“Friends are revealed in misfortune”. This is what the Chinese President Xi Jinping declared at the opening of the Eastern Economic Forum taking place on 11–13 September 2018 in Russia’s Far Eastern city of Vladivostok. And friends are indeed necessary to counter a powerful enemy. This enemy appears to be Trump’s US: both leaders accuse Washington of damaging their countries’ economies through escalating sanctions, in the case of Russia, and a tariff war against Chinese goods.
Russia’s turn to China in light of the mounting tensions with the West is not news: shortly after the EU announced sanctions for Russia’s annexation of Crimea, Russia struck a massive gas deal with China, after years of negotiations. The deal was less convenient for Russia than initially envisaged (the Chinese managed to negotiate a lower price), but it allowed Putin to send a powerful message to the EU – the main market for Russian gas – and the West at large: we do have alternatives.
The ongoing Forum offered a chance to cement the alliance between Moscow and Beijing on the economic level. The main highlight of the Forum so far is definitely the deal between Alibaba, the Chinese e-commerce giant, and the Russian oligarch Alisher Usmanov, who controls both Megafon and the internet company Mail.ru and VK, the “Russian Facebook”. The deal foresees the creation of a Russian branch of the retail site AliExpress and it may be a game-changer in Alibaba’s competition with Amazon, its main competitor. However, this has also important consequences for Russia. As Alibaba’s president Michael Evans remarked, this is the first time in the world that social networks combine with commerce, but also the first time that a Chinese company integrates so deeply with a Russian one.
The Forum also gave a stage to Putin and Xi to voice their opposition to the US protectionist policies and economic predominance. In an attempt to sideline the US dollar, the leaders vowed to start using national currencies in their bilateral transactions. This is certainly not the first time Putin argues against the dollar’s hegemony. But the anti-dollar front is growing. In response to the recent clashes with Trump, Turkish President Erdogan recently declared his willingness to pursue non-dollar transactions in trade and investment with other countries, saying that the US is behaving like "wild wolves". Iran's supreme leader Ayatollah Ali Khamenei said on Twitter that the US sanctions on Iran, Russia and Turkey make a very strong point for expanding political and economic cooperation between the three countries, with an emphasis on “making economic transactions without the dollar”.
But not everything is about money in the increasingly warm relationship between Moscow and Beijing. At a time when Putin needs to boost patriotism at home to counter increasing pressure over a widely-criticised pension reform – which contributed to a 12-point popularity drop over the last three months – Russia is also conducting a massive military exercise in collaboration with China and Mongolia. Labelled Vostok-2018 (Dongfang-2018 in Chinese) and lasting for one week, this military exercise represents one of the biggest military deployments of Russian forces. Its significance increases if we consider that it has been conceived as a means to directly challenge NATO Rapid Trident military drill held with Ukraine during the same period. Because of its magnitude and significance, Vostok-2018 has already been compared to the Zapad-81 (West-81) military exercise conducted by all the Warsaw Pact countries in 1981.
There are two major reasons that explain the importance of the current military exercise. The first one concerns its military dimension. Both countries deployed a considerable number of soldiers: Russia used more than 300.000 troops, 1.000 aircrafts, 36.000 military vehicles, and 80 ships, while China deployed 3.500 soldiers. Moreover, concerning the theatres of operation, these exercises will extend across nine testing grounds, located in different parts of the country, and three seas, such as the Sea of Japan, the Bering Sea and the Sea of Okhotsk. At the same time, this military exercise sheds light on both countries’ ability to coordinate at the military level and on their growing military arsenal, immediately deployable in the region if circumstances require so.
The second reason, which is directly connected to the previous one, concerns the growing assertiveness of both Russia and China at the regional level. In other words, both countries want to be considered as strong state-actors when it comes to their relations with the United States and in light of the progressive shift towards a multipolar system. China and Russia share the same geopolitical concerns, especially now that their economic and infrastructural interests might be challenged by the new Indo-Pacific strategic design (mainly sponsored by the US). The design is targeting both the Belt and Road Initiative – the core Chinese infrastructural and development program for the region – and the Eurasian Economic Union – and the Russian alternative project to the Chinese one for Central Asia. In other words, at the geopolitical level, it is becoming increasingly important for both countries to be able to protect their growing economic and regional interests by developing a stronger military apparatus. According to this changing geopolitical landscape, it becomes then clearer why China and Russia lately conducted other significant military exercises before Vostok-2018. For example, Russia deployed more than 12.000 troops for the Zapad-2017, a military exercise conducted on the western part of the country as a show of strength against NATO troops as well as other countries joining the Atlantic alliance. On the other hand, China set the stage, last April, for its biggest naval military exercise, which demonstrated Beijing’s latest maritime developments and improvements, like its ability to deploy its new aircraft carrier.
What these two coterminous events (the economic forum and the military exercise) tell us about the future Sino-Russian ties is yet to be seen. However, the fact that the economic forum has been held at the same time of the military exercise demonstrates that both countries are strengthening their economic as well as military relations with the aim of becoming a credible deterrence against the US. In other words, despite the existing frictions and the deep asymmetry between Moscow and Beijing, what emerges is a not-so-veiled attempt to create a strong strategic partnership in order to challenge a common enemy; exactly what “friends” would do in times of need.
