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Belt & Road ABCs: Analysis of “One Belt – One Road” initiative

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Understanding the foreign policy and geo-economic strategies of countries, especially in such a difficult time when national borders are closed and the “militarization” of cybersecurity, becomes an important, if not vital, task for each individual country in its attempts to take its rightful place in building a new world order and development economy.

In the XXI century, it was impossible not to notice the rapid economic growth of Asia, given that the growth rates of each of the national economies of the region exceed those of the Western countries.

For a long time, Asian countries have taken the best of both worlds, building economic relations with China, and maintaining strong ties with the United States and other developed countries. Many Asian states for a long time have considered the United States and other developed countries as their main economic partners. But now they are increasingly taking advantage of the opportunities created by China’s rapid development.

Moving away from Asia, let’s have a quick look what is happening in East Europe, or Central Asia, or Latin America, or even Africa. Most of the countries in these regions are struggling to take their place in “the geopolitical game” in pursuing of the benefits that Chinese investment can bring. But what is the main core and nature of Chinese Investments or Chinese geoeconomic “One Belt – One Road” project? The answer to this question is still unclear for most countries seeking to join. To understand the Belt and Road Initiative, let us also take a brief look at 10 key basics (ABCs) of this initiative:

Why and when was the Belt & Road Initiative (BRI) created?

The Belt&Road Initiative (BRI) – is an umbrella initiative spanning a multitude of projects designed to promote the flow of goods, investment, and people. The new connections fostered by the BRI could reconfigure relationships, reroute economic activity, and shift power within and between states.

The Scope of the Initiative is very big which makes it difficult to clearly identify the main initiative’s goals. Thus, the best way to understand the purpose of the Belt&Road Initiative (BRI) – is to have a quick look on its development phases, each of which has its’ own aim and perspective:

1. Preparation period (1990s – 2000s)

After fruitful economic reforms in China (1970 – 1980s: during Deng Xiaopin’s reforms which pushed forward the transformation of China’s economy), in 1990s with the implementation of the concept of “one country, two systems” (biggest offshore zones Hong Kong and Macao returned under Chinese jurisdiction), the strengthening of Chinese geoeconomics became even bigger. As a result, during 1990s – 2000s financial crises China was the only country with steady currency (while regional stock markets collapsed), being able to provide to the region a platform for further economic boom. 

After 2008 global financial crisis it became clear that Chinese stock market is stable and can protect the development of regional economies. China is starting to play a dominant role in the region (shift from “country with closed policy” into regional leader).

2. Conceptualization (2000 – 2012)

While 2000 – 2010 were accompanied by stable economic development (export oriented), the development gap between Chinese regions was getting bigger, weakening the status of a strong regional (and further global) economic power. Due to these Chinese administrations was trying to work on ways to develop less developed regions of the country – started to think on creating a regional integration mechanism within Asia, where China would play the key supplier role. Starting from 2004 China is getting more involved into supplying activities in the region, expanding the production and manufacturing, logistic facilities in low-developed areas of the country (2004 – opening of TRACECA transshipment line; 2008 construction of the transcontinental highway “West Europe – West China”; 2009 construction of gas transportation infrastructure between China and Iran; the early-mid-2010s large-scale transport and infrastructural projects in Central Asia etc).

In 2011, when US Secretary of State H.Clinton proposed the development of a New Silk Road with Afghanistan as a center, Chinese leadership decided to step in and to move from individual projects to a large-scale Eurasian strategy. This decision led to the creation of the BRI.

3. Implementation (2012 – 2017)

The main role of this stage was to build a stable basis of the Initiative, which could guarantee stable economic and infrastructural development. While promoting the BRI, Chinese were concentrating on diversification and facilitation of regions logistics system. Another important element of this stage was the creation of economically strong financial base of the initiative (2013 – launching of the BRI initiative (starting budget USD47 billion), October 2014 – creation of the Asian Infrastructure Investment Bank, Silk Road Fund etc). and Initiative’s promotion (by May 2015 about 60 countries joined the AIIB (decision to join BRI project).

While putting enormous amount of investments into regions’ (mainly ASEAN, Russia, Central Asia) transportation systems, China decided not to lose a profit and export products outside using already existent transshipment routes (through TRACERA, Suez, Malacca straights etc.). As a result, in 2013 – 2015 348 international projects were started, volume of USD24.7 bln, in 2015 Chinese investment increased of 37% compared to 2014 and BRI became a “process – brand”, the period 2016 – 2017, total cost of infrastructural projects is estimated at $ 60 billion

4. Expansion (2017 – ..)

 In May 2017 radical changes in the dimension and nature of the initiative happened:

  • initiative is based on transport corridors leading from China to Europe and Africa;
  • Continuous flow of FDI to Central Asia, Transcaucasia, Eastern Europe, and the Middle East;
  • launched the creation of new markets in countries along transit routes;
  • radical changes in approach to FDI protection.

These changes brought certain results into the development of BRI and China itself:

  • in 2017 China put an additional 15 billion USD to the Silk Road Fund.
  • by the end of 2017 China’s trade turnover with partner countries increased annually by an average of 6%.
  • 2019 – 2020 additional $ 8.7 billion has been allocated for the needs of developing countries that were involved in the project.
  • Estimated that 4 – 8 trillion dollars will be invested in the BRI project by 2030.

Thus, 2017 played a crucial role in turning the “regional integration initiative” into a new global level one.

To sum up, during Initiative transformation, its’ aims were gradually transforming as well:

  • First Phase – to develop an approach for stable economic development of China;
  • Second stage – to guarantee country’s positions as stable strong regional leader;
  • Third stage – regional integration with expansion to neighboring countries;
  • Fourth stage – global expansion and occupation of the geo-economic space of minimum three continents.

Nevertheless, few general aims, which were there from the very first day of BRI’s implementation, can be identified:

  • improving intergovernmental communication to better align high-level government policies like economic development strategies and plans for regional cooperation;
  • strengthening the coordination of infrastructure plans to better connect hard infrastructure networks like transportation systems and power grids;
  • encouraging the development of soft infrastructure such as the signing of trade deals, aligning of regulatory standards, and improving financial integration;
  • bolstering people-to-people connections by cultivating student, expert, and cultural exchanges and tourism.

The end result of BRI should be the ceation of a “Community of Common Destiny for Mankind” (人类命运共同体), defined as a new global system of alternative economic, political, and security “interdependencies” with China at the center (zhongguo, 中国). For this reason, Chinese leaders describe BRI as a national strategy (zhanlüe, 战略), with economic, political, diplomatic, and military elements (综合国力), not a mere series of initiatives.

Thus, BRI directly supports many elements of China’s national security strategy. At a macro level, it seeks to reshape the world economic order in ways that are conducive to China’s drive for Great Power status.

What does the creation of the BRI mean in terms of globalization?

While talking on the role of BRI in Globalization trends, its’ global and national scopes (impacts), should be empathized:

Contribution to the “world’s” Globalization:

  • Transport and infrastructure development increases trade;
  • increasing of connectivity;
  • stabilization in monetary policy;
  • stabilization of the level of security in the region;
  • contribution to the cultural exchange.

Responding to global trends in globalization, based on the principle of mutual benefit and having a far-sighted perspective, BRI has several foreign policy strategic advantages that can contribute to the cohesion of the countries of the 3 main continents (Asia, Europe, Africa) and the disclosure of their economic potential.

Contribution to the “country’s” Globalization:

  • BRI is intended to support the development and reform of all provinces and regions in China through involving them into global cooperation with the worlds regions;
  • development and connectivity of China’s provinces and neighboring countries;
  • contributing to continued strong and sustainable growth in China while simultaneously benefiting from new commercial opportunities (See Attachment 1 below).

Attachment 1: Strategy on “Globalizing” of China

Source: BRI official website, 2015

How does BRI relate to Xi Jinping`s government’s characteristics?

While thinking on BRI as a new trend in Chinese foreign policy, it is worth noting that it was the new way of thinking (and developing of the policy strategy) of The 5th generation of the P.R.C. administration (Administration of Xi Jinping). His predecessors were mainly concentrated on inner policy of China (namely strengthening of Chinese inner market, economy and reducing the “development gap” between the Chinese provinces and cities) and further strengthening of China as regional player (late years of the Administration of Deng Xiaoping). New Administration (Xi Jinping since 2012) decided to take Chinese foreigner policy to next level, announcing the conversation of the doctrine of the “Chinese Dream” (improving of well-being of Chinese people within China) into proper international status (first regional leader, then expansion of BRI into at least 3 continents).

What’s more, no Chinese leader has done more globe-trotting within such a short time (first term 2012 – 2016, second term 2016 – …). Since 2013, president Xi has logged 28 overseas trips that brought him to 56 countries across 5 continents, as well as the headquarters of major international and regional organizations.

As a result of BRI implementation, at least in terms of two of China’s policies – bringing in (qingjinlai) and going out (zouchuqu) – Xi’s first term (2012 – 2016) already marked a new era in Chinese foreign policy. But there was much more to the new era than the flurry of diplomatic visits. Xi introduced four new concepts into Chinese foreign policy: a new type of major country relations (P2P diplomacy, bilateral diplomacy approach, hub-regions integration (ASEAN, CEE etc.), major country diplomacy with Chinese characteristics (strategy of “blue water”, “diplomacy of straights” etc.), a global community of common destiny (strategy “Chinese dream”), and a new type of international relations (BRI).

Further, in 2017, while announcing the start of the expansion phase of BRI, Xi Jinping underlined again the importance of the balanced development of both China and BRI: “Chinese government seeks to

  • “ensure and improve living standards through sustainable development”;
  • it condones market “reform and opening” (gaige kaifang 改 革 开 放) and
  • encourages Chinese enterprises to “go out” (zou chuqu 走出去) especially along the Silk Road Economic Belt and 21st Century Maritime Silk Road (and Polar Silk Road in near future).

Thus, it can be seen, that in 2012 new Chinese Administration (Xi Jinping) noticed that China’s relatively slow growth rate since 2009 has required a rebalancing of its economy away from investment-led growth and towards a more consumption-driven economy. The realization of this fact forced new Administration to think on other possible ways to sustain and develop Chinese economy, which further turn into idea of the creation of new economic integration mechanism in the region (and further continent) – the Belt and Road Initiative. The further phrases of its development have been commonly used in China to indicate the importance of this recalibration.

Meanwhile, because of Xi Jinping new approach of the development of China, the country gained a profound impact on global economic development (which, is safe to say, China has never had before).

Why does China seem to be focusing on African countries?

China is both a long-established diplomatic partner and a new investor in Africa. Chinese interests on the continent encompass not only natural resources but also issues of trade, security, diplomacy, and soft power. China is a major aid donor, but the scope, scale, and mode of Chinese aid practices are poorly understood and often misquoted in the press (since they mainly analyze Sino – African relations only in terms of “what does China gain out of these relations”). It will be fair to emphasize, that few analysis have approached Sino – African relations as a vibrant, two-way dynamic in which both sides adjust to policy initiatives and popular perceptions emanating from the other.

While analyzing the main reasons of the development of Sino – African ties (within BRI or not), it can be underlined that China has four overarching strategic interests in Africa:

1.    China wants access to natural resources, particularly oil and gas. It is estimated that, by 2025, China will import more oil worldwide than the United States. To guarantee future supply, China is heavily investing in the oil sectors in countries such as Sudan, Angola, and Nigeria.

2.    a huge market for Chinese exported goods, might facilitate China’s efforts to restructure its own economy away from labor-intensive industries, especially as labor costs in China increases.

3.    China wants political legitimacy. The Chinese government believes that strengthening Sino – African relations helps raise China’s own international influence. Most African governments express support for Beijing’s “One China” policy (HK and Taiwan, Xinjiang Uygur Autonomous Region are fully Chinese territories), a prerequisite for attracting Chinese aid and investments.

4.    China has sought a more constructive role as contributor to stability in the region, partly to mitigate security-related threats to China’s economic interests.

At the same time, African governments are counting on China to ensure political recognition and legitimacy and contribute to their economic development through aid, investment, infrastructure, and trade. To some degree, many African leaders hope that China will interact with them in ways that the United States and other Western governments do not – by engaging economically without condescendingly preaching about good governance, for example, or by investing in high-risk projects or in remote regions that are not appealing to Western governments or companies. Some Africans aspire to replicate China’s rapid economic development and believe that their nations can benefit from China’s recent experience in lifting itself out of poverty.

From what I personally heard from my African colleagues and friends: “we (Africans) prefer to work with China, because if it (China) promises us (Africa) something (i.e. to build a highway or a plant, to invest in solar power facilities etc.) – it will do so, but if the same is promised by the US or Western Europe – we (Africans) will never see the results and furthermore will pay huge percentages and loans for nothing”. Afterall, it makes sense, as Central – East – European countries are mainly willing to cooperate with China because of the same reasons. Thus, it’s not surprisingly that not very high-developed (in terms of economy and infrastructure) countries are tempted to choose Chinese investments, over the Western countries or the WTO.

Thus, BRI, which mainly focuses on the development of large infrastructure projects, is a real hope for many African countries to fill their own infrastructure gap, with less cost and in a more efficient way (so far Chinese companies are top in logistics and infrastructure development and improvement). As a result – as of September 2019, 40 of 55 African countries had signed some sort of memorandum of understanding or other agreement on the BRI.

Africa is also an important end user of China’s industrial overcapacities, particularly coal, cement, steel, glass, solar, shipbuilding, and aluminum, for use in BRI projects.

Also, it must be emphasized another, not necessarily official goal of BRI in Africa – geopolitics and geo-economics. Thus, with the help of African continent, BRI also increases China’s control of critical global supply chains and its ability to redirect the flow of international trade in the world’s sea. Central to these efforts are steps to open up new sea lanes and expand China’s access to strategic ports around the world. Thus, while The Silk Road Economic Belt establishes 6 land corridors (or high-speed train and highways networks, oil, and gas pipelines), connecting China’s interior to Central Asia and Europe, The Maritime Silk Road (and possible Polar Silk Road) further establishes 3 “blue economic passages” knitted together through a chain of seaports from the South China Sea to Africa that also direct trade to and from China. (See Details in Attachment 2).

Attachment 2: Transshipment lines from Far East to Western Europe and Africa

Source : EADB, 2020

African continent is of great importance to the implementation of China’s 13th Five Year Plan, a document adopted in 2016 that provides long-range implementing guidance in five-year increments, which calls for the “construction of maritime hubs” to safeguard China’s “maritime rights and interests” as it embarks on laying a “foundation for maritime Great Power status” by 2020. The centenary of the founding of the People’s Republic of China, 2049, has been set as the year when it will become the world’s “main maritime power” (海洋强国). Accordingly, China’s drive to acquire port access and secure supply lines are likely to intensify alongside the expansion of the Maritime and Polar Silk Roads.

The Maritime trade routes help China diversify its supply chains and create a China – Indian Ocean – Africa – Mediterranean Sea Blue Economic Passage to connect Africa to new maritime corridors in Pakistan, Bangladesh, Sri Lanka, and Myanmar. (See Details in Attachment 2).

But it worth noting, that China’s return on investment from increased port access and supply chains is not only about economics. In five cases (2 of which are in Africa) – Djibouti, Walvis Bay (Namibia), Gwadar (Pakistan), Hambantota (Sri Lanka), and Piraeus (Greece) – China’s port investments have been followed by regular People’s Liberation Army (PLA) Navy deployments and strengthened military agreements. In this way, financial investments have been turned into geostrategic returns. (See Details in Attachment 3).

Attachment 3: Global BRI strategy: roadmap

Source: MERICS, 2020

Within this scenario one can trace the implementation of well-known Chinese geopolitical strategy “string of pearls” and “blue waters”, which is primarily aimed at protecting China’s oil flows, establishing the country as a global Maritime power with diverse interests around the world, and overcoming US attempts to block access to China or its access to the world’s oceans. Due to this strategies Africa (namely Djibouti and Walvis Bay) have a crucial role in this strategy in terms of security.

In this aspect we can see that the African vector of Chinese “diplomacy of straits” is playing a significant part in Chinese foreign policy. In 2016 it was stated that in Djibouti (the African side of the Bab el – Mandeb, connecting the Gulf of Aden (and hence the entire Indian Ocean basin and the Asia – Pacific region) to the Red Sea and further, through the Suez Canal, with the Mediterranean Sea), in the port city of Obock, work on the construction of a naval base of the PRC began. This base will not only enable Beijing to control the Bab – el Mandeb Strait to some extent, but also will serve as a military guarantee of Chinese interests on the African continent, which is (for 2014) $ 210 billions of trade turnover and $ 20 billions of FDI.

The base in Djibouti allowed the Chinese Navy to increase its presence in the Indian Ocean and became a stronghold in the event of an emergency evacuation of Chinese citizens from Africa.

In addition to purely security issues, Africa is also a market for Chinese weapons. From 2013 to 2017, exports of Chinese weapons to Africa grew by 55% compared with the previous five years. From 2008 to 2017, China exported $ 3 billion worth of arms to Africa. Algeria already purchases 10% of all exports of Chinese weapons, including warships.

Thus, Africa’s importance to China in this regard stems from its location in the maritime zone, in which Beijing hopes to expand its presence and project its power. Indeed, ten years ago, China could not penetrate the adjacent waters of Africa. Today, it is estimated that the PLA Navy maintains five battleships and several submarines on continuous rotation in the Indian Ocean. This is set to increase in the coming decades as Chinese rival – India – ramps up its own presence in the area.

What is the significance of the Belt & Road Initiative in Europe?

When the policy of US Presidents D. Trump and later Joe Biden has brought uncertainty to relations between the world’s three largest economic partners – the US, China and the EU, collaboration between official Brussels and Beijing remained one of the most important factors in world politics. Thus, Sino – European relations are one of the primary factors determining the development of the entire system of international cooperation in Eurasia.

Modern relations between the European Union and China are characterized by a comprehensive content of the bilateral agenda, which includes issues of investment, trade, economic, political cooperation, environmental protection, etc. Same principals can be applied when analyzing Sino – European collaboration within BRI.

An important role in these relations is played by the countries of the Eastern borders of the EU – the countries of Central and Eastern Europe. As a kind of geopolitical bridge between Asia and Europe, the CEE countries providing the Chinese side with large platforms for investment and development of trade and economic collaboration. Despite the geo-economic prospects, however, the CEE countries also pose as a considerable threat to the promoting of the BRI project to the West (economically unstable, lack of reliable infrastructure and logistics, high level of political instability and conflicts).

Also, providing a strong basics for development of China – EU ties, Sino – CEE relations, at the same time, bringing higher level of uncertainly and fears to European business and political circles. Thus, while implementing BRI in CEE region and hence strengthening economically and infrastructurally countries of the region, China contributes to shifting of “political preferences and support” of these countries from EU-oriented trends to East-oriented (which in some point can damage European identity and unity).

An important characteristic of Sino – EU relations (which the EU leadership is not fully supporting), is that instead of seeking a “block-based” approach with the whole of Europe, China develops multiple arrangements and memorandums of understanding, resulting in a certain East – West divide, with more Eastern European countries being BRI members. This complicated puzzle of bilateral arrangements ultimately favors a hidden growth of Chinese continuous influence in Europe.

Nevertheless, it can be underlined, that the improving of Sino – CEE ties within BRI requires deep collaboration on the principle of mutual complementarity of economies of the region. Such complementarity provides an important basis for long-term business cooperation, because only in the process of joint efforts to create the BRI will it be possible to fully overcome the underdevelopment of infrastructure in the region. The cooperation between China, the EU and CEE countries can also contribute to the balanced development of Europe.

While talking about BRI from European perspective, the most relevant infrastructural projects of the Initiative are railways and ports. The BRI’s investments in railway and port infrastructure will certainly influence trade relations between China and Europe by lowering transportation costs and increasing trade volumes. New connections will develop trade and have an impact on each European country’s trade turnover with Asia. Thus, it is estimated that “a 10% reduction in railway, air, and maritime costs increases trade by 2%, 5.5% and 1.1% respectively”. Nevertheless, the effects of new connections should also be analysed regarding the specific composition of trade flows.

The maritime route of the BRI then is going to be the most relevant component of BRI both in terms of volume (93% of total trade in 2016) and value (61% of total trade in 2016) of goods in the Sino – European trade. This will reinforce the status of the Mediterranean and Southern Europe as the terminal point of the main BRI shipping route. (See Details in Attachment 4).

Also, the new shift in Sino – EU relations within BRI were intensified by the parallel impact of three concurrent factors:

  • expansion of the Suez Canal in August 2015 that doubled the daily capacity of cargo transit;
  • emerging “naval gigantism”, or the strategic use by the main shipping companies of huge vessels (between 13,000 and 22,000 TEU) that can only be hosted by the Suez Canal;
  • acceleration of global alliances made by shipping companies to reinforce their economies of scale, as in the case of the Ocean Alliance, consisted of the China Ocean Shipping Company (COSCO), CMA CGM from France, Evergreen from Chinese Taiwan, and OOCL from Chinese Hong Kong, which controls 35 per cent of the Europe – Far East route trade and 40 percent of the transpacific route trade.

These three concurrent phenomena (i.e., Suez enlargement, naval gigantism, and global alliances) are progressively reinforcing the competitive advantage of the Europe – Far East route, making it even more convenient than the transpacific route for the Chinese cargo directed towards the American north-eastern coast. These processes provide the European Mediterranean with an unprecedented “centrality” within both of China’s most important trade segments with Europe and the US.

Attachment 4: Projects presented under the EU-China Connectivity Platform. Projects in EU Member States

Source: Five Expert Group meetings held in November 2016 in Beijing, in May 2017 in Brussels, in July 2018 in Beijing, in November 2018 in Brussels, and in July 2019 in Beijing.

Why are there concerns about the expansion of Chinese trade routes? What threats BRI poses to other countries?

As any other project, global scope of the BRI reserves not only big number of opportunities, but also high level of uncertainly and challenges. Thus, the main groups of risks are as follows:

1. Environmental risks:

  • BRI transport infrastructure is estimated to increase carbon dioxide emissions by 0.3 % worldwide—but by 7 % or more in some countries as production expands in sectors with higher emissions.
  • creating bottlenecks in cold waters (Straits of Malacca and Singapore, Suez, Gibraltar, Panama, etc.;)
  • interferes in Arctic and Antarctic circles (melting of ice, global warming);
  • oil spills (mainly Indian ocean);
  • biodiversity loss (mainly South-Asia waters).

2. Social Risks:

  • An influx of workers related to an infrastructure project could create risks of gender-based violence, sexually transmitted diseases, and social tensions.
  • Increasing of development gap (between world regions and countries).
  • Monopolization risks:
  • There are examples of Chinese companies using the terms of a contract for financing the construction of infrastructure facilities to obtain, if possible, control over the recipient companies. For example, under the terms of the financing agreement, if the construction and commissioning of the facility is delayed, control of the foreign partner company passes to the Chinese company.
  • countries’ technologies degradation (while implementing projects China prefer to use its manpower, raw materials, and technologies).

4. Governance Risks:

  • Moving toward international good practices such as open and transparent public procurement would increase the likelihood that BRI projects are allocated to the firms best placed to implement them;
  • absence of clear and stable policies transparency;
  • interfere in territorial sovereignty of the countries (best example – countries of South-East Asia, Pakistan, Ukraine);
  • inconsistency in legal and financial policies due to political instability in countries participants (best example – Myanmar, Russia, Ukraine, Pakistan, Kashmir).

5. Business risks:

  • BRI countries have more restrictive and burdensome FDI policies than high-income OECD countries, in terms of starting a foreign business, accessing industrial land, and arbitrating commercial disputes;
  • Risk of losing control over project (if country can’t cover the dept – construction company (China) can take over the facility/project/profits);
  • corruption risks.

6. Debt Sustainability Risks:

  • Among the 43 corridor economies for which detailed data is available, 12 – most of which already face elevated debt levels – could suffer a further medium-term deterioration in their outlook for debt sustainability;
  • FDI to projects exceeds country’s GDP (Best examples: B&H, Cambodia, Laos, Greece, Djibouti)

And the last group of risks can be identified in its geo-economic and geopolitical scope (should be noted that this group is a basic of majority of fears about the expansion of the BRI (especially from the EU, the US and Indian perspectives)):

7. Geopolitical and geo-economic risks:

7.1. Geostrategical aspect:

–      the project is consistent with the logic of the classical geopolitical Formula: “…who rules Eurasia controls the destinies of the world”;

–      creating “fulcrums” within strategical transportation hubs (CEE, ASEAN region, Gwadar, Djibouti etc.) through over the world;

–      takes control over Indian Ocean: the realization of the idea of building the Kra – Canal (The Thai Canal through the Malacca Peninsula of Thailand), connecting the Pacific (Siamsky Bay) and the Indian (Andaman Sea) oceans.

–      according to the long-standing tradition of the “Chinese box” (foreign policy strategies “string of pearls”, “blue water”, etc.), the main geopolitical goal of the Chinese project is gradually revealed to the outside world:

  • 2013 – 2017: gradual opening of foreign policy and economic objectives;
  • 2017 – …: entering the path of reaching the main goal (creating a large Eurasian multidimensional space with a huge consumer market).

7.2. Resource’s aspect:

–      within Maritime Silk Road (MSR) the construction of oil and gas pipelines from the coast of the Arabian Sea to China’s Xinjiang provides stable oil imports bypassing the Strait of Malacca (hence not controlled by the US and India);

–      within Polar SR get access to resources-rich Arctic region (gas and oil);

–      within land BRI get access to resources of Eurasia and receive massive discounts on the import of gas (from Central Asia mainly);

–      within Polar SR along the Northern Sea Route in the Arctic, facilitate increased resource extraction and cargo deliveries, as well as tourism and scientific opportunities;

–      As a result, second quarter of 2021: Total FDI Energy – 44 %, transport – 30% (considering Pandemic impact).

7.3. Military aspect:

–      Within MSR places military bases and electronic intelligence facilities in friendly Southeast Asian countries (Myanmar, Cambodia, Thailand, Bangladesh) ;

–      the deployment of a naval base and electronic intelligence station in Gwadar (on the Makranska coast of Balochistan (Pakistan)) will ensure the security of oil imports from Iran and control the transportation of oil from the Persian Gulf zone to India;

–      Development diplomacy of Straights (strategies “string of pearls”, “blue water”, etc.);

–      the construction of a naval base in Djibouti allows to take under control imports of oil (the Bab – el Mandeb and Hormuz Straits) and gives military guarantees of Chinese interests on the African continent;

–      control over South China Sea and partially Indian Ocean (to control oil/gas import).

7.4. Geo-economic aspect:

–      A multidimensional model of regional cooperation will expand the geo-economic space for development by forming the following areas (corridors):

          1. Transport Corridor,

          2. Energy Corridor,

          3. shopping corridor,

          4. Cyber and Information corridor,

          5. Scientific and technical cooperation,

          6. Agricultural development,

          7. Cultural exchange

          8. Increase educational and career opportunities,

          9. Tourism Development,

          10. security and political interaction.

–      BRI, MSR and Polar SR along with the creation of Port outposts in ASEAN, Africa and CEE indicates intentions to take soft “economic” control over the whole of Eurasia and Africa.

Which BRICS members will take more advantage of the new BRI structures?

An obvious winner (from BRICS) of new structure is China. Thus, few aspects can be underlined during the analysis of an impact of BRI on separate nation:

  • A large global economy such as China will almost inevitably gain market power through its economic size and its importance as a trading partner;
  • Increasing the speed of the extension of use of Chinese goods, technologies and investments abroad (export not only of goods, but factories), gaining power through FDI and “shares” approach;
  • In the last quarter of 2020, China’s trade with Belt and Road countries increased by 3.2%, almost 10% points higher than the overall negative growth rate of China’s foreign trade volume;
  • BRI is expected to boost China’s GDP by 0.3% every year over a 10-year period, and provide access to new resource-rich markets and trade routes, and reduce its reliance on existing ones;
  • Chinese companies are entering the banking, technology, and retail sectors in BRI markets through 3 continents. Globalizing their economy and extending borders of country’s geoeconomics influence.

And that’s only talking in economical aspect, without mentioning the infrastructure, geopolitical impact, and geo-economic and cultural expansion.

Even though it is worth noting numerous benefits for Russia, South Africa (especially considering countries’ poor economic development, unsatisfactory logistics and Russian – Ukrainian crisis), outcomes for Brazil (which is rather distant player) and India (which rather loses than gains from the BRI), China remains the main “BRICS beneficial” of the BRI.

Which countries will benefit the most from the BRI?

As BRI became a “process – brand”, the number of countries which could benefit from the Initiative grew gradually:

  • Western Europe and Latin Americaareexpected to gain significantly in terms of economic development. Local companies, especially those involved in trade, logistics and construction, stand to benefit as the region begins to recognize the benefits of being a BRI hub;
  • CentralEast Europe: Development of energetic, logistics fields allows the region to strengthen its’ position within the EU as an important logistics hub of Europe, at the same time bringing energy Independence for majority of the countries of the region;
  • in Africa, as of late 2020, over 90 BRI-linked projects were estimated to be in the pipeline; the USD3.2 billion railway line linking Kenya’s capital Nairobi with its port city of Mombasa on the Indian Ocean is one example of the impact BRI is having on the continent;
  • China’s trade with the Middle East has grown over 10-fold between 2000 and 2016 to USD114 billion. And the BRI is expected to further strengthen this relationship, helping raise Dubai’s status as a key access point into the region for Chinese businesses;
  • Inthe Central Asia, China is investing USD4.5 billion worth of road, power, and gas pipeline projects in Kyrgyzstan alone. One of the routes through region is a 12,000km-long freight train line that connects China with the UK via Kazakhstan and Belarus, with the potential to cut cargo transit times by half, the China – Europe Railway Express service is already linking dozens of cities across Europe and Asia;
  • Major projects in the South Asia include upgrading Bangladesh’s transport links and building ports and power plants in Sri Lanka and Pakistan. Other sizable investments include projects in Mongolia that are worth nearly as much as the country’s 2017 nominal GDP (USD3 billion) and USD5.2 billion to build three airports across Cambodia;
  • In ASEAN region, China’s FDI nearly doubling between 2014 and 2017. South Asia and Southeast Asia have received the lion’s share of Chinese outbound FDI to B&R countries. Countries such as Laos and Philippines are expected to benefit significantly – for example, from Chinese funding and technical know-how for the construction of rail links.

Thus, much of the increase in outbound greenfield FDI to BRI countries is concentrated in South Asia, Africa, and Central Asia, while the increase in construction projects is concentrated in South Asia, the Middle East, and Southeast Asia. Even though, so far, the main beneficiary remains ASEAN region, as it is expected to require USD26 trillion in infrastructure investment between 2016 and 2030, or USD1.7 trillion a year, to maintain its growth momentum and BRI helps fund a sizable portion of that.

(See Details in Attachment 5 and Attachment 6)

Attachment 5: BRI’s impact on worlds regions

Estimated BRI investments across 150+ countries from 2020 to 2030. Forecasting model includes core infrastructure, including power, rail, road, ports and water, as well as related activity, including export manufacturing.

Source: Silk Road Associates, 2020

Attachment 6: Main beneficials of BRI

Source: Silk Road Associates, 2020

How has the Covid-19 pandemic affected the progress of the Belt & Road Initiative?

As a person, who used to live in Wuhan and left it 10 hours before the lockdown of the city, I know from own experience how Pandemic can change and influence lives. Nevertheless, must mention, that in politics the affects slightly vary from country to country.

In China they managed to take an outbreak under strictest control relatively fast, but it obviously influenced (and influences) Chinese economy and foreign policy significantly (especially in “lowest” level, considering that country strictly closed its borders to all the foreigners and limited to minimum inter-countries connections).

Moreover, due to the Pandemic restrictions China had to adapt the new BRI strategy in a way, the initiative can still fulfill its mission. Thus, the country implemented a new post-Covid-19 domestic strategy, which further was expanded on big implications for China’s trade with BRI countries. The new strategy was called “dual circulation” (strategy, which envisions a new balance away from global integration (the first circulation) and toward increased domestic reliance (the second circulation)) and implies several simultaneous shifts:

• Strengthening Chinese domestic consumer markets as a source of economic growth;

• Prioritizing domestic high-tech manufacturing and associated services for export;

• Reducing dependency on income from exporting low-value manufactured goods; and

• Reducing dependency on singular sources of imports into China.

This shift could benefit BRI countries, at least in the short and medium term. For instance, currently providing just 4% of China’s imports, African countries may gain from the import diversification and consumer market growth the policy implies.

Thus, the biggest impact pandemic had on the BRI – is an access to Chinese marked and access to China itself. From March 2020 it is extremely difficult to get even the most astute and innovative foreigner businesspeople and their new products into China, especially value-added products. Entrance into China will require considerable relaxation of China’s immigration rules and non-tariff trade restrictions with BRI countries, both of which have yet to be seen in (hopefully) 2021.

But the impact was not only limited to an “access” restriction. Thus, in June 2020 China revealed that 20% of BRI projects had been “seriously affected” by the virus, with up to 40% being “somewhat affected”. That meant that the overall BRI investment dropped by a whopping 50% in the first half of 2020, down from $46bn in the same period in 2019. Due to this numbers (and since China’s internal economy is under great pressure because of Covid-19), Chinese leadership decided it is smarter for the time-being to concentrate more on inner development, rather than massively investing money overseas, so further investment is likely to be thought out much more carefully with a particular focus on profit, something that many BRI investments currently lack. (See Details in Attachment 7).

Attachment 7: Number of construction projects owned by Chinese corporations, 2010-2020

Source: GlobalData, 2021

But this data does not mean that China could not keep BRI lending in high gear, however. BRI loans are just a small part of China’s overall lending portfolio, and China’s main policy banks have enough political backing to bear the cost of upcoming (and those “frozen” due to the pandemic) projects.

Additionally, in addition to the supply shock, Covid-19 has reduced the demand of many countries for BRI investments, not least due to falling energy needs and a decrease in the ability to borrow money.

Worth noting the current usage of BRI transshipment roads to supply other countries with medical technology and medicine to help fighting the Covid-19 outbreak outside of China. Starting from January 2020 government took “medicine field” (especially technologies that use AI and other innovations that monitor Covid-19 carriers) under the strictest control, giving “export rights” only to those enterprises which are checked (quality standards) and authorized.  Meanwhile, international e-commerce initiatives in the field of MedTech are also being prioritized to help accelerate economic growth in China.

Investments on energy-related projects outside and inside China were influenced by Pandemic the most. Thus, the drop has hit traditional fuels the hardest. In fact, the first half of 2020 was the first six-month period in which non-fossil fuel-related energy investment (including large hydropower and solar power) dominated BRI energy investments, which further helped to implement the “Greening of BRI” strategies. The turn into “greening” became very resultative in long-tern run point of view (i.e., the EU always underlined that “the BRI is not green enough” to be safely and successfully implemented within Europe). But these trends will become clearer once the dust settles and a global Covid-19 vaccination programme begins.

As for current way to further maintain and develop the BRI, China seeks to share its valuable experience of battling Covid-19 with other BRI countries, one key area of potential will be in projects focused on strengthening the health systems of low-income countries, even if focused on soft processes rather than hard infrastructure.

Also, beyond the short-term, changes to global supply chains will bring new opportunities for diversification through joint activity with other countries. There is also potential for accelerated digital BRI (Digital Belt and Road) activity in relation to Chinese tech companies and private players may now become more active in the BRI.

What are the long-term prospects for BRI? Can the Chinese Belt & Road be considered the beginning of the Asian century?

Exploring the nature of the new geopolitical project, it should first of all be emphasized that it is aimed at radically changing the entire economic map of the world. In addition, many economic experts consider this project as the first shot in the struggle between East and West for influence in Eurasia.

Belt&Road Initiative, based on a multidimensional approach (“five connections”) is promoting mutually beneficial international cooperation. Thus, in contrast to the United States, which relied on the path to world hegemony for neoliberal globalization, China’s foreign policy has taken a course to regionalize international economic relations.

Economically, China will remain the engine of growth for Asia and the world. Its contribution to global growth will rise to over 28% by 2023 (a compound annual rate of 6.1 per cent), according to IMF projections. However, the nature of China’s economic role will evolve along with domestic rebalancing.

The initiative is also projected to boost global trade by 12% impacting more than 65 countries and nearly two-thirds of the world’s population.

Short long-run Sum up:

  • BRI is estimated to provide (Globe):
    • to raise global GDP by about 4.2 % in 2040, or 9.3% of GDP in 2019-2021;
    • up to 56 countries forecast to have their annual GDP in 2040 boosted by more than $10 billion as a result;
    • establish over 35 economic corridors to include the following strategic distribution lanes, which will impact the future transport of commercial goods.
  • A targeted completion date (100th anniversary of the PRC (2049)):
  • China would make several trillion USD dollars’ (4 – 8) worth of investments – in ports, airports, roads, railways (including high-speed routes), bridges and tunnels, as well as power plants and telecommunications networks;
  • One of the more notable examples included a clean energy “super grid”, consisting of ultra-high voltage electricity networks linking China and much of the Euroasian continent.
  • BRI is estimated to provide (China):
  • a competitive advantage in the processing of vessels in the world’s major canals, processing of goods at the major ports of entry;
  • the prioritization of the ground transport of goods in key countries’ economic zones;
  • ability to leverage port economics within BRI participating ports provides it with a commercial advantage in the global market;
  • as China’s industrialization and GDP grow, its exports will start leveling with US exports in the commercial market.

Thus, we can forecast 5 main scenarios (models) of the further development of the BRI:

1. Baseline Model: Continuing the current trajectory equals an estimated US $940 billion in BRI infrastructure investments

If BRI infrastructure investments stay on their current course, the original 65 core BRI countries will continue to see significant investment, as will the recently joined Latin American countries. In this model, while the number of BRI projects will continue to increase, many projects will be of average size and smaller value, which is a trend already in evidence. (See Details in Attachment 8).

Attachment 8: Baseline Model

Source: McKenzie, 2019

2. Global Cooperation Model: Collaboration wins big, totalling US $1.32 trillion in BRI investments

Lessons learned so far, point to collaboration as the win-win BRI solution that reduces political opposition and ensures the highest long-term success rate for infrastructure projects and better access to ongoing multilateral funding. This scenario is based around more formal partnerships between China and external 3rd parties, including other governments and private capital, and BRI-project alignment with the multilateral development banks. (See Details in Attachment 9).

Attachment 9: Global Cooperation Model

Source: McKenzie, 2019

3. Global Sustainability Model: Sustainability becomes a key driver, pushing future BRI investments to US $1.2 trillion

If China adopts a policy of even closer alignment between its BRI goals and sustainable initiatives, it is very likely that it will gain access to new streams of multilateral funding for BRI projects. It will also make Chinese engineering and construction companies more competitive globally to win major clean energy and water project bids as part of BRI. (See Details in Attachment 10).

Attachment 10: Global Sustainability Model

Source: McKenzie, 2019

4. Supply Chain Relocation Model: With tariffs remaining high over a longer-term period, BRI infrastructure projects can still garner an estimated US $1.06 trillion

Ongoing trade tensions between the US and China have led to the partial relocation of manufacturing away from China, including by Chinese companies, to low‐cost countries in Southeast Asia and South Asia. In this scenario the influx of manufacturing sees renewed interest in BRI infrastructure investments in these countries (private and through state-owned enterprises) to support the production relocation. (See Details in Attachment 11).

Attachment 11: Supply Chain Relocation Model  

Source: McKenzie, 2019

5. Uni-Polar Model: Global protectionism dampens down future BRI investment, totalling US $560 billion

Fierce, politicised and protectionist competition among countries will almost halve global BRI investments when compared with the Baseline Model (Forecast 1). Of all the five forecasts, this one offers the most modest benefits to all stakeholders. (See Details in Attachment 12).

Attachment 12: Uni-Polar Model

Source: McKenzie, 2019

 If we are talking about possible Asian Century, lying at the heart of the regional economy, China will undoubtedly play a central role in Eurasia. Implementing BRI and hence recognizing that multilateralism is the only way to meet our transnational challenges and sustain an open, inclusive global economy, China’s role in Asia and the world will be to uphold the international order while offering innovative solutions to global governance, in line with its responsibility as a major global player.

In the previous phase of globalization, Chinese exports drove global trade as foreign investment came in to help modernize the economy. In globalization 4.0, Chinese imports will play an ever-larger role as Chinese multinationals invest across Asia and the world. From now until 2030, Asia’s consumption growth is expected to exceed that of the US and Western Europe combined.

It is estimated that if fully implemented, BRI transport projects could increase trade between 1.7% and 6.2% for the world, increasing global real income by 0.7% to 2.9% and helping to lift 7.6 million people from extreme poverty in the process. To truly fulfill BRI’s potential, over the coming years, the BRI will shift towards a more multilateral approach.

But to discuss whether BRI’s implementation is the beginning of the Asian Century is not quite right. Moreover, it is still too early to talk about the existence of such at all.

Chinese economy and potential are strong, BRI’s and Asia’s are even bigger, but one needs to understand, that being a locomotive of the new era is not only about having strong economy and development, but about having the high level of stability and security. While some countries in Asia (i.e., China, Japan, South Korea) boast stability, the level of security and stability in the region as a whole is still low compared to the old world (Europe).

Moreover, BRI can be also considered as a new approach of Chinese foreign and domestic policies to adapt to the new trends in worlds geopolitics and disproportionate development of the country itself. In 21st Century, when Chinese Political Economy is observed, it is to be seen that engines of the economy that once led China to development become the very problems that are distorting the development and growth today. Those problems make the “challenges of China” and they are deeply connected to each other making local operations ineffective in long term solutions. Hence, China needs a restructuring in social and economic architecture of the country that will not only enable a grand solution to those challenges but that will also guarantee the stability in domestic affairs. By employing BRI, China aims to achieve peace and harmony in its’ domestic structures regarding economy and society. Therefore, China’s domestic challenges render BRI essential for the survival of a stable China.

Referring to the global scale and importance of the BRI for current China’s existence, it should be noted that the BRI represents a possible integration mechanism in Eurasia, led by China, which unites Asia within its borders, but also has a dangerous asymmetric structure (the size of China’s huge economy and the smaller economies in most of the receiving countries along the BRI). It brings us to the issue of the creation of stable multilateral setting which can tackle not only economic, but security issues in Asia.

History shows that, unlike Europe, Asia was never forced to create a culture of negotiation: while the whole of Europe was twice involved in devastating wars in which it could not win, countries were forced to sit down at the table of diplomacy and negotiation, which ultimately led to the creation of a compromise – Organization for Security and Co-operation in Europe. The countries of Asia, on the contrary, have never been on the brink of survival in recent history, which, as a result, has not forced the countries to create a pan-continental union or a single pan-Asian integration mechanism.

Up to day countries of the region did not create a stable multilateral mechanism which can help them to work out a compromise solution on the issue of legal registration of state borders and territorial claims. Even despite the fact, that Asian countries today are more willing to consult and cooperate with each other on the integration and creating of the zone of co-prosperity issues, nevertheless in Asia, there is hardly a single state which has no territorial dispute within its neighborhood. This issue is one of the most important, since it can guarantee the territorial integrity of States and ensure non-interference in their internal affairs, as well as represent one of the barriers to external threats to their national security, such as smuggling, international crime, extremist and terrorist movements, illegal migration.

Numerous integration mechanisms such as ASEAN, APEC, SAARC or BRI in most cases, are created to jointly solve economic problems, achieve economic integration in the region or sub-regions, but not to tackle security issues.

Economically and potentially strong East today lacks stable political integration and is unable to capitalize (on) its success. To consolidate the total power of Asian countries the largest continent must consider the creation of its own comprehensive pan-Asian multilateral setting, without which it is impossible to establish an Asian century.

Dr. Maria Smotrytska is a senior research sinologist and International Politics specialist of the Ukrainian Association of Sinologists. She is currently the Research Fellow at International Institute for Middle East and Balkan Studies (IFIMES), Department for Strategic Studies on Asia. PhD in International politics, Central China Normal University (Wuhan, Hubei province, PR China) Contact information : officer[at]ifimes.org SmotrM_S[at]mail.ru

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East Asia

Politicizing the COVID-19 pandemic and Xi Jinping’s vision to reshape the new world order

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First: The internal and external strategic objectives of Comrade Chinese President “Xi Jinping“, in parallel with the international partnerships and relations of the Communist Party of China “CPC” around the world

Second: The recognition of Chinese Comrade President “Xi Jinping” before the leaders and youth of the Central School of the Communist Party “CPC” of the profound global changes post (Covid-19) world

Third: The relationship between the global achievements of the Communist Party of China, and the Chinese President, Comrade “Xi Jinping” call for establishing an international multipolar world, and the politicization of the “Covid-19” pandemic in the USA and the West

Fourth: The relationship between the outbreak of the Coronavirus pandemic and the test the (new global governing systems and global governance) from the Chinese perspective

   The Egyptian researcher was invited as an expert in Chinese and Asian political affairs, by the “Friends of the International Chinese Belt and Road Initiative Forum” in the Pakistani capital “Islamabad”, on Friday, September 10, 2021, to talk about:

  “Politicizing the origin of the COVID-19 pandemic and linking it to China, and the reasons behind this matter“, in a meeting that was intensively covered by the international media, in several international, Chinese and Asian websites, newspapers and news agencies, in reference to the importance of this event for Beijing.

   In fact, it is not possible in any way to separate the attempts of the United States of America and the West to distract China towards achieving its primary goal of (building a multipolar, multilateral world and international poles), and the vision of Comrade Chinese President “Xi Jinping” on (reshaping the world order and makes it more compatible with Chinese interests and values).

   Where China’s leaders see that the liberal international system reflects the (global vision of the white colonial powers victorious in the Second World War), which it created to serve their interests at the headquarters of the United Nations “UN”.  Accordingly, Comrade “Xi Jinping” has formulated a strategy for China consisting of (two points), as follows:

  1. China is increasing its power, personnel, and financial influence within existing global governing institutions.
  • At a time when China’s leaders, on the other hand, must work on (building new institutions centered around China), such as:

(Belt and Road Initiative, Asian Infrastructure Investment Bank, Silk Road Fund) … besides, some other relevant Chinese international institutions.

– Hence, the Egyptian researcher sought to draw attention to the “real reasons behind the principle of politicization of the origin of the “COVID-19″ pandemic, and its relationship to China’s international achievements”, through the following division:

– First: The internal and external strategic objectives of Comrade Chinese President “Xi Jinping”, in parallel with the international partnerships and relationships of the Communist Party of China “CPC” around the world

  China has developed a comprehensive plan that the United States of America and the West tried to obstruct, in order to prevent China from internationally rising. The most important successes of China internationally are represented, by:

1) The ruling Communist Party of China has sought to establish international partnerships and party relations under the supervision of the senior and central leaders of the party, which is known as, the strategy of the (relationship between the Communist Party of China “CPC” and the other international parties), as an important part of the Chinese long-term strategy.

2) The Communist Party of China has internally developed a plan adopted by itself, represented in the (realization of the original goal of seeking the happiness of the Chinese people and the renaissance of the Chinese nation, as well as the unity of the world).

3) The Communist Party of China, in cooperation with the international parties with the same ideological thought and even intellectually opposite with it, seeking to the (commitment of achieving consensus and mobilizing the international forces to build a new China).

4) The Chinese President, Comrade “Xi Jinping“, raised an important international Chinese slogan with many connotations, represented in:

“The world is common to all, and we are a nation with one common destination for humanity”

5) In order to achieve these Chinese priorities externally, the Communist Party “CPC” and its Committee on Foreign Communications and external Relations of the “CPC” worked in parallel and in line with the “Chinese Ministry of Foreign Affairs”, as an official institution together, through the (strategy of the Communist Party of China to deepen exchanges and cooperation with international political parties, and give full play to the for the advantages of contacts between the various political parties with the Communist Party in Beijing), in response to the call of the times to build a community of a shared future between China and the world, especially African, poor and developing countries.

6) Chinese President “Xi Jinping” was keen to (confronting international hegemony and unilateralism by Washington), and President “Xi Jinping” in his capacity as “General Secretary of the Communist Party of China”, stressed that “the fate of the world should be controlled by all countries on an equal footing, as international rules should jointly be formulated by all countries, and all countries of the world together manage the various affairs of the world”

7) Indeed, the senior communist leaders in Beijing have succeeded in transforming this global economic strategy into a (trustworthy support for the votes of the members of the Group of 77 in its favor in various forums, and at all known international parties).

8) To achieve the previous priorities, President Comrade “Xi Jinping” personally supervised the (transformation of the People’s Liberation Army from an institution based on the Continental Defense Army into a force to project power and influence beyond China’s borders), through the expansion of (navy, air, cyberspace capabilities and satellites). Here, Comrade Xi’s stated mission is to “build a world-class military institution to fight and win wars” in the post (Covid-19) world.

9) We also find the continuation of Chinese national efforts aimed at transforming China into a (technological superpower), imposing its global power and technical progress on (fifth generation networks of communications, semiconductors, supercomputing, and artificial intelligence).

10) The Chinese President, Comrade “Xi Jinping“, and the leaders of the Communist Party of China, supported what is known as the “sovereignty of the Chinese people”, as the (first priority). The Communist Party “CPC” officials and Comrade “Xi”, in their political speeches, considered that:

“The position of the Chinese people is the basic political position of the Communist Party, making sincerely serving the Chinese people the basic objective of the Party, realizing the people’s aspirations for a better life, due to their constant pursuit and struggle, and promoting reform and development to achieve greater benefit and better well-off of living for all”

 Thus, the Communist Party “CPC” has always and along the way won the support and support of the masses of the Chinese people.

11) Many Western researchers, experts and academics themselves confirmed that the goals and endeavors of the Communist Party of China at every stage are very clear, and it adjusts its policies, according to the changing domestic and external situations in order to meet the needs of the Chinese people, and here, we can indicate out to a (research report issued by Kennedy College of Government at Harvard University) in 2020, which showed that:

“The Chinese government, led by the Communist Party of China, enjoys more than 93% of support and satisfaction among the Chinese people”, as another survey conducted by (York University in Canada), which is showed that:

“The Chinese people trust their government by up to 98%, and that trust has increased, especially after the emergence of Covid-19”

12) The Chinese President, Comrade “Xi Jinping”, and the Central Committee of the ruling Communist Party were also keen on deepening (belonging and unity) among the Chinese people, with Comrade “Xi’s affirmation” that:

“History’s journey has no end, but the future has already begun”

13) The “anti-corruption campaign” led by Comrade “Xi Jinping” in the Chinese interior, which was dubbed “Tigers and Flies“, included more than one million senior and junior officials of the Communist Party of China.

14) In order to achieve China’s goals internationally, the Chinese leader “Xi Jinping” presented his vision of the (future of China), which he called as the “Chinese Dream“, within the framework of a project entitled: “Rebirth of the Chinese Nation“, and succeeded in carrying out economic reforms that contributed to reducing the decline in economic growth, limiting state ownership of industry, combating pollution, and most importantly implementing the giant land transport project, known as the “Silk Road Initiative”

   Hence, China’s global achievements and its call for a multipolar international world made it as a primary target for attempts to obstruct it by the United States of America and its allies in the West.

Second: The recognition of Chinese Comrade President “Xi Jinping” before the leaders and youth of the Central School of the Communist Party “CPC” of the profound global changes post (Covid-19) world

   President “Xi Jinping’s realization” of the importance of (political education for Chinese youth) in the post (Covid-19 world), came as Comrade “Xi” affirmed to the youth and leaders of the Communist Party, that the most important reason for China’s success and steadfastness now is to work together on the necessity of mobilizing leaders and the youth of the Communist Party of China and its president with the (Network of Friends around the World), because of those current profound international changes that the world is going through now, through the following affirmations:

1) President “Xi Jinping” believes that there is a “politicized war” against China, as a result of the changes that the world is currently witnessing, by saying:

“The world is currently undergoing profound changes that have not been seen in a century and is rapidly evolving after the Coronavirus pandemic”

2) Comrade “Xi Jinping’s affirmation” of the profound indications for the global changes came in his speech before the (Central Institute of the Communist Party), which is an educational institute of the Central Committee of the ruling Communist Party, as a signal from him to keep pace with the Communist Party of China with current international events.

3) In the same context, the Chinese President, Comrade “Xi Jinping”, confessed that:

“China is bothering with its international stances”

4) The most dangerous message of the Chinese President was what came from Comrade “Xi’s affirmation” before the leaders and youth of the Central School of the ruling Communist Party, about:

“China must not budge one iota on matters of principle, and adhere to China’s sovereignty, security and development interests with unprecedented firmness”

5) In the context of “Xi Jinping’s keenness” to pay attention to the Chinese youth to lead the Chinese nation, Comrade “Xi”, called:

“Young officials should uphold their ideals, adhere to the party’s loyalty, seek truthfulness from reality and facts, shoulder responsibilities, and strive to become the backbone of a society in which the Party and the people will trust together”

6) In the context of Chinese President “Xi Jinping’s assertion” that: “China strongly confronts any attempts against it”, emphasizing “China’s military and economic renaissance, as matters, according to Comrade “Xi Jinping” that are “irreversible”, and stressed out these points in his international speech, which was globally highlighted, on the occasion of the centenary of the founding of the Communist Party of China on July 9, 2021.

7) Believing in the role of the “Chinese people” in the struggle against Washington and the West and their attempts to distort China’s international image, President “Xi Jinping” addressed in front of crowds of Chinese audiences in the “Tiananmen” famous Square, location in the center of the Chinese capital, “Beijing”, with the affirmation led by “Xi” in his speech to the Chinese masses, by confirming that:

“China does not oppress other countries”

8) Chinese President “Xi” also warned that “no one should try to “persecute China”, saying:

“They beat their heads against a steel fence”

9) What stopped the Egyptian researcher most during Comrade “Xi Jinping’s discourse” to the Chinese masses on the occasion of the centenary of the Communist Party of China, while the Comrade “Xi’s affirmation” of his rejection of foreign attempts to distort the image of the Communist Party of China.

10) Today, Comrade “Xi Jinping” is keenly to internationally talk about the (role of the Communist Party in the modern history of China), by saying:

“The Communist Party of China has an essential part to the growth of the Chinese state, and attempts to separate it from the people will fail”

11) We find Comrade “Xi’s affirmation” of the necessity of (unification and the unity), as the only way that can (save China), and is capable of achieving the “development in China” in both of the internal and external side.

12) In the context of attempts to politicize the “Covid-19” pandemic, and stigmatize China with it, Comrade “Xi Jinping” confirmed that:

“We will never in China allow anyone to bully, oppress or subjugate China”

13) In a reference by “Xi Jinping” to the strength of the Chinese people in defending of their ruling Communist Party, his assertion came that:

“Anyone who dares to threaten China, its leaders and its ruling Communist Party, hits their head at the mighty steel wall represented by more than 1.4 billion Chinese citizens”

   Thus, we can understand the overall current international situation, that the increase in the intensity, strength and fierceness of the American-Western competition, in the face of China and the attempt to mobilize certain regional and international parties against each other, especially after the outbreak of “Covid-19“, which has contributed to the deepening of the global differences and the intensification of conflicts. So, China has repeatedly accused unfair forces of trying to curb its growth, and these statements were taken as an explicit and clear Chinese signal to Washington in the first place.

Third: The relationship between the global achievements of the Communist Party of China, and the Chinese President, Comrade “Xi Jinping” call for establishing an international multipolar world, and the politicization of the “Covid-19” pandemic in the USA and the West

  Chinese President Comrade “Xi Jinping” has repeatedly warned against “politicizing the issue of the COVID-19 virus” or stigmatizing it as the Chinese virus. In his international political discourses, he has explicitly pointed out that:

1) Refusing to marginalize or exclude others or certain countries from working with the international community, by the call of Comrade “Xi” in his speeches on:

“We must reject the attempts to build blocs to exclude others and oppose the zero-sum approach. We must view each other as members of the same large family, continue to win-win cooperation, transcend those ideological differences and not fall into the trap of clash of civilizations”

2) Comrade “Xi Jinping” linked as well the relationship between the Coronavirus pandemic and the current international concepts, by emphasizing in his political discourses, about:

“The COVID-19 pandemic reminds the world that we are living in a global village that is interconnected and has a common interest, in which all countries are closely linked and share a common future”

3) In an important speech by President “Xi” at the (Annual Boao Forum for Asia) in April 2021, Comrade “Xi Jinping” criticized the efforts of countries that aimed at “building barriers” or “separating countries from others and dividing the world into warring or conflicting fronts”. Here, Comrade “Xi Jinping” has asserted on:

“Dividing the world into many competitors and building barriers between nations without working together or adopting the principle of common destiny of humanity will inevitably harm others and completely will not benefit anyone”

4) President “Xi Jinping’s long-standing call” for “reform of global governance” came to better reflect a broader and more diverse range of visions and values ​​from the international community, including their own, rather than those of a few major countries. This was as expected has rejected by Washington that has deeply warned of achieving the Chinese objectives, and the American officials have been claiming that:

“USA is a leader of the libral democratic values ​​in the world, and is globally leading the paths of defending human rights”

5) Comrade “Xi Jinping’s statements” at the “Boao Forum for Asia“, in April 2021, confirmed the purpose of his calls for a (new world order), because:

“The world wants justice, not hegemony”

6) Here, Comrade “Xi”, along with the leaders of the Central Committee of the Communist Party of China, are keen, in all international events, to emphasize that:

“The big country must appear with an international appearance worthy of it, with its ability to assume more international responsibilities”

   We can understand and conclude from this above understanding that the Chinese President, Comrade “Xi Jinping” was keenly to referring to the concepts of “hegemony, unilateralism and isolationism”, besides the other related terms, but Comrade “Xi” didn’t mention or refer to a specific country in his statements or all of his political speeches, but the Chinese officials have recently explicitly referring to the American “hegemony”, in a public criticism of Washington’s imposition of its power and influence in trade and geopolitics in an unfair manner that harms the interests of other countries.

Fourth: The relationship between the outbreak of the Coronavirus pandemic and the test the (new global governing systems and global governance) from the Chinese perspective

   The Chinese President, Comrade “Xi Jinping“, has called in all his current political discourses on the need to work to establish “international economic blocs” that work for the benefit of developing countries, a multipolar system and a multilateral international world, which is directly and reflected largely in the “increased American competition in the face of  China, and the attempt by Washington and its allies in the West to politicize the origin of the Coronavirus, by calling for its stigmatization and appending it to China“.

  Washington’s attempt to turn the world against China by causing the spread and outbreak of the Coronavirus pandemic, which was documented by Chinese President “Xi Jinping” in his political speeches, through the following points:

1) President “Xi’s admission” that the world’s ruling systems are the main criterion for their success in combating the global epidemic, certainly came in an international speech to him, by stressing out:

“The spread and spill over of “Covid-19″ is a major test of the ability of countries’ governance systems to withstand or decline, and a test of the global system of governance”

2) Comrade “Xi” goes extremely beyond, by calling for a “global governance system”. China developed its philosophy and features, through “Xi’s emphasis”, on:

“The global governance system must adapt to evolving global political and economic dynamics, as an attempt to face the global challenges and adopt the fundamental direction of peace, development and win-win cooperation”

3) Comrade “Xi” was also keen to set clear moral standards that guide China’s relationship with the world, and the world’s relations with each other, by calling:

“Countries must not violate ethical standards and comply with international standards, provide the global public good, bear due responsibilities and be in the good faith of their citizens”

4) In the talk of Comrade “Xi Jinping” about the (relationship between the current global economic system and the Corona pandemic), Comrade “Xi Jinping”, indicated that:

“The spread of COVID-19 reminds the world that economic globalization is an indisputable fact and a historical trend”

5) In order to achieve the success of any governmental system or political system, President “Xi” has stressed the need to adhere to the following criteria, as:

“We must strike an appropriate balance between government and market, equity and efficiency, growth and income distribution, technology and unemployment, to ensure full and balanced development that benefits people of all countries, sectors and backgrounds in an equitable manner”

6) Here, we find that what was and still angers the United States of America and the West the most against Comrade “Xi Jinping” is his call that:

“We must continue open and inclusive development, commit to building an open world economy, and support the multilateral trading system with the “World Trade Organization” “WTO” as the cornerstone”

7) Here, we find that China’s attempt to create and strengthen regional and international ties, by strengthening its relations with countries within (collective frameworks), each of which is specialized in a specific region, such as: (ASEAN Organization, Shanghai Cooperation Organization), and others. In the sense that these institutions are working to create (parallel frameworks) for those on which the current international system is based, which is dominated by the United States of America with the help of its allies, which has provoked the United States of America with the continuation of Chinese calls and efforts to have a “central leadership role in a new pluralistic international system”, in order to globally extend its influence.

8) With the increasing calls of Comrade “Xi Jinping” for Chinese involvement in the international multilateral issues, from here, China found it in its interest to call for new global regimes, in order to enhance its international standing, thus China contributed to reaching a “climate agreement“, and increased its efforts in confronting the multiple international issues, such as: (confronting poverty, the spread of epidemics, all global and development efforts), and other related mechanisms, which aroused the ire of the United States of America by inviting China to lead the international efforts in the field of global governance systems and to develop a preliminary vision for the shape of new systems of governing institutions and Governance, which are mainly for (labor and management), additionally the peacekeeping efforts are under the direct supervision of the United Nations “UN”.

9) In an understanding from China of the reality of the current international situation in the post (Covid-19) world, the Chinese comrade “Xi Jinping”, has confirmed by saying:

“China’s situations may have been negatively affected by the global ordeal of the outbreak of “Covid-19″, but China is not in a hurry to transform itself into a great power, but rather announced that it has three decades to reach, and the future is still open for it to achieve this possibility”

10) China is currently working to deepen several other goals, through which it sees that:

“The best way to enhance China’s international standing is to safeguard the interests of the largest number of countries, strengthen the foundations of economic dependability, and stress out on achieving the mutual benefits of relationships among the different nations, not just their own interests”

11) For achieving the above-mentioned objectives, China, through the (International Belt and Road initiative “BRI”), has implemented infrastructure projects in multiple countries, established road and railway networks, and built electricity and water plants, which makes it easier for it to globally promote its call in “multi-polar world“.

   China has focused its efforts to be the “largest trading partner of many Asian and African countries”, facilitating its international efforts to establish a new administrative system, known as: (Global Governance and Managing Political Systems from a mainly Chinese perspective), which greatly angers Washington and its Western allies.

   Through the previous analysis of the Egyptian researcher, we note that “by comparing the American strategic goals with their Chinese counterparts and their development initiatives around the world”, the United States of America shows its achievements by being the (maker of peace through force and not peace), the call for a new Middle East, and a unilateral climate agreement, and others.

   Perhaps this is what was actually put forward by the speech of the former President of the United States of America “Trump” when he spoke about the “achievements of the United States of America internationally in confronting China“, during the (deliberations of the seventy-fifth session of the World General Assembly of the United Nations “UN”), and from here, it becomes clear to us the difference between the Chinese initiatives of development to serve (global development goals), and among those American goals that support the use of force, with their failure to use it effectively, as happened in (Afghanistan and Iraq), and others.

   Hence, the attempts of the United States of America to stigmatize the “pandemic of the Coronavirus” and attach it to China, by confusing the “scientific reasons for the causes of the global outbreak of the pandemic, and those real underlying political, economic and strategic reasons behind the principle of American and Western politicization of Covid-19”, mainly aims to:

“Distracting Chinese attention away from those American international problems and crises by raising the world against China and paying attention to it for causing the spread of the Corona virus, so that the United States of America is unique in leadership on the international scene within the framework of international hegemony and unilateralism”.

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East Asia

The war and the treaty that proclaimed Japan’s emergence as a world power

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September 5 marks 116 years since the end of the Russo-Japanese War, with the signing of the U.S.-mediated Treaty of Portsmouth. Fought in the beginning of the 20th century, it has a unique place in history, as the warring sides fought over the territory of two neutral states China and Korea and it also saw a European power being defeated by an Asian power for the first time in the modern era.

The Background

1904-05 was a tense period in the history of Asia. The story begins a few decades back when the island nation of Japan emerged from over two-and-a-half century of isolation, following the Meiji Restoration of 1868. In the next three to four decades, the country would undergo a rapid modernisation of its society, army, navy, and industry, with the adoption of Western methods and standards. The Russian Empire which already had control over Siberia was looking to expand further into East Asia, particularly towards the east of River Amur which would give them outlets of warm-water ports in the Sea of Japan, also known as the East Sea, and thereby in the Pacific Ocean. Since the 1850s, Russian urban settlements appeared along the left bank of River Amur, despite protests from a weakening Qing China.

Owing to the domestic turmoil in the backdrop of the struggle against British and French aggression and the Taiping Rebellion, imperial China was not in a position to resist Russian power. Finally, China was forced to cede to Russia all the territory from the mouth of the Amur till the frontiers of the Korean peninsula, including the region where the port of Vladivostok would emerge soon. Russian expansionist policy went unchallenged for the next three decades. In the late 1880s and early 1890s, Russia’s interest in Siberia, Russian Far East and East Asia saw a revival, but this time there it had to confront a newly emerging Asian power – Japan.

The decisive victory of Japan in the Sino-Japanese War of 1894-95, which was fought over the control of Korea, demonstrated Japanese power and the weakness of the Qing Empire. Before the war, Korea had long been a key client state of the Chinese empire, but its strategic location opposite the Japanese archipelago, with all its natural resources like coal and iron, attracted Japanese interest in the peninsula. The war ended in the Treaty of Shimonoseki, signed in 1905. After the war, Korea was removed from the suzerainty of China and was placed under the Japanese sphere of influence. Taiwan and parts of Manchuria also came under Japanese control.

Japanese power emerges from the shadows

In the next ten years, Japan, a collection of islands in the Pacific with a largely rugged terrain, would go into war with a European great power and a bi-continental giant – Russia. With the 1894-95 war with China, Japan now has control over the Korean Peninsula. This signalled Russia that an upcoming face-off with Japan was inevitable due to its own conflicting interest in the region. A slew of diplomatic efforts by Russia followed as a run-up to the war. Tsar Nicholas II of Russia led the efforts along with his cousin, Germany’s Kaiser Wilhelm II, and France, a part of the so-called ‘Triple Intervention’, trying to persuade Japan to give up its territorial demands in Northeast Asia in return for an increased indemnity.

In 1896, Russia even forged an alliance with the Qing Empire to protect the latter’s territorial integrity from foreign aggressions in the future. But, in fact what followed was the scramble for China’s coastal territories among the Russians, Germans, French and the British in the remaining part of the 1890s, which culminated in the rise of resistance movements against the Qing dynasty, including the Boxer Rebellion. In the meantime, Japan was building up its own armed forces by the way of increased conscription that gathered momentum in the late 1890s.

The breakout of war

The Japanese strategy was such that it never intended of attacking Russia directly, but the focus was put on winning an early and decisive victory that would secure their hegemony in Northeast Asia without any rivals. Russian leadership was also ineffective to counter a well-prepared and well-equipped land and naval forces like Japan’s. Realising Japanese strength in the region, Russia’s minister of war, Aleksey Kuropatkin, in fact, recommended the Tsar to abandon his imperial ambitions in Manchuria and the Amur River region.

Even though the Tsar accepted his minster’s proposal, the extremists at the imperial court and other influential commercial interest groups behind the Russia’s expansionist project in East Asia acted as a hindrance for its execution. Meanwhile, the Russian military was left in the lurch to fight the Japanese, who were well-determined to win any battle. In short, Russia heavily underestimated Japan’s military edge. Thus, in February 1904, the Russo-Japanese War broke out with the Battle of Port Arthur, then a naval base and currently in the Liaodong Province of north-eastern China, which was then leased to Russia by the Qing dynasty of China from 1897 onwards. It was a surprise night attack by the Japanese naval forces on the Russian fleet stationed in the port.

The war escalated and went on for the next one-and-a-half years. Russia suffered a number of defeats in the battles that followed, both in land and sea, with some being indecisive. Tsar Nicholas II thought that Russia could win if it continued to fight, and he chose to remain engaged in the war and wait for the outcomes of key naval battles. By May 1905, Russia’s final glimmer of hope for victory faded in sight with its defeat in the Battle of Tsushima, a strait located halfway between the Japanese island of Kyushu and the Korean Peninsula.

Negotiations begin in Portsmouth, the peace treaty is signed

By August 1905, negotiations to end the Russo-Japanese War began when the then American President Theodore Roosevelt invited both nations to conduct direct negotiations at a neutral site of Portsmouth, New Hampshire, in the north-eastern coast of the United States. The Portsmouth Naval Shipyard was specifically selected as the site for the negotiations by President Roosevelt. The final treaty was signed on 5 September 1905, affirming Japanese presence in south Manchuria and Korea. It also ceded the southern half of the island of Sakhalin to Japan. It was the first international treaty to be signed in the U.S. and also with American mediation.

The Treaty of Portsmouth would set the balance of power in East Asia and the Pacific for the next four decades. It effectively ended Russia’s expansionist policies in Northeast Asia. The war and the subsequent treaty announced the emergence of Japan to the status of a world power. American diplomacy, thus, began its journey, which would reach it zenith following the two world wars. U.S. President Theodore Roosevelt was awarded the 1906 Nobel Peace Prize for his efforts to end the Russo-Japanese War. The following four decades would witness Japan going on a rampage across Asia in pursuit of its militaristic ambitions, particularly in China, Korea, and Southeast Asia, before it would savour defeat at the hands of the Americans in 1945.

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East Asia

Russian Far East and Arctic: Emerging Arenas for India-China Competition?

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arctic silk road

In a speech this year in Moscow, Indian Foreign Secretary highlighted the three strategic geographies- Eurasia, Indo-pacific and the Russian Far East (RFE), and the Arctic, which will be the key emerging theatres of geopolitics that upcoming diplomats will be engaged in throughout their careers. He further stressed that not only is Russia crucial to all the three regions, but there is also an inherent need of multi-polarity for the security and prosperity of these regions. Also, a multipolar world and a multipolar Asia is not possible without India and Russia.

Did the Foreign secretary underline the increasing Chinese ambitions in these regions and the need for countering these ambitions by pointing towards the necessity of multipolarity in Asia? Several questions arise when we take in consideration the recent rejuvenation in the relationship between India and Russia, and the narrative that strategic hedging against China is the main motive behind this rejuvenation. 

For answering these, one needs to understand why China is interested in these regions and what has been China doing in these key areas. Further, what are India’s stakes in these regions and whether India can think of competing with China here. Moreover, how Russia looks at the competition if it exists. This piece tries to analyze these questions and highlight the ongoing geopolitical dynamics in the RFE and Arctic and the pertaining Indian and Chinese foreign policies, in their past, present, and future goals.

Importance of RFE and Arctic

Geographically, RFE comprises of the Far Eastern Federal district that is the easternmost territory of Russia sandwiched between eastern Siberia and the Pacific Ocean. The district shares land borders with Mongolia, China, and North Korea to the south and shares maritime borders with Japan to its southeast and with the US to its northeast.

Having never known serfdom, this region has been culturally, religiously and politically different from Moscow and the Russian heartland for a major part of history, by virtue of more entrepreneurism and autonomy. Today there exists an additional dimension to this ‘difference’ between the RFE and the center. In the Soviet period, the region was tied to Europe economically but in past decade it has become increasingly clear that several of the Far Eastern krais and oblasts (units of governance in Russian political system like districts), especially those bordering China are now economically dependent more on Asia than on European region. This situation is compounded by migration related demographic issues. For more than a decade now the region has witnessed exodus of ethnic Russian population and seen a growing influence of Chinese businesses and migrants. The extent of this phenomenon is widely visible as over the years large tracts of land in this region have been leased to Chinese for farming, infrastructure projects and energy exploration, with a low tax regime and a considerable amount of autonomy over the activities. As a result, the region has witnessed  emergence of Chinese run farms which look like fortresses, surrounded by high fences and red flags.

The Arctic is deemed as the northernmost region on Earth. While most part of this region used to remain covered with snow for a major part of the year, this phenomenon has been on a downfall due to changes being purported by climate change. The Arctic region not only contains plethora of mineral resources but is extremely important from strategic point of view. During the cold war era, the Arctic held a prominent place in the political and military standoffs between the two superpowers- US and USSR. The region observed a drop in the geopolitical and geostrategic relevance in the 1990s and remained of ‘low tension’ due to commitments made by the Arctic states to keep the Arctic a zone of peace.

The unfreezing of snow makes way for the possibility of opening of the Northern Sea Route which can provide a cost-effective and shorter duration alternative for global shipping routes. Also, scientific developments taking place in hydrocarbon exploration and exploitation can lead to full-scale utilization of the resource base of the Arctic in near future.

Moscow’s Approach  

Since the rise of Vladimir Putin at the helm of Russian Federation, Moscow’s approach towards development of the RFE has been to inject money into existing industries which according to many analysts of the field has not worked due to the lacunae in addressing the problems of infrastructure and regional integrity. Moscow desires to integrate the region with the broader Asia-Pacific region to solve the problems of development, investment, and connectivity.

 In last few years, Moscow has taken decisions like encouraging the return of Russian ‘compatriots’ from Central Asia to accelerate large scale projects. It has also created Special Economic Zones with low tax regimes, focused on modernizing the ‘Trans-Siberian railway’ network, and emphasized on plans to invite investments in the region from nations like India and Japan, beyond the biggest investor in the region- China.

It has to be noted that any developments in the RFE cannot be in isolation from that in Arctic. With the aim of developing both the regions in concurrence, Moscow created the ‘Ministry of the RFE and the Arctic’ which is now working on creation of a corporation in order to supervise the economy and to assume control over elements like ports and exchanges.  For the Arctic, Russia rolled out its ‘Strategy for Developing the Russian Arctic Zone and Ensuring National Security through 2035’ in October last year, which aims to advance the development of the region’s abundant resources (especially oil and gas), and improve living conditions for the population. As a long-term objective, Russia hopes to establish the Northern Sea route as a new global shipping lane. These aims and policies need to be considered while understanding Chinese and Indian policies and ambitions and the emerging geopolitical triangle between the three countries, resulting in both cooperation and competition.

The India-China Competition

 The perception of China has seen a rise and fall in the last three decades in Russian society. Unlike the 1990s, when there was much skepticism regarding a rise in Chinese immigration, Russia became less wary of engaging with China when relations with the west deteriorated in the aftermath of conflicts in Georgia in 2008 and in Crimea in 2014. Gradually, China became the leading source of foreign direct investment in the region as well as the leading exporter to the districts at the Russia-China border. The extent of asymmetry in terms of trade resulted in a situation where while the exports from this region are diversified among the three northeast Asian states- South Korea, China and Japan, the imports are heavily dominated by China, mainly consisting of machinery, equipment and metals. This imbalance has been further aggravated by factors such as sanctions by the west- leading to declining investment from European nations, and the dramatic rise of China in realm of manufactured goods- which has led to stagnant conditions for the local industries of these regions which are now dependent on export of mainly raw materials and minerals.

As observed by some experts, Beijing’s interest in the region increased after the Global Financial Crisis of 2008 when the Chinese investment was followed by an influx of Chinese migrants in the five districts at Russia-China border, namely- Amur oblast, Jewish autonomous region, Primorsky Krai and Khabarovsk Krai. From amongst these regions, Amur oblast has the largest gold reserves in Russia, while in another near-border district of Oktyabrsky, there are large Uranium deposits. Adjoining Amur is Sakha (or Yakutia), which carries the world’s largest diamond deposits.

 However, mineral resources are not the only source of motivation for Chinese investment in the region. RFE contains huge potential for infrastructure development in realm of power generation (where Chinese electric companies have already shown interest to gain foothold), and upgradation of railway infrastructure which can connect the RFE, Northeast China and Japan with Europe with a land-based network and thus reduce the sea-dependence. Invariably, there has been an increasingly accepted reality that like the Russian Asia-Pacific policy, the policy in RFE too might become lopsided due to the factor of overdependence on China.

 Kremlin on its part remain aware of the increasing dependence on export of raw materials to China. China on the other hand is working actively in diversifying its own energy imports and is now seeking to compete with Russia in realm of exports to traditional Russian markets for weaponry and technology. Ideas like temporary placement of skilled manpower from India in RFE are being explored. Besides this, the pledge by India for a $1 billion Line of Credit for development of the RFE highlights the importance being placed by the two countries to make this region a source of renewed cooperation.  For now, the plans have been in phase of conceptualization and once the implementation stage arrives, China’s stance towards the potential competition here will be interesting to observe.

Unlike the case of RFE, the changing dynamics and increasing Chinese interests in the Arctic region have been debated and speculated much more in the global geopolitical arena. In the last two decades, not only has Beijing accumulated memberships in all Arctic-related regional associations in some form, but Beijing has also made it a surety that China actively participates in all international organizations whose responsibilities cover the Arctic Ocean and laws related to it. To this end in the past decade, Beijing has started projecting its interest and speaking up on issues pertaining to Arctic. The extent of this activism can be verified by the aims and objectives mentioned in the white paper published by China on 26 January 2018, titled ‘China’s Arctic Policy’. This policy paper very explicitly states that China will participate in regulating and managing the affairs and activities relating to the Arctic, and that ‘respect’ is the key basis for China’s participation in Arctic affairs.

Beijing has made it clear that it has formulated policies and have interest in every realm in the Arctic, ranging from development of shipping routes, exploration and exploitation of oil, gas and minerals, conservation and utilization of fisheries, tourism, as well as strengthening her leadership credentials by having a say in Arctic governance. In totality, if RFE is a region for China’s increasing influence in Russia’s domestic landscape, Arctic is much more of an opportunity to put on display the increasing clout and aspirations for being accepted as a ‘great power’ who now has interests in every corner of the world. India, even if starting to present itself as an alternative to China in the RFE, will find it difficult to match the Chinese position in the Arctic.

 In January this year, India rolled out a draft Arctic policy of its own and highlighted that India seeks to play a constructive role in Arctic by leveraging its vast scientific pool and expertise in Himalayan and polar research. India remains aware that Arctic might be becoming an arena of increasing power competition.  But beyond planning, goal setting, and utilizing the existing mechanisms for scientific development, in coming years, the economic base of India will not let New Delhi go all-out for claiming a position on the Arctic high table. This is bound to increase tensions in Moscow who would not want a challenge to its hegemony in the Arctic by an increasingly ambitious China.

Conclusion

 On its part, Moscow has taken several steps to develop the RFE region to reduce its overdependence on China. However, remoteness of the region, outmigration and difficult business environment are some other issues which append the complex dynamic of the region. Beijing is aware of the benefits available due to scarce ethnic Russian labor, lack of investment from other sources for Russia, the geographical difficulties for nations like India for smooth access, and the absence of deep pockets like China for other nations. In case of the Arctic, Beijing is going for proactive diplomacy and wooing the smaller states. Although Beijing would not want to come to blows with Washington or Moscow in any ways, creating a discourse where China starts being seen as a ‘Arctic’ and not just a ‘Near-Arctic’ state will be a big win for China even before any other advantages as mentioned above are realized. India while looking to initiate presence in RFE can be deemed capable to some extent, but the credentials in case of Arctic region seems no match to that of China. Russia on her part, will want India to at least think about trying to punch above its weight and rise to the task of providing Moscow a way for hedging against Chinese hegemonic ambitions. Recently, India has expressed interest in cooperating with other nations like Japan in these key strategic areas. How Moscow responds to these plans by New Delhi will shape the geopolitical dynamics between Moscow, Beijing, and New Delhi in these two emerging regions which look all set to witness a competition in the coming years.  

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