Sino-Russian baby comes of age

What stands out when the SCO’s ninth summit meeting begins in the Urals city of Yekaterinburg in Russia on Monday is that the setting in which the regional organization – comprising China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan – is called on to perform has itself unrecognizably shifted since last August’s gathering of leaders in Dushanbe. First, the big picture.

The world economic crisis has descended on the SCO space like a Siberian blast that brings frost and ice and leaves behind a white winter, sparking mild hysteria. The landscape seems uniformly attired, but that can be a highly deceptive appearance. Russia and China, which make up the sum total of the SCO experience, are responding to the economic crisis in vastly different terms.
To be sure, its impact on the geopolitics of the SCO space cannot be overlooked. Simply put, China’s profile as the “donor” country in the SCO space is shining brighter than ever before. China has given US$25 billion as a loan to Russia and $15 billion as a loan to Kazakhstan, the two big-time players in the SCO, during the April-May period.

Last week, in yet another breathtaking move, China offered a loan of $3 billion to Turkmenistan. The loan for Russia is a vital lifeline for its number one oil major Rosneft and its monopoly pipeline builder Transneft. The loan for Kazakhstan, which goes partly towards acquiring a 50% stake in MangistauMunaiGaz, increases China’s share of oil production in Kazakhstan to 22%. Again, the loan for Turkmenistan ensures that China has the inside track on the fabulous Yolotan-Osman, which is reputed to be one of the biggest gas fields in the world.

In short, if the law of nature is such that gravitation in life is inevitably towards where the money comes from, the locus of the SCO has shifted to Beijing more than ever before. In any other context, this would have straightaway introduced a high state of disequilibrium within the SCO. It took decades for France and Germany to figure out cohabitation within the European Economic Community. The China-Russia equilibrium within the SCO has always been delicate, but it may have prima facie become more so than ever before. But in actuality, it isn’t so.

It goes to the credit of the leaderships in Moscow and Beijing that they have steered their relationship in a positive direction by rationally analyzing the imperatives of their strategic partnership in the overall international situation rather than in a limited sphere of who gains access to which gas fields first in the Caspian or who is a lender and who is a borrower in these extraordinary times.

Thus, the frequent tempo of Russia-China high-level exchanges has been kept up. Both sides are sensitive to each other’s core concerns and vital interests. Russia’s conflict in the Caucasus last August was a litmus test and Beijing passed the test. The Russia-China mutual understanding survived intact without bruises.

Asia Times