China is searching for alternative sources to Australian iron ore, looking to India, Myanmar, Mongolia and Guinea, among others. Russia could be the answer given its proximity to China, large iron ore reserves and friendly political relations.
At a time when much of the West is planning an exit from fossil fuels, Russia is proceeding with an enormous oil project. One key reason is China, which doesn’t see a swift energy transition as a realistic path and could drive global oil demand in the medium term.
Oil refineries in the US and Europe are flailing while China adds mega facilities, supported by demand for plastic and petrochemicals as Asia recovers more quickly from the pandemic.
While projections suggest the pandemic will not hurt the Russian economy as badly as feared, stagnation and inefficiency continue to hold back its growth. The Kremlin should institute deep structural reforms to boost growth and avoid a worsening deficit.
In addition to robust bilateral trade, projects such as the Amur Gas Chemical Complex which will supply polythene and polypropylene to China, the Power of Siberia pipeline and de-dollarisation efforts by both countries bode well for the future.
Until now, Russia’s relationship with China has looked decidedly one-sided, but Donald Trump’s trade war has changed all that, and Moscow could be a natural hedge against international pressure.
Paranoia about foreign influence in China and the US is hurting academia on both sides. Universities that depend on foreign students for revenue will suffer, and so will international exchange and diplomacy.
Beijing may tout its growing cooperation with Russia in natural gas, but the real problem lies with China’s reliance on coal and the coal-guzzling metals industry for economic growth.
Vladimir Putin’s decision to attend the East Asia Summit signals his determination to diversify Russia’s relationships away from Europe and the US.