Despite a lot of buzz about the Kremlin’s turn to the East in Russian political and media circles, there are some important challenges that would appear to hinder the future development of Russian-Chinese relations.
A security agent holds a rope outside a room where China's President Xi Jinping meets Russian Foreign Minister Sergey Lavro at the Great Hall of the People in Beijing, April 28, 2016. Photo: AP
With Russian President Vladimir Putin going to visit China in late June, the leading Moscow-based think tanks are considering the future trajectory of Russia-China relations. To what extent has Russia’s “pivot to the East” actually taken place?
During the week of May 30, two events were dedicated to this question: the May 30-31 international conference “Russia and China: Taking on a New Quality of Bilateral Relations,” organized by the Russian International Affairs Council (RIAC), and the June 2 presentation of the new Valdai report “Toward The Great Ocean 4: Turn To The East.”
While some experts argue that the pivot to China is in full swing, there are a lot of skeptics who think otherwise. According to them, Russia has failed to complete the turn to the East. The main factor they cite is that economic cooperation between Moscow and Beijing is not advancing as quickly as originally projected, evidenced by the lack of Chinese investment in Russia and the significant decrease of the trade turnover between the two countries.
Lack of economic cooperation
In fact, Russia-China trade dropped from about $88 billion to almost $64 billion between 2014 and 2015, according to the Valdai report. The RIAC report gives different data, but underlines the common trend: Russian-Chinese trade turnover plummeted from $95 billion to $68 billion over the same period of time.
In comparison, China’s trade with Europe and the U.S. has been robustly increasing for the last three years. In 2015, it reached about $590 billion with the EU and almost $660 billion with the U.S., according to recent statistics. That’s why, economically, Russia’s pivot to the East has failed to take place, as RIAC General Director Andrei Kortunov told Russia Direct.
“While Russian-Chinese trade has decreased by 30 percent, Beijing’s trade with Washington has been steadily rising despite geopolitical differences," he said.
Moreover, some Chinese experts question Russia’s approaches of doing business. For example, Li Fenglin, ambassador extraordinary and plenipotentiary of China to Russia (1995-1998), is among the skeptics. During his speech at the RIAC conference, he said that Russia and China are lacking cooperation in the field of small and medium-sized business, which is overshadowed by the robust collaboration between the state gas monopolies of the two countries.
Likewise, Evgeny Nadorshin, chief economist at PF Capital-Moscow, an investment company based in New York, argues that the model of China-Russia cooperation is outdated, with Russia exporting raw materials like gas and oil and China providing manufactured goods.
Meanwhile, other participants of the RIAC conference believe that China’s level of investment is not increasing because of China’s tough manner of negotiating and its tenacity in promoting its national interests. The Chinese companies offer very tough conditions that Russians cannot accept, which accounts for the lack of Chinese investment in Russia, according to Kilzie Fares, the chairman of the board at CREON Energy, a Russian consultancy on the oil, gas and chemical industries.
“Without economic collaboration, there won’t be the social foundation for robust political relations,” warns Kortunov.
However, at the same time he admits that, politically and strategically, China and Russia see each other as close and friendly partners, as indicated by the number of their joint bilateral summits, readiness to cooperate in the field of security and frequent meetings between top Russian and Chinese diplomats and political leaders.
In fact, today Russia sees China as an alternative to the West and its pivot to the East is a result of the deterioration of its relations with the U.S. and Europe (which stemmed from the Ukrainian crisis). Such an approach hinders any reorientation to the East and reveals the fact that Russia hasn’t until recently viewed the Asian vector of its foreign policy as self-sufficient and full-fledged.
In this regard, the turn to the East hasn’t so far happened, there are just some shifts, according to Alexander Lukin, the director of the Center for East Asian Studies at Moscow State Institute of International Relations (MGIMO University), who also took the floor at the Valdai club event.
Building a long-term strategic framework for Russian-Chinese relations
To maintain their relations on a respectable level, Moscow and Beijing have to be mindful about both opportunities and obstacles for their cooperation and look at the situation realistically. As Fenglin said during the RIAC conference, Russia and China have to understand not only where they agree, but also where they disagree. What is most important for the two countries is to prevent their different approaches from turning into political contradictions, he added.
That’s why Moscow and Beijing should be more rigorous in coming up with a strategic long-term framework. However, the absence of “strategic depth” is still a problem for them, Sergey Karaganov, the dean of the Faculty of World Economy and International Affairs at Moscow’s Higher School of Economics, said during the presentation of the Valdai report. He suggests that the two countries have to participate actively in different integration projects.
One of them is the widely publicized linking of the Russia-initiated Eurasian Economic Union (EAEU) and the Silk Road Economic Belt (SREB), China’s attempt to integrate with Central Asia and expand economic cooperation in the region. Ostensibly, the integration of these two ambitious projects deal with economy and trade, however some Russian and Chinese tend to see it as a political tool, aiming at alleviating the Russian-Chinese rivalry in Central Asia and nipping the potential conflict between them in the bud.
According to Kortunov and many other experts who took the floor at the recent RIAC conference, such integration between the two countries could become a good response and an alternative to the U.S.-initiated Trans-Pacific Partnership (TPP). However, currently there is no clarity what will be the foundation of such a project. So far, pundits agree that the Shanghai Cooperation Organization (SCO), the EAEU and the Association for Southeast Asian Nations (ASEAN) might serve as a potential platform of potential integration between Russia and China.
“If the entire world prefers to integrate in different organizations and Russia’s EAEU is too small and too weak to compete with the TPP or TTIP [the Transatlantic Trade and Investment Partnership, another U.S. regional free trade agreement with Europe – Editor’s note], we will have to be involved in a bigger economic group,” Kortunov told.
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However, some foreign experts remain skeptical about the nature of Russia-China relations. Jeff Schubert, director at the International Center for Eurasian Research at the Presidential Russian Academy of National Economy and Public Administration (RANEPA), argues that there are some risks over the long run that the interests of Moscow and Beijing might collide.
“Over the longer term, tensions will rise between China and Russia, because both have legitimate strategic interests in Central Asia. It is not always easy to reconcile these interests,” he told Russia Direct.