The bonhomie between China’s and Russia’s leaders at the St. Petersburg International Economic Forum last week was demonstrable. In a sign of the heightened tensions between the U.S. and the two countries, Russia’s annual investment gathering was boycotted by the U.S. Ambassador to Russia, Jon Huntsman. His absence was ascribed to the prevailing environment in Russia for foreign entrepreneurs, typified by the detention of U.S. private equity investor Michael Calvey on allegations of fraud. Conversely, the Chinese telecommunications equipment manufacturer Huawei signed an agreement with Russia’s principal mobile operator to start 5G networks, in a rebuff to Washington’s attempts to isolate the firm internationally. Russian President Vladimir Putin and his Chinese counterpart Xi Jinping made it clear in St. Petersburg that the tensions with the West had only drawn them closer. The rift with Russia began with Moscow’s annexation of Crimea in 2014 and the stand-off in eastern Ukraine that continues. Russia’s tensions with the U.S. and some EU countries stem also from their opposition to the 1,200-km-long Nord Stream 2 gas pipeline from Russia to Germany. U.S. objections draw in part from its eagerness to export liquefied natural gas to Europe, besides thwarting Moscow’s ambition to dominate the region’s energy market. Far more sensitive has been U.S. Special Counsel Robert Mueller’s inquiry into possible Russian meddling in the 2016 U.S. presidential election. Washington’s blacklisting of Huawei, prohibiting it from selling technology to the U.S. and barring domestic firms from supplying semiconductors to Beijing, falls into a class of its own among international trade disputes.
Amid these tensions, in St. Petersburg Mr. Xi and Mr. Putin emphasised that bilateral relations were at a historic high, marked by increased diplomatic and strategic cooperation. China participated in Russian military exercises on its eastern border last September, marking a watershed. Moscow and Beijing, hostile rivals of the Cold War era, have for a while been adopting common positions at the UN Security Council on critical international issues. Bilateral relations are also guided by pragmatism. Russia appears realistic about the growing Chinese economic clout in Central Asia, once firmly in its sphere of influence, thanks to China’s massive infrastructure investments under the Belt and Road Initiative. Chinese cooperation would moreover prove critical for Russia’s elaborate plans to exploit the Northern Sea Route along the Arctic as an alternative transportation hub. International sanctions have not been very effective in isolating Russia. European states, notably Germany, recognise the importance of engaging with Russia to contain Mr. Putin’s expansionist aims. Equally, President Donald Trump’s “America first” policy is compelling potential rivals to make common cause.
