Assertiveness in unison

The series of recent commentaries on Russia’s and China’s international behaviour has focused on the challenge the two great powers pose to the liberal international order. Written in a rather pessimistic tone, the analyses have resorted to phrases such as ‘the return of History’ or ‘the revival of the Great Power conflict’. The authors have also frequently made reference to past rivalries, including during the World War I and the Cold War in particular. Dominique Moisi laid the blame on Vladimir Putin and Xi Jinping for the absence of statesman-like leadership. In his view, Russia’s policy towards Ukraine and China’s territorial claims in the East and South China Seas reveal a readiness towards brinkmanship and a lack of strategic self-restraint. Anne Applebaum reproached Russia and China for the return to Cold-War patterns of foreign policy, demonstrated primarily by the aggressive attempts to secure a privileged position in their neighbourhood. Walter Russell Mead put forward the most radical interpretation. In his view Russia, China and Iran form a revisionist coalition aspiring to overthrow the Eurasian status quo, which is advantageous to and protected by the US.

It cannot be denied that Russia and China have occasionally coordinated their actions towards the West, e.g. in the UN Security Council. They have tended to adopt similar positions on normative aspects of the post-Cold War international order, which in practice meant the objection to any kind of military intervention organised under the auspices of Western states. Interestingly, in the 2000s, a particular ‘division of labour’ emerged between Moscow and Beijing with regard to their roles in the global order. Moscow actively and noisily participated in the management of global affairs, eager to join all formal and informal forums (from the G-8, G-20 and BRICS to the Six Party Talks and the P5+1). Beijing, for its part, kept a low profile, engaging in global issues only when China’s vital interests were at stake. In the realm of international security, it was Russia which stood out as the non-Western voice.

This ‘division of labour’ has been reflected in different strategies adopted by Moscow and Beijing towards the West. Russia challenged US primacy while China searched for a modus vivendi. Moscow openly contested the Western-led liberal order. Putin’s speech in Munich in 2007 was the most pronounced declaration of Russia’s unwillingness to accept Western rules. The 2008 war with Georgia, the purpose of which was to block the process of NATO enlargement, demonstrated Moscow’s determination. Conversely, China chose to adapt to the Western-led liberal order, which was most clearly manifested in its accession to the WTO in 2001. China searched for benchmarks which could testify to its non-confrontational rise, such as the participation in UN peacekeeping operations. The concept of a ‘peaceful rise’, promoted in the mid-2000s, was quickly replaced by that of a ‘harmonious order’ as soon as it became clear that the former policy was a cause of concern among the neighbours of both China and the West.

These global roles ran contrary to the trends in the Russo-Chinese bilateral relationship. China allowed Russia, the gradually weakening partner, to enjoy larger international prestige and visibility. It was not until the global economic crisis of 2008-2009 that Russia and China opted for new strategies towards the West and US global primacy. Moscow toned down its assertiveness and improved its relations with the US within the ‘reset’ framework. Embarking on a modernisation agenda, it ultimately joined the WTO in 2012. Conversely, Beijing became more assertive towards the US and its own neighbours. It has pursued territorial claims with regard to the disputed maritime borders, thereby testing Washington’s resolve to support US allies in the region. These shifts were in line with the new balance of power between Russia and China.

Putin’s return to the presidential seat in 2012 has been marked by a growing assertiveness in Russia’s foreign policy. Moscow has effectively dropped its modernisation ideas and has embraced an anti-Western and anti-American agenda. The change of the Chinese leadership, which also took place in 2012, has only intensified China’s demands in the international realm. Russia and China have thus finally ‘united’ in their assertiveness towards the West.

But should the West be wary, as commentators suggest? While Russia and China demonstrate a similar approach towards their neighbours, they do not endorse each other’s attempts to gain recognition of the ‘zones of privileged interests’. Globally, Moscow and Beijing are striving to prevent the West from re-interpreting the idea of state sovereignty and thus oppose the practice of intervention. However, neither Russia, nor China has formulated a normative framework which would present an alternative to the contemporary liberal order. Selectively opposing US primacy, the two most powerful non-liberal states are not building an anti-hegemonic coalition. Russia’s and China’s ruling elites seem to care more about legitimising their international status as equal with the US within the existing order rather than overturning this order entirely.

Escaping Sinocentrism?

Observers of Russian-Chinese relations continue to search for Moscow’s potential balancing acts against China’s rising power. It seems unlikely that the Kremlin could have ‘put all its eggs into one basket’, particularly taking into account the growing asymmetry of power between the two states. Russia’s diplomatic offensive towards its Asian neighbours last month has given the impression that Moscow is trying to escape from its Sinocentric policies. The political-military consultations with Japan were conducted for the first time in history in the ‘2+2’ formula (foreign affairs and defence ministers). Vietnam was offered closer co-operation with the Russian-led Customs Union. The idea of a transit corridor from East Asia to Europe (of course via Russia) was aimed at attracting the attention of South Korea. Russia finally handed over the aircraft carrier to India which New Delhi ordered almost a decade ago.

Is Russia trying to hedge (if not balance) against China’s rise? How seriously should these attempts be taken? What are Moscow’s prospects for improving its position with regard to Beijing by means of closer ties with China’s neighbours?

For decades, dating back to the Soviet period, Moscow has considered India as the best counterweight to China. After a short period of mutual post-Cold War disappointment, Russia and India re-built their relations. The arms trade was the most acute symbol of India’s place in Russia’s foreign policy landscape. Russia used to sell its most advanced weaponry to India while denying similar equipment to China. This pattern persisted till the early-2010s, when serious obstacles emerged. The American-Indian quasi-alignment, dating back to 2005, has been viewed by Moscow with growing suspicion. Russian arms producers started to lose one bid after another for the Indian weapons market, including the tender for 126 multi-role combat aircraft, worth US$ 20 billion. Russia’s reputation as arms supplier for the Indian armed forces has also deteriorated. The delivery of the aircraft carrier was postponed several times and its price doubled over a decade. Both states continue to co-operate on the construction of the 5th generation fighter but implementation has been terribly slow. Stripped of the arms trade, Russian-Indian relations will become an empty shell. There are no joint economic projects or investments. India’s access to Russia’s energy resources is limited. Moreover, the expected Russian-Chinese agreement on the sale of the Su-35 fighters – a more advanced type of aircraft than that operated by India – would mark the end of India’s privileged position in the Russian worldview.

Interestingly, Moscow seems to have noticed India’s weakness as a potential counter-balance against a rising China and has reached out to the East Asian states – Japan, South Korea and Vietnam. All three states, despite their entanglements with the Chinese economy, remain suspicious towards Beijing’s intentions and wary of the growing might of China.

Another candidate to counter-balance China, Japan, was approached by Russia only after the end of the Cold War. Since then, Moscow has repeatedly attempted to mend fences with Tokyo, offering access to East Siberian oil and gas and inviting Japanese investors to the Russian Far East. Every time, the territorial dispute over the Kuril Islands has stood in the way of a Russo-Japanese rapprochement. The most recent overture was made by Russia after the 2011 Fukushima nuclear catastrophe. Moscow declared its readiness to replace the nuclear component of Japan’s energy balance sheet with its hydrocarbons. While the Russian idea was not implemented, the return of Shinzo Abe as prime minister in Japan paved the way for closer political ties. In April 2013 he paid a visit to Russia, followed by the ‘2+2’ consultations in November. Both states agreed to deepen security co-operation, including the conduct of joint naval exercises. The key question regards the extent to which this momentum can be sustained, particularly if it is not supplemented with closer economic co-operation. This is even more the case since rapprochement with Japan has not prevented further security co-operation between Russia and China – further naval drills have been announced for 2014. Chinese companies secured access to the lion’s share of the Russian oil sent to the Asian market.

With regard to smaller Asian states, such as Vietnam or both Koreas, Moscow has consistently pursued certain ideas for the last decade. Vietnam has become an important customer of the Russian military-industrial complex (e.g. the sale of submarines) and for Russian energy companies (e.g. exploration of oil in the South China Sea by the joint venture Vietsovpetro). Moscow has also been attempting to convince Vietnam to allow Russia to return to the naval base in Cam Ranh, which it vacated in 2001. The most recent idea encompasses the establishment of a free trade zone between Vietnam and the Customs Union. In the case of the Korean states, Russia has been promoting the idea of the Asia-Europe corridor, linking the two Koreas with the Russian railway system. Its first stage – the link between Russia and North Korea – was built in September 2013.

Looking at the broader East and South Asian picture, it is difficult to assess to what extent the policies pursued by Russia can contribute to making it less dependent on China. The ideas which they are based on are not new – they have been part of Russia’s discourse for several years. It is their implementation that has turned out to be much more difficult to achieve.

Is there any place left for the SCO?

In my previous post I have argued that a new status quo has emerged in Central Asia over the past few years. During this period Russia and China have worked out and tailored their respective strategies of pursuing their interests in the region: selective multilateralism and bilateralism. Moscow has strived to secure its grip on Central Asia by means of integrating Kazakhstan, Kyrgyzstan and Tajikistan into the Eurasian Union and by maintaining a military presence under the framework of the Collective Security Treaty Organization. Beijing has focused on the establishment of bilateral economic ties. A series of agreements have been concluded with Central Asian states since the late-2000s involving multi-billion dollar loans and investments, in particular in energy exploration and infrastructure. As a result, the Shanghai Cooperation Organization (SCO), which was supposed to be the most suitable structure for region-wide cooperation, has found itself side-tracked. The summit of the SCO, which took place in Bishkek in mid-September, has only testified to the continuing stagnation.

The fundamental bone of contention concerns what type of organization the SCO should be: a vehicle that facilitates the pursuit of the global interests of great powers (i.e. of Russia and China), or the framework for cooperation in Central Asia which would not be dominated by any single actor.

The Bishkek declaration conforms to the former vision, promoted first and foremost by the Kremlin. With the focus on global challenges and strategic issues, this document resembles those issued regularly at the Russo-Chinese bilateral summits and reflects concerns which predominate in Moscow and Beijing. In the declaration the SCO members have: criticized the West’s propensity to use force and its disrespect for international law; called for UN principles to be respected and for the organization to be reformed; expressed concerns related to climate change and food security. They have taken a stance with regard to almost all on-going international crises and contentious issues: they have supported Russia’s initiative concerning Syria’s chemical weapons, opposed the threats of the use of force against Iran and deemed the development of regional or global missile defence unacceptable.

Regional affairs are barely mentioned in the Bishkek declaration. The dispute on how the SCO should finance joint projects – by creating a development fund (promoted by Russia) or a development bank (promoted by China) – has not been solved and the mutually exclusive ideas have found their way into the final document. Russia is not interested in establishing yet another international bank in the post-Soviet space as it is already financing the Eurasian Development Bank. China, on its part, is seeking a flexible formula which could facilitate the implementation of its region-wide energy- and infrastructure-related projects.

This disagreement goes beyond rhetoric or purely economic calculations and reveals a fundamental difference between Moscow and Beijing that prevents greater cooperation among the SCO members. Russia would prefer an organization with global reach and objectives. This is because Moscow already has an abundance of organizations at its disposal in the post-Soviet space, including the Eurasian Union, EurAsEC and CSTO. Conversely, China is in need of a regional organization which would help neutralize the fears of smaller Central Asian states and smooth China’s economic expansion, providing multilateral clout. One of the outstanding consequences of the Russo-Chinese difference is the persistent absence of agreement on the issue of the enlargement of the SCO. The temporary solution, which may prove long-lasting, has been to introduce different association categories, such as observers (e.g. India and Mongolia) and ‘partners in dialogue’ (e.g. Belarus and Turkey).

The only issue which the SCO leaders fully agree on seems to be the necessity to protect their regimes from real and imagined enemies. The attention paid to the Arab revolutions as well as the focus on information security illustrate deep-seated fears of autocrats. The ‘authoritarian security community’ may turn out to be the only possible path for the development of the SCO. But, if that is the case, should not Kyrgyzstan be replaced by Turkmenistan?

The (surprising) absence of the Great Game

The metaphor of the Great Game has been regularly invoked with regard to Central Asia, most recently relating to the competition for the region’s energy resources and geostrategic location. Beijing’s growing economic and political clout has been perceived as a challenge to Moscow’s aspirations and interests in the region. As a consequence, Central Asia has been identified as the most plausible trigger, should a breakdown in Russo-Chinese cooperation occur. Surprisingly, however, both Eurasian powers have managed to steer their relations in Central Asia off a collision course so far. Neither have the series of Chinese inroads, ranging from building oil and gas pipelines to multi-billion dollar investments and loans, nor Russia’s half-baked counteraction in the form of the Customs Union/Common Economic Space led to outright competition.

Since the mid-2000s, relations in Central Asia had undergone deep transformation which, towards the beginning of the current decade, has resulted in the emergence of a new status quo. This power transition has been far from optimal for both Russia and China but satisfactory enough to remove Central Asia from the list of pressing concerns of the Russo-Chinese relationship.

The realm of energy – the most delicate and prone to fierce competition – is an illuminative example of this new status quo. China broke the Russian near-monopoly on the import of resources from the region, having constructed an oil pipeline from Kazakhstan and gas pipelines from Turkmenistan (via Uzbekistan and Kazakhstan). Chinese upstream investments have trumped those of Russian energy giants, in Kazakhstan in particular (24% of oil and gas exploration belongs to China, about 12% to Russia). Meanwhile, Russia has managed to maintain its presence in energy sectors of Uzbekistan and Kazakhstan as well as to retain the dominant position in those of Kyrgyzstan and Tajikistan.

Other aspects of the new status quo include stagnation with regard to multilateral structures in the 

region (with the exception of the Eurasian Union, discussed below). The Shanghai Cooperation Organization seems to have exhausted its potential by the mid-2000s, since then becoming little more than a forum for discussions, photo-ops and regularly conducted military exercises. Neither Russian nor Chinese ideas for substantial cooperation have received support from other SCO members. The energy club, promoted by Moscow, was denied as it would tie China’s hands in the realm of energy. The free trade zone, put forward by Beijing, was dismissed as it would ensure Chinese economic domination. The growing number of observers (the most recent being Afghanistan) and ‘partners in dialogue’ (Turkey) disguises the absence of consensus between Moscow and Beijing whether, if at all, to enlarge the SCO. The Russian-led Collective Security Treaty Organization (CSTO) provides symbolic reassurance of Moscow’s primacy in the field of regional security.

The moves undertaken by Russia and China in recent years have not challenged the new status quo. China has been increasing its presence in the energy sector, further investing in Kazakhstani oil fields and enlarging the capacity of the gas pipelines. The China National Petroleum Corporation has recently concluded a new agreement on the exploration of Tajik natural gas resources, but China has tacitly withdrawn from supporting hydro-energy projects in this state. Russia’s Gazprom has taken over Kyrgyzgaz. None of the other undertaken steps constitutes a qualitative breakthrough. China’s generous loan- offer for Central Asian states, which was to reach  10 billion USD, has not been taken up. Only two projects are underway in Uzbekistan and Tajikistan, which value is estimated at 150 million USD – a fraction of the promised amount).

What are the reasons behind the surprising absence of rivalry between Russia and China in Central Asia? Are we witnessing a ‘new type of great powers relationship’ emerging in the region? It has become the Chinese ‘keyword’ for having a greater say in relations with the U.S. At this stage, it looks more like a return to policy prescriptions of classical realism. Following the emergence of the new status quo in the region, both Russia and, to a larger extent, China have demonstrated self-restraint. Particularly Beijing’s material capabilities would allow for gaining a much more robust position in Central Asia, to the detriment of Russia’s political preponderance, but China seems to be unwilling to project its power.

What are the potential game changers? The most recent Russia’s move – the attempt to establish the Eurasian Union – has a latent potential to tip the existing status quo off the balance. It assumes the creation of a closed economic bloc in the post-Soviet space, with Kazakhstan already being a member and Kyrgyzstan negotiating its accession. Nevertheless, as long as the Russian-led integration does not endanger key aspects of the Chinese presence - such as the energy assets and infrastructure - one should expect neither harsh reactions from Beijing nor increased rivalry with Russia. The predominantly (geo)political nature of the Russian project implies that much of the integration is going to remain on paper, thus perpetuating the new status quo based on informal division of economic and political influence.

Russian assessment of Xi Jinping’s rule

For Russland Analysen, I examine the Russian discourse on China:

The change in Chinese leadership, concluded in March 2013, spurred increased interest among the Russian media and expert community. While the Kremlin stressed continuity in the relations between both powers and praised their unprecedented cordiality, participants in the Russian debate agree that China’s domestic and foreign policies are to undergo transformation which is bound to influence the Russia-China relations.

The idea of ‘the Chinese dream’ which is supposed to lead to the ‘rejuvenation of the Chinese nation’, presented by Xi Jinping shortly after his confirmation as the president, has been widely discussed in Russia. The ‘Chinese dream’ is regarded as potentially paving the way for more nationalistic and assertive policies. The expected period of Xi’s rule – which is to comprise the 100^th anniversary of the Communist Party in 2021 – has been interpreted as conducive to more robust policies, aimed at securing the place of the current Politburo members in the Chinese history as well as to accommodate the growing ambitions of the Chinese society. Two most plausible policies, which attracted the bulk of Russian observers’ attention, included the ultimate re-unification of the Chinese lands and the transformation of the present socio-economic model of development so that it becomes less export-oriented and more domestic demand-driven. As a consequence, while it has been admitted that China should remain preoccupied with its internal challenges, there is a growing belief that Beijing will become more engaged in  international affairs, going beyond the narrow understanding of national interest which has directed the Chinese foreign policy so far.

The recent increase in China’s assertiveness towards its neighbours and the US has not escaped the attention of Russian spectators. Beijing has been perceived as more immune to its neighbours’ security concerns  and more openly challenging the US dominant position in East Asia. This evolution of Chinese foreign policy has been ascribed to the increase in China’s economic and military power as well as to the transformation of its domestic scene, i.e. the strengthening of the military (and hard-liners in general) and the growth of nationalism among the Chinese society. The military modernization has been subject to particular scrutiny by the Russian expert community but no consensus has been reached with regard to actual capabilities of the Chinese armed forces. It is the potential of Chinese nationalism, to which the leadership has been forced to yield, that seems to concern Russian observers even more than the ‘upgrading’ of military capabilities.

In the short-term, China’s rise under Xi Jinping is not perceived by the majority of Russian commentators as threatening. Taking the long-term perspective, however, uncertainty prevails. According to supporters and opponents of cooperation with China alike, mutual mistrust has not been overcome, despite progress in bilateral relations achieved over the last two decades.

My more detailed analysis was published by Russland Analysen (in German).

China plays the Russian (military) card

Since the mid-2000s, Russo-Chinese military cooperation has been symbolized by the regularly-held large exercises, codenamed the Peace Mission. Presented as ‘anti-terrorist’ activities, their scenarios and the forces employed (regular army units supported by tactical and strategic aircraft) have been a clear indication of the aim to practice conventional warfare. Although the Peace Mission exercises have continued, the second decade of the 21^st century has been marked by the naval drills (Joint Sea 2012, 2013), which have become yet another hallmark of the change in Russo-Chinese relations.

In the 2000s the joint military exercises served to strengthen Russia’s image of a re-emerging great power and to demonstrate to the West its close partnership with China. In the face of growing tensions with the West, Moscow was eager to play the Chinese ‘military card’, suggesting the possibility of forging an alliance. Beijing, at that time, was focused on presenting itself as an almost exemplary peacefully-rising power.

For the last two years the roles have reversed. Now it is China who is playing the Russian military card, both against the U.S. and its East Asian allies. Asserting its claims in the contested waters of the East and South China Seas in a more robust way, China has turned to Russia for political support. The 2012 Sino-Russian naval drills, which took place in the Yellow Sea, were interpreted as a response to the exercises conducted by the US with the Philippines and South Korea. The Joint Sea 2013 mirrored the US-Japanese drill.

One should not over-estimate the importance of the Russo-Chinese naval cooperation. Both navies are hardly ready to fight against the U.S. or its allies. The main goal of the joint exercises is political. It has been intended to send a message to Washington and its partners in the region. Russia – at least formally – maintains a neutral stance with regard to the territorial disputes in the South and East China Seas. The engagement in military co-operation in the potential conflict area demonstrates, however, Moscow’s clear political support for Beijing’s position.

For the last couple of years Russia has been eager to show off, deploying its vessels in the Mediterranean Sea or in the Gulf of Aden. The naval drills with China become yet another opportunity to strengthen Russia’s image as a global naval power and an important actor in East Asian security. At the same time implicit support for China’s assertive policies undermines Moscow’s ability to act as a potential counter-balance against Beijing’s ambitions (which has recently been suggested by Elizabeth Wishnick) and limits Russia’s attractiveness to smaller East Asian states.

Sechin steps in Khodorkovsky’s shoes or 'ironiya sudby'

The past several  weeks have been marked with the acceleration of the once denounced Russo-Chinese energy co-operation.

On 24 June, the Russian state-owned energy giant, Rosneft and the Chinese National Petroleum Corporation (CNPC) concluded a deal that provides for another breakthrough in energy trade between the two states.

Rosneft agreed to supply the CNPC with 30 million tons of oil per year. What this means in practice is the doubling – by 2018 – of the amount of oil that is currently sent to China via the East Siberia-Pacific Ocean pipeline. This oil pipeline is by no means the only way of transporting Russian ‘black gold’ to Chinese customers. Starting in 2014, Rosneft will send an additional 7 million tons via another route – the Kazakhstan-China pipeline. Moreover, in 2012 the Russian energy behemoth agreed to supply the planned (though still not constructed) Russian-Chinese refinery in Tianjin with another 9 million tons of oil. Taken together, by the end of the decade Rosneft can be expected to send 46 million tons to China – almost 20% of Russian oil export (about 240 million tons).

On 21 June, the aforementioned CNPC entered into another ground-breaking agreement. It secured a 20% stake in the Yamal-LNG project. The project, led by the independent Russian gas producer Novatek, will enable Russia’s entry into the increasingly competitive LNG market.

The Russo-Chinese energy deals go far beyond their market value and are bound to have far-reaching consequences in the strategic and domestic realms of the two states.

Moscow continues to adapt to China’s rise, strengthening its ties with Beijing whilst allowing possible options for hedging in the case of a political setback between the two powers to disappear one after another. The actions undertaken by Rosneft, and its curator in Putin’s inner circle, Igor Sechin, have effectively undermined the Kremlin’s strategy of diversification of oil exports to Asia. They have led to the dependence on one customer – China. One cannot avoid a sense of the irony of fate – Igor Sechin as the chairman of Rosneft is pursuing a policy for which Mikhail Khodorkovsky has so far spent 10 years in jail. Back in 2002, Khodorkovsky proposed to build an oil pipeline exclusively to China. His idea went contrary to the then Russian strategy aimed at hedging against China: The Kremlin had planned to incite Sino-Japanese rivalry over access to Russian resources and oil transportation routes. The economic crisis of 2008-2009 forced Russia to give up this idea; although it still strived not to become reliant on one sole client in Asia. Sechin’s current behaviour almost completely undermines this.

With regard to the domestic scene, China has unintentionally become a shaping force of Russia’s domestic power relations. Sechin and Rosneft both thrive on deals with China, gaining easy money and additional influence through bargaining over further assets (such as TNK-BP which has just been taken over, while other oil firms like Bashneft are threatened with takeover). The CNPC’s deal with Novatek strengthens the latter against Gazprom and weakens this Russian gas behemoth in its continuous fight to keep its export monopoly. In the meantime, Gazprom has still not struck the expected deal with China, which was supposed to pave the way for the first gas pipeline in Asia and open the Chinese market. In June yet another publicly set deadline passed.