Country Report: Russia (July 2016)

Editorial Staff (with the assistance of Olga Puzanova)

Articles in the spring and early summer of 2016 were split between two categories: those on Sino-Russian relations, affirming or refuting charges that they have failed to meet expectations; and those praising Russia’s ability to remain aloof from the major disputes in the Asia-Pacific while maintaining its great power role. The former tended to draw analogies between conditions faced in Europe and Asia, while the latter found a diametrically opposed situation in the two regions for Russia. The contrast hinted at a debate under way with implications for Russian relations with Southeast Asia after the Sochi Russia-ASEAN summit of May 19-20, with Japan after Abe Shinzo’s visit to Sochi on May 6, and with both Koreas as implementation of the Resolution 2270 waits. Yet, on all three challenges, there was limited forthright analysis on the real state of things.

Divided over the meaning of the lack of progress in joining the Eurasian Economic Union (EEU) and the Silk Road Economic Belt (SREB)—just a transit corridor or a geo-economic, geopolitical rearrangement—Russians widened their horizons to Greater Eurasia. Yet, no matter the angle, China loomed large in the background. If ties were to improve with Japan, Southeast Asia, or South Asia, there could be no respite from the partnership with China—the funder of infrastructure, the security partner in balancing the West, and the civilizational opponent of the West that opens the door for Russia to assert its own rejection of “universal values.” Hitching its future to an Asia that marginalizes the United States, Russia is searching for a still-hidden roadmap.      

Asia-Pacific Region

ASEAN was the preoccupation in May, due in part to the Russia-ASEAN Sochi summit. Sergei Lavrov in Mezhdunarodnaya zhizn’ stressed Russo-ASEAN relations, praising ASEAN as the center of the Asia-Pacific region, which will remain integral to the world economy and the formation of global polycentric architecture. The success of Russian relations with ASEAN is showcased, insisting that Russia is an inseparable part of the Asia-Pacific region, that Russia plays an important role in strengthening regional security, and opposing trade liberalization on the pretense of “exclusivity.” Lavrov repeated Putin’s December initiative for an economic partnership between the EEU, SCO, and ASEAN. Yet, he was silent about two overriding issues: the dispute with China over the South China Sea, and China’s “One Belt, One Road” initiative and its linkage to the economic integration plan.

In Mezhdunarodnaya zhizn’ Ekaterina Koldunova and Paradon Rangsimalon explain that Russia is turning to ASEAN to preserve its status as a great power and be recognized as an important factor, while ASEAN is using Russia to boost its importance and address its concern about one-sided US dominance. The authors recall that in 2005, some ASEAN states opposed Russia’s joining the ASEAN + framework but in 2010, it was welcomed along with the United States to balance against China’s growing economic and political role. The authors then argue that Russia has proven to skeptics such as Lee Kuan-Yew that it belongs with ASEAN. Summarizing views from ASEAN on Russia’s geopolitical role, they find that Russia matters as one of the world’s leading players, a major exporter of arms and a country with military potential, a nation with similar political views to those of some ASEAN states, and a supporter of “sovereign democracy” with an autonomous foreign policy and refusal to interfere in the internal affairs of others. Yet, the article is ambiguous as to whether Russia will distance itself from China on the South China Sea, and if ideas at the Sochi summit will lead to concrete results or prove to be sustained. Putin rarely appears at forums organized by ASEAN, ASEAN does not know much about Russia, and for the past two years, Russia has been concentrating only on China in its “turn to Asia,” the article remarks. Yet, it insists that Russia regards ASEAN as critical in a polycentric regional system and, along with China, as one of its key partners.

Economic ties with Russia, as seen from ASEAN, have good potential—to diversify energy sources and purchase weapons. Their trade in 2014 reached $22.5 billion,, and though that is only 0.9 percent of the ASEAN total trade volume, the two sides are not used to conducting business with each other. While Russia talks of a free trade pact with the EEU, the article offers no clarity on what that would mean, noting the competitiveness of the energy market in Southeast Asia, the divergence in business culture, and the western orientation of the Russian elite, who look to Singapore as well as Hong Kong for alternative sources of financing. Recognizing a dearth of “soft power,” the article presents only the value of Russian tourism and Thailand’s appreciation of the way Russia accepts its political situation, while bemoaning reliance on Western sources of information that have not been adequately counteracted by Russia-based coverage. Many other articles on ASEAN reflected similar hopes with scant substance on what Russia may have to offer.

Vasilii Kashin in carnegie.ru on June 17 argued that with its military might and a more active Eastern policy, Russia’s approach toward resolving the problems in Asia is opposite to that of Europe. Russia remains on the sidelines of thorny problems and less influenced by historical and ideological factors; its only territorial issue is with Japan, which poses no military threat. Russia carefully avoids becoming involved in bilateral problems in the East and South China seas, but it has room to take initiatives in security. Its main task is to have political ties that help it diversify economic relations with all of the main actors, especially with Japan (with which, he says, it also needs to boost security ties). While avoiding involvement in territorial disputes, it criticizes the US role in the South China Sea. While it cannot undercut China’s confidence in it, closer ties to Japan would help it to avoid Chinese economic monopoly in the Russian Far East and to stay aloof from the region’s most serious problems. Kashin concludes that conditions are favorable in this region for Russia as it is on the margins of the deepening tensions there. It can build on the legacy of good relations with Vietnam and India. The US introduction of the THAAD missile defense system in East Asia is far less of a concern for Russia than US moves in Eastern Europe—therefore, it will not harm relations with South Korea and Japan. In the case of China, he sees no danger of large-scale migration into the Russian Far East and that resources of interest to China are too far from China’s border, posing a problem little appeal for invasion. Indeed, China needs Russia as a partner to transform the international system and would be in danger of isolation without Russia. In this view, Russia has leverage and need not be so concerned about deferring to China. Given Sino-US relations, Kashin expects China to build closer military ties with Russia (as the preconditions of an alliance have already been established). Kashin, however, is not complacent about future bilateral relations, should there be a regime change in China, given that there are voices critical of the relationship and its pretensions. Clearly, the critics of one-sided pursuit of China have gained ground compared to 2015.

The East and South China Seas are treated by Kashin as potential areas of Sino-Russian coordination—a possibility seen by some Chinese experts–but he says that there is nothing officially discussed. Russia could sell China advanced weapons, having an impact on the balance of forces. Its position against “internationalizing” the problem of the South China Sea (or East China Sea) serves China’s interests, and it will assist China against US pressure while criticizing the US position, but its arms sales to Vietnam has angered China, he adds. Kashin identifies Russia’s main aim in the region as maximum diversification of economic ties, adding that, in the long-term, its security interests depend on its economic relations in the region. Thus, he warns against the “turn to the East” becoming the “turn to China,” calling instead for a balanced system of ties with Japan the priority partner, though not at the expense of China.  Complete dependence on any country is an outcome he strongly resists. Suggesting that both sides can make tough choices on the territorial issue, Kashin overlooks China’s response to the extensive and close ties with Japan that his article advises Russia’s leaders to pursue.

On June 17, in Nezavisimaya gazeta, Vasilii Mikriukov called on Russia to draw closer to China as a countermeasure to the US inclination to weaken Russia in the Far East. This is an unabashed review of the arms agreements reached over a quarter century ago and appeal to showcase even more the unity of the two states in opposition to the United States, whose “pivot to Asia” is identified as against both China and Russia. Rather than suggesting that Russia could split US alliances in the Asia-Pacific region, he blames the allies for containment policies against Russia and China and proposes a Russo-Chinese axis distinct from the US-Japan axis, attracting Iran and Pakistan in particular to counter US strategic plans. Doubling down on the 2014-15 “turn to China” is still strongly supported in Russia.  

On June 15, Alexander Gabuev in Vedemosti asked why Russia is turning to the East so slowly, citing its main success as the declaration of cooperation between the EEU and the SREB, which boosted Xi’s initiative: giving it prestige, approving its plans for transport arteries in the direction of Europe, opening new markets for China’s infrastructure firms, simplifying access to local markets for Chinese products and linkage of Central Asian resources to China, and strengthening the role of the yuan as regional currency, while preventing a struggle with Moscow in the region. Russia won respect—unavailable in the West—and counted on access to easy credit and investment in infrastructure to connect the EEU states with each other. It would receive income from transit fees between Asia and Europe, logistical services, and new routes for its own exports. Finally, more economic development in Central Asia would reduce risks for its neighbors. Yet, when the EEU met on May 3, there was little sign of momentum, just leaders giving instructions for talks with China with prospects ahead of no less than 10 years. In the meantime, China can proceed with bilateral talks with other states, as states in Central Asia bypass the EEU as a platform for such talks on terms favorable to China while what Russia has gained remains unclear.

Gabuev finds that Russia errs in thinking of its partners in the EEU as passive objects, who had no voice in Russia joining the two pacts and then found themselves treated as traitors for directly dealing with China as in Kazakhstan’s talks about a route across the Caspian Sea bypassing Russia. Russia lacks a vision of its own role in Central Asia—apart from a general ideological thinking about dominating all spheres to befit the status of a great power—and fails to grasp that it cannot maintain economic dominance with countries that are also export-oriented and unlikely to trade much among themselves. Moscow does not seem to realize that China’s share will only keep growing, Gabuev adds. New elites will treat Russia as just one center of power, Russian will fade as the common language, and Russia’s economic stagnation may cast doubt on its role as the guarantor of security. Moscow lacks a strategy to protect its interests in Central Asia as China’s influence grows and it must stop treating countries as “younger brothers” and show the respect needed to lead a coalition of states weaker than China to establish the rules of the game. Rather than trying to interfere with alternative routes, Russia needs to make the Kazakhstan-Russia route the most attractive transit pathway to investors. Gabuev asks that Russians stop fearing the SREB as an instrument of economic expansion by China, which only leads to Russia’s exclusion in bilateral arrangements. Interfering with the creation of the SCO bank of development does not help Russia to set the rules for the bank. Along with state partners, Moscow needs to turn to private businesses as allies. Clearly, in this view, the problems are largely of Russia’s own making, while China does not offer a way out.

In the June issue of Vestnik mezhdunarodnykh organizatsii, I.A. Makarov and A.K. Sokolova discussed the possibilities of linking the EEU and SREB, which they call an important step in Russia’s “turn to the East.” They remark that the SREB, in spite of a widespread view, is not just a transport route to move Chinese goods to Europe but has a broader meaning as China reacts to various conditions, including its economic slowdown and the growing presence of the United States in Asia. There are benefits for Russia from participating: integrating its transportation system into a regional network; strengthening industrial cooperation among neighboring countries; developing the core of a more ambitious project of cooperation in Greater Eurasia. After all, the “One Belt, One Road” initiative has developed into a complex strategy for China’s internal and external policies.

Makarov and Sokolova assert that progress is being made on joining the regional plans.
In June 2015, the Russo-Chinese working group met in the shadow of the Ufa summit of the SCO and the BRICS as Asian leaders discussed the new initiatives. They aimed to set the contours of cooperation on vast infrastructure projects, forge a system to protect investments and to resolve disputes, and specify areas of high-tech coordination.  . India was wary of the Maritime Silk Road raising China’s influence in the Indian Ocean and the railroad across Kashmir and Pakistan. ASEAN states were concerned too about China’s plans. The two authors also found many in Russia nervous that the SREB is an instrument of Chinese expansion in Central Asia, using economic might to resolve foreign policy challenges. No unity was evident even among Chinese officials on whether the plan is only commercial.

On the Russian side, there was impatience to arrange financing for the Moscow-Kazan’ line and for energy projects in the Russian Far East and Siberia, but comparisons of the routes across Russia and bypassing it took precedence. Russian preference for the trans-Siberian route faced doubts as the railway is already at its limits. The second choice through Kazakhstan and Kazan’ had been approved by Chinese investors in October 2014 on condition that the high-speed route would veer south to Beijing through Astana. The width of the rails remains in dispute in what is considered the model project for the linkage of the EEU and SREB. Russians worry that a route through Iran or across the Caspian would bypass their country; in addition, they are concerned that the project will fail to materialize since sea routes are much cheaper and China-Europe trade is growing at a slower rate as both economies slump. Makarov and Sokolova argue that China needs the SREB not for transit but for security due to the US naval presence in the South China Sea and Indian Ocean. In addition, they posit that Russians are misjudging the project due to illusions about its being the bridge between Europe and Asia, and failing to gauge China’s economic driving forces as its seeks new sources of growth. They trace a path of Russian fear of the SREB in 2013, euphoria in 2014, and sobriety in the second half of 2015. There was no way to stop it, and China guaranteed that it would respect Russia’s political interests in Central Asia.

Russia found that Kazakhstan and Kirghizia prefer bilateral talks with China (just as Putin signed the merger agreement without the presence of the Central Asians). At odds is the division of labor, since Russia and Kazakhstan seek high-value production on their territories, and China seeks resources and jobs for its workers, whose presence leaves others wary. With Sino-Russian trade slipping, Chinese investments on hold, and Russians struggling with recession, sanctions and exaggerated hopes for a breakthrough in development of the Russian Far East, talks in 2016 turned to the lessons from the failure of the “turn to the East” and the lack of a panacea from political closeness with China. In this context, the idea of Greater Eurasia offered new hope, limiting dependence on China alone, opening new markets for Russian goods, and shifting the focus of discussion. One corridor would lead to South Asia, another would cross Mongolia, agreeing with China’s support for linkage with Mongolia’s “steppe route.” Essentially, areas from India to Iran to Korea, which are excluded from TPP and TTIP, would join in a transport, trade and investment, social, and political system, according to this conceptualization. In this way, Russians grasp for the SCO to build from the EEU and SERB, drawing on proposals by Russia to China. Somehow Russia would be able to turn the Silk Road goals of China—to outsource labor-intensive or environmentally harmful production, help northwest China develop and stabilize, guarantee the use of construction capacity, and especially, diversify export risks due to confrontations at sea with the United States—into a transport, industrial, and political blueprint for Eurasia.

On the Russia-China-Mongolia triangle, Viktor Samoilenko in Mezhdunarodnaya zhizn’
emphasized Russia’s influence in the world, courtesy of its location and natural resources. He wrote about its continuous search for strengthening the security of its eastern flank via integration into the Asia-Pacific region and activism in the SCO, now becoming the number one factor in the political and economic life of Asia.  He concentrated on one triangle, visualized as part of the linkage of the EEU and SREB, plus the “Steppe Road.” The aim is to boost economic growth at the sub-regional level. As for the SREB, he says that the major part of the belt should pass through Russia, helping to resolve Russia’s needs. Mongolia seeks to seize the opportunity of linking the Russian and Chinese plans to make itself the main line of communications between the two as a transit country, identifying five corridors: railroad, auto, electricity, gas, and oil. Yet, it fears that it will be bypassed, as has happened with many of the recent Sino-Russian projects. For Russia, triangular economic development also has its merits: stimulating development in parts of Russia even as the routes through Kazakhstan take precedence. In 2012-13, the Mongolian president called for closer triangular ties, which arose from concern that falling prices and the departure of international firms would leave his country in a troubled state. Russia followed with ideas for an economic corridor in 2015. The article noted that there are financial and economic problems in all three states complicating this quest, that past Russo-Mongolian plans have not materialized, that questions remain about the role of Mongolia’s third neighbor (inclusive of many states) that led to Russia’s exclusion from projects, and that “resource nationalism” since 2012 has driven out foreign companies from Mongolia, and lower prices have added to the serious risk for foreign investors. The article, however, mentioned little about China and offered no reason for optimism about the aspirations that it strongly endorses—another example of wishful thinking despite awareness of realities.

Korean Peninsula

Anticipating a deteriorating situation on the Korean Peninsula, most likely to lead to armed conflict, Kashin, in the article cited above, observed that Russian specialists differ from most in the West in regarding the North Korean regime as capable of fighting hard and long, which could result in a humanitarian catastrophe. He argues that North Korea conducts a pragmatic, calculated policy to use tension to express its dissatisfaction to Seoul and Washington. He says that the 2016 sanctions can provoke it to heighten tensions or, alternatively, to cut a deal with China so that the sanctions will not be seriously enforced, which could exacerbate Sino-US relations. Russia, he argues, has all of the advantages in the region: good ties to all participants in the conflict and the possibility of regulating its degree of involvement. It is not marginal, but a major player in the crisis.

On May 5, in Rossiya v Global’noi Politike, Georgii Toloraya asked if there would be war on the Korean Peninsula. Finding that China’s fundamental change in position, away from an unconditional support for the DPRK, has been decisive, he sees differences opening within each camp—the United States vs. the ROK, and Russia vs. the PRC. In the first case, there is doubt about the nature of US protection, resulting in calls for nuclear arms in the ROK. In addition, there was concern about Washington using the sanctions and growing tensions as a pretext for strengthening its military presence in the region through deploying THAAD, which may lead Russia to weaken its cooperation with the other states. While blaming Pyongyang for disturbing peace, he also criticizes Seoul for its role in the current crisis, projecting propaganda against the DPRK, which is only interested in preserving its regime. He suggests that one should only laugh at threats to “destroy Manhattan,” but that is not possible in the West, which is determined to destroy this “odious regime.” Pyongyang’s goal is recognition from Washington, explaining its behavior. Obama failed because he would not pay the price of normalization in exchange for denuclearization, leading to predictable results, even if China agreed to isolate the North, concludes Toloraya. THAAD, he says, is to show China its own security interests will be harmed unless it is tougher on the North. He calls South Korea’s role very negative, both toward the DPRK and in trying to drag others, including Russia, to its side, for the goal of occupying the North, which has remained unchanged, especially since 2008. Park’s own initiatives were a smokescreen for unification on the South’s terms, readers are told. In response to Kim Jung-un striving to restart relations, Park responded by suffocating the North. Such reasoning about Obama and Park runs the risk of misrepresenting their intentions, shifting the blame from Kim Jung-un, treating nuclear weapons as hardly a problem at all, and dismissing the sanctions as well as defensive measures by others as of little consequence in resolving the crisis, even hinting that Russia should break with the soft stance of China toward the US-ROK position.

China

On June 27, in Nezavisimaya Gazeta, Vladimir Skosyrev explained that China is not preparing to pull Russia out of its crisis even though Putin in his visit with Xi Jinping succeeded in strengthening relations with Xi Jinping. It cast doubt on the level of political cooperation because of the shakiness of the economic foundation, noting that there are no contracts for a series of big project in energy and high-tech areas. The explanation offered is that Chinese investors are afraid of Russian bureaucratic obstacles and US threats to sanction banks linked to Russia. The upshot is that it will take Russia’s “turn to the East,” rebalancing political and economic interests to the dynamically growing Asia, will take a long time. Putin and Xi share many views, but their agendas differ: Xi needs Russia to realize the Silk Road Economic Belt, and Putin needs a partnership as a counterweight to US dictates. Yet, China does not want to be drawn into confrontation with the West over something so insubstantial, in its thinking, as the Donbas. Putin also needs Chinese money and technology, and it has taken time for Russians to realize that China is not in a condition nor does it have the desire to give Russia what it wants. The article concludes that it is now clear that not a step has yet been taken to link the SREB and the EEU. Pipeline deals are stalled, the high-speed Moscow-Kazan’ railway is on hold (although it is possible that a deal will be reached by the end of the year if both sides are confident that this will be a money-making project), and the planned passenger airplane in progress since 2008 is only now beginning to get set. Skosyrev cites Alexander Larin that “regrettably, it has become a tradition that on a high level a thick packet of agreements is signed, which are little more than intentions and go no further without corresponding contents or are realized very slowly. The problem is that Russia has a very unfavorable investment climate, which repels investors, and even now there are no permits for the Advanced Development Territories in the Russian Far East. Indeed, the article observes that many foreign businessmen consider the business climate to have grown worse since the Ukraine crisis began. The one bright spot in the article is that use of the ruble and the yuan is increasingly possible and the structure of trade is now improving for Russia, according to Putin.

For Vasillii Kashin, in Rossiiskii sovet po mezhdonarodnym delam on June 29, there was a different take on Putin’s late June visit to China, which brought concrete results without heightened expectations. Kashin called it one of the most result-laden Russo-Chinese meetings at the top level and unusual for its potential to influence the dialogue of both Moscow and Beijing with the United States on strategic questions. He also found promise in the intentions expressed to work on a completely new integration initiative—an all-around Eurasian partnership, which would encompass not only the EEU and China but the states of ASEAN too—praised as possibly having an enormous impact. The joint declaration presented Russia and China as defenders of global strategic stability against the dangerous tendency to seek military superiority with the aim to use force to advance their own interests. Ignoring their own actions that change the status quo and the North Korean threat to it, they depict themselves as acting defensively to guard the status quo against the United States. The article suggests that with this summit, new coordination against US moves toward stronger missile defense has considerable significance. An analogous result is seen in the area of information security, where a new level of coordination will follow.

Kashin is also upbeat about the economic results of the summit, stressing first Chinese financing of $12 billion for the Yamal LNG project and the joint enterprise for building wide-body aircrafts, which is seen as significant for Russia’s civilian aviation industry. He adds that, at long last, the joint project for heavy helicopters is at the stage of realization, having started in 2008. Thus, Kashin insists that real progress has been made in preparing large, joint projects, including gas pipelines and a petrochemical complex with SINOPEC in the Russian Far East, and that there has been considerable movement forward in the development of cooperation, to the extent that it would have been difficult to expect better results. The problem, he adds, is failure in the management of expectations, which acquires a “catastrophic character” in Russia due to the uproar of state propaganda as soon as political plans begin to take shape. The result is not only disappointment, but discrediting of the plans. Kashin adds that in 2014 propaganda trumpeting the “turn to the East” raised exaggerated hopes about progress in bilateral relation, leading to the letdown in 2015, which was accompanied by absurd rumors that China was actually joining in the sanctions and that no progress was occurring in Sino-Russian relations. The reality is that bilateral economic cooperation is determined by a limited number of very big projects in energy, infrastructure, and industry, each of which requires years of negotiations and must not be rushed or the quality of the deal will be affected. In fact, in severe period of Russian economic crisis, China offered to help, which Russia declined due to its weak negotiating position. Given the sanctions regime, he says that the experience of Sino-Iranian economic ties had to be considered to move Sino-Russian financial ties beyond the reach of US financial controls. The article asserts that all is well in Sino-Russian relations despite unavoidable obstacles.

Vitalii Vorob’ev explored the formula for Sino-Russian partnership in the 21st century in Mezhudarodnaya zhizn’, recalling 20 years of their strategic partnership. He praises the success in turning the border issue into a good-neighborly symbol, making light of historical discussions in China about “lost territory.” He raves about how fast the focus of relations turned from the past to the future through uninterrupted growth of mutual understanding. Vorob’ev stresses the role of military and arms ties in the 1990s as a brick in the foundation of trust. Removing the territorial issue and military tensions on the border, relations thrived, although he notes some differences in thinking that led to constant search for harmonization based on equality and respect for the other’s opinion.

On May 9, in Kommersant, the results of a full year of joining the EEU and SREB were assessed by Mikhail Korostikov with stress on difficulties, including doubtful economic routes and mutual distrust. He called this move the culmination of unprecedented closeness caused by the split between Moscow and the West, demonstrated by the May 2015 joint appearance of Putin and Xi as victors in war at the 70th anniversary parade. Korostikov pointed to Russian expectations—support from the world’s second economic power after economic ties with the West were fractured, modernization of infrastructure by using Chinese money, and international realignment through joining the EEU and SREB as the two sides recognized each other’s sphere of influence. China was seen as securing its northern flank at a time of competition with the United States. It was eager to find use for surpluses to increase connectivity between China and Europe and to “buy itself friends” in Eurasia combining soft power and investment projects as well as preparing for confrontations with the United States by developing continental supply routes. This gave Russia a unique opportunity to resolve its traditional infrastructure problems, says Korostikov. By April 2016, the stage of preparing the routes had begun, drawing the concrete proposals of the EEU countries. The Silk Road fund had already bought a 9.9 percent stake in the Yamal LNG project, and more was expected. In March, together with Wang Yi, Lavrov had called for linking the SCO with ASEAN, forming a single space across the Eurasian continent, repeating a December 2015 assertion by Putin on Russia’s initiative for the integrated areas from Belarus to Brunei. The article casts doubt on what can be achieved by Russia, suggesting that this is a sign of losing interest in the unity of the Russo-Chinese anti-Western front and seeking to avoid extreme dependence on China.

Korostikov finds problems of both logistics and trust in the Sino-Russian plans. For the Chinese, a non-stop route to Europe is ideal, while Russia and Kazakhstan seek the maximum number of stops to receive money for more than transit. Three routes via the EEU within the SREB are under consideration: 1) via Kazakhstan to Western Europe, said to require $2.5-3 billion for modernization; 2) from Grodekovo and Zabaikal’sk using the Trans-Siberian railroad; and 3) a trans-Caspian route bypassing Russia, in need of $2-2.5 billion in upgrading. A problem exists in Kazakhstan’s failure to build facilities such as container terminals and to train personnel, despite past Chinese funding for border infrastructure, due to central-local divisions and fear of dependency on China. The costs for the route are therefore twice those of the sea route. Heavy winds in the spring and fall complicate transit. The article also finds that the route through Zabaikal’sk has a few problems of its own. China’s ultra-contemporary complex in Manzhouli is in stark contrast with Russia’s two small (private and state) terminals and the 14 kilometers to the trans-Siberian on a one-track line with 12 exits has yet to be modernized despite claims that the number of containers handled will be nearly doubled. Cheaper Chinese goods replacing more expensive Japanese and Korean ones will not bring joy, one source predicts.

Casting doubt on the Eastern Economic Forum to take place in September, Korostikov asks what successes of Russia’s “turn to Asia” will be celebrated. He warns that the sea route remains economically preferable despite all the talk of land routes, and that China has non-economic goals in mind, which Russian authorities and companies fear: to wrest Central Asia from Russia’s orbit, not needing Russia as an intermediary with these states, and dismissing the EEU as a mere attempt by Russia to coerce these states into its orbit and something that makes no economic sense. The process of formation of the EEU is very slow to advance without a unified customs code needed by China and obliging it to proceed with individual governments. In the near future, China is likely to show little interest in projects to build infrastructure on Russian territory, while blaming the Russian side for not wanting the Chinese on their territory, e.g., by renting land for farms and shops. Permission for Chinese investments is being blocked at various levels in Russia as trust in foreign economic activity in Russia is exceedingly low. Russia tries to dictate the rules of the game on an economic playing field where China’s weight is far greater. The article concludes that frustration with Russia could lead to building the SREB such that it bypasses Russia. The entire onus is put on Russia for the past year’s unrealized results in this endeavor.

Vladimir Portyakov, on May 6 in Rossiya v Global’noi Politike, asked if China had surpassed the United States in terms of comprehensive power, as Hu Angang wrote in 2015. He disagrees on the economic dimension, finding China at 63 percent of the US level in 2015, and suggesting that China’s model is in crisis. Portyakov proceeds through other dimensions to draw the overall conclusion that China has not yet surpassed the United States, but he finds it significant that the Chinese are now claiming that they have done so.

#ASEAN #Asia-Pacific region #East and South China Seas #Eurasian Economic Union #Silk Road Economic Belt #Sochi Russia-ASEAN summit