Russia is becoming rapidly dependent on China. That suits China just fine. Our cover in Asia this week
). China is a vital market for Russian raw materials: Rosneft, Russia’s national oil company, depends on Chinese financing and is increasingly diverting its oil to China. As Russia seeks to evade the hegemony of the dollar, the yuan is becoming a bigger part of its foreign-currency reserves . China supplies vital components for Russia’s advanced weapons systems. And China is the source of the networking and security gear that Mr Putin needs to control his people.
However, Mr Putin is mistaken. For a start, the Russian version of state capitalism is a rent-seeking, productivity-sapping licence for the clique that surrounds him to steal freely from the national coffers—which is one reason why Chinese investment in Russia is rather limited. There is also a contradiction between Mr Putin’s claim to be restoring Russian greatness and the increasingly obvious reality of its subordinate role to China. This creates tension in Central Asia.
Who can say when the strains will show? Imagine that Mr Putin chooses to step down in 2024, when the constitution says he must, and that his successor tries to mark the change by distancing Russia from China and turning towards Europe. Only then will it become clear how deep China’s influence runs and how much pressure it is prepared to exert to retain its sway. Russia’s next president may find that the country has lost its room for manoeuvre.
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