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From the Eurasian Economic Union to the Greater Eurasian Partnership: The View of Chinese Scholars on Eurasian Integration

February 28, 2020
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This overview summarizes part of the views of Chinese academic circles on the Eurasian Economic Union (EAEU) from different perspectives. Since Chinese scholars do not see a lot of potential in the EAEU to develop on its own, they tend to pay more attention to the integration of Greater Eurasia, and the alignment of the EAEU and the Belt and Road Initiative (BRI).

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The opinions of Chinese scholars on the EAEU from different perspectives

In Chinese academic circles, the research on the EAEU can be roughly divided into four perspectives:“strategy”, “institutionalization”, “relationship”, and “economics”.

From the perspective of "strategy", scholars focus on the analysis of the formation background and existing problems of the EAEU. Some scholars define the EAEU as a result of Russia’s effort to integrate the post-Soviet Space, while others understand the EAEU in a broad sense, describing it as the Russia-led regional project with the objective to become the bridge connecting the Asia-Pacific region. In terms of Russia’s economic intention, Moscow wants to strengthen economic cooperation within the CIS states, in order to better deal with the external economic difficulties. Most scholars notice Russia’s political intention inside the EAEU. Professor Zhang Xin argues that EAEU is a political project in essence. Firstly, Russia needs to use EAEU to strengthen its influence over the CIS states, especially Central Asia. Secondly, when CIS states are united, Moscow can transform the geopolitical game between Russia and the West into the one that favors Russia. Thirdly, President Putin has the ambition to make the EAEU a potential pole in the upcoming multipolar world. When it comes to the achievements of the EAEU, many scholars state that the Union indeed helps facilitate the trade between member states somehow, but the development of the EAEU may be limited due to internal and external reasons. Externally, for a certain period, Russia will continually face the geopolitical pressure from the West. Internally, Russia, as the main actor pushing for Eurasian integration, is going through an economic slowdown, leading to its inability to provide more economic stimuli for the development of the union. Moreover, as Lu Nanquan points out, without Ukraine – the second most economically-developed CIS state – in the EAEU, Russia is unable to become a powerful Eurasian “empire”. When it comes to the structural problems, low trade complementarity between EAEU members caused by homogeneous industrial structure makes deeper economic integration difficult. Skeptical of Russia’s political intentions, other EAEU members are reluctant to agree on any economic decision, which can possibly harm their sovereignty. Since the extent of integration within the EAEU is limited, the solution for Russia to develop the EAEU is to cooperate more with the external partners. Therefore, many scholars focus their study on the cooperation between China and the EAEU, which will be discussed in the part regarding the alignment of the EAEU and the BRI.

From the “institutionalization” perspective, scholars try to outline the institutional setting of the EAEU. By comparing the institutional similarities and differences between the Eurasian Economic Community and the EAEU, Wang Chenxing and Li Xing [1] attempt to point out problems regarding the institutionalization of the EAEU and the possible solutions to them. In their opinion, the EAEU, faced with the problems like personnel redundancy and concentration of decision-making power on a small group of people, should make its functioning mechanism more streamlined and efficient in the future. In addition, the EAEU needs to build a group of professional international civil servants, who can represent the interests of the organization, rather than the mere interests of their own countries. It should be noted that although the decision-making mechanism is based on the absolute equality of member states, which can mitigate other states’ concerns over Russia’s damage to their sovereignty, it hinders the strength of Moscow to push the integration process further. It is worth thinking about how balance can be found between the absolute equality of member states and Russia’s dominating position.

From the perspective of "relationship", scholars attempt to clarify the relationship between member states and external actors. For instance, scholar Zhang Xin once predicted the future of Central Asian states. After the BRI initiative has been set forth, Russia may be inclined to the “selective integration” strategy. Russia, on the one hand, will deepen political and economic interdependence with Kazakhstan and, on the other increase its influence in Kyrgyzstan and Tajikistan. As a result, the sovereignty of Bishkek and Dushanbe may be “swallowed”. Turkmenistan will be ignored by Russia, as long as it remains stable and neutral. Due to Uzbekistan’s ambition to dominate Central Asia, Tashkent will be regarded as a “problem” by Russia. This opinion, however, is not mainstream.

In terms of the relationship between EAEU and external partners, a few articles touch upon the EAEU - Vietnam FTA. Li Ziguo [2] contends that this agreement shows the bargaining power of the EAEU as a whole. Analyzing the data about the EAEU - Vietnam trade, Gong Yanhua [3] argues that bilateral trade remains at a small scale, and liberalization is at a low level after the establishment of the FTA. The trade volume of the EAEU with Vietnam only accounts for less than 1 percent of the Union’s trade turnover with third parties. Moreover, the EAEU - Vietnam FTA has quite narrow coverage, only concerning trade in goods and tariff reduction, while trade in services and investment are excluded. Therefore, this kind of FTA has a more political than economic meaning: the EAEU can use Vietnam as a window to further cooperation with the ASEAN. Sun Changlong [4] understands the EAEU - Vietnam FTA from another angle. He explains that this is an FTA signed with a country with a small economy like Vietnam, which reflects the Union members’ wariness of the possible risk followed by economic integration.

From an economic perspective, scholars attempt to describe the status,existing problems and the prospects of economic cooperation within the EAEU and with countries outside the Union. Reviewing the economic performance of the EAEU, Gu Wei [5] notices that the GDP growth rate in 2010 increased significantly because of the establishment of the Customs Union, but economic growth slowed down in the following years. This means that despite the positive effect of the increasing intra-Union trade in the beginning, the impact of integration on member states’ economy is weakening. Moreover, the contradiction between the “depth” and the “breadth” in the development of the Union was mentioned. If the EAEU strives for deeper integration, members may lose certain degree of sovereignty. As a result, the Union will be less attractive to other potential members. But if the EAEU wants to include more members, it may just remain at a low level of integration, such as the FTA. Li Ziguo [6] claims that trade diversion effect brought by the Union is not that significant, since the percentage of intra-Union trade volume in the EAEU total trade turnover of the Union still remains low. He points out the problems in intra-Union trade, such as duty exemptions and trade barriers. It can be said that member states have not completely reached a unified customs tariff. In order to protect their own interests, member states strive for a duty exemption policy for their import on goods from third-party countries. In addition, there exist other trade barriers, such as quota restrictions, technical barriers, and corruption in customs services. Wang Zhi [7] thinks that the EAEU is, in essence, something between a Customs Union and a Common Market. the EAEU has unified and lowered customs duties among members, but the negotiation on non-tariff barriers goes slowly. He points out the obstacles in the formation of a common market as well. Because of many disagreements on rules and technical issues, the formation of a common medical market has to be delayed. At the same time, member states have not agreed on the common electric power market yet. It is stipulated in the EAEU treaty that a supranational organization will be established to regulate the common financial market, but the discussion doesn’t address the important issues of a single currency and single central bank. Some scholars concentrate on cooperation in specific sectors. Focusing on the financial sector, Sun Yu [8] claims that in spite of the present roadmap, the incomplete openness of member states’ financial markets and their low sovereign credit rankings add to the difficulties in forming a common financial market. In terms of the prospects of the EAEU, Liu Dan [9] is one of a few scholars, who are optimistic about the future of the Union. She believes that the establishment of the EAEU is conducive to the free circulation of factors of production in the region. Member states have economic complementarity due to the labor division that was developed in the past. With the lifting of sanctions on Russia and the development of the EAEU common market in the future, the Union will remain open and generate regional economic growth. However, most of the scholars are dubious about the possibility that EAEU may develop as its previous roadmap envisaged. Li Ziguo [10] claims that the EAEU may continue to exist due to its strategic importance to Russia, but this organization may not thrive. According to his scenarios, the EAEU will continue to develop in the short run, but it may stagnate in the midterm. With Russia’s continuing economic slowdown, the EAEU is likely to gradually “melt” into the integration process of Greater Eurasia. Gu Wei [11] contends that due to the difficulties in deeper integration, the EAEU will turn to a wider integration, such as accepting new members and establishing FTAs with other states.

A shift from Small Eurasia to Greater Eurasia

Not seeing much potential in the EAEU to develop on its own, scholars have, for a long time, focused on the study of the integration of Greater Eurasia and the EAEU-BRI alignment. As Russia put forward the idea of “Greater Eurasian Partnership”, the integration of Greater Eurasia became increasingly discussed. When it comes to the origin of the Greater Eurasian Partnership, Pang Dapeng [12] argues that the Greater Eurasian Partnership is the continuation of the Russian elites’ Eurasian strategy after the collapse of the Soviet Union. The background of the Greater Eurasian Partnership can be boiled down to Russia’s understanding of its relationship with Europe and the change of the international system. Russia has realized the impossibility of integrating into Greater Europe. Moreover, while the West is falling, the East is rising. Russia, spanning over Eurasia, can benefit from the change of the international system. Li Ziguo understands the objective of the Greater Eurasian Partnership in these ways: for one thing, the Greater Eurasian Partnership is Russia’s short-term reaction to the pressure from the West; for another, Russia wants to use this as a platform for constructing a new world order. The Greater Eurasian Partnership is put forward with the aim of neutralizing, rather than substituting China’s BRI. Russia hopes to play an equal role to China during the integration process of Greater Eurasia. Moscow wants to build a multi-polar world order with the help of the Greater Eurasian Partnership, and simultaneously prevent China from being the regional hegemon. Li Ziguo compares the similarities and differences between the Greater Eurasian Partnership and the BRI. Economically speaking, they share much in common. The difference is in their strategy. The BRI focuses on economic cooperation, while the Greater Eurasian Partnership has a grand geopolitical objective. Russia wants to become the provider of public security goods in the region.

The EAEU-BRI alignment is heatedly discussed among Chinese scholars

When it comes to the integration of the Greater Eurasia, the alignment of the EAEU and the BRI has always been the center of the discussion. Scholars discuss the essence and the benefits of the alignment, provide suggestions for its implementation and comment on the recently signed Agreement on trade and economic cooperation between the EAEU and the PRC. According to Li Jianguo, the alignment of the BRI and the EAEU is, in essence, a consensus reached by China and Russia to coordinate their interests in Eurasia. The opinions on the inevitable conflicts between Beijing and Moscow in Eurasia are criticized quite a lot. Zhao Huasheng contends that geographical factor determines that China and Russia are present in Central Asia. But their cooperation or conflict depends on how countries can coordinate their interests. Moscow ought not to regard China’s presence in Central Asia as an intrusion in Russia’s sphere of influence. China, as well, should adjust its policy in Central Asia to reduce the competition with Russia.

The need for the EAEU to align with the BRI and the benefits of the alignment are obvious. First of all, for years to come, both China and Russia will face pressure from the US, which serves as the prerequisite for the cooperation of the two sides. Second, the EAEU and the BRI share the goal of facilitating cooperation and development of the regional economy. Central Asia is at the core of these regional cooperation projects. Since China and Russia are important trade partners to each other, they can coordinate their projects in Central Asia. Third, given the BRI is just a “soft” institution, which does not require any sovereignty transfer, it will not challenge the EAEU that has already been institutionalized. Fourth, Moscow is worried that Chinese infrastructural projects may impact the existing infrastructures in Russia, such as Transsibirskaya magistral and Baikalo-Amurskaya magistral, but this is not the case. The higher level of regional economic development can lead to better maintenance of local infrastructures. The BRI, aiming at achieving regional interconnectivity, can help develop regional economy and contribute to the maintenance of Russia’s infrastructure in the Far East. [13]

Regarding the direction for the alignment, Zhang Ning and Zhang Lin [14] believe that it is difficult to start directly from the institution-building for the EAEU-BRI alignment. The linking of the EAEU and the BRI should start from the alignment of projects. Institutional alignment can only be possible when cooperation on practical projects reaches a certain level, helping reduce institutional obstacles and barriers. Wang Zhiyuan [15] shares a similar opinion. His in-depth analysis shows that the Sino-Russian relationship is an "asymmetric inverted triangular” model, which makes it difficult for both sides to conduct comprehensive and effective alignment. Consequently, the discussion on alignment should not concentrate on the grand strategy, but on practical projects instead. Huang Xiaoyan and Qin Fangming [16] hold a different opinion, attaching great importance to the alignment of institutions. It is widely believed that since the alignment of regulations and policies may face greater obstacles, the implementation of joint projects should be the focus. However, without the alignment of institutions, the projects being implemented can get caught in a bottleneck. Therefore, it is a pressing matter to actualize the institutional alignment during the implementation of practical projects, which can start from the alignment of trade and investment regulations, and the alignment of commodity and technical standards. As far as Li Ziguo is concerned, the alignment of the EAEU with the BRI needs to include bilateral and multilateral cooperation. Bilateral cooperation should be focused on practical projects implemented by China and each EAEU country, while multilateral cooperation ought to concentrate on negotiation regarding the alignment of institutions between China and the EAEU as a whole. The EAEU-BRI alignment should take three steps, beginning with the reduction of non-tariff barriers and investment facilitation, then to the establishment of an FTA timetable, and ultimately culminating in the formation of a Greater Eurasian FTA. Concerning the platform for alignment, many scholars agree that the SCO can be a platform for alignment,while some do not regard the SCO as an ideal platform. Wang Zhiyuan [17] thinks that since the SCO is focused on security issues, this organization has not performed its own economic function well. Accession of India and Pakistan as members further complicates economic cooperation. Zhang Congming [18] state that problems can occur due to the inconsistency of purposes among the SCO, the EAEU, and the BRI. Li Ziguo [19] argues that we can adopt the SCO’s experience, but it is not an ideal platform for the alignment. When it comes to the alignment of the projects, some scholars pay attention to the energy sector, while others focus on the formation of FTA. Wu Dahui and Zhu Hui [20] suggest that the alignment can be based on the formation of an energy community. China and the EAEU should consider the possibility of turning the Eurasian energy market into the fourth-largest crude oil trading market in the world, and put forward Eurasia’s own crude oil price indicator. In regard to the formation of FTA, Lu Shanbing and Huang Mengfang [21] suggest that the alignment should start from granting most-favored-nation treatment and conducting FTA negotiations However,Huang Xiaoyan and Qin Fangming [22] are dubious regarding the possibility that Russia may make concessions on the FTA issues. The main purpose of the EAEU is to realize the re-industrialization of member states, which possibly requires certain trade protection measures,such as restrictions on the import of goods from China. Russia may not compromise in this regard.

Several scholars discuss the recently signed Agreement on trade and economic cooperation between the EAEU and the PRC. Like in the official discourse, this agreement is described by scholars as the first important institutional arrangement reached by China and the EAEU in the economic sphere. It marks that the economic cooperation between China and the EAEU begins to be driven by the institution-building. The agreement has three characteristics. Firstly, it strengthens the alignment of policy and regulations. Secondly, it helps increase the transparency and predictability of the trade, since both sides have reached a consensus on customs, quality inspection, technical standards, etc. Thirdly, the agreement widens the cooperation space for the EAEU and China, because it touches on the new issues, such as intellectual property, government procurement, and e-commerce. the impact, weak points, and the prospects of this agreement. According to Liu Huaqin, given that the EAEU members are mostly landlocked countries, and the degree of trade and investment facilitation is relatively low, the removal of institutional barriers can really produce a significant economic effect. Jiang Jing and Liu Yang [23] assess that although this is a non-preferential agreement, it further explores the potential for trade cooperation between the EAEU members and China, improves the level of trade facilitation, reduces non-tariff trade barriers, improves the transparency of market regulation, and finally lays down the institutional foundation for deeper cooperation. Despite the emphasis on information exchange and consultation mechanisms and wide coverage on different issues, this agreement mainly consists of a broad framework, rather than concrete content about the practical operation. This weak point can be attributed to the EAEU members’ worry that Chinese goods may flood in their market. Nevertheless, this agreement is believed to be beneficial for deepening cooperation between the EAEU and China in transportation, industrial modernization, agriculture, digital economy, and trade in services. Since industrial modernization is emphasized in the agreement, economic cooperation may be switched from low value-added goods to high value-added ones, and investment is likely to be diverted to the sphere conducive to industrial modernization. Sun Chalong [24] analyses prospects of the agreement from a legal perspective, emphasizing the necessity to complete provisions regarding trade remedies and the need to gradually push for the formation of the FTA legal system between the EAEU and China.

Conclusion

To sum up, Chinese scholars focus their study of Eurasian integration on the Small Eurasia and Greater Eurasia. In regard to Small Eurasia, Chinese academia carry out their analyses on the EAEU from the “strategy”, “institutionalization”, “relationship”, and “economics” perspectives. However, having not seen much of potential in the EAEU itself, scholars seem to pay more attention to the integration of Greater Eurasia. In the study of the Greater Eurasia, experts concentrate on the idea of Greater Eurasian Partnership, attaching importance to the alignment of the EAEU and the BRI, attempting to advise on its implementation and comment on the Agreement on trade and economic cooperation between the EAEU and the PRC. [25]


References

[1] Wang, C.X., Li, X. Ouya jingji gongtong ti yu ouya jingji lianmeng bijiao fenxi [A comparative analysis of the Eurasian Economic Community and the Eurasian Economic Union]. Russian, East European & Central Asian Studies,2016(04):93-112. (in Chinese).

[2] Li,Z.G. Ouya jingji lianmeng: jixiao, wenti,qianjing [Eurasian Economic Union: achievements, problems, prospects.] Russian Central Asian & East European Market, 2016(02). (in Chinese).

[3] Gong,Y.H. Ouya jingji lianmeng duiwai zimaoqu hezuo fenxi [An Analysis of Eurasian Economic Union Free Trade Area Cooperation]. Siberian Studies,2017,44(04):53-58. (in Chinese).

[4] Sun, C.L. Zhongguo yu ouya jingji lianmeng jingmao hezuo de qianjing,zhangai yu falv jianyi [Prospects, Obstacles and Legal Advice of Economic and Trade Cooperation

between China and the Eurasian Economic Union]. International Economics and Trade Research,2019,35(08):4-15. (in Chinese).

[5] Gu, W. Ouya jingji lianmeng de xin Dongxiang ji qianjing [New trends and prospects of the Eurasian Economic Union]. China International Studies.,2015(06): 36-49. (in Chinese).

[7] Wang, Z. Ouya jingji lianmeng: jinzhan yu tiaozhan [The Eurasian Economic Union: developments and challenges]. Russian Studies, 2018(06). (in Chinese).

[8] Sun, Y. Ouya jingjilianmeng kuangjia xia jinrong yitihua jizhi goujian lujing ji zhiyue yinsu [The Path and Restrictive Factors of Financial Integration Mechanism under the Framework of Eurasian Economic Union]. Academic Journal of Russian Studies, 2018,8(06):53-64. (in Chinese).

[9] Liu,D. Ouya jingji lianmeng de neibu jiegou, waibulianxi yu qianjing fenxi [Internal Structure, External Links and Prospect Analysis of Eurasian Economic Union]. Academic Journal of Russian Studies, 2016(06). (in Chinese).

[10] Li 2016, op. cit.

[11] Gu 2015, op. cit., pp.26-49.

[12] Pang, D.P. Eluosi de da ouya huoban guanxi [Russian “Great Eurasian Partnership”]. Academic Journal of Russian Studies, ,2017,7(02):5-17. (in Chinese).

[13] Li,Y.Q. (2015). He er butong: sichou zhi lu jingji dai yu ouya jingji lianmeng [Harmonious but different: Silk Road Economic Belt and Eurasian Economic Union]. Russian, East European & Central Asian Studies, 2015(04): 1-6. (in Chinese).

[14] Zhang, N., Zhang Llin. Sichou zhi lu jingji dai yu ouya jingji lianmeng duijie fenxi [Analysis of Connection between Silk Road Economic Belt and Euro-Asia Economic Alliance]. Journal of Xinjiang Normal University(Philosophy and Social Sciences) ,2016,37(02):85-93. (in Chinese).

[15] Wang, Z.Y. Yidai yimeng: zhong e “fei duicheng”jiegou xia de wenti fenxi [“Belt and Alliance”: Analysis of the Alignment Between China and Russia Under the“Non Symmetrical Inverted Triangle”Structure].International Economic Review,2016(03):97-113. (in Chinese).

[16] Huang, X.Y.,Qin,F.M. Sichou zhi lu jingji dai yu ouya jingji lianmeng duijie(2015-2017) [Reviews on the Docking between the Silk Road Economic Belt and the Eurasian Economic Union ( 2015 -2017)]. Russian, East European & Central Asian Studies, 2018(03). (in Chinese).

[17] Wang 2016, op. cit., pp.97-113.

[18] Zhang, C.M. Yi dai yi meng duijie wenti tanxi [The discussion on the alignment of the BRI and the EAEU]. Russian Central Asian & East European Market.,2016(05):63-70. (in Chinese).

[19] Li,Z.G. Kuoyuan Beijing xia dui shanghai hezuo zuzhi de zairenshi [The Reacquaintance of the SCO Under the Background of Expansion]. Academic Journal of Russian Studies,2018,8(02):76-89. (in Chinese).

[20] Wu,D.H., Zhu, H. Silu jingji dai yu ouya jingji lianmeng de duijie: yi nengyuan gongtongti de goujian wei jishi [Docking of Silk Road Economic Belt and Eurasian Economic Union: on the basis of building Energy Community]. Contemporary World, 2015(06):23-25. (in Chinese).

[21] Lu, S.B., Huang, M. F. Zhongguo yu eluosi ji zhongya guojia Shenhua jingji hezuo celve tanxi [The Construction of“Silk Road Economic Belt” Chinese with Russia and the Central Asian Countries to Deepen Economic Cooperation Strategy Research] Hebei Academic Journal ,2015,35(05):115-119. (in Chinese).

[22] Huang, X.Y.,Qin,F.M. Sichou zhi lu jingji dai yu ouya jingji lianmeng duijie(2015-2017) [Reviews on the Docking between the Silk Road Economic Belt and the Eurasian Economic Union ( 2015 -2017)]. Russian, East European & Central Asian Studies, 2018(03). (in Chinese).

[23] Jiang, J., Liu, Y. Zhonghua renmin gongheguo yu ouya jingji lianmeng jingmao hezuo xieding [Analysis on the Economic and Trade Cooperation Agreement between the People's Republic of China and the Eurasian Economic Union]. Academic Journal of Russian Studies,2019,9(06):27-39. (in Chinese).

[24] Sun 2019, op. cit. pp.4-15.

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