Russia & China have “highly complementary” economies to fulfil ambitious projects under the Belt & Road Initiative (BRI) and resist the policy of unilateral sanctions and blockades, Kong Dan, the chairman of CITIC Reform and Development Research Foundation, said in an interview.
China’s BRI, first announced in 2013, is aimed at developing infrastructure and strengthening ties and “all-around connectivity” among Eurasian countries. The project focuses mainly on the Maritime Silk Route and on the land-based Silk Road Economic Belt.
In April 2019, Beijing hosted the second Belt and Road Forum for International Cooperation, which brought together leaders of 37 countries, including President Vladimir Putin.
According to Kong, while being connected both to China and its neighbouring countries in the east and Europe in the west, Russia is seen as a major hub for BRI.
“In terms of interconnection, Russia is very important. There are many opportunities for cooperation in railway, transportation and logistics. In addition, Russia has a vast territory, rich resources, and great potential for market development.
For China, Russia is highly complementary. If you combine Chinese manufacturing with Russian manufacturing, and if the cooperation is successful, we can even build BRI projects together in a third country,” he said.
In this regard, the Russian leader’s idea of connecting BRI with the Eurasian Economic Union seems “very necessary,” the expert added.
Kong believes that, “from a supply and demand perspective,” such a partnership has a “great potential for cooperation” and can resist trade protectionism and unilateral sanctions.
“China has a strong market with a population of 1.4 billion and a strong consumer market and investment market. Although Russia does not have as much population as China has, it is also a relatively developed market.
The complementary markets between the two countries and the complementary supply and demand may in itself create resistance to sanctions and blockades,” he suggested.
In particular, the researcher noted that Beijing was currently facing pressure from Washington, who “fears its development” and is “worried” that China will replace the United States.
Pressure, in the form of “sanctions and blockades,” is also being exerted toward Russia in the hope to stem its revival after the Soviet Union’s collapse, according to Kong.
“In this respect, we have all been suppressed by the United States. Although the situation is different, from the state of economic development to the specific problems we face, but we have something in common in this perspective,” he said.
According to Kong, BRI opposes hegemonism and hopes to encourage development “through globalisation and mutual cooperation, while the US unilateral policies, including those aimed at excluding China from the global supply chain, only hurt Washington itself.
“There is a saying that ‘killing 1,000 enemies while losing 800 of your own.’ I am afraid that the damage [the US suffers] may not be less than 1,000. But the US attempt also forced us to consider forming a community [of common destiny],” he said in a reference to the concept, which was put forward by President Xi Jinping back in 2012 and was reiterated at the BRI inaugural summit in 2017.
He expressed belief that “China and Russia can form a community of destiny in terms of development and security.”
Unlocking Cooperation Potential
According to Kong, Russian-Chinese “strategic partnership” has all the chances to advance thanks to “extraordinary” trust between its two leaders.
“On the other hand, the development of economy and trade [between China and Russia] has not yet reached the desired level. The total amount of cooperation and projects between Russia and China are not sufficient, which is where the potential for development comes from,” he pointed out.
The expert, however, opined that, after exceeding the set goal of $100 billion in trade last year, the two countries would only boost cooperation.
“I believe that China-Russian trade will get better and better, because many problems have been solved. It is always difficult to start, but once the scale expands, everything will follow through,” he said, referring to diverging reciprocal national policies and regulations.
Companies of both countries, meanwhile, are yet to establish a “healthy and sustainable” business model to make money and overcome “the early stage of small-scale border trade and the low credibility trade model,” according to Kong.
“Moreover, I believe in the Chinese philosophy of ‘move forward in face of difficulties.’ We should not let difficulties and problems, or even commercial disputes, obstruct our progress. We should focus on solving problems, resolving problems, and turning various challenges into various opportunities,” he stressed.
China – US Trade War: What will Happen Next?
When asked to project how the Chinese-US trade war would be developing after last week’s collapse of trade talks and subsequent exchange of new tariff hikes, Kong found it difficult to outline a concrete scenario.
“Responsibly, it is difficult for me to predict the specific changes. If the United States does not give up suppressing China, or even tries to restrict China’s development opportunities and change China’s development model and road, if this is happening, the problem will be difficult to be resolved smoothly,” he said,
If the United States, in contrast, accepts “the coexistence of different development paths,” then the problem can be solved, according to the expert.
He also suggested that the current tensions actually had something to do with “national sovereignty and the management model of the economy,” adding that Beijing could “connect with the international community, but cannot give up sovereignty.”