At a conference in Moscow, experts agreed that current Moscow-Beijing relations had reached an “unprecedented” level, but pointed out that a lot of questions still need to be answered.

Chinese Foreign Minister Wang Yi (right) gestures next to Russian Foreign Minister, Sergey Lavrov before they leave after a joint press conference held at the Chinese Foreign Ministry in Beijing, China, Friday, April 29, 2016. Photo: AP

On May 30-31 representatives of government, academia and business from Russia and China gathered in Moscow to discuss the state of Russian-Chinese relations and talk about ways to strengthen the quality of bilateral ties. In anticipation of the upcoming June visit of Russian President Vladimir Putin to China, the discussion touched upon a range of subjects, including Russia-China regional security cooperation and global economic challenges emerging as a result of U.S. trade initiatives in Asia-Pacific (for example, the Trans-Pacific Partnership).

“The level of relations between our countries – which is in fact the highest in historical perspective – represents an example of cooperation in the 21st century,” said Russian Foreign Minister Sergey Lavrov, who spoke at the conference organized by the Russian International Affairs Council. “This relationship does not entail covering up the questions where we have not yet achieved a consensus, but rather, discussing them in an honest, friendly and respectful manner to come up with mutually beneficial agreements.”

On the other hand, the conference, titled "Russia and China: Taking on New Quality of Bilateral Relations," showed that, notwithstanding the high level support for more integration between the Russian and Chinese economies, problems do exist and the huge potential for cooperation between the two powers remains largely unrealized, requiring a substantial amount of time and resources to make a reality.

The strength of Moscow-Beijing ties is ensured by mutual trust, support and respect, said Dai Bingguo, chairman of the Chinese chapter of the Russian-Chinese Committee of Friendship, Peace and Development. But it is vitally important to make robust efforts to ensure the current level of bilateral ties remains on the same level and continues to develop not only politically, but also economically.

Was Russia’s “pivot to the East” a success?

Li Fenglin, director of the Institute for Social Development in Europe and Asia of the Development Research Center of the State Council of China and Ambassador Extraordinary and Plenipotentiary of China to the Russian Federation (1995-1998), thinks that speaking of a “pivot” is not entirely correct, as the East was always an inseparable part of Russia.

As he sees it, a “pivot” should only mean a change in state policies that has now started to focus more on cooperation with Eastern countries, including China.

“The partnership is developing, but I wouldn’t say that something entirely new has emerged. Of course, the process has started to evolve more actively, because both China and Russia understand the importance of moving their partnership forward,” he told Russia Direct.

“What is happening is a process of Russia rebalancing from the West to the East,” according to Dmitri Trenin, director of the Carnegie Moscow Center. The important thing here, he says, is that Russia has stopped considering Europe to be a model for its development.

The current state of Russia-China cooperation is mainly characterized by ambitious projects that have a long-term focus. One of them is a 30-year agreement worth $400 billion for the purchase and sale of natural gas signed between Russian energy giant Gazprom and China National Petroleum Corporation (CNPC) in May 2014.

Another widely discussed project is a new high-speed railway from Moscow to Beijing that would cut the journey from six days on the Trans-Siberian Railway to just two. The project would cost more than $230 billion and be over 7,000 kilometers (4,350 miles) long.

Such projects are in progress, but it remains to be seen whether they will be successfully implemented in the future.

The upcoming visit of Russian President Putin to China in June is likely to bring more joint projects within the current framework of bilateral cooperation. According to Viktor Vekselberg, chairman of the Russian chapter of the Russian-Chinese Chamber for Commerce in Machinery and High Technology Products, 52 proposals will be on the table.

From his perspective, Russia’s intellectual potential and Chinese industrial capacity can work well together in a range of fields, for instance, on building high-speed railways, developing new materials or producing airplanes or robots.

“What is necessary is to create joint companies that will not only be competitive in China and Russia, but also on the world market,” he said.

What obstacles exist?

Problems, however, do exist. According to statistics of the International Trade Center, trade turnover between Russia and China has actually decreased, not increased  from $88.8 billion in 2013 to $61.4 billion in 2015. Moreover, raw materials still account for the significant part of Russian exports. In 2015, they accounted for more than 65 percent of all exports. The huge potential is still untapped as, apart from raw materials, trade in other goods remains on a very low level.

Pavel Kadochnikov, vice-rector of the Russian Foreign Trade Academy, thinks that Russian-Chinese agreements should give businesses certainty that such joint ventures will be beneficial for them. From his vantage point, business should have a greater voice in the development of joint ventures.

Fenglin agrees that the initiative in defining joint projects should be given to small and medium-size companies, not putting too much emphasis on state planning. He adds that the majority of obstacles are created by Russian bureaucracy and the lack of thinking in market terms. “It is necessary to work and not only wait for a piece from a state budget,” he told Russia Direct.

Fyodor Lukyanov, editor-in-chief of Russia in Global Affairs journal and chairman of the presidium of the Council on Foreign and Defense Policy, seems to agree on this point. Recently, he has argued that even though a year is not a very long time to assess the achievements of Russia’s “pivot to China,” there still are no signs that the situation is changing. The reason for this is not the lack of political will, but the way the Russian state apparatus works.

“The Chinese are looking at us with growing amusement. They are facing a lot of problems themselves, but if the decision is made, thousands of officials, experts and specialists in different fields will start to work on implementing the decision. Acknowledging the fact that there is a different system in Russia, they still can’t understand why nothing is happening,” Lukyanov wrote.

Working on improving outdated legislative and administrative mechanisms, ensuring the interests of small and medium-size businesses are taken into account and promoting exports in ready-made goods, rather than raw materials, are some of the necessary steps to ensure Russia’s ties with China continue to evolve.