The long history of Sino-Russian relations since the 1600s suggests that bilateral ties can flourish only while there is a semblance of military, political, and economic balance between the two sides. With China's star rising while Russia sinks into a quagmire of its own making, the writing may be on the wall.
HONG KONG – Since around the start of this century, Chinese leaders visiting Moscow and Russian leaders visiting Beijing have spared few superlatives. Sino-Russian relations, they have proclaimed, have entered “their best period ever,” soared to “unparalleled heights,” and attained an unprecedentedly “high level of mutual trust.”
Such claims tell us something about the Sino-Russian relationship as it is today. But to understand how it evolved to this point, and how it might change in the future, we must examine the past, starting with the two powers’ first encounters in the seventeenth century.
After the Qing (Manchu) dynasty conquered China in 1644, it was confronted with what it saw as two distinct types of Russians: members of trade and diplomatic missions who arrived from the west; and Cossacks who had crossed Siberia and started marauding along the northeastern fringe of Qing territory, in the Amur River valley. The Qing called the first cohort Eluosi (an attempt at “Rus”) and the second one Luocha (“flesh-eating demons”).
Yet by 1670, the Qing had concluded that the Eluosi and Luocha were both associated with a formidable new power to China’s west and north. The Qing emperor, Kangxi, committed himself to driving out the Cossack marauders, first by besieging their outpost at Albazin in 1685-86. But he also took pains to put Sino-Russian relations on a stable and peaceful footing, acknowledging that, “If we advance and they retreat and we retreat and they advance there will be no end to the conflict and the border people will not be at peace.”
Kangxi therefore made overtures to the czar in Moscow, leading to the Treaty of Nerchinsk in 1689. The Russians agreed to withdraw from the Amur valley in exchange for access to the Beijing market for their merchants. Remarkably, this was the first-ever case of a Chinese government signing a document with a foreign power on approximately equal terms (a development partly explained by the fact that the Qing were not ethnic Han Chinese). The stage was set for a prolonged period of equilibrium.
NEW FRONTIERS
Under this new dispensation, the Qing secured Russian neutrality in their conflict with the insurgent Dzungar Mongols, and the Russians enjoyed the right to sell their furs and other products – initially through state-controlled caravans to Beijing, and later through private traders at Kyakhta, a new entrepôt established on the Russian-Mongolian frontier.
But tensions remained. By the 1750s, Russia and China had parceled out all the territory between them, and the great border regions of Xinjiang, Mongolia, and Manchuria became perennial sources of friction. Still, the Qing were in no hurry to be drawn into conflict with their northern neighbor, and the czar’s Siberian government likewise did not want to become embroiled in a war with China at a time when Russia was already fighting Prussia (in the Seven Years’ War).
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So, an equilibrium survived, but so did tensions. Once the Dzungars were wiped out, the Qing no longer needed the Russians’ tacit support on that front, and the border trade at Kyakhta was sometimes abruptly suspended for years at a time. Moreover, as the Manchu rulers became Sinicized, they came to see the Russians more as tribute bearers, reprising the haughty language of age-old Chinese protocol.
These trends, however, were eventually offset by the steady growth in Russian military and economic power. In the 1850s, the old balance was suddenly overturned. In the aftermath of the First Opium War (1839-42), the Russians had already begun to fret about their trade at Kyakhta being eclipsed by British competition; and following Russia’s defeat in the Crimean War, the Kremlin was hankering for compensation in the East. The Russian solution was to advance territorially. Beginning in 1854, Count Nikolay Muraviev, the Governor-General of Eastern Siberia, sent a series of flotillas down the Amur, planting Russian settlers at various points along the river’s north bank and harassing the local Manchu commanders.
Through a series of new treaties signed in 1858-60, the Russians were able to peel away from Qing rule the whole of “Outer Manchuria,” a region the size of France and Germany together. The old equilibrium had been replaced by overwhelming Russian military, political, and economic superiority over China, which would characterize the relationship for the next 130 years.
But, unlike the contemporaneous British and French assaults on China, this was a bloodless conquest. The Russians adopted an avuncular attitude and offered to mediate for the Qing with the Western European powers, even arranging a package of weapons and military training to bolster the dynasty against the Taiping rebellion in the south. Of course, the Qing weren’t entirely fooled by these blandishments. As one Manchu prince put it, “All the barbarians have the nature of brute beasts. The British are the most unruly but the Russians are the most cunning.”
From 1860 onwards, the Russians and other Western allies had reliable access to the Chinese interior, owing not least to the arrival of the telegraph, steamships, and railways. Although the main figure behind the construction of the Trans-Siberian Railway, Count Sergei Witte, predicted that “Russian power in the East would increase in proportion as the distance diminished,” Russia still maintained its generally benign posture.
After the Japanese routed the Qing in the war of 1894-95, Witte, then serving as Russia’s finance minister, concluded a secret treaty with the Chinese statesman Li Hongzhang to forge a defensive alliance against Japan. The main condition was that China would allow the Russians to build the Chinese Eastern Railway through Manchuria, giving Russia near-monopoly control of the local economy. The deal was initially hailed in Beijing, though not without reservations. As Li wrote in his diary, “If Russia did not want to control us in all our home affairs what a strong alliance would be possible between us.”
INTO IMPERIALISM
But this was the high noon of imperialism, and the great powers were vying with one another to appropriate Chinese territory, either by leasing it or through outright annexation. Most Russian policymakers were anxious not to be left out. Czar Nicholas II himself was reported to have “an unreasoning desire to seize Far Eastern lands,” and the watchword in Saint Petersburg was: “We must take!” (“Nado vzyat!”). In the winter of 1897-98, a Russian squadron occupied the Qing naval base of Lüshun (Port Arthur) and the trading port of Dalian without any attempt to consult the Manchu authorities.
The earlier avuncular approach had clearly been abandoned. In 1900, during the Qing-supported anti-foreign Boxer Insurrection, a czarist army invaded and overran Manchuria in the first significant bout of fighting between Russians and Chinese for 200 years. The victorious czarist commanders began to dream of establishing a “Yellow Russia.” Russian military commissars were attached to the Qing military governors in the Manchurian provinces on the model of the British political advisers in the Indian princely states. It was the closest the Russians ever got to annexing a considerable portion of China.
But such an outcome was never really in the cards. Anti-Russian resistance was widespread in Manchuria, and cooler heads reckoned that a permanent army of 130,000 would be needed to hold down the densely populated southern Manchurian province of Fengtian. Any lingering dreams of annexation were shattered by Russia’s defeat in the Russo-Japanese War of 1904-05.
Still, that setback did not end the czarist expansionist drive. On the contrary, the Russians teamed up with their vanquishers, concluding a series of secret treaties between 1907 and 1916 that designated the Chinese borderlands as czarist or Japanese spheres of influence. Russia’s interest had now largely shifted to Outer Mongolia, whose princes sought to secede from China following the fall of the Manchu dynasty in 1911.
Then, in 1915, the Russians extracted a treaty from the weak new government of the Chinese Republic in which the Outer Mongolians were granted autonomy under nominal Chinese sovereignty. As a result of these maneuvers, czarist Russia became a special focus of loathing for the young Chinese nationalists who had begun to find their voice in the 1911 revolution. Bilateral relations were more unbalanced than ever.
THE CZAR IS DEAD, LONG LIVE THE CZAR
The fall of the czarist regime in 1917, and the ensuing collapse of Russian imperial power in the Far East, allowed China to nudge the balance back in its favor. That December, the warlord regime in Beijing sent troops to disarm mutinous guards on the czarist-administered Chinese Eastern Railway – the first time in history that a contingent of European soldiers had been compelled to submit to a Chinese armed force.
The leading warlord, Zhang Zuolin, took command in Harbin, the railway capital, and turned it into what a dismayed Harper’s Magazine writer described as “the only white city in the world ruled by yellows.” Meanwhile, a lesser militarist named Xu Shuzheng marched on Urga, in Outer Mongolia, where he tore up the autonomy treaty of 1915 and reimposed direct Chinese control.
For their part, Soviet Russia’s new rulers launched a drive to present their country once again as a benevolent patron to China. Over the next ten years, Soviet advisers micromanaged the political and military activities of both the Chinese Nationalist and Chinese Communist parties alike. The goal was to ready them for a great “Northern Expedition” to overthrow the warlord regimes and rally the country against the world’s imperial powers. During this time, many young Chinese radicals were welcomed in Moscow for training at the Communist University of the Toilers of the East and, later, at Sun Yat-sen University.
But the old equilibrium still was not restored. The Soviet Russians were firmly in the driver’s seat, giving orders to frequently restive Chinese clients. The Nationalist Party’s mainstream ranks were deeply suspicious of both the Soviet Union and the Chinese Communists, while the Communist Party of China (CPC), wholly dependent on Soviet funding, resented being pitchforked by Moscow into an alliance with the “bourgeois” Nationalists. Both Nationalists and Communists were also conscious that the Soviet regime’s revolutionary glow concealed some of the old-style czarist strategic designs.
Hence, the Karakhan Declaration, which in 1919 promised the Chinese people sweeping concessions over the Chinese Eastern Railway and other matters, was mysteriously retracted the following year. Similarly, in 1921, the Red Army installed a pro-Soviet government in Outer Mongolia, essentially reinstating the 1915 autonomy agreement that had detached the region from Chinese rule. In 1927, at the height of the Northern Expedition, the Bolsheviks’ revolutionary experiment failed spectacularly. Tens of thousands of CPC activists were slaughtered by Nationalist troops in Shanghai and Guangzhou, and the Soviet advisers attached to the two Chinese parties were expelled from the country, imprisoned, or shot.
Throughout the next decade, Joseph Stalin pursued a cold-blooded geopolitical strategy, steadily favoring Chiang Kai-shek’s Nationalist regime in Nanjing as the only political force in China strong enough to provide the Soviets with support against the menace posed by Japan. When Chiang was kidnapped by his own officers in the celebrated Xi’an Incident of 1936, the Soviet chief intervened to rescue his Chinese counterpart from being handed over to the CPC for trial and execution.
Then, in 1937-38, when the Japanese launched their all-out invasion of China and no other foreign power was ready to give China help, Stalin supplied Chiang with a massive infusion of war credits, arms, and high-caliber military advisers – support that arguably prevented the Chinese resistance from crumbling during the first two years of the Second Sino-Japanese war. Yet none of this seems to have fostered any sympathy for the Soviets within the Nationalist leadership. On the contrary, after Germany invaded the Soviet Union in 1941, Chiang took advantage of the Kremlin’s distraction to restore Chinese control in Xinjiang, which had been within the Soviet sphere of influence for almost a decade.
REVOLUTION AND RESENTMENT
By 1949, Mao Zedong and the CPC had prevailed over the Nationalists in the Chinese Civil War, owing to massive (if belated) aid from the Soviets. The Russians therefore found themselves on the ultimate inside track with the new People’s Republic of China. With Stalin’s approval, the Chinese capital had been moved north from Nanjing to Beijing, putting it within easy reach of Soviet influence. While Soviet airmen protected China’s skies, Soviet naval experts arrived to help create a modern Chinese fleet, Soviet political advisers were posted to every department of the new Chinese central and regional governments, and Soviet scientists and engineers moved in to lay the foundations for “the most comprehensive technology transfer in modern industrial history.”
But such largesse implied that the old imbalance in the relationship remained. Just three months after coming to power, Mao made an unhappy visit to Moscow, where he was obliged to accept an eerily colonial-style treaty providing for Sino-Soviet joint ventures in mineral extraction, civil aviation, and shipbuilding in Xinjiang and Manchuria. The Kremlin dispensed financial aid, but as a loan, rather than a grant, and for the somewhat miserly figure of $300 million.
When Russia and China joined forces in the Korean War (the first joint military operation outside their borders), the Chinese had to provide the manpower and pay for the deliveries of Soviet aircraft and tanks, not all of which were of top quality. After Stalin died in 1953, CPC leaders seized the moment and started to claim that Mao, rather than Stalin’s successor, Nikita Khrushchev, was the rightful leader of the world Communist movement. Khrushchev for his part, poured in more aid and removed some of the worst irritants from the relationship; but this did not win him Mao’s respect.
AFTER THE SECRET SPEECH
By 1955, Khrushchev and his colleagues were so alarmed at the state of Sino-Soviet relations that they confided their misgivings to Western leaders such as the then British Minister of Defense Harold Macmillan and German Chancellor Konrad Adenauer. Meanwhile, at the grassroots, Western-trained Chinese scientists were sniffy about Soviet technology, with some daring young Chinese occasionally speaking openly about a future in which they would outstrip their Soviet “elder brothers.” But the most profound shift in the relationship came after Khrushchev’s February 1956 “secret speech” condemning Stalin, which revealed that the Soviet Union was no longer a monolith, and that the Kremlin could no longer claim doctrinal infallibility. That distinction was now claimed by Mao.
This was a signal change. Ever since the 1850s, it had been the Russians who had taken the initiative and made proposals, which the Chinese could either accept or try to modify or reject. But henceforth, with the Russians increasingly passive and on the defensive, the Chinese would push for independence from Moscow and a return to the old equilibrium.
The CPC’s counter-thrust started with a series of rhetorical jabs. In January 1957, Mao dispatched Premier Zhou Enlai to Moscow to give Soviet leaders a dressing-down for their U-turn on Stalin and their great-power arrogance, which had contributed to the recent upheavals in Poland and Hungary. Then, at a grand meeting of Communist parties held in Moscow that November, Mao did his utmost to paint the Russians as wimps who were terrified of nuclear war.
The next year brought China’s Great Leap Forward and the People’s Communes, colossal social experiments designed to propel China past the Soviet Union into a Communist utopia. In 1960, the Chinese began to provoke incidents along disputed tracts of the Soviet border with Manchuria and Xinjiang, and in 1964 Mao doubled down by threatening to “present the bill” for all of the “Outer Manchuria” territory that the czarist regime had seized in the 1850s.
In 1969, the two powers took a terrifying glimpse into the abyss after outbreaks of heavy fighting (apparently instigated by the Chinese side) on the disputed island of Damansky/Zhenbao in the Ussuri River in Manchuria, and around the Soviet border settlement of Zhalanaskol adjacent to Xinjiang. The Soviet defense minister, Andrei Grechko, called for a “surgical strike” against Chinese nuclear installations, and the Soviets discreetly checked with the United States to establish whether it would acquiesce in such a move. Mao, for his part, is said to have ordered tests of two hydrogen bombs in Xinjiang.
Once again, however, the Russian and Chinese combatants pulled back from the brink. The Soviet leadership, under Leonid Brezhnev, settled for a policy of containment not unlike the one deployed by the US against the Soviet Union in the early years of the Cold War. Mao was apparently induced to rescind the order for his suicidally dangerous H-bomb tests, and instead sought security reassurances through his new diplomatic opening to the Nixon White House.
BIDING TIME
During the years of stand-off that followed, Mao’s successor, Deng Xiaoping, presented the same stony face to the Kremlin. But, unlike Mao, he sought a “peaceful international environment” for China’s modernization. In 1979, he authorized fresh negotiations with the Kremlin over various “unsettled problems.” But these talks soon ran aground, with the New China News Agency reporting that, “It seems the Soviet Union still regards itself as the instructor of the Chinese people, with the right to teach them how to think, live, and which way to choose.”
Three years later, both sides seemed to want a rapprochement. However, Deng insisted that the Soviets should first remove “Three Great Obstacles”: their support for the Vietnamese occupation of Cambodia, their military presence in Afghanistan, and their military build-up along the Sino-Soviet frontier. Tensions thus remained until the late 1980s, when the new Soviet leadership under Mikhail Gorbachev effectively yielded to Deng’s conditions.
With Gorbachev’s visit to Beijing in May 1989, a new equilibrium seemed finally to have been achieved. State-to-state and party-to-party relations supposedly had been restored on the basis of strict equality. However, overcoming old historical grudges was easier said than done. While declaring that it was time to “close the past and open the future,” Deng himself remained preoccupied with the czarist annexations of Chinese territory and the Soviet removal of Outer Mongolia from China’s grasp. Ideological differences continued to fester.
Moreover, Gorbachev’s visit coincided with the massive student protests in Tiananmen Square, where many hailed him as an icon of liberal reform. With Deng having privately called the Soviet leader “an idiot” for not keeping a political lid on his attempts at economic reform, this obviously did not go over well. By November, Chinese Prime Minister Li Peng was warning ominously that while state-to-state relations had been normalized, party-to-party relations had not been.
We now know that an internal CPC document a year later would describe Gorbachev as a “traitor to the socialist cause,” and that Chinese representatives were in contact with hardline Soviet plotters both before and during the August 1991 attempt to overthrow the Soviet leader before his resignation that December.
FRIENDS WITH INTERESTS
With the disintegration of the Soviet Union, Russia and China had another opportunity to create a new balance. One necessary step, after a wary first year, was to jettison the old ideological clashes. Although the two countries’ quarrels had always been fundamentally nationalistic, their shared commitment to the secular religion of Marxism lent those quarrels the venom of a family dispute.
On his first visit to Beijing at the end of 1992, the new Russian president, Boris Yeltsin, made a point of declaring that the “ideological barrier” had been removed. Over the following years, the new relationship was developed slowly and cautiously, from one of “friendly countries” (1992) to a “constructive partnership” (1994), a “strategic partnership” (1996), and a “comprehensive strategic partnership” (2016).
By now, this new alignment has lasted three times longer than the doomed Sino-Soviet “honeymoon” 70 years earlier. This surely reflects the fact that its purpose is not revolutionary but rather deeply conservative. It is geared toward defending the principles first espoused in the 1648 Treaties of Westphalia, among them the sanctity of national borders and the right of national governments to do as they please within their own borders without external interference.
Russia and China are both eager to defy the growing Western view that rulers are answerable to a higher global authority if they abuse their populations. Seeking a “multipolar” world to replace the US-dominated “unipolar” one, the two partners have been trying to form their own bloc of Central Asian states and, increasingly, Global South powers such as their fellow BRICS members, Brazil, India, and South Africa.
In recent years, the new Sino-Russian coalition has seemed increasingly sure of its own durability. As China’s former deputy foreign minister wrote in Foreign Affairs in December 2015, the partnership is “complex, sturdy, and deeply rooted,” and “by no means a marriage of convenience.” Five years later, in a call to his “best friend and colleague” Vladimir Putin, Chinese President Xi Jinping affirmed that the two countries’ ties could not be broken by any third party and could “weather all kinds of international crises.”
When Putin embarked on his military adventures in Georgia (2008), Crimea (2014), and the rest of Ukraine (2022), China adopted a posture of studied ambivalence, even though these moves clearly flew in the face of its own oft-professed belief in the sanctity of borders. In practice, this has meant declining to endorse Putin’s actions while calling in vague terms for dialogue and trying to blame Russian aggression on NATO enlargement. And, of course, China has made massive purchases of Russian oil and gas, thus helping the Kremlin to escape the full impact of Western sanctions.
For now, at least, the Russian and Chinese leaders do seem to have steered their countries’ relationship out of the bitter hostility of the late Soviet period to reach “unparalleled heights.” But in the longer term, with China’s strength and global clout growing, the new equilibrium is likely to become unbalanced once again. China has surged far ahead of the Russians economically and technologically. Chinese GDP is now reckoned to be around ten times higher than Russia’s. The Chinese once supplied food and raw materials to the Soviet Union in exchange for machinery; now they export sophisticated electronic equipment to Russia in exchange for energy supplies, while showing a diminishing interest in Russian industrial goods.
As late as the 1990s, Chinese arms purchases were said to be playing a crucial role in sustaining the Russian military-industrial complex. By the 2000s, however, arms traffic between the two countries had entered a “strategic pause”; and by the time of Putin’s invasion of Ukraine, it was the Russians who were in the market for Chinese military hardware, ranging from surface-to-air missiles to armored and logistical vehicles and military reconnaissance drones.
ENTER THE DRAGON
For a while, the Russians were quite philosophical about this overall trend, with Yeltsin declaring himself content to “lean on China’s shoulder” in his dealings with the West. Still, many observers wondered how long Russia would remain happy serving as a “resource appendage” to a rising China.
Moreover, other sources of tension were lurking in their shared geopolitical sphere. Since 1991, formerly Soviet-ruled Central Asia has been coming under Chinese influence for the first time since the mid-eighteenth century. At first, Russia and China arrived at a fairly amicable division of labor, with the Russians maintaining their traditional political and military preeminence while the Chinese concentrated on economic expansion.
In 2016, however, China was discovered to have stationed some 3,000 troops in Tajikistan and was engaged in training the Tajik National Army. According to China, the aim was to monitor and block Islamic extremism from flowing into Xinjiang from Afghanistan via Tajik territory. But since the deployment was made without consulting or alerting Russian authorities, many in the Kremlin were reportedly left “rattled”.
One also must not forget the two countries’ older territorial disputes, which may be dormant but are not dead. In 2004, Russian and Chinese leaders celebrated a “final settlement” of the Far Eastern border, with Russia agreeing to give up the last three disputed islands in the Rivers Amur and Argun. But nothing was said about the vastly larger expanses of “Outer Manchuria,” and Chinese teachers reportedly still taught their history classes about the czarist depredations of the mid-nineteenth century.
Demographic questions are closely tied to these issues, considering that the six million inhabitants of the Russian Far East are now looking across the Manchurian border at 110 million Chinese. As early as the 1890s, czarist officials feared that the “flowing tide” of Chinese traders and laborers would soon engulf their Far Eastern possessions. After the fall of the Soviet Union, a similar panic convulsed the new Russia: Chinese crossing the frontier to supply food and clothing to destitute local people were seen as the spearhead of a sinister Beijing-directed “Move to the North.”
More recently, it has been suggested that the time may come when climate change turns large parts of northern China into a desert, prompting a mass migration of desperate people in search of food. Reports are already circulating in Russia of Chinese attempts to get access to the water resources of Lake Baikal.
Finally, there remains the difficult question of grassroots relations. Back in the 1950s, the growing acrimony between Soviet and Chinese political leaders was somewhat offset by friendlier interactions between Soviet technical experts and their Chinese pupils. But by the 1990s, this pattern had been inverted. While political leaders hug each other and tout their limitless friendship, Chinese professionals no longer think they have anything to learn from their Russian counterparts. The two countries’ dealings are thus “warm on the outside but cold within.”
LESSONS LEARNED
Looking back on the centuries of the Sino-Russian relationship, one can draw some tentative generalizations. First, for Sino-Russian relations to flourish, there needs to be at least a semblance of balance. The more one partner gets ahead of the other militarily and economically, the greater the strain on the relationship.
Second, it helps to have a perceived common enemy, such as Japan in the past and the US today. If the enemy ceases to act like an enemy to both parties, the bonds of the partnership will surely weaken. But even if Sino-Russian relations worsen, the two powers are unlikely to end up at each other’s throats (no matter how much some in the West might hope for that outcome). As a former Soviet diplomat in Beijing once observed, China and Russia have never fought a major war. Though they have come to the brink on several occasions, they have always sensed danger and stepped back.
Finally, Western arguments about China and Russia being culturally incompatible clearly reflect wishful thinking. Over the years, the two peoples have proven both willing and able to appreciate each other’s literature and art. And whatever their political differences at times, they have managed to form plenty of business partnerships and personal friendships. With no other choice but to share the Eurasian continent, that is what Russia and China have done, though rarely on equal terms.
...The tech downturn has also led to greater uncertainty overwhat startups are really worth. “People are still not exactly sure where to price things,” said Jenny Fielding, managing partner at The Fund. Founders are reluctant to agree to lower valuations in funding rounds — deals known as down rounds, which are dreaded by startups. “I’ve talked to a few founders who said, ‘Yeah, the round is stalled.’ I’m like, ‘Great, lower the price,’ ” Fielding said. “It is about supply and demand.”
Founders are loath to lower prices, and VCs are reluctant to invest if they don’t. “There’s a little bit of a disconnect. A lot of founders haven’t gotten the message that valuations are coming down,” Fielding said. For investors, she said, the stakes are higher than they were before. “No one wants to look like an idiot.” —Priya Anand
An MIT vet wants to revolutionize the steel industry. But finding funding for big swings in climate tech isn’t easy
April 21, 2023
“Hertha Metals is the future,” Laureen Meroueh, founder of the one-year-old sustainable steel producer startup told me. This may sound like a familiar, hyperbolic sentiment to those in the world of Silicon Valley, but Meroueh, who says she created a one-of-a-kind method for creating sustainable steel without carbon, is being literal.
Steel is crucial to modern industry—and its demand is only growing. Nearly two billion metric tons of steel are produced every year worldwide. Yet the process of making steel contributes to over 9% of global carbon dioxide emissions, making the way it’s currently produced untenable for a green future. “This metal is so important and fundamental, and there’s hardly any innovation in the sector,” Meroueh said. “I realized it was this trillion-dollar market, and yet no one was really getting deep into the weeds and figuring out how to address it.”
But to think big, you often have to think long-term. Meroueh has been working on creating sustainable metal production technology over the past ten years, she explained. Before founding Hertha Metals, she cofounded Alchemr, a company that produces green hydrogen through scrap aluminum and water. She started Texas-based Hertha Metals last year, yet the startup won’t be at its full-scale commercialization stage, a two-million-ton per-year plant, anytime soon—and she hopes that’s just the beginning. Meroueh explained that Hertha Metals’ sustainable steel will likely go to market for commercial use in the next decade, while smaller samples of the product will be available to a few select customers in the next few years. “Nothing worthwhile is built overnight,” she said. Yet she also thinks there should be more funding avenues for companies like hers, that may not fit into the timeline of VCs’ usual funds.
I spoke to her last week about how she built her company and why more climate tech investors should think long-term when investing in sustainable technology. Our conversation has been edited for length and clarity.
Term Sheet: How did you design the technology for Hertha Metals? Did you know you were going to found a company?
Meroueh: I am an engineer by training and an entrepreneur by heart. I’m a mechanical engineer, civil engineer, and material scientist. I did my master’s and Ph.D. at MIT. While I was there, I kept seeing these technology breakthroughs in MIT News every single day, and I would say to myself, ‘Wow, this technology can have such an impact on the world, where did it go?’ And it went nowhere. Why? Because to have an impact with technology, you need to scale it up and you need to commercialize it. That’s what really drove me into entrepreneurship.
I did a minor in business and entrepreneurship at MIT and really dove into that world. I then asked myself, ‘Where does the world need attention to decarbonize and hit our net zero 2050 goals?’ I studied all the hard-to-abate sectors which are cement, steel, heavy-duty transport, and really fell in love with the challenge that steel presents. I thought, ‘Now, what would a commercial green steel reactor look like?’ and really developed that idea. I founded Hertha Metals [last year] and we were off to the races.
The technique you use for manufacturing steel is the first of its kind, can you explain for those of us who aren’t familiar with engineering how it works?
Today, the [traditional] way steel is made is through a coal-based process, which can be done with either high-grade iron ore or low-grade ore, but low-grade ore is more commonly used because it is cheaper and more abundant. There’s one sustainable solution for green steel that already exists, which is close to commercial scale, called hydrogen direct. This technique uses reduced iron coupled with an electric furnace to replace carbon. The issue is that this solution is unfortunately only economical when using high-grade iron ore, and less than 15% of the world’s iron ore is of that high grade, so it’s a massive challenge.
That’s where Hertha Metals comes in. Our solution has the ability to use low-grade iron ore, so now we are no longer dependent on high-grade iron ore, which is a very limited and expensive resource. What comes out of our system is a pure molten steel. That steel is the same as the steel that we are used to that we make every day. It’s the same product, we just made it in a different way.
Why is it important to have new, fresh steel as opposed to recycled steel?
Scrap steel and steel recycling are fantastic, and we should continue to optimize that process. However, there are two challenges. One, there is not enough scrap steel in the world to meet demand, even if demand stays the same. But demand is increasing. Second, you cannot make all grades of steel from scrap, because scrap steel comes with these other alloying elements and impurities. So when you’re talking about the high-grade steel required in a certain part of an automobile, for example, you have to make that from iron ore. Roughly 60% of steel comes from scrap, and the other 40% has to come from iron ore.
Who are your customers and prospective customers?
Customers and partners consist of today’s traditional producers, whether they are “mini mills” or integrated steel producers. Other customers are also the end user. For example, the companies that make your cars or make package food cans or install your H-VAC systems. So, we really dip our hands into all of those profiles.
What does your timeline look like in terms of commercialization?
We don’t want to wait eight to 10 years to start engaging with the market and selling products to our customers, and this is something that all of these companies like mine need to think about, right? How do you start engaging with customers and selling products before you reach that final large scale?
We have no doubt in the future of green steel and we have customers that also recognize that we will be getting to a final two-million-ton per-year plant in the next decade. But due to this customer appetite, we are going to be offering products before then, within the next couple of years.
What has your experience been like raising capital as a startup with a longer time horizon?
Companies that have these long-term time horizons to reach final commercial scale, in my opinion, are the most rewarding types of companies to build. What they’re building is going to be massive, and the reward will be massive. So it’s that end vision that really keeps us going and makes it all worthwhile. And it’s that end vision that our investors also believe in.
I’ve leveraged different types of financing buckets. So, we’ve dipped into forms of grants, such as through the Breakthrough Energy Fellows Program, which is funded by the Gates Foundation. We’ve also dipped into equity financing from venture capitalists. There are also public grants from entities such as the Department of Energy. There are also other financing vehicles that do debt financing and also a kind of convertible note to pay for pilot plants. Those are really important for the type of company I’m building and we need more of those available for startups. (When asked about who her venture investors are, Meroueh explained that the company is not disclosing its venture investors at the moment.)
Do you think investors are paying an appropriate amount of attention to longer-term climate startups?
There should absolutely be more firms focused on investing in longer-term companies, such as nuclear companies, cement companies, steel, etc. There aren’t nearly enough of those people and organizations out there to support these kinds of companies that are beneficial for the world. That being said, there are more and more people seeing the vision.
I encourage venture capital firms to embrace risk. Think about the big picture—the future is coming, whether you’re on board or not. It’s going to be more expensive to ignore climate goals than to pursue them. There are these fantastic companies, such as mine, working towards disrupting [traditional] infrastructure. So I encourage venture capitalists and other types of funders to take that risk and capture the opportunities that are in front of you right now. It’s the time.
Thanks for reading Hyperdrive, Bloomberg’s newsletter on what’s reshaping the auto world. Read today’s featured story online here.
Where Robocars Are Going, They’ll Need Roads
On Tuesday, the central Silicon Valley city of San Jose, California, made a surprising choice: It granted initial authorization for a plan to develop a network of autonomous cars that will need their own dedicated roads.
The system, known as personal rapid transit, or PRT, will feature sleek four-person electric pods that ferry passengers between San Jose Mineta International Airport and the city’s central Diridon Station, which serves as a hub for regional transit and maybe, one day, California’s beleaguered high-speed rail project. If everything goes according to plan, cars reminiscent of the angular coupe that Tom Cruise escaped from in Steven Spielberg’s Minority Report could be zooming on narrow paths running alongside traffic-clogged roads as soon as 2028.
San Jose’s decision is a repudiation of both more conventional mass-transit options, such as buses and subways, and the orthodoxy in artificial intelligence circles that fleets of autonomous cars will soon be suitable for public roads. After the city began soliciting proposals for an airport connector in 2019, officials received 21 responses, including bids from companies developing electric buses, trams and automated minibuses. One came in from Elon Musk’s Boring Company to dig a tunnel between the airport and the train station for the self-driving cars that the Tesla boss has predicted — year after year — are just around the corner.
A prototype Glydcar autonomous vehicle at the company’s testing facility in Concord, California. Photographer: David Paul Morris/Bloomberg
Instead, the city selected a team led by developer Plenary Americas and Glydways, an untested seven-year-old startup based in South San Francisco. The companies pitched a network of automated cars that operate on 5.5-foot-wide paths instead of the typical 12-foot-wide lanes on streets. City officials were intrigued by the novelty, efficiency and low carbon footprint of the project — as well as the promised savings relative to building conventional mass transit. “What is potentially exciting is taking a project that in other cities has cost multiple billions and structuring it around new technology and a public-private partnership,” says San Jose Mayor Matt Mahan. “In a sprawling city like San Jose, local light rail is a tough proposition.”
The idea behind PRT as an alternative to cramming people into subway cars or trams has been kicking around for the last half-century. PRT involves small, automated pod-like cars or mini-trains, operating in tight formation, merging and de-merging to ferry people between stations on a network of roads separated from regular car and pedestrian traffic. In the 1960s, researchers at the congressionally funded nonprofit Aerospace studied the notion and published a book about it. In a 1972 speech to Congress, President Richard Nixon lobbied for federal PRT development, arguing, “If we can send three men to the moon 200,000 miles away, we should be able to move 200,000 people to work three miles away.”
But the attention never led to anything beyond a few demos at various transportation expos. Even today, there are only a few PRT networks in use, including one at Heathrow Airport in London and another in Dubai.
Mark Seeger, an engineer and entrepreneur, founded Glydways in 2016 to change that. The company believes that conventional public transit has become too costly to build and operate. (Exhibits A and B: the 2.25-mile Automated People Mover at LAX and the 1.5-mile Central Subway extension in San Francisco, which cost about $2 billion each to construct.)
Glydways predicts its three-mile airport connector in San Jose will cost less than quarter of that, and unlike every other mass-transit system in the world, it will turn a profit, in part because it’s closely attuned to demand. Instead of running half-empty trains or buses at 2 a.m., Glydways’s bidirectional pods — a ride will cost about $6 — operate only when passengers summon them with a smartphone app.
According to the current plans, rides will cost about $6. Photographer: David Paul Morris/Bloomberg
Only 4% of cities with the population and density to require mass-transit systems such as subways and trams have them, says Seeger, speaking outside the company’s test track at a decommissioned naval base in Concord, California, where its pods roam between three dummy stations, their doors butterflying out to allow test riders aboard. “If we’re able to double that to 8%, imagine what life will look like for another 50 to 80 million people. We’re going to move the needle on the human experience.”
Glydways’s primary backer, venture capitalist Vinod Khosla, is equally rapturous discussing the potential of PRT. A co-founder of Sun Microsystems and an investor in such companies as Stripe, DoorDash and OpenAI, Khosla wrote a paper on his 60th birthday in 2015 that included a paean to autonomous electric cars operating on private roads in an on-demand network. He met Seeger a few years later and transferred his own PRT patents to the startup, which has so far raised $40 million, with Khosla Ventures as the majority investor. (The firm also backed Hyperloop One, another novel transit idea that’s failed to live up to its initial hype.)
If they’re widely deployed, self-driving cars from companies such as Waymo and Cruise will only increase congestion on regular roads, Khosla argues. They “solve the individual problem but make the societal problem much worse,” he says. “They also have to handle every circumstance including chickens crossing the road. We greatly reduce the problem in complexity and with much cheaper vehicles.”
A lot still must happen for these PRT dreams to come true. The San Jose City Council has authorized what’s called a “predevelopment agreement” with Plenary Americas, Glydways and their partners. Next up are environmental and engineering reviews, as well as a validation report in which the companies and the city will jointly review the business case. These steps can bedevil any mass-transit project.
Glydways is also bidding for projects in San Bernardino and Contra Costa County in California, and exploring other projects around the world. At least some transportation analysts are optimistic that PRT’s moment may have finally come.
“Full self-driving isn’t ready for prime time, despite what Elon Musk wants you to believe,” says Nidhi Kalra, a senior information scientist at Rand Corporation. The Glydways proposal “may be a little bit of a litmus test for doing some things differently.” — By Brad Stone
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HONG KONG – Since around the start of this century, Chinese leaders visiting Moscow and Russian leaders visiting Beijing have spared few superlatives. Sino-Russian relations, they have proclaimed, have entered “their best period ever,” soared to “unparalleled heights,” and attained an unprecedentedly “high level of mutual trust.”
Such claims tell us something about the Sino-Russian relationship as it is today. But to understand how it evolved to this point, and how it might change in the future, we must examine the past, starting with the two powers’ first encounters in the seventeenth century.
After the Qing (Manchu) dynasty conquered China in 1644, it was confronted with what it saw as two distinct types of Russians: members of trade and diplomatic missions who arrived from the west; and Cossacks who had crossed Siberia and started marauding along the northeastern fringe of Qing territory, in the Amur River valley. The Qing called the first cohort Eluosi (an attempt at “Rus”) and the second one Luocha (“flesh-eating demons”).
Yet by 1670, the Qing had concluded that the Eluosi and Luocha were both associated with a formidable new power to China’s west and north. The Qing emperor, Kangxi, committed himself to driving out the Cossack marauders, first by besieging their outpost at Albazin in 1685-86. But he also took pains to put Sino-Russian relations on a stable and peaceful footing, acknowledging that, “If we advance and they retreat and we retreat and they advance there will be no end to the conflict and the border people will not be at peace.”
Kangxi therefore made overtures to the czar in Moscow, leading to the Treaty of Nerchinsk in 1689. The Russians agreed to withdraw from the Amur valley in exchange for access to the Beijing market for their merchants. Remarkably, this was the first-ever case of a Chinese government signing a document with a foreign power on approximately equal terms (a development partly explained by the fact that the Qing were not ethnic Han Chinese). The stage was set for a prolonged period of equilibrium.
NEW FRONTIERS
Under this new dispensation, the Qing secured Russian neutrality in their conflict with the insurgent Dzungar Mongols, and the Russians enjoyed the right to sell their furs and other products – initially through state-controlled caravans to Beijing, and later through private traders at Kyakhta, a new entrepôt established on the Russian-Mongolian frontier.
But tensions remained. By the 1750s, Russia and China had parceled out all the territory between them, and the great border regions of Xinjiang, Mongolia, and Manchuria became perennial sources of friction. Still, the Qing were in no hurry to be drawn into conflict with their northern neighbor, and the czar’s Siberian government likewise did not want to become embroiled in a war with China at a time when Russia was already fighting Prussia (in the Seven Years’ War).
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So, an equilibrium survived, but so did tensions. Once the Dzungars were wiped out, the Qing no longer needed the Russians’ tacit support on that front, and the border trade at Kyakhta was sometimes abruptly suspended for years at a time. Moreover, as the Manchu rulers became Sinicized, they came to see the Russians more as tribute bearers, reprising the haughty language of age-old Chinese protocol.
These trends, however, were eventually offset by the steady growth in Russian military and economic power. In the 1850s, the old balance was suddenly overturned. In the aftermath of the First Opium War (1839-42), the Russians had already begun to fret about their trade at Kyakhta being eclipsed by British competition; and following Russia’s defeat in the Crimean War, the Kremlin was hankering for compensation in the East. The Russian solution was to advance territorially. Beginning in 1854, Count Nikolay Muraviev, the Governor-General of Eastern Siberia, sent a series of flotillas down the Amur, planting Russian settlers at various points along the river’s north bank and harassing the local Manchu commanders.
Through a series of new treaties signed in 1858-60, the Russians were able to peel away from Qing rule the whole of “Outer Manchuria,” a region the size of France and Germany together. The old equilibrium had been replaced by overwhelming Russian military, political, and economic superiority over China, which would characterize the relationship for the next 130 years.
But, unlike the contemporaneous British and French assaults on China, this was a bloodless conquest. The Russians adopted an avuncular attitude and offered to mediate for the Qing with the Western European powers, even arranging a package of weapons and military training to bolster the dynasty against the Taiping rebellion in the south. Of course, the Qing weren’t entirely fooled by these blandishments. As one Manchu prince put it, “All the barbarians have the nature of brute beasts. The British are the most unruly but the Russians are the most cunning.”
From 1860 onwards, the Russians and other Western allies had reliable access to the Chinese interior, owing not least to the arrival of the telegraph, steamships, and railways. Although the main figure behind the construction of the Trans-Siberian Railway, Count Sergei Witte, predicted that “Russian power in the East would increase in proportion as the distance diminished,” Russia still maintained its generally benign posture.
After the Japanese routed the Qing in the war of 1894-95, Witte, then serving as Russia’s finance minister, concluded a secret treaty with the Chinese statesman Li Hongzhang to forge a defensive alliance against Japan. The main condition was that China would allow the Russians to build the Chinese Eastern Railway through Manchuria, giving Russia near-monopoly control of the local economy. The deal was initially hailed in Beijing, though not without reservations. As Li wrote in his diary, “If Russia did not want to control us in all our home affairs what a strong alliance would be possible between us.”
INTO IMPERIALISM
But this was the high noon of imperialism, and the great powers were vying with one another to appropriate Chinese territory, either by leasing it or through outright annexation. Most Russian policymakers were anxious not to be left out. Czar Nicholas II himself was reported to have “an unreasoning desire to seize Far Eastern lands,” and the watchword in Saint Petersburg was: “We must take!” (“Nado vzyat!”). In the winter of 1897-98, a Russian squadron occupied the Qing naval base of Lüshun (Port Arthur) and the trading port of Dalian without any attempt to consult the Manchu authorities.
The earlier avuncular approach had clearly been abandoned. In 1900, during the Qing-supported anti-foreign Boxer Insurrection, a czarist army invaded and overran Manchuria in the first significant bout of fighting between Russians and Chinese for 200 years. The victorious czarist commanders began to dream of establishing a “Yellow Russia.” Russian military commissars were attached to the Qing military governors in the Manchurian provinces on the model of the British political advisers in the Indian princely states. It was the closest the Russians ever got to annexing a considerable portion of China.
But such an outcome was never really in the cards. Anti-Russian resistance was widespread in Manchuria, and cooler heads reckoned that a permanent army of 130,000 would be needed to hold down the densely populated southern Manchurian province of Fengtian. Any lingering dreams of annexation were shattered by Russia’s defeat in the Russo-Japanese War of 1904-05.
Still, that setback did not end the czarist expansionist drive. On the contrary, the Russians teamed up with their vanquishers, concluding a series of secret treaties between 1907 and 1916 that designated the Chinese borderlands as czarist or Japanese spheres of influence. Russia’s interest had now largely shifted to Outer Mongolia, whose princes sought to secede from China following the fall of the Manchu dynasty in 1911.
Then, in 1915, the Russians extracted a treaty from the weak new government of the Chinese Republic in which the Outer Mongolians were granted autonomy under nominal Chinese sovereignty. As a result of these maneuvers, czarist Russia became a special focus of loathing for the young Chinese nationalists who had begun to find their voice in the 1911 revolution. Bilateral relations were more unbalanced than ever.
THE CZAR IS DEAD, LONG LIVE THE CZAR
The fall of the czarist regime in 1917, and the ensuing collapse of Russian imperial power in the Far East, allowed China to nudge the balance back in its favor. That December, the warlord regime in Beijing sent troops to disarm mutinous guards on the czarist-administered Chinese Eastern Railway – the first time in history that a contingent of European soldiers had been compelled to submit to a Chinese armed force.
The leading warlord, Zhang Zuolin, took command in Harbin, the railway capital, and turned it into what a dismayed Harper’s Magazine writer described as “the only white city in the world ruled by yellows.” Meanwhile, a lesser militarist named Xu Shuzheng marched on Urga, in Outer Mongolia, where he tore up the autonomy treaty of 1915 and reimposed direct Chinese control.
For their part, Soviet Russia’s new rulers launched a drive to present their country once again as a benevolent patron to China. Over the next ten years, Soviet advisers micromanaged the political and military activities of both the Chinese Nationalist and Chinese Communist parties alike. The goal was to ready them for a great “Northern Expedition” to overthrow the warlord regimes and rally the country against the world’s imperial powers. During this time, many young Chinese radicals were welcomed in Moscow for training at the Communist University of the Toilers of the East and, later, at Sun Yat-sen University.
But the old equilibrium still was not restored. The Soviet Russians were firmly in the driver’s seat, giving orders to frequently restive Chinese clients. The Nationalist Party’s mainstream ranks were deeply suspicious of both the Soviet Union and the Chinese Communists, while the Communist Party of China (CPC), wholly dependent on Soviet funding, resented being pitchforked by Moscow into an alliance with the “bourgeois” Nationalists. Both Nationalists and Communists were also conscious that the Soviet regime’s revolutionary glow concealed some of the old-style czarist strategic designs.
Hence, the Karakhan Declaration, which in 1919 promised the Chinese people sweeping concessions over the Chinese Eastern Railway and other matters, was mysteriously retracted the following year. Similarly, in 1921, the Red Army installed a pro-Soviet government in Outer Mongolia, essentially reinstating the 1915 autonomy agreement that had detached the region from Chinese rule. In 1927, at the height of the Northern Expedition, the Bolsheviks’ revolutionary experiment failed spectacularly. Tens of thousands of CPC activists were slaughtered by Nationalist troops in Shanghai and Guangzhou, and the Soviet advisers attached to the two Chinese parties were expelled from the country, imprisoned, or shot.
Throughout the next decade, Joseph Stalin pursued a cold-blooded geopolitical strategy, steadily favoring Chiang Kai-shek’s Nationalist regime in Nanjing as the only political force in China strong enough to provide the Soviets with support against the menace posed by Japan. When Chiang was kidnapped by his own officers in the celebrated Xi’an Incident of 1936, the Soviet chief intervened to rescue his Chinese counterpart from being handed over to the CPC for trial and execution.
Then, in 1937-38, when the Japanese launched their all-out invasion of China and no other foreign power was ready to give China help, Stalin supplied Chiang with a massive infusion of war credits, arms, and high-caliber military advisers – support that arguably prevented the Chinese resistance from crumbling during the first two years of the Second Sino-Japanese war. Yet none of this seems to have fostered any sympathy for the Soviets within the Nationalist leadership. On the contrary, after Germany invaded the Soviet Union in 1941, Chiang took advantage of the Kremlin’s distraction to restore Chinese control in Xinjiang, which had been within the Soviet sphere of influence for almost a decade.
REVOLUTION AND RESENTMENT
By 1949, Mao Zedong and the CPC had prevailed over the Nationalists in the Chinese Civil War, owing to massive (if belated) aid from the Soviets. The Russians therefore found themselves on the ultimate inside track with the new People’s Republic of China. With Stalin’s approval, the Chinese capital had been moved north from Nanjing to Beijing, putting it within easy reach of Soviet influence. While Soviet airmen protected China’s skies, Soviet naval experts arrived to help create a modern Chinese fleet, Soviet political advisers were posted to every department of the new Chinese central and regional governments, and Soviet scientists and engineers moved in to lay the foundations for “the most comprehensive technology transfer in modern industrial history.”
But such largesse implied that the old imbalance in the relationship remained. Just three months after coming to power, Mao made an unhappy visit to Moscow, where he was obliged to accept an eerily colonial-style treaty providing for Sino-Soviet joint ventures in mineral extraction, civil aviation, and shipbuilding in Xinjiang and Manchuria. The Kremlin dispensed financial aid, but as a loan, rather than a grant, and for the somewhat miserly figure of $300 million.
When Russia and China joined forces in the Korean War (the first joint military operation outside their borders), the Chinese had to provide the manpower and pay for the deliveries of Soviet aircraft and tanks, not all of which were of top quality. After Stalin died in 1953, CPC leaders seized the moment and started to claim that Mao, rather than Stalin’s successor, Nikita Khrushchev, was the rightful leader of the world Communist movement. Khrushchev for his part, poured in more aid and removed some of the worst irritants from the relationship; but this did not win him Mao’s respect.
AFTER THE SECRET SPEECH
By 1955, Khrushchev and his colleagues were so alarmed at the state of Sino-Soviet relations that they confided their misgivings to Western leaders such as the then British Minister of Defense Harold Macmillan and German Chancellor Konrad Adenauer. Meanwhile, at the grassroots, Western-trained Chinese scientists were sniffy about Soviet technology, with some daring young Chinese occasionally speaking openly about a future in which they would outstrip their Soviet “elder brothers.” But the most profound shift in the relationship came after Khrushchev’s February 1956 “secret speech” condemning Stalin, which revealed that the Soviet Union was no longer a monolith, and that the Kremlin could no longer claim doctrinal infallibility. That distinction was now claimed by Mao.
This was a signal change. Ever since the 1850s, it had been the Russians who had taken the initiative and made proposals, which the Chinese could either accept or try to modify or reject. But henceforth, with the Russians increasingly passive and on the defensive, the Chinese would push for independence from Moscow and a return to the old equilibrium.
The CPC’s counter-thrust started with a series of rhetorical jabs. In January 1957, Mao dispatched Premier Zhou Enlai to Moscow to give Soviet leaders a dressing-down for their U-turn on Stalin and their great-power arrogance, which had contributed to the recent upheavals in Poland and Hungary. Then, at a grand meeting of Communist parties held in Moscow that November, Mao did his utmost to paint the Russians as wimps who were terrified of nuclear war.
The next year brought China’s Great Leap Forward and the People’s Communes, colossal social experiments designed to propel China past the Soviet Union into a Communist utopia. In 1960, the Chinese began to provoke incidents along disputed tracts of the Soviet border with Manchuria and Xinjiang, and in 1964 Mao doubled down by threatening to “present the bill” for all of the “Outer Manchuria” territory that the czarist regime had seized in the 1850s.
In 1969, the two powers took a terrifying glimpse into the abyss after outbreaks of heavy fighting (apparently instigated by the Chinese side) on the disputed island of Damansky/Zhenbao in the Ussuri River in Manchuria, and around the Soviet border settlement of Zhalanaskol adjacent to Xinjiang. The Soviet defense minister, Andrei Grechko, called for a “surgical strike” against Chinese nuclear installations, and the Soviets discreetly checked with the United States to establish whether it would acquiesce in such a move. Mao, for his part, is said to have ordered tests of two hydrogen bombs in Xinjiang.
Once again, however, the Russian and Chinese combatants pulled back from the brink. The Soviet leadership, under Leonid Brezhnev, settled for a policy of containment not unlike the one deployed by the US against the Soviet Union in the early years of the Cold War. Mao was apparently induced to rescind the order for his suicidally dangerous H-bomb tests, and instead sought security reassurances through his new diplomatic opening to the Nixon White House.
BIDING TIME
During the years of stand-off that followed, Mao’s successor, Deng Xiaoping, presented the same stony face to the Kremlin. But, unlike Mao, he sought a “peaceful international environment” for China’s modernization. In 1979, he authorized fresh negotiations with the Kremlin over various “unsettled problems.” But these talks soon ran aground, with the New China News Agency reporting that, “It seems the Soviet Union still regards itself as the instructor of the Chinese people, with the right to teach them how to think, live, and which way to choose.”
Three years later, both sides seemed to want a rapprochement. However, Deng insisted that the Soviets should first remove “Three Great Obstacles”: their support for the Vietnamese occupation of Cambodia, their military presence in Afghanistan, and their military build-up along the Sino-Soviet frontier. Tensions thus remained until the late 1980s, when the new Soviet leadership under Mikhail Gorbachev effectively yielded to Deng’s conditions.
With Gorbachev’s visit to Beijing in May 1989, a new equilibrium seemed finally to have been achieved. State-to-state and party-to-party relations supposedly had been restored on the basis of strict equality. However, overcoming old historical grudges was easier said than done. While declaring that it was time to “close the past and open the future,” Deng himself remained preoccupied with the czarist annexations of Chinese territory and the Soviet removal of Outer Mongolia from China’s grasp. Ideological differences continued to fester.
Moreover, Gorbachev’s visit coincided with the massive student protests in Tiananmen Square, where many hailed him as an icon of liberal reform. With Deng having privately called the Soviet leader “an idiot” for not keeping a political lid on his attempts at economic reform, this obviously did not go over well. By November, Chinese Prime Minister Li Peng was warning ominously that while state-to-state relations had been normalized, party-to-party relations had not been.
We now know that an internal CPC document a year later would describe Gorbachev as a “traitor to the socialist cause,” and that Chinese representatives were in contact with hardline Soviet plotters both before and during the August 1991 attempt to overthrow the Soviet leader before his resignation that December.
FRIENDS WITH INTERESTS
With the disintegration of the Soviet Union, Russia and China had another opportunity to create a new balance. One necessary step, after a wary first year, was to jettison the old ideological clashes. Although the two countries’ quarrels had always been fundamentally nationalistic, their shared commitment to the secular religion of Marxism lent those quarrels the venom of a family dispute.
On his first visit to Beijing at the end of 1992, the new Russian president, Boris Yeltsin, made a point of declaring that the “ideological barrier” had been removed. Over the following years, the new relationship was developed slowly and cautiously, from one of “friendly countries” (1992) to a “constructive partnership” (1994), a “strategic partnership” (1996), and a “comprehensive strategic partnership” (2016).
By now, this new alignment has lasted three times longer than the doomed Sino-Soviet “honeymoon” 70 years earlier. This surely reflects the fact that its purpose is not revolutionary but rather deeply conservative. It is geared toward defending the principles first espoused in the 1648 Treaties of Westphalia, among them the sanctity of national borders and the right of national governments to do as they please within their own borders without external interference.
Russia and China are both eager to defy the growing Western view that rulers are answerable to a higher global authority if they abuse their populations. Seeking a “multipolar” world to replace the US-dominated “unipolar” one, the two partners have been trying to form their own bloc of Central Asian states and, increasingly, Global South powers such as their fellow BRICS members, Brazil, India, and South Africa.
In recent years, the new Sino-Russian coalition has seemed increasingly sure of its own durability. As China’s former deputy foreign minister wrote in Foreign Affairs in December 2015, the partnership is “complex, sturdy, and deeply rooted,” and “by no means a marriage of convenience.” Five years later, in a call to his “best friend and colleague” Vladimir Putin, Chinese President Xi Jinping affirmed that the two countries’ ties could not be broken by any third party and could “weather all kinds of international crises.”
When Putin embarked on his military adventures in Georgia (2008), Crimea (2014), and the rest of Ukraine (2022), China adopted a posture of studied ambivalence, even though these moves clearly flew in the face of its own oft-professed belief in the sanctity of borders. In practice, this has meant declining to endorse Putin’s actions while calling in vague terms for dialogue and trying to blame Russian aggression on NATO enlargement. And, of course, China has made massive purchases of Russian oil and gas, thus helping the Kremlin to escape the full impact of Western sanctions.
For now, at least, the Russian and Chinese leaders do seem to have steered their countries’ relationship out of the bitter hostility of the late Soviet period to reach “unparalleled heights.” But in the longer term, with China’s strength and global clout growing, the new equilibrium is likely to become unbalanced once again. China has surged far ahead of the Russians economically and technologically. Chinese GDP is now reckoned to be around ten times higher than Russia’s. The Chinese once supplied food and raw materials to the Soviet Union in exchange for machinery; now they export sophisticated electronic equipment to Russia in exchange for energy supplies, while showing a diminishing interest in Russian industrial goods.
As late as the 1990s, Chinese arms purchases were said to be playing a crucial role in sustaining the Russian military-industrial complex. By the 2000s, however, arms traffic between the two countries had entered a “strategic pause”; and by the time of Putin’s invasion of Ukraine, it was the Russians who were in the market for Chinese military hardware, ranging from surface-to-air missiles to armored and logistical vehicles and military reconnaissance drones.
ENTER THE DRAGON
For a while, the Russians were quite philosophical about this overall trend, with Yeltsin declaring himself content to “lean on China’s shoulder” in his dealings with the West. Still, many observers wondered how long Russia would remain happy serving as a “resource appendage” to a rising China.
Moreover, other sources of tension were lurking in their shared geopolitical sphere. Since 1991, formerly Soviet-ruled Central Asia has been coming under Chinese influence for the first time since the mid-eighteenth century. At first, Russia and China arrived at a fairly amicable division of labor, with the Russians maintaining their traditional political and military preeminence while the Chinese concentrated on economic expansion.
In 2016, however, China was discovered to have stationed some 3,000 troops in Tajikistan and was engaged in training the Tajik National Army. According to China, the aim was to monitor and block Islamic extremism from flowing into Xinjiang from Afghanistan via Tajik territory. But since the deployment was made without consulting or alerting Russian authorities, many in the Kremlin were reportedly left “rattled”.
One also must not forget the two countries’ older territorial disputes, which may be dormant but are not dead. In 2004, Russian and Chinese leaders celebrated a “final settlement” of the Far Eastern border, with Russia agreeing to give up the last three disputed islands in the Rivers Amur and Argun. But nothing was said about the vastly larger expanses of “Outer Manchuria,” and Chinese teachers reportedly still taught their history classes about the czarist depredations of the mid-nineteenth century.
Demographic questions are closely tied to these issues, considering that the six million inhabitants of the Russian Far East are now looking across the Manchurian border at 110 million Chinese. As early as the 1890s, czarist officials feared that the “flowing tide” of Chinese traders and laborers would soon engulf their Far Eastern possessions. After the fall of the Soviet Union, a similar panic convulsed the new Russia: Chinese crossing the frontier to supply food and clothing to destitute local people were seen as the spearhead of a sinister Beijing-directed “Move to the North.”
More recently, it has been suggested that the time may come when climate change turns large parts of northern China into a desert, prompting a mass migration of desperate people in search of food. Reports are already circulating in Russia of Chinese attempts to get access to the water resources of Lake Baikal.
Finally, there remains the difficult question of grassroots relations. Back in the 1950s, the growing acrimony between Soviet and Chinese political leaders was somewhat offset by friendlier interactions between Soviet technical experts and their Chinese pupils. But by the 1990s, this pattern had been inverted. While political leaders hug each other and tout their limitless friendship, Chinese professionals no longer think they have anything to learn from their Russian counterparts. The two countries’ dealings are thus “warm on the outside but cold within.”
LESSONS LEARNED
Looking back on the centuries of the Sino-Russian relationship, one can draw some tentative generalizations. First, for Sino-Russian relations to flourish, there needs to be at least a semblance of balance. The more one partner gets ahead of the other militarily and economically, the greater the strain on the relationship.
Second, it helps to have a perceived common enemy, such as Japan in the past and the US today. If the enemy ceases to act like an enemy to both parties, the bonds of the partnership will surely weaken. But even if Sino-Russian relations worsen, the two powers are unlikely to end up at each other’s throats (no matter how much some in the West might hope for that outcome). As a former Soviet diplomat in Beijing once observed, China and Russia have never fought a major war. Though they have come to the brink on several occasions, they have always sensed danger and stepped back.
Finally, Western arguments about China and Russia being culturally incompatible clearly reflect wishful thinking. Over the years, the two peoples have proven both willing and able to appreciate each other’s literature and art. And whatever their political differences at times, they have managed to form plenty of business partnerships and personal friendships. With no other choice but to share the Eurasian continent, that is what Russia and China have done, though rarely on equal terms.