Chinese President Xi Jinping and Russian leader Vladimir Putin pledged to intensify cooperation against US “containment” of their countries, as they warned of growing nuclear tensions between rival powers.

Putin and Xi accused the US of planning to station missile systems around the world that “pose a direct threat to the security of Russia and China,” in a joint declaration after more than two hours of talks in Beijing on Thursday. They agreed to tighten coordination, including between their militaries, against what they called Washington’s “destructive and hostile course.”

The two leaders also warned of “increased strategic risks” from spiraling tensions between nuclear powers. They accused the US of seeking to violate the strategic nuclear balance to gain a “decisive military advantage.”

Putin’s in China on the first foreign visit since his inauguration last week for a fifth presidential term, indicating the importance of the relationship with Xi in enabling Moscow to resist unprecedented sanctions from the US and its allies over Russia’s invasion of Ukraine.

The leaders said “preventing direct military confrontation between the nuclear powers is the priority task,” but lambasted nuclear states that “encroach on each other’s vital interests” by expanding military alliances near their borders, a dig at NATO expansion in Europe and US-led efforts to forge security partnerships in the Asia-Pacific region to counter China.

Xi said China was “ready to work with Russia as a good neighbor, friend and partner with mutual trust,” state broadcaster China Central Television reported after the pair had met. China was prepared “to consolidate the friendship between the two peoples for generations to come,” he added.

Putin described the nations’ cooperation as “one of the main stabilizing factors in the international arena,” according to a video posted on a Kremlin social media account.

The two leaders declared a “no-limits friendship” just weeks before Putin launched his full-scale invasion of Ukraine in February 2022, and have met more than 40 times since Xi came to power in 2012.

Driven by Russian oil and gas sales and purchases of electronics, industrial equipment and cars, Moscow’s trade with China hit a record $240 billion in 2023. Despite that, China’s exports to Russia have dipped for the past two months amid mounting US threats of reprisals.

Putin wants the visit to ensure that the economic and diplomatic support that China has provided since he attacked Ukraine remains intact. The US has warned China over its trade with Russia, threatening to sanction banks that prop up the Kremlin’s war machine.

Sitting beside Xi at a ceremony later Thursday to sign agreements on deepening cooperation in areas ranging from energy and military exercises to AI and space exploration, Putin noted that 90% of trade between Russia and China was settled in yuan and rubles.

“This means we can say our trade and investments are effectively safeguarded from the influence of third countries,” he said, an apparent reference to the US and the dominant role of the greenback globally.

Putin added that Moscow and Beijing had agreed to step up banking ties and increase the use of national payment systems. Details of those agreements and the ones signed before cameras were not released.

Xi also took a veiled swipe at the US, saying that “unilateral hegemony, confrontation and power politics threaten global peace and all countries’ security.” He repeated his nation’s position on the war in Ukraine, saying that “a political solution to the Ukraine crisis is the correct direction.”

What Bloomberg Economics Says:

We expect Putin will continue to press his ultimate goal of seeing China fully replace Europe in terms of energy trade, technology transfer and financial markets. A “Crussia” plan would take years and billions of dollars to execute — but may be Russia’s only rational option if the war in Ukraine extends into the foreseeable future.

Putin said he’d discuss the situation in Ukraine at informal talks with Xi that were planned for later Thursday.

The visit comes just days after Putin appointed Andrey Belousov, an economist and technocrat, as his new defense minister, replacing the long-serving Sergei Shoigu in a sign the Russian leader sees an extended conflict ahead.

In recent weeks, the US has stepped up warnings to Chinese banks and exporters about consequences if they help to bolster Russia’s military capacity.

In December, the Treasury Department announced it would impose secondary sanctions on banks that facilitate deals in which Russia procures semiconductors, ball bearings and other equipment necessary for its military — even if they’re unaware they’re doing so.

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No limits? Why Vladimir Putin's latest visit will test China-Russia ties

China's expanding relations with Russia will be put to the test when Vladimir Putin makes an official visit this week, as Beijing tries to keep Moscow close while avoiding Western sanctions over the Ukraine war.

The Russian president will arrive in Beijing on Thursday for a two-day trip that is expected to be a show of the neighbours' growing geostrategic alignment and the "deep friendship" of Putin and Chinese leader Xi Jinping. But analysts say it could also reveal the limits of China-Russia ties.

With its full-scale invasion of Ukraine now in a third year, Russia - hit by sanctions and isolated by the West - has been edging closer to Beijing.

As the US and its allies pile pressure on China over its alleged support for Russia's defence industry, analysts say Putin will be keen to secure a commitment to the nations' "no limits" partnership during his visit.

"For Putin, the visit is important to emphasise that the strategic partnership with China remains strong, at a time when his own personal travel is restricted and his country is isolated internationally and economically," said Elizabeth Wishnick, an expert on China-Russia ties and senior research scientist at the Centre for Naval Analyses, a US think tank.

But for Beijing, while the quasi-alliance with Moscow has become a countervailing force against Washington and its allies, it still needs to balance ties between Russia and the US to avoid confrontation with the West amid threats of fresh American sanctions over Ukraine.

That is why Putin's latest China visit is of unusual significance, according to Artyom Lukin, an associate professor at Russia's Far Eastern Federal University in Vladivostok. He added that the outcome could "define the further direction of Sino-Russian ties for the foreseeable future".

He said the US demand that China curb deliveries of dual-use goods to Russia was a test of Beijing's claim to be neutral on the conflict in Ukraine.

"Considering that a very wide range of modern products and services - such as machine tools, trucks, chips or satellite images - are essentially dual-use, such demands are tantamount to the requirement of a blanket embargo on trade with Russia," Lukin said.

"If China submits to this ultimatum, it will wipe out much of its current trade with Russia."

US Secretary of State Antony Blinken, after talks with Xi in Beijing last month, alleged Beijing was a "top supplier" to Russia's defence industrial base and that "Russia would struggle to sustain its assault on Ukraine without China's support".

"I made it clear that if China does not address this problem, we will," Blinken said, hinting at new sanctions against Chinese banks and companies on top of the existing ones that involve more than 100 Chinese enterprises.

Despite heavy criticism from the US and its allies, China and Russia have strengthened their economic and security ties since Putin launched an all-out war against Ukraine in February 2022, with bilateral trade surging from US$145 billion in 2021 to US$240 billion last year.

But with the US threatening to extend sanctions to banks and other Chinese entities, China's exports to Russia - which grew at a double-digit pace last year - have dropped significantly this year.

Those Chinese exports include industrial equipment and other non-military trade such as cars and electronics, while its imports are mostly oil, pipeline gas and other energy commodities.

But by March, some 80 per cent of payment settlements between Russia and China had been suspended as sanctions mount, according to a report released last week by Renmin University's Chongyang Institute for Financial Studies in Beijing.

Vladimir Putin and Xi Jinping have met more than 40 times since 2013. Photo: AFP alt=Vladimir Putin and Xi Jinping have met more than 40 times since 2013. Photo: AFP>

Li Mingjiang, an associate professor at Nanyang Technological University's S. Rajaratnam School of International Studies in Singapore, said the US and European pressure tactics would bring uncertainty to China-Russia ties.

He said Putin was visiting China at a critical time for both countries.

"This is a dilemma for Beijing, because its decision on whether to cooperate with the US and Europe will be consequential for Russia, whose combat capabilities in Ukraine could be significantly affected if it cannot obtain China's support in critical areas," he said.

But Li said China was unlikely to make major concessions to the US due to the importance it attached to its ties with Russia.

"Such concessions would upset Russia and undermine the strategic trust between the two countries," he said. "China has placed stabilising ties with Russia at the top of its diplomatic priorities since the Ukraine war started."

Lukin also said that Beijing was not expected to openly defy Washington nor fully comply with the US demands. "Most likely, some balance will be struck between keeping the strategic ties with Russia and avoiding confrontation with Washington," he said.

Developments on Ukraine's battlefields would be part of Beijing's thinking. "If the war tends to go in Russia's favour, as is the case at the moment, China will be more likely to side with Moscow rather than abandon it," he said.

Lukin noted that Xi and Putin's close personal ties could also be a factor.

The pair have met 42 times since 2013, and during Putin's last China visit, in October, Xi hailed their "good working relations and deep friendship".

"As long as Xi and Putin are in power, the Russia-China entente will most likely stay intact," Lukin said, adding that "much will hinge upon their confidential conversations during the summit".

Russia specialist Mark Katz, a professor of government and politics at George Mason University in the US, said Putin's trip should be viewed in the context of Xi's European tour of France, Serbia and Hungary last week.

In a trilateral meeting in Paris, French President Emmanuel Macron and European Commission President Ursula von der Leyen urged Beijing to help rein in Putin, highlighting Russia's aggression against Ukraine as an "existential" threat to European security.

Xi insisted the conflict should not be used as a tool to criticise China.

"As much as Xi might want to see Europe move away from the US, Europe is not going to do so as long as it feels threatened by Russia," Katz said.

He said that while European leaders hoped China would help end the war, Putin would be seeking more support from Xi. "Beijing, though, may be coming to see that it cannot increase Chinese influence in Europe if China is seen to be increasing its support for Russia."

Li Lifan, an expert on Russia and Central Asia at the Shanghai Academy of Social Sciences, said while ties between Beijing and Moscow had steadily developed in recent years, Ukraine had become a "hurdle".

"China and Russia need each other to mitigate the pressure from the US-led West, but they don't necessarily see eye to eye on many issues that are deemed to be their respective core interests," he said, adding that there may not be much room to elevate relations.

Despite Moscow's strategic importance for Beijing, Li said ties with Russia had not reached the heights of China's "ironclad friendship" with Serbia and its "all-weather partnership" with Hungary.

"China has handled the Russia-Ukraine conflict with utmost caution, trying to deepen political and economic ties while avoiding being entangled militarily," he said. "It is clear that both China and Russia have no intention of forming a real military alliance any time soon."

He expected the two leaders to discuss the situation in Ukraine when they meet, and also establishing new payment and settlement channels to get around sanctions.

Wishnick said Putin was also expected to raise the stalled Power of Siberia 2 natural gas pipeline project, but Xi was unlikely to sign off on it due to concerns about China's energy dependence on Russia.

She said while a renewed commitment to their partnership could be expected, it was "not very probable" that Putin would accept a proposal - backed by Xi - for a global truce during the Olympic Games in Paris this summer.

Wishnick also noted that China had stopped describing its partnership with Russia as having "no limits" since Xi visited Moscow in March last year. She said Beijing had instead returned to a policy of "three noes" - no alliances, no threatening third parties, no confrontation.

"Neither party wants to be dragged into conflicts by the other and they have parallel but not identical interests on many issues, including the South China Sea, Central Asia, the Arctic," she said.

"Although this is a period of deepening partnership, likely to endure ... in the short to medium term, the history of their relations tells us that domestic and/or international developments may arise that could pull them apart in the future."

Lukin said China's reluctance to enter into a full alliance with Russia and other autocracies could change if the US continued to step up its containment policies against Beijing.

"If Beijing decides that compromise with Washington is impossible, then China may go for a full alliance with Russia," he said.

"The option of an alliance with Russia is significant leverage that Beijing wields over Washington. US policymakers may understand this, which probably makes them more circumspect in dealings with China. They should know that if there is a major breakdown in China-West ties, nothing would keep Beijing from creating an anti-Western geopolitical bloc based on the China-Russia axis."

Katz said although Moscow and Beijing remain united in their opposition to the United States, there may be a growing realisation that "the more successful Putin is in Ukraine, the more Chinese ambitions in Europe will be negatively impacted".

"Chinese officials may also be thinking that growing Russian dependence on China should result in greater Russian deference to Chinese interests. Moscow, though, doesn't seem to share this view," he said. "I have a feeling that neither Putin nor Xi is going to be satisfied with their meeting."

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Despite Western pressure, China in no hurry to reduce Russia support

Despite Western calls on China to cut its support for Moscow's war against Ukraine by limiting supplies of dual-use materials and weapons components to Russia, Beijing has no interest in dropping its backing for President Vladimir Putin, analysts say.

While China does not want to upend its ties with the West, and insists it is not sending lethal weapons to Moscow, Washington has stressed that Russia would struggle to sustain its assault on Ukraine without Beijing.

On Thursday, Putin arrived in China on a two-day visit as Moscow is seeking more support from President Xi Jinping for the war effort in Ukraine following multiple rounds of Western sanctions.

The high-profile talks follow Xi's summit last week in Paris with French President Emmanuel Macron, who welcomed "commitments" of China to "control strictly" the exports of dual-use goods while also evoking concern about "information that we may have" about violations by certain Chinese companies.

European Commission President Ursula von der Leyen, who also joined those talks, said that "more effort is needed to curtail delivery of dual-use goods to Russia that find their way to the battlefield."

"Providing Russia with dual-use components rather than finished weapons has allowed China to provide support for Russia while claiming plausible deniability," wrote Nathaniel Sher, a senior research analyst at Carnegie China.

"Even if Beijing curtails dual-use exports in order to avoid further sanctions, its strategic interest in Russia remaining a stable partner will persist."

Citing customs data, Sher said that every month, China is exporting over $300 million worth of dual-use products identified by the United States, the European Union, Japan and the United Kingdom as "high priority" items necessary for Russia's weapons production.

Such items refer to 50 dual-use products such as microelectronics, machine tools, radars and sensors, that are essential for manufacturing weaponry like missiles, drones and tanks, according to the think tank.

- Jet-parts to Russia -

The Center for Strategic and International Studies (CSIS) said that according to some estimates, Beijing's overall share in Russian imports of machine tool parts jumped to 80–90 percent in 2023.

"Throughout the war, China has sold millions of dollars' worth of semiconductors, chips, ball bearings, navigation equipment, parts for fighter jets, and other components to Russia," the Washington-based think tank said in a recent report.

"This has ultimately enabled the Kremlin to speed up its weapons production, including armor, artillery, missiles, and drones, and put up an effective defense against Ukraine's 2023 counteroffensive."

Western officials have repeatedly expressed concern about transfers of dual-use materials from Chinese businesses to Russia.

On a visit to China in April, US Treasury Secretary Janet Yellen warned Chinese officials of the consequences of supporting Russia's military procurement efforts.

"However, Beijing has done little to prevent such transactions, given the rise in dual-use trade with Russia," said Sher.

"Increasingly deep links between the Chinese party-state and private firms make it difficult to imagine a scenario in which Beijing would not have foreknowledge of dual-use transactions with Russia, especially in highly sensitive domains," he said.

- 'Overreliance' on China -

The scale of Chinese aid puts Russia in a delicate position.

"Such overreliance makes Russia critically dependent on maintaining good relations with China," the CSIS said in the report.

Putin, who has become a virtual pariah in the West, has little choice.

Marc Julienne, director of the Centre for Asian Studies at the French Institute of International Relations (IFRI), said Beijing needed to perform a careful balancing act.

Its relationship with Moscow serves its geostrategic interests, but it is not in China's interests to allow Russia to become "too weakened" and rely solely on China, he said.

"Beijing now benefits much more from staying out of the conflict than from getting directly involved," Julienne told AFP.

While China has emerged as Russia's most important partner, Moscow has been relying on other countries in its war effort as well.

A Ukrainian government website called War & Sanctions has a database of components found in Russian weaponry originating from over 30 countries.

In Kyiv, AFP journalists have been shown a Russian drone carburettor inscribed with "Made in Ireland" and Japanese camera lenses from a Russian Kartograf reconnaissance drone.

Nearly all of the top suppliers of microelectronics into Russia are based in China and Hong Kong, with one outfit based in Turkey, according to the CSIS.

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