Russia has Nothing to Offer China Except Raw Materials and Empty Words, Russian Analyst Says

Paul Goble

            Staunton, April 27 – Vladimir Putin’s flatfooted offer to China to combine Beijing’s plans for an east-west transit network with Russian hopes for the development of the Northern Sea Route called attention to the reality that “Russia has nothing to offer the Chinese Peoples Republic except talk about friendship, oil and forests,” Andrey Ivanov says.

            And that in turn shows that Beijing at the present time “considers the Russian Federation not so much as a partner in its global projects,” the Svobodnaya pressa commentator says, “but rather as a supplier of raw materials” that China’s growing economy needs (svpressa.ru/economy/article/231533/).

            Despite Moscow’s appeals, China has decided to focus on the development of transportation links with Europe that bypass Russia in large part because of fears about sanctions and the deteriorating relations between Moscow and Brussels but also because of the weakness of Russia’s transportation links and specific Russian policies, Ivanov continues.

            And underlying that is the fact that Russia is simply not that important a trading partner for China. Moscow has been celebrating its record trade exchange with China last year – 108 billion US dollars. But this is deceptive: 85 percent of Russian sales to China are raw materials, and the total in bilateral trade is far less than that between China and Vietnam (148 billion).

            “In principle,” he says, “given such a disbalance, China could dictate to Russia its conditions for trade operations,” demanding lower prices for raw materials because Moscow under sanctions has few options to buy manufactured goods from other than Chinese sources – and Beijing knows that.

            But instead of working to avoid that, Moscow is compounding the problem by failing to invest in infrastructure projects on its own territory. Andrey Ostrovsky, deputy director of the Russian Institute for the Far East, says Moscow doesn’t have the money to develop even the Northern Sea Route.

            Indeed, it hasn’t even maintained the Trans-Siberian railway to the point that it is economically viable for producers in the Far East. Chinese trains travel at 350 kilometers an hour. Russian ones travel on average 35 to 40 km per hour – and “on certain parts of the TransSib in Siberia, the speed doesn’t exceed 10 km per hour.

            Moscow could change this if it was willing and able to get loans to improve things, but so far, experts says, it isn’t willing and is increasingly less able. Not surprisingly, China and others in Asia are looking around Russia rather than through it, however often Putin suggests that they should be “partners” with Moscow.