US tensions prompt closer China-Russia cooperation

Subject

China-Russia cooperation.

Significance

Beijing and Moscow are compensating for deteriorating ties with Washington by building -- or at least declaring -- close political and economic relations with each other. Chinese exporters of production and consumer goods are replacing Western companies that are curtailing activities due to Western sanctions and Moscow’s countersanctions. However, neither Beijing nor Moscow sees the other as a true substitute for normal relations with Washington.

Impacts

• China and Russia will more actively use the renminbi and ruble as settlement currencies.
• Russia will preserve its position as China’s key supplier of oil and will significantly expand deliveries of natural gas.
• Russia will press for closer ties in high-tech industries; China will be wary, fearing this might prompt new US sanctions.
• The epicentre of Russia’s foreign economic ties will shift further from the EU to China.
• Greater economic interaction with Russia will help China cement its relations with other former Soviet countries.