Country Report: Russia (November 2020)

Editorial Staff (with the assistance of Olga Puzanova)

Sino-US relations were foremost on Russian observers’ minds in the autumn of 2020, both before and after Joe Biden’s election victory. Anti-Chinese sentiments in the post-Soviet space drew attention, as did China’s troubling discourse about the Arctic and talk of the Arctic-Pacific as a construct—a new way of showcasing Russia’s centrality. India was another focus of attention, given both its warmer attitude toward the Quad and the search for understanding of its historical memory. With Abe departed in Japan, his legacy and prospects for Russo-Japanese relations were of interest. There was also some notice taken of the stalled condition of Putin’s “turn to the East.” China’s assertive moves were raising new doubts. Past popular themes such as Greater Eurasia, the docking of the EEU and BRI, and the Korean Peninsula were less visible.

Above all, fundamental problems were neglected in Russian writings. Why had the Russian Far East fallen short on one developmental program after another? What does Xi Jinping’s turn to “wolf warrior” foreign policy mean for Russia? Why had Abe’s quest for a breakthrough with Putin failed? What could Russia do to manage the growing rift between China and India? The one focus of far-reaching significance was Sino-US relations, but US thinking was not conveyed.

Sino-US relations

Evgenii Kogan on November 10 in Vedomost’ wrote about Biden and China. Biden’s victory gives China hope for a thaw in relations with the US and the removal of some sanctions, but will that—plus China’s success in overcoming the pandemic—put China ahead in world economies? China is growing from the base of a low per capita income and will have to face the challenges of a developed country. The Trump legacy with China will last a long time, even as Biden makes changes. Things will stabilize some under a “bureaucratic heaven” of US deliberations. Remarks such as these reinforced thinking that China will not be so strong as to forego a need for Russia or that the US will be able to extricate itself from the new cold war despite renewed dialogue.

Sergey Afontsev in the October RSMD wrote about the risks to Russia from the Sino-US decoupling and its impact on the global economy, which he did not find very large. The slide of the world economy towards protectionism and the start of full-scale confrontation between the US and China are decisively going beyond the framework of a trade war, we are told. The pandemic has added depth to geopolitical shocks. For Russia the main risk factor in the context of the US-China confrontation is the downward pressure on the global commodity market associated with a slowdown in the growth of the Chinese economy. This is fraught not only with a reduction in budget revenues and resources but also with an increase in the volatility of the ruble exchange rate. The outflow of capital from emerging markets, which is inevitable in the event of aggravation of US-China relations, will act as an additional negative factor. 

These effects could be partially offset by the intensification of cooperation with Chinese companies interested in expanding the range of partners as pressure from the US grows. Nevertheless, the significance of this factor will critically depend on the readiness of Russian manufacturers to join the value chains formed by Chinese companies, as well as on the readiness of Russian regulators to allow large-scale creation of the corresponding chains on Russian territory. Russian regulators have been cautious about such chains, seeing them as a threat to domestic companies, and focused instead on creating products for servicing the domestic Russian market. Few Russian companies are of interest to potential Chinese partners, considering the technological level achieved by the latter, as well as sanctions threats for Russian—and soon, probably, Chinese—technology companies. Under these conditions, the negative effects of the confrontation between the US and China for the Russian economy will likely prevail over the positive ones, although their net contribution to the slowdown in GDP growth is unlikely to exceed 0.2–0.3 percentage points.

On October 4, Vladimir Skosyrev wrote in Nezavisimaya about the US pulling partners into an anti-Chinese bloc. He covered Pompeo’s tour of Japan, South Korea, and Mongolia, the highlight of which was the meeting in Tokyo in the Quad format. Formally, this structure was created for a dialogue on security. But Washington wants to turn it into an Asian NATO-like alliance against China. The rest of the Quad do not want to escalate against the PRC, but China managed to spoil relations with many countries in the region. Even in Mongolia, there are demonstrations against Beijing’s policy on the national question—and this makes it easier for the head of US diplomacy. Washington is tough on China, and most of America’s Asian allies are happy about it. But they are not enthusiastic about Pompeo’s anti-Chinese rhetoric and do not want to openly antagonize China. Special mention is made of the US and India being united by anger against China, and they are forging stronger military ties, which could change the balance of power in the region. Acknowledging that Washington’s relations with India have not always been friendly, the article hints at blame of China for alienating India. Citing the crisis in the Himalayas that is helping to change Indian thinking, it suggests that American diplomats believe it will draw India into regional partnerships with the United States, Japan, and Australia. Former State Department officials say this was aided by offensive actions by China itself. Because of them, India is looking more favorably on participation in the anti-Chinese coalition. It goes without saying that this strikes a huge blow against Russian geopolitical aspirations.

The article turns to Modi’s recent phone call with Suga, stressing that the two countries must work together to ensure a "free, open, inclusive atmosphere" in the Indo-Pacific region. In the same vein, they interpret the Quad. Earlier, Delhi tried not to provoke China too much. But now India is not showing its former restraint about rapprochement with the United States. In 2020, India is expected to purchase US $20 billion worth of weapons. India has previously always negatively perceived the presence of foreign military forces near its borders. But in September, the US entered into a defensive agreement with the Maldives, a tiny island nation in the Indian Ocean. India blessed the deal. This too is an unacknowledged problem for Russia, whose concerns are not directly raised.

It is further mentioned that China has quarreled with everyone, is pursuing a policy that rejects its neighbors. The secretary of state travels not only to Japan, but also to Mongolia, where prominent American figures rarely travel. In Mongolia, anti-Chinese demonstrations have taken place over the past two days. The reason is that people of Mongolian nationality were arrested in the Autonomous Region of Inner Mongolia. In this analysis, there is more than a wisp of disappointment that China is driving states toward the US rather than rallying states in Asia behind the Sino-Russian agenda of prioritizing opposition to the United States’ presence.

China

In Kommersant on October 2 Alexandr Gabuev wrote about China’s mechanism for sanctions, creating an official basis for full-fledged application of sanctions as a first sign that it is fighting back against US pressure. Some in Russia are enthusiastic, given nervousness about new anti-Russian sanctions under Biden, but Gabuev warns that Chinese sanctions will fall short because of the inability to impose secondary sanctions under threat of a cutoff from the global financial system. China can restrict access to its market, impose visa restrictions, and prohibit its citizens from dealing with designated foreign businesses. These steps are already being used, as in the case of South Korea, but they pale before the threat of not being able to use dollars through the US banking system. The yuan only accounts for less than 5 percent of world trade, a share that is growing only slowly due to China’s own restrictions, its inconvertibility, and unpopularity. Gabuev concludes that China’s sanctions will be as ineffective as the bows and shotguns used by imperial Chinese soldiers to fend off foreign long-range guns. This conclusion flies in the face of reasoning that China has the clout to contest the US in the use of economic coercive power.

In Sravnitel’naya Politika, No. 4, I. E. Denisov discussed the transformation of China’s foreign policy under Xi Jinping focusing on discursive power, which is treated as the successor to past pursuit of soft power and reflects a more severe outlook on conveying China’s rise. Earlier the focus was on telling about the “good history” of China (its culture, philosophy, morals). Now, the aim is to convey the transformative role of China in the global transfer of authority. On a wide array of international problems, China’s discourse serves to further its interests. Trump’s decision to withdraw the US from a range of international organizations is seen in Beijing as creating further possibilities for Sinification of international political standards through its discursive power. One example of special relevance to Russia raised in the article is the Arctic. On January 26, 2018 the PRC issued a white paper on the policy of China in the Arctic, some five years after China gained observer status in the Arctic Council, a further six years after this goal was made clear. China’s discourse asserts that the Arctic belongs to all nations of the world, and since one-fifth of the world’s population is Chinese, China deserves its fair share of the resources, Terms such as “near-Arctic state” and “important stakeholder in Arctic affairs” ignore national laws, especially those of Russia and Canada, the article warns, This is seen as a long-range discursive strategy, putting China forward at the center of the world stage and forming an agenda for new “rules of the game”—not openly treated as opposed to Russia.

In Izvestiya on October 29 Natalia Portyakova wrote about China’s self-sufficiency bet in its new five-year plan. Stressing the great importance of the October plenum, she points to plans to stimulate domestic demand and lean on the digital sector. Despite deglobalization, China will remain highly connected to the world economy. Since 2006 China has been successful in reducing the share of GDP from foreign trade from 36 to 17 percent. Yet Trump’s openly anti-Chinese policies, including against Huawei, have made self-sufficiency doubly urgent. Both US political parties are determined to block China’s rise, viewing it as a geopolitical, ideological, and economic opponent. The article concludes that the mission of China’s leadership is both well-considered and realistic, given the 90 percent success of the past three five-year plans.

In Nezavisimaya on October 18 Sergei Syplakov wrote about China’s strategy over the next 15 years, prioritizing reliance on its own forces while remaining open to the outside. Xi Jinping’s trip to Shenzhen, reminiscent of Deng’s 1992 trip to the South, set the goal of generally completing China’ modernization, but the task is complicated by cold war opposition from the US—which will use all of it forces to isolate China and confront it ideologically—de-globalization, and an overall worsening external environment. Internal problems also lead China to search for a new strategy, along with the impact of the pandemic in the world. More self-reliance and less openness are linked to national security and control over possible risks in high technology, energy, food security, etc. The author concludes that China’s approach is fully pragmatic. It will lose part of foreign production but can attract other foreign investors, above all in modern services. The appeal of China’s vast market will work, including more free trade zones and the “free port” of Hainan as well as gradually opening financial markets. Diplomacy will do all that is possible to prevent an anti-Chinese coalition, especially Europe joining it.

On October 15 in Nezavisimaya Vladimir Skosyrev wrote about China’s policies in Tibet, noting that people are forced into camps, where they are encouraged to abandon their traditional faith, learn the Chinese language, and master a working profession. And when the course is over, the new proletarians can be sent to work in a factory somewhere in another region of the country without further ado, as is happening in Xinjiang. The author considers this a strongest attack on the way of life of Tibetans since the 1966-1977 Cultural Revolution. It is the forcible transformation of nomads and farmers into the working class, a researcher associated with the Jamestown Foundation is quoted as saying. The article goes so far as to charge that the title of separatist was given to the Dalai Lama unreasonably. In fact, he does not demand independence, but stands for broad autonomy. This newspaper seems to have grown bolder in criticizing China, but it is not alone, albeit in often finding sources from outside Russia.

Ivan Zuenko, Iurii Kulintsev, Alibek Mukambaev, and Kubatbek Rakhimov on November 9 in Rossiya v Global’noi Politike wrote about anti-Chinese protests in post-Soviet space. They cite Russia, Kazakhstan, and Kyrgyzstan, pointing to Sinophobia and the weakness of China’s soft power, which coincides with integrationist processes positive for China’s foreign agenda.

In Kazakhstan areas far from China’s border have more anti-Chinese sentiments despite little experience dealing with Chinese. Dissatisfaction relates to the lack of workplaces in the privileged oil sector as Chinese occupy the upper echelon, arousing tensions and Sinophobia. Episodes of haughty diplomats have mattered as did the 2016 unilateral Chinese decision to tighten conditions for tourist and business visas, when China’s representative responded that the Kazakhs do not know with whom they are dealing. That year also saw mass meeting against a change in the land codes allowing foreigners to rent farmland on a long-term basis. Public pressure led to a moratorium on putting this into force. Only indirect mention is made of the reactions to Chinese ethnic policies in Xinjiang, but a Chinese blogger in April 2020 aroused a furor by asking why Kazakhstan is striving to return to China. A movement to repatriate from Xinjiang drew attention from this posting, leading to an official protest by the foreign ministry of Kazakhstan on the eve of the first visit to China of the new president Tokaev.

Another issue regarded the construction of a joint enterprise in the oil and gas sector in western Kazakhstan, in which opposition to Chinese expansionism led the government to decline Chinese credit. The article proceeds to say that Kazakhstan regards China as a supplier of technology and investment. In October 2019, a documentary film “Near Neighbor: Reality without Myths” offered an expert evaluation of the level of cooperation and explained why Sinophobia had arisen, showing a decrease in foreign debt to China. Three reasons are noted: the widespread conviction that joint ventures (55 were cited) bring outdated, ecologically dangerous structures; Chinese workers arrive, limiting the workplaces for Kazakhs; and due to corrupt Kazakh officials, projects are delayed and much that was borrowed is wasted.

In Kyrgyzstan, there were anti-Chinese protests from 2016 due to gold miners in Chinese companies, alarm over land transfers to Chinese companies, and concern over growing indebtedness to China (50 percent of the foreign debt after rising rapidly for a decade). Part of the mass media—including a radio station from American project “Liberty”—spread fear, citing the case of Tajikistan, which had to transfer territory over unpaid debts. Credits were being directed at the Bishkek thermal power plant, which were accompanied by prominent cases of corruption, as anti-corruption measures were deployed as an instrument in political battles. In early 2020 concern centered on construction of a trade and logistics center 100 km from the border city of Torugart, which had been expected to draw $280 million and create 15,000 workplaces for locals despite a sparse local population. It was discovered that 170,000 hectares would be leased for 49 years, raising fear of land being sold to the Chinese. To avoid conflict the Chinese investor withdrew. The authors conclude that the main cause of the protests were the interests of local businessmen and politicians, using anti-Chinese rhetoric in the media and local offices to resolve their problems.

The article next turns to the eastern regions of Russia, asserting that anti-Chinese feelings have been much less there than in Central Asia due to three circumstances. First, against the background of opposition from the West, China is considered the main geopolitical ally of Russia unlike in the 1990s or, to a lesser degree, the 2000s. Second, Chinese diplomats and others are more careful in what they say about Russia than about other post-Soviet states, attentive to Russia’s geopolitical value. Third, the scale of penetration of Chinese capital and migration into eastern areas of Russia is far from what would be regarded as expansion, and the number of Chinese workers has been falling. Yet the activities of Chinese business largely remain in the shadows, pretending to be under Russians, prioritizing informal agreement, and concealing the gap between the declared and real scale of operations. There are no reliable statistics on the amount of investments and the number of Chinese working in the Far East, and the public does not trust the official figures while still fearing the threat of investments. The media tends to exaggerate the scale of the Chinese presence and to accentuate the negative side of cooperation with China, agitating Sinophobia, more on line than on the streets.

The two main cases of anti-Chinese outbursts in the 2010s were in the Baikal region. One was a reaction to a plan to transfer 115,000 hectares of unused agricultural land; the other a plan to build a bottling plant for Baikal water, which led to a petition to stop it and demonstrations in 30 cities for a “clean Baikal.” In response to Russian xenophobia, anti-Russian rhetoric spiked on Chinese social media. Work could not proceed. In 2018, Oleg Deripaska acquired a plant able to bottle 70 million liters of Baikal water a year aimed at sales to the Chinese market. The article explains the situation as economic competition, in which Chinese origin of an investment serves as a convenient excuse for arousing public discontent. Media keen on boosting their ratings find it easy to drum up Sinophobia. Thus, justification for anti-Chinese actions are questioned here.

In all of these countries the key problem was the absence of trust in society for authorities. Anti-Chinese actions resulted not because Chinese companies brought real harm to the local economy (usually they did not get that far), but because society did not trust the state, whose officials were suspected of corruption and hiding the real motives for cooperation. On social media bloggers repeatedly denied official rhetoric. Ads depended on the number of visitors to sites, leading to conscious or unconscious provocations in headlines, photos, and quotations. Local residents were fearful of ecological disasters and Chinese arrivals driving them out. in these sparsely settled areas at a loss for development. Central Asians were much easier to mobilize in protests, reflecting national moods, weaker governments, much more influential foreign sources of information, and stronger Sinophobic ethnic and religious motives such as solidarity with repressed Chinese compatriots or fear of loss of ethnic purity. Russian activism was far less. In all cases protests led to halting investment, worsening the investment climate.

On November 9, in Rossiya v Global’noi Politike Alexei Kupriianov wrote about constructing the Arctic-Pacific. Calling the concept of the “Indo-Pacific” notorious, he ties it to Washington losing hope in ASEAN states serving as a bulwark against China and turning instead to India, Whereas the US focuses on the Quad to contain China, Asian countries interpret the concept to revive inclusive trade and cultural cooperation and are interested in Russia with its rich natural resources and powerful fleet being involved. Yet, Russia criticizes the Indo-Pacific, failing to note the Asian interpretation. It cannot project force in the Indian Ocean, avoids conflicts in the Pacific, and calls for Greater Eurasia—a purely continental project of little interest to India and Southeast Asia as well as much of East Asia, whose transportation is by sea. Indian elites needed a new ideological and political construct in response to the rise of China and growing great power aspirations. Russia too needs a new geopolitical construct, given global warming opening the Arctic, the rise of Pacific economies, and the start of what will be a long-term Sino-US confrontation. The Arctic can be transformed for transit and resources, readers are told.

Arguing that China’s navy is several times weaker than the US fleet, the article stresses its need to overcome the vulnerability of the Southern Sea Route, which can be interrupted at any point in contrast to the Northern Sea Route protected by Russia. More expensive it may be, but that is not significant given its security value. For Japan and South Korea, the Northwest Route to the US will be sought as well. Russia needs other countries to develop the Arctic-Pacific while guaranteeing observance of its political interests. If countries try to carry out notorious freedom of navigation operations, Moscow must prevent violations of its sovereignty, e.g. warning China that it risks losing a safe sea route and the entire cold war to the US. The article opposes the use of other countries’ icebreakers. The challenge is to attract investments while ensuring unconditional sovereignty, the article concludes without explaining how this is realistic apart from the assumption that China will be desperate enough to need Russia for its security vs, the US.

India

Olga Solodkova in the same issue of Rossiya v Global’noi Politike wrote about historical memory in India. She sees the BJP using historical politics in order to achieve national unity and mobilize society as asserting interpretations of historical events as dominant. Defining this as
“interpretations of history chosen for political reasons, and attempts to convince the public of the correctness of such an interpretation,” she discerns a movement to create a special Hindu identity, primarily associated with belonging to the nation. The concept of the Hindu nation with Hindutva, Hindu communalism, or revivalism spread as religious unification coincided with the formation of the Indian nation. While the Prime Minister Jawaharlal Nehru, who advocated a secular state and tolerance for Muslims, believed that “to call Indian culture Hindu is a complete delusion,” Hindu nationalist organizations gradually emerged from the shadows until the BJP gave it a big boost in pursuit of a new national identity as a nation of Hindus in search of a vaunted place in the world as an exclusive civilization. History is the key to identity, socialism is dismissed, and Narendra Modi is the leader for shedding a 50-year history of confusion. Left unclear is what this means for Russia—a close partner of India over much of this sorry history. At least, the strong antagonism to colonialism could suggest no move toward close US relations.

Mezhdunarodnaya Zhizn’ on November 9 examined prospects for Indo-Russian economic and trade development as the pandemic is overcome. Vacheslav Bessonov and Aleksandr Rybas insisted that the pandemic’s influence on the development of the international economic system is unprecedented as many countries impose travel restrictions, closing down firms and no longer working with organization, etc. As a member of this system, Russia must grasp the most effective way of exiting from this crisis.  Autonomous India has its own measures to get out of the crisis. but it faces great demands on its state and regional budgets. It is prioritizing the coal industry, defense industry, civil aviation, energy, social infrastructure, space, and atomic energy. International investment is critical. Russian companies can engineer services in each of these spheres, and their technology and equipment in agriculture have potential. In information technology, health and distance learning are areas for cooperation. Thus, the pandemic is considered a corrective to economic development with promise for Russia. India will adhere to its course of maximal autonomy in all spheres of power, guiding its acquisition of new technology abroad. Missing from the article is any proof that Russia will be competitive.

Japan

In Nezavisimaya on September 20 Valery Kistanov wrote that Suga said his administration will keep the Japanese-American alliance as the main pillar of the country’s foreign policy. He will continue to implement the concept of a “Free and Open Indo-Pacific” region put forward by Abe and taken up by Donald Trump, which has anti-Chinese overtones. Along with this, he intends to build stable relations with neighboring countries, including China and Russia. Kistanov adds that
Abe’s younger brother, Kishi Nobuo, who became minister of defense, has a reputation for being knowledgeable in defense and security issues. Over the years, he has held a number of positions related to these areas. Like his older brother, Kishi is in favor of a constitutional amendment, revising the pacifist postwar constitution. There is talk of preparing to deliver a preemptive strike against enemy bases in the event of a threat to national security, an idea believed to be aimed at eliminating the threat posed by North Korea’s nuclear missile potential. It is clear, however, that such an idea can be tried not only on Pyongyang, but also on Beijing and Moscow, warns the article. Yet, it insists that Tokyo needs to improve its relations with all three capitals, as well as ties with Seoul that have fallen below the floor, adding that the ability to refresh Abe’s approaches to these tasks will largely determine Suga’s success or failure in the diplomatic career. Suga has already paid tribute to the "diplomacy of the summits."

On Russia, the article observes that Suga will proceed from the last telephone conversation between Abe and Putin, where the “two friends,” who met a total of 27 times, confirmed their intention to continue to negotiate on the conclusion of a peace treaty between the two countries. Suga told a press conference on September 14 that Abe "has strengthened an extremely trusting relationship with Russian President Vladimir Putin." At the same time, the new Japanese leader has already noted that he intends to continue the dialogue on the issue of the "northern territories." He puts a new nuance to the position of Abe, who avoided mentioning all four islands at once, emphasizing agreement with Putin to speed up negotiations on a peace treaty and a territorial issue based on the 1956 Soviet-Japanese Declaration. The document provides for the transfer of only two smaller islands to Japan as a gesture of goodwill, and only after the signing of a peace treaty, readers are told, with the addition that Medvedev observed that after the amendment of the Russian Constitution, the dispute with Japan about the ownership of the Kuriles has been facilitated, as well as by the statement of the press secretary Dmitry Peskov that the answer about the fate of the disputed islands is in the updated version of the Russian Constitution. Attention is also drawn to Peskov’s words that Moscow and Tokyo under Abe did not come close to signing a peace treaty. Whether the two capitals will approach this goal under Suga in light of these “nuances” is cast in a more skeptical light.

Oleg Paramonov in RSMD on October 28 wrote about the modest results from Japan’s long road to boost military exports as part of Abe’s legacy along with his push to strengthen ties in security under the concept of the Indo-Pacific region and with others in NATO, Turkey, and ASEAN. The case of the Philippines is cited, where Japanese radar will be used to monitor Chinese activity in the South China Sea with new exchanges of information. This will help Japan monitor the strategic zone between the Philippines and Taiwan. Attention centers also on the Pentagon’s interest in Japanese robotics, lasers, and composite materials. Yet the article notes that this vector of Abe’s defense policies seriously interfered with Abe achieving his goals with Russia. Japanese companies, despite having a small share of defense orders in their overall production fear that their image as “merchants of death” could be seriously hurt. Unlike in Russia, there is no autonomous defense-industrial complex. The article still concludes that for peacekeeping and humanitarian missions there could be some space for joint projects between Russia and Japan.

Turn to the East

In Profil’ on September 29 Sergey Karaganov and Anastasia Likhacheva offered advise on how to beef up the “turn to the East,” which has stalled. They argue for a change in social policy in the Russian Far East, saying that progress has made at the federal level of geostrategic and civilizational choice and at the business level (mainly federal) of large economic projects and boosting export potential to be seen in the next five years as large factories and modernized logistics are established. Yet there is a danger of Potemkin villages, used for impressing visiting bosses and theft. Locals fear the contrast between enclaves for imported specialists plus massive import of cheap foreign labor. While the area slips from their grasp. The authors argue that the “turn to the East” has been stalled for a year and a half, that elites in Central Russia fear losing their positions and resist it and do not understand its benefits, and that compared to the end of the 2000s, external conditions for integration into Asia have become more difficult. Just by military-political interaction and export of raw materials, Russia will not be successful. A colonial approach that economically exploits the area (as perceived by locals) or a Soviet-style paternalistic approach that distributes benefits for defense goals (or now export ones) is not the answer. A modern, attractive social and business infrastructure is.

 

 

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