Greater Eurasia: the Common Challenges for China and Russia

The 19th Congress of the Communist Party of China in Beijing touched upon the “Belt and Road” problematics. In particular, the Chinese leader said in his speech that the initiative is primarily needed to “build a trade and infrastructure network connecting Asia with Europe and Africa along, and beyond, the ancient Silk Road trade routes”. This initiative was in fact considered in his presentation as both the report on its successful implementation and the plan for the next five years.

In the Russian expert community, the potential social and economic benefits of the initiative are considered from the point of view of the possible diversification of the Chinese project. Which means the usage of not only infrastructure/transport projects, but also some other areas, which will inevitably accompany the New Silk Road development. According to the experts, today there are already several tracks, including transport, banking, investment, trade, tourism, humanitarian.

The idea to create a Greater Eurasian Partnership (GEP) was initially formulated on December 3, 2015, when the President of Russia in his Address to Federal Assembly proposed to initiate consultations on the formation of an economic partnership between the Eurasian Economic Union member states, ASEAN and the Shanghai Cooperation Organization. Throughout 2016, the concept was repeatedly recited at various multilateral venues, having in effect become the flagship of the Russian initiative to develop the Eurasian integration.

The backbone of this process is the constructive Moscow-Beijing interaction. In this regard there are some skeptical assessments (especially in the West), based on the belief that the formation of a new pole of power is impossible due to allegedly insurmountable Russian-Chinese contradictions. Meanwhile, none of the discussed disagreements between the leading Eurasian states is objective, deep or antagonistic. The common neighborhood is regarded by Russia and China as a source for different resources and opportunities, which are labour force in one case and the space for investment expansion in the other. However, both countries are vitally interested in regional security and in stabile political regimes.

The initiative was to a large extent caused by Russia’s concern over the decline in the authority of the World Trade Organization (WTO) and the creation of some “closed” regional trade associations. The supposed response is aimed at harmonization of the various regional economic formats with strict adherence to equality and openness principles. As a positive experience, Vladimir Putin mentioned the activities by Eurasian Economic Commission and the negotiations on its coordination with the Chinese project, which could prospectively contribute to the construction of the Greater Eurasian partnership. The ultimate goal is the approval of the EAEC as the central unifying structure in the regional Eurasian integration network.

As the most powerful Eurasian countries, Russia and China act as natural allies in the integration, infrastructure and trade processes in Eurasia. The coincidence of their geoeconomic interests is additionally strengthened by the implementation of the Chinese “Belt and Road” initiative and Russian “turn to the East”. The bilateral Russia-China relations and their strategic stability provide a decisive influence on the successful confluence of the Eurasian Economic Union with the “Belt and Road”, and the future formation of the Greater Eurasian Partnership.

While the US is not part of Eurasia geographically, it has geopolitical and investment interests there, trying to gain access to certain areas of the continent through providing either financial, economic or security services (Afghanistan). As the recent practice shows, the quality and political orientation of these services contradict the interests of Russia and China, leading to destabilization and aggravation of the conflicts in the zones where the US stays. The policy of Donald Trump, aimed at protectionism and the development of domestic US priorities reduced this trend, but did not eliminate the potential of America’s rivalry with Russia and China for Eurasia.

For Russia, the priority site in Eurasia is the EAEU. While fully supporting the initiatives of the Organization, within its framework Russia and China develop cooperation on two tracks. Firstly, it is the preparation of non-preferential agreements on trade and economic cooperation, including customs regulation, electronic commerce, protection of intellectual property, etc. Secondly, it is the combination of the EAEC and the Chinese “Belt and Road” initiative, including the formation of an agreement to establish a free-trade zone (FTZ) with Vietnam, the negotiation of the FTZ with India, Singapore, the Republic of Korea, Mongolia, Cambodia.

The trigger of multilateral initiatives in Eurasia is the process of creating a network to control transport corridors linking the key subregions of Eurasia into a single whole. As a state located between Europe and Asia along the main transport routes, Russia has yet unrealized logistic, transit and some other infrastructural reserves and opportunities. When formed, the Eurasian transport network will help make use of these advantages.

The Trans-Siberian Railway could play an important role in the transportation sphere integration. The project to construct high-speed highways in Russia’s territory, including the construction of the Moscow-Kazan railway and prolongation of this line through Kazakhstan to the northwest of China in the future, has a significant potential. The project will create a new basic transport infrastructure to effectively communicate between Russia, the Central Asian countries, China and Europe.

It is highly advisable for Russia to study the Chinese experience of formation of container transportations for the goods delivery to European countries: they are under-loaded on the way back from Europe to China. Russia could use this opportunity to deliver to China the demanded Russian goods quickly and cost-effectively: for doing this, it is necessary to create a network of modern transport and logistics centers.

Strengthening security and economic cooperation in the Eurasian centre is the key task of SCO, which expanded from six to eight permanent member format in 2017. The entry of India and Pakistan means qualitative evolution of the Organization, its regional status being shifted to the global structure level. Any potential tensions within the Organization among individual members were informally stabilized by the Russian-Chinese “axis” both before and after the SCO expansion. Russia and China together with India, Pakistan and the Central Asian states are ready to offer a qualitatively new set of high technology, investment, banking, transport and other services in the areas of trade and economic cooperation.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.