08.10.2013 Author: Alexander Salitsky

China and Russia’s Eurasian Plans. Part 1

i765The Bishkek SCO (The Shanghai Cooperation Organisation) summit has fully confirmed the viability of unions which tend to strengthen regionalism in the world today.

This strengthening is particularly linked with the fact that, in this new century, the centre-periphery structure of the world economy and politics has weakened. On the other hand, ties between non-Western countries have strengthened considerably, due to their compatibility with each other with respect to the degree and goals of their development. This is due, in large part, to the rise of China – an independent, active and powerful global player that has long professed the doctrine of polycentrism.

While at first only adapting to the global economy, the process of which completed with its entry into the WTO in 2001, Beijing then began to fully integrate it into its own. Engaging the old centres on an equal footing, China has practically created its own separate subsystem within the international division of labour. It has become the largest industrial and commercial power while at the same time closely tying its neighbours and many distant countries to itself. Its economic expansion, the bulk of which coincided with the financial crisis in the West and U.S. failures in the Middle East, caused a sharply negative response from Washington in the late 2000s and early 2010s. As a result, the trend towards polycentrism acquired a further hint of a new bipolarity.

This bipolarity in terms of foreign policy is supported by Russia, who is actively defending ideas of national sovereignty. In particular, the consistent policy of our country in Syria as well as in other areas has had a positive influence on international relations, allowing relatively weak countries to benefit from the advantages of polycentrism. This fully applies to the countries of Central Asia, who have found reliable and interested partners within Russia, who is stabilizing the regional situation, and a rising China.

After the 2008-2009 crisis, it is becoming widely accepted that the neo-liberal phase of domestic and foreign policy in the Western countries that began in the 1970s was a period of inhibiting development and a massive slowdown in economic growth. The globalization driven by the West allowed only a small group of countries and territories to repeat, following the example of a post-war Japan, the success of an economy oriented towards external markets. Globalization has, in fact, paradoxically, led to stagnation within Japan, created a vast “grey zone” of third world countries forgotten by the global powers, increased the number of failed states and, finally, caused major disruptions to the economic dynamics within the most developed countries.

China and India haven proven to be the statistically significant and successful counterbalances to the neoliberal globalization within the past quarter century. They, even with their size, could not be integrated into the Western-centred, binuclear (U.S. and the E.U.) world economy. As a result, a polycentric world began to take shape, while the vibrant transformation of China into a new global centre practically meant overcoming the policy of inhibiting development.

The ASEAN countries have also made significant progress in independent, collective and regional development, which, among other things, has reduced the role of such “global” institutions as the IMF, World Bank and WTO, making them an arena for more equal and intense discussions. The importance of regional cooperation has increased, including within the financial sphere. Accordingly, this has increased the variety of development paths other states are able to take, especially since the monetary and credit monopoly of the West has practically become a thing of the past, taking with it the ability to dictate development strategies.

The emergence of China as a powerful new partner for a number of “forgotten third world countries” within the first decade of this century has caused a fairly contradictory return to the scene of the old global centres. However, along with the reappearance of the competition for the third world, we have unfortunately witnessed a series of unproductive regime changes which have considerably pushed back the socio-economic development of a number of comparatively well-off countries.

Meanwhile, having finally grown accustomed to globalization, China has become its active proponent.

Announced at the XVIII Congress of the Communist Party in 2012, it is worth noting that within a number of new provisions in China’s foreign policy there is a call for the further liberalization of the international flow of goods and, to some degree, capital as well. A report by Hu Jintao stated that, “while taking on an active role in managing the global economy, China promotes liberalization and opposes any kind of protectionism”.

Such a declaration is long overdue given China’s current level of competitiveness. Although this level of competitiveness has been achieved, in large part, due to decades of protectionist policies, the emergence of China as “the driver of the next phase of globalization” should be taken seriously, as a legitimate and serious qualitative shift.

This shift signals the beginning of an intense phase of economic development within the Celestial Empire, when national capital (first state capital, then private capital) will feel restricted even within the huge domestic market, and it will increasingly rush abroad, where it will find at its disposal connections with numerous, once again paternalistic, diaspora, both old and new1.

Chinese expansion not only promotes, but also partly modifies, globalization, because, as a “latecomer to the table”, Beijing must offer its partners better terms for cooperation than those that existed in the previous, Western-centred, phase of this process. In accepting these conditions, China’s partners are also free to trade with other centres of power. This, generally speaking, ends up benefitting those participants of the international arena that are weaker or have simply been forgotten at the previous phase of globalization. In other words, with the help of China, a space for the independent development and diversification of its external sources is being recreated.

Simultaneously, through active participation from China, there is a revival of the ideas of development within foreign policy, including development within the activities of BRICS, SCO and regional organizations in developing countries (including ASEAN). Western criticisms have begun to take on a practical and constructive character.

Renewing development and the means to independently support it characterizes China’s main proposition to economically weaker states. In its new capacity as the inspiration for sustainable growth, Beijing has, justifiably, declared that it is interested in the genuine independence of its partners, including those in Central Asia. Independence cannot be meaningful without the creation of capable states with steady economic development, which includes within the sphere of infrastructure and industry, which China is ready support both in word and in deed, as it now has large investment construction and machine-building complexes which have already started to face an demand shortage within the country.

As a result of these general trends, Central Asian countries have found China to not only be an important alternative market for hydrocarbons, but also a real partner to aid them in strengthening their foreign policy positions, including with respect to Moscow, Europe and Washington.

Beijing’s distrust of countries outside the region that try to strengthen their position within Central Asia is associated with the natural fear that they will support separatism in Xinjiang and Tibet, as well as the possible destabilization of Pakistan and Iran. Russia also has similar concerns.

In describing the current geopolitical situation in the region, Chinese analyst Yu Sui writes, “Interfering in the affairs of Central Asia has been a strategic breakthrough for the U.S. after the Cold War. Washington’s measures are directed against Russia, but it bears noting that the they are also attempting to surround and change China. The Central Asian countries are no less important than countries in Asia’s northeast and southeast, because the region has close ties to the Chinese Xinjiang, where numerous separatists are awaiting a suitable opportunity”. Additionally, Xinjiang is now a crucial domestic fuel base for the Chinese economy.

Yu Sui adds that, “In most cases, China is merely Russia’s supplementary force in Central Asia, while the relationship of Beijing and Moscow with the United States is heavily dependent onU.S. policy.” In general, it is possible to agree with this statement, while duly noting that Beijing’s reputation in Central Asia is a key indicator of the entire situation within and around the region.

Alexander Salitsky, PhD in Economics, chief research fellow at IMEMO, professor at the Institute of Oriental Countries; Nelly Semenova is a researcher at the Centre for Energy and Transport Research and Institute of Oriental Studies, exclusively for the online magazine “New Eastern Outlook”.

1 It should be noted that in China, emigrants are no longer called on to be politically neutral. Thus, around 500 prominent members of the Chinese diaspora were invited to the Huaqiao International Conference in Beijing in the spring of 2012. The forum was attended by almost all the top leaders of the country, who emphasized in their speeches the importance Chinese people participating in the political life of the countries abroad where they now live, “achieving common goals through methods of public diplomacy”