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Mar 22, 2023
Xi Aligns With Putin Against US, But Hesitates on Big Gas Deal
(Bloomberg) -- Xi Jinping used two days of talks in Moscow to firmly align with Russia against the US. But the Chinese leader held back from offering Vladimir Putin something he’s been looking for: A commitment to buy a lot more gas.
The visit by Xi, his first to Russia since Putin invaded Ukraine just over a year ago, marked a political win for both leaders. Xi saw an opportunity to push back at the US and buttress his image as a global statesman after helping to broker a Saudi-Iran deal, while Putin can show he has the support of one of the world’s most powerful leaders even as the US and its allies try to isolate him.
Yet the lack of progress on any major energy deals — or specifics on other areas of economic cooperation — showed some hesitation from China on appearing too close to Russia. Xi wants to avoid facing more stringent economic sanctions that could damage China’s economy, while also keeping Russia on side as a partner that could push back against the US and its allies — and provide cover for countries that don’t want to pick sides.
Emphasizing that China-Russia ties “are not the kind of military-political alliance during the Cold War,” one of the joint statements issued after the talks drew a more explicit boundary than a lengthy joint statement last year that hailed a “no limits” friendship between the countries when Putin visited Beijing just weeks before the invasion.
“Xi’s plan is to strike a balance: China wants Russia to survive, but doesn’t want to be viewed as completely supporting Russia,” said Dongshu Liu, an assistant professor specializing in Chinese politics at the City University of Hong Kong. “The problem is when the war develops, if Russia becomes further disadvantaged and needs economic and military support from China in order to survive, what will China do? China will need to make a bigger choice then.”
The joint statements issued after the talks contained many of the principles China has long espoused in pushing back against the US. The two leaders vowed to prevent “color revolutions,” called for an investigation into the Nord Stream pipeline explosion, expressed concerns about US and UK plans to cooperate with Australia on nuclear-powered submarines and called on NATO to respect “diversity of civilizations.”
The increasing asymmetry in the economic relationship was evident in the statements on energy. Putin promised to deliver at least 98 billion cubic meters of gas a year to China by 2030. While that’s more than six times higher than what it sold to China last year via pipeline, it’s still well below what Russia delivered to Europe at its peak.
But Xi didn’t give Putin an explicit agreement or even a nod to minimal progress on the bellwether Power of Siberia 2 gas pipeline, a crucial link as Moscow attempts to sell more gas to the east while its export infrastructure largely faces west. Putin said after the talks that the new pipeline, which would run to China through Mongolia, was discussed and “almost all” parameters of a deal agreed. But the joint statements were far less explicit.
While that pipeline could supply China with a cheaper alternative to liquefied natural gas, Xi’s government remains focused on securing diversity of supply — essentially not repeating the European error of excessive reliance on Russia. And there’s a lot of countries seeking to sell gas at the moment, including the US, Qatar, Australia and Turkmenistan, according to Batt Odgerel, a senior research analyst at the Energy Policy Research Foundation, Inc.
“It’s a buyer’s market for China,” he said. “Unless Russia gives an extremely pleasant offer, China can wait as long as it wants. Additional gas from Russia is not required, especially after the lockdown-induced economic downturn.”
The extent to which China will continue this balancing act with Russia will be made clear in the coming weeks. Xi is expected to soon hold his first conversation since the invasion with Ukrainian President Volodymyr Zelenskiy in order to further his vague proposal for a cease-fire, which has already been dismissed by the US and its allies.
“Many of the provisions of the peace plan proposed by China are in line with Russian approaches and could be used as the basis for a resolution when Kyiv and the West are ready for it,” Putin said Tuesday in his most detailed comments yet on the blueprint, speaking in the Kremlin alongside Xi.
John Kirby, a spokesman for the US National Security Council, on Tuesday tore into Xi for flying “all the way to Moscow” without first speaking with Zelenskiy.
“Now look, if he’s willing to talk to President Zelenskiy and willing to get the other side and, if any future potential negotiation can incorporate Ukrainian views and perspectives,” Kirby added, “then that’s something that that could be seen as impartial.”
China Foreign Ministry spokesman Wang Wenbin rejected that assertion on Wednesday, asking whether it was “impartial to keep pouring weapons into the battlefield.”
China’s cease-fire paper has little detail and largely consists of broader foreign policy positions long espoused by Beijing. While its embrace of the principle of territorial integrity won praise in Kyiv, which seeks to drive Russian forces back across the border, a cease-fire call that would freeze forces in current positions is a non-starter.
The Xi-Putin meeting is also being closely watched for any signs that China will provide Russia with overt military support. The two discussed military cooperation, Kremlin aide Yuri Ushakov said, without providing details, according to Tass.
NATO Secretary General Jens Stoltenberg said Tuesday that the alliance had seen “some signs” Russia had requested lethal aid from China for the war in Ukraine, but “we haven’t seen any proof that China is delivering lethal weapons to Russia.”
“This meeting wasn’t about a specific gas deal or or not even about as much about Ukraine war,” said Alexander Korolev, senior lecturer at the University of New South Wales in Sydney who wrote China-Russia Strategic Alignment in International Politics. “It’s about consolidating China-Russia alignment in the context of deteriorating US-China relations.”
--With assistance from Lucille Liu, Vladimir Kuznetsov and Philip Glamann.
(Updates with Foreign Ministry spokesman’s comments)
©2023 Bloomberg L.P.
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