China and the World, Talking Point

A new world order?

Washington watches on as Russia edges closer to China alliance

Russia's President Putin shakes hands with China's President Xi during their meeting at Kremlin in Moscow

A very welcome guest: Vladimir Putin greets Xi Jinping at the Kremlin

In 1941 a Chinese leader tried to warn Stalin that his country was about to be invaded by a Nazi army.

According to Jay Taylor’s book The Generalissimo, Chiang Kai-shek knew – via a spy – of Hitler’s planned invasion of the Soviet Union as early as April of that year. By June 18 – the day the Germans signed a treaty with Turkey –  he became convinced the offensive was imminent. “There will be no more than a few days before Germany attacks the Soviet Union,” he wrote in his diary, rightly concluding the Turkish alliance was designed to cover the invader’s flank.

Taylor says that according to official Comintern documents: “Chiang summoned Zhou Enlai to tell him that the German attack on the Soviet Union would commence on June 21 and he urged the Chinese Communist Party to warn Stalin.”

Stalin refused to believe Chiang, or any of the other signs that Hitler was about to violate the Nazi-Soviet Pact. Accordingly, his forces were unready when the Wehrmacht’s sensational blitzkrieg was unleashed.  In the first three weeks of Operation Barbarossa the Red Army lost two million soldiers, as well as 3,500 tanks and over 6,000 aircraft. (It was arguably the worst military setback in history, though one later glossed over by Stalin’s propaganda machine.)

This week another Chinese leader was in Moscow, to help commemorate that invasion and Stalin’s eventual success in defeating Nazi Germany. But on this occasion there was no danger that the current Russian leader – Vladimir Putin – was going to ignore anything his Chinese counterpart was saying.

Indeed, it marked a busy fortnight of geopolitical diplomacy for Xi Jinping, who fresh from attending the Moscow parade was set to host India’s dynamic leader Narendra Modi in Beijing.

Was Xi’s Moscow trip significant?

Relations between Russia and China “have reached previously unattained heights” – that was the message from Putin this weekend. And he was clearly grateful: Xi was the only major world leader to attend the event. Western leaders did not show up, snubbing the Kremlin over its annexation of the Crimea and its interventions in eastern Ukraine.

Also a fillip to Putin: ahead of Xi’s two-day trip a state-linked Chinese media group produced a saccharine propaganda video called “what ordinary Chinese think of Russia”.

In it Russians were called “big” , “strong” , “good looking”, and Putin was called all three. “He is such a great guy,” said one Chinese grandmother. “We invite you to come here more often,” gushed a young student.

During the parade Putin and Xi look at ease with each other, chatting throughout, with the Chinese leader sitting on the Russian’s right (with Xi’s wife Peng Liyuan in a place of honour too).

More than 100 Chinese soldiers marched in Red Square. It was the first time the country’s leader and its troops have appeared together in a military parade overseas. The Chinese honour guards were all carefully picked: with an average height of 1.88 metres (Chinese men average 1.69 metres). Impressively, these PLA soldiers were also able to sing the old Soviet wartime song Katyusha (in Russian, while goose-stepping).

In his speech Putin said China “like the Soviet Union, lost many millions of people in this war. China was also the main front in the fight against militarism in Asia.” (China Daily reported that Russia suffered 27 million casualties, while the Chinese lost an even greater 35 million.)

Later it was announced that Russian troops would participate in China’s equivalent parade marking the defeat of Japan in September.

Several Russian newspapers hinted that this closeness would be detrimental for America and Europe. “Now it is the really tough time for America because China and Russia have effectively combined their strengths,” wrote the Russian business newspaper Vzglad. Xinhua commented meanwhile that Xi’s presence “highlighted a shared resolve to safeguard world peace”.

Military messages galore?

Speaking on CNBC this week, Marc Faber – aka Dr Doom – said the symbolism of Xi’s attendance signalled a “new world order” that will unsettle the West’s dominance of global affairs.

In fact, possibly even more significant than the parade itself was the joint naval manoeuvres arranged by the two countries on Monday. These were held for the first time in the eastern Mediterranean, signalling China’s growing ability to project its military power. The live-fire drills featured three Chinese ships and six Russian vessels in what The Economist declared “a further symbol of the growing strategic partnership between the two countries”. It added that for Russia it signalled that “it has a powerful friend and a military relationship with a growing geographic reach”, while for China “it speaks of an increasing global ambition in line with Xi’s slogan about a ‘Chinese dream’, which he says includes a ‘dream of a strong military’”.

The Global Times reckoned the exercises fitted too with Xi’s economic agenda. “The Mediterranean Sea is an important trade route linking China with Europe. It is also one of the key regions of China’s ‘One Belt, One Road’ initiative,” a Beijing-based naval expert told it. And if anyone thought Chinese ships shouldn’t be in the Med, the state-backed newspaper made this assetion: “The US has maintained a naval presence in the Mediterranean since the early nineteenth century.”

Indeed, one of the netizen comments that was posted at the end of this article, drew some extraordinary extrapolations: “With all due respect to Russia, this is the start of the Pax Sinica (China Peace), following the Pax Americana and the Pax Brittanica, all the way back to the Pax Romana of 2000 years ago, when the Mediterranean was called ‘Mare Notrum’, ‘Our Sea’, by the Romans.”

The netizen added: “The Chinese naval presence in the Mediterranean would seem to be an incredible provocation, at least to the US, but not necessarily to the EU. Because it is not about Europe, but all about the Middle East, where European and Chinese peacemaking efforts and interests tally. The US pivots out of the Middle East (after making a gigantic mess) to Asia (preparing for another gigantic mess). China pivots to the Middle East, trying to remedy the perpetual American mess. Of course, Europe will ultimately welcome this drill, though they may frown at the Russian presence. How China will pacify the Middle East is another tough question. But if anyone can do it, it will be China.”

A barrage of deals too…

Chinese generals played down the idea of a formal military alliance with Russia. But according to the South China Morning Post, the retired general Xu Guangyu says the recent initiatives suggest the two countries are developing an “all-round strategic partnership” that covers security as well as economic issues.

Indeed, amid the raft of announcements made during Xi’s trip there were some pretty significant moves in relation to the sale of armaments. Russia will sell China 24 of its latest Sukhoi-35S combat aircraft. The previous month China also agreed to pay $3 billion for the S-400, an air-defence system that could prove tactically important in a dispute in the South China Sea or over the Taiwan Strait. On the flipside, China made plain its hope that the Mediterranean naval drills will lead to Russian orders for its own Type 054A guided missile frigate.

On the economic front, sanctions-hit Russia has been looking to China to give it a boost. During the Xi visit around 40 deals were signed, including a cooperation between CNPC and Gazprom for a new pipeline to bring in gas from Siberia. China will also invest in the $21.4 billion Moscow to Kazan high-speed rail project, that will connect the two countries via Kazakhstan.

Indeed, Russia Today says this scheme fits more broadly with Xi Jinping’s Silk Road Economic Belt, which is seeking to promote economic and cultural ties with China’s neighbouring countries. (The AIIB, a Chinese-led bank, will finance much of the infrastructure that will make this new, Sinocentric Silk Road a practical reality.)

Once upon a time, Putin would have been wary of this Chinese initiative, viewing Central Asia as Russia’s backyard and wishing to lock those nations into his own Eurasian Economic Union.

So it was something of a win for the Chinese side when Putin proclaimed last weekend that “the integration of the Eurasian Economic Union and Silk Road projects means reaching a new level of partnership and actually implies a common economic space on the continent”.

This may have been the price Putin was prepared to pay to gain Chinese agreement for an innovative new financing scheme designed to aid cash-strapped Russian firms with loans from China’s banks. Bloomberg reports that as much as $25 billion in loans could be made by China Construction Bank via a special partnership with Russia’s sovereign wealth fund. Around 70 of Russia’s largest firms will be eligible, with the Russian Direct Investment Fund purchasing 15% of the loans as a mezzanine tranche and incurring the first losses in the cases of default. “In essence, we guarantee part of the loan,” the boss of the sovereign wealth fund told Bloomberg.

Other deals signed involved agriculture, new oil and gas exploration in Russia and Chinese purchases of small Russian passenger jets.

But in almost all cases, the deals revealed where the real balance of power lay in the relationship. As The Economist concluded: “For Russia, the partnership with China has become painfully necessary. For China it is nice to have, but far from essential.”

The Wall Street Journal also agrees that the China-Russia relationship is an uneven one. “Xi acts very much like the senior partner. His economy is powerful; Russia’s is crumbling. China is a global actor, Russia a regional one,” writes the Journal’s China columnist Andrew Browne.

Any other signs of that?

In an editorial written about Xi’s pre-Moscow Eurasian tour (which included stops in Kazakhstan and Belarus), China Daily pointed to a pertinent statistic. It said bilateral trade with countries on Xi’s two Silk Roads (the other being the maritime one) had reached $226 billion in the first quarter. This equates to 26% of the country’s total import and export volume – and importantly that trade is increasingly settled in China’s own currency.

Meanwhile yet another instance of China projecting its global reach emerged while Xi was in Moscow. News broke last weekend that Beijing is negotiating to open its most far-flung military base in the East African nation of Djibouti.

The country’s president confirmed the long rumoured news in an interview with AFP over the weekend. The Horn of Africa nation, which sits at the entrance to the Red Sea and the Suez Canal, is already home to US, French and Japanese military bases – which are used in anti-terror and anti-piracy operations in neighbouring Yemen and in the waters off Somalia.

“France’s presence is old, and the Americans found that the position of Djibouti could help in the fight against terrorism in the region,” President Ismail Omar Guelleh said. “The Japanese want to protect themselves from piracy — and now the Chinese also want to protect their interests, and they are welcome,” he said.

On Monday China did not deny reports of the negotiations. “China and Djibouti enjoy traditional friendship,” a spokesperson for the Ministry of Foreign Affairs said. “Friendly cooperation between the two sides has achieved constant growth over recent years, with practical cooperation carried out in various fields. What needs to be pointed out is that regional peace and stability serves the interests of all countries and meets the aspirations shared by China, Djibouti and other countries around the world. The Chinese side is ready and obliged to make more contributions to that end.”

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