Today, the logistics centers play an important role in the development of various formats of international interaction at the beginning of the new Millennium. At the present stage, their role is particularly high in the context of integration processes at the regional and global levels. The trends of globalization and regionalization led to the formation of the concept of “global region” and the increasing competition of integration associations for sales markets.
The current fight in the transit transport market in the regions of the world is becoming more complicated, as in modern conditions, competition for transit cargo flows is moving from offering more rational routes and cost-effective services to meeting the geopolitical and geo-economic interests of the main participants.
In this regard, initiatives by individual States or mega-partnerships to build new systems and channels of economic interaction between individual countries and subregions are emerging in regions of the world. It should be understood that the implementation of such projects requires the creation of a new architecture of international transport corridors. Thus, in response to the new challenges of developing economic relations between Europe and Asia, EU leaders began to take steps towards the development of logistics routes on the continent.
The Concept of the pan-European corridor was one of the first to appear as part of the concept of pan-European transport infrastructure and was developed for more than 8 years at the so-called Prague (1991), Cretan (1994) and Helsinki (1997) conferences. Its main goal was to increase the EU’s connectivity with its (back then) potential members – the countries of Central and Eastern Europe (CEE). After the Helsinki conference, the content of the pan-European transport and infrastructure network was formulated, which consists of : 1. Trans – European transport network in the EU (TEN-T); 2. 10 pan-European corridors in CEE; 3. 4 pan-European transport zones; 4. TRACECA Eurasian routes.
The implementation of the 10 pan-European corridors program (in 1995 – 2005) was closely linked to integration processes in Europe and the desire to develop pan-European cooperation. Nevertheless, the large number of States in Europe and the borders separating them, and differences in the rules governing international transport, significantly slowed down the cross-border movement of goods.
After the EU enlargement in 2005, a Program was developed to expand the main transport routes (5 logistic roads) to neighboring countries and regions, which were considered as an infrastructure framework for pan-European economic cooperation, which was linked to the future prospects of the EU .
Deepening integration processes within the Union and building up mutual economic and social ties have revealed bottlenecks in European logistics in the form of disparate national projects for its development, lagging in the introduction of intermodal transport technologies, and insufficient coordination of the development of individual modes of transport and improving their environmental friendliness. In order to eliminate these bottlenecks, the EU adopted the Trans – European transport network development program (TEN-T), designed up to 2050.
TEN-T consists of two subsystems: a comprehensive one that provides integrated transport development in the EU countries and a high-speed connection of about a hundred European urban agglomerations, all major seaports, airports and border checkpoints, and a basic one in the form of Trans – European highways, where international traffic is concentrated. There are 9 main logistics hubs: North sea – Baltic; Mediterranean ; Rhine – Danube ; Baltic – Adriatic ; North sea – Mediterranean ; middle East ; Atlantic ; Scandinavia – Mediterranean; Rhine – Alps.
The implementation of the program allows ensuring the smooth functioning of the internal market, economic, social and territorial cohesion of the EU, and improving transport accessibility throughout the Union.
Another EU project to strengthen logistics routes along the EU – Asia line was the TRACECA project created in 1993. Over the past ten years, more than 50 technical assistance and investment projects have been implemented under the TRACECA program, in which 14 States participate, and private investment has exceeded $ 1 billion. In particular, over the past five years, $ 25 million has been invested in the development of the ports of Baku and Turkmenbashi, $ 70 million in Amirabad (Iran), and about $ 100 million in Aktau.
As a result, a significant part of the cargo traffic passing through the Caspian region already goes through TRACECA. However, difficulties in the implementation of the project are also present and the deadline for the corridor to reach full capacity has been pushed back to the 2020s. This project provides for the reconstruction of logistics between Europe, the Caucasus and Central Asia.
Geopolitical changes on the world map and the strengthening of the PRC as one of the main actors in international relations not only in the region, but also in the world, attracted the attention of European political and business circles to a new project put forward by the PRC in 2013 – Belt and Road Initiative (BRI)
According to the Chinese side, the BRI concept should not be considered an integration structure, international or regional organization. This is an initiative of mutually beneficial cooperation and joint development of China and neighboring countries.
The main goal of the project is to redirect the flow of exports of goods and capital to those countries with which China has begun to develop cooperation in the last decade, primarily to countries in Africa and Central Asia and Western Europe. The project’s focus on solving China’s long-term Eurasian problems is clearly visible. After solving numerous political, organizational, financial and other issues, the communication basis of the project should be implemented in the current logistics.
According to the initiators of the project, the New Silk Road should include land and sea components. The land-based silk road, as it was a thousand years ago, will start in Xian (Shaanxi province), then pass through China to Lanzhou (Gansu province), Urumqi district, and cross Central Asia, Iran, Iraq, Syria, and Turkey. Then, passing through the Bosphorus Strait, it will go to Moscow (Russia), continue to Rotterdam and end in Venice (Italy), where it will meet the sea component.
The Maritime Silk Road will start in Quanzhou (Fujiian province), pass through the major cities of southern China, Guangzhou (capital of Guangdong), Beihai (Guangxi) and Haikou (Hainan), reach the Strait of Malacca with a stop in Kuala Lumpur (Malaysia), cross the Indian ocean with calls in Kal-Kutta (India), Colombo (Sri Lanka) and the Maldives, and reach Nairobi in Kenya. Then it will pass through Djibouti, the Red sea and the Suez canal to Athens (Greece) and then to Venice (Italy), where it will connect with the land route.
Control over two Silk Road routes ensures China’s energy security and helps protect its investments in strategically important regions. In addition, the implementation of the project allows to reduce logistics costs. Thus, it is important for China to ensure the security of East, Central and South – East Asia, on which political and economic stability depends the well-being of a number of border regions of the PRC, as well as the stability of its trade.
The emergence of the Belt and Road Initiative has become the embodiment of a competition of development models that challenges the former role of the EU as a global model of regional integration. “Belt and road” partnerships of ASEAN with major international players (USA, China, Russia, Japan, South Korea), as well as the Trans – Pacific partnership are a set of new initiatives, “significantly different from classical integration schemes, which are formulated in the theory of international relations based on the experience of the EU, and “new regionalism” relying on non-state actors and transnational processes that occur “apart from” state” .
China’s ability to respond with interest to new plans for regional cooperation has become an advantage against the background of the EU’s wary attitude to the BRI, which has led to the involvement of the interests of Central Asian and Eastern European countries in the initiative. Thus, as a consequence of the involvement of the Eastern partnership countries in the Chinese investment zone of influence, the EU and China decided to combine their logistics routes.
Analyzing the Sino – European relations, it can be noted that the current relations between the EU and China are characterized by a comprehensive content of the bilateral agenda. In an effort to strengthen a common foreign policy line in relations with China, in 2015 The EU has developed a document“Elements of a new EU strategy towards China”. A new “Connecting Europe & Asia: The EU Strategy” was adopted in 2018, which specified the European policy towards Asian countries as part of the “connectivity” approach, providing a forum for coordinating EU and Chinese infrastructure investment relating to TEN-T and the BRI.
A key objective of the “Connectivity Platform” is to ensure that investment takes place within a framework of fair and undistorted competition based on regulatory convergence, while promoting cooperation in areas such as technology, engineering, construction and the development of standards.
An important initial area of work for the “Connectivity Platform” is the financing of investment on priority transport corridors. The Sino – EU summit 2016 in Riga (Latvia) provided further confirmation of an increasing focus on BRI – related projects and initiatives. At the closure of the summit, participants declared that they would make concerted efforts to develop synergies between the BRI and relevant EU initiatives such as the Trans – European Transport Network, more generally support the development of transport routes between Europe and Asia, and establish multimodal logistics centres throughout the area of the New Eurasian Land Bridge. They also committed to improving the international supply chain and border crossing rules on key transport corridors and the connection from the Port of Bar (Montenegro) to the railway network in Central and Eastern Europe.
Analysing the logistics along TEN-T, it should be mentioned that the EU has ports on the Black Sea, Mediterranean Sea (including the Aegean, Adriatic, Tyrrhenian and Balearic Seas), North Atlantic Ocean, North Sea and Baltic Sea, providing a wide range of access points for shipping from outside the EU.
Also should be taking into the consideration the possible approaches to the EU by land and sea and the TEN-T core network corridors. Thus rail services between China and the EU currently operate mainly on the route through Russia, Belarus (where they transfer from the Russian, broad gauge (1,520mm) to the standard UIC gauge (1,435mm) at Brest) and Poland, using the North Sea – Baltic TEN-T Core Network Corridor (CNC) at least as far west as Warsaw. In the course of this research, various rail routes from the Far East to the EU were assessed to determine the most likely ones for carrying rail freight in the future. To that end, the attractiveness of the time of the shipment was considered. Based on the above assumption, it was found that, with shipping times to the North Sea up to one week longer than to the Mediterranean Sea, rail would be most attractive for transport to Europe north of the Alps, including to EU Member States bordering the North Sea and Baltic Sea.
Containers carried by rail, therefore, would primarily be those previously shipped to North Sea ports, and would travel along the route from Moscow (Russia) through Brest (Belarus) and Warsaw (Poland) to Berlin (Germany). Containers carried by sea would first pass or call at ports in Southeast Europe, such as Athens/Piraeus in Greece, where they could in principle be transferred to rail for travel further north. However, most freight of sufficiently high value to justify the additional costs of rail across the Balkans would already have switched to overland rail travel across Asia. It would therefore be more cost-effective for the remaining containers at Athens/Piraeus to continue by sea to ports in the north Adriatic Sea, such as Venice and Trieste in Italy, Koper in Slovenia and Rijeka in Croatia.
Assuming that sufficient end – to – end capacity is available between China and the EU, the focus of future rail freight flows, including those attributed to the BRI, is likely to be the North Sea – Baltic TEN-T CNC from Brest to Warsaw(Poland).
Some freight trains through or around Warsaw (Poland) currently continue to Berlin and Duisburg in Germany, but, by 2040, services may diverge to a range of destinations: south via Katowice in Poland to Hungary and Austria, Slovakia and the Czech Republic, and onwards to southern Germany, Switzerland and France; southwest via Łódź and Wrocław in Poland to Germany; west, as at present, via Poznań (Poland) to Germany, and onwards to the Netherlands, Belgium, the United Kingdom and Ireland, and via Hamburg to Denmark and Sweden; and northeast along Rail Baltica to Lithuania, Latvia, Estonian and Finland.
The routes to the west and to the northeast form part of the North Sea – Baltic Core Network Corridor of the TEN-T, which extends from Warsaw west to Berlin, Amsterdam and Rotterdam and north to Tallinn and Helsinki. The North Sea – Baltic Core Network Corridor Study includes estimates of rail freight tonnage crossing the border between Belarus and Poland in 2025. While it is difficult to compare estimates of tonnages and TEUs, the estimates in the Corridor Study appear to be small compared with the potential volume of BRI – related traffic by 2040.
Despite wide range of synegration of TEN-T and BRI, the analysis showed, that the geographical and project scope of the BRI are not clearly defined and that they continue to evolve.
The analysis of potential future traffic flows in this study suggests that the first study should focus on the New Eurasian Land Bridge Corridor connecting with the North Sea – Baltic Core Network Corridor of the TEN-T. This would require dialogue with other organisations already engaged in the development of rail transport routes in Eurasia, in particular CAREC. It would also require engagement with organisations such as UNIFE, representing manufacturers of rail equipment, with an interest in the promotion and application of EU standards beyond its borders.
The analysis of BRI – related traffic flows in the EU suggested that the BRI could generate additional rail freight of approximately 3 million TEU (equivalent to 50 – 60 trains per day or 2 – 3 trains per hour each way) between the Far East and the EU by 2040. Subsequently, it was concluded that the most likely TEN-T corridor to be required to accommodate this traffic would be the North Sea – Baltic Core Network Corridor.
It is not expected that the BRI changes patterns of shipping traffic materially other than to reduce slightly the volume of freight entering the EU via the North Sea Ports. Any effect might be offset by a growth in the shipment of BRI – generated freight across the North Sea to the UK. Nevertheless, it should be noted that maritime trade between China and the EU is already well-established, and that it is not possible to forecast possible changes in related trade patterns as a result of the BRI.
Given these results, and taking account of the uncertainties surrounding the definition and evolution of the BRI, recommendations to address particular constraints or bottlenecks on TEN-T beyond those already highlighted by the corridor studies would be premature. In the absence of greater clarity on the scope and priorities of the BRI, there is a risk that the development of specific investment projects designed to accommodate more traffic on the North Sea – Baltic Core Network Corridor, for example, would prove either inadequate or redundant.
It is also worth noting the issue of stabilization of subsidies for infrastructure and logistics projects of the PRC through the EU – Asia line.
At the same time, the TEN-T Corridor Studies should be reviewed and developed periodically as the work of the “Connectivity Platform” progresses and the BRI is defined more clearly. This would require TEN-T policy to become more outward-looking, with an explicit requirement to take account of major policy initiatives sponsored by countries outside the EU. It could also be facilitated by the development of periodic forecasts of BRI – related traffic, following the model of the European Commission’s Reference Scenario, with forecasts developed under the framework of the “Connectivity Platform” and jointly approved by participating countries.
Despite the presence of problem areas in the development of logistics ties between the EU and China, partners (especially the EU) note that the development of the logistics is greatly influenced by the geopolitical considerations of countries, in particular the desire to strengthen their foreign policy influence through modern infrastructure, reduce the geopolitical risks of entering major markets, and diversify options for communication with world markets. In other words, the dynamics of the developing of the EU – China logistics is a reflection of technological progress in transportation, the progress of globalization and regionalization of the world economy, geopolitical and geo-economic interests of participating countries in the development of international communications.
It should be understood that one of the key advantages of continental cooperation in the Eurasian space is the possibility of developing transport potential and related infrastructure. Work in this direction will lead to a number of positive effects, the main of which are the use of the transit potential of countries, localization of industry along the Trans – Eurasian transport corridors, export development and increased connectivity of inland States and regions.
Constructive interaction between the EU and China on the development of logistics routes in Eurasia shows that participation in the Eurasian cooperation can help the participants of the initiative “consolidate the strategic rear”, provide a basis for the rise of countries and influence the restructuring of the world structure, become a useful platform for global governance and international policy building.
China’s economic slowdown and its implications for the rest of Asia
China’s economy has slowed down considerably since the past year. The key reasons for China’s slow growth are its stringent lockdowns, to achieve its objective of a zero covid policy. Here it would also be pertinent to point out, that many of Chinese President Xi Jinping’s policies especially tightening of credit for the real estate sector had an adverse impact on the real estate sector and the economy as a whole (according to estimates, real estate counts for 29% of the country’s Gross Domestic Product (GDP). A number of Chinese real estate developers have been downgraded by Moody’s. A number of companies, including Evergrande are part of the B3 category, which denotes “speculative and are subject to high credit risk’.
In August 2022, Chinese Premier Li Keqiang while commenting on the slowdown said:
‘A sense of urgency must be strengthened to consolidate the foundation for economic recovery’
There is a growing realisation that a further slowdown could lead to serious social problems, the stringent lockdowns have resulted in growing unemployment.
A number of steps have been taken to prevent the slowdown, such as Real Estate Sector and steps for Small Medium Enterprises. In August 2022, the Chinese government offered support to the tune of US $29 billion to Chinese real estate developers so that they can complete stalled projects and deliver them to home buyers. Earlier this year, China’s government announced that it would provide fiscal concessions and tax exemptions to MSME’s to small businesses in China. One of the key factors behind this course correction by Xi Jinping was the 20th national congress of the Communist Party will be held from October 16, 2022 (Xi Jinping is likely to secure a third-term and also consolidate his hold over the party and consolidate his position as the most powerful leader after Mao Zedong)
Challenges still persist for China’s economy
Reports of multilateral agencies clearly point to China’s growth in 2022 being well below earlier estimates and targets. According to a World Bank Report, growth in 2022 for the Asia-Pacific region is likely to be a little over 3% (3.2%), while China’s growth is likely to be 2.8%. China had targeted a growth of 5%, and even multilateral agencies had estimated that the country would grow at over 5%
An Asian Development Bank (ADB) report which estimated that China’s growth will be a little over 3% states that ‘developing’ Asia (which includes Cambodia, Bangladesh, Nepal, Myanmar, Sri Lanka etc) will grow at over 5% and highlights a significant point, that the last time China grew slower than the rest of Asia was in 1990, when China grew at below 4% (3.9%) and the rest of the region grew at 6.9%. Emerging Asian economies which include China, India, Indonesia, Thailand, the Philippines and Vietnam are likely to grow at 4.3% in 2022 and 4.9% in 2023 again a drop from earlier estimates.
It would be pertinent to point out, that a number of foreign investors in China have also complained about the lockdowns and restrictions. While in the short run, it is unlikely that they will shift their operations in a big way, they are likely to look for alternatives.
In contrast to China, the rest of the region has benefited from easing out covid19 restrictions. Says the ADB report:
‘Easing pandemic restrictions, increasing immunization, falling Covid-19 mortality rates, and the less severe health impact of the Omicron variant are underpinning improved mobility in much of the region’
Can ASEAN and South Asia benefit from China’s slowdown?
The case of Association of South East Asian Nations (ASEAN) countries is especially important, because their policies with regard to covid have been fundamentally different from that of China. Opening up of borders has given a boost to the tourism sector in the region — especially Malaysia and Thailand. This is important, because tourism accounts for a significant percentage of the GDP of these economies. Here it would also be pertinent to point out, that a number of companies have moved out of China, in the aftermath of covid 19, with Vietnam being a favoured destination due to its geographical location and other economic advantages (some companies have also moved to other ASEAN nations as well as India).
Even the stock markets of these countries have been doing reasonably well. In April 2022, analysts from JP Morgan and Goldman Sachs had picked Indonesia, Vietnam and Singapore as their favourite markets, while last month Credit Suisse said its favourite market in the region was Thailand.
In conclusion, while there is no doubt that China has been driving economic growth not just in Asia, but globally, it is unlikely that its economic challenges are likely to reduce in the short run. It is not just covid, but Xi Jinping’s economic policies which have been responsible for the slowdown. The biggest beneficiaries of China’s covid19 policies as well, as it’s slowdown in the longer run, would be the ASEAN region — especially countries like Vietnam and Indonesia — along with South Asian nations – especially India and Bangladesh who with investor friendly policies could attract more companies seeking to relocate from China.
Russia Struggling to Explore Africa’s Market
Building on post-Soviet relations with Africa, Russia has been struggling for strategies on how to establish economic footprints, promote investment and deepen cooperation in Africa. Despite the road map adopted at the end of the first Russia-Africa summit held in October 2019, little has been achieved since then.
Late September, the Regional Chamber of Commerce and Industry welcomed the participants to another round of conference under theme: “Russia-Africa: Prospects for Cooperation” held in St. Petersburg. That gathering featuring a few interested Russian enterprises was part of a series of steps brainstorm and discuss opportunities, developments and challenges with regards to the preparation of the forthcoming Russia-Africa summit planned for July 2023.
Additionally, the goal of this St Petersburg conference event was in line with the priorities on how to engage with credible investors who can partner with the government and private sector to exploit the market. It discussed the possibilities of strengthening partnership between Russia and Africa, as well as issues related to export/import, logistics and peculiarities of working with African partners.
Vice President of the Chamber of Commerce and Industry of the Russian Federation Vladimir Padalko welcomed the participants via video link from Moscow. In the video, Padalko emphatically reminded that “preparations for the second Russia-Africa summit, scheduled for July 2023 in St. Petersburg, are in full swing and we should come to it with concrete results in the form of agreements ready for signing.”
According to him, the Coordinating Committee for Economic Cooperation with African Countries should focus on conducting business missions that would identify specific areas for conducting business cooperation with African countries. It is necessary to help Russians to learn what the African market is, so that they are not afraid of taking investment risks in Africa.
Padalko said that the prejudices that Russians have regarding Africa should be overcome. He referred to his own experience, emphasizing that the first trip to the African continent made him change his mind significantly about the opportunities offered by cooperation with Africa. Russia is trying hard to improve its commercial relations with its African partners. In 2009, it established the Coordinating Committee for Economic Cooperation with sub-Saharan Africa to assist in promoting Russian business interests in Africa.
Senator Igor Morozov, Chairman of the Coordinating Committee for Economic Cooperation with African Countries, called for increasing the pace and level of cooperation with African countries through, as he put it, “bringing small and medium-sized businesses to Africa.”
According to him, Russia is far behind in its activity on the African continent from such countries as the United States, Britain, China, France and even India and Turkey. These countries are developing a network of technology parks, working in the continental free trade zone, participating in the development of the infrastructure of African countries, the construction of roads, bridges and railways.
Senator Morozov noted that “Russian business does not have the tools to enter Africa and, above all, in the field of the banking system. No other banks give guarantees to Russian business. According to him, African countries are interested in the supply of agricultural machinery, and in this sense, the Kirov Plant in St. Petersburg may have good opportunities. And in this sense, we should take an example from our Belarusian friends.”
That was not the first time analyzing the development of business and trade elations with Africa. The African market is competitive and complex, therefore Russian business needs to work thoroughly and systematically in it in order to achieve success. It is necessary to help interested businesses willing to navigate African realities, find a niche for their work, learn about the conditions for entering certain markets.
According to Morozov, there is really the need for a specialized investment fund to support entrepreneurs. In general, with the prospect of working with African partners for many years, more serious state support is needed, and finally suggested that it is necessary to return to barter trade and concessions, which will make it possible to obtain minerals from Africa.
“We need to develop our international payment instruments – sanctions are already being imposed against the Mir system,” he said. A great deal of hope is being placed on the working group for developing new mechanisms in currency regulation and international settlements led by Kremlin aide Maxim Oreshkin, “which is supposed to work out these mechanisms soon,” Morozov said.
“We need to see how we will work within the framework of national currencies” and use them for settlements with African countries, he said. “We need to work in this direction, understanding that SWIFT will never again be [the main system for interbank payments] for us,” Morozov, who also serves on the Federation Council’s Economic Policy Committee, said.
Talks on options for settlements between Russia and African countries in the current economic circumstances are already being held, but “we shouldn’t get ahead of events. African central banks are already beginning to come [to Russia]. Everyone understands that we are leaders in grain exports, leaders in sunflower oil, mineral fertilizers, and it is necessary to settle up,” Morozov.
Other options for settlements could be barter and concessions. The outlook for cooperation and possible Russian projects in Africa, Morozov said Russia can offer its competencies in hydropower, electric passenger transport, automobile manufacturing, farm machinery and pharmaceuticals. Afrocom operates with the support of the Russian Chamber of Commerce and Industry, the Federation Council and government institutions, according to the committee’s website.
Associate Professor Ksenia Tabarintseva-Romanova, Ural Federal University, Department of International Relations, acknowledges huge existing challenges and perhaps difficult conditions in the current economic cooperation between Africa and Russia. Creating African Continental Free Trade Area (AfCFTA) is the most important modern tool for the economic development of Africa, and this is unique for exploring the market and to get acquainted with the opportunities that it offers for business cooperation.
She, however, maintains that successful implementation requires a sufficiently high level of economic development of the participating countries, logistical accessibility, developed industry with the prospect of introducing new technologies. This means that in order for African Continental Free Trade Area to effectively fulfill its tasks, it is necessary to enlist the provision of sustainable investment flows from outside. These investments should be directed towards the construction of industrial plants and transport corridors.
Speaking earlier in an interview discussion, Tabarintseva-Romanova pointed to the fact that Russia already has vast experience with the African continent, which now makes it possible to make investments as efficiently as possible, both for the Russian Federation and for African countries. In addition, potential African investors and exporters could also explore business collaboration and partnerships in Russia.
Local Russian media, Rossiyskaya Gazeta also published an interview with Professor Irina Abramova, Director of the Institute of African Studies under the Russian Academy of Sciences, focusing on the economic cooperation with Africa. In this interview, Abramova reiterated explicitly that Russians have to do away with negative perceptions and attitudes toward Africa. The change in attitudes has to reflect in all aspects of the relationship with Africa and Africans.
“In Russians’ minds, Africa is synonymous with backwardness, poverty and hunger, which is not true at all. It is currently one of the most promising regions for foreign investment. In fact, it is a tiger ready to pounce. Africa today is in the same situation that China was in the 1990s. Today, China is the world’s number-one economy in purchasing capacity, a strong power which largely determines global development,” she explained.
“Africa is the zone where all big players overlap since its geographic location between the east and the west puts it at the peak of controversy and big game between all players, meaning between Europe and America, on the one hand, and China, India and other countries, on the other. And if Russia poses as a superpower it will lose its global influence without indicating its position in Africa as well,” she said.
According to her, seven African countries specifically Egypt, Algeria, Morocco, South Africa, Tunisia, Nigeria and Sudan, account for nearly 90% of Russia’s trade. “At the same time, China is present in almost all African countries. Millions of Chinese work in Africa today. It is a good moment for Russia now, because Western partners are trying to impose their values on the Africans, while China is dealing with its challenges at the expense of Africa,” the expert stressed.
The middle class is expanding very fast there, already amounting to 250-300 million people and this constitute a huge consumer market for products and services, according to her estimation.
Professor Abramova noted that it is a very good market for Russian products. The Chinese understood that long ago and are tapping the African market, having flooded it with their products, though Russia also has opportunities as it is fairly competitive in the energy, infrastructure and agriculture sectors, and exporting products such as fertilizers, trucks and aircraft supplies.
The fact that many prominent politicians and businessmen of the African continent graduated from Russian universities and speak Russian well contributes to strengthening of Russian-African relationship, the expert said, adding though that a new generation is about to take over in Africa, which is also reason why Moscow should maintain the existing solid social and cultural ties.
Senator Igor Morozov and Professor Irina Abramova are both members of the Kremlin’s Committee assigned the responsibility for coordinating and preparations for the next Russia-Africa summit in July 2023. Both Russia and Africa had problems finding a suitable African venue for the summit. The joint declaration adopted in Sochi says the summit be held every three years and the venue alternated between Russia and Africa.
Sampson Uwem-Edimo, President of the Nigerian Business Council and General Director of Trailtrans Logistic LLC, delivered a report “Nigeria as a Window to Africa” and further stressed that Russia does not have a common strategy on how to enter African markets, which exists, say, in China or France.
By removing barriers to trade in the region will create new entrepreneurial activities and spur innovations in technology. Now the African Continental Free Trade Area (AfCFTA) seeks to create better conditions for investment. On the other hand, Russian corporate directors most often have problems with their business in Africa. The key obstacles ranging from their inconsistencies in approach, poor knowledge of the local political and business environment. Russians must also invest more in R&D collaborations with their African partners.
According to him, while Russians hope for brisk business, many African business leaders today are still Western mind-oriented, have various support from the United States and Europe. But the practical reality, Russia could still steadily transfer technologies for local processing of raw materials as a catalyst for Africa’s development.
Uwem-Edimo noted that such former colonial powers as France and Great Britain, although they left their colonies, keep control panels in their capitals. The Nigerian businessman, who spoke in Russian, introduced the conference participants to the opportunities and vast potential of the African continent, focusing on Nigeria, which makes up 18 percent of the continent’s population – 240 million people.
President of the St. Petersburg Chamber of Commerce and Industry, Vladimir Katenev, also addressed the conference participants with a greeting. The moderator was Ekaterina Lebedeva, Vice-President of the St. Petersburg Chamber of Commerce and Industry Union, who called on representatives of the business community, in spite of the emerging challenges, to consistently work towards prioritizing Africa.
China-ASEAN Comprehensive Strategic Partnership: A Shared Future for Pursuing Regional Economy Integration
For ASEAN, China is a neighboring country as well as a strategic partner in various fields, especially in the economic field. China has become the largest ASEAN trading partner for 13 consecutive years since 2009 (Global Times, 2022).
A survey conducted by the ISEAS-Yusof Ishak Institute to more than 1,600 ASEAN citizens said that 76.7% of them chose China as the most influential economic power in ASEAN (Heijmans, 2022). China has also grown to become an economic giant in the Asian region and is predicted to surpass the US as the world’s strongest economy by 2030 (Jennings, 2022).
This mutual relationship between China and ASEAN is getting stronger after the agreement of the Comprehensive Strategic Partnership (CSP). In the economic aspect, the implementation of the CSP is carried out in line with the Belt Road Initiative (BRI) and the Regional Comprehensive Economic Partnership (RCEP) project. Both projects are grand plans that have been prepared for economic integration and encouraging a more inclusive trade between two parties.
On the other hand, ASEAN also has a similar agenda in the region, which is to build an economic community that regulates trade as well as delivers economic benefit to its members. The common vision between China and ASEAN certainly smoothes the process of this cooperation. Then, how can China and ASEAN achieve their common goals? Are there any obstacles and challenges that they will face in implementing this CSP?
China-ASEAN: Sharing The Same Economic Vision
In pushing its foreign policy agenda, China has made visits to various neighboring countries in recent years. Rather than building an image as an economic great power, China focuses more on a friendly approach by promoting “a community with a shared future” to its neighbors (Wei, 2022). As a close neighbor and strategic partner, ASEAN become the one whom China wants to share the future with.
For ASEAN, BRI and RCEP itself have an aligned purpose with the establishment of the ASEAN Economic Community (AEC). AEC aims to promote a single market and product base, a highly competitive region, with equitable economic development (ASEAN, 2020a). Through AEC, ASEAN also commits to a freer flow of goods and services, and eases the distribution of skilled labor and the flow of capital in the region (Asian Development Bank Institute, 2015).
ASEAN’s ambition to build an integrated regional economy sounds promising. However, building an integrated economy ecosystem doesn’t only require geographical proximity, but also an adequate infrastructure (Donghyun et al., 2008).
Even though Southeast Asia is rich in resources and manufacturing, some areas still suffer from infrastructure lack and slow industrial development. Several ASEAN countries still have poor transportation infrastructures. In fact, transportation is a key factor in fastening economic distribution.
At this point, China came up with a BRI project plan which mainly prioritized large investments in transportation infrastructure (Donghyun et al., 2008). This long-term project has ample potential to provide infrastructure and other development facilities, hence promoting the growth in the region (Iqbal et al., 2019).
The CSP also regulates the Regional Comprehensive Economic Partnership (RCEP) agreement that aims to broaden and deepen free trade activity between ASEAN-China, Japan, Korea, New Zealand, and Australia (“RCEP: Overview and Economic Impact,” 2020). The RCEP later marks the birth of the world’s largest FTA which surely opens up wider trade and market access for ASEAN.
The RCEP will also help both China and ASEAN forge mutually beneficial industrial chain and supply chain partnerships, also to shape more inclusive trade cooperation in the future (Bo & Jing, n.d.). This opportunity is expected to be an open door for ASEAN integration with global trade, which is also the initial mission of AEC. Also can attract other countries to plant their foreign investment in ASEAN countries (ASEAN, 2020b).
For China, BRI and RCEP are essential to strengthen China’s position in the region. China is contriving to build “literal and metaphorical” bridges as a connector and a highway to greater influence in global politics and economy (Lockhart, 2020).
Both China and ASEAN share great economic interests in the CSP agreement. This makes both parties find a smooth path in the negotiation and agreement process. However, in the implementation process, ASEAN and China need to be more serious and committed.
ASEAN is currently in the process of compiling the ASEAN Economic Community (AEC) Blueprint 2025. The mid-term review criticized the uneven implementation of the AEC blueprint, with “easier” initiatives prioritized over challenging commitments. Both policy-making processes at national levels and practice need to be in line in order to reach common goals (Chen & Jye, 2022).
The Covid-19 pandemic becomes another obstacle to realizing economic integration in the region. The pandemic hits ASEAN quite heavily, where currently the members are still concerned about restoring the stability of the domestic economy. The cooperation with China is used well by ASEAN countries at the national level, such as the proposal submission for building several economic infrastructures by Indonesia, encouraging digital development in Thailand, signing economic bilateral relations with Vietnam, etc. Yet for the regional purpose, it still needs to be maximized.
The CSP begins a higher level of relationship, as reflected in the deeper cooperation, shared normative frameworks and institutionalized cooperative mechanisms, and high-level political commitment and priority from China and ASEAN (Ha, 2022). It will be less than optimal if ASEAN only sees CSP as a bridge to strengthen bilateral relations with China. ASEAN needs to view CSP as a strategic relationship for an ideal future of regional economic integration.
For optimizing the common goals for both, mutual political trust is the basis and safeguard (Bu, 2015). CSP does not happen overnight, building connectivity and an integrated ecosystem is a large-scale and long-term project. In order to reap the rewards of this investment and agreement, active dialogue, healthy relations, and stable growth of the upbringing of China-ASEAN relations must be strived by both parties.
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