The recent surprise announcement that Russia and China had reached agreement on a long term gas supply contract may portend a troubling development for the United States.  The parties had been negotiating for 20 years.  Then they suddenly reached a 30 year agreement at precisely the same time that Russia and the United States were involved in a confrontation over Ukraine.

The question is whether this is harbinger of a new alliance between Russia and China, in which these two will support each other in conflicts with the United States.  Cooperation between these two Eurasian powers has substantial historical precedent.  For example, it was Russia which supplied China with the technology to construct nuclear weapons—a deal which led to the starvation of millions of Chinese as Mao shipped grain, badly needed in China, to Russia.  More recently, they cooperated during the Vietnam war and often coalesced on Iraq and Iran policy.

With this deal, Russia diversifies its market, gaining a potentially more reliable purchaser than those in Western Europe.  Moscow had to be concerned with threats to find an alternative gas supplier in order to punish Russia for Crimea and Ukraine.  The deal will also spur economic growth in Russia’s far east; and it could reduce tensions over border issues for Russia in Siberia.

For China, the benefits are enormous.  Already a major energy importer, the Chinese desperately want to increase their use of natural gas to reduce horrendous air pollution.  The US is experiencing a boom in natural gas production and could have been a supplier.  However, for China, dealing with the US carries baggage, including pressure for modifications of policy on human rights and a softer approach toward other Asian countries.  Russia is less demanding.

On the other hand, China may be wary of an alliance that looks overtly hostile to the US.  Beijing faces economic constraints in its dealings with Washington.  In the past, its very favorable trade balance with the US has been a major factor in its ability to achieve economic growth—albeit less so now with its new emphasis on increasing domestic consumption.  Also, the United States is the safest place in the world for China to invest its substantial reserves.

Apart from energy, economic,  and environmental consequences, the deal may have sizeable strategic impact.  If China believes that it enjoys Russian backing, then  leaders in Beijing may risk a confrontation with Washington by pursuing an even more aggressive approach in disputes with Japan, the Philippines, and Vietnam.  Russia and China could block Security Council action in response to Chinese moves in the Pacific in connection with natural resource disputes.  Should this occur, the United States will face even more complexity as we strive to support our allies in Asia.