Russia’s current economic, foreign affairs and international image problems will not only impact relations with the West, but also her position vis-à-vis China and other important players around the globe. Both, the ongoing economic recession as well as the diminishing general trust towards oral and written assurances by the leadership of Russia will be having effects beyond Russia-EU cooperation. Because of its erratic political behavior, manifest breach of international law and low economic performance, as well as in light of continuing Western sanctions, Russia is becoming a more risky and less solvent partner not only for Western partners, but for everybody. This trend could continue, if not increase during the next years, limit Russian growth prospects, and further diminish Russia’s relative weight.
As Russia’s economic problems and international political isolation are concurrently growing, her relative decline will thus become more and more acutely felt. In the next years, Russia will become an ever more obviously junior partner of China, and secondary player, in the SCO (obviously, even more so, if India joins). These trends will also lead to a decline of Russia’s impact within the BRICS group where its presence has always been an oddity. Ever since the creation of BRICS, Russia stood out in the group as a petro-state benefitting from growing energy prices. It never was a successfully developing economy with a dynamic industrial or/and progressive service sector as, to one degree or another, all the other BRICS members are.
In contrast to Western institutions like the EU or NATO, the BRICS group or SCO are distinctly pragmatic non- or anti-Western alliances. They have considerable geopolitical weight, yet lack distinct ideational foundations, long-term plans or larger visions of their own. China & Co. will react with interest to the new frostiness in Russian-Western relations, as a result the Ukrainian fall-out. Beijing and other non-Western countries may be glad to see Russia getting more engaged within the SCO, BRICS, RIC, Silk Road project, Beijing-dominated development banks, etc. Yet, the Chinese and others will have fewer and fewer reasons to treat an economically weak and politically isolated Russia with the kind of respect and concern that Moscow will continue to expect. Instead, they may, as in the case of China’s spring 2014 gas deal with Russia, take advantage of Russia’s diminishing alternative options and ties. Given the lack of common identity between, and coherent ideology of, the SCO and BRICS group, these ad hoc alliances will not provide to Russia a maintainable long-term geopolitical home, or a sustainable alternative path of development. They cannot offer Moscow something equivalent to the previous course and expected results of Russia’s earlier gradual integration into Western structures.
Apart from general economic and cultural hindrances of Moscow’s teaming up with Beijing, there are additional, specific, potentially problematic issues between the two countries. Above all, in order to be acceptable for Russia’s elite and ordinary people, the currently growing Chinese economic engagement in Russia would have to be large enough to compensate for the increasing losses in investment from, and trade with, the West. Before the “Ukraine Crisis,” about 75% of foreign direct investment into Russia came from, and almost 50% for Russian foreign trade was with, the countries of the EU.
Thus, the West contributed significantly to Russia’s earlier economic successes – an input that, especially in Germany, was seen as furthering Russia’s modernization. Europe’s economic engagement with Russia will, to be sure, continue. Yet, the volume of Western FDI, trade and other interaction has been markedly shrinking over the last months, and will continue to do so. More intense economic relations with Asia could make up for these losses in the Russian-Western exchanges.
What happens, however, if growing Chinese and other non-Western investment into, and trade with, Russia does not sufficiently compensate for the losses in the west, and for the structural defects of Russia’s economy? Without widely tangible and fully positive effects on Russia’s economy, Russian public opinion may turn against Moscow’s closer ties to Beijing. A resulting skeptical or even adversarial Russian public view on Sino-Russian cooperation could undermine the entire rationale behind Moscow’s turn to the East.
An increasing Chinese presence in Russia may be welcomed by many, if the Russian economy starts to grow again. In such a case, Chinese investments, Asian partnerships and Russia’s integration into the Eastern world could be perceived as part of a successful anti-Western redefinition of Russia. If, however, these changes are not accompanied by a Russian socio-economic rebirth, the Kremlin’s pivot to the East may become a flop.
Finally, as frequently mentioned in expert analyses, Russia and China are geopolitical competitors in Central Asia for obvious geographic reasons. In terms of economic engagement, a somewhat similar argument can be made for Siberia and Russia’s Far East. So far, the warnings about the risks of this rivalry have, however, turned out to be self-defeating prophecies. All three sides, Russia, China and the Central Asian countries have been at pains to avoid a geopolitical conflict, and been successful in diffusing political and economic tensions. Yet, it is noteworthy that China has, for instance in its energy relations with Turkmenistan, already repeatedly contradicted Moscow’s interests and policies in the region. Until now, the Kremlin has shown remarkable restraint in its reactions towards Beijing’s growing involvement in Central Asia, and Chinese immigration in Siberia as well as the Far East. A sort of condominium has developed that so far has secured a mutually acceptable modus vivendi.
While that is an encouraging trend, its political costs for the Kremlin could assume a dimension that may be difficult to handle. As a result of growing economic disparity, China’s pull in Central Asia will rapidly increase even without new ambitiousness towards the region in Beijing. As Moscow will have fewer resources and arguments for making its influence felt in Central Asia, the post-Soviet republics’ turn away from Russia may become a strange corollary of the Kremlin’s turn to the East. Should China use its growing relative might in Central Asia more aggressively than the Kremlin can swallow, Moscow and Beijing may become at loggerheads, in their common neighborhood, with dire consequences for Russia’s general foreign affairs. Moreover, there are other possible contradictions between Russia’s and China’s interests in Asia including those that the two countries have with regard to India, Vietnam, and North Korea. In a worst-case scenario, disagreements over intense Chinese engagement in Siberia and the Far East could turn the world’s largest land-border into a line of conflict, rather than economic opportunity zone.
*Andreas Umland, Dr. Phil., Ph. D., is Senior Research Fellow at the Institute for Euro-Atlantic Cooperation in Kyiv, and General Editor of the book series “Soviet and Post-Soviet Politics and Society” published by ibidem Press, Stuttgart and Hannover.