putin and ci

BY MAXIM TRUDOLYUBOV

What started as an illusory promise of rapprochement is now a bitterly acrimonious relationship. The United States and Russia are expelling each other’s diplomats by the hundreds, taking away diplomatic properties and closing down missions.

Following the U.S. Congress’s vote to upgrade anti-Russian sanctions and turn them into law, Moscow ordered a reduction of U.S. diplomatic staff in Russia by 755 people. Washington retaliated yet again by requiring Moscow to close its consulate in San Francisco.

As if that were not enough, two major international stories involving two troublesome regimes are now tightening the conflict between the United States and Russia even further. The U.S. president Donald Trump’s strategy in dealing with North Korea does not look reconcilable with that of Moscow or Beijing. The White House recipe for dealing with a government crisis in Venezuela is also at odds with the Kremlin’s approach and its political and economic interests there.

The Korean Peninsula was “balancing on the brink of a large-scale conflict,” Russian president Vladimir Putin wrote in an article for Chinese media ahead of the BRICS Summit to be held in Xiamen, China, in early September.

BRICS, started in 2000s as a marketing gimmick by a Goldman Sachs economist, is an association of five major non-Western economies—Brazil, Russia, India, China and South Africa—that have held summits since 2009. Putin will have a separate meeting with his Chinese counterpart Xi Jinping on the sidelines of the event, the fourth one-on-one sit-down between the two leaders this year.

Ostensibly addressing Trump’s approach to dealing with the leaders of North Korea, Putin called the policy of putting pressure on the reclusive regime over its missile program “misguided and futile.” The article does not mention Trump by name. “Provocations, pressure and militarist and insulting rhetoric are a dead-end road,” Putin continued.

Trump’s improvised remarks about a month ago, in which he threatened to unleash “fire and fury” on North Korea if it continued its missile program, did not go over well in Beijing and Moscow.  China and Russia share a border with the DPRK and have a long history of containment of the regime, paired with policies of limited cooperation that include using North Korean laborers in agriculture and construction. Beijing is Pyongyang’s lifeline. Over 90 percent of all of North Korea’s trade is with China, and North Korea also depends on China for its food and energy supplies.

Since the early 2000s, China’s strategy in North Korea has been to push, quietly but steadily, for an economic (rather than political) opening of the regime. North Korean–Chinese bilateral trade growing tenfold between 2000 and 2015 is testament to that. Trade between the two countries peaked at $6.86 billion in 2014.

Since North Korea’s Kim Jong-un stepped up his ballistic missile program, the relationship has soured but has remained under Beijing’s control.

In what was seen in early August as a major U.S. success in international politics, both China and Russia supported new UN sanctions that are expected to cut North Korea’s export revenues by a third. Both countries thought that their voting for the sanctions was a significant step toward a multilaterally acceptable solution of the North Korean problem.

Trump’s subsequent war of words with Kim all but undid that initial meeting of minds and undercut his own diplomats, who had been working for a quieter dialogue with Pyongyang. The White House’s harsh rhetoric did not seem to stop Pyongyang from provoking its neighbors. Earlier this week North Korea fired a ballistic missile over Japan. Both China and Russia will now distance themselves from the U.S. approach. In fact, Putin said in his piece that Russia and China had drawn up a roadmap for establishing peace on the peninsula without the use of threats or military force.

Russian-Chinese relations are far from cozy and are marred by mistrust and gaping nonparity in economic might. But on seeing what kind of dangerous game Washington is prepared to play in their neighbourhood, they are incentivized to align their respective policies even closer.

The second international conflict that is driving Washington and Moscow further apart is Venezuela, and Russia’s involvement with the regime of Nicolás Maduro. The Russian state-owned oil company Rosneft was recently on the brink of acquiring a controlling stake in a U.S.-based oil company, Citgo Petroleum Corp. Citgo is a subsidiary of Venezuela’s government-owned Petróleos de Venezuela (PdVSA). Rosneft got into this deal because Venezuela offered Citgo to Russia as collateral for $1.5 billion in loans the Russian firm made in 2016 to help prop up the Venezuelan government.

According to the Wall Street Journal, the Trump administration was preparing to block Rosneft, an entity under U.S. sanctions, from gaining control of Citgo. This case is less controversial than that of North Korea. If the U.S. administration is to be consistent with its own and Congress’s policies, it probably has little choice but to stop Russia’s oil giant from moving into the United States. But Rosneft is an extension of the Russian state and the company’s head is Putin’s feared associate, Igor Sechin. If the United States goes on to block the deal, the move is guaranteed to cause even more tension between Washington and Moscow.

Russia’s original pivot to China, in 2014, was a frantic attempt to break free of a Western-imposed isolation following Russia’s annexation of Crimea. The realignment did not work all that well at the time. China was not prepared to make any significant economic concessions or to provide Moscow with generous credit as Beijing was unwilling to antagonize Washington. Now that the White House seems to be fine with antagonizing China, there is less reason for Beijing to be cautious about embracing Moscow.

Maxim Trudolyubov
Follow me

Maxim Trudolyubov

Senior Fellow at Kennan Institute
Maxim Trudolyubov, Senior Fellow with the Kennan Institute and editor-at-large with Vedomosti, has been following Russian economy and politics since the late 1990s. He has served as an opinion page editor for Vedomosti and editor and correspondent for the newspaper Kapital. He is the author of Me and My Country: A Common Cause (2011) and People Behind the Fence (2016). He won the Paul Klebnikov Fund’s prize for courageous Russian journalism in 2007, was a Yale World Fellow in 2009, and was a Nieman fellow at Harvard in 2010-11.
Maxim Trudolyubov
Follow me
U.S. Drives China and Russia Closer Together