Between West and East: Why Russia Should Be Mindful of China
April 15, 2014
Come May, Vladimir Putin is to pay a visit to China, where a number of consequential agreements will be signed. To be sure, this visit will have a profound impact on Russia's development in the years to come. If Putin decides to reorient its policy towards the East, there is little hope that Russian economy will modernize. Whereas the European Union is currently Russia's top economic partner, China plays a second role in trade mainly importing Siberian mineral resources. Given the current tensions between the West and Russia, President Putin will likely yield to China's demands during negotiations. By cementing the strategic relationship through gas deals and increased imports, China may finally become Russia's most important partner. In this essay, I argue that Putin's confrontation with the West will have serious political and economic repercussions for Russia's development in light of China's rise.
Strange things are happening in Russia these days. An upsurge in patriotism following the Sochi games and Crimea's Annexation has distorted reality so that it is no longer clear what Russia is today. How come referendums, strictly prohibited in Russia, are allowed in Crimea, and armed Russian-speaking people are given a green light to seize government buildings in a neighboring state? This inconsistency between formal and informal practices of the Kremlin's political survival only shows that Russia no longer respects international norms in spite of the world's opprobrium. In light of recent developments in Ukraine, the West has chosen to avoid direct confrontation with Putin, constantly threatening to broaden the list of sanctions instead. The reason is simple: EU and US policies on Ukraine are by and large disconcerted, and the sanctioning mechanisms against Russia are being used for the first time. Put simply, the West has been poorly prepared for dealing with this kind of task.
Anti-Western rhetoric in Russia has been recently brought up to a whole new level by state media. Blinded by patriotic hysteria, Russians started to pay less attention to the economy, which, according to Prime Minister Medvedev, "is not doing quite well" these days. Some pro-Kremlin experts even go as far as to say that economic isolation will help Russia improve its economic capacity. But when has this been the case? In fact, the cases of Iran and North Korea will point to the contrary. Isolation will only thwart Russia's economic development, and in order to diversify exports the Kremlin will seek deeper engagement with the likes of China, Iran, Syria and other autocratic governments. Given that China is Russia's closest neighbor, there is every reason to believe that Beijing will exploit every opportunity to enslave Russia economically.
Just to give you an overall idea of what Sino-Russian economic relations look like (data are taken from FIIA report, 2011).The economic partnership between Moscow and Beijing remains the weakest aspect of bilateral relations. Although the volume of bilateral trade has been growing steadily throughout the previous decade reaching $60 billion in 2010, it is still far below its potential (the trade volume between Russia and Germany, for instance, is $104 billion as of 2013). Bilateral trade during 1996-2010 was marked by the decrease in Russia’s exports of machinery and transport equipment from 17.7% to 1.3%, whereas exports of raw materials to China increased from 7.1% to 20.6%. By contrast, China’s exports of machinery and transport equipment increased from 5.7% in 1996 to 35.4% in 2010, while manufactured goods started to constitute 18.6% of China’s exports to Russia as opposed to 7% in 1996. The picture is indeed very dismal.
An economic disparity in trade capacities raises grave anxieties that Russia is gradually becoming a “junior partner” in Sino-Russian relations. Indeed, it can be argued that the West is not Russia's gravest foe: while Europe is quite critical of the regime, it is not a threat for Russians, whose logic is to get richer, not to stay in power indefinitely. China, on the other hand, does not constitute a political threat to the Kremlin, but Russia's increased dependence on China will make the lives of ordinary Russians much worse. Instead of driving BMWs, many will have to switch to Geelys and other manufactured goods imported from China. Vladimir Putin's upcoming visit will not only signify a change in Russia's foreign policy orientation, it will also determine the patterns of the country's economic development for years to come. Lamentably, by severing ties with the West, Russia is about to fall into the Chinese trap by becoming a resource appendix to a growing superpower.
Share this article