Gorbachev�s policy brought changing attitudes to China in the Soviet conservative ruling elite and military. Cooperation of Russian and Chinese defence bodies, including the issue of arms, became one of the cornerstones for new partnership. In the views of Gorbachev's conservative critics, Chinese experience in economic reforms presented an attractive alternative to Gorbachev�s domestic political reform and "pro-Western" orientation of his foreign policy. This resulted in demands by a wide spectrum of Russian political forces ranging from leftists to centrists to integrate Chinese lessons in Russian reforms of the early 1990s (1). Meanwhile, the Russian democrats assessed China as a totalitarian Communist state and avoided any contacts with it, putting the stress on the Western dimension of Soviet foreign policy.

Closer relations with China and stress on Russian-Chinese cooperation as having priority for Russia's Asia-Pacific policy (2) and the option for strategic cooperation with the People�s Republic of China (PRC) emerged as a characteristic of conservative influence on Russian foreign policy. In its turn, China appeared to be among nations who recognized the Emergency State Committee of 1991 attempted coup d'etat and to be deeply cautious about Russian reform and the possible future effect of the demise of socialism. Besides, Russian efforts for integration into the world democratic community subsequently coincided with a major campaign in the West to protect human rights in China after Tian�anmen Square incident of 1989. This only strengthened the Russian democrats' negative view of China as a "communist totalitarian regime". The defeat of August 1991 coup d'etat in Moscow, Soviet Communist party loss of power and victory of anti-Communist pro-Western political forces have temporarily frozen Russian-Chinese rapprochement. An overwhelmingly pro-Western political orientation and the stress that the Russian authorities at first put on the issue of human rights in China, did little to overcome this growing gap in mutual perceptions. Thus, the PRC in Russian international priorities got its place behind the United States, Western Europe, Japan and the ROK. It is not by chance that the Russian Foreign Ministry even asserted in 1992 that China was of secondary importance in Russia�s foreign policy (3).

In early 1992 there was a chance to develop a radically new Russian approach to Northeast Asia which would place major emphasis on relations with Japan as a member of the Western community that might provide the voice of influence much needed by Russia. However, this opportunity met fierce domestic political opposition. From the very beginning, foreign policy was targeted by opposition groups who insisted on a more versatile Asian dimension, as opposed to the then foreign minister�s, Andrei Kozyrev, line for cooperation with the West. Asian partners favoured were China and India, rather than Japan.

Indeed, since 1993 the People's Republic of China has emerged as the most natural partner to promote cooperation with. There were a few reasons for this. First, Russian-Chinese relations in 1990s did not suffer significant setbacks, unlike the dialogue with Japan which was complicated by the dispute over the Kurile Islands or the efforts to integrate Russia in Asia-Pacific regional institutions. The ground was prepared by Gorbachev. The concentration of both nations on domestic economic priorities and the parallel, though uneven, reduction of troops along the border (4), the first agreement on the delimitation of the eastern part of the border signed in 1991 (5) and the elimination of territorial claims (6) calmed perceptions of the persistent threat that had been felt in 1960s -1980s and removed ideological competition from the agenda. President Yeltsin's visit to Beijing in December 1992, second in Asia-Pacific region after Seoul, managed to restore the atmosphere of normal relations.

The second key factor that contributed to improved relations between China and Russia was the expansion of Russian arms sales to China and increased military technical cooperation between the two (7). As a result of the Tian�anmen Square incident sanctions had been imposed on China by the West which curbed the major supply of modern arms and military technology (8) while the under-financed Russian military industry experiencing a decline in national weapons purchases benefited from the increase in demand from China; China soon became its largest customer in the world, and one that, unusually, was eager to expand (9).

A third factor promoting closer Russian-Chinese partnership was the growing gap of perceptions and alienation from the West. Through the 1990s China has encountered challenges from the West on questions of human rights, its stance on Taiwan, its military programs and especially activities around the Taiwan Strait and the South China Sea islands. Russia's concerns lay in different directions, namely in the general trend towards elaborating its assertive foreign policy, periodically diverting attention from the situation in the former Yugoslavia, Iraq, Libya, Iran, and the Baltic countries with the intensifying dispute over NATO expansion - issues which remained remote from Chinese attention. Even so, a general trend towards distancing themselves from the West and rejecting the model of an American-led international community, an insistence on the need for a multipolar post-cold war international system, and the palpable lack of direct conflicts on issues separating them from the West all opened the way for China and Russia to give each other at least verbal support and to prepare the ground for strategic partnership aimed at bringing about a multipolar world".

The gradual discovery of China as the most suitable partner for Russia in Asia did not stem from any calculated strategy. It emerged as a result of Russia's rather unsuccessful attempts to formulate guidelines for a new Asian-Pacific policy. This was a final attempt to improve cooperation with its Asian neighbours and to escape from the limits imposed on it by the cautious vision and the lack of political will of every other possible partner. The intensive development of Sino-Russian cooperation after 1993 mirrored the trend in Russian foreign policy of moving away from the 'romanticism' of Atlantic cooperation to new self-assertiveness. This enabled Russia to find another important critic of the US-led world and yet one that was outside the club of 'pariah nations'.

However, the Russian-Chinese 'strategic partnership' does not of itself enable Russia to find a new Asian-Pacific or Northeast Asian strategy. The stake on priority engagement with China did not simplify Russia�s aim to determine and to pursue its goals in the Asia-Pacific. The dialogue with China did not touch upon the cooperation on issues vital for Russia�s Asian policy, for example, its role on the Korean peninsula and the resolution of Korean problems, arms control, the establishment of confidence-building measures (CBMs) in Asia-Pacific (except directly where border arrangements were concerned), Russia�s integration into regional structures and so on. It is oriented not so much for mutual practical assistance in international or regional issues, but rather for a parallel global response to the United States' and their allies' attempts to impose their views on Russia and China through mutual support on issues where their interests do not overlap. Sino-Russian relations seem to be a trump card in Russia�s relations with the West. Hence the Chinese stake does not settle Russian problems in Asia-Pacific and preserves the need for further search for accommodation with other regional powers. Virtually, the revival of Russian-Japanese dialogue in 1996-97 reflects the last need (10).

China recognized new Russia as early as December 1991, and in early 1992 the Chinese leadership adopted a decision to stimulate contacts with Russian business circles. To revive bilateral cooperation, China used existing channels in Russia, primarily with military-industrial cooperation and with trade and economic relations which might provide a new ground for bilateral ties.

During 1992 Moscow and Beijing have managed to overcome ideologically determined mutual distrust and alienation. Prospects of practical gains from cooperation, primarily in military industrial sphere, on the basis of agreements reached in the late Gorbachev period finally prevailed. Various contacts on different levels were made. By the time of President Yeltsin's visit to Beijing in December 1992 the ground for intensive development of economic cooperation was thoroughly prepared. During the visit The Joint Declaration on the Foundation of Mutual Relations between the Russian Federation and the PRC was signed (11). by two leaders who made mutual obligations not to join alliances against each other and not to allow a third party to use their respective territory to endanger security of the other.

The view that the principal object of Sino-Russian rapprochement was to secure the Russian-Chinese border in order to concentrate of efforts on economic transformation is commonly accepted but not quite correct. It goes without saying that in 1980s both nations have set their top priorities on economic development and gradually evaded the dominance of ideological stereotypes. But, even in the era of the most hostile perceptions, none of them considered a large armed conflict of strategic scale as realistic (12), although both spent large amounts for military build up on the border (Russian sources evaluate military expenditures related to "Chinese threat" to be 200 billion roubles of pre-perestroika period over twenty years before the normalization (13)). The reduction of ideological confrontation brought on by reforms in both countries and the resulting improvement of bilateral ties has easily opened the way for radical and rapid decrease of military confrontation in the Far East.

For at least three decades relations between Moscow and Beijing were based on the triangular interdependent logic of balance of powers between the USSR, United States and China. The level of confrontation between the participants and their power potential largely determined the functions of the big triangle. The logic assumed that two weaker and/or more passive sides would cooperate to meet the challenge of the one stronger and/or more active. In the 1970s, despite supposed detante, Russia was the most offensive, but in the late 1980s the United States gradually took a more active stance. Under these conditions and within the logic of triangular relations China put the accent on enhancement of relations with the 'weaker' side - the USSR.

With the collapse of the USSR the triangular seemed to vanish too. However, tensions between Russia and the West, confusion over relations among the countries of the Commonwealth of Independent States (CIS) and Russia�s weak position in the Asian Pacific Region (aggravated by the unsettled territorial dispute with Japan) subsequently led the Russian leadership to return to a triangular logic in its foreign policy course.

Thus, by the mid-1990s the 'triangular' political motivation re-surfaced as dominant in Russian-Chinese relations. During his visit to Beijing in January 1994 the Russian foreign minister Andrei Kozyrev proposed to raise bilateral cooperation to the level of strategic partnership, an idea accepted by China after a period of hesitation (14). The Joint Declaration signed during the visit to Moscow President Jiang Zemin in September 1994 characterized Russian-Chinese ties as 'new relations of cooperative partnership' (15).

Russia's rapprochement with China was smoothed by the fact that the two countries can easily and with minimal effort support each other in two issues that are vital for them, the expansion of NATO and the problem of Taiwan. The Joint Declaration signed on President Yeltsin's visit to Beijing in April 1996 provided a new step forward, formulating 'partnership relations of equality and confidence oriented on strategic interaction in the 21st century' (16). China has stated that it understands the Russian position against NATO eastward expansion and supports Russian actions to preserve the federation, assessing the Chechen issue as a domestic one. Russia in its turn reiterated that the PRC government is the only legal administration to represent all China, and Taiwan is an integral part of Chinese territory. Therefore Russia will not establish official relations or have official contacts with Taiwan. Russia also recognized that Tibet is an integral part of China.

In general in 1991-96 Russian-Chinese relations furthered the debate on "partnership relations of equality and confidence oriented on strategic interaction in the 21st century" as a major issue. Besides, 1996 was marked by the Chinese Prime Minister's, Li Peng, visit to Moscow with an agreement to intensify top level contacts (not less than once a year) and starting the business cooperation structure similar to Gore-Chernomyrdin commission in US-Russian relations (17) with not less than two annual sessions. In June 1997 the two governments signed a ten year agreement to establish a "mechanism of regular meetings between the heads of Russian and Chinese governments" (18). The "mechanism" is aimed at developing the bilateral cooperation in the following fields: trade and economic ties, military exchange, scientific cooperation, energy and nuclear energy production, and transportation. Within the framework of the "mechanism" relevant commissions were established.

The April 1997 summit highlighted the desire to demonstrate to the international community (primarily the United States) the correlation of geopolitical posture of two nations, as represented in the Joint Declaration on Multipolar World and Emerging New International Order (23 April 1997) (19). The document is unique for post-Soviet Russia as nothing of the kind was ever agreed with any other nation. Both sides highly praised the Declaration as "a result of serious analysis of international relations in the post-confrontation period" showing common views and approaches towards the post-Cold war international situation (20).

The Sino-Russian rapprochement is basically a reaction to the changing balance of power in world politics, enabling two nations to act in parallel rather than as allies. Efforts to develop a strategic partnership seek to counter the US line of preserving a unipolar international system and seek the establishment of multipolarity with both countries playing the most independent roles. Hence the final objective of joint actions by Moscow and Beijing are concurrent self-determination, independent influence and separate bargaining positions rather than a close military and political alliance. It is very symbolic that a search for terms defining stages of their bilateral cooperation is mostly a search for labels to attract attention of third parties (the United States and Japan). At the same time the absence of an alliance relationship between Russia and China is constantly stressed.

China and Russia have successfully used the triangular relationship of China, Russia and the USA for their own interests. The verbal support Russia received from China on the question of the NATO enlargement made it easier for Russia to bargain with the West and receive compensation in the form of participation in the Group of Seven leading industrial nations, to be admitted to the Paris Club of creditor countries (21) and to restructure debts with London Club of private lenders (22). The Krasnoyarsk meeting between Yeltsin and Japanese Prime Minister Ryutaro Hashimoto was the result of Russian efforts to obtain an alternative partner in Asia and avoid being oriented exclusively toward China. As is well-known, one of Tokyo�s main concern was to balance stable relations with Russia against China�s growing power.

China seems to know better than Russia what to do with the possibilities that are open to it. In its turn, it was given the opportunity for constructive dialogue with the United States. As Li Fenglin, China�s Ambassador to Russia put it, "the Chinese-Russian strategic partnership ... does not rule out relations of partnership between other countries. Moreover, if the world�s major powers establish relations of partnership, this would benefit global peace and stability" (23). Practically, China seeks to balance its relations with Russia by promoting ties with the USA. The formula of "strategic partnership" that in 1996-1997 was to characterize the Sino-Russian relationship was discussed by Washington and Beijing as well (24). A small but significant detail is that in 1996 China and Russia agreed to establish a "red phone line" (a direct line between the two presidents), but the actual implementation was postponed until 1998 when a similar agreement between China and the US came to force. Li Fenglin cited the following opinion on cooperation ties between the three parties: Beijing and Washington - cooperation without sentimentality; Beijing and Moscow - sentimentality without cooperation (25). This seems to be true.

China�s current assessment of the structure of international relations is based on the premise that international forces are dispersing. Currently the U.S. is the only super power in the world, but the Chinese believe that the ability of the U.S. to influence international affairs will gradually diminish in the near future. Thus, the world is becoming a multipolar structure, in which various powers are balanced and large-scale military conflicts are unlikely.

In the new international situation China is to continue its policy of "maintaining independence and keeping initiative in hands". That means China intends to independently determine its position on the world arena, it refuses to participate in any alliance and arms race, and develops cooperation with all nations of the world on the basis of "five principles of peaceful coexistence" (26). Essentially, Beijing tries to be pragmatic and does not want any ideological community or dispute to determine its international relations. It has mostly removed ideological constraints for its foreign policy to avoid ideological and geopolitical factors prevailing over the economic expediency.

On the whole, the emergence of military and political Russian-Chinese alliance seems inconceivable as their geopolitical and strategic national interests do not coincide. China would rather evade the prospect to become a part to the conflict situation in remote Europe in case of threats to NATO-Russian relations. Also Russia would not endanger her relations with the United States, Japan and other Asian Pacific nations in case of a conflict in the Taiwan strait or grave confrontation around territorial claims on islands in South China and East China seas. At the same time both nations are ready to develop military-technical cooperation, one of the major driving forces for their current ties.

Meanwhile confidence-building measures (CBMs) along the border acquire important symbolic value in bilateral relations. By signing two agreements on border delimitation in 1991and 1995 (27), Russia and China have settled their territorial dispute to ease cooperation on CBMs. In 1992 they have signed a memorandum which provided for radical cuts of arms and weapons along the border. In 1994 they adopted the declaration on mutual non-targeting of strategic nuclear missiles to each other and reinforced the obligations not to use nuclear weapons against each other as a first strike. In 1996 China and four CIS nations (Russia, Kazakhstan, Kirghizia and Tajikistan) have signed the agreement on border CBMs, supplemented in April 1997 by the agreement on mutual reduction of armed forces along the border (28). Despite their importance, these agreements ensure nothing more than stabilization of the current balance of forces along Russian-Chinese border and have basically only symbolic meaning to support broader political declarations.

It is more significant that in late 1997 two nations completed six years of work between government bodies on the demarcation of the Sino-Russian border. The final demarcation agreement undoubtedly has a deep influence on relations between the two countries. It curbs the strong irritant for both sides and eliminates possible territorial claims, above all Chinese claims to the Primorye region of Russia (29).

Economic interaction in civil areas is not yet important enough to determine the flow of political cooperation. Sino-Russian economic relations develop very slowly and chaotically in comparison to political ties that constantly go up. Meanwhile leadership of both nations understands the importance of stable economic basis for an effective bilateral political relationship and stimulates activation of economic ties. In other words political motivation in Russian-Chinese relations heavily overweigh economic reasons unlike the Chinese cooperation with the United States and Japan where economic interests help to soften political contradictions.

Today Russia has to acknowledge that it cannot cultivate the Chinese market on the basis of "special relations" with the Chinese government arising from the "strategic partnership". But such illusions persist. For example, Russian energy machine-builders expected that they would be given favorable terms in China. However, in 1997 they received a cold shower when they did not win the tender on equipment deliveries to the Three Gorges Dam project (30). It also came as an unpleasant surprise when Washington removed its ban on U.S. companies to supply nuclear reactors to China. Now the Russian nuclear energy export company "Atomenergoexport" expects to encounter stiff competition in a market that the Russian company practically considered to be its inherited estate (31). These events show that Russian enterprises have an inaccurate idea about the Chinese market. They see it as some kind of alternative to competitive struggles on the world market.

In 1994 China experienced something similar. There was a sharp rise in Russian-Chinese trade between 1991 and 1993, during which time it seemed to the Chinese that they could buy from the Russians products for excessively low prices and that the Russian market would absorb consumer goods of any quality. Today the Russian market is saturated with consumer goods and Chinese sales have fallen sharply. That was the period when bilateral economic ties were highly dependent on small businesses, including individuals (so-called "chelnoki" - shuttles). They distinguished themselves with short-term orientations and intentions to use the Russian economic crisis for their own benefit. The decrease of small companies' activities was the main reason for the dramatic fall of trade turnover in 1994 after 1993 record of US$ 7.6 bln. (32). Only in 1996 did turnover reach US$ 6.84 bln. (33).

However, the current trade turnover is far from the target of US$ 20 bln. set by the two governments in 1997. In 1996 China took the fifth place among Russia�s foreign trade partners - behind the Ukraine, Germany, the United States and Belarus. The Chinese share was only 4.5% of the total Russian foreign trade turnover. For China, Russia appeared to be the eighth partner in the world. The bilateral trade turnover grew to US$6.84 bln., an increase of 25 percent on 1995 (34), but in 1997 there was another fall by 10.5 per cent (to US$5.48 billion) (35). Unlike steadily developing political relationship, bilateral economic ties have developed chaotically.

Russian exports to China are very vulnerable to market changes, this is due to its primitive structure. For example, in 1993 exports of ferrous metals contributed to 40% of Russia�s total revenue received from sales to China, and in 1994 the figure rose to 50% (36). This caused protests by the Chinese steel producers who felt the low prices offered by CIS companies (first of all Russian) put them at a disadvantage, even though they were able to produce nearly all the range of steel products. Following these protests, in 1995 China reduced its purchases by 40%. Subsequently, in late 1996 the Chinese Ministry of Metallurgy brought in anti-dumping measures against CIS producers. Inevitably, all this affected the bilateral trade turnover.

Russia�s major exports to China (US$ 5.15 bln. in 1996) include planes, cars and trucks, agricultural machines, mining and oil-processing equipment, textile equipment, chemical products, construction materials, steel, timber, cement, etc. Fertilizers and ferrous metals continue to be leading export goods that have more than 50% of the total deliveries (37). In 1996 Russia exported to China machines and equipment with a total value of US$ 930 mln. China supply Russia with consumer goods (US$ 893 mln. in 1996), food products (US$ 427 mln. in 1996).

Today Russian arms sales seem to be the only stable sector of Sino-Russian trade. Thus, there is a reason for concern that Sino-Russian economic ties will be reduced to trade in armaments (38). Stephen J. Blank argues that Russia�s government has lost control over its arms sales program but dares not react negatively, despite the military implications of such transfers for its own security (39). However, the problem is that though the government is still capable of controlling its arms export(40) it not only gives free hand to arms producers but helps to promote their sales. 1998 visits of Russian high-ranking military to Beijing show that Russia is determined to promote such cooperation.

Russian arms suppliers are expanding sales to China despite objections from certain military circles. Former defense minister Igor Rodionov, for example, called China a potential opponent (41). The giant military production complex created in Soviet times has lost orders from the government, as Russia is not able and does not need to support such enormous amounts of military production (42). China�s attempts to increase its regional role by modernizing its army is manna from heaven for the Russian ailing military industry, which simply can not turn its back on the potential Chinese market.

It is true that one of the main reasons for Russia�s governmental support of expanding arms sales to China is a privatization of state policy (and the whole of state apparatus) which has taken place under Yeltsin (43). Thus, the government represents and protects interests of certain industrial lobbies, arms producers among them. Logically, given China is a "strategic" partner, arms sales to it provided a good substitute to vanished governmental subsidies to the industry.

Chinese interests in expanding contacts with Soviet military leadership and party nomenklatura is to be explained by a number of factors. These include ideological, political and strategic considerations, like prevention of a further expansion of "bourgeois ideology" and "peaceful evolution" of socialist nations to capitalism, weakening of Western pressures, and overcoming the international isolation in the aftermath of Tian�anmen incident. Also, Chinese-Russian contacts were significantly boosted following adoption of plans aimed at rapid modernization of the People's Liberation Army. This strategy was advocated by Chinese military and party conservative radicals evaluating international politics from the position of military power.

As Michael D.Swaine put it, today China is the most critical and the least understandable variable for the future Asian security structure, as current trends suggest that it will emerge as the dominant military and economic power in Asia, capable of projecting its air, ground and naval forces far beyond its boundaries (44). Precisely that determines most of the suspicions about the Sino-Russian military cooperation.

Russian modern arms deliveries provided China with a unique opportunity to close the technical gap with military superpowers. Russia has supplied and plans to supply the most advanced weapons. That are "SU-27" fighters, "C-300PMU-1" air defence missile complexes, "Kilo"-class submarines, "Smerch" (Tornado) multiple rocket launchers, "Metis" and "Konkurs" anti-tank rocket systems, "AK-630"-class high-speed ship guns, "Kashtan" air defence marine complexes, "Sovremennyi"-class destroyers (the ship has eight of the most modern "Mosquito" anti-ship ultra-sonic rocket launchers and two "Shtill" air defence guided missile launchers), T-80U and T-90C tanks, BMP-3 and BTR-80 armoured vehicles, "Mi-28N" and "Ka-50" multipurpose helicopters, "Tor-M1" air defence missile complex, "Msta-S" and "Vena" self-propelled artillery, "Tunguska" air defense gun-missile complexes (45). Russian "Il-76" planes may become the base for installing "Falcon" early warning system, the delivery of which China successfully negotiated with Israel in July 1996 (46).

Besides - or even in the first turn - China intends to buy Russian arms technologies. In 1996 China bought from "Sukhoi" firm a license for producing 200 "Su-27" fighters in the city of Shenyang (47). On the whole, the proportion of Russian weapon deliveries and arms technology sales is 7 to 3. China wants to reverse it (48).

Russian arms supplies are especially important for China. That is not only because of the Western embargo, but also because of the fact that several decades ago China obtained the technological base through Soviet technology transfers and with the help of Soviet experts. Russian modern arms sales help to increase the level of Chinese professionals and educate military personnel (including education in Russian military colleges) to use modern warfare. Thus, China�s own military R&D can be quickly promoted and the procedure of its implementation becomes easier.

Recently, a bilateral cooperation in the sphere of energy resources supply emerged as a very promising direction of economic cooperation between Russia and China. In June 1997 during the visit of former Premier Viktor Chernomyrdin and former vice-premier Boris Nemtsov to China, the Russian Ministry of Fuel and Energy and China�s National Oil and Gas Corporation signed an agreement on cooperation in crude oil and natural gas production. According to the agreement two parties will cooperate in exploring so-called Irkutsk project which should run 3360-km gas supply main from Kovykta gas deposit (Irkutsk District of Russia) through Mongolia to a Chinese port (probably, the port of Rizhao on the Yellow Sea) (49). Later in 1997 the Russian joint-stock company "Gasprom" and China�s National Oil and Gas Corporation signed another agreement on cooperation in the natural gas industry.

Two parties are also studying the feasibility of a so-called Western project to run a gas main from Russia through the Western border of China to China�s South-East. At the same time the Russian Ministry of Fuel and Energy and China�s National Oil and Gas Corporation will cooperate in crude oil transportation from East Siberia to China, and they will study projects of crude oil transportation from Kazakhstan and Sakhalin to China. Gasprom and China�s National Oil and Gas Corporation intend to cooperate in tapping gas and oil fields in China (50).

The export of Russian energy resources seems to be the only field where Russia now expects no competition from other countries expanding their exports to China. According to Boris Nemtsov, the Russian government would grant an implicit support to Russian energy exporters trying to develop the Chinese market (51). A successful cooperation in this sphere might have a two-fold implication. Inwardly, it would help Russia in further developing its rare competitive industries and in raising funds to support East Siberia and the Russian Far East having been the most harshly hit by the economic crisis. Outwardly, it would offer the basis for the Russian integration to the Northeast Asian regional economy, which Russia particularly needs after its entry to the Asia-Pacific Economic Co-operation forum (APEC) (52). The Chinese energy shortages are well known. Currently they constitute a "bottleneck" in the development of the Chinese economy. Thus, the Russian expectations seem to have a good chance of being reaised.

At the same time, the cooperation in the supply of energy resources may have deep consequences. It will change the participants and the entire structure of the bilateral ties, as large companies enjoying governmental support will dominate in bilateral ties. The character of the cooperation on the provincial level will also change. However, the growing economic interdependence between the two economies may appear to be controversial and may turn into a "zero sum game", and in case of failure in developing normal cooperation ties this may strain political ties.

Internal changes in Russia, as well as changes in its foreign policy, which embrace Sino-Russian rapprochement as a very important part, brought on dramatic changes into the smaller triangle of Russia-China-Mongolia. It can be said, that Mongolia used to be a "hostage" of Sino-Soviet relations. There is no secret that the Sino-Soviet hostility directly influenced the Sino-Mongolian relations: as Ulaan Baatar took the Soviet side, the Sino-Mongolian relations were nearly frozen. As former Prime Minister Dyushiin Bambasuren put it, 95% of outside world had not existed for Mongolia (53). That was due to the fact that the Mongolian foreign policy was entirely placed under Moscow's command.

In early 1990s the Mongolian People�s Revolutionary Party (MPRP), which ruled the country for 70 years, abandoned its traditional Leninist ideology, adopted a new Constitution (February 1992) and proclaimed democratic reforms. In autumn 1990 MPRP allowed a multi-party Cabinet - the first one in the Mongolian history � to be formed. Eventually, MPRP stepped aside and let the democratic coalition come to power. Together with changes in domestic politics a new vision of foreign affairs was introduced.

The new foreign policy is oriented to find a balance between the two powerful Mongolian neighbors � Russia and China. The historical legacy complicates this task. The former controlled Mongolia for seven decades, and the latter, once being under Mongol rule, in its turn conquered Mongolia in the 17^th century. Inevitably, Mongolia is to take into consideration ambitions of the two neighbors, but it also tries to gain an outer counter-balance through strengthening ties with the West, first of all with the USA.

The USSR collapse and Russia's domestic economic difficulties eventually put the Mongolian economy on the brink of catastrophe. The termination of financial aid coming from outward and the implementation of world prices in foreign trade have broken traditional economic ties that had been established through decades. One should note that in late 1980s Soviet subsidies totaled 30% of Mongolia�s GNP, while Soviet experts were an organizing elite at the top of every organization (54). Enterprises built with the Soviet aid provided more than a half of Mongolian exports. They amounted up to 100% of electricity production, copper and molybdenum concentrates, coal, fluor-spar, etc. (55)

The situation was aggravated by a certain level of hostility of the new Mongolian leadership aspiring to ensure the independence and by underestimation of Asian policy in Russia. However, in January 1993, during the visit of Mongolian President Ochirbat to Moscow, Russia and Mongolia signed a new Treaty on Friendship Relations and Cooperation (56). The treaty stipulated for the two countries� non-participation in political and military alliances aimed against each other. The two countries pledged themselves not to sign agreements and treaties violating sovereignty and interests of the opposite party. That - together with the fact that in 1992 Russia withdrew its 60,000 troops from Mongolia - normalized relations between the two countries.

In 1992-1997 the bilateral trade turnover dropped by half mainly due to reduction of Mongolian exports to Russia. Nevertheless, Russia is still Mongolia�s major trade partner. In 1997 10.1% of Mongolian exports went to Russia (thus, putting Russia on the third place after Switzerland and China), while Russia was the primary source of Mongolian imports (34.7%) (57). Despite the fact that now Russia does not invest much into the Mongolian economy, its share constitutes 30% of total foreign investment in Mongolia. There are more than 150 Russian-Mongolian joint ventures (58).

Similar political arrangements Mongolia has achieved with China. In May 1992 Mongolian Prime Minister Bambasuren visited Beijing. That was the first official visit in three decades. Still historical issues hang over Sino-Mongolian relations.

Reportedly, the Chinese authorities strengthened persecutions against ethnic Mongolians that support the idea of independence for Inner Mongolia from China and organized demonstrations to manifest the support (59). The nationalistic opposition in Ulaan Baatar in its turn also launched a campaign for reunification of Outer Mongolia and Inner Mongolia. However, this is impossible to realize for pure demographic reasons: in Inner Mongolia Chinese settlers now outnumber indigenous Mongols by five to one.

According to Reuters, in March 1992 Beijing issued a secret party document to confirm the historical belonging of Mongolia and Buriatia to China (60). However, China recognized the Mongolian independence by the 1960 agreement, which was signed by Chinese Premier Zhou Enlai and Mongolian President Yumjaagiyn Tsedenbal. Today China does not show any intention to change the current status of Mongolia. Thus, the document was mostly aimed to counteract Mongolian separatists of Inner Mongolia, but not to advance territorial claims.

On the whole, the principle that Mogolia is a dependant in Sino-Russian relations did not change. Russia's and China's political and economic reforms, as well as their foreign relations determine Mongolia's domestic situation and its foreign policy. Apparently, it is not necessarily bad. For example, if projects of Sino-Russian energy cooperation being under discussion since 1994 are implemented, Mongolia will be able to receive a lot of benefits from that.

Russia does not have a consolidated vision of prospects for its relationship with China. It is obvious that reforms promote the status of China from regional power to global superpower. Currently both nations use each other to counterbalance American or Japanese regional dominance. Yet emergence of China as a global superpower may conflict with Russian strategic interests, particularly in case it succeeds in becoming active and important partner with Asian-Pacific nations, which is too, China�s ultimate regional goal (61). Simultaneously China would compete with the United States and Japan for the leading role in the Pacific rim.

On the other hand, different evaluations of favourable and unfavourable factors in Chinese social development such as diverting assessments of problems confronting China and abilities of its leadership to cope with them, provoke conflicting forecasts. There exists a pessimistic vision of Chinese prospects stressing probability of isolationism, regionalization with only formal feeling of national identity and unity, fluctuations and hesitations in political options, as well as forecasts of complete integration of China into world economy without posing military or political threats to neighbouring nations. Judging by pure economic factors the catastrophic scenario seems improbable for coming two decades. Meanwhile social and economic transformation of China brings objective ground for a deep crisis of society institutions, i.e. contradictions between central government and provinces as well as between provinces, growing social tensions, increasing discrepancy between the archaic political system and a booming economy, deepening ethnic problems. Hence any prognosis of the future of post Deng Xiaoping regime is rather hard to evaluate.

Taking these hypothetical scenarios pessimists assess China as a potential threat to Russia either as an authoritarian state with growing military might, or as a nation doomed to repeat the fate of the USSR with consequences hard to foresee. Therefore they advise to avoid measures strengthening China, especially weapons and arms technology deliveries. Optimists believe that Chinese leadership is able to manage the nation, a scenario responding to Russian interests. This vision assesses Chinese military build up as a modernization of the backward army without possible threats to the region, maybe except Taiwan, but the last one is viewed as China's domestic affair. An optimistic vision now prevails among Russian leadership.

The future of Russian-Chinese relations largely depends on American foreign policy, i.e. results of the engagement policy towards China and level of trust in Russian-American cooperation. Obviously ideological considerations complicate the improvement of US-Chinese relations. The American allergy to any kind of totalitarianism and periodical emotional campaigns on human rights in China preserves mutual distrust. Joseph Nye, noting that both the liberal "New Republic" and the conservative "Weekly Standard" call China "totalitarian", though today�s market communism is a far cry from the real totalitarianism of Mao, assessed the US policy towards China as "a strange alliance of left and right against the center" (62). Unless the United States play down these tendencies in their approach to China Beijing will always have a strong motivation for closer ties with Moscow. On the other hand, the increasing Russian feeling of being duped, isolated and neglected by the West puts her to find its most suitable partner in China.

The following characterize the present Sino-Russian strategic partnership:

1. Rapprochement is motivated by the external logic of the 'triangular' strategic relationship and the main value of their cooperation is determined by a shared need to meet real or perceived challenges from the West;

2. The strategic partnership offers both countries the opportunity to overcome possible isolation in international affairs and helps them to assert specific national interests vis-a-vis uncooperative Western nations;

3. The absence of overlapping or conflicting national priorities allows the two to give each other verbal support without essential expenditures or sacrifices;

4. The slogans and declarations are vague and the partners' practical understanding of the essence of partnership is insufficient.

5. The level of political coordination in Asia-Pacific regional issues is low.

6. Military industrial and military-technical cooperation is of great mutual value, helping China to modernize the army and opening the market for Russian defense industry.

7. The two countries have persistent perceptions of possible shared threats of geopolitical nature and rather cautious evaluations of scenarios for the future.

8. There is no real economic base for political cooperation. However, Russia�s energy supply may close the gap.

On the whole, the Russian-Chinese strategic partnership seems to lack adequate internal motivation and to be to a great extent determined by the international environment. Narrow isolationism and increasing tension with the West does not correspond to the optimal preferences of either, and both would prefer to diversify their international connections. In that sense any suspected quasi-alliance is nothing but inevitable tactics for dealing with the worst-case scenario imposed from the outside.

John W.Garver, comparing patterns of international relations after the first World War and the Cold War when there emerged dominant coalitions of the victorious powers and countervailing non-dominant coalitions of "pariah" powers, called the Sino-Russian strategic partnership a "Far Eastern Rapallo" (63). However, today nobody can imagine Russia or China overloaded with their domestic problems aspiring to the world hegemony. And it seems in future precisely domestic factors will influence the bilateral relationship more than international environment. The recent Russian crisis proves that...

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