Not all is well between China and Russia, but Beijing says the “disturbances” have been “thwarted”

Five days after Russian counterintelligence authorities publicized the arrests of a Chinese spy ring, the Chinese and Russian foreign ministers met at the G20 in Bali, Indonesia. According to China’s Ministry of Foreign Affairs: “Under the strategic guidance of the two heads of state, China and Russia have thwarted disturbances, maintained normal exchanges, and pushed forward cooperation in various fields in an orderly manner, showing the strong resilience and strategic determination in bilateral ties.”

While it’s not clear what “thwarted disturbances” (排除干扰 páichú gānrǎo) alludes to, the phrase is striking: Beijing does not appear to have used it before in the context of China-Russia relations, although the PRC has used similar phrases in other bilateral contexts.

• In 2017, amid a dispute with South Korea over the THAAD missile system, Beijing urged Seoul to “overcome disturbance to ensure the healthy development of [ties].”
• Similarly, amid tensions with Ankara in early 2022 over Beijing’s treatment of Uyghurs, the PRC pressed Turkey to “overcome disturbance so as to consolidate the political foundation of bilateral relations.”

Beijing appears to be acknowledging some difficulties in the Sino-Russia relationship (such as those caused by, say, Chinese-caught spies trying to steal extremely sensitive Russian military technology), while suggesting that the strategic-level relationship remains intact, as any deterioration in ties has been “thwarted.”

CPC oil exports open, again, for now

After initially ordering the Caspian Pipeline Consortium (CPC) to suspend operations for 30 days, the Russian court system decided instead to issue a small fine, worth about $3,000: The Kremlin may have ordered its judiciary to allow the CPC to export again over Chinese pressure.

• Most of Kazakhstan’s oil exports are via the CPC, but the pipeline goes through Russian territory.
• China has significant direct and indirect economic interests in Kazakhstan. While most of Kazakhstan’s exports flow west to Europe, not east to the PRC, Chinese companies have significant holdings in Kazakhstan, particularly in the energy sector (Chinese state media checked in on Chinese energy investments in Kazakhstan amid the latter’s January 2022 economic protests).
• Kazakhstan is also significant for Beijing due to its indirect effects on oil markets: Removing the CPC’s exports of about 1 million barrels per day from an already-tight market could send oil prices back to annual highs, or higher. With the Chinese economy potentially on the verge of more large-scale lockdowns, Beijing has limited patience for any machinations by Putin that lead to higher world oil prices.

The CPC (and Kazakhstan) was at the center of a bilateral spat between Moscow and Beijing in March. While the Kremlin and the PRC’s interests largely align in Central Asia, tensions are growing between Nur-Sultan and Moscow. The China-Russia-Kazakhstan triangle is worth watching carefully over the medium term, particularly if Nur-Sultan and Beijing ever agree on a major, east-bound crude oil pipeline.

Kazakhstan and the CPC could also reappear in the news later this year. With European sanctions on Russian crude and crude products exports ramping up throughout the year, Putin may attempt to maximize revenues on remaining exports by removing competing Kazakh barrels from the market and stimulating prices. It’s possible that Putin again sanctioned Kazakh exports, in part, to test responses from Beijing and the West.

It’s not clear how Beijing would respond if Putin escalates sanctions against Kazakhstan later this year, although domestic factors, such as COVID lockdowns, economic or financial troubles, and the 20th Party Congress, will largely shape Beijing’s calculus. Still, the body evidence to date suggests that Beijing is likely to back Moscow rhetorically while complying with the substance of Western sanctions.