Russia and China new best chums? Column

Author: us-russia
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Russia and China new best chums? Column
Published 6-04-2014, 14:52

David A. Andelman

David A. Andelman, a member of USA TODAY's Board of Contributors, is editor in chief of World Policy Journal and author of A Shattered Peace: Versailles 1919 and the Price We Pay Today.

As Obama and EU alienate Putin, he's looking for a friend in other strong places.

U.S. and Western European sanctions against Russian President Vladimir Putin and his cronies, however just their cause, risk undoing what more than half a century of American presidents sought to foster — continued division and distrust between China and Russia. So far, the sanctions are weak and unlikely to cause much change in the financial relationship between Europe and Russia, but if they are strengthened, as President Obama is suggesting, the calculus in Moscow and Beijing could change rapidly.

Some European leaders understand the danger of uniting Eurasia's largest resource-rich nation with the world's most populous nation or, at least, the permanent disruption it could cause in both military and economic terms.

This week, the French newspaper Le Monde published on its website a chilling interactive map of the ties that bind each European country to Russia, which Obama archly dismisses as merely a "regional power."

In fact, for so many of its neighbors, Russia is the godfather of regional powers.FinlandLithuaniaEstoniaSlovakia and the Czech Republic buy virtually all their natural gas from Russia, while PolandAustriaLatviaBulgaria and Greece, look to Russia for a half to three-quarters of their gas. Even Europe's economic powerhouse,Germany, relies on Russia for 40% of its gas supplies.

New customers

Times could be changing. In May, Putin is planning a state visit to Beijing. At the top of the agenda — a 30-year deal to redirect Russia's vast gas supplies to China. At least38 billion cubic meters of gas a year would begin flowing to China by 2018. That's about what all of the European Union, other than Germany, buys from Russia.

A decision by Russia to disentangle itself from unreliable European economic partners would have far more wide-ranging consequences.

Russia is a major investor in Western Europe, including $31 billion in the Netherlands, $30 billion in Cyprus and $8 billion in Switzerland.

Americans and Europeans are big investors there, as well. Since 2009, hundreds of billions have flowed into Russia to buy stocks and debt. Direct investment by foreign companies in Russia hit a record $94 billion in 2013 alone. If you have a 401(k), chances are good you've invested in Russia.

Moreover, Russia is a major destination for West European exports — with Germany's giant Siemens conglomerate in the midst of a 2.5 billion euro contract to supply locomotives to Russian Railways and France producing two Mistral-class warships for the Russian navy at a cost of 1.2 billion euros. Trade between Russia and the EU wasmore than $400 billion in 2013, below only the United States and China.

New order

At one time, in the depths of the communist era, there was fear of Chinese hordes poised to come pouring across the broad frontier, overwhelming Russia and its people. Since the breakup of the old Soviet empire, certainly since the arrival of Putin in power, the frost on the relationship between Beijing and Moscow has been thawing.

The "Sino-Soviet split" was real and tangible under Mao, Stalin and their successors.

Now, though Russia has been expelled from the Group of Eight club of developed nations, Russia and China have become leaders of another bloc of powers: theShanghai Cooperation Organization, which also embraces Central Asian nations that were once all components of the Soviet Union.

Clearly, Russia is preparing for a new order of some sort. With each additional set of sanctions, the stage is being set for separation.

After the White House persuaded Visa and MasterCard to drop their cards issued by Russian banks, Putin announced the establishment of a Russian payment system with its own credit cards and underwriting.

In last week's swing through Western Europe, President Obama set forth a program designed to further isolate Russia from the West. But as many Europeans envision and fear, when one door closes, another opens.

In the end, we must listen carefully to European concerns that tightening sanctions will isolate Europe and the United States as much as it will Russia. The danger that Obama's tough talk forces Russia finally to turn its back on the West, embracing a new opening to the East, is profound.

 

www.usatoday.com

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