Pyongyang tensions belie Sino-Russian ties

London

CHINESE President Xi Jinping makes a state visit to Russia next week from Monday to Wednesday for meetings with President Vladimir Putin. The trip, just before the G20 in Germany, will underline the growing bilateral dialogue between Beijing and Moscow, including on key regional and global issues such as the Korean nuclear stand-off.

Coming after May's Belt and Road Forum for International Cooperation in Beijing, attended by both Mr Xi and Mr Putin, the primary emphasis of the visit is to try to deepen the bilateral political and economic partnership. China and Russia already enjoy a relatively extensive economic dialogue, which has warmed in several aspects since the crisis in Ukraine that saw Moscow's suspension from the G8.

In the period following escalation of those tensions, Russia has for instance announced plans for numerous cooperation projects with China, including a new method of interbank transfers and a joint credit agency that seeks to create a shared financial and economic infrastructure that will allow them to function independently of Western-dominated financial institutions.

China and Russia are also among the states involved in creating alternative fora to the World Bank and the International Monetary Fund, including the New Development Bank. This will finance infrastructure and other projects in the Brics states and a related special currency reserve fund worth US$100 billion.

In the energy sector, the two states have signed a natural gas supply deal worth US$400 billion which will see an approximately 3,219-kilometre gas pipeline from eastern Siberia to northeast China. Both sides have agreed to construct a second major gas pipeline from western Siberia to China's Xinjiang province.

Moscow has also opened parts of its upstream oil and gas sector to direct investment from Beijing. Chinese firms have also stepped in to provide their Russian counterparts with technology; Chinese banks have become an important source of loans for Russian businesses in the wake of Western sanctions.

While the warming of ties since the Ukraine crisis can be overstated, with little substantial progress made so far on an array of economic and financial projects that have been announced, the boost to the bilateral cooperation agenda has made steps towards stronger, common positions on key regional and global issues possible. Both parties are looking to the meetings to enhance this strategic coordination from the Middle East to Asia-Pacific and the Americas.

The top item on the agenda is likely to be North Korean nuclear tensions. Both China and Russia know that security problems on the Korean peninsula have no easy resolution: both sides are grappling with how best to respond to not just the regular missile launches by Pyongyang, but also its nuclear tests.

Recent US rhetoric has given Beijing, in particular, heightened concerns that Washington might now be thinking, much more seriously, about a pre-emptive strike on Pyongyang's nuclear capabilities. Only last Monday, US President Donald Trump asserted that North Korea "is causing tremendous problems and is something that has to be dealt with, and probably dealt with rapidly".

This builds on his comments several weeks ago - prior to his meeting with Mr Xi in Florida - that if Beijing "is not going to solve North Korea, we [the United States] will". This upped the ante from US Secretary of State Rex Tillerson's striking announcement earlier this year that the two decades-long US policy of "strategic patience" towards Pyongyang is now over and "all options" are on the table.

This US rhetoric is one reason why Chinese Foreign Minister Wang Yi has asserted that "China's priority now is to flash the red light and apply the brake to both [the US and North Korean] trains" to avoid a collision. Both Beijing and Moscow are concerned that tensions on the peninsula could spiral out of control and have previously indicated support for a UN Security Council initiative that would build on the UN vote last year to tighten some sanctions in response to Pyongyang's fifth nuclear test.

The UN measure favoured by Russia and China would require the United States and South Korea to halt military drills and deployment of the controversial Terminal High Altitude Area Defense missile system (THAAD). China vehemently opposes THAAD which it fears could be used for US espionage on its activities, as much as for targeting North Korean missiles.

Russia shares this concern and Deputy Foreign Minister Gennady Gatilov asserted that THAAD is a "destabilising factor", asserting that it is "in line with the vicious logic of creating a global missile shield". He also warned that it also undermines "the existing military balance in the region".

The UN initiative would also put further pressure on North Korea to stop its missile and nuclear tests. It is feared that Pyongyang may be preparing for a new nuclear test. The regime also recently unveiled in a major military parade what appear to be new intercontinental ballistic missiles.

However, unlike the US, China has been reluctant to take more comprehensive, sweeping measures against its erstwhile ally. The key reason why Beijing has differed with Washington over the scope and severity of actions against Pyongyang largely reflects the fact that it does not want to push the regime so hard that it becomes significantly destabilised.

From the vantage point of Chinese officials, this risks North Korea behaving even more unpredictably and the possibility of the implosion of the regime which would not be in Beijing's interests. Such a scenario could lead to instability on the North Korean border with China and ultimately, the potential emergence of a pro-US successor nation.

Taken overall, Mr Xi's visit will highlight growing willingness of both sides to develop a significant cooperation agenda. Despite positive mood music, the warming of ties should not be overstated.