How long can Russia withstand the crisis?

Source:Global Times Published: 2014-12-22 0:08:01

Unlike the image many people hold of Russia, it is neither a powerhouse that embraced the NSA whistle-blower Edward Snowden and annexed Crimea, nor a feeble country as evidenced by the plummeting ruble. The truth of Russia's situation is unclear to many people, both in the West and China.

The Russian economy is overly dependent on crude oil exports, and this ongoing crisis proves that it is not easy for Russia to be an extra-large Saudi Arabia. Some people suggest that Russia should learn from Canada and Australia, which have managed to transform huge reserves of natural resources into fortunes. However, due to Russia's large population of 140 million people, its modernity and strong currency cannot be solely supported by oil, gas and timber.

Western sanctions cannot be the straw that breaks the back of Russia. This old trick has proven much less effective even in smaller countries like Cuba and Iran. That is why Russia's annexation of Crimea only left the US and Europe impotent earlier this year. The ongoing crisis engulfing Russia in the wake of plummeting oil prices and the ruble depreciating is probably not what the US had planned. For Washington, what is happening in Russia is more or less unexpected.

Vladimir Putin's reign can hardly be overturned simply by currency inflation. Russia has experienced many ups and downs, and it has the tenacity to withstand risks and dangers.

However, many of Putin's visions, such as vaulting Russia to the top five in terms of economic strength by 2020 can hardly be realized now. Russia's morale and unity might fall victim to these failures, and the long-term stability of Russian politics is uncertain.

China's help will not get Russia completely off the hook. China is capable of offering sufficient capital, technologies and markets to Russia, but these efforts can only take limited effect if Russia's economy still relies heavily on oil exports and lacks structural diversity.

If Chinese investment in Russia shoots up under these circumstances, Moscow might suspect China has ulterior motives. Russia does not want to be a vassal of the Chinese economy, and this red line must be clearly understood by China.

It doesn't mean China should give Russia the cold shoulder and involve itself with the West. As a close neighbor, Russia plays an indispensable role as a strategic partner of China in the international community. China must hold a positive attitude to help Russia out of this crisis.

China must act as an active mediator between Russia and the US, or it will have to face unavoidable geopolitical risks if their conflict spirals out of control.

China hopes Russia can regain its economic strength as soon as possible. But anything we can do to help will be limited to what Russia asks for.

Posted in: Editorial

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