This post was edited by laoda1 at 2014-12-22 17:38|
Enter the Dragon
Ruble Crash: China Pledges to Support Russia
Dec 22, 2014
Though it has been entirely unreported in the West, Chinahas been saying all week that it stands ready to support Russia if its help isneeded.
With $3 trillion of reserves the sums necessary would fromChina’s point of view be small change.
The only condition is that Russia must first ask China forassistance, as this editorial in the semi-official English language Chinesenewspaper Global Times sets out.
Global Times belongsto The People’s Daily, the official newspaper of the Communist Party of China,so an editorial published by Global Times has official sanction and representsthe opinion of the Chinese government.
Putting the question beyond any further doubt were commentspledging support for Russia from the Chinese Foreign and Commerce Ministers asreported by the Russian TASS news agency, which we also reproduce below.
With oil prices sinking and the ruble falling in value,Russia is experiencing the gravest economic crisis since the turn of thecentury. After its value crashed for two days running, the ruble hasdepreciated over 50 percent against the US dollar so far this year to becomethe worst performing global currency. At present, there seems to be no way tobail it out, and what will happen to the Russian economy is difficult topredict.
Some analysts are comparing Russia's current situation withthe eve of the Soviet Union's dissolution, when oil prices were also at a lowebb. Some speculate that the deepening economic crisis will impose newchallenges to Russian President Vladimir Putin's tenure, forcing him to apply adefensive strategy. But there are also some concerns about him becoming moreaggressive.
This speculation raises a question: Is Russia's economyworse now than the time when the Soviet Union collapsed?
Compared with 23 years ago, Russia's manufacturing capacityand agricultural production have not greatly improved, and it's much diminishedstrength has not left much room to maneuver. What's more, Moscow now facesWestern sanctions and there is deep antagonism between Moscow and Washington.
But Russian society is much more united than before. Putinretains high approval ratings among the Russian public, who learned heavylessons after the collapse and harbor no delusions toward the West.
Russia's foreign exchange reserves still boast about $400billion, which means, unlike immediately following the dissolution of theSoviet Union, the well-being of the Russian people will not be severelyimpacted in the short term. Although the threat of collapse is still far away,Russia will go through a long-running winter instead of a temporary storm.
China has become a significant factor that determinesRussia's strategic environment. Seeking China's support is one of Russia's mostrealistic options.
While it might play a key role, China has to keep a clearmind when giving a helping hand to Russia. China-Russia cooperation is nolonger ideology-based but driven by common interests. Although it has thecapability to offer help to Russia at critical moments, China does not have toact in a proactive manner.
Any facilitation and aid must be given with the request ofMoscow through the normal channels of country-to-country exchanges. This willreduce Moscow's misunderstandings to the minimum.
This crisis will probably urge Russia to recalibrate some ofits national strategies. But it is by no means a fact that Russia will drawcloser to China because of this. With many uncertainties, China also faceschallenges about how to lead its relationship with Russia to a reciprocal end.
Russia is at a crossroads, and the direction it chooses willimpact world politics. China's stance is clear, and it does not want Russia tocollapse.
The following article appeared on the website of the Russiannews agency TASS.
China believes Russia will be able to overcome the currenteconomic problems, and is ready to offer whatever assistance if needed, China’sForeign Minister Wang Yi said in an interview with Hong Kong’s Fenghuangtelevision channel on Sunday.
“We believe that Russia has opportunities and knowledge toovercome the current problems in the economy. The Chinese-Russian relations ofstrategic partnership are at a high level, we are always supporting and helpingour friend. If the Russian side needs it, we shall offer all possible supportwe may have,” the foreign minister said.
China’s Minister of Commerce Gao Hucheng told Fenghuangwhile commenting on the situation with rouble: “As for certain fluctuations inthe stock market and the fluctuations in the currency market - they may be ofcertain interest for some capital investors, and from the practical cooperationpoint of view - we are still calm and promote actively our cooperation.”
The minister of commerce also expressed confidence thecurrent financial and economic situation in Russia would not afflictimplementation of the major Russian-Chinese projects in the energy, industriesand other spheres.