Unequal Partners: China and Russia in Eurasia

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Unequal Partners: China and Russia in Eurasia

China and Russia are stepping up their collaboration, even as they compete for regional primacy.

Unequal Partners: China and Russia in Eurasia
Credit: REUTERS/Sergei Karpukhin

Recent strategic shifts by China and Russia simultaneously – and paradoxically – mark closer ties, challenges to the U.S., an unequal partnership, and rivalry between them in Eurasia.

The shifts were confirmed last month. On May 8, Chinese President Xi Jinping was the guest of honor at Moscow’s Victory Parade; a few days later, on May 11, China and Russia began their first joint naval drill in the Mediterranean Sea. The ten-day exercise displayed their power and cooperation in the American-dominated Mediterranean, around which neither Russia nor China has any coastline. They were contesting America’s primacy in international waters, which connect Europe, Africa and the Middle East. Beijing signaled that China could flex its naval muscles in distant European waters, indeed in “NATO’s lake,” just as the U.S. does in the Asia-Pacific.

China and Russia have much in common. Both are authoritarian states who see the United States as a threat to their power. Both make territorial claims on neighboring countries, and maintain a diplomatic silence over each other’s ambitions over territories including Ukraine, Tibet, Japan, and the Philippines. Their penchant for saber-rattling and conquest leaves them a lonely but threatening and powerful twosome. Both are increasing military spending at a time when America and its NATO allies are cutting defense budgets. And China and Russia have much to offer each other. Both benefit from trade in national currencies. Both are members of the emerging markets group known as BRICS, the Chinese-sponsored Asian Infrastructure Investment Bank (AIIB), and the Shanghai Cooperation Organization (SCO). However, China’s giant economy gives it the advantage in each of these groups.

Russian Interests

Political and economic imperatives have pushed Russia closer to China. Low energy prices and Western economic sanctions imposed after Russia annexed Crimea in March 2014 have hurt its economy. Russia needs money to upgrade its infrastructure and to increase arms sales to keep its military machine functioning smoothly. Once reluctant to sell state-of-the-art weapons to China, Moscow, now unnerved by Russia’s economic decline, recently offered the S-400, its most advanced anti-aircraft missiles, to Beijing. China is the first country to be allowed to buy these missiles, and could use them to strike targets over Taiwan, Japan, and parts of India.

During Xi’s stay in Moscow, Russian President Vladimir Putin announced the creation of “a common economic space of Eurasia” which would harmonize China’s One Belt, One Road strategy with the Russian-fostered Eurasian Economic Union (EEU), which currently comprises Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan. Putin’s announcements flagged a break from his own five-year-old idea of a “Greater Europe,” stretching from Lisbon to Vladivostok, comprising the European Union and a Russian-led EEU. Moscow has pivoted eastwards.

The aim of member-states of the EEU, which came into effect on January 1, 2015, is to ensure the free movement of goods, services, capital and workforce on their common turf.

The EEU common market is of significance for the Silk Road Economic Belt, which calls for closer diplomatic coordination, standardized trade facilities, and free trade zones. A successful implementation of the strategy would establish China’s economic and diplomatic preponderance in Eurasia.

Putin and Xi signed 32 agreements in Moscow, including one promising billions of dollars in Chinese investment in a railway connecting Moscow to Kazan, both in the European part of Russia. If Moscow and Beijing agree to extend the railway, across Kazakhstan, to China, the line could become another Silk Road venture, which would link China with markets in the Middle East and Europe.

In May 2014 a $400 billion deal paved the way for the supply of Russian gas to China for the next 30 years. But Moscow and Beijing have yet to agree on how the gas will be delivered to China’s industrial centers and the price China will pay for the gas. With an eye on the best bargain, energy-hungry China would rather buy cheap Turkmen gas than Russian gas sold at high rates to European countries.

China is clearly the stronger partner in the latest Sino-Russian association. Russia’s weakness is evident from its inability to offer China much more than expensive energy, arms, and minerals. Beijing can derive satisfaction from Russia’s discomfiture as its lends Moscow huge amounts of cash and makes extensive investments in Russia. These highlight Russia’s economic travails and its weak negotiating position.

Mediterranean Cooperation

But the unequal Sino-Russian partnership derives its momentum from more than economics. Over the last few years the Mediterranean Sea has taken on strategic importance for Beijing. The Mediterranean has 70 per cent of the world’s energy resources, which could help sustain China’s progress. Moreover, China’s global ambitions and its wish to diversify its markets and sources of energy have steered its economic and strategic interests westwards, outside of Asia to the coasts of southern Europe, northern Africa, and the Persian Gulf.

The Mediterranean marks the western end of China’s New Silk Road, which is designed to link China to markets across Central Asia and into Europe and the Middle East. The Silk Road needs a western outlet to the sea. So Chinese companies are contributing to the modernization of Mediterranean ports, in places like Piraeus (Greece) Marseilles (France) and Barcelona (Spain). In Israel, China is building railway lines connecting Tel Aviv and Haifa on the Mediterranean coast to Eilat, on the northern end of the strategically important Red Sea, one of the sea lanes connecting Europe, the Persian Gulf and East Asia. In Africa, China is developing Port Sudan with a view to improving its shipping facilities in the Red Sea, East Africa, and the Horn of Africa areas.

Economic interests could give impetus to the expansion of China’s military presence in the Mediterranean. Cooperating with Russia, China could compete with Western navies for influence in the Mediterranean.

Strategic Theater in Central Asia

Yet Sino-Russian collaboration cannot hide the contest for economic influence in Central Asia. An economically beleaguered Russia cannot offer Central Asian countries the largesse and investment that China can bestow. Indeed, China has supplanted Russia as the main moneylender to Central Asia. Beijing has good reason to invest in Central Asian transport and supply networks: Better transport facilities could link China to European markets and give China increased access to the oil resources of Kazakhstan, the mineral deposits of Kyrgyzstan and the natural gas produced by Turkmenistan.

China is encouraged by the fact that not all Central Asian countries are enthused about the imagined benefits of joining the EEU; they fear that Russia could use the EEU to bully them and make them dependent on a collapsing ruble. The Central Asian states are active participants in the new great game between China and Russia. Barely a decade ago the five newly independent countries had to pump their huge supplies of oil and gas to Russia, their centuries-old imperial oppressor. Now the chances are that a new “energy find” will be sent eastwards to China. Two years ago Xi inaugurated the world’s second-largest gas field in Galkynysh in south-western Turkmenistan. As the world’s fourth-largest holder of gas reserves, Turkmenistan hailed the start of production from the field, as it seeks new export routes for the fuel to minimize its dependence on old pipelines to Russia.

Meanwhile, China’s investments in Kazakh energy annoy Russia, which wants to preserve the hold its companies have on Kazakh oil and gas.

China’s growing economic ties with Central Asia are further underlined by plans for a $16.3 billion fund to finance railways, roads, and pipelines across the region. China has been building the Central Asia–China gas pipeline network, which starts in Turkmenistan (along the border with Uzbekistan) and runs through Uzbekistan, Kyrgyzstan and Kazakhstan (both neighbors) before ending in China’s western Xinjiang province. Last year China started work on a gas pipeline from Tajikistan (also a neighbor) to Xinjiang in north-western China; another pipeline will deliver oil from Kazakhstan’s Caspian shore to the province.

As Russia turns its strategic axis eastwards it is struggling to maintain its influence in Central Asia – while China is moving westwards with the intent of becoming a great Eurasian power. The fact that they are finding common ground and their deepening economic and military ties only show up their competing interests in Russia’s Central Asian “near abroad.” Mutually useful and apparently friendly with each other, the “has-been superpower” and the “wannabe great power” are engaged in a contest for primacy in Eurasia.

Anita Inder Singh is a Visiting Professor at the Centre for Peace and Conflict Resolution in New Delhi.