Posts Tagged ‘China-Russia’

More catch-up, this time a longer magazine sized piece for the excellent current affairs journal Current History. This explores the China-Russia relationship with a particular focus on Central Asia sitting in between them. Clearly more on this topic to come – including a piece soon focused a bit more on the econ and geopolitical equation more broadly. I have pasted the first paragraph below to give you a flavour, but the whole thing is available as PDF below as well.

China and Russia’s Soft Competition in Central Asia

China and Russia have a long history of conflict and competition in Central Asia. Sitting between the two great superpowers, the landlocked Central Asian nations appear to have little choice or control over their destiny, and are often considered to be pawns in a perpetual great game. Yet this narrow view misses the broader picture of the Sino-Russian relationship. It is undeniable that the region has been slipping out of Russia’s immediate economic sphere of influence for some time, but China has been making inroads with Russia’s full acquiescence. For Moscow and Beijing, Central Asia is increasingly a region of soft competition where they are very aware of and attentive to each other’s interests, rather than a source of conflict and tension.

Overriding any differences concerning the steppe are the larger realities of the Sino-Russian strategic relationship on the international stage, where the two permanent members of the United Nations Security Council continue to support each other’s refusal to bow to a Western-dominated global order. Russia may appear to be the loser in Central Asia, but the two powers have established a modus vivendi that suits the interests of both. The real geopolitical losers are likely to be the Central Asians, slowly slipping from Russia’s orbit into China’s.

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Finally posting my second piece from last week around the SCO Summit, this time for the South China Morning Post. Focuses more on the China-Russia side of things. Beyond this, spoke to the Independent about the elusive Abdel-Majed Abdel Bary, the Daily Mail about ISIS and women, and Reuters about Chinese intelligence dealing with the counter-terrorism questions outside the country.

Russia holds the door to Central Asia open for China

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Raffaello Pantucci says to a region in need, the Chinese offer of funds and expertise is too attractive to resist, as agreements at the Moscow-hosted BRICS and SCO meetings show

PUBLISHED : Wednesday, 15 July, 2015, 12:05pm

Late last week, the leaders of almost half the world’s population gathered in Ufa, Russia. The collision of the BRICS and Shanghai Cooperation Organisation (SCO) summits was orchestrated by Russia to guarantee exposure and attention, and highlight to the world how many friends Russia has. Dig below the shallow surface, however, and the links between the countries of the two international organisations are barely skin deep, with everyone attending for their own reasons.

For China, the two summits provide another opportunity for global engagement, as well as helping Beijing advance two international financial institutions. A timid player in many ways on the international stage, Beijing has found that its capital is one lever that it can use without raising too many hackles, and the meetings in Ufa gave it another opportunity to flex these financial muscles.

Fixating on the slow path to SCO membership for India and Pakistan, the world largely missed the key takeaway from the summits: China’s growing financial domination of Russia and its immediate backyard.

In the wake of the first Ufa summit, greater clarity was cast around the BRICS development bank, a new financial entity to emerge from the grouping of Brazil, Russia, India, China and South Africa, with an initial market capitalisation of US$50 billion. The leaders also created a US$100 billion currency exchange reserve, of which US$41 billion was offered by China, while Russia, Brazil and India each gave US$18 billion, and South Africa contributed US$5 billion.

A day or so later, the SCO members agreed once again to try to advance the concept of an SCO development bank or at least a joint fund.

China has been pushing the idea of an SCO financial institution for some time.

Seeing economic engagement as its major advantage in Central Asia, many years passed before Chinese interlocutors first presented the idea of an SCO development bank.

However, the idea has never quite taken off, with Russia in particular concerned that the vehicle would simply leave the door to Central Asia wide open for Beijing.

We live now, however, in different times, and, rather than be concerned, Russia has opened the door to Beijing. Indeed, Moscow appears to be helping to hold the doors open as China uses its lever in Russia’s backyard. Already endowed with the Silk Road Fund (focused on China’s western partners in Central and South Asia) and the Asian Infrastructure Investment Bank, China’s external constellation of economic firepower has been further enhanced by Ufa.

Russia itself has further opened up its own economy to Chinese investment, offering Chinese state-owned firms majority stakes in its oil and gas fields.

Eager for foreign investment and unable to look west anymore, Moscow is reaching east and apparently willing to throw open not only its backyard, but also Central Asia’s.

The result is a further strengthening of China’s hand in Central Asia, as the country pours finance and infrastructure into a part of the world that is crying out for it.

While in the short term there is little to worry about this investment (these are infrastructure-poor countries that will benefit from China’s appealing combination of low-cost construction firms and cheap loans), over the longer term, Chinese leverage will certainly offer Beijing a grip over the region. The lesson from Ufa is that the region’s one great resistor, Russia, has largely lifted its objections and is now welcoming all the Chinese investment it can attract.

Raffaello Pantucci is director of international security studies at the Royal United Services Institute

This article appeared in the South China Morning Post print edition as Russia holding the door to Central Asia open for China

A new op-ed in the South China Morning Post with Lifan looking at China and Russia’s relationship and China’s foreign policy more grandly as part of the discussion around the Conference on Interaction and Confidence-Building Measures in Asia (CICA) currently going on in Shanghai. I also spoke to Agence France Presse about the meeting.

China relishes its new role fostering regional cooperation

Li Lifan and Raffaello Pantucci study China’s rising profile as a big power

PUBLISHED : Monday, 19 May, 2014, 9:12pm

UPDATED : Tuesday, 20 May, 2014, 4:02am

The Conference on Interaction and Confidence Building Measures in Asia, which begins today in Shanghai, largely passes unnoticed most years. But this year it is being touted as a major global event, largely due to Russia’s current awkward relationships elsewhere and China’s growing global profile.

It also offers a window into President Xi Jinping’s vision for China’s foreign policy.

First proposed by President Nursultan Nazarbayev of Kazakhstan in 1992, it took 10 years for the conference to hold its first summit in Almaty. Now with 24 members, nine observer states and four observer organisations, the conference offers an interesting forum where countries with difficult relations can interact.

This year, there are high expectations of what it might mean for regional engagement in Afghanistan in the post-drawdown world.

The group’s first summit in 2002 was held in the shadow of the September 11 attacks and concluded with a declaration on eliminating terrorism. Non-traditional security threats have always been high on the agenda; in the current environment, they remain a priority.

But in many ways, this year’s event will be overshadowed by the interaction between Russia and the various members.

Both China and Russia have already hinted that this is finally the year when they will resolve their long-standing gas pricing dispute, and both have indicated they will have substantial bilateral interactions, including military exercises near the time of the conference.

The benefits for Russia are obvious. At a time when its relations with Europe and the US are soured over Ukraine, this is an opportunity to interact with a friendly community of nations and show how Russia has other geopolitical options.

One has to take a step back, however, to appreciate the benefits for China. For China, the conference is an opportunity to showcase itself as a major power at the heart of a number of different international forums (China is host this year), as well as a moment where Xi can offer a glimpse into his vision for China’s foreign policy.

This vision needs to be understood in the context of Chinese strategic considerations. One is the four trade corridors: the Silk Road economic belt (through Central Asia); the China-Pakistan Economic Corridor; the Bangladesh-China-India-Myanmar Forum for Regional Cooperation; and the maritime Silk Road. These are really four strings of the same instrument – one that flows from Xi’s comments about the importance of China’s border relationships late last year.

Foreign policy under Xi is one in which China will play an increasingly proactive role, founded on practical economic relationships, but also one that is heavily focused on multilateral cooperation. Xi wants his foreign policy to be seen as all about regional cooperation and integration.

For China, the meeting is in many ways an expression of this. Bringing together contentious partners and old friends alike, it highlights China as a major power that can convene important conferences with all sorts of actors around the table. Its concepts of “peaceful development” and “new great power relations” are both captured within this bigger vision.

The reality, of course, is that this is the natural state of international relations between states, where contentious relations sit alongside necessary cooperation. But it is significant that Xi has seen it as such a critical concept.

Li Lifan is secretary general of the Centre for SCO Studies at the Shanghai Academy of Social Sciences. Raffaello Pantucci is senior research fellow at the Royal United Services Institute.

An earlier version of this piece appeared in the South China Morning Post and was re-posted on China in Central Asia, however, this expanded version was done for my institutional home RUSI. An interesting topic a bit adjacent to my core interests, an aspect I may return to is the impact of events in Ukraine on Central Asia and China’s relations with the region.

Tensions Over Ukraine: Where Does China Sit?

RUSI Analysis, 11 Apr 2014

By Raffaello Pantucci, Senior Research Fellow

On the growing crisis over Ukraine, China has remained quietly supportive of Russia. Yet, Russia overestimates and exaggerates China’s level of support that is closer to acquiescence rather than actual support for the turmoil that Russia is engendering.

Putin and Xi Jinping

China has largely sat on the sidelines of the current dispute over Ukraine. Hawkish Chinese commentators have stated that this approach of standing aside and watching is part of a bigger Chinese strategy to encourage a multipolar world, while the official position has largely been quite bland. In contrast, Russian commentators and officials have used every opportunity to highlight the fact that Beijing was on the same page as Moscow.

Recently, in an interview on Russian state television, Foreign Minister Sergey Lavrov characterised China as ‘our very close partners’ of whom he has no doubts. For Russia, asPresident Putin put it when he formally announced Crimea’s annexing in the Duma, ‘we are grateful to the people of China, whose leaders have always, when considering the situation in Ukraine and Crimea, taken into account the full historical and political context.’

Chinese Conern

On the face of it, these interpretations of China’s support are accurate, but the reality is far more complex, with China uneasy about Russia’s actions though it may share Moscow’s concerns.

For all the bombast in its Pacific seawaters, it could be argued that China remains largely a status quo power that sees advantage in letting the current global order proceed along what it perceives as a natural trajectory in which it is ascendant. For policymakers in Beijing, this is a path that ends with China atop a constellation of new and old power centres from the UN Security Council to the G20 and BRICS.

China can see that its economic might and physical size places it in a position that current global trends favour. The question is how to manage this rise in a smooth manner so as to ensure the Communist Party can maintain supremacy in this complicated world.

Russia’s actions in Ukraine do little to smooth this path. In fact, they cause chaos and instability in a number of key Chinese markets, from Russia to Europe, as well as stirring up concerns in adjacent Central Asia.The former Soviet states of Central Asia worry about Russia’s long-term intent and the implications to them of sanctions. They have little interest in becoming involved in Russia’s spats with the West and are concerned that Moscow may try to exert its considerable leverage over them in some manner contrary to their interests.

China is the ascendant power in the region, but the Central Asians have little interest in completely re-aligning themselves towards Beijing and, in any case, China lacks the weight (and interest) to become the main regional security guarantor. In Europe, markets are in turmoil as leaders fret about how to punish Russia in a way that is not damaging to themselves while also worrying about the longer term implications of growing tensions between themselves and Russia.

All of this will doubtless have a knock-on effect on Chinese markets, be this through shrunken global trade or weakened regional trade: these factors might damage China’s already slowing economic growth. The Chinese leadership has little interest in such tensions that do nothing but disrupt markets.

Moreover, China does not look favourably on people recognising separatist states and has traditionally maintained, at least rhetorically, to its sacred non-interference principle (though this is in fact an increasingly obsolete principle). China fears the dangerous precedent that has been set in recognising a separatist province. Previously, when Russia carried out similar behaviour in Georgia in 2008, China was clear in using the Shanghai Co-operation Organisation (SCO) to block a call of support for Russia’s actions. Both China and the Central Asian members of the SCO have their own set of concerns about separatist or minority communities – the last thing that they are interested in is supporting a new international trend of recognising breakaway states.

Explaining Chinese Acquiescence

Yet behind all these concerns, there is also a sense of agreement with Russia’s actions, something that helps explain China’s quiescent pose on Ukraine.These are captured in an attentive reading of Lavrov’s comments. As he put it: ‘Our contacts with Chinese partners have shown that they not only understand the lawful interests of Russia in this entire affair but that we have the identical understanding of the initial causes of the current deep crisis in Ukraine’

This is a more nuanced comment than it might sound, explaining in part how China recognises the validity of Russian concerns, but does not express its own views of Russian actions. China fundamentally agrees that the chaotic governance that led to the collapse of the Yanukovich regime and subsequent trouble is a bad thing. China, like Russia, sees great potential danger in public protests that culminate in the overthrow of a government.

Both countries were appalled at the chaos stirred up by the ‘colour revolutions’ in Ukraine (2004), Georgia (2003) and Kyrgyzstan (2005) and have looked on unhappily as the West has watched the Arab world implode in response to public protests during the Arab spring:as emphasised in particular in Syria. The Arab world has yet to really recover, while arguably, the ‘colour revolutions’ in former Soviet countries are still resonating today with difficult governments in all three.

In this analysis, Ukraine today is merely the latest iteration of this trend, and it is one that both China and Russia fear might lead to repercussions or even emulation at home. This fear, added to China’s unwillingness to turn completely against Moscow seeing it as a long-term geostrategic ally on important international issues like Iran, Syria or others, will ultimately bind the two countries together and will see China continuing to play a largely observer role in events in Ukraine.

For outside observers, the lesson is an important one. China is a passive ally of Russia over Ukraine, something borne out of an ideological and geopolitical concerns rather than an appreciation of the Russian heavy-handed response.

How Best to Appeal to China?

This difference is key to note if the West is going to find a way to get China to grow into a bigger role internationally. China is not the same sort of difficult global power like Russia, it is rather a power that sees trends going in its direction and is happy to continue to nurture them along.

This means that China’s interests can be appealed to if care is taken to understand China’s motivations. In the longer-term China wants a stable Ukraine, Europe and EU-Russia relationship. All of these will provide it with the sort of economic partners that it can profit and grow from. China may be sitting on the sidelines in the current difficulties, but their eye is on longer-term global picture where they see themselves triumphant.

Somewhat belatedly, I am reposting here an article that I had published in the Chinese 东方早报 (The Oriental Morning Post) during Xi Jinping’s visit to Moscow a week or so ago. The article does not seem to have been put online, so I have posted the English text that I submitted below. I currently cannot figure out how to attach a PDF here, so cannot add the tear page, but if you are interested, please drop me a line and I can send it over. Related, I did an interview for Danish radio on the visit, focusing in particular on Central Asia. I am also going to use this opportunity to highlight interviews I did for the Italian AGI and The Atlantic on China in Central Asia. As ever for more on my work in this direction, please have a look at the site I manage with Alex focusing on our project on China in Central Asia.

China and Russia will maintain a pragmatic partnership

There has been a great deal of speculation in the press about the significance of Xi Jinping’s decision to make Russia his first foreign trip as leader of China. The implication of much of the discussion is that China is about to reorient itself to turn Moscow into a priority ally, creating some sort of a new axis in international affairs. The reality is that little is practically changing in this relationship beyond reaffirmation of the fact that both sides see the other as a power with which it suits them to be perceived as being aligned.

The relationship in the past few years has evolved substantially. Discussions about enhancing military cooperation and the prospect of joint technological development projects were highlighted during Defence Minister Shoigu’s visit to Beijing late last year, national energy giants CNPC and Rosneft have signed deals to build refineries near Tianjin and explore similar opportunities in Russia as well as looking at doing a large $25-$30 billion loan for oil deal – the Russian firm is believed to be seeking the loan from the Chinese firm in a repeat of a deal from a few years ago. At a political level, President Putin visited Beijing very soon after his election victory, so in some ways this is reciprocating. And on the international stage, China and Russia broadly find themselves in agreement with regards their postures on issues like Syria or Iran and generally prove willing to support each other’s positions in the United Nations Security Council. They both found the ‘colour revolutions’ of a few years ago alarming, and view the ‘Arab Spring’ in an even darker light. Trouble from rebellious provinces is an issue they both share, and they see western plots inside domestic problems.

But beneath this cordiality there is a tension. In the run-up to President Xi’s visit, much has been made in the Chinese press that some final agreement may be about to come about on the topic of gas pricing, a discussion that has been ongoing between China and Russia for over a decade. Unable to reach an agreement, we have seen a number of high level visits come and go with no conclusion in sight of the deal. This time, we are told, it may actually happen. And the logic may finally be there: China’s growing gas relationship with Turkmenistan means that it is going to be less reliant on finding Russian sources, something that will in turn pressure Russia to come to some agreement to not lose its hand in the discussion with China.

This aside, there is the question of Central Asia more broadly. A region that Russia has traditionally seen as its strategic backyard, but where China is increasingly becoming the more relevant actor. Economically, this is displacing Russian interests, though it remains clear that the Central Asian powers continue to see Russia as the more important security guarantor regionally. The story of the past decade, however, is the money and investment flowing in mostly from Xinjiang rewiring Central Asia so its roads all lead to China. Russia is seen to be pushing back against this through the institution and implementation of the Customs Union that at the moment only encompasses Belarus, Kazakhstan and Russia. But this is a still developing project and it is unclear how it will ultimately impact Chinese economic growth in Central Asia.

Looking beyond Central Asia, there is the dilemma of Afghanistan and the tensions between India and Pakistan. This triumvirate of countries is a complicated one with both Moscow and Beijing having very different views. Russia has always supported ally India, while Beijing retains strong ties with Islamabad. A delicate balance that has the result of keeping both India and Pakistan out of the Shanghai Cooperation Organization (SCO). And on Afghanistan, while there is evidence that China is slowly coming to the realization that more must be done and soon, Russia remains trapped in the shadow of its history in that country and refuses to commit much.

The point is that China and Russia are not an easy pairing. They may concur on a few things, but disagree on others too. But what they do share is a concern about western dominance in international affairs and a feeling that the American approach is not always necessarily the right one. And it is maybe here that we should look for deeper meaning in the Russia-China relationship. It is not so much that they are partners of principle, but they are partners of utility. Each sees the value in having a strong counterpart whom is willing to stand up to the United States and the West. Left alone, they would end up being isolated in international affairs and have to deal with the brunt of international wrath when they stood up for unpopular issues. But united they are able to provide some cover for each other and extend the travel schedule of any western foreign minister seeking to lobby their support for issues at the UNSC or elsewhere.

China and Russia remain partners of convenience. Their tentative gestures towards a real strategic partnership are likely to continue to edge gradually forwards, and mutual support will continue on the international stage, but the reality is that this is never going to be a holistic and firm axis in international affairs. Instead it will remain a utilitarian partnership that will provide each other with a useful ally when facing down against perceived western interventionism.

 

Raffaello Pantucci is a Senior Research Fellow at the Royal United Services Institute (RUSI) in London

Slightly delayed posting of my latest piece, this time with my sometime co-author and friend Li Lifan looking again at China-Russia and Central Asia. This was part of a series that Ben edited at Open Democracy Russia which seems to have attracted some attention. As usual, a lot more on this topic coming soon as part of mine and Alex’s project on China in Central Asia.

Decision time for Central Asia: Russia or China?

LI LIFAN and RAFFAELLO PANTUCCI 24 January 2013

Vladimir Putin’s attempts to draw the countries of central Asia into his fledgling Eurasian Union creates a dilemma for some of them: if they take up his offer, they might lose their valuable trading links with China. Li Lifan and Raffaello Pantucci discuss their options.

If one turns enough of a blind eye, it is easy to be optimistic about Central Asia. Wily diplomats from Kyrgyzstan and Tajikistan are masterfully playing off the great powers. Kazakhstan and Turkmenistan are turning into hubs in their own right – and nobody can tell plucky Uzbekistan what to do. This is nobody’s backyard, and attempts by neo-imperialists in Moscow, Washington and Beijing to play games in the region are only strengthening the hands of the Central Asian states themselves. This is a comforting picture – which is why Western policymakers love it – but it looks increasingly false as President Putin tightens the screws.

Why a Eurasian Union matters

Russia’s desire to strengthen its sphere of influence in Central Asia seems to be intensifying. The first sign came in October 2011 when Russia’s ‘national leader’ published his vision for a Eurasian Union in the Gazprom-Media owned daily Izvestia. Here Putin stated that the Customs Union with Belarus and Kazakhstan that would come into force on 1st January 2012 was just the beginning – and that it would expand ‘by involving Kyrgyzstan and Tajikistan. Then, we plan to go beyond that, and set ourselves the ambitious goal of a higher level of integration – a Eurasian Union.’

The Russian president is said to dream of his third term being his ‘geopolitical presidency,’ where he will make up for the lost ground and lack of achievement in foreign affairs that he views as his main failing. The transformation of the fledgling Customs Union into the Eurasian Union of his dreams is the centrepiece of this strategy. Whilst Kazakhstan seems to have already decided that it wants to be a part of the Union (and its president, Nursultan Nazarbayev is credited for first raising the idea of a Customs Union back in 1995), for the Central Asian states of Kyrgyzstan and Tajikistan this is a potential turning point, forcing a decision on which partner they want to prioritize: China or Russia?

The way Central Asian states will turn — to Russia’s Eurasian Union or to China — is the test for influence in the region. Photo: (cc) Wikimedia/IvaNdimitry

Deciding whether to follow Putin into the Eurasian Union will be a decisive choice for both states in the year ahead, as it will force them to choose which they want to risk: the GDP they get from trade with China or the GDP generated from remittances from their nationals working in Russia. Putin has thrown down the gauntlet – they will now have to make up their minds whether their economic future is going to be closer to Moscow or Beijing. Their dichotomy is not quite as black and white as this, but this is nevertheless a power test. The choices they make will decide whether Russia or China has a stronger say in Central Asia.

Kyrgyzstan’s dilemma

There is a simple reason why Putin’s union matters so much to Kyrgyzstan and Tajikistan: trade with China. Unlike energy rich Kazakhstan, already in the Customs Union, Bishkek and Dushanbe’s economies are dependent on business with Beijing. Kyrgyzstan’s ‘shuttle trade’ business with China, where small traders cross borders as ‘tourists’ with their goods in suitcases in order to avoid Customs duties, accounts for roughly a third of its GDP.

On the other hand there is fear in Bishkek that if they do not deepen integration with Moscow then the millions of migrant workers it exports to Russia – whose remittances are also equivalent to a third of GDP – will be forced to carry international passports, or suffer far reduced quotas. The nightmare is that they will eventually end up barred from Moscow’s labour market by a full visa regime – something nationalist elements in Russia, including charismatic opposition leader Alexey Navalny, have been calling for.

These fears are well grounded: in December 2012 Putin warned that within three years he wanted to end the post-Soviet practice of migrants from the CIS being able to come to Russia on their internal passports, effectively ID cards – but Customs Union members will be exempted from the new requirement for international passports. Polls conducted by the independent Levada Centreshow over 60% of Russians supporting tighter immigration controls.

Visa-free admission to Russia and access to the Russian labour market may be soon be a thing of the past for Kyrgyz migrants. Photo: (cc) Shutterstock/FotograFFF

That free access to Russia can no longer be taken for granted is not lost on Kyrgyzstan. But at the same time the Kyrgyz elite fears that joining a Eurasian Union would mean effectively losing control over its border tariffs and regulations, and would destroy the rich network of new trade routes that are tying them into China, bringing them cheap goods and enabling a substantial re-export economy. These trade routes are economic lifelines for this fragile state – and for this network the Customs Union has all the potential to be a total disaster. As a former Kyrgyz cabinet minister put it to one of us in Bishkek last year, it would ‘decimate’ the country’s key markets in the south at Kara Suu and Osh. In his words, ‘almost every’ small business in Kyrgyzstan is reliant on trade with China and any new tariffs or rules would entirely change the local economy.

China: vulnerability and official indifference

Chinese officials insist that the expansion of the Customs Union matters little to them. Ambassador to Bishkek Wang Kaiwen put it succinctly to reporters in late November when he said: ‘Kyrgyzstan’s entry into this Customs Union will not affect trade relations with China.’ Kyrgyz-Chinese trade, he pointed out, oscillated somewhere between $5-$10 billion per annum, a figure that was ‘a small problem’ dwarfed by China’s overall foreign trade of $3 trillion. The question of whether ‘to join or not…should be your decision.’

This blunt response hides a complex reality. It is true that in the grand scheme of things, China’s trade with Kyrgyzstan is a drop in the ocean. The problem for China is that it is a drop that comes from one of the most troubled parts of one of its most restive provinces. China is not investing massively in its trade infrastructure with Central Asian countries for reasons of charity – but to stabilize its own restive Xinjiang Uygur province by turning it into a trade hub for this region.

The Eurasian Union would have a potentially damaging effect on the substantial investment China has made on both sides of its border. The erection of a Russia controlled tariff barrier between China and Kyrgyzstan is likely to have a chilling effect on trade coming out of Kashgar, at a time when the Chinese government has invested a great deal into trying to develop the southern city. Capital of a part of Xinjiang that has faced heightened ethnic tensions for decades, the government has spent a lot of money re-developing the old city and establishing a Special Economic Zone with the aim of turning it into a hub for Central Asian trade.

According to recent figures China invested some $91.91 billion into infrastructure in its ‘western provinces’ – an area that covers Tibet, Guizhou and Xinjiang. This is a focused strategy and Xinjiang sits in the middle of it. All of this will be threatened if suddenly traders no longer find it profitable to send their goods along the roads winding into the CIS from Kashgar. At the same time these traders’ choice of markets is surprisingly limited: without a route through Kyrgyzstan or Tajikistan they would have to travel through the Khunjerab Pass to Pakistan. The problem there is the roads on the Pakistani side remain woefully under-built. Their only other possible border crossing would be with Afghanistan, which remains firmly closed at time of writing.

Seen from China, these are unanswered questions. When one of us asked a group of academics in Urumqi, the capital of Xinjiang, what they thought of the Customs Union’s impact to China, they shrugged and in vague terms said they were ‘waiting to see’ if the Customs Union would actually come to pass across the whole region. In Shanghai and Beijing, everyone has stories of friends who have conducted surveys in the region that highlight its unpopularity. But this is largely behind closed doors. The official line is that espoused by Ambassador Wang, that ‘Kyrgyzstan’s entry into Customs Union will not affect trade relations with China.’ Nothing to see here, keep moving on…

A losing game for small states?

This used to be the sort of situation where Central Asians were in their element, masters of the game of playing one partner off against another. Kyrgyzstan in particular has cannily used access to its Manas airbase to extract large chunks of money from both America and Russia. This time it seems as though Moscow is playing a much harder game, forcing Bishkek into a decision that could ruin one aspect of its economy or another. How this plays out may end up determining the shape of the Kyrgyz economy. For all the talk about China in Central Asia, Putin is still able to compete with Beijing – and the choices made in Bishkek and Dushanbe will make it clearer whether Moscow is still the world power it dreams of being.

A new op-ed in today’s South China Morning Post, this time a solo number. Looks at the relationship between China and Russia, and how not all that is BRICS is united. They may agree on some things, but this is not some new geopolitical alignment. Touches also upon my China in Central Asia work, about which there is going to be a lot more over the next few weeks.

China and Russia are no more than allies of convenience

State councillor Dai Bingguo’s visit to Russia this week for strategic security talks has once again focused attention on the supposedly close relationship between the two BRICS powers.

An image of alliance thrown up by their parallel voting in the UN and Western analysts’ inability to look beyond former cold war alliances mean that suspicion is often cast on a relationship that has as many fractures as it does cohesion. The reality is China and Russia disagree as often as they agree.

On the chaos in Syria, the two have shown they are willing to support each other by holding up the UN as a reason for their refusal to countenance action on Syria. But while both may see eye to eye on this issue, this is not always the case. Looking in the annals of Security Council resolutions over the past few years, one can find a few instances where China or Russia found themselves abstaining alone.

Disagreeing in the UN Security Council on lesser resolutions is one thing, but far more contentious is the long border they share and the countries in between.

These concerns have two key aspects: on the one hand, Russia fears the loss of its economic and strategic influence in Central Asia, while, on the other, it fears China may overwhelm its vast and empty eastern provinces. Back in 2000, then prime minister Vladimir Putin enunciated how fundamental these concerns might become when he stated that “if we don’t make concrete efforts, the future local populations [in Russia’s East] will speak Japanese, Chinese or Korean”.

Russian analysts often talk in alarmed tones about the huge demographic disparity between China’s northeastern provinces like Heilongjiang (38 million people) and Amur Oblast on the Russian side (830,000)

And, economically, Russia can also see that it is increasingly losing out in Central Asia, previously its economic backyard. While Russian remains the language of choice in the region, it is China that is being seen as the economy of the future. Kazakh, Kyrgyz and Uzbek traders all go to Guangzhou and Urumqi for goods to import, and the China National Petroleum Corporation has signed and brought online with extraordinary speed a growing array of pipelines and oil and gas contracts from Central Asia.

The loser in this growing pipeline orientation to China is of course Russia. Not only because its firms are losing control of the Central Asian resources, but also since a growing reliance on Central Asian energy is playing against Russia in its direct negotiations with China over bilateral energy sales. The two sides have been unable to agree on the pricing of gas for almost a decade – in which time China has built a major gas pipeline from Turkmenistan, one of the world’s richest gas reserves, something that strengthens China’s hand in its negotiations with Russia.

Losing economic might and the potential fear of Chinese demographic pressure are fundamental concerns for Russia. And they build on tensions that were left over after the cold war, where the Chinese and Russian communist parties never quite saw eye to eye.

It may be the norm for elder Chinese officials to know some Russian language from that time, and for Dai to speak of how a “healthy relationship” has been forged over the past decade. But often when China looks to Russia, it sees an example of how not to manage the opening up of the state from a socialist regime. And from a Russian perspective, the new Muscovites see themselves as more European and transatlantic in their outlook and international gravitas than as members of the up-and-coming BRICS community.

So, Dai’s visit to Russia, for all the usual reassurances uttered from both sides about close co-operation, should not be taken as further evidence of some great geopolitical alignment reflective of a shifting global order. China and Russia are occasional allies of convenience, not geopolitical brothers in arms building the “other” world order.

Raffaello Pantucci is a visiting scholar at the Shanghai Academy of Social Sciences

Somewhat belated posting of an op-ed with Lifan from last week in the South China Morning Post, timed to come out with the Shanghai Cooperation Organization (SCO) Summit (that I was in Beijing at the same time as, hence the picture below which I took in Tiananmen Square). This has been something of a focus of late, and will continue for a while (for all of this work in a concentrated form, have a look at China in Central Asia, though I have a number of large terrorism projects that I am working on for those more interested in that.

Clashing Interests in Central Asia Strain Sino-Russian Co-operation

June 6, 2012

By Li Lifan and Raffaello Pantucci

On the surface, this week’s Shanghai Co-operation Organisation (SCO) summit will be another marker in the organisation’s steady development as a serious player in regional and, increasingly, international affairs. Below, however, a growing tension between China and Russia is starting to show.

The two powers increasingly see their interests diverging in Central Asia. They are close allies in the UN Security Council, but on the ground China and Russia are steadily moving in different directions.

And it would seem that the SCO is not the only reason for his visit. In initial discussions, the summit was to be held in Shanghai. But, primarily at Moscow’s instigation, the decision was made to hold the conference in Beijing. Given that this was Putin’s first visit to China in his new role, he was eager to ensure that it was held in the capital so he could combine the summit with a state visit to Beijing, highlighting the importance of the bilateral over the multilateral in Russian minds.Russia’s hesitation with the SCO is observable in several ways, not least in President Vladimir Putin’s travel schedule. His first foreign visit since regaining the reins of power took him to Belarus, Germany and France, before coming to China this week.

In addition, in a pre-election article laying out his vision for foreign policy, Putin highlighted his nation’s potential for co-operation with China in “the UN Security Council, BRICS, the SCO, the G20 and other multilateral forums”. This is the only mention of the SCO in the article – while the other blocs get repeated mentions, with elaboration on what Russia might do with them.

Most significantly, Putin speaks repeatedly of a proposed Eurasian Union that aims to bring the former Soviet republics together in an economic union and semi-free trade zone. As Putin has put it, the bloc will co-ordinate economic and currency policy, bringing direct economic benefits. Besides, it will help its members “integrate into Europe faster and from a much stronger position”.

However, such a bloc will also erect higher tariff barriers between the SCO states, specifically along the Chinese border alongside Russia, Kazakhstan, Kyrgyzstan and Tajikistan. This will not only have a direct impact on Chinese trade with these countries, but also render somewhat complicated further SCO economic development.

And while China may lose some trade as a result, the greater loss will be felt on the ground in poorer countries like Kyrgyzstan that will lose significant proportions of their gross domestic product.

Much is made of the vaunted Sino-Russian co-operation in the UN Security Council. And while the two clearly have coinciding visions of a global order, on the ground, tensions are far more obvious. China and Russia’s inability to negotiate gas pricing and direct energy links is in stark contrast to China’s rapid development of energy connections with other Central Asian states.

Of course, the Russia-China connection is not the only factor on the table at this week’s summit. The expected decision to admit Turkey as a dialogue partner is important, but even more significant is the agreement to let Afghanistan in as an observer member.

Member states are also set to approve a strategic plan for the medium-term development of the SCO, the first time they will agree on orienting the development of the SCO over the next 10 years.

Terrorism continues to be a priority, as members are expected to approve a co-operation programme for the next three years to combat terrorism, separatism and extremism.

Discussions will also continue about a proposed SCO university – a programme that will allow students from member states to undertake joint degrees in a selection of universities across the organisation – and the potential for an SCO development bank.

But all of these ambitious plans will be for naught if Russia and China fail to agree on the fundamental issue of the importance of the SCO. Russia is increasingly a questioning partner. At the same time, while China has continued to try to focus on the SCO as a key vehicle for development in Central Asia, it has not hesitated to guarantee its bilateral relations with nations in the region.

While Afghan President Hamid Karzai is in town for the summit, he will sign a strategic agreement with Chinese leaders clarifying Beijing’s role in Afghanistan for the near future. Furthermore, Islam Karimov of Uzbekistan will also use this opportunity to sign a declaration of strategic partnership.

And in the run-up to the SCO summit, General Chen Bingde , chief of the general staff of the People’s Liberation Army, visited Tajikistan, Turkmenistan and Uzbekistan.

The SCO remains a relatively young organisation, but it is currently stymied by tension at its core between its two largest members. Always sceptical of China’s role in Central Asia, Russia is increasingly showing its hand, and the development of a Eurasian Union will directly clash with the future strengthening of the SCO as an economic body.

Sometime allies, Russia and China’s clashing interests in their border regions will increasingly express themselves, and this will slow the development of the SCO. Greater concord must be found; otherwise, little tangible progress will be made.

Li Lifan is secretary general of the Centre for SCO Studies at the Shanghai Academy of Social Sciences. Raffaello Pantucci is a visiting scholar at the academy

A new big think piece for The National Interest that has already been re-posted on The Atlantic’s site under the title ‘The New Great Game: Development, Not Domination, in Central Asia.’ It is another piece to emerge as part of the project that I have been working on with Alex and which is primarily housed at my other site, http://www.chinaincentralasia.com. I am in the midst of a long period of travel for this project, so expect a lot more along these lines in the near future.

The Clash of Eurasian Grand Strategies

May 1, 2012

In Khorgos, on the China-Kazakhstan border, trucks laden with Chinese goods line up along the road, waiting for Chinese and then Kazakhastani customs officers to give them the go-ahead to continue their transcontinental journey across Eurasia. Many will be heading to the great markets of Central Asia, like Dordoi, Barakholka and Kara Suu, while others head all the way to Europe. Squeezing through a single lane, the trucks get stuck in lengthy backlogs as they wait in the shadow of the brand new multilane Chinese customs point that sits idle next door. This idleness is the product of conflicting strategies, emblematic of a lack of coordination that is taking place across Central Asia.

It is cliché to talk about Central Asia in great-game terms, with battling rival powers elbowing each other to assert their influence. Seeing the region as either as a buffer area to other powers or as a source of natural wealth and instability, the surrounding large powers have long treated Central Asia as little more than a chessboard on which to move pawns.

These days, however, the strategic approach taken by surrounding powers has shifted. Rather than talking about dominating the region, the discussion is focused on differing approaches to development, all of them tied to great powers’ particular interests. Lead amongst these are China, Russia and the United States—all of which have launched new initiatives intended to bring stability and security to the region.

Three Rival Strategies

The American strategic approach has been most clearly laid out by Secretary of State Clinton, who last year in Chennai, India told the audience of America’s desire to “work together to create a new Silk Road, . . . an international web and network of economic and transit connections.” While the United States is clearly eager for the entire region to be developed, later Clinton highlighted one of the U.S. key rationales for this approach: “An Afghanistan firmly embedded in the economic life of a thriving South and Central Asia would be better able to attract new sources of foreign investment, connect to markets abroad and provide people with credible alternatives to insurgency.” In other words, it is a strategy focused on tying Afghanistan economically into its neighborhood, which will help facilitate American withdrawal. An “action request” leaked soon after Clinton’s speech confirmed that this New Silk Road strategy was Clinton’s “number-one policy priority” for Central and South Asia.

For China, whose overriding priority is to develop Central Asia to help stimulate prosperity and stability in its restive Xinjiang province, the approach of tying the region together using trade and transport links is an old one. As early as 1994, then prime minister Li Peng declared in Central Asia that “it was important to open up a modern version of the Silk Road.” Years later, in a 2004 article in China Daily, the principle was expanded to include a “landbridge” between China and Europe, a network of train links that would make up a so-called Iron Silk Road and provide an alternative to lengthy and sometimes treacherous sea routes. Since then, China has moved this strategy forward, developing its own rail infrastructure at an astonishing rate, while also investing in regional train systems linking Central Asia together. While some projects such as those in Kazakhstan seem to have stalled, work is advancing on regional rail lines in Kyrgyzstan and Uzbekistan.

Russia, on the other hand, has taken an approach to the region that seeks to build on previous glory. Building on the already extant customs union that Belarus, Kazakhstan and Russia formed in 2009, in October last year President Putin proposed a Eurasian Union that would coordinate “economic and currency policy” while also being open to new members presumably drawn from the former Soviet space. As Putin put it, “membership in the Eurasian Union, apart from direct economic benefits, will enable its members to integrate into Europe faster and from a much stronger position.”

An admirable goal maybe, but one that directly clashes with China’s aims to try to integrate the broader region. In discussions last year in Kyrgyzstan, we were told by a former cabinet-level minister that should the Eurasian Union proceed, the markets in southern Kyrgyzstan at Kara-Suu would be “decimated.” And these tensions are already visible here at Khorgos, the ambitious “trans-national free trade center” that China and Kazakhstan opened last December between their two borders. The shining new Chinese customs post is unused, and a field of construction cranes await the go-ahead to continue their work developing the rest of the special economic zone.

And it is not only the Chinese and Russian strategies that are seemingly at odds with one another. As Chinese analysts in Urumqi were quick to highlight, the American and Chinese strategies also differ: America’s aim is to tie Afghanistan into its broader region, with paths largely going north-south across the region, while China’s is a grander east-west ambition enabling direct trade with Europe. China also is developing different infrastructure plans across Afghanistan, opening up an east-west path across the country to Gwadar, the Pakistani port it has been helping develop. While not necessarily contradictory, different end goals drive the respective projects.

The result is a series of strategies for tying together Central Asia—with each focusing on priorities dictated by the varying interests of Beijing, Washington and Moscow. China is promoting its development and trade; America wants to leave a more stable and prosperous Afghanistan; and Russia wants closer ties with the former Soviet space. These are fundamentally divergent approaches that contradict each other and leave the region torn between competing capitals.

Greater coordination and discussion is needed on what is essentially redevelopment of the Silk Road. The end state desired by all is a prosperous and stable region brought about by economic development—rather than the barrel of a gun. But until there is greater coordination, the result will be a confused latticework of competing strategies that leave everyone the poorer.

Raffaello Pantucci is a Visiting Scholar at the Shanghai Academy of Social Sciences (SASS) and Alexandros Petersen is the author of The World Island: Eurasian Geopolitics and the Fate of the West. Their joint research is available at http://www.chinaincentralasia.com.

Veering away from my recent spate of terrorism related articles, a new op-ed for the South China Morning Post, a newspaper I have written for before on China-Central Asia with the same co-author, my friend Li Lifan. This uses the recent Russian election as a spring-board for some analysis of China’s relations with Russia and Central Asia. This is a topic I am going to be doing a bunch of writing on in the next few weeks. Unfortunately, however, SCMP operate a firewall, so I cannot simply post this here, though I will ask my editorial contacts. In the meantime, feel free to write if you have any questions. (UPDATE, per SCMP’s approval, I have now reposted it all here).

Contest over Central Asia between allies

Li Lifan and Raffaello Pantucci say China and Russia are both adept strategists

Mar 20, 2012

Vladimir Putin’s return to the presidency in Russia was predictably controversial in Europe and America. In Beijing, the official read-out provided by Xinhua highlighted a positive conversation, with President Hu Jintao stating with “confidence that Putin’s new presidential term would see faster progress in building a stronger and richer nation”. That statement affirmed the importance of the Sino-Russian axis as a pole in international relations. Putin, the quintessential Russian chess master, has a very clear sense of where Russia’s future must lie, and needs Beijing onside if he wants to carry this out.

The Sino-Russian relationship has had its ups and downs. As Putin put it recently, “there are some sources of friction”. The joint Chinese-Russian veto last month of a UN resolution on Syria attracted attention. But, beyond this, tensions persist as Russia proves implacable in discussions over energy pricing, and tries to develop a “Eurasian Union” to counter China’s successful inroads into Central Asia. The resultant price increase is detrimental to Chinese interests and delays economic integration under the auspices of the Shanghai Co-operation Organisation (SCO).

But these contradictions are perfectly adapted for both the Chinese and Russian political system, where shadow chess games are seen as the antidote to erratic Western policy strategies. Rather than make dramatic shifts and pronouncements, both sides forge long-term alliances of convenience, focusing on their mutual interests, where possible, while recognising unresolved tensions remain.

This malleable alliance is something that both countries will need in the next few years, as problems over Iran’s nuclear programme come to a head and the US withdraws from Afghanistan, leaving potential chaos in both China and Russia’s backyard. Neither China nor Russia have any interest in seeing the Iranian situation escalate.

In Afghanistan, neither is interested in seeing the nation fall back into chaos, but they will be relieved to see a reduced American military footprint in their immediate neighbourhood. Figuring out how to manage the situation post 2014, the deadline for US withdrawal, will probably require a joint effort, which Russia and China have started to explore within the SCO format. The security drills to be held in Tajikistan in June will showcase the grouping’s capacity to address threats regionally and help improve co-ordination ahead of the American withdrawal.

Domestically, the abutting regions of Xinjiang and Siberia are their respective nations’ most underdeveloped regions and will require close attention from Beijing and Moscow. Xinjiang is a cauldron of ethnic tensions that China is trying to calm with economic development, while Russia’s east is a largely empty space that gets ever more depopulated as its youth go west to Moscow and Europe.

Establishing better prospects and opportunity there will help stabilise the administration of both nations, and better economic co-operation and regional stability are key to long-term development. Of course, underlying this is a competition for resources and markets in Central Asia, with unresolved energy pricing issues and the Russian fear of mass Chinese immigration colouring debates.

But these are known tensions, and carefully managing them is something that leaders on both sides recognise as important.

The two are each other’s biggest allies in the United Nations Security Council and are members of the new BRICS club. As such, they see a close alignment on international issues. At the same time, regionally, they see elements of peer competition.

Striking a balance is the essence of realist international relations. The result is a considered game of chess between a Chinese leadership used to deliberative policymaking and a newly minted Russian leader who has long shown his capacity for an unemotional approach to international relations.

Li Lifan is a senior fellow and Raffaello Pantucci is a visiting scholar at the Shanghai Academy of Social Sciences