What Should Washington Do When the Belt and Road Comes to Russia?

Monday, May 20, 2019

By Sagatom Saha and Theresa Lou

Abstract

Increasing military and economic cooperation between Russia and China has led some to believe that America's two primary adversaries are joining together in an anti-U.S. alliance. However, this emerging relationship amounts to little more than a convenient alignment rather than a steadfast alliance. This analysis delves into emerging Sino-Russian competition and cooperation in Central Asia and the Arctic to illustrate diverging strategic interests and also provides recommendations for U.S. policymakers to capitalize on divides between America's competitors.


Xi Jinping and Vladimir Putin

Xi Jinping and Vladimir Putin. Image courtesy of www.kremlin.ru and licensed under Creative Commons license Attribution 4.0

For those who believe that Washington’s hostile relationship with Beijing and Moscow is pushing them into an anti-U.S. alliance, evidence abounds. Last September, Chinese troops participated in the 2018 Vostok military exercise, Russia’s largest war game since the Soviet Union’s collapse. Just three months before, President Vladimir Putin publicly touted cooperation between his Eurasian Economic Union (EEU) and Beijing’s Belt and Road Initiative (BRI), their respective grand, outward-facing economic projects (TASS Russian News Agency 2018). 

Chinese President Xi Jinping and Putin both seek an alternative to the U.S.-led liberal international order. Their shared foreign policy interests guide their hostility to democratic transitions, appalling approach to human rights, and skepticism toward Western-led multilateral institutions. Growing military and economic cooperation seem to be yet another opportunity for Beijing and Moscow to advance a shared agenda. 

Beijing’s rise challenges Moscow’s geopolitical interests and clout as much as it does Washington’s.

But these areas of cooperation belie Beijing’s and Moscow’s different outlooks on the global order and visions of their respective statuses in a multipolar world (Lo 2017). Moreover, they ignore the likelihood of competition as China encroaches on Russia’s prized spheres of influence in Central Asia and the Arctic. Beijing’s rise challenges Moscow’s geopolitical interests and clout as much as it does Washington’s. In both regions, Russian cooperation with China may help secure short-term goals at the risk of compromising Moscow’s long-term influence. The tension between Russia’s increasing reliance on China and its attempts to maintain regional hegemony will only grow.

Although Russia and China will continue to keep each other close, Washington shouldcoordinate with like-minded countries to exploit the natural seams inMoscow’s and Beijing’s bilateral relationship and exercise global leadership when geopolitical tensions arise. 

 

Steppe-By-Steppe Conflict in Central Asia

 

In September 2013, Xi announced the expansion of the BRI to Kazakhstan—a close Russian ally and key transit country for BRI’s westward expansion. This was no coincidence. The Kremlin had initially perceived the initiative as Chinese encroachment in Central Asia, which was part of Russia’s sphere of influence from the mid-nineteenth century until the dissolution of the Soviet Union. Moscow resisted the BRI, pushing for the establishment of the EEU, which joins Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia in a single market with common external tariffs.

Smaller EEU members, notably Kazakhstan, have resisted Moscow’s push for fear of Russian encroachment into their sovereignty, particularly after the annexation of Crimea in Ukraine.

Moscow intends for the EEU to become a comprehensive political union that aligns members not only on economic policies, but also on foreign policy, defense integration, and border security (Dragneva 2016). However, this aim has not been realized in the four years since the institution was founded in 2014. Smaller EEU members, notably Kazakhstan, have resisted Moscow’s push for fear of Russian encroachment into their sovereignty, particularly after the annexation of Crimea in Ukraine. To date, the EEU remains little more than a framework for economic integration, which is of minimal value to Russia. Only 5 percent of Russia’s exports go to EEU partners, and the EEU amounts to only one-tenth the economic value of the European Union in terms of GDP (Wolczuk and Dragneva 2017).

Despite Putin’s reservations concerning the BRI, Russia’s current financial crisis has constrained his policymaking options. He endorsed BRI only after falling oil prices and the international sanctions that followed Crimea’s annexation severely weakened the Russian economy. As Russia’s trade and investment waned in Central Asia, China flooded the region with investment (Stratfor 2018). Between Xi announcing the BRI in 2013 and Putin declaring a “great Eurasian partnership” with Xi in 2015, Russian GDP fell by 40 percent in current dollar terms while China’s grew by 15 percent (World Bank Data Group).

The Kremlin wants to have its cake and eat it too—co-opt BRI while maintaining Russian leadership on regional security. But the dynamics that made Moscow initially wary of Beijing’s economic interest as a means of geopolitical intrusion persist and are deepening. 

Russia might let China grow its economic influence in Central Asia if Moscow remains the paramount geopolitical force in the region. However, China’s tendency to leverage its economic projects into political clout will put Moscow’s and Beijing’s interests at odds. Despite self-styling BRI as an open global development plan providing win-win economic opportunities for all involved, BRI projects in Djibouti, Pakistan, and Sri Lanka have served Chinese strategic purposes (The State Council of the People's Republic of China 2015). 

If China does not leverage its economic ties into political gains in Eastern Europe, it would be the exception to what is becoming the rule of China’s emerging maximalist and opportunistic foreign policy.

If China does not leverage its economic ties into political gains in Eastern Europe, it would be the exception to what is becoming the rule of China’s emerging maximalist and opportunistic foreign policy. Despite weak economic rationale for the Hambantota port, Chinese loans for the project gushed into Sri Lanka during the President Mahinda Rajapaksa’s tenure (Hillman 2018). When Sri Lanka could not repay the $6 billion of loans, the Chinese demanded a controlling equity stake and a 99-year lease for the strategic deepwater port (Abi-Habib 2018). Close Sino-Maldivian relations under former president Abdulla Yameen—fueled in large part by the more than $1 billion Chinese infrastructural loans—particularly alarmed India when the Maldives allowed three Chinese warships to dock in Malé in August 2017 (Pal 2018, Anees 2017). Having booted Yameen from power in November 2018, the Maldives has been struggling to grasp the full scale of its exposure to Chinese debt, which could be as high as $3 billion (Mundy and Hille 2019). Similar tales of debt distress in the South Pacific also surfaced in August 2018, when Tonga—one of eight Pacific island nations holding significant debt to China—raised concerns of consequences for not meeting the loan repayment conditions (Greenfield and Barrett 2018). Later in 2018, Tonga received a reprieve from Beijing on the timing of debt repayments and joined several other island nations in signing up to the BRI (Greenfield and Barrett 2018). Although small, the Pacific island nations are of significant strategic value to Beijing (Greenfield 2018). Each controls vast portions of resource-rich ocean and votes at international forums. Six maintain diplomatic relations with Taiwan, which Beijing claims as its sovereign territory. Outside of the Indo-Pacific region, there is strong evidence that the People’s Liberation Army is establishing a permanent presence on the Afghan-Tajik border, encroaching on both Russian and U.S. military interests (Shih 2019).

There is every reason to believe that these same strategic imperatives drive China's plans for Central Asia.  China has incentive to take a more active role in the region’s security policies given Beijing’s focus on political suppression in Xinjiang, where Chinese leaders believe Uighur dissidents have linked up with Eastern Turkestan Islamic Movement (Lynch 2018). Just as China has sought to bolster its maritime front through BRI investments, it may attempt to do the same on its western border. 

Moscow’s shrinking economic and political leverage in Central Asia will make it hard for the Kremlin to turn a blind eye to the spread of Chinese influence in the region.

Moscow’s shrinking economic and political leverage in Central Asia will make it hard for the Kremlin to turn a blind eye to the spread of Chinese influence in the region. Instead of facilitating cooperation with the EEU, BRI will more likely cannibalize Russia’s small club of post-Soviet economic partners into China’s better funded project, leaving Moscow at Beijing’s mercy. Although Russia will rely on Chinese money regardless, the BRI stands to erode an already diminishing “near abroad” that Moscow prizes. The Kremlin has spent significant financial and military resources to halt encroachment on its border with Europe, another important market for Russia. If the Kremlin views Central Asia similarly to its border with NATO, Moscow would respond with aggression. 

 

Chilly Relations in the Arctic

 

Competition could also heat up in the Arctic, as the minimally governed space melts due to climate change. Russia views the Arctic as central to its national interest. The Kremlin considers the region as evidence of Russia’s military prowess and great power status and has flexed its military muscle by steadily increasing its military presence in the Arctic for the last decade (Gramer 2017). Beijing’s increased influence in the Arctic inevitably comes at Moscow’s expense, and as China’s footprint in the Far North grows, so too does the likelihood of strategic competition with Russia.

Russia’s geopolitical interests in the Arctic are coupled with economic ones. The country views the Far North as a “strategic resource base” critical for Russian interests (Medvedev 2008). Moscow’s ultimate goal is to have Arctic deposits make up 20 to 30 percent of all its oil production, making the region invaluable to its future energy production plans and, by extension, Russia’s long-term fiscal stability (Jacob 2017). 

As in Central Asia, there appears to be room for cooperation between Russia and China in the Arctic. The Kremlin has struggled to realize its Arctic goals unilaterally due to Moscow’s limited experience with difficult offshore oil and gas exploration (Klimenko 2014). The economic sanctions imposed on Russia after its annexation of Crimea in 2014 further impeded Moscow’s abilities to explore the Arctic shelf. Unable to implement its Arctic strategy alone, Russia has increasingly “turned to the East” and partnered with China for help (Rodkiewicz 2014). 

Sino-Russian cooperation in the Arctic has served Beijing’s interests as well. The retreating sea ice presents Beijing with unprecedented opportunities to access the Arctic’s mineral resources and reserves of untapped oil and natural gas (Dillow 2018). Additionally, China may see an opportunity to commandeer newly abundant mines rich with rare-earth elements (REEs) that are critical ingredients for advanced technologies in the clean energy, communication, and defense sectors (Shi and Lanteigne 2018). Beijing has dominated the world’s REE mining and supply chain since the 1990s and can further tighten its monopoly over the minerals by investing in the Arctic. 

China’s growing ambitions and influence may bump against Russia’s desire to remain preeminent in its “privileged sphere of interest.”

Moreover, as a major trading nation and commodity importer, China relies heavily on secure sea lines of communication and maritime choke points such as the Straits of Malacca, through which over 64 percent of China’s maritime trade transited in 2016 (Xinhua 2017) (Center for Strategic and International Studies 2019). The Northern Sea Route through the Arctic benefits Beijing strategically: as the region becomes more accessible due to rising temperatures, China can bypass the choke points it fears and the U.S. naval presence that it currently chafes at (White and Pierre-Louis 2018). 

However, China’s growing ambitions and influence may bump against Russia’s desire to remain preeminent in its “privileged sphere of interest.” China views itself as a “great power” with commensurate interests globally (Buckley and Bradsher 2017). Since joining the Arctic Council as an observer in May 2013, Beijing has worked to grow its role in the region by expanding its polar research and development efforts and investments (Myers 2013, Zhenghua 2013).Beijing has in recent years notably increased its investments in Arctic projects and smaller Arctic economies to increase influence (Grady 2018, Simpson 2018). China explicitly highlighted its Arctic ambitions in its inaugural Arctic policy white paper, in which China declared itself a “near Arctic state” and “Arctic stakeholder” with increasing rights and responsibilities in the region (The State Council of the People's Republic of China 2018). In so doing, Beijing attempts to normalize its “right to speak” on polar governance matters (Brady 2014). 

But Arctic Council members are not keen on diluting their control. Russia, in particular, jealously guards over its sovereign rights in the Far North, preferring to keep discussions of Arctic issues primarily among Arctic nations (Chivers 2007, Stronski and Ng 2018). But as China continues to invest in the Arctic for economic, scientific, and strategic gain, it will likely seek a formal seat at the table in order to shape the Arctic governance agenda in Beijing’s interest. Moreover, the lengthy list of Sino-Russian Arctic projects reflects Russia’s reliance on Chinese economic and technological support in cultivating the Arctic. The growing power imbalance will only complicate the relationship between the strange bedfellows.  

 

A Wary Embrace: Recommendations for U.S. Policymakers

 

The United States should take seriously the warming relations between its two main adversaries. But, more importantly, U.S. policymakers should understand the relationship for what it is: a wary embrace. The relationship is one of convenient alignment, not steadfast alliance, and will last for as long as it is mutually beneficial. Moscow’s and Beijing’s incompatible geopolitical aims and the growing asymmetry in the relationship suggest their “honeymoon-phase” has an expiration date. 

The United States needs to remain committed to global leadership in the uncertain times ahead and to stay agile enough to capitalize on the seams in the Sino-Russian relationship when they emerge.

Outright confrontation resulting from competition is unlikely—both China and Russia recognize that cooperation, even if laced with competition, is better than the alternative. For now, Russia views its border with NATO differently than its border with the Belt and Road in Central Asia. However, their different visions and competing interests will complicate attempts to coordinate strategically. U.S. misperceptions of the Sino-Soviet relationship during the Cold War resulted in policies that unintentionally pushed the two countries together. At the time, both powers ended up vying for influence in developing countries as they likely will now. Had U.S. policymakers more carefully examined held beliefs about the monolithic nature of communism, they may have more readily observed and exploited the growing tensions between the two countries before the split inevitably came in 1962.

Over half a century later, Washington has the opportunity to benefit from previous mistakes and keep in mind the natural seams in the Sino-Russian relationship when the next joint-military drill or economic agreements occurs. Relatedly, the United States needs to remain committed to global leadership in the uncertain times ahead and to stay agile enough to capitalize on the seams in the Sino-Russian relationship when they emerge. Similarly, the United States should coordinate closely with other Arctic Council members to challenge China’s pursuit of “win-win” outcomes in the Arctic should they impinge on the strategic interests of Arctic countries. Likely partners include Canada, which has traditionally been wary of including non-Arctic states into the Arctic Council, and Iceland and Denmark, both of which have declined Chinese investments in the Arctic (Pezard 2018). But overreacting not only risks inadvertently strengthening Chinese-Russian cooperation, it also makes the United States seem insecure.


About the Authors

Sagatom Saha is an MPA candidate at the Woodrow Wilson School of Public and International Affairs. He would like to thank the JPIA editors for their comments and suggestions. Sagatom can be reached @sagatomsaha on Twitter.

Theresa Lou is a security studies graduate student at Georgetown University’s Edmund A. Walsh School of Foreign Service, where she focuses on security challenges in East Asia. She was formerly a research associate at the Council on Foreign Relations, and has published in Foreign Affairs, The Diplomat, and World Politics Review.


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