Russian far east and Central Asia: Impediments to Sino-Russian partnership
Attribution:
Dhananjay Sahai, “Russian Far East and Central Asia: Impediments to Sino-Russian Partnership”, ORF Issue Brief No. 280, February 2019, Observer Research Foundation.
This brief analyses the politico-economic relations between Russia and China and the recent changes in their power equation owing to Russia’s fall in economic and demographic strength and, for its part, China’s economic and military growth. Russia’s unfavourable position has been identified as a possible reason for the rise in Chinese influence in Central Asia and the Russian Far East (RFE), in areas of military power and trade. The brief analyses the possible methods of coercion Beijing might employ in both these regions. It suggests ways for Russia to address the same, to secure its ‘near-abroad’ and RFE interests. The brief closes with recommendations for India to position itself as a strategic partner for Russia while subverting Chinese influence.
This brief is part of ORF’s series, ‘Eye on China’. Find other research in the serieshere:
Introduction
When the newly appointed Chinese Defence Minister Wei Feng attended the seventh Moscow International Security Conference, he declared to his Russian counterpart, “We have come to support you.”[1]The bonhomie between China and Russia is considered amongst the biggest challenges to US supremacy. However, while the two countries have often pooled efforts to resist American influence, competing interests and subtle rivalry in various areas mar their relationship.
For one, Russia and China compete in Central Asia. While China is trying to establish its dominance in this resource-rich region, Russia is struggling to maintain its own clout in what it considers its “near abroad.” Illegal immigration and conflicting territorial claims could also lead to a clash between Russia and China in the Russian Far East (RFE).
Despite their potential in getting embroiled in a massive geopolitical confrontation, the relationship between China and Russia has seen an upward trend. The West’s sanctions against the Russian Federation have pushed it to foster closer ties with the People’s Republic of China. Conventional narratives postulate that the relationship between Moscow and Beijing is likely to strengthen in the current international strategic environment. However, given the increasing disparity between the two countries, this relationship forms an asymmetrical interdependence. As the power disparity between Russia and China increases, it will dramatically alter the balance of power between the two countries in the long run, increasing Beijing’s coercive strength over Moscow. This could create a rift between the two.
Potential Points of Conflict
Central Asia
The region between the Caspian Sea and the Xinjiang province has the potential to create tensions between Russia and China. As Moscow tries to retain predominance over this region—earlier a part of the USSR—it is bound to clash with Beijing and its economic penetration. Both China’s One Belt One Road (OBOR) initiative[2]and the Russia-dominated Eurasian Economic Union (EEU) seek to establish influence in Central Asia. While the leaders of both countries have asserted that the two projects can co-exist,[3]the much larger OBOR is likely to eclipse the EEU, orienting the Central Asian economies towards China.[4]This would be in direct contradiction to Moscow’s interest, which considers this region a part of its “near abroad”, where it has been struggling to maintain influence. The EEU has been seen as Russia’s attempt to bring itself closer to the Central Asian economies and counteract the influence of outsiders. As the World Bank noted, “[It] creates an opportunity for Russia to expand its exports and its presence in Central Asia at the expense of exports from other countries, such as the European Union and China.”[5]
Map 1: China-Central Asia- West Asia Corridor.
Source:OBOReurope.
This hydrocarbon-rich region can serve as an alternative source of energy imports, reducing China’s dependence on Moscow.[6]China is the largest global importer of natural gas and crude oil,[7]and it relies heavily on Russia for their supply. As of 2016, China imports 14 percent of its crude oil from Russia and is also a large market for Russian gas exports. Energy-related products form around 58 percent of Russian exports to China.[8]While China has run into friction with the Central Asian countries[9]over the supply of LNG,[10]it still remains committed to strengthening trade and investment, particularly in the energy sector. This includes the China–Central Asia–West Asia Corridor, a subset of the OBOR. It “mainly covers five countries in Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Turkmenistan) as well as Iran and Turkey in West Asia.”[11]Additionally, China has expressed interest in building another corridor connecting its city of Khorgos to Greece’s Piraeus port, passing “through only three intermediate countries: Georgia, Azerbaijan and Kazakhstan.”[12]Both these projects bypass Russian territory to connect China with the European Union (EU) and will have severe implications on the geopolitics of the region, cementing China’s influence to the exclusion of Moscow.
Figure 1. Trade with Central Asia (in US$ thousands)
Source:International Trade Centre (2018)
Various analysts have suggested that the two countries can still cooperate in this region, with China establishing economic dominance and Russia entrenching itself as the region’s security provider.[13]Moscow has a large security presence in Central Asia: it has troop deployments and bases in most countries and is a major arms exporter to the region. A part of this presence has been formalised into the Collective Security Treaty Organisation.[14]However, Russia’s increasing economic distress limits its ability to spend on military power. China, on the other hand, has shown an increased military interest in the region as well as willingness to use its military overseas, in a major departure from previous policy.[15]The question to be asked is how long this “division of labour” between Russia and China[16]can survive in the face of growing disparities.
The Russian Far East
Throughout history, the border between Russia and China has been a source of tension between the two countries. Large parts of the RFE came under the control of the Tsarist Empire after the signing of a number of “unequal treaties”[17]with the Qing dynasty. In the 20thcentury, the Far East witnessed two violent border conflicts, the last one between the Soviet Union and the People’s Republic of China in 1969.[18]However, over the years, the two countries have made efforts to settle their issues on the border, and the transfer of territories in 2008 officially marked the end of any land disputes between them.[19]
Map 2: Historical Map Showing the Change in the Border between Russia and China.
Source: US Library of Congress.
However, the region remains vulnerable to another border dispute. The resource-rich Russian territory is sparsely populated, with 23.9 million Russians living in the border areas of Siberia and the Far East.[20]Meanwhile, the Chinese provinces bordering Russia have a combined population of 111 million.[21]While Russia is keen on developing the region, it is hobbled by a lack of infrastructure and labour resources. With economic slowdown hampering its aspirations, Russia has been in search of partners.[22]While China has shown interest in investing in the region,[23]Russia is wary of its intentions. Economic incentives availed by Chinese investors have stirred local resistance.[24]In 2015, the leasing of 1,000 sq. km of land in Siberia to a Chinese company was heavily criticised by Russian media and politicians. Grievances include the grant of subsidies to Chinese firms, their extraction of natural resources and their alleged disregard of laws and interests of local Russians.[25]Much of the resentment stems from the migration of Chinese population to the RFE. Chinese companies tend to hire migrants from their own country to work on their projects in Russia, and it is often a prerequisite for investment. Locals, unable to get these jobs, feel that their resources are being taken away by China.
Furthermore, reports of illegal immigration from China have led to the fear of a Chinese appropriation of the RFE. While it is difficult to ascertain the actual number of Chinese illegal immigrants in the region, the phenomenon has been a cause of concern for Russian authorities. Media and politicians have frequently quoted a figure between two to five million,[26]prompting even Vladimir Putin to say, “If we do not take practical steps to advance the Far East soon, after a few decades, the Russian population will be speaking Chinese, Japanese, and Korean.”[27]
What Lies Ahead
The current confrontation between Russia and the West was triggered by reports of American involvement in the Euromaidan protests of 2014[28]and the violent overthrow of the elected Ukrainian President Viktor Yanukovych. Yanukovych had resisted the integration of Ukraine with the EU and had forged closer ties with Russia.[29]Moscow viewed his removal as an instance of the West’s attempts to establish hegemony and isolate Russia in its near abroad, fearing that the end goal was to instigate a regime change in Russia.
This fear is backed by history. In the early 2000s, “colour revolutions” swept across the former Soviet Union.[30]Fears of encirclement began to emerge as NATO repeatedly ignored Russia’s overtures and took in new members in an oft-labelled “eastward expansion.”[31]When the US remained determined to build a missile defence shield on Russia’s border after rejecting an offer from Moscow for a joint US–Russia radar station in Azerbaijan in 2007, Russian President Vladimir Putin expressed disinterest in a NATO membership and termed the organisation a “real threat.”[32]Suspicions of American support in the two-year-long protests in Russia in 2011 convinced Moscow that the West intended to undermine Russia.[33]Thus, the defence of its perceived sphere of influence triggered Russian hostility towards the West. Thereafter, Moscow’s interference in the internal affairs of NATO members and their allies—particularly its involvement in the 2016 US presidential elections[34]and the poisoning of Yulia and Sergei Skripal in 2018 in the United Kingdom[35]—has been seen as an escalation. This has widened the divide between Russia and the West, making the possibility of a reconciliation more difficult.
Economic slowdown, along with economic sanctions and open antagonism with the West, thus forced Moscow to look for allies elsewhere. China was the obvious choice, given the large size of its economy and military and a shared desire to restrict US influence. While the two countries have pooled their resources to counter American interests, both are aware of the increasingly unequal nature of their relationship. As Alexander Gaubev puts it, “Russia needs China more than China needs Russia.”[36]This is evident in Russia’s increasing willingness to accept Chinese involvement in areas where it was earlier suspicious of its intentions. In 2016, Russia set aside its long-held apprehensions of Chinese reverse-engineering and IPR violations and began the sale of advanced defence equipment, e.g. the S400[37]and the Sukhoi Su 35.[38]Russia has also agreed to sell gas from fields in Eastern Siberia to China via a new pipeline, despite having previously resisted multiple similar offers.[39]
As Moscow faces increasing isolation from the West, it runs the risk of becoming over-dependent on China. According to figures from the International Monetary Fund, China’s economy is over eight times larger than Russia’s, and the gap is bound to increase over the years.[40]While trade between the two countries has been increasing and has received a major boost from the competitive tariffs between the US and China, the “balance of trade” remains heavily in China’s favour. In 2016, Russia’s Trade Deficit with China amounted to over US$ 10 million. Additionally, around 80 percent[41]of Russia’s exports to China consist of natural resources, while manufactured goods dominate Russian imports from China. Russian policymakers must study this economic relationship carefully, especially since the country has had to concede to terms set by Beijing.
Figure 2. Russia’s Trade Deficit With China
Source:World Integrated Trade Solutions (2017)
Russia’s economic slowdown is bound to affect its ability to deploy military power. According to the Stockholm International Peace Research Institute, Russian military expenditure in 2017 dropped for the first time in almost two decades, coming down almost 20 percent to US$66.3 billion, despite increased global military spending that year.[42]
A drop in military power is concerning, if not downright alarming. Moscow’s claim to great-power status has always been based on military strength, and elites have used military campaigns to evoke nationalist fervour. The image of a resurgent Russia using its military to intervene abroad seems to be Vladimir Putin’s tool of choice to shore up his nationalist base and maintain his popularity, especially in the face of a declining economy.[43]So far, this has worked because the electorate perceives Russian military campaigns as an instrument of national strength, advancing their country’s interests in the world.
Figure 3. Military Expenditure in Constant (2016) US$ million
Source:Stockholm International Peace Research Institute (2017)
However, overdependence on China in the future will change this. When Russia used its military to advance its own interests, e.g. Georgia in 2008[44]and Crimea in 2014,[45]China’s reaction was restrained. In 2008, China did not support Russia’s stance, refusing to diplomatically recognise Georgia’s breakaway territories of South Ossetia and Abkhazia. It also refused to back Russia in the Shanghai Cooperation Organisation (SCO).[46]In 2014, China’s reaction to the Russian invasion of Crimea and the crisis in Ukraine was similarly lukewarm. It has since rapidly invested and improved economic ties with Ukraine, partially filling the void left by Russia’s departure.[47]If Russian military becomes economically dependent on Beijing, it will reflect in the nature of their campaigns and hinder the country’s ability to deploy its military for its own agenda. Russia will have to align its interests with China’s, which is likely to provoke concern amongst the political elite.
A decline in Russia’s relative strength will allow China to be more assertive on bilateral issues. In case of a direct clash of interest between the two countries, Russia will be vulnerable to Chinese coercion and may have to make some key concessions and sacrifice some of its own stakes. Compromises made by Russia after the Ukraine crisis—the Siberian gas deal and the sale of advanced military technology—prove that Beijing will not shy away from using Moscow’s predicament to its own advantage.
There are multiple such areas where a direct clash of interest between the two countries is possible. In Central Asia, the success of the OBOR is poised to cement China’s already growing economic clout in the region that Russia considers its near abroad. According to RFERL, “OBOR’s success could ultimately cost Russia a sizable chunk of Chinese investment, a further loss of markets to Chinese firms, and lucrative construction deals in Central Asia as Beijing gains greater access to natural resources.”[48]The OBOR also creates a land route connecting China to Europe, via Central Asia, completely bypassing Russia, and further reducing Moscow’s leverage in the geopolitics and economics of the region.
China has all but established itself as the predominant economic power in Central Asia, and the size of its investment and the employment of its labour allows Beijing to increase its military footprint in the region under the pretext of protecting its assets and people. Africa is a good example of how China has managed to increase its military footprint on the back of economic and developmental initiatives,[49]while officially maintaining its commitment to non-interference. The situations in Sierra Leone[50]and Zimbabwe[51]show that China is open to interfering in the political domain to advance its interests. China has also changed its laws to allow for its military to be deployed abroad to protect its “overseas interests.”[52]Similarly, China seeks to increase its military presence in Central Asia in the name of border protection and fighting the “three evils” of terrorism, separatism and religious extremism.[53]
China’s current military presence in Central Asia appears to be limited by design, where it shows deference to Russian interests. However, Russia’s inability to pay the staff of its Tajikistan base[54]or deliver on promises to increase troop deployment and financial-security assistance[55]casts doubt on Moscow’s ability to continue as the region’s net security provider. China, which has both political and economic reasons to ensure the security and stability of this region, might attempt to fill this void, creating tensions with Moscow as it loses influence over its near-abroad regions.
Another area where there could be a direct clash of interests between the two countries is the RFE. The declining population and bad infrastructure in this region hinders Russia’s potential to tap into the large repository of natural resources. Acknowledging the need to develop the Far East, Russia has reluctantly accepted Chinese involvement in this region, whose natural resources have a large market in Beijing.
China’s eagerness to take advantage of Moscow’s isolation from the West to obtain economically lucrative deals has led to the country being termed Russia’s “loan shark.”[56]The large and increasing trade deficit, leading to a build-up of trade debt, call into question Russia’s ability to repay loans, particularly the ones it has taken from China.[57]The cases of Sri Lanka[58]and Africa[59]show that accruing debt from China is dangerous. For Russia, it can lead to Moscow losing control over its natural resources. The hydrocarbons and minerals in the RFE, for which there is great demand in China, might become tempting targets for this “debt-trap diplomacy.” Currently, China has chosen to avoid extending precarious loans to Russia and has even withdrawn its investment when it seemed risky. However, given Russia’s growing economic distress and its need for Chinese capital, China is likely to consider such an approach in the future.
China’s historical claim over the RFE is also a contentious issue. China holds a grudge over what it finds as “unequal treaties,” which led to the “century of humiliation” that subjugated China to European colonialism.[60]This narrative features prominently in Chinese popular imagination and has been evoked repeatedly by their leaders. Much of what is today’s RFE and Siberia was once under Chinese control, and the Qing dynasty was forced to hand them over to the Tsars during the “hundred years of national humiliation.”[61]In particular, the Treaty of Aigun forced China to cede around 600,000 sq. km to Russia.[62]
While, officially, China has claimed to have settled all its territorial disputes with Russia, the public resentment has translated into people using the Chinese traditional names for cities in Russia, e.g. calling the city of Vladivostok “Haishenwai.” Evidently, the Chinese public still believes that large parts of the Russian territory should be under China’s control. Groups such as the Falun Gong, who use these issues to mobilise and gain supporters, have also contributed in keeping these views alive.[63]This sentiment is dangerous and could stoke a conflict between Russia and China.
“Haishenwai” is not the only example. A similar conflict arose over the name of the city “Aihui,” which shows that disputes exist despite the Border Agreement of 2008.[64]While these issues are seemingly trivial, Moscow should be concerned. In the past, China raised a diplomatic furore over attempts to rename parts of the South China Sea that Beijing claimed.[65]With India, too, China has used the same tactic by assigning Chinese names to cities that it claims in India.[66]
This approach, along with the growing disparity between Russia and China, could create a dangerous situation for Moscow in the RFE. Continuous Chinese migration could make them a powerful demographic group in the resource-rich and sparsely populated region. While China insists that its relations with Russia is currently at their “best level in history,”[67]Moscow should not become complacent, as the status quo might change in the future.
Russia’s antagonism towards the West was in reaction to the infringement of its influence in its near abroad and out of a fear of encirclement. The ensuing interventions show that Moscow did not kowtow to the West’s much larger economy or the US’ military superiority. In 2014, President Putin said, “If you compress the spring all the way to its limit, it will snap back hard.”[68]Currently, China is in a position to fuel similar anxieties about encirclement and loss of influence, which could cause Russia to react antagonistically, as it did with the West.
Options for India
According to Carnegie, “In the near future, however, barring an unlikely course correction in Russia’s relations with the West, Moscow’s dependency on Beijing will continue to grow.”[69]To solve this conundrum, Russia needs alternatives to China. Countries such as Japan[70]and Germany[71]have shown a willingness to accommodate Moscow. Additionally, Vladimir Putin can capitalise on US President Donald Trump’s eagerness to improve America’s relations with Russia,[72]to prevent Russia from becoming China’s “junior partner.”[73]
Indian policymakers should watch this situation closely. India is in a position to assist Russia’s rebalance with the West. Moscow and New Delhi have had warm ties dating back to the Soviet era, but Russia’s increasing closeness to China and its newfound support for Pakistan is not in India’s interests.[74]India should thus be ready to use any avenue that moderates China’s influence on Russia. One way to do this is to act as a mediator between Russia and the West. India enjoys cordial relations with most Western countries, particularly the US. It also shares Russia’s concerns regarding the growing strength of China. India should use its diplomatic goodwill to bring the two sides together on a shared platform, based on common interests and concerns. Such attempts by India—to facilitate rapprochement between Russia and the West—will be compatible with the efforts of countries such as Japan and Germany, who have tried to normalise relations with Russia despite remaining close to the US.
India can also work with Russia to further their shared interests in Central Asia and the RFE. India has long sought greater engagement in Central Asia[75]and, much like Russia, is also wary of China’s influence in the region.[76]With the Ashbaghat Agreement[77]and the International North South Transit Corridor,[78]India is looking at an enhanced economic role in the region, which offers trade and investment opportunities for India. At a political level, India’s membership in the SCO has supplemented its bilateral engagements.[79]New Delhi should use the SCO as a platform to combine its interests with those of Moscow and adopt a cohesive multipronged approach towards Central Asia.
Moscow could use help from India in the RFE as well. India is currently seeking investment opportunities in the region and has set up an “Invest India” desk to facilitate business.[80]Both countries are interested in developing a direct shipping route from Vladivostok to Chennai.[81]India can use this project to develop a maritime corridor in the region, with the support of powers such as Japan, South Korea and ASEAN members,[82]all of whom share concerns over the rise of China and are keen on strengthening relations with Russia and India.
Map 3: The proposed shipping corridor between Russia and India
Source:The Economic Times.
India can also consider exporting its surplus labour to the RFE to facilitate economic development of the region. In 2006, Russia had announced that it would “welcome Indian labour migration to Siberia and other regions suffering from growing depopulation.”[83]This news did not receive much attention at the time, but India could still use this approach, sending labour and investment to the region. While this might face some local resistance, Indian migrants could counterbalance and offset the effect of the growing Chinese population. Since India has no history of political grievance or any claim in that region, the presence of an Indian diaspora will not raise the kind of concerns caused by Chinese presence.
If India increases cooperation with Russia, it will reduce Moscow’s dependence on Beijing, in turn allowing India to contain the growing closeness between Russia and Pakistan. These trends can also further India’s ability to mediate between Russia and the West and to gain from any resulting rebalance.
Conclusion
Russia’s current predicament has forced it to ‘pivot’ towards China. As Moscow grows increasingly dependent on Beijing, it becomes vulnerable to the latter’s coercion and could be forced to make concessions. There are a number of areas where the two countries have diverging interests, primary amongst those being Central Asia and the RFE. In Central Asia, once a part of the USSR, Russia is struggling to maintain its influence, and China is emerging as its main competitor. In the RFE, China’s historical claims coupled with Russia’s current economic and demographic decline have made Moscow suspicious.
Currently, the two countries have kept the focus of their bilateral ties away from these contentious issues. However, it is possible that in the future, the conflict of interest will become more apparent. If Russia wants to protect its interest in the long run, it must balance China by improving its relations with the West.
From India’s perspective, these issues provide an opportunity to facilitate rapprochement between Russia and the West. India can also cooperate with Russia to limit Chinese influence in Central Asia and can help counteract Russian fears about the Chinese in their REF region. These events will have larger geopolitical consequences, which India could use to its advantage.
Dhananjay Sahaiis a student of Law at Delhi University’s Campus Law Centre.
[2]Troy Sternberg, Ariell Ahearn and Fiona McConnell, “Central Asian ‘Characteristics’ on China’s New Silk Road: The Role of Landscape and the Politics of Infrastructure,”Land6, no. 55 (2017).
[11]Sooksripaisarnkit, Poomintr and Garimella, Sai R. (2018)China’s One Belt One Road Initiative and Private International Law, Routledge, ISBN 1-138-56383-X
[27]Alekseev, Mikhail (2006), “In the Shadow of the “Asian Balkans”: Anti-Chinese Alarmism and Hostility in the Russian Far East”,Immigration Phobia and the Security Dilemma: Russia, Europe, and the United States, Cambridge University Press, ISBN 0-521-84988-8
Downs, Erica S. (2010) “Sino-Russian Energy Relations: An Uncertain Courtship.”The Future of China-Russia Relations, ed. Bellacqua James, 146-76. University Press of Kentucky. ISBN 978-0-8131-2939-6
Minakir, Pavel A. (1996), “Chinese Immigration in the Russian Far East: Regional, National, and International Dimensions.”:Cooperation and Conflict in the Former Soviet Union:
Implications for Migration, RAND, ISBN: 0-8330-2466-3.
Nicklas Norling, “China and Russia: Partners with Tensions.”Policy Perspectives4, no. 1 (2007).
Olga Alexeeva, “Chinese Migration in the Russian Far East”,China Perspectives,no. 3 (2003)
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Dhananjay Sahai is an Advocate based in New Delhi. He practices before the Supreme Court High Court and various Tribunals in fields including commercial and ...
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