oil exports act in a way seemingly so detrimental to their own economic interests?
Regarding Russia’s motives, the answer seems obvious. The main casualty of prolonged low oil prices would be the US energy industry. For decades, the US was highly dependent on energy imports, as anyone knows who remembers the fuel crises generated by the post-1973 War Arab oil boycott. This has changed over the past two decades as new fracking technologies have enabled US energy producers to exploit the country’s vast shale oil reserves. Thanks to fracking, the US achieved energy independence by 2016, and last year began exporting significant amounts of crude and refined petroleum products.
Fracking is more expensive than drilling, however. At $30/barrel, most oil drilling operations may not be lucrative, but they remain viable. Fracking, by contrast, begins losing its economic viability at around the $50/barrel mark. For Saudi Arabia and Russia, prices hovering over the $30 mark are the economic equivalent of a bad cold. For the US energy industry, such prices are a terminal disease that will cause the fracking industry to implode. … [To read the full article, click the following LINK – Ed.]
For Further Reference:
Report: Russia, Turkey, Iran Agree to Remove Syria’s Assad: MEMO, May 4, 2020 — The Russian International Affairs Council (RIAC) expects that Russia, Turkey and Iran will reach a consensus to remove the head of the Syrian regime, Bashar Al-Assad, and establish a ceasefire in exchange for forming a transitional government that includes the opposition, members of the regime and the Syrian Democratic Forces (SDF).
Putin’s Religious Soft Power Hits Jerusalem: Shay Attias, BESA, May 5, 2020 — In January 2020, Benjamin Netanyahu and Vladimir Putin struck a deal that rescued Israeli backpacker Naama Issachar from a Russian prison and brought her safely home in exchange for Russian sovereignty over the Alexander Courtyard in Jerusalem, which is near the Church of the Holy Sepulchre. This deal was a major win for Vladimir Putin as he pursues his aim of Russian global imperialism.
Hamas: Egypt, Russia Working to Reach Prisoner Swap: Khaled Abu Toameh, Jerusalem Post, May 5, 2020 — Hamas on Tuesday again denied that there was any progress regarding a prisoner exchange agreement with Israel, but said Egypt and Russia were involved in mediation efforts to secure a deal.
State Report: Russian, Chinese and Iranian Disinformation Narratives Echo One Another: Betsy Woodruff Swan, Politico, Apr. 21, 2020 — China, Iran and Russia are using the coronavirus crisis to launch a propaganda and disinformation onslaught against the United States, the State Department warns in a new report.
This Is How Russia and China Will Exploit US Elections: Janusz Bugajski, The Hill, May 4, 2020 — he United States needs to brace itself for an intensive barrage of Russian and Chinese disinformation as the coronavirus pandemic crisis increasingly blends with the presidential election campaign. Both Moscow and Beijing will seek to capitalize on America’s vulnerabilities with the aim of exacerbating domestic conflicts and reducing the U.S. global presence.