The Russia-China-Iran Triumvirate against the US


Asia Times describes in its article “Far from quiet on the US vs Russia-China front” on May 29 Russia, China and Central Asia’s busy activities on interaction between Euroasia Economic Union (EAEU) and Belt and Road Initiative (BRI) and the expansion of their Shanghai Cooperation Organization (SCO) to include Iran.

By taking Iran into SCO, there will be a formal Russia-China-Iran triumvirate against the US. Iran has applied for SCO membership. As the US is carrying out three wars respectively against Russia (sanctions on Russia for Ukraine), China (the trade war) and Iran (the sanctions and military pressure), there has already been the de facto triumvirate whether or not Iran will be an SCO member.

Comment by Chan Kai Yee on Asia Times’ article, full text of which can be viewed at
https://www.asiatimes.com/2019/05/article/far-from-quiet-on-the-us-vs-russia-china-front/


Iran to keep exporting crude oil despite US pressure: Iran president


Iran will continue to export oil despite U.S. pressure aimed at reducing the nation’s crude oil shipments to zero, Iran President Hassan Rouhani said in a speech broadcast live on Iranian state TV on Tuesday.

30 Apr 2019 02:34PM

GENEVA: Iran will continue to export oil despite US pressure aimed at reducing the nation’s crude oil shipments to zero, Iran President Hassan Rouhani said in a speech broadcast live on Iranian state TV on Tuesday (Apr 30).

“America’s decision that Iran’s oil exports must reach zero is a wrong and mistaken decision, and we won’t let this decision be executed and operational” Rouhani said.

“In future months, the Americans themselves will see that we will continue our oil exports,” he said.

If the United States is able to stop one method for Iran to export oil, then it will find other ways, Rouhani said.

Oil prices hit their highest since November last week after Washington said all waivers for sanctions-hit Iranian oil would end this week, pressuring importers to stop buying from Tehran and further tightening global supply.

The United States demanded last Monday that buyers of Iranian oil stop purchases by May 1 or face sanctions, ending six months of waivers that had allowed Iran’s eight biggest customers, most of them in Asia, to continue importing limited volumes.

Ordinary Iranians are the ones who feel the pressure from US sanctions, Rouhani said.

Source: Channel News Asia “Iran to keep exporting crude oil despite US pressure: Iran president”

Note: This is Channel News Asia’s report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


Russia-China Alliance –US Military’s Nightmare


There is the opinion in vogue among US politicians and military officers that there has been no Russia-China alliance or Russia and China though allying with each other will each pursue its own interests when the other is in war with the US.

The former is reflected in Leon Aron’s article “Are Russia and China Really Forming an Alliance?” published by Foreign Affairs on April 4 with the subtitle “The Evidence Is Less Than Impressive” while the latter was described by Robert Farley in his article “US Military’s Worst Nightmare: A War with Russia and China (at the Same Time)”

Leon Aron is a Russian refugee in the US. He is regarded as a Russia expert currently serving as a resident scholar and the director of Russian studies at the American Enterprise Institute (AEI). He believes that “Chinese-Russian economic, foreign policy and military cooperation is less than impressive so that many foreign-policy experts are wrong in being convinced that an anti-US alliance between Russia and China is emerging.

China joined Russia in its veto of Western attempt of military intervention for regime change in Syria. Is that not military cooperation of emerging alliance?

When Russia annexes Crimea and provides military support to Ukraine local militia’s struggle for independence, China conducted large-scale reclamation to build artificial islands in the South China Sea. Was that not a move to divert West’s attention while attaining China’s own goal? The timing in Ukraine and South China Sea proves wonderful cooperation of alliance.

Russian president insisted on provision of top aircrafts for China with the argument that the sale was political instead of commercial. Did that not indicate that Russia-China alliance was taking shape?

When US President Trump threatens North Korea with military attack to force North Korea to give up its nuclear weapons and ballistic missiles. Russia and China opposed Trump’s attack together.

When the US threatens Venezuela with war to force Venezuelan President Maduro to resign, China who has lots of interests in Venezuela does not send military to protect Maduro, but Russia does though it does not have significant interests there. Is that not military cooperation between the two countries?

The two allies have conducted cooperation wisely. For example when the West imposed sanctions on Russia due to the Ukraine issues, China does not join the West claiming that sanctions are useless. However, it silently provided Russia with economic assistance to make the sanctions useless. Do you think China did so out of the necessity to prove its argument that sanctions are useless?

On the other hand, China provides Russia with food procession technology to make effective Russian counter sanctions of banning import of European processed food. China provided Russia with food processing technologies to enable Russia to produce import substitutes for European processed food.

For a long time Russia had a plan for utilizing its rich agricultural resources to achieve food self-reliance so as to greatly reduce its expenditure of foreign exchange in importing processed food. Western sanctions provide Russia with justified reason to carry out the plan as retaliation of Western sanctions. Russian people suffered for some time the shortage of Western processed food but they supported the government’s counter sanctions. Chinese support had helped Russia overcome the shortage of processed food except Cheese.

There is a prevailing Western view that petrified egg is the worst Chinese food while almost all Chinese people regard cheese as the worst Western food. No wonder China is not able to make good cheese to supply Russia nor has China the technology to help Russia make good cheese.

As the West imposed sanctions with military intention, Chinese assistance to make Western sanction ineffective and Russian sanctions on the West effective shall be regarded as strong and effective military cooperation with Russia.

Leon Aron is stupid to regard the structure of Russian-Chinese trade as skewed. True Russia’s exports to China are mostly raw materials, especifically crude oil, wood, and coal while China’s sales to Russia are mostly consumer goods and electronics and machinery. That means the two countries’ economies are supplementary. When their trade lifelines are cut by the West, they will be able to supply each other’s needs. Such supplementary economies make them ideal allies.

The two countries’ leaders have met 25 times to design wise ways of cooperation. For example, China supports Russia’s actions in Ukraine and Syria but does so silently without hurting its relations with the West.

Russia takes strong measures to support Venezuela to help maintain Chinese interests there so that China need not take actions. As a result, China is able to avoid upsetting the US and creating obstacles to its talks with the US to end the trade war.

There cooperation in their arms race with the US is especially wise. Russia focuses on developing nuclear weapons to threaten the US so that the US has to allocate much financial resource to the improvement and development of its nuclear weapons. China, on the other hand, focuses on developing conventional weapons, especially aircraft carriers to put an end to US dominance of the oceans.

The US, though has a much larger military budget, has to take care of both nuclear and conventional weapons while China and Russia only to take care of one of the two sections of weapons so that their much smaller military budgets are enough.

Robert Farley is one of those who believe Russia-China alliance has really been emerging. He is an experienced analyst. He has written The Battleship Book and is a senior lecturer at the Patterson School of Diplomacy and International Commerce at the University of Kentucky. He published on National Interest an article titled “US Military’s Worst Nightmare: A War with Russia and China (at the Same Time)” on Russia-China alliance. The article can be viewed at http://nationalinterest.org/feature/us-militarys-worst-nightmare-war-russia-china-the-same-time-17490.

In the article he asks the question that plagues him: What if China and Russia sufficiently coordinated with one another to engage in simultaneous hostilities in the Pacific and in Europe?

However, he does not think it likely that China and Russia may coordinate a pair of crises to drive two separate US military responses as each country has its own goal. He believes, “More likely, one of the two would opportunistically take advantage of an existing crisis to further its regional claims. For example, Moscow might well decide to push the Baltic States if the United States became involved in a major skirmish in the South China Sea.”

In such a scenario, Europe is strong enough to deal with Russia with some support from US navy and air force. As a result the US may focus on dealing with China with almost all its navy and air force.

The article believes that US only has the difficulties in winning quickly in Asia in order to transfer its force to European theater as soon as possible.

According to current US military strength, it is indeed possible for the US to win first in Asia and then in Europe if China and Russia fight separately in two different theaters. However, what if China and Russia join force in fighting the US in one theater?

Chinese and Russian leaders are both very clever. They have so far designed very wise way of cooperation to cause trouble to the West, especially the United States.

If one of their countries is in war with the US, the other will certainly come to help its ally as it is common sense that they rely on each other to resist the US so that if one of them is defeated by the US, the other will not be able to resist the US without its ally’s help.

The US is not strong enough to fight both countries at the same time; therefore, Russia-China alliance is US military’s nightmare.

Article by Chan Kai Yee


Russia Is Winning the Sanctions Game


These sanctions were supposed to punish Moscow’s elite, but instead they’ve spurred economic development and patriotism.

by Judy Twigg

March 14, 2019

The current conversation about Russia sanctions centers around targeting and scope. Are we punishing the people whose behavior we most want to change? Is there pain, well inflicted, on those individuals responsible for creating chaos in Ukraine and Crimea, for reckless attacks on Sergei Skripal and others, and for wanton interference in Western elections? Can we hurt Russian elites in a way that Putin will notice? Have we done enough?

In at least one sector, though, the sanctions are a textbook case of unintended consequences: they’ve put Russian farmers in the best shape they’ve ever been. Countersanctions aimed at imported Western food products—put into effect just days after the initial sanctions in the summer of 2014—initially sent Russian consumers into a tailspin, hungry from a lack of immediate alternatives to tasty European cheeses and processed foods. But palates adjusted quickly, and the import substitution effects boosted Russia, by 2016, to the position of top wheat exporter in the world. As the United States hemorrhages global agro-market share courtesy of Trump-era tariffs and trade wars, Russia is actively and aggressively filling the gap.

The Sanctions

In early 2014, following Russia’s illegal annexation of Crimea and continued involvement in separatist uprisings in eastern Ukraine, the United States, European Union, and several other Western countries imposed sanctions. Throughout 2014, these measures progressed from the diplomatic (limits on previously scheduled meetings and talks), to curbs on specific individuals and organizations (targeted visa bans and asset freezes), and finally, in July and September, to restrictions on Russia’s financial, defense, and energy sectors. The latter limited access to capital markets and low-interest loans, imposed an arms embargo and ban on exports of dual-use items to military clients, and prohibited export of innovative extractive technology (with special approval required for all other energy-related exports). Since 2014, the sanctions have been sustained and augmented, but they have remained within these categories.

In August of 2014, Russia initiated countersanctions to ban specific food commodities imported from the United States and EU. Affected foods included beef, poultry, fish/seafood, fruits/vegetables, nuts, milk and dairy, cheese, and a wide range of processed and prepared foods. The ban was broad, covering both staples and luxury items. It hit many foods on which Russia was most import-dependent, and its wide geographic scope (the range of countries it covers) has made it difficult to compensate fully for shortages by increasing imports from non-sanctioned countries.

The Impact

Russia felt the whole spectrum of sanctions in three immediate ways : increased volatility on foreign exchange markets, leading to significant depreciation of the ruble and resulting inflationary pressures; restricted access to financial markets; and depressed consumption and investment. Imports sank in the third quarter of 2014. The steep drop in world oil prices in the fourth quarter of 2014 likely had even more profound effects on the Russian economy than the sanctions and countersanctions. In late 2014 and early 2015, oil prices fell so far (from $100 per barrel in Q2 2014, to under $60 by the end of 2014, and even further by the second half of 2015) that Russia’s export revenues were cut by a third . And the financial sanctions meant that Russia could not mitigate the oil price plunge by borrowing money.

Right off the bat, the countersanctions impacted $9.5 billion worth of food annually, covering almost a tenth of total food consumption in Russia and a quarter of food imports. Before the countersanctions, domestic production covered less than 40 percent of Russia’s intake of fruit, 80 percent of milk/dairy, and 90 percent of vegetables; Russia was already a net exporter of cereals, potatoes, and oil plants. The countersanctions banned 60 percent of incoming meat and fish, and half of imported dairy, fruits, and vegetables. Overall, the share of imports in total food consumption decreased from over a third in 2014 to just over 20 percent in the second quarter of 2017.

Prices immediately increased. By February of 2015, food inflation (year-on-year) was over 23 percent. Households shifted food buying and eating habits away from pricier, formerly imported foods (fruit, milk/dairy, beef) toward less expensive, domestically-sourced goods (potatoes, bread, chicken), and have adopted “smart shopping” strategies to value acceptable quality at lower prices (including a diminished appetite for prestige brands in favor of trusted store brands). Before too long, the consumer environment had largely adjusted and recovered. By 2018, food price increases were much lower than overall inflation.

Some banned food products from the EU have made their way to Russia as re-exports from other countries. In the final quarter of 2014, for example, EU dairy exports to Belarus increased tenfold compared to the previous year, and exports of fruit and fish doubled—not likely a surge in the domestic Belarussian market. While not a large percentage of Russia’s overall food trade, these secondary import substitutions have exacerbated trade tensions between Russia and Belarus, leading to a reinstatement of customs controls between the two countries in December 2014, as well as the threat of restrictions on imports of milk products from Belarus as recently as spring 2018. Probably rightly, Russia accuses Belarus of being a willing conduit for banned, counterfeit, and low-quality or mislabeled foods.

The Industry

The countersanctions were a gift to the Russian agrifood industry. They legitimized and catalyzed an import substitution strategy whose broad objective had been in place since the late 2000s: to become self-sufficient in food. In other words, the sanctions paved the way for Putin to overcome a long-standing embarrassment dating back to the collapse of the sector in the 1990s. The timing of the countersanctions—announced just a couple of days after the sanctions—led many observers to wonder whether the lists of banned products had been planned beforehand, specifically as a measure intended ultimately to boost domestic production.

Russia’s food industry has seized this opportunity. Many investors who had not previously bothered with agriculture suddenly became interested in farming. High-end oligarchs also got the message, with the agriculture sector becoming a point of national pride and patriotism for some. Viktor Vekselberg , for example, has started investing in the construction of urban greenhouses. The government has earmarked 242 billion rubles (just under $4 billion USD) in agricultural support for 2018–2020, focused on rail transportation, subsidized loans, block grants to regions, partial compensation for capital investments, and targeted support for dairy farmers. A new legal requirement for public procurement gives preferences to domestic products—not just for food, but across the board, including key industries like software. This government purchasing boost, in combination with the countersanctions, has been of comparatively less benefit to domestic sectors that don’t produce quality alternatives to imports, but the food industry has benefited significantly. Even sub-sectors not covered by the countersanctions have asked to get in on the game. In June 2015, Russian candy manufacturers asked for countersanctions to extend to European chocolate, hoping to capture the market niche from Belgium, France and Germany. The Minister of Agriculture, Alexander Tkachev, summed it up neatly in 2015: “We are thankful to our European and American partners, who made us look at agriculture from a new angle, and helped us find new reserves and potential.”

Agrifood was one of the few bright spots in the country’s otherwise bleak economy from 2014–2016, boasting 3.2 percent average growth. In the words of Andrey Guriev , the chief executive of PhosAgro, a Russian phosphate fertilizer producer: “In one day, the Russian agricultural sector became profitable as hell.” And the growth continues. Russia now produces almost twice as much grain as it consumes, and it’s nearly self-sufficient in sugar and meat products. Domestic production has completely displaced imports of pork and chicken. By 2016, Russia had become the world’s largest exporter of grains, which had overtaken arms sales to become Russia’s second-largest export commodity (after oil/gas) to the tune of almost $21 billion. The Black Earth region of central and southern Russia, close to Black Sea ports, is well positioned to supply large wheat importers like Turkey and Egypt, and there has been huge investment in storage facilities and export terminals. This food market turbulence has attracted a new superpower; China is rapidly creating a market for Russian soybeans and sunflower seeds, replacing U.S. products hit by Trump-era tariffs. And it doesn’t stop there. Russia has about 50 million still-unused acres of potentially productive land, on top of the seventy-nine million where wheat was grown in 2017, and its crop rotation schemes—including winter wheat, corn, barley—hedge well against bad weather and unpredictable markets. Putin’s “May decrees” last year included a goal to double 2018’s $25 billion in food exports by 2024.

Import substitution in agrifood has certainly not been challenge-free. Ruble depreciation has increased prices for imported machinery and technology used in food production, and the availability of Russian replacements remains limited, hiking modernization and expansion costs. High interest rates have constrained possibilities for accelerated investment. Government support schemes routinely disbursed funds late. The slump in demand for relatively expensive foods has reduced the benefits accruing from lack of Western competition. Imports still dominate the landscape of high-value products, including beef, fruits, and vegetables. Russian wheat is, on average, of lower quality than Western counterparts (11.5 percent protein versus 13.5 percent in American wheat). But the impact of all of these factors has diminished since 2016. Last year, for example, Germany and The Netherlands sold $650 million worth of farm equipment to Russia, and lower Russian wheat prices seem to be working as a compromise for lesser quality.

Russian consumers adjusted quickly to the new lineup of products on the shelves. Over time, shoppers have perceived that the quality of domestic alternatives to imported food is getting better. Two-thirds of consumers polled in August of 2017 indicated that the quality of food under the import ban had not deteriorated over the previous year. Against a backdrop of bubbling unrest about Putin’s overall economic policies, most Russians still blame Western sanctions—rather than Russian countersanctions—for restrictions on availability and increased prices of imported foods. This attitude appears to be robust, even as popular concerns about the sanctions overall rose from 28 percent to 43 percent in 2018. Russian consumers have adopted “food nationalism” in response to the sanctions environment; 94 percent of urban consumers in 2015, and 90 percent in 2016, reported that they preferred to buy Russian-made food products even when equally priced imports of comparable quality were available. “Grown in Russia” is a powerful sentiment.

There’s Just One Lingering Problem

The most visible hitch in matching Western food quality has centered on cheese. Things have become desperate: in August 2017, a Russian man was caught trying to smuggle one hundred kilograms of cheese from Finland in a compartment of his car disguised as a fuel tank. Although many small, artisanal Russian manufacturers have sprung up, none have quite risen to the level of Swiss, Italian, and French cheeses, many of which take decades to produce. Parmesan is especially challenging: it uses a lot of milk, as well as access to credit to keep things running while the cheese ages. Russia produces only about 60% of the raw milk needed to satisfy demand for cheese and other dairy products; some domestic cheese makers are instead using imported dry milk, separated dairy proteins, and even palm oil. By mid-2015, about a quarter of Russian cheese was considered “fake” due to use of palm oil, whose imports increased by 35.8 percent in the first quarter of 2018 over the previous year, indicating that the practice continues. Desperate to find acceptable milk sources, one farm outside Moscow imported one thousand French goats in late 2016 specifically to source cheese.

Despite these challenges, the countersanctions have clearly created a market opportunity around cheese. The Moscow regional government, for example, is currently compensating half of the cost of modernization of family dairy farms and up to 20 percent for cheese-making facilities. At a large cheese festival held outside Moscow every summer since 2016, farmers have exhibited a prized dairy cow named “Sanctions,” and one vendor sells “Thanks for Sanctions” t-shirts. And journalists have had fun with “punny” illustrative headlines: “Sanctions Present Russian Cheesemakers with Gouda Opportunity ”; “ War and Cheese ”; and “Russians Find Whey around Sanctions by Copying Cheese.”

“We’ll Show You”

In July of last year, Putin announced that the countersanctions would remain in place at least through December 2019. This was no surprise. Why would he backtrack, when his previously languishing farmers have thrived under these new conditions? The sanctions created an opportunity to build back a crippled Russian food industry, and Putin grabbed it. Recent U.S. tariffs have expanded the opening even further to new export markets. Moving forward, the Trump administration needs to think this through: unintended consequences are more likely when a clever adversary is actively looking for ways to create and exploit them. Regardless of whether Trump sees Russia as an adversary or wants to maintain sanctions at all, it’s hard to imagine the bolstering of a Russian competitor to U.S. farmers as a desired outcome of the sanctions regime. In this specific case, Russia remains a few steps ahead in the game.

 

Judy Twigg is a professor of political science at Virginia Commonwealth University, an adjunct professor at Georgetown University, and a senior associate (non-resident) at CSIS. She consults regularly on global health and development issues for the World Bank, U.S. government, and other agencies.

Source: National Interest “Russia Is Winning the Sanctions Game”

Note: This is National Interest’s article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.


China Masters Infrared Thermal Imaging Technology, Exports to Russia


Mil.huanqiu.com says in its report “The US blocks Russia’s essential supply, China provides timely help: This equipment is too important for Russia” that Russia is used to import infrared thermal imaging equipment but US sanction makes it impossible to import the equipment from the West, which has a monopoly over the technology.

Now China has made a breakthrough in the technology to be able to make equipment of that important technology equal to Western ones. It now is providing Russia with such equipment indispensable for Russia.

Source: mil.huanqiu.com “The US blocks Russia’s essential supply, China provides timely help: This equipment is too important for Russia” (summary by Chan Kai Yee based on the report in Chinese)


US says progress with China on N.Korea UN sanctions, true test is Russia


U.S. Ambassador to the United Nations Nikki Haley directs comments to the Russian delegation at the conclusion of a U.N. Security Council meeting to discuss the recent ballistic missile launch by North Korea at U.N. headquarters in New York.

UNITED NATIONS (Reuters) – The United States is making progress in talks with North Korean ally China on imposing new United Nations sanctions on Pyongyang over its latest missile test, but Russia’s engagement will be the “true test,” U.S. Ambassador to the U.N. Nikki Haley said on Tuesday.

The United States gave China a draft resolution nearly three weeks ago to impose stronger sanctions on North Korea over the July 4 missile launch. Haley had been aiming for a vote by the 15-member Security Council within weeks, senior diplomats said.

“We’re constantly in touch with China … Things are moving but it’s still too early to tell how far they’ll move,” Haley told reporters, adding that she was pleased with China’s initial response to the U.S. proposal because it showed “seriousness.”

“We know that China’s been sharing and negotiating with Russia, so as long as they are doing that, we’re going to continue to watch this closely to make sure it is a strong resolution,” she said.

China’s U.N. Ambassador Liu Jieyi told reporters: “We are making progress, it requires time, but we’re working very hard.”

Traditionally, the United States and China have negotiated sanctions on North Korea before formally involving other council members, though diplomats said Washington informally keeps Britain and France in the loop. Along with Russia, those five countries are veto-wielding Security Council members.

“The true test will be what (the Chinese) have worked out with Russia (and whether) Russia comes and tries to pull out of that,” said Haley.

The United States and Russia have waged rival campaigns at the Security Council over the type of ballistic missile fired by North Korea. Western powers have said it was an intercontinental ballistic missile (ICBM), while Russia said the missile fired was only medium-range.

Diplomats say China and Russia only view a long-range missile test or nuclear weapon test as a trigger for further possible U.N. sanctions.

“Everyone that we have dealt with acknowledges that it’s an ICBM. Whether they are willing to put it in writing or not is going to be the real question,” Haley said.

North Korea has been under U.N. sanctions since 2006 over its ballistic missile and nuclear programs and the Security Council has ratcheted up the measures in response to five nuclear weapons tests and two long-range missile launches.

President Donald Trump’s administration has been frustrated that China has not done more to rein in North Korea and senior officials have said Washington could impose new sanctions on Chinese firms doing business with Pyongyang.

When asked how long Washington was willing to negotiate with China at the United Nations before deciding to impose its own secondary sanctions, Haley said: “We’re making progress … We’re going to see what the situation is.”

“We want China and every other country to see it as serious and we’re going to keep moving forward that way,” she said.

China’s Ambassador to Washington Cui Tiankai said on Tuesday that Beijing objected to secondary sanctions. In June, the United States blacklisted two Chinese citizens and a shipping company for helping North Korea’s nuclear and missile programs.

“Such actions are unacceptable. They have severely impaired China-U.S. cooperation on the Korean nuclear issue, and give rise to more questions about the true intention of the U.S.,” he told the Institute for China-America Studies in Washington.

Additional reporting by David Brunstrom in Washington; Editing by James Dalgleish

Source: Reuters “U.S. says progress with China on N.Korea U.N. sanctions, true test is Russia”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


Russian-Chinese Alliance to Save Russia from Collapse


A "Russian-doll" building in Inner Mongolia. China will not give up its partnership with Russia, an analyst says. Photo: SCMP

A “Russian-doll” building in Inner Mongolia. China will not give up its partnership with Russia, an analyst says. Photo: SCMP

As soon as the US began to adopt its policy of pivot to Asia to encircle China, China switched to Russia’s side by joining Russian veto over Syria issue. China followed Sun Tze’s teaching in The Art of War that subduing the enemy by diplomacy is the second best.

This blogger regards that as Obama’s stupid blunder as Chinese-Russian alliance can challenge US world leadership.

However, at that time, the US still had room of maneuver as Russia did not want China as its ally eagerly. It was seeking improvement of relations with Japan in spite of the hot maritime territorial dispute between China and Japan.

Obama came out to facilitate the establishment of Chinese-Russian alliance again. He drove Russia to China’s side by taking the lead in imposing sanctions on Russia for Ukraine issue. This blogger described the consequence of Obama’s error in his post “China the Biggest Winner in US-Russian Confrontation” on August 7.

Perhaps, US experts believe that it is impossible for Russia to be China’s ally as Putin fears that China will weaken Russia’s Asia pivot. That is the opinion of Josh Cohen in his article “Putin’s fear of China weakens Russia’s Asia pivot” today on Moscow Times.

Cohen is a former U.S. State Department project officer involved in managing economic reform projects in the former Soviet Union. He currently works for a satellite technology company and contributes to a number of foreign policy focused media outlets.

In spite of being such an experienced Russia watcher, Cohen ignores the dire predicament Russia is in now due to US and its allies’ sanctions and efforts to push down oil prices in order to crush Russia.

Who can rescue Russia now? Only China is able and willing to. China is not only willing but anxious to rescue Russia as it needs Russia in confronting the US.

Americans may think that China has the best opportunity to recover the 2 million square-meter land it lost to Russia long ago. Sadly for Americans, that is not Chinese way. A friend in need is a friend indeed. Helping Russia now will establish long-term friendship between Russian and Chinese peoples. It will bring benefit to both peoples for centuries.

For the time being, Russian-Chinese alliance is but a short-term one aiming at joining forces to counter the US. If the US has eased its pressure on Russia or China, the alliance will weaken and even disappear.

However, if China helps Russia now when Russia is on the verge of collapse and no one is willing or capable to rescue Russia, the friendship resulted from that between Russian and Chinese people will last for a long time.

Therefore, Russia’s predicament now is not an opportunity for China to hurt Russia but the opportunity for long-term good neighborly relationship between the two peoples. This blogger believes that Xi has the wisdom and vision to act that way. SCMP also believes so. It says in its report “Beijing may boost project spending in Russia amid rouble crisis” today, “Although a direct handout is unlikely, China might help the Russian economy by boosting funding for projects, mainland analysts say.”

Perhaps being a Hong Kong media SCMP knows China much better.

Anyway, for the time being, under intensifying Western pressure, Russia will be forced to export its top weapons and weapon technology to China in exchange for financial aids from China to defend its currency. Obama is helping China to win and win greatly.

The following is the full text of SCMP’s report:

Beijing may boost project spending in Russia amid rouble crisis

Although a direct handout is unlikely, China might help the Russian economy by boosting funding for projects, mainland analysts say

China is preparing to flex its financial strength amid the economic crisis in Russia as it closely watches how the slump of the Russian rouble affects cooperation between the two countries, mainland analysts have said.

They said Beijing was unlikely to send aid to Moscow, but it would boost infrastructure and investment projects to stop the collapse of the Russian economy, a result that would hurt the two nations’ joint attempts to build influence in international affairs.

China and Russia have both described their relationship as reaching a “new stage” after the signing of massive cooperation deals in recent months, including an agreement for Beijing to import 38 billion cubic metres of gas annually, starting in 2019. Companies have already started talks about building the necessary pipeline to deliver the gas.

But a continued drop in the Russian economy could leave Moscow unable to complete the pipeline, and Chinese capital – possibly a concessionary loan – could be required, analysts said.

“This will affect delivery of the gas,” said Wang Haiyun, a former attaché at the Chinese embassy in Moscow.

“China will actively consider whether Russia demands more Chinese investment input into the project.”

In remarks seen as signaling Beijing’s support for Moscow, foreign ministry spokesman Qin Gang said Russia had enough reserves and resources to resolve the crisis.

China and Russia have long sought to present a united front on the global stage, often as a counterweight to the United States.

In a security conference in Shanghai in May, President Xi Jinping and his Russian counterpart Vladimir Putin said they opposed interference in a nation’s domestic affairs and the use of unilateral sanctions.

The comments were seen as a veiled attack on Washington, which had levelled sanctions against Moscow for annexing Crimea from Ukraine, and had irked Beijing by strengthening ties with Asian nations in sovereignty disputes with China.

Li Lifan, a Russian affairs expert at the Shanghai Academy of Social Sciences, said a collapse of the Russian economy would affect China’s international standing.

“China will not give up its partnership with Russia because that would definitely affect China’s influence in setting its agenda in international governance,” he said. “Both nations need each other, especially in counterbalancing the US.”

Li said Russia expected to lure more Chinese investment and boost exports to China to offset the impact of sanctions. This in turn could boost China’s imports of Russian high technology.

Li Xing, a professor of Russian affairs at Beijing Normal University, said China was deeply concerned about the financial crisis, and would step up investment in Russia’s Far East region.

This blogger also gives full text below of Cohen’s article today on Moscow Times “Putin’s fear of China weakens Russia’s Asia pivot”

Putin’s fear of China weakens Russia’s Asia pivot

As Moscow’s relationship with the West continues to deteriorate, Russia has engaged in a concerted and very public “pivot to Asia,” the focus of which has been to deepen its relationship with China. Beyond the rhetoric, however, is there a sufficient overlap of interests between Moscow and Beijing for the two sides to actually implement a formal alliance?

Russia and China do share a number of key interests, starting with energy. After nearly a decade of negotiations, during a visit to Beijing in May, President Vladimir Putin signed a 30-year, $400 billion deal for Russia to supply China with 38 billion cubic meters of gas per year to be transported from remote fields in eastern Siberia via a planned 4,000-kilometer pipeline.

In addition to this “eastern route” project, Putin recently asserted that negotiations are ongoing for a second, “western route” pipeline project that would carry gas from Altai to northwestern China.

Military cooperation is another rapidly developing pole of the Russia-China relationship. Earlier this year, Russia and China conducted a joint naval drill in the East China Sea, and according to Russia’s TASS news agency, the two sides will hold two more joint-naval drills next year, one in the Pacific and one in the Mediterranean.

Russia has long sold much of its most advanced weaponry to China. During the 1990s and early 2000s, China became a key Russian arms customer, one keeping the Russian military-industrial complex on its feet after domestic orders dried up following the fall of the former Soviet Union.

Now, after a hiatus of several years, Russia and China are in discussions for new arms sales, this time for Russia’s most advanced fighter jets and anti-aircraft missile, the Su-35 and the S-400, respectively.

Finally, Russia and China share broadly similar perspectives on most global issues. Ideologically, China and Russia hew to a philosophy that states should not interfere in each other’s internal affairs, and both have long bridled at the Americans’ focus on promoting democracy and human rights.

The two Eurasian powers also share the geopolitical objective of a multipolar world as opposed to one dominated by the United States. Viewed from Moscow, NATO expansion and Western meddling in Ukraine represent an American strategy to surround and contain Russia. Likewise, U.S. President Barack Obama‘s much vaunted “pivot to Asia” is simply an excuse to prevent China from resuming its role as the leading power in Asia.

Observing the deepening Moscow-Beijing entente, some American analysts have gone as far as to speculate that Russia and China could potentially form the equivalent of a “Eurasian NATO” that would dominate the Eurasian landmass at the expense of the United States. A closer look at the reality, however, suggests that a combination of differing regional interests and mutual suspicion — primarily unspoken Russian fears regarding China’s rise — make a formal alliance between Moscow and Beijing highly improbable
A key issue inhibiting a true Russian-Chinese alliance is the power imbalance between the two. While the economies of the two nations were about the same at the time the Soviet Union broke up, today the Chinese economy is five times Russia’s and growing rapidly. Unlike in the 1950s, when China initially allied itself with the former Soviet Union and allowed Moscow primacy, today it is clear that Russia would be the far junior partner in any alliance.

“Every alliance has a horse and a rider. Russia is the horse,” said Stephen Blank, a senior fellow for Russia at the American Foreign Policy Council.

An example of the power disparity between Russia and China can be observed in the $400 billion gas contract Putin signed with China in May. While the Russians have interpreted a $25 billion Chinese advance in the contract as a prepayment for the gas to be delivered, the Chinese now say that this advance is actually just a loan with interest, meaning that the deal is far from complete.

The “western pipeline” meanwhile is purely smoke and mirrors at this point, simply discussed in a “working group” between Gazprom and Chinese state gas company CNPC.

“Despite the hype regarding a strategic economic partnership, the money’s not coming from China at this point. The Chinese are extremely tough negotiators, and they will take advantage of any Russian weakness they can,” noted Blank.

Furthermore, many Russians worry that China actually sees Russia as nothing more than a supplier of raw materials, much as Beijing views Africa. Moscow sees a resource-poor China with 1.3 billion people abutting an increasingly depopulated Siberia and worries that even without any military action by China the Russian Far East could come under Beijing’s sway economically and ultimately politically.

China’s military capabilities are not overlooked either. As Carnegie Moscow analyst Dmitry Trenin has observed, the Russian security establishment believes that China military is currently focused eastward and southward on Japan and the South China Sea. By the same token, given the economic and demographic disparities between the two countries, Russia understands that China’s ambitions could easily turn northward someday.

Indeed, Russia’s largest military exercises to date — involving 160,000 troops, 5,000 tanks and a number of ships and aircraft — were held in the Russian Far East near the Chinese border. It is widely understood in Moscow that the land-based aspect of the drill — by far the exercise’s largest component — was meant to deter China.

Moscow’s longtime interest in ending or modifying the 1987 Intermediate Nuclear Forces Treaty between the U.S. and Russia is also partially motivated by the Kremlin’s desire to maintain a strong deterrent on its exposed far-eastern flank.

Although Moscow has gone out of its way not to explicitly antagonise China, the Kremlin has gone about hedging its bets by cultivating relationships with other Asian powers — many of whom have their own differences with Beijing.

For example on his recent trip to India — a country with which China has an increasingly open strategic rivalry — Putin and Indian Prime Minister Narendra Modi reaffirmed the two countries’ longtime alliance, with Modi describing Russia as a “pillar of strength” for his nation. The two sides signed contracts for weaponry development as well as for Russia to build 10 new nuclear power plants for the Indians.

Russia is also keen to rebuild Cold War ties with Vietnam, a country with whom China fought a bloody border war in 1979, and Putin reaffirmed Russia’s longtime commitment to Vietnam on his November visit to Hanoi.

In sum, although Putin welcomes the opportunity to piggyback on China’s growing power to challenge the U.S., a latent fear of China — “a threat that dare not be spoken in Moscow,” according to Blank — as well as the Kremlin’s unwillingness to accept a relationship where China would be the far dominant power make a true alliance between the two great Eurasian powers extremely unlikely.

Source: SCMP “Beijing may boost project spending in Russia amid rouble crisis”

Source: Moscow Times “Putin’s Fear of China Weakens Russia’s Asia Pivot”