Russian President Vladimir Putin is heading to China for the first foreign visit of his new term, underlining the vital importance of the relationship as Beijing faces growing U.S. pressure to curtail support that\u2019s helping Moscow continue its war in Ukraine.<\/p>\n
Putin, 71, who extended his nearly quarter-century rule in tightly controlled March elections, will visit Beijing starting May 16, as well as the northern city of Harbin where he\u2019ll take part in the opening ceremony of the eighth Russian-Chinese Expo. <\/p>\n
He is likely to prioritize countering the U.S. warnings to China over trade with his country at talks with Chinese President Xi Jinping.<\/p>\n
The two leaders, who declared a \u201cno-limits friendship\u201d just weeks before Putin invaded Ukraine, have met more than 40 times since Xi came to power in 2012. China, which has helped Russia weather unprecedented U.S. and European sanctions imposed over the Kremlin\u2019s invasion of its neighbor, has faced increasing U.S. threats of retaliation.<\/p>\n
The world\u2019s second-largest economy has become an indispensable ally for Russia, which relies on China as a market for its energy and supplier of its wartime needs. That\u2019s put Putin in a sometimes awkward position, with Beijing wary of his nuclear sabre-rattling and mindful of the need to keep unfettered access to the U.S.-led global economic system.<\/p>\n
Putin\u2019s decision to make Beijing his first foreign destination since his inauguration last week shows that \u201cChina is without a doubt our main partner,\u201d said Fyodor Lukyanov, head of the Council on Foreign and Defense Policy, which advises the Kremlin. \u201cIn some aspects, we\u2019ve no other alternative.\u201d<\/p>\n
The visit comes just days after Putin appointed Andrey Belousov, an economist and technocrat, as his new defense minister, replacing the long-serving Sergei Shoigu in a signal the Russian leader sees an extended conflict ahead. <\/p>\n
Several other prominent officials, some with experience working with China, kept their current roles. Deputy Prime Minister Alexander Novak, who oversees Russia\u2019s relations with the OPEC+ group of oil-exporting nations, retained his position, while adding oversight of the nation\u2019s economy to his responsibilities.<\/p>\n
In addition to a one-on-one meeting with Xi, Putin also will be joined by both Belousov and Shoigu for closed-door talks, Kremlin foreign policy aide Yuri Ushakov said, according to the Interfax news service. Novak, Foreign Minister Sergei Lavrov and Bank of Russia Governor Elvira Nabiullina are among a host of other officials that will also participate in talks, he said.<\/p>\n
In recent weeks, the U.S. has stepped up warnings to Chinese banks and exporters about consequences if they help to bolster Russia\u2019s military capacity.<\/p>\n
In December, the Treasury Department announced it would impose secondary sanctions on banks that facilitate deals in which Russia procures semiconductors, ball bearings and other equipment necessary for its military \u2014 even if they\u2019re unaware they\u2019re doing so.<\/p>\n
Banking transactions between Russia and China in general have now hit obstacles, according to Alexander Gabuev, director of the Carnegie Russia Eurasia Center and an expert on Russia-China ties. \u201cThe chilling effect of U.S. policy is already there,\u201d he said.<\/p>\n
The two leaders and their top officials could look for solutions such as designating smaller banks with no exposure to the U.S. financial system to handle transactions with Russia, said Gabuev.<\/p>\n
The Chinese ambassador to Russia, Zhang Hanhui, said in an interview with Russian state TV last week that U.S. sanctions have caused \u201csome disturbance\u201d in trade between the two countries. He added that the \u201ctwo sides are actively holding consultations and striving to find effective solutions as soon as possible.\u201d<\/p>\n
In a written interview with China\u2019s official Xinhua News Agency published Wednesday, Putin said he was confident in the economic relationship with Beijing. <\/p>\n
Driven by Russian oil and gas sales and purchases of electronics, industrial equipment and cars, Moscow\u2019s trade with China hit a record $240 billion in 2023, more than double the $108 billion reached in 2020.<\/p>\n
Despite the growing economic ties, China\u2019s exports to Russia were down 13% in April from a year earlier, the second month in a row of an annual decrease, according to Chinese customs data. Russian media reported that Chinese banks in late March began blocking payments from companies in Russia buying components for electronic assembly.<\/p>\n
\u201cIt has become a tradition for the two heads of states to visit each other in the first overseas trips of their respective new presidential terms,\u201d a display of mutual trust, said Wang Yiwei, a professor of international relations at Renmin University in Beijing.<\/p>\n
However, Beijing doesn\u2019t want to be seen as tied to Russia\u2019s war machine, he said. \u201cChina wants to build a multi-polar world with partners including European nations \u2014 as President Xi\u2019s recent trip showed \u2014 not just with Russia,\u201d said Wang, who was also a former Chinese diplomat to the European Union. Xi traveled to France, Serbia and Hungary last week, seeking to promote China as a reliable partner.<\/p>\n
On the energy front, negotiating a new supply contract with China will be on the agenda. Russia has all but lost its position in the European gas market in the wake of the invasion, and gas giant Gazprom PJSC sees China, the world\u2019s largest energy importer, as a replacement. <\/p>\n
Currently, Gazprom ships natural gas to China through just one route, the Power of Siberia pipeline. Deliveries have been growing gradually and are planned to reach an annual record of 38 billion cubic meters next year. They are set to increase by a further 10 billion cubic meters, with supplies starting from 2027, under a separate contract signed in 2022.<\/p>\n
Russia\u2019s ambition is to reach another agreement with China, with one option being a potential new Power of Siberia 2 link through Mongolia, which could lift Gazprom\u2019s eastbound deliveries by 50 billion cubic meters a year. <\/p>\n
While Putin and Xi may discuss the contract when they meet, the Russian side does not expect a final agreement this time around, according to a person familiar with the matter. <\/p>\n
Even if China and Russia did agree on a new deal, Gazprom\u2019s flows to the Asian nation wouldn\u2019t exceed half of what it used to ship to Europe, and would be less lucrative, with the price for Russian gas to China lower than for remaining European clients through at least 2027, according to an economic outlook prepared by the Economy Ministry.<\/p>\n
Yet another source of worry for Russia is Ukraine\u2019s bid to rally international support for a June conference in Switzerland aimed at promoting Kyiv\u2019s demand for a Russian troop withdrawal from occupied territory as a pre-condition for any peace agreement.<\/p>\n
\u201cThe key here is whether China attends or not,\u201d said Lukyanov from the Council on Foreign and Defense Policy. \u201cMoscow takes into account the risk that the conference will create the impression on the world stage that everyone is for peace except Russia.\u201d<\/p>\n
Still, China is continuing to sell more than $300 million a month of dual-use components to Russia identified by the U.S. and its allies as essential for making weapons such as missiles, drones and tanks, according to a study by the Carnegie Endowment for International Peace published May 6.<\/p>\n
Providing components rather than weapons allows Beijing to claim plausible deniability, while supporting Russia diverts American resources away from the Indo-Pacific where China and the U.S. are in competition, the study said. <\/p>\n
For China, \u201cthey don\u2019t want Russia to lose\u201d the war in Ukraine, Carnegie\u2019s Gabuev said.<\/p>\n
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(With assistance from Jing Li and Philip Glamann.)<\/p>\n
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