Prof. (Dr.) Nishakant Ojha.
When Russia's economy contracted by 2.1 percent in 2022 following Western sanctions over Ukraine, Moscow had little choice but to look east to China. Already the world's second largest economy with $17.9T GDP, China offered a lifeline. Iran, faced with it's worst economic crisis in decades with inflation over 40 percent, needed partners willing to defy America's pressure. What emerged was unlikely to be ideological unity but practicality-three nations that have been excluded or threatened by the West's dominance finding strength in cooperation.
The new partnership formed faster than most geopolitical analysts expected. In 2023, China-Russia bilateral trade reached $240 Billion, a 26.3 percent increase from 2022. Russian oil exports to China reached 1.6 million barrels daily, making China Russia's largest energy customer. Iran in late 2023 exported an estimated 1.5 million barrels of oil daily to China, bypassing American sanctions.
Economic Interdependence as Strategic Glue
This association was made out of necessity and not for any ideological purposes. The "Power of Siberia" pipeline represents such cooperation, which supplies natural gas from Russia to China. The subsidies (38 billion cubic meters per year) tie these countries together, creating the dependence that ensures there is no betrayal between them.
The figures speak for themselves. Russia's energy sector contributes to roughly 40 percent of federal budget revenues. China, which imports 73 percent of its oil and 45 percent of its natural gas needs reliable suppliers that aren't under Western influence. Iran possesses the world's fourth-largest proven oil reserves (158.4 billion barrels) but can only sell to willing buyers outside the Western financial system.
China's technology and capital flow in exchange. In 2023, Chinese investment in Russia and Iran combined to exceed $8B, filling a void when Western banks closed their doors. Chinese semiconductors-critical for everything from civilian infrastructure to military technology-replace Western technology cut off by sanctions. Russian military expertise, particularly in artillery and electronic warfare systems, is used to train Iranian forces. The exchange is practically beneficial to both sides.
The Military Component Puts New Numbers into the Equation
There is more to the military component than mere symbolism in joint military training exercises. Russia has some 140 submarines, which include 12 nuclear powered ballistic missile submarines. China operates 48 submarines of which six are nuclear powered. Iran has some 30 submarines which are predominantly diesel electric but with growing capability for cruise missile technology.
Take the Gulf of Hormuz for example. The 21-nautical mile passage sees the movement of 21% of global petroleum traffic daily (23 million barrels a day).
Russia provides advanced anti-ship missiles that can reach shipping lanes. China has submarines and maritime surveillance systems that monitor traffic. This coordination gives leverage over petroleum trade that Western naval power can't easily ignore.
The 2021 joint Russian-Chinese naval exercise in the Sea of Japan involved 15 warships, and demonstrated capability for coordinated operations. The 2023 drill of the Arabian Sea included for the first time the participation of Iran, marking operational cooperation.
Cyber power is another capability. Chinese cyber activities have been successful in penetrating the US government network several times. Russian hackers have managed to gain unauthorized entry into critical infrastructure such as energy grid and financial systems.
Iranian operatives conducted 777 documented cyberattacks on American infrastructure between 2016-2022. While each operate independently, there is implicit coordination deniable pressure on Western societies.
Construction of Parallel Institutions
Most importantly, the alliance creates alternatives to Western-led organizations. The Asian Infrastructure Investment Bank, created in 2015, China being its largest shareholder, has funded $207 billion worth of projects in Asia without the oversight of the World Bank and the IMF. Similarly, the Shanghai Cooperation Organization, comprising 23 percent of the world's GDP, operates without any Western participation, coordinating policy in Eurasia.
Regarding financial systems, the alliance lowers reliance on SWIFT. The first transaction between Russia and China in yuan took place in 2010; by 2023, yuan transactions became 90 percent of total Russia-China trade. Iran is creating parallel payment systems to avoid the dominance of the American banking system. These aren't revolutionary measures but do create real alternatives to Western domination.
Structural Weaknesses
Nonetheless, there remain deeply ingrained weaknesses below this surface level. China boasts an economy worth $17.9 trillion, twice as much as that of Russia's and three times as much as Iran's. This translates into the existence of a balance of power in favor of China. The military mightier yet economically weaker Russia finds itself playing second fiddle, a condition that has increasingly become a source of frustration for the Russian elite class. Old tensions persist. The 4,000-km China-Russia border has historically remained militarized. Russia is wary of Chinese territorial ambitions in Central Asia; China considers the Russian presence a hindrance. In 1969, a border incident cost many lives. The rivalry is only sleeping, not dead.
Governance philosophies differ. Russia maintains Orthodox Christian nationalism. China pursues communist-party technocracy. Iran practices Shia theocratic revolution. Finding unified vision beyond "opposition to the West" is increasingly difficult as cooperation grows.
Economic vulnerabilities constrain the sustainability. Russia's economy, dependent on energy exports subject to price volatility, lacks diversification. The 2023 oil price averaging $82 per barrel (down from $100 in 2022) has already strained budgets. Iran requires perpetual external support; its economy contracted 4.8 percent in 2023 alone. China faces demographic decline-working-age population fell 6.83 million in 2022-threatening its long-term growth trajectory.
The Realistic Assessment
This alliance poses a threat to the dominance of the West geographically, but certainly not the unmovable force that certain Western observers see it to be. Indeed, this alliance is a reality, economically dependent and possibly military significant. Yet its longevity is kept only due to outside pressure. Without this pressure, internal rivalries could arise once again.The existing power disparity, despite current management, might constitute an element of future instability. Economic weakness means that this partnership persists under continued pressure from the West or improvement in its economy.
Thus, it requires adaptation from Western countries. The assumptions of the superiority of military potential in the zones of contestation, the expectation of the success of economic sanctions in forcing compliance, and the belief in the indestructible nature of Western technological dominance - all these assumptions are becoming obsolete.
The world did not end, but it became truly multipolar. Western countries still have many resources: technology, democracy, dynamism, allies. But the era of unchallenged dominance has become history. Adjusting to this new reality entails developing resilience, fostering innovations, strengthening the democratic institutions, and acknowledging the limitations of Western power.
About the Author:
Prof. (Dr.) Nishakant Ojha is a leading strategic affairs and national-security thinker who has written extensively on the future of warfare, aerospace and cyber security, emerging technologies and global security.
Disclaimer - This advertorial represents the views and analysis of the author and is intended for academic, analytical and informational purposes. The views expressed herein are those of the author and do not necessarily reflect the views of the publication, its editors or its management."
