On the China-Russia border, trade is booming as Xi and Putin pull closer

The Age

3 days ago

Manzhouli: In a dusty car park in the Chinese border town of Manzhouli, Russian and Belarusian truck drivers are milling around drinking coffee and smoking cigarettes, waiting for customs to clear their cargo so they can set out on the long trek towards Moscow.
Some have been waiting for days and, by midmorning, are still asleep in their truck cabins, bare feet propped on their dashboards, poking through a curtain that has been pulled across the windscreen for privacy.
'If we can load goods quickly, roughly it takes six days to get to Moscow. Then we turn around and come back again,' says Alex, a 36-year-old Belarusian driver, who gives only his first name. He drives the loop to Manzhouli two or three times a month.
Perched on the 4209-kilometre China-Russia border, in the remote Inner Mongolia region, Manzhouli is China's largest land port. It has become a pivotal link in Beijing's economic lifeline to Moscow since the Kremlin's invasion of Ukraine in 2022.
More than 100 trucks are parked in this makeshift parking lot, a few hundred metres from the Russian border, their trailers loaded with essential goods – fresh vegetables and fruit, clothes and electronics, as well as toys, according to drivers stationed there on a weekday in early May. Opposite the car park, in a fenced-off area, row upon row of new tractors and heavy equipment also wait to be exported to Russia.
It's part of a cross-border trade stampede that hit a record $US245 billion ($380 billion) last year, having more than doubled since 2020. Much of this trade has passed through Manzhouli and headed north, as Moscow has grown increasingly reliant on its neighbour to sustain its wartime economy through the tightening noose of Western sanctions.
'It's difficult to imagine the Russian economy would be in the shape that it is – and it's not in the best shape, but neither is it in a collapse – without China's assistance,' says Philipp Ivanov, a former Australian diplomat and founder of Geopolitical Risks and Strategy Practice, a firm specialising in China-Russia relations.
This economic reliance includes a surge in the supply of Chinese dual-use technology, such as electronic components, computer hardware and chips, machine tools and communications systems that have both civilian and military applications, which has fuelled Russia's war machine.
'Certainly, it's a lifeline [to Russia] and it's been very important to this conflict,' says China-Russia expert Dr Elizabeth Wishnick, a senior research scientist at the Centre for Naval Analyses.
The role of Russian leader Vladimir Putin's war in supercharging Moscow's dependence on Beijing has triggered extensive debate among experts about whether the deepening ties between the countries now resemble a quasi-alliance, in the absence of a formal one, centred around the shared goal of weakening US global power.
But it's a relationship that, many analysts argue, remains transactional and strategically superficial, and infused with distrust and pressure points despite the bromance projected by Chinese President Xi Jinping and Putin.
In the Manzhouli parking lot, the war is a delicate subject, and few drivers are willing to speak about it beyond the impact on their trade routes. The Chinese government is also tracking this masthead's movements, having dispatched two local officials to monitor the interviews.
'I used to drive to Italy, but after 2022, I started coming to China,' says Russian driver, Denis, 40, adding, 'because of the war', a reference to the European Union ban on Russian and Belarusian trucks operating in the bloc.
'If you go to Russia from this region, you can see that many young people have died. Neither Russia nor Belarus needed it,' says Alex, the Belarusian, who also used to drive routes through Europe until the war. He has two cousins, both Russian officers, who are fighting in Ukraine.
'Many people have different opinions, but the war, even the word war, is bad. Very bad.'
On Sunday, Ukraine exploited vulnerabilities in Russia's extensive trucking network to carry out its most devastating military operation of the war. Using drones smuggled into Russia and transported on trucks deep into Russian territory by seemingly unwitting drivers, Ukraine attacked airbases and destroyed as many as 40 enemy warplanes, according to Ukrainian officials.
With details still emerging, it's unclear what checkpoints the trucks passed through, or if any third country borders were crossed, but the attack is likely to rattle the foundations of Russia's cross-border trade and be met with ramped-up security checks.
Russia-China bromance: Who needs whom more?
On the train tracks that run through the centre of Manzhouli, the economic lifeline operates in the other direction. Dozens of containers piled high with Russian black coal sit on the tracks, acrid fumes infusing the air.
China's fossil fuel imports, including oil and gas, from its neighbour have ballooned since the Ukraine war, adding billions to the Kremlin's cash-strapped reserves, while giving Beijing access to discounted energy supplies by exploiting the closure of the European market to Russia.
Last year, China imported a record $US62 billion of Russian crude oil, an increase of more than 50 per cent since 2021, a year before Western governments sanctioned Russian oil exports, according to an analysis by the Mercator Institute for China Studies (MERICS), a German think tank. As much as 40 per cent of the trade between the two countries is now done in Chinese yuan, up from 2 per cent three years ago.
With China's economy now 10 times the size of Russia's, and Beijing Washington's foremost strategic rival, some experts have argued that the Ukraine war has hastened Russia's relegation from 'big brother' to its neighbour's lapdog.
'Russia is now locking itself into vassalage to China', Alexander Gabuev, director of the Carnegie Russia Eurasia Centre in Berlin, wrote in Foreign Affairs magazine in April 2024.
'A couple of years down the road, Beijing will be more able to dictate the terms of economic, technological and regional co-operation with Moscow.'
It's a contested view among Sino-Soviet scholars. While there is a clear asymmetry in the relationship, analysts point out that China still needs Russia, namely as a major strategic partner to counter the US-led international world order, particularly in arenas such as the United Nations.
'China and Russia have a more aligned world view,' MERICS analyst Claus Soong says. 'When China tries to compete with the US in the global arena about what is the justified national order, China needs a major power to speak up for it. Russia is the most reliable one to do so.'
The continued boom in cross-border trade despite the West's threatened secondary sanctions signals Beijing's calculation that the benefits of aligning with Russia outweigh the risks. To date, dozens of Chinese firms have been added to US and EU sanctions lists for supplying dual-use goods, sparking furious denials from the Chinese government, which publicly insists it is a neutral player in the Ukraine conflict, and does not provide lethal weapons.
As recently as the past week, Ukrainian Foreign Intelligence Service chief Oleh Ivashchenko alleged that China was supplying 'tooling machines, special chemical products, gunpowder and components' to Russian military plants.
'There is no doubt that Russia needs China more than China needs Russia,' Ivanov says. 'At the moment, this is not an alliance, it's an alignment. Both are fiercely independent and major powers … there is a great deal of mistrust between them.'
By propping up Russia's economy while it has been the world's most sanctioned country, Beijing has benefited by demonstrating the limits of Western power, he says.
'This is the message that a lot of countries in the Middle East, in Latin America, in Africa and the rest of Asia have taken from the last three years,' he says.
Limits to 'no limits' relationship
Xi and Putin have assiduously cultivated an image of peak China-Russia ties that stems from their close personal friendship. They have met more than 45 times in the past decade, including with public displays of tea drinking and dumpling making. Putin has gifted Xi ice cream for his birthday, and Xi has trumpeted Putin as his best friend.
But it was after a meeting on the sidelines of the Beijing Winter Olympics in February 2022, when the pair declared their countries' friendship was now one with 'no limits', that China-Russia ties came under fresh scrutiny. Less than three weeks later, Putin sent tens of thousands of troops into Ukraine.
But for all the posturing and strengthened economic and military ties, analysts say there remain obvious limits to this 'no limits' relationship. The two sides have not declared a formal military alliance, and China, unlike North Korea, has not sent troops or weapons systems to aid Russia's invasion of Ukraine.
Their relatively recent 'brotherhood' sits against a backdrop of fractious relations, border skirmishes and mistrust for much of the 20th century, culminating in the bitter Sino-Soviet split of the 1960s. Today, the two countries still compete in their spheres of influence in Central Asia and the Arctic.
'China worries about entrapment, about getting drawn into Russia's more disruptive actions, like the war in Ukraine, and the way they've been tainted by association. Russia is also reluctant to get drawn into China's struggles in the Indo-Pacific,' says the Centre for Naval Analyses' Wishnick.
There have also been flashes of rare dissent among respected Chinese scholars over Beijing's support for Moscow, running counter to Chinese state media's parroting of Russian talking points about NATO expansionism being the root cause of the war.
'China has paid too much both economically and politically without achieving the expected results of improving China's international stance or easing the US pressure on China,' Chinese Professor Feng Yujun said in a translated lecture in 2023.
Another prominent academic, Hu Wei, was forced into early retirement after his 2022 essay calling for China to 'cut off as soon as possible' its ties with Putin went viral and was quickly scrubbed from the Chinese internet by censors.
Meanwhile, US President Donald Trump's early 'pivot to Putin' in the opening weeks of his return to the White House has added another dynamic to the relationship, seemingly born from his idea that 'you never want Russia and China uniting. I'm going to have to un-unite them', as he told US pundit Tucker Carlson in October.
Dubbed the 'reverse Nixon' by geopolitical analysts, after US president Richard Nixon's historic trip to China in 1972 to draw closer to Beijing and undermine Kremlin influence, the strategy has mostly been pilloried as a fantasy based on misunderstood history.
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What you have now 'is the reverse of the 'reverse Nixon'' former senior US State Department official Evan Feigenbaum told The Wall Street Journal in February. In attempting to split two powers with an ideological affinity and shared strategic interests, 'what it has done instead is to split the West, while Russia aligns with the US and with China simultaneously'.
In a show of solidarity last month, Xi was Putin's guest of honour in Moscow at a World War II Victory Day parade in Red Square, where Chinese troops goosestepped alongside Russia's. Xi later declared their countries were 'friends of steel' who must 'decisively counter' US efforts to contain them, in a clear rebuke to Washington.
On the China-Russia border, life grinds on
For all the professions of 'brotherhood' and 'unbreakable' bonds by Putin and Xi, it's difficult to gauge whether the two leaders have generated a genuine affinity between the peoples of their countries.
In Manzhouli's main street, called the China-Soviet Golden Street, a giant statue of a panda and polar bear holding hands has been erected as a tribute to the countries' close ties. The street is lined with shops selling cheap leather jackets, electronics and souvenirs aimed at Russian tourists, while Russian restaurants and a nearby theme park built to resemble Moscow's Red Square hope to entice Chinese tourists.
For local Chinese traders, many of whom speak Russian, the Machiavellian power plays of the world's strongmen are a secondary concern to the daily reality of trying to carve out a living in a border town straddling two sputtering economies, one ravaged by war and the other by the long drag of a property market collapse. Cross-border trade might be booming, but business isn't.
'Thanks to the war, business is getting worse and worse,' says Li Yanshan, 49, a shoe shop owner who caters to Russian tourists.
Wang Shanshan, the owner of a healthcare shop, is also feeling the pinch. In the past, Russian tourists spent lavishly in the town, she says.
'Not any more. Now they don't buy anything that are not life necessities. It will only get better when the war comes to an end,' she says.