The leaders of Russia and China join forces. Russian President Vladimir Putin traveled to Beijing for the Winter Olympics to show solidarity with its biggest trading partner in an event that the United States, Canada, United Kingdom and Australia boycott diplomatically. The statement Putin signed with Chinese leader Xi Jinping confirms their overlapping interests, their shared insistence on the right to do what they want within their own borders, and their disgust at the destabilizing nature of the various US military actions.
There’s a lot of high-level language in the declaration about democracy, economic development and commitment to the Paris climate goals. But the timing of the statement suggests it’s really about hard power. Putin hasn’t traveled to Beijing and Xi Jinping hasn’t met with his first foreign leader in two years simply to hammer out a general statement of principles. Putin wants China to have his back on Ukraine and in return supports Chinese claims on Taiwan and Hong Kong.
It is not easy misunderstanding, given that the two countries have a long and suspicious relationship. In the past, Russia watched China’s global economic ambitions with concern, and a certain type of Russian conspiracy theorist worried that large numbers of Chinese were settling in the Russian Far East under people. Before Putin took power, China was uncomfortable with the political volatility of its northern neighbor. After Putin, Beijing was unhappy with the Kremlin’s military escapades in its near abroad.
But that is changing. “For the first time in one of Russia’s recent aggressions, Putin has won the Chinese leader’s open support,” writes Robin Wright in the new yorker. “China did not support Russia’s war in Georgia in 2008, nor its invasion of Ukraine in 2014, nor did it recognize Russia’s annexation of Crimea.”
The geopolitics of the new relationship between China and Russia is certainly important. But let’s look at what really powers this new alliance.
Literally.
Fossil Fuel Friendship
Inside the Arctic Circle, just opposite the grim military outpost of Novaya Zemlya, Russia has built the world’s northernmost natural gas facility: Yamal LNG. More than 200 wells have been drilled to exploit the equivalent of 4 billion barrels of oil. Nuclear-powered icebreakers clear Sabetta harbor for liquefied natural gas carriers to ferry fuel to points south. Russia also plans to build a train line to ship what it expects to be 60 million tonnes of natural gas per year by 2030.
Russia can thank climate change for facilitating access to natural gas deposits. He can also thank China.
Beijing owns around 30% of Yamal LNG. The Arctic is quite far from China’s usual Belt and Road Initiative projects. Yamal is also an increasingly perilous investment as the melting permafrost jeopardizes all of this mining infrastructure. But China needs huge amounts of energy to keep its economy growing at the rate the central government deems necessary.
This is why so many Belt and Road Initiative projects involving Russia are centered around fossil fuels. Topping the list is the first Power of Siberia pipeline, which opened in 2019 to pump natural gas from the Russian Far East to China. A second pipeline of this type is under study, which would connect China to… Yamal LNG.
Currently, natural gas from the Russian Arctic supplies European consumers. With a second Power of Siberia pipeline, Russia could more easily resist a boycott by European importers. Yamal, by the way, is already under US sanction, which has made Chinese financial support even more essential. China is investing a total of $123.87 billion in the three phases of the Power of Siberia project, more than any other BRI oil and gas investment and four times what China spends on Arabia’s power saudi.
But these are not the only Belt and Road connections between the two countries. Five of the BRI’s top 10 mining projects are in Russia, including a $1.8 billion coal mining complex. China is also investing in an Arctic free trade area and improving rail and road links between the two countries.
Let’s be clear: the bear and the dragon don’t agree on everything. As Gaye Christoffersen writes in Asan forum:
China has focused on infrastructure projects useful for importing Russian natural resources, while Russia has focused on developing resource processing industries. The two sides did not reach a consensus. Later, China insisted, as a state close to the Arctic, on an equal partnership in the development of the Northern Sea Route, while Russia demanded respect for its sovereignty and rejected Arctic claims. from China. They are still at odds despite joint efforts.
But the basic relationship remains: Russia has energy to sell and China is an eager buyer. In a side deal that coincided with their recent Olympic declaration, for example, China agreed to buy $117.5 billion worth of oil and gas. “Rosneft, Russia’s largest oil producer, has announced a new deal to supply 100 million tonnes of crude via Kazakhstan to Chinese state-owned China National Petroleum Corporation over the next ten years, while oil giant Russian energy company Gazprom has pledged to ship 10 billion cubic meters of oil. gas a year to China via a new pipeline,” Frederick Kempe writes to the Atlantic Council.
Talk about greasing the cogwheels.
A future Eastern alliance?
Vladimir Putin has not abandoned Europe. He still has friends in Victor Orbán’s Hungary and Aleksandar Vučić’s Serbia. Europe remains the largest market for Russian oil and gas. And NATO and the European Union continue to attract interest from countries bordering Russia, which means the Kremlin must pay close attention to its western flank.
But the Ukrainian crisis, even if it does not turn into a war, could represent a turning point in contemporary geopolitics.
Vladimir Putin and Xi Jinping have a lot in common. They are both nationalists who derive much of their public legitimacy not from abstract political ideology but from their appeals to the homeland. They have a mutual distaste for the liberalism of human rights and checks on government power. Despite their involvement in various global institutions, they firmly believe in a sovereignist position that imposes no constraints on what they do within their country’s borders.
But perhaps the most operationally important aspect of their overlapping worldviews is their approach to energy and climate.
China and Russia are theoretically committed to fighting climate change. They have pledged to be carbon neutral by 2060, although they both use questionable accounting to offset their actual emissions and meet their Paris pledges. China is more serious about installing renewable energy infrastructure, with solar, wind and other sources responsible for 43% of electricity generation. Russia’s commitment to renewable energy at this stage is negligible.
But both remain committed to fossil fuels. It is a matter of economic necessity for Russia as the world’s largest natural gas exporter, second oil exporter and third largest coal exporter. Fossil fuels accounted for more than 60% of the country’s exports in 2019; oil and gas alone provide well over a third of the federal budget. All of this is in jeopardy as many Russian customers are trying to wean themselves off fossil fuel imports to reduce their carbon emissions and lessen their dependence on the Kremlin.
But not China. Despite its considerable investments in renewable energies, Beijing remains a huge consumer of fossil fuels. Chinese demand for natural gas has been on the rise for a few years and will not peak until 2035, which is bad news for the world but good news for Russia’s gas industry. Oil consumption, which is more than double that of natural gas and growing more slowly, will peak in 2030.
Coal remains China’s main source of energy. “Since 2011, China has consumed more coal than the rest of the world combined,” according to ChinaPower. “In 2020, coal accounted for 56.8% of China’s energy consumption.” In 2020, as Alec MacGillis points out in a New Yorker piece, China has built three times as much coal-fired power generation infrastructure as the rest of the world combined, and it continues to extract staggering amounts of it. Despite all the domestic production, China still depends on imports. Due to trade tensions with Australia, the world’s second-largest coal exporter after Indonesia, China is increasingly looking to Russia to meet demand.
In other words, Russia and China are positioning themselves to use as much fossil fuel and emit as much carbon as they can over the next two decades to strengthen their economies and their hegemonic power in their adjacent spheres – and before that international institutions acquire the determination and power to compel countries to keep their carbon reduction promises.
Yes, other countries are slow to abandon fossil fuels. The United States, for example, is increasingly dependent on natural gas for electricity generation to offset a marked reduction in coal use. Japan remains heavily dependent on oil, natural gas and coal. Thus, Russia and China are not unique in their commitment to these energy sources.
But if the world’s biggest consumer of fossil fuels joins forces with one of the world’s biggest producers, it doesn’t just baffle NATO generals and the transatlantic establishment. This should worry anyone who believes we still have a chance of preventing runaway climate change by 2050.