Tuesday, November 18, 1997

Playing the China Card

By Yury Tsyganov

The final demarcation agreement will undoubtedly have deep significance for 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. The agreement is the start of defining Russia's disputed borders with China in the wake of the Soviet Union's collapse.

Chinese President Jiang Zemin's visit to the United States caused several Russian analysts to comment that China and America had "betrayed" Russia. The logic behind such commentary dictated the "strategic" rapprochement between Russia and China between 1994 and 1996 during which Russia and China were establishing closer relations faced with the United States' dominant world position.

The many steps that were taken by the two countries were, however, symbolic signals designed to attract the West's attention rather than to come into conflict with it. Russia received verbal support from China on the question of enlargement of the North Atlantic Treaty Organization, but this made it easier for Russia to bargain with the West and receive compensation in the form of participating in the Group of Seven leading industrial nations and entering the Paris and London clubs.

The September meeting between Yeltsin and Japanese Prime Minister Rytaro Hashimoto was the result of Russian efforts to obtain an alternative partner in Asia and avoid being oriented exclusively toward China. One of Tokyo's main concerns was to balance stable relations with Russia against China's growing power.

It should be noted, however, that right before Yeltsin's visit to China, the Japanese news agency Kyodo Tsushin revealed secret instructions of the Chinese Communist Party Central Committee to develop military collaboration with Russia with the aim of obtaining an end to the embargo of the West on the export of military technology to China.

Therefore, to speak of the "betrayal" of one country by another is inappropriate. Russia and China successfully used the triangular relationship among Moscow, Beijing and Washington for their own interests. Russia received membership in the G-8 and China got the opportunity for constructive dialogue with the United States. It is another matter that China seems to know better than Russia what to do with the possibilities that are open to it.

Apparently, the period of sensations in Russian-Chinese relations -- involving declarations of a strategic relationship, multipolar world and the formation of a new world order -- is over. The future requires a pragmatic approach to bilateral relations. This is first of all a question of economic ties.

Russia will eventually have to acknowledge that it cannot cultivate the Chinese market on the basis of "special relations" with the Chinese government. But such illusions persist. Russian energy producers expected that they would be given favorable terms in China. It therefore 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 Atomenergoeksport has to encounter stiff competition in a market that the Russian company practically considered to be its inherited estate.

Several years ago the Chinese had experienced something similar. There was a sharp rise in Russian-Chinese trade between 1992 and 1993, during which time it seemed to the Chinese that they could sell the Russians various products for exorbitant prices and that the Russian market would absorb consumer products of any quality. Today the Russian market is saturated with consumer goods and Chinese sales have fallen sharply.

In Russia there have appeared industrial lobbies trying to push the government into creating favorable conditions for economic collaboration. Russian suppliers of energy equipment, energy resources and arms have placed great stakes on China. For them, mastering the Chinese market is not only a chance to earn profits but a form of survival.

But recent 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.

Today there is reason for concern that Russian-Chinese economic ties will be reduced only to arms trading. Russian arms suppliers are expanding sales to China despite objections from certain military circles. Former defense minister Igor Rodionov, for example, has called China a potential opponent. China's attempts to increase its regional role by modernizing its army is manna from heaven for the Russia's ailing military industry, which simply cannot turn its back on the potential Chinese market. But the industry could get the same cold shower that the energy industry got when the United States lifted its nuclear technology ban.

Both sides must learn to see each other as full members of the world community and not try to create a club of countries that for one reason or another experience difficulties in their relations with the West. Russia has currently done all it could to develop political relations with China. Now it must do everything possible to grasp the realities of the Chinese market and develop normal economic ties. And here much depends on Russia itself.

Yury Tsyganov is a senior researcher at the Institute for World Economy and International Relations. He contributed this comment to The Moscow Times.