China–Russia relations

Putin visited China and met with Xi Jinping on 4 February 2022

Xi and Putin met on February 4, 2022, during a massive Russian build-up of force on the Ukrainian border, with the two expressing that the two countries are nearly united in their anti-US alignment and that both nations shared "no limits" to their commitments.[26][27] Western Intelligence reports said that China had asked Russia to wait to invade Ukraine until after the Beijing Olympics ended on February 20.[27] Shortly before the invasion, Chinese media would repeat Russian statements that Russia's troops were being pulled away from the border with Ukraine.[28]

On February 22, two days prior to the invasion of Ukraine, a leaked post The Beijing News' Horizon News on Weibo detailed instructions on how to report on a crisis in Ukraine; the post asked editors to monitor unfavorable comments, to only use tags shared by Chinese state media and stated "Do not post anything unfavorable to Russia or pro-Western. Let me review your words before posting".[28][29] On February 25, 2022, one day following the Russian invasion of Ukraine, Putin told Xi during a phone call that Russia is eager to engage in high-level negotiations with Ukraine, according to China's foreign ministry.[30]

China refused to condemn the Russian invasion of Ukraine, repeated Russian propaganda about the war, opposed economic sanctions against Russia, and abstained or sided with Russia in UN votes on the war in Ukraine.[31]

In 2022, Russia added Taiwan to a list of foreign states and territories that commit "unfriendly actions" against its military invasion of Ukraine.[32] Chinese leader Xi Jinping has assured Vladimir Putin of China's support on Russian "sovereignty and security" in May.[33][34]

In April 2022, in an interview with the Italian newspaper Corriere della Sera, Russian political scientist Sergey Karaganov, who is considered close to Vladimir Putin, said that Russia "will be more integrated and more dependent on China", further stating that "Chinese are our close allies and friends and the biggest source of Russian strength after Russian people themselves."[35]

In June 2022, Chinese Communist Party leader Xi Jinping had a call with Putin where he reaffirmed support for Russia on security issues while saying that "all parties should responsibly push for a proper settlement of the Ukraine crisis".[36][37]

Ukrainian president Volodymyr Zelenskyy said that China has the economic leverage to pressure Putin to end the war, adding "I'm sure that without the Chinese market for the Russian Federation, Russia would be feeling complete economic isolation. That's something that China can do – to limit the trade [with Russia] until the war is over." In August 2022, Zelenskyy said that since the beginning of the war in Ukraine, CCP general secretary Xi Jinping had refused all his requests for direct talks with him.[38]

Putin welcomes Xi in Moscow during Xi's visit to Russia in March 2023

In February 2023, Putin's spokesperson Dmitry Peskov rejected the Chinese peace proposal, saying that "for now, we don't see any of the conditions that are needed to bring this whole story towards peace."[39]

In March 2023, Politico reported that Chinese state-owned weapons manufacturer Norinco shipped assault rifles, drone parts, and body armor to Russia between June and December 2022, with some of the shipments going through via third-countries including Turkey and the United Arab Emirates.[40] According to the US Department of Defense, Chinese ammunition has been used on battlefields in Ukraine.[41]

On 20–22 March 2023, Xi Jinping visited Russia and met with Vladimir Putin both in official and unofficial capacity.[42] It was the first international meeting of Vladimir Putin since the International Criminal Court issued a warrant for his arrest.[43]

In May 2023, the EU identified that Chinese and the UAE firms were supplying weapon components to Russia. The EU banned export of dual-use goods targeting 8 Chinese firms.[44]

On 20 July 2023, the Chinese general consulate in Odesa, Ukraine was damaged in a Russian attack on a grain terminal in a nearby port, plus other parts of the city.[45][46] China has been the largest importer of grains from Ukraine.[47]

Territories that have become part of Russia under the Aigun Treaty and the Beijing Treaty of 1860

In 2005, Beijing and Moscow ratified an agreement that ended more than three and half centuries of their struggle over territory and for dominance.[50] Russia is the only country that still controls the territory it acquired from Qing dynasty China via the unequal treaties.[18]^{: 249–250}

On November 23, 2010, at a meeting of Russian Prime Minister Vladimir Putin and the Chinese Premier Wen Jiabao, it was announced that Russia and China have decided to use their own national currencies for bilateral trade, instead of the U.S. dollar. The move was aimed to further improve the relations between Beijing and Moscow and to protect their domestic economies during the financial crisis of 2007–2008. The trading of the Chinese yuan against the Russian ruble started in the Chinese interbank market, while the yuan's trading against the ruble started on the Russian foreign exchange market in December 2010.[64][65]

In coordination with other emerging economies, the 2010 BRIC summit was held in Brasília in April 2010.

In 2014, Beijing and Moscow signed a 150 billion yuan central bank liquidity swap line agreement to avoid and counter American sanctions.[66]

In December 2014, Chinese Foreign Minister Wang Yi pledged to offer financial support to Russia and support the Ruble, if needed, in light of the currency's depreciation.[67]

Russia's dependence on the Chinese yuan increased heavily after its invasion of Ukraine in 2022. The share of Russian exports paid in yuan rose to 16% by December 2022, compared to 0.4% before the invasion, while share of imports paid in yuan increased to 23%, up from 4% before.[68][69] Yuan's share of stock market trading in Russia increased from 3% to 33%[61] Nearly 50 financial institutions were offering yuan saving accounts by 2023, and households were holding around $6 billion worth of yuan in Russian banks by the end of 2022.[61]

Tourism, especially from China to Russia, has seen a massive spike over the years. More than 2 million Chinese tourists visited Russia in 2019, compared to 158,000 a decade ago. China is one of the most important tourist markets for Russia. Support for cooperation between Russian and Chinese investment organizations in tourism industry is provided in the context of the Joint Action Plan by the Russian Federal Agency for Tourism and China's State Administration of Tourism.[70] More than 2.3 million Chinese tourists flew into Moscow's Sheremetyevo – Alexander S. Pushkin international airport in 2019, including 1.26 million who transferred via the airport. Sheremetyevo, which offers flights to 29 Chinese cities served by eight Chinese airlines, expects their number to grow by 30 per cent a year in the years to come. Russia has played into this tourism boom by expanding capacity of Moscow's largest airport. "Russia has also allowed more flights from regional Chinese air companies to Moscow, which helps to turn the Russian capital into an air hub for Europe-bound Chinese tourism." Sheremetyevo is looking to capitalise on that growth. Pǔtōnghuà or standard Chinese is among the languages displayed on Sheremetyevo's signs and announcements, while duty-free stores accept popular Chinese payment methods, including UnionPay cards and online systems WeChat Pay and Alipay. As many as 70 per cent of tax-free receipts handed out at Russia's airports go to Chinese citizens. By 2019, Russia has become among the top 3 travel destinations for Chinese tourists.[71]

The official relationship between the People's Republic of China and the Russian Federation has been upgraded three times since the establishment of diplomatic relations in 1991. Beginning as "good-neighborly and mutually beneficial" in December 1992, it evolved into a "constructive partnership" in September 1994, and finally a "strategic partnership of coordination" in April 1996.[88] In September 1999, the two countries began joint construction of a nuclear power station at Lianyungang, Jiangsu Province with an installed capacity of 2 million kW, one of the first situations of mutual energy cooperation.[89]

The late 1990s also marked the beginning of feasibility studies for natural gas and oil pipeline projects in Western and Eastern Siberia. In 2001, Russian company Yukos proposed the unprecedented Eastern Siberia-Pacific Ocean (ESPO) Oil Pipeline Project, which would link Yukos's oil refinery in Angarsk to Daqing, in northern China.[90] At the time, rail routes were the only means of transporting oil into the growing Chinese market. The project stalled in October 2003 when Yukos chief executive Mikhail Khodorkovsky was arrested on charges including tax evasion and fraud, and the Russian government launched an immediate investigation into the company.[91][92] Many speculated that the series of events were politically motivated, given that Mr. Khodorkovsky had been a vocal opponent of President Putin.[93] A week after Mr. Khodorkovsky's arrest, China Foreign Ministry spokeswoman Zhang Qiyue publicly announced that the Kremlin investigation would not impact the proposed China-Russia oil pipeline project.[94]

In September 2004, Chinese premier Wen Jiabao met with Russian Prime Minister Mikhail Fradkov in Moscow, where the two heads of government signed agreements affirming Russia's promise to set the route of a proposed pipeline from Eastern Siberia to the Pacific, with priority given to laying a pipeline spur to China, as well as increasing rail oil exports to China to 10 million tons (200,000 b/d) in 2005 and 15 million tons (300,000 b/d) in 2006.[95] Four days before Wen's visit, Yukos, then the largest supplier of Russian oil to China and Russia's biggest oil producer, publicly announced that rail shipments of crude oil to the China National Petroleum Corporation (CNPC) would end beginning on September 28, 2004. The Kremlin had begun auctioning off the troubled company's operating assets a month prior in August.[96]

Gazprom, Soyuzneftegaz and the Chinese Embassy in Moscow all expressed interest in Yuganskneftegaz, a main arm of Yukos.[97] The subsidiary was ultimately acquired by Russia's state-owned oil company Rosneft for roughly $9.3 billion. In February 2005, Russian Finance Minister Alexei Kudrin revealed that Chinese banks provided $6 billion in financing the Rosneft acquisition. This financing was reportedly secured by long-term oil delivery contracts between Rosneft and the CNPC.[98] In the same month, the Chinese Foreign Ministry denied that China provided "funds" for the deal. The Foreign Ministry could not confirm whether there were any "loans" involved, ministry spokesman Kong Quan said.[99]

State-owned Lukoil became China's largest Russian oil supplier when CNPC reached a strategic cooperation agreement with the company in September 2006.[100] As promised during Premier Wen's visit to Moscow in 2004, construction on a direct pipeline spur to China began in March 2006, when CNPC signed an agreement providing state oil producer Transneft $400 million for constructing a pipeline from Skovorodino, about 70 km (43 mi) from the Chinese border. In the same month, CNPC agreed to a set of principles establishing future joint ventures with Rosneft.[101][102]

In 2006, Gazprom was made responsible for all exports of gas from Russia's eastern Siberian fields, outside of sales made through production sharing agreements (PSAs). This was another move widely seen to be politically motivated, since successful commercial development of these fields and export to Asian markets would be impossible without Gazprom – and therefore Kremlin – involvement.[103][104] In an annual shareholder report two years prior, Gazprom acknowledged a plan for supplying natural gas to China. Two routes, roughly equal in capacity, would be constructed, with a total volume of 68 billion cubic meters of gas per annum. An Altai pipeline would link West Siberian fields with the Xinjiang Uyghur Autonomous Region in western China, while the eastern pipeline would run from Yakutia into northeastern China.[105][106]

Chinese domestic natural gas consumption roughly matched domestic production in 2004. Since then, however, its rate of growth and more sustainable energy profile compared to oil inevitably led to a surge in Chinese natural gas imports.[106] In March 2006, CNPC signed a memorandum of understanding (MOU) with Gazprom for the delivery of natural gas to China, which officially began pricing negotiations between Gazprom chief executive Alexei Miller and Chen Geng, then head of the CNPC. In September 2007, the Russian Federation Industry and Energy Ministry approved a development plan for an integrated gas production, transportation, and supply system in Eastern Siberia and the Far East, taking into account potential gas exports to China and other Asia-Pacific countries. Gazprom was appointed by the Russian Government as the Eastern Gas Program execution coordinator.[107]

Russia's desire to diversify its export markets has been matched by China's willingness to invest in Russian energy production and infrastructure. Russian policymakers, however, have expressed reserve about increased Chinese influence in the energy sector. In 2002, CNPC attempted to bid for Russian oil firm Slavneft, but withdrew just weeks later.[108][109] International news sources suggested the bid failed partly due to anti-foreign sentiment in the Duma, Russia's lower parliamentary house.[110][111][112][113] Slavneft was privatized by parity owners TNK (later OAO TNK-BP) and Sibneft (later OAO Gazprom Neft) soon afterwards. In 2004, Slavneft was then acquired by TNK-BP, the product of a merger between the Alfa Access Renova Consortium (AAR, Alfa Group) and British Petroleum (BP).[114] In 2006, Russia denied CNPC a significant stake in OAO Rosneft. When the Russian company went public, CNPC was allowed to purchase $500 million worth of shares, one-sixth of the $3 billion it had sought. The financial crisis triggered in 2008 gave China its opportunity to invest in Russia on a grander scale through a loans for oil program.[115] In 2009 and 2010, China's long-term energy-backed loans (EBL) extended large sums of capital to companies and entities not only in Russia, but also in Brazil, Ecuador, Turkmenistan and Venezuela.[116][117]

Growing Chinese investment is speculated to be about more than energy security for China. Chinese news agency Xinhua reported in 2010 that many Chinese enterprises believe the Russian market will allow them to become truly global.[118] Gao Jixiang, Associate Research Fellow of the Russian Economy Research Office of the Russia, East Europe, and Central Asia Research Institute of the Chinese Academy of Social Sciences, reported that China's investments in Russia totaled $1.374 billion as of 2007, and were projected to reach $12 billion by 2020.[119] In 2008–09 alone, total investments rose 25.4% to $2.24 billion and direct investment went from $240 million to $410 million.[120]

Meeting between Dmitry Medvedev and Hu Jintao at the 2009 APEC Summit.

2009 marked the 60th anniversary of established diplomatic relations between Moscow and Beijing, and also coincided with the signing of over 40 contracts worth roughly $3 billion. Chinese leader Hu Jintao and President Dmitry Medvedev of Russia conferred three times in four days during mid-June at the Shanghai Cooperation Organisation summit in Yekaterinburg, at the first-ever heads-of-state meeting of the BRIC countries (Brazil, Russia, India, and China), and again when Hu made a state visit to Moscow from June 16–18, representing what many saw to be a high-water mark in Chinese-Russian relations.[121]

Growing economic closeness also seemed to suggest a growing political alliance. A joint statement released by the two heads of state expanded upon how the two governments usually pledge mutual support for their sovereignty and territorial integrity. The Russian government explicitly affirmed that Tibet, along with Taiwan, are "inalienable parts of the Chinese territory", while the Chinese supported "Russia's efforts in maintaining peace and stability in the region of Caucasus."[122] During Hu's visit, however, Gazprom announced it could not begin delivering natural gas to China in 2011 as planned because of pricing disagreements. Construction of the Western Siberian Altai pipeline, which could deliver over 30 billion cubic meters of natural gas annually to China, was originally scheduled to begin in 2008.

September 27, 2010 marked the completion of the 1,000-kilometre (620 mi) Russia-China Crude Pipeline. Stretching from Russia's Skovorodino station to China's Mohe station, it was the first pipeline ever built between China and Russia.[123] In April 2009, Rosneft and Transneft had signed deals with CNPC guaranteeing the pipeline's production of 300,000 barrels of crude oil per day for twenty years as part of a $25 billion loan-for-oil agreement.[124] Upon the pipeline's completion in 2010, CNPC also signed a general agreement with Transneft over the operation of the pipeline, a framework agreement with Gazprom to import natural gas to China from 2015 onwards, an agreement with Rosneft on extending oil supply to the Russia-China Crude Pipeline, and an agreement with Lukoil on expanding strategic cooperation. Both sides hailed the series of agreements as a "new era" in cooperation, and Russia's Deputy Prime Minister Igor Sechin told reporters in Beijing that Russia was "ready to meet China's full demand in gas" going forward.[125]

In September 2010, President Putin reaffirmed the potential nuclear future of Russia and China's energy relations, saying "Of course, our cooperation with China is not limited to just hydrocarbons ... Russia is China's main partner in the field of peaceful use of nuclear energy, and equipment supplies here amount to billions of dollars".[126] As of 2011, however, Russian officials have remained reluctant to transfer nuclear energy technologies and other knowledge products to Chinese partners. Industry experts have pointed out that while proprietary technology would protect Russian exports from being displaced by lower-cost Chinese products in third-party markets, such an approach may reinforce Chinese doubts about Russia's reliability as a long-term energy partner.[81]

The Russian oil industry has not only been burdened by corporate struggles such as with Yukos and political disagreements between the countries, but also by the reoccurring breaches in safety. Some difficulties stem from the Kazakh riots[127] to endless environmental concerns,[128][129][130] but most recently the capsizing of an oil platform that was allowed to operate in the north late in the season, while towed under adverse maritime conditions.[131] Incidents such as these cannot help but give potential foreign investment, which the region needs, pause as to the reliability of Russian energy supplies.

In 1996, the Russian Federation completed two production sharing agreements (PSA) for oil and gas exploration off the northeast coast of the Sakhalin Islands. The Sakhalin-I project, operated by Exxon Neftegas (EN), has estimated potential recoverable reserves at 307 million tons of oil (2.3 billion bbn) and 485 billion cubic meters of gas as of 2002.[132][133] EN, a subsidiary of US-based ExxonMobil, holds a 30 percent interest in the project, while Rosneft holds 20 percent via its affiliates RN-Astra (8.5 percent) and Sakhalinmorneftegas-Shelf (11.5 percent). Japanese consortium SODECO and the Indian state-owned oil company ONGC Videsh Ltd. holds the remaining 50 percent (30 and 20 percent, respectively).

The Sakhalin-II project is managed by the Sakhalin Energy Investment Company Ltd. (Sakhalin Energy). As of 2011, Russian state monopoly Gazprom holds 50% plus 1 share, RoyalDutch Shell 27.5%, Mitsui 12.5% and Mitsubishi 10%.[134] Gazprom purchased its majority stake from Sakhalin-2 operator Royal Dutch Shell in 2006. The project had been placed permanently on hold by environmental regulators, but moved forward after the sale.[135] The series of events led to widespread speculation that environmental violations may have been used as a bargaining chip in the deal.[136] Sakhalin-II consists of two 800-km pipelines running from the northeast of the island to Prigorodnoye (Prigorodnoe) in Aniva Bay at the southern end. The consortium built Russia's first liquefied natural gas (LNG) plant at Prigorodnoye. Industry sources speculated that "some in Russia hope to sell China gas from Sakhalin-2's or other facilities' future LNG holdings now that it has mastered the technology".[137]

In December 2003, CNPC and Sakhalin Energy signed a frame agreement on exploration and development in Russia's Sakhalin oilfield.[138] ExxonMobil also looked towards the Chinese market, making preliminary agreements on supplying Sakhalin-I gas to China as early as 2002. On November 2, 2004, CNPC began negotiations with ExxonMobil for possible long-term gas deliveries from Sakhalin-1.[139] Negotiations were then concluded in October 2006, when Exxon and CNPC officially announced an agreement. Under the deal, Sakhalin-1 could sell up to 10 billion cubic meters of gas to China over 20 years by pipeline. The plan met strong opposition from Gazprom, which has a rival pipeline project and controls all Russian gas exports apart from sales through PSAs such as Sakhalin-1.[140] In August 2006, Sakhalin-I's De-Kastri oil terminal began exporting processed petroleum to markets including China, Japan, and South Korea.[141]

The influence of Russia's regional energy trade has led to a sense of local uneasiness about foreign countries' influence in the sector. In 2000, President Putin warned a Siberian audience that unless Russia intensified the region's development, the Russian Far East would end up speaking Chinese, Japanese and Korean.[142][143] In 2002, the Deputy Secretary of the Russian Security Council, Vladimir Potapov, expressed serious concerns about the region's combined remoteness, weak infrastructure, declining population, and wealth "in very diverse resources".[144][145] Political figures like Viktor Ozerov, Chairman of the Federation Council's Defense and Security Committee, warned of military threats in the Far East and decried the predatory use of the region's resources, and large-scale illegal immigration, though scholars pointed out that no imminent threat was visible.[146] Dmitri Trenin stated that, 'the principal domestic reason is the situation of eastern Russia, especially East Siberia and the Russian Far East. Since the collapse of the Soviet Union, the territories have been going through a deep crisis. The former model of their development is inapplicable; a new model is yet to be devised and implemented. Meanwhile, the vast region has been going through depopulation, deindustrialization, and general degradation. ... The quality of Moscow's statesmanship will be tested by whether it can rise up to the challenge in the East."[147] The RFE has been one of the most difficult areas to transition between the structure of the Soviet Union and the still developing Russian state due to the lack of economic self-sufficiency in the region or any prospects of stable growth.

In September 2005, the Minister of Economic Development and Trade German Gref promised a doubling of state support for the RFE to $612 million in 2006, and the consideration of allocating a new $2.5 billion infrastructure fund for projects in the region.[148] A year later, at the end of 2006, Putin reiterated that the socio-economic isolation of the RFE represented a threat to national security, and advocated yet another new socioeconomic commission and regional development strategy to be formed. He specifically pointed to the perceived threat of foreign immigration in the Far East.[149] Scholars and regional experts have suggested that China's rapid economic growth (especially relative to Russia's GDP growth rate) lies at the root of anxieties concerning the RFE. While the Russian and Chinese economies were roughly the same size in 1993, China's grew to over 3.5 times larger than Russia's by 2008. Even since 1998, when Russia began a rapid economic recovery, China has grown at a faster rate; the gap has only widened since the global economic crisis and falling energy prices of the late 2000s. China's growth has led to the creation of new productive capacity, whereas Russia's recovery has been based largely on reutilizing Soviet-era capacity that had idled in the early 1990s.[150][151]

Russian officials have repeatedly reiterated their opposition to being merely China's natural resources storehouse.[152] As early as 2001, Deputy Prime Minister and Finance Minister Aleksei Kudrin warned that if Russia failed to become "a worthy economic partner" for Asia and the Pacific Rim, "China and the Southeast Asian countries will steamroll Siberia and the Far East."[153][154] At the start of his presidency in September 2008, Dmitri Medvedev echoed similar concerns, warning a Kamchatka audience that if Russia fails to develop the RFE, it could turn into a raw material base for more developed Asian countries and "unless we speed up our efforts, we can lose everything."[155][156] Regional experts have pointed out that despite these increasingly vocal concerns, the local economy of the RFE has become increasingly reliant on Chinese goods, services, and labor over the past decade; furthermore, local out-migration shows little sign of reversing. For all the early promises under Putin, Moscow's policy towards the RFE has not seemed effective as of 2008.[157]

Dmitri Trenin of the Moscow branch of the Carnegie Endowment has argued that Siberia's development could become Russia's most urgent challenge.[158] Failure to develop the region into more than a raw material outpost could lead to what he calls a "Chinese takeover of the region, not by migration but rather by economic means of trade and tourism."

Russia's plans for this region have revolved around building energy infrastructure to leverage exports and attracting investment so that the capital will be available for modernizing regional infrastructure.[159][160] These plans largely depend on foreign investments, which Russian companies have grudgingly acknowledged. In 2008, a consortium of Chinese engineering firms led by Harbin Turbine signed an agreement with Russian power producer OGK to produce coal-fired turbines in the RFE, adding 41,000 megawatts of new generating capacity by 2011. Stanislav Nevynitsyn, executive director of OGK, admitted, "It is simply a necessity for us to work with the Chinese – we will not get the capacity built otherwise."[161] Through loans to Russia's Bank for Development and Foreign Economic Affairs, Vnesheconombank (VEB), China became a major stockholder in Lukoil in 2009.[162] In the same year, after having excluded foreign firms from bidding on the huge Udokan copper mine in Southeast Siberia, Moscow welcomed Chinese, South Korean, and Kazakh miners and refiners back into the bidding process.[163][164]

As part of the 'Russia's Energy Strategy till 2020' program, the Russian government launched a program of creating a unified gas production, transportation, and supply system in Eastern Siberia and the RFE in 2006. The program would ultimately provide affirmation of an all-Russia gas system from the Baltic Sea up to the Pacific Ocean."[165] Russian policymakers have also suggested building an international center for spent fuel and nuclear energy in the RFE, hoping to raise the profile in the export of nuclear energy to the global market.[166]

In 2009, Gazprom was awarded subsurface licenses for the Kirinsky, Vostochno-Odoptinsky and Ayashsky blocks to begin the Sakhalin-III project.[167] Geological exploration has been underway at the Kirinskoye field and, as of 2009, natural gas production is scheduled for 2014. The field will become one of the natural gas sources for the Sakhalin–Khabarovsk–Vladivostok gas transmission system (GTS). The first GTS start-up complex will be 1,350 km, with a capacity of 6 billion cubic meters (bcm) per year.[168]

Meeting of Xi Jinping, Vladimir Putin and Mongolian President Ukhnaagiin Khürelsükh in Samarkand, Uzbekistan on 15 September 2022

China and Russia generally cooperate with each other regarding Central Asia affairs.[169] While they sometimes compete in Central Asia, those competitions are typically focused on economic matters and proceed in an orderly way within established norms.[169] Where competition in Central Asia does occur between the two powers, it typically arises as a product of the circumstances rather than as an intentional effort to contain the other country.[169]

In 1996, China, Kazakhstan, Kyrgyzstan, Russia and Tajikistan formed the Shanghai Five, a collaborative body that was renamed the Shanghai Cooperation Organisation (SCO) with the addition of Uzbekistan in 2001.[170] As members of the SCO, China and Russia have cooperated in military exercises, such as counterterrorism drills in Kyrgyzstan in 2002 and similar exercises in Kazakhstan and China in 2003.[171]

Russian and Chinese leaders regularly call for greater cooperation and coordination through the SCO between their two countries in the context of their broader goal of promoting multilateral diplomacy.[172][173][174] In a joint statement issued on May 23, 2008, Russia and China asserted that "International security is comprehensive and inalienable, and some countries' security cannot be guaranteed at the cost of some others', including expanding military and political allies."[175] Zhao Huasheng, Director of Russian and Central Asian Studies at Fudan University's Shanghai Cooperation Center, has argued that economic cooperation will ensure the long-term relevance of the SCO, as current security threats recede.[176] While China and Russia do enjoy some bilateral energy cooperation, which experts predict will continue to grow in the future, the two countries have emerged as rivals for Central Asian oil and gas supplies.[177] With the rising oil prices in the mid-2000s, Russia has sought to renew its influence in Central Asia, in particular the region's southern flank, to guarantee access to gas supplies for reexport to Europe and for its own domestic needs. As China's energy needs have grown and its policymakers have sought to develop its western provinces, China, too, has sought to expand its influence in Central Asia.[171]

In 2007, at a meeting of SCO prime ministers in Tashkent, Russian Premier Viktor Zubkov reiterated Moscow's desire to forge a Central Asian energy "club" within the SCO, comprising Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. The SCO energy club could be set up as soon as 2008, Russian Deputy Industry and Energy Minister Ivan Materov announced in Tashkent. Materov insisted, however, that the club would not amount to a sort of mini-OPEC. Political and economic analysts in Moscow believe the Kremlin is keen to establish an energy club as a means to prevent a possible clash with China over Central Asia's energy resources.[178]

At a May 2007 SCO summit in Turkmenbashi, Russian, Kazakh and Turkmen leaders announced the expansion of the Prikaspiisky gas pipeline from Turkmenistan into Russia.[179] The plan has stalled due to several obstacles, including price disagreements and the economic recession of the late 2000s.[180][181]

Uncertainty over the Prikaspiisky route has given China an opening into the region, especially in Turkmenistan. During a brief visit to Ashgabat, Chinese Premier Wen Jiabao called for efforts "to step up bilateral trade cooperation to a new level." Berdymukhamedov, in turn, expressed interest in "working closely" with China on a natural gas pipeline project, Xinhua News Agency reported. In December 2005, Kazakhstani President Nursultan Nazarbayev inaugurated the Atasu-Alashankou pipeline to ship oil to China. The $800 million Atasu-Alashankou route still needs Russian crude oil from Western Siberia, transported via the Omsk-Pavlodar-Shymkent pipeline, to reach its full annual capacity of 20 million tons by 2010.[182] Although China and its Central Asian partners view their expanding cooperation as a means of diversifying their energy partnerships, Russia has enjoyed success in other major energy projects. In November 2007, two Russian companies (TNK-BP and GazpromNeft) signed an agreement with KazTransOil to ship up to 5 million tons of oil annually to China via the Omsk-Pavlodar-Atasu-Alanshakou pipeline. In the first quarter of 2008, 300,000 tons of Russian crude oil were exported to China along this route.[183] Moreover, a Russian engineering company, Stroytransgaz, won a tender to build Turkmenistan's section of the gas pipeline to China.[184]

China and Russia announced in May 2014 that they had reached a 30-year gas deal where "Russia would supply 38 billion cubic meters of natural gas each year to China".[185] These developments continue to show Russia and China's attempts to work together outside of USA confinements.