CRANK Call | April 2025

CRANK Call is a monthly review of developments involving cooperation, and at times contention, among China, Russia, Iran, and North Korea (the CRANKs).

April 2025 Highlights

China rejects Gazprom offer of additional gas via Kazakhstan

Amid increasing financial strain on Gazprom due to its decreased sales to Europe, China has reportedly rejected the Russian firm’s offer to route additional natural gas volumes via Kazakhstan. With the proposed Power of Siberia 2 pipeline project on hold for years—and China having recently ceased imports of U.S. liquefied natural gas (LNG) because of tariffs imposed by the United States—Gazprom has been casting about for ways to increase revenues.

Russian Deputy Prime Minister Alexander Novak first raised the Kazakh option in November 2024, shortly after a previous round of talks on Power of Siberia 2 failed. The most recent offer proposed transporting an additional 35 billion cubic meters (bcm) per year through Kazakhstan’s existing natural gas pipeline network to China. However, China’s ambassador to Russia, Zhang Hanhui, stated on April 15 that it was not technically feasible to move that much gas through the current network. The disagreement over feasibility may stem from differing assumptions about how to boost throughput, such as increasing pipeline pressure and adding pumping stations.

China has not shown eagerness to move forward with the 50 bcm/year Power of Siberia 2 project via Mongolia unless Russia substantially improves the pricing. Although Chinese and Russian officials have continued to hold regular meetings on the project, there is no indication of progress on the core issues. The Chinese side has reportedly insisted that Gazprom sell the gas at the same prices charged to Russian consumers—about one-quarter of Gazprom’s proposed export prices, even after wartime increases—a demand that would likely result in losses for Gazprom. China also has a strong preference for avoiding excessive dependence on a single supplier, especially given that its imports of Russian LNG are already up from prewar volumes.

Russia clarifies it has no obligations to defend Iran from U.S. or Israeli attack

As President Trump has threatened potential U.S. military action if the United States and Iran fail to reach an agreement on limiting Iran’s nuclear program, Russian officials have publicly clarified that their Strategic Partnership Agreement, signed in January, does not obligate them to aid Iran’s defense in the event of a military attack. Russian Deputy Foreign Minister Andrei Rudenko stated on April 8, in remarks carried by state media, that Russia had no such obligations, despite acknowledging the potentially dire consequences for the region. This position stands in contrast to the strategic partnership signed with North Korea, which does include mutual defense language. Kremlin spokesman Dmitry Peskov reiterated this point when he praised North Korea’s contribution to pushing Ukrainian forces back in Kursk Oblast.

While the arms production relationship between Iran and Russia is important, Russian interests in the Middle East are complex and require careful balancing. Moscow must weigh its relationship with Iran against other significant interests, particularly its strong ties with Israel and the Gulf Arab states, which are far more important economically to Russia than Iran, despite a recent uptick in trade.

Russian banks set up “China Track” for concealing trade payments

Several Russian banks have established a special netting payment system to help conceal transactions between Russian and Chinese entities, thereby avoiding secondary sanctions. The scheme, referred to as the “China Track,” involves foreign intermediaries in several friendly countries. Payments for imports and exports are netted out against each other in both directions, significantly reducing the volume of transactions flowing through regular banking channels. The system entirely bypasses the SWIFT network, which would otherwise make such transactions visible to Western governments. Russia has seen a surge in trade with China since its invasion of Ukraine in 2022. While Chinese buyers continue to purchase Russian energy commodities, fears of secondary sanctions have dampened Chinese exports of consumer goods, as Chinese firms remain wary of losing access to more lucrative U.S. and European markets.

Chinese nationals fighting for Russia are mercenaries, not soldiers, say U.S. officials

U.S. officials have confirmed that more than 100 Chinese citizens are fighting for Russia against Ukrainian forces. Western intelligence agencies believe, however, that these individuals are private mercenaries who traveled to Russia independently and are not affiliated with the Chinese government. Admiral Samuel Paparo, head of U.S. Indo-Pacific Command, confirmed that Ukraine has captured two Chinese nationals. The Chinese fighters reportedly have minimal training. This U.S. confirmation came on April 10, following Chinese officials’ public condemnation of what they called “irresponsible” claims by Ukrainian President Volodymyr Zelensky regarding alleged Chinese involvement in the war. While they have not seen combat, Chinese military officers have visited Russian forces in rear areas of the battlefield for meetings on lessons learned from the conflict.

Links

—Chinese President Xi Jinping visited Russia for Victory Day. (Reuters, Global Times)

—Thirteen countries, including some members of the BRICS, have joined Russia in developing the International Lunar Research Station. (Sputnik, South China Morning Post)

—The Russian lower house of the State Duma ratified a 20-year Strategic Cooperation Agreement with Iran, which was signed in January. (Reuters)

—The Kremlin stated that it supports both direct and indirect negotiations between the United States and Iran to resolve the nuclear issue. (Reuters)

—Russia hosted a meeting in Moscow from April 23–25 of the Joint Iranian-Russian Economic Committee, created under their strategic partnership agreement. (IRNA)

—Russia agreed to fund a new nuclear power plant in Iran. (Jerusalem Post)

—Economic advisors to President Vladimir Putin stated that the Iranian-Russian economic relationship is more important than ever, with bilateral trade reaching $4.8 billion in 2024. (IRNA, IRNA)

—Vladimir Putin thanked North Korea for its assistance in retaking Kursk Oblast. (TASS)

—In a corresponding statement, North Korea publicly declared for the first time that it is a party to the war in Ukraine. (The Guardian)

—Russia and North Korea have broken ground on their project to build a highway bridge across the Tumannaya River, connecting the two countries. (Reuters, TASS)

Recent Analysis

China-Russia Alignment – a Shared Vision, Without Fully Seeing Eye to Eye (Claus Soong, Mercator Institute for China Studies)

What Can the United States Do to Counter Growing Chinese and Russian Influence in Antarctica? (William “Bill” Muntean III, Center for Strategic and International Studies)

CRANK Perspectives

Why China should welcome a US-Iran thaw (Fan Hongda, Shanghai International University, published originally in Lianhe Zaobao, translation by ThinkChina.sg)

CRANK Call

Editor-in-Chief, Paul Saunders
Editor, Greg Priddy (gpriddy@cftni.org)