Russia’s Asian turn: declarations and reality
After Western countries had approved the fourth level of sanctions, Moscow began to speak openly about having to turn east in response. It was recalled that Russia is not only a European, but also an Asian country. Long ago, Count Yuli Witte also pursued an active eastern policy towards China. For this purpose, he had the Trans-Siberian Railroad laid through a territory that also included Manchuria.
Although the government explained to its people, in a new fit of jingoism, that sanctions against the great Russia were like buckshot to an elephant, they still created problems. Moreover, the latter are on the rise not least because the Kremlin is responding, reflexively, with similar actions.
High-ranking officials, not only financial experts, admit that sanctions have caused a shortage of dollars and euros in the country, due to which the ruble began to plummet. Besides, credits from major Western financial organizations are now inaccessible or unprofitable because of a high interest rate.
For this reason, Moscow strategists began to play the Asian card. It is based on the strategic calculation of an ever increasing face-off in the Beijing – Washington – Tokyo triangle. It is not only about laying claim to some islands in the South China Sea, but also about China’s aspiration to take a dominating position in Eastern Asia.
In these conditions, Moscow expects China to help it in its confrontation with Europe and the US – first of all in the financial field. After sanctions had been imposed, Russian banking institutions began to experience an acute shortage of credit resources and of foreign currency. Moscow began to speak seriously about bilateral settlements with China based on the yuan and the ruble. This will allegedly reduce the two countries’ need in dollars and euros.
Nevertheless, Beijing is not exactly rushing to give Moscow a leg-up. Moreover, Russia is being more and more forced out of such a strategic region as Central Asia.
As Elena Kuzmina, chief of the Post-Soviet Countries’ Economic Development Sector of the Russia Academy of Sciences’ Institute of Economics, told the Moscow-based Nezavisimaya gazeta, we should not expect Russia to invest in, say, hydroelectric power generation in Kirghizia or Tajikistan – by all accounts, these projects will have to be put on a long hold. China, which tops the list of the main investors in and trade partners of each of the region’s states for a third year running, would like to take advantage of the current situation. “Uzbekistan is more and more looking at the Asian states, while Tajikistan and Kirghizia are increasingly dependent on China. Western sanctions will therefore further narrow Russia’s possibilities in the Central Asian regions as a whole,” she says.
Of the same opinion is Nabi Ziyadullayev, deputy director for research of the Russian Academy of Sciences’ Institute of Market Problems. He does not rule out that Tajikistan and Kirghizia will soon be a raw-material appendage to China which will, at the same time, seek lucrative energy contracts with Russia. Judging by the fact that the Chinese gas monopolist CNPC has not given Gazprom a $25-billion advance loan for the construction of the Siberian Strength gas pipeline, Beijing will go on squeezing commercial or perhaps even political concessions from Russia.
China does have money. After the visit of Chinese leaders to India, where a contract was signed on a $25-billion Chinese loan to Delhi, the great eastern neighbor made it clear to Moscow that it can always change Russia for something more attractive.
It would be wrong to exaggerate China’s wish and ability to enter into a confrontation with Europe and the US. A good example in this case is sanctions against Iran. Although Beijing has not yet formally supported these sanctions, Chinese banks discontinued operations with Iranian banks after Teheran had been cut off from SWIFT. And there are no grounds at all to believe that things will be different in the case of Russia. Switching to rubles and yuans can be considered as an attempt to bypass this obstacle, but this will be of limited importance.
The same applies to Moscow’s attempt to find credit resources on the Hong Kong financial market. Firstly, its potential is not so large. Secondly, the Hong Kong dollar is tightly pegged on the US dollar with all that this implies. Thirdly, the cost of the Hong Kong loans will go up, which will also impair the Chinese borrowers. Beijing will reap no benefit from this.
The cheerful assurances that Chinese foodstuffs, particularly vegetables and fruit, will replace European items in Russia should be interpreted as propaganda, pure and simple, in an attempt to pacify the populace. This may be true for the Far East, but even previously nobody had supplied, say, Polish apples and pears to Vladivostok or Khabarovsk because this would be a long-time and costly affair. It is easy to assess the price of a kilogram of the same apples delivered from China to Smolensk or farther on to Kaliningrad. It will not be cheaper, not to mention the preservation of a perishable item during the transportation.
Besides, it was reported more than once that Chinese foodstuffs do not meet the Russian phyto-sanitarian standards. Chinese producers use the chemicals banned in Russia and Europe. Therefore, this will create major problems. It will not be easy to replace European goods with their Chinese counterparts. This is already the point of an ever-increasing debate in Russia.
It is not only the Russian opposition that is sounding the alarm that the country is turning to an energy and raw-material appendage to China. While it was in principle possible earlier to buy the cutting-edge high-tech equipment in the West in exchange for oil and gas, it is not so easy to purchase the same in China. For, in spite of its industrial gains, Beijing continues to lag behind the West and Japan from this angle. Russia’s eastern neighbor does not produce and buys in the West many things, such as, for example, petrochemical equipment and appliances for producing hard-to-extract oil. The Chinese firms will not choose to violate the EU and US ban and resell this kind of equipment in order to avoid being blacklisted.
Economic and financial problems are always followed by political ones. It would be very naive to presume that Beijing will not take advantage, one way or another, of Moscow’s dire straits to which it was reduced due to its own stupidity. This will be felt, first of all, in Central Asia. While the Kremlin is unable to fund high-profile energy and infrastructure projects, Beijing can and will be doing this, which is bound to boost pro-Chinese attitudes in the Central Asian states’ elite.
Leaders are going to change in Kazakhstan and Uzbekistan, for the time runs fast. As Russian influence is abating, the void will be filled by China and, to some extent, the West. The geo-strategic consequences of this are obvious and can in no way console the Kremlin.
Moscow’s propagandistic rhetoric apart, there will be no radical turn of Russian policies into the eastern, in our case Chinese, direction. Even the diehard Russian chauvinists are very well aware of the dangers involved. All the more so, the same applies to the economic and financial groupings under the Kremlin’s aegis.
In this connection, there may be some diplomatic maneuvers in the Ukrainian direction aimed at showing peacefulness and attempts to freeze, to some extent, or even lessen the sanctions – at least until the warm period of the next year. In all probability, the armed conflict will rekindle in the spring, while Moscow will be claiming that it has done its utmost for peace in the Donbas but remained unheeded.
At the same time, the Chinese card will be also played for the credulous. Yet the number of the latter has diminished, at least in the West, after Moscow showed such a brutal behavior.
