NATO diplomats and other Western observers said they are struck by the vague nature of what it is that this supposedly new Russian-Chinese initiative is all about.
“Modernize? But modernize what?” asked one diplomat watching the visit unfold in Beijing,
It appears Russia is seeking help from China for high-technology investment because Moscow cannot afford the high costs of industrial base equipment to transform its industry. In the past, the two states sought a two-way exchange of modernization know-how.
Machine-building equipment and other manufacturing machinery make up just 5 percent of exports.
In contrast, more than 50 percent of Chinese exports to Russia are machined or technology-based products.
“The reason for this imbalance is easy to see,” said a Russian industry analyst attending a defense-technology show in Beijing. “The degree to which Chinese industry receives state support and the speed at which they drive innovation is something Russia can only dream about.”
In the past five years, Beijing made “race-to-the-moon” levels of investment in innovation, building 126 “science cities.”
Russia is committed to developing one: the Skolkovo complex outside of Moscow billed as a Russian analog to California’s Silicon Valley.
Experts say the troubled partnership will likely worsen. A recent report from the Stockholm International Peace Research Institute predicted that defense exports to China will continue to decline and that distrust between the two nations will increase.
“There are strategic planners in Beijing and Moscow who view the other side as the ultimate strategic threat in the long term,” the report concludes. “In both countries, strategic planners warn that the present competition could escalate to a more pointed rivalry, entirely undermining the notion of a strategic partnership.”