Russia and China signed a landmark deal on July 21, officially ending all outstanding territorial disputes between the two countries. Under the agreement, Russia will hand over Yinlong Island (known as Tarabarov in Russia) and half of the Heixiazi Island (Bolshoi Ussuriysky) at the confluence the of Amur and Ussuri rivers, clearing the way for closer strategic and economic relations with China.

The deal flowed from an initial agreement signed in 2004 by former Russian President Vladimir Putin that proposed a 50-50 division of the disputed islands. While Russia returns Yinlong and half of Heixiazi, totalling 174 square kilometres, China has given up its claim to the other half of Heixiazi.

In the 1960s and 1970s, clashes over the islands brought the former Soviet Union and China to the brink of war. Last month’s agreement is the final step in resolving the longstanding issues involving the 4,300-kilometre border between the two countries. The other disputes, mainly concerning China’s western border, were settled in the 1990s.

The political calculation behind the territorial settlement is clearly to strengthen the developing Russo-Chinese strategic partnership to counter the growing pressure from the US and its NATO allies on both countries on a number of fronts.

Chinese Foreign Minister Yang Jiechi described the agreement as a mutually beneficial “win-win”. Russian Foreign Minister Sergei Lavrov declared: “President [Dmitry] Medvedev asked me to tell you that the development and strengthening of the strategic partnership and cooperation with China is our foreign policy priority. The new edition of the Russian foreign policy concept, which was recently approved by President Medvedev, made a point of it.”

The new Russian doctrine, released earlier in July, declared a “negative stance” toward the eastward expansion of NATO, especially proposals to include the Ukraine and Georgia in the bloc as well as the US plans to deploy its anti-ballistic missile system in Poland and the Czech Republic. At the same time, the document declared that “Russia will expand the Russian-Chinese strategic partnership in all areas, based on shared basic fundamental approaches to key issues of world politics.” It also called for a “Russia-India-China triangular format”, obviously aimed at countering Washington’s efforts to establish a strategic alliance with New Delhi.

There were no such formulations in Russia’s previous foreign policy statement in 2000, when Putin was attempting to engage with the US. The US invasions of Afghanistan in 2001 and Iraq in 2003, as well as other aggressive American moves to install pro-Western regimes in former Soviet republics, led to closer relations between Moscow and Beijing.

With its rapid economic growth, China has come to be seen by the US as a long-term “strategic competitor”. In the past eight years, the Bush administration has been seeking to strengthen or cultivate alliances stretching from Japan, South Korea and Australia to India and much of South East Asia, in order to strategically encircle China. China and Russia both regard the establishment of US bases in Afghanistan and Central Asia as a threat to their vital strategic interests.

To counter US moves, China and Russia formed the Shanghai Cooperation Organisation (SCO) in 2001 with the Central Asian states of Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan. Iran, India, Pakistan and Mongolia have attended SCO meetings as observers. The SCO lobbied for the removal of US bases in Uzbekistan and Kyrgyzstan in 2005. In addition to cooperation over military technology, Russia and China have held joint military exercises in recent years, leading to speculation that the SCO may one day become a formal security pact.

Putin also proposed forming an “energy club” among the SCO states, with Russia seeking to increase its exports of oil and gas to the Asia-Pacific from 3 percent of its total at present to one-third by 2020. China has built mines and pipelines in Central Asia to exploit the region’s energy and mineral resources. India and Pakistan are looking to the SCO as a means of accessing Central Asian energy reserves. Amid US military threats, Iran has been seeking a security guarantee from China and Russia by joining the SCO as a full member. At present, Beijing and Moscow have turned down Tehran’s application for fear of openly antagonising Washington.

Russia and China have also come together to oppose the deployment of elements of the US missile defence shield in Eastern Europe and Japan. Neither country believes US claims that the shield is defensive or aimed primarily at blocking ballistic missiles from so-called rogue states such as Iran or North Korea. Rather the fear in Moscow and Beijing is that the anti-missile system undermines their ability to retaliate against an aggressive nuclear first strike by the US.

During his first foreign visit in May, Russian President Medvedev issued a joint statement with Chinese President Hu Jintao denouncing the US missile shield. The two countries have been closely cooperating on other global issues such as Iran’s nuclear program. Russia and China have been opposing any tough UN sanctions against Tehran. Not only do Russia and China have major economic stakes in Iran but the country is located at a strategic juncture between Central Asia, South Asia and the Middle East. A regime change in Tehran by the US would be a major blow to Russian and Chinese interests in these key regions.

Potential for disputes

Despite close relations at present, the potential of conflict between Russia and China is far from over. As the largest client of the Russian arms industry, Chinese military has been complaining about Moscow’s reluctance to sell it the most advanced technology, while allowing China’s regional rival, India, to purchase sophisticated weapons. Although Beijing has endorsed Moscow’s idea of a “Russia-China-India” triangle, there are suspicions in China that Russia is trying to balance China’s rising power by arming India. It is worth recalling that Beijing regarded Moscow’s “neutral” position during the Indo-Chinese border war in 1962 as a betrayal, which became one of the major factors behind the Sino-Soviet split.

With high energy prices, Moscow is seeking to use the country’s vast energy resources to enhance its economic and strategic position. China, on the other hand, is a major importer and is striving for energy self-reliance. China’s rapid penetration into Central Asia to secure oil and gas poses a potential challenge to Russian energy corporations, which are seeking to monopolise the region’s resources. Close ties with Moscow have not always guaranteed China priority in access to Russian energy over rivals such as Japan.

While territorial disputes have been formally settled, tensions continue to simmer. Nationalist voices have accused both governments of betrayal. In 2005, there were demonstrations of Cossack residents in neighbouring Khabarovsk against the handing over of the Russian-controlled islands to China. Sections of the media in Hong Kong and Taiwan have denounced Beijing for giving up China’s claim not just to Heixiazi, which was lost to the Soviet Union in 1929, but all of outer Manchuria, captured by Tsarist Russia in the nineteenth century.

The Russian radio station Ekho Moskvy on July 21 broadcast comments expressing fears that the agreement opened the door for China to claim more land. Veteran Far East journalist Sergey Doreko declared: “China’s claims go far beyond the Tarabarov Island or the Bolshoi Ussuriysky Island. China’s claims concern the entire treaty which defined the Russian Far East in the second half of the nineteenth century. Therefore, by giving in now we are giving China an opportunity to put forward ever-expanding claims.”

There is a long history of bitter territorial disputes between Russia and China. Amid China’s defeat by Anglo-French forces in the Second Opium War, the Tsarist regime forced the Manchu dynasty to give up 1.2 million square kilometres of land in Manchuria in 1858-60. The Chinese regime has repeatedly emphasised in its patriotic education that these events were “national humiliations”.

After the October Revolution in 1917, the new Bolshevik regime promised to abandon all colonial concessions in China. Leon Trotsky insisted, however, the territory should be returned to China only upon the victory of the working class or it would become a base for hostile imperialist powers to attack the USSR. Later, with the rise of the Stalinist bureaucracy and its betrayals of international socialism, Moscow’s foreign policy was increasingly based on national interest.

The Heixiazi/Yinlong islands were seized by the Soviet army in 1929 during a skirmish with the Manchurian warlord, Zhang Xueliang. Through US arbitration, Zhang restored the Chinese Eastern Railway (a former Russian concession) to Soviet control in exchange for the withdrawal of Soviet troops from Manchuria. However, the Soviet army held onto the islands due to their strategic value.

Stalin did not return the islands to China even after the coming to power of the Chinese Communist Party in 1949. Instead, Stalin regarded a unified China under Mao Zedong as a potential rival. Stalin used the Sino-Soviet alliance to reassert former colonial concessions lost during the Russo-Japanese War in 1905. At the same time, Mao’s resentment toward Stalin’s “Great Russian chauvinism” stemmed from the thoroughly nationalist ideology of the CCP. The conflicting national interests laid the basis for Sino-Soviet split in the early 1960s.

Negotiations between the two countries over the status of Heixiazi took place in 1964. Beijing demanded acknowledgement of the “unjust” character of all the seizures of territories by Russia since the nineteenth century. Moscow refused to discuss the issue. The second round of talks in 1969 ended abruptly with the eruption of armed clashes over Zhengbao (Damansky) Island in the Ussuri River. Both sides massed millions of troops along their borders as tensions escalated.

Mao denounced “Soviet social imperialism” and followed this with a pragmatic turn toward US imperialism in 1971 and the formation of a de facto anti-Soviet alliance with Washington. Normalisation of Chinese relations with the US laid the basis for Deng Xiaoping’s “market reform” in 1978. The third round of talks with Moscow over disputed territory took place only in 1986, after former Soviet leader Mikhail Gorbachev called for a rapprochement with China, as part of his embrace of capitalist market relations.

Behind the cynical Sino-Soviet polemics over who represented “Marxism-Leninism” were the national interests of two competing bureaucratic cliques, both of which were based on the reactionary Stalinist conception of “socialism in one country”. The Soviet Stalinists ultimately restored capitalism in the former USSR in 1991, while Mao’s heirs transformed China into the sweatshop of the world after brutally crushing the working class in Tiananmen Square in 1989.

What is now bringing the two countries closer together is the common concern in ruling circles at the threat posed by US militarism. But if the strategic partnership no longer serves their national interests, the two capitalist powers could quickly become hostile to each other and the “settled” territorial disputes could again flare up.