44

Witold Rodkiewicz

The Turn To The easT

The flaWed diveRsificaTion of Russian foReign policy

NUMBER 44WARSAWNOVEMBER 2014

The Turn To The easTThE flAWEd diVERSificATiON Of RUSSiAN fOREigN pOlicy

Witold Rodkiewicz

© copyright by Ośrodek Studiów Wschodnichim. Marka Karpia / centre for Eastern Studies

content editorsAdam Eberhardt, Marek Menkiszak

Editorhalina Kowalczyk

co-operationKatarzyna Kazimierska, Anna Łabuszewska

TranslationJim Todd

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Contents

ExEcUTiVE SUMMARy /5

I. ThE iNTENSificATiON Of RElATiONS WiTh ThE EAST ANd iTS pREREqUiSiTES /7

II. ThE pOlicy Of ENgAgEMENT – ThE RUSSiAN REAcTiON TO ThE RiSE Of chiNA’S pOWER /12

III. MOScOW–dElhi: A gEOpOliTicAl cONSENSUS /22

IV. RUSSiAN-JApANESE RElATiONS: A fRUiTfUl ‘STRATEgic pATiENcE’ /25

V. RUSSiA ANd ThE MUlTilATERAl STRUcTURES iN ThE REgiON /29

VI. ThE RUSSiAN RESpONSE TO ThE ASiAN chAllENgES /31

VII. ThE lAME EcONOMy /34

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ExEcutivE summary

• The ‘turn to the East’ in Russian foreign policy announcedin 2010 has failed to bring about the heralded fundamentalchangeinrelationsbetweenRussiaanditsAsianpartners,norhasitsignificantlyreinforcedRussia’spositioninEastAsia.Ithasalsofailedtocreateaneffectivemechanismforharness-ingtheeconomicdynamismoftheAsia-PacificregionforthepurposeofmodernisingRussia’sFarEasternterritories.

• However,the‘turntotheEast’hasnotbeenmerelyrhetorical.Moscowhasgenuinelybecomemoreactiveandvisibleintheregionalmultilateralstructures,andithasbeenconsistentlydevelopingbilateralrelationswithanumberofmajorregionalactors.Oneresultofthisactivityisthediversification(albeitso far limited) of Russian foreign policy,which is graduallybecomingless‘West-centric’.ThisdiversificationhasallowedtheRussianpolitical elite toavoida feelingof isolationdur-ing the recent serious crisis in relationswith theWestoverUkraine.However,thisdiversificationhasbeenrestrictedtothepoliticalanddiplomaticdimensions,anddoesnotextendtotheeconomicrealm.TheshareofAsiancountries inRus-sia’sforeigntradeandforeigndirectinvestmentshasnotin-creasedsignificantlycomparedtothestillpredominantshareofWesterncountries.ItistooearlytoascertainwhetherthelimitedsanctionsimposedbytheWestinresponsetoRussianpolicytowardsUkrainewillchangethisproportioninfavourofAsiancountriesattheexpenseoftheWest.

• Moscow’s response to the challenge posed to Russia by theriseofChinesepowerconsistsofthreecomplementarycom-ponents:thecontinueddevelopmentandenhancementofco--operation with China, especially in the energy sector; at-tempts to diversify economic ties and political contactsthroughintensifyingrelationswithotherAsiancountries;andostentatiously distancing itself fromWashington’s attempts

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orintentionstoadoptapolicyofcontainment–evensoft,letalonehard(military)–withregardtoBeijing.

• RelationswithBeijingarebecomingmuchmoreimportanttotheKremlinthanco-operationwithotherAsianpartners.In-creasingly,Moscow’scontactswithotherAsiancountriesarebeing subordinated to its relationswithBeijing.As its rela-tionswiththeWest,andespeciallytheUnitedStates,arede-teriorating,relationswithChinamaysoonbecomethecentralaxisofRussianforeignpolicyasawhole.

• The relations theKremlin is buildingwithChina and Indiaareexpectedtoserveasamodel forrelationsbetweenpow-ersinanew,polycentricinternationalorder,aspostulatedbyRussiandiplomacy.Thisorder,unlikethepost-ColdWarorderbasedonUShegemony,should(inMoscow’sview)bebasedonanoligarchicconsensusofgreatpowers,civilisationalplural-ism,thede-ideologisationofinterstaterelations,theabsolutenon-interference in the internalaffairsof ‘greatpowers’,re-spect fortheirspheresof influence,andtheprioritisationofbusinessco-operation.

• TheKremlinhasbeensuccessfullyplayingasubtlegamewithJapan in an attempt to convince it that in view of the rapidgrowthofChinesepower,Tokyoshouldbeinterestedinculti-vatinggoodrelationswithMoscowandthereforemustacceptRussianconditionsforsettlingthedisputeovertheKurilIs-lands,aswellasincreasewithoutpreconditionsitseconomicengagementwithRussia.Bymakingeffortstointensifypoliti-calandeconomicrelationswithJapan,theKremlinwantstoreinforceitspositionwithregardtoBeijing,diversifyitseco-nomiccontacts in theregion,andcreatemoreroomforma-noeuvreforTokyointheinternationalarena,thuscontribut-ingtoalooseningoftheJapanese-USalliance.

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i. thE intEnsification of rElations with thE East and its prErEquisitEs

Since2010RussianofficialsandexpertshaveregularlycalledforRussianforeignpolicytostrengthenits‘Easternvector’bybecom-ingmoreactivelyinvolvedinpoliticalandeconomicprocessesintheAsia-Pacificregion.AdirectstimulusforthiswasprovidedbyaspecialmeetingheldinKhabarovskon2July2010bythethenpresidentofRussia,DmitryMedvedev.During thismeeting,hesettwogoals:intensifyingeconomicco-operationwithcountriesfrom theAsia-Pacific region, and strengtheningRussia’s role inregional organisations. Medvedev ordered the development ofa “comprehensive action plan to reinforce Russia’s position intheAsia-Pacificregion”1.Afewdays later, theheadofthestate-controlledRusskiy Mir foundation,VyacheslavNikonov,present-eda‘RussianstrategyintheAsia-Pacificregion’asdevelopedbyagroupofdiplomatsandacademicsfromtheMoscowStateInsti-tuteof InternationalRelations (MGIMO),withasuggestionthatRussia should be transformed into a ‘European-Pacific’ state2.At the same time the term ‘turn to theEast’ (povorot/razvorot)3,began to appear in Russian foreign policy discourse, signallingaradicalchangeinRussianforeignpolicy.AsoneRussianexpertputit,Russia“hassetitselfthefundamentalgoalofbalancingthe

1 ‘Stenograficheskiy otchet o soveshchanii po sotsialno-ekonomichesko-mu razvitiyu Dalnego Vostoka i sotrudnichestvu so stranami Aziatsko--Tikhookeanskogo regiona’, pp. 2, 10; www.kremlin.ru/transcripts/8234.Theagendawasonly signed inApril 2011; ‘Svostochnostyudonaoborot’,Kommersant,29November2011.

2 ‘TikhookeanskayastrategiyaRossii’,8July2010,p.1;http://russkiymir2.ru/export/sites/default/russkiymir/ru/events/adver-tisement/docs/Nikonov_080710.pdf

3 Forexample,thistermwasusedbyVyacheslavNikonovduringthe‘roundtable’ entitled ‘Russia’s Foreign Policy in the Pacific Region’ held by thePIR-Centre on 6 December 2010, Index Bezopasnosti No. 2 (2011); http://www.pircenter.org/en/articles/102-russias-foreign-policy-in-the-pacific-region.SeealsothereportfromtheRussianInternationalAffairsCouncil‘Aziatsko-TikhookeanskiyeOrientiryRossiiposlesammitaATESvoVladi-vostoke’,2013,pp.5,7;http://russiancouncil.ru/inner/?id_4=1523#top,andViktorKuvaldin,‘Razvorotnavostok’,Izvestia,29March2011.

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EuropeanandthePacificvectorsinitsforeignpolicy4.”Ina2013report assessing the results of this policy turn, theRussian In-ternationalAffairsCouncilconcludedthat“neverbeforehastheRussianFederationdedicatedsomuchattentiontoitsFarEasternregionsandtoissuesofco-operationwithAsia-Pacificcountries5.”

TheideaofintensifyingrelationswiththeEastisnotacompletenovelty in Russian foreign policy rhetoric. In the late 1990s, itwasforcefullyputforwardandpromotedbyYevgenyPrimakov,thethenministerofforeignaffairs.Inimplementingtheideaheinitiatedregularmeetingsoftheso-called‘Moscow-Delhi-Beijingtriangle’.The ‘ConceptfortheforeignpolicyoftheRussianFed-eration’signedbyVladimirPutininJune2000attheonsetofhisfirstpresidencyalsospokeaboutthenecessityofpayinggreaterattention to the Asian vector in Russia’s foreign policy, linkingthiswith the need to ensure economic development inRussia’sFarEast.ItalsoincludedaproposaltoraisethelevelofeconomicrelationswithChinauptotheexisting(implicitly‘high’)levelofpoliticalpartnershipwiththiscountry6.Inautumn2000,Putinhimselfwrotethat“thetimehascometomove,togetherwiththestatesfromtheAsia-Pacificregion,fromwordstoaction,andtoenhance(narashchivat)economic,politicalandotherbonds”7.

In practice, Putin has paid the greatest attention to China andcontinuedtheconsistentdevelopmentofrelationswithBeijinginmanyfieldswhichhadbeeninitiatedbyBorisYeltsin.Atthesametime,Moscowretainedthecloseandfriendlydiplomaticrelationsaswellasmilitary-technicalco-operationwithDelhiwhichithad

4 VladimirOrlov,thepresidentofPIR-Centre,‘Russia’sForeignPolicyinthePacificRegion’, Index Bezopasnosti No.2 (2011),p.90.

5 ‘Aziatsko-TikhookeanskiyeOrientiryRossiiposlesammitaATESvoVladi-vostoke’,p.7.

6 Accordingtothisconcept,Russiawoulddevelop‘friendlyrelations’inAsia,“aboveallwithChinaandIndia”,Nezavisimaya Gazeta,11July2000.

7 ‘Rossiya:Novyievostochnyieperspektivy’,Nezavisimaya Gazeta,14Novem-ber2000.

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inherited from Soviet times. In contrast, relations with Japan,which–givenitssecurityalliancewiththeUnitedStates–wasviewedinMoscowasanintegralpartoftheWest,remainedcool.Any fundamental improvement inrelationswasblockedby theunresolveddisputeovertheKurilIslands.(Theseislandswereoc-cupiedby theSovietUnionduringWorldWar II, and Japanhasbeendemandingthattheislandsbereturnedtoiteversince.)

The intensification of Russian discourse concerning policy to-wardstheAsia-Pacificregionseensince2010hasbeenaccompa-niedbyamajorevolutionintheRussianelite’sperceptionofthebalanceofpowersintheinternationalarena.Thekeystimulusforthisevolutionwasprovidedbytheeconomiccrisisof2008–2009,andmorepreciselybytheconclusionstheRussianpoliticalelitedrewfromit.Theysawthecrisisasamanifestationoffundamen-talchangesintheglobaleconomy,theessenceofwhichistheap-proachingdeclineoftheglobaldominationoftheWest.Accordingtothisinterpretation,EastAsiaisgraduallybecomingthecentreof theglobaleconomyby increasing its share in industrialpro-duction,tradeandfinancialassets,attheexpenseoftheWest.Asone reportpreparedbyprominentRussian expertsput it, “TheAsia-Pacificregionisincreasinglybecomingtheengineofglobalcivilisation,takingovertherolewhichEuropehasbeenplayingoverthelastfivecenturies.”8

In the opinion of the Russian political elite, the economic riseof theAsia-Pacific regionwill gradually be converted byAsianpowers,especiallybyChina,intogreaterpoliticalinfluenceandmilitarypower.Asaresult,withinadecade,ChinamaybecomesufficientlystrongtoassumeapositionasAmerica’sgeopoliticalrivalonequalterms9.ForMoscow,theUS-Chinarivalry,whichis

8 ‘TikhookeanskayastrategiyaRossii’,8July2010,p.1.9 The authors of the collective report developed under the auspices of the

RussianInternationalAffairsCouncil(whichatpresentistheleadingsemi-official Russian think-tank specialising in international relations)write:“ItisalmostuniversallyrecognisedthattheAsia-Pacificregionisbecoming

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todaystillrestrictedtotheAsia-Pacificregionbutwillsoonreachaglobalscale,hasalreadybecomethemain‘axis’determiningthenatureofinternationalrelations.

ItiscommonlybelievedinRussiathattheriseofthenewAsianpowersisinevitablyleadingtofundamentalchangesintheglobalbalanceofpowers.TheRussianpolitical establishmentbelievesthattheinternationalsystemiscurrentlyinatransitionalphasebetweenthepost-ColdWarorderbasedonUS(andmorebroadly,Western)hegemony,andapolycentricorder(theterm‘multi-polarorder’isfrequentlyusedinRussianexpertandofficialdiscourse,despitethelogicalabsurdityofthisphrase:therecanonlybetwopoles),basedonarelativebalancebetweenseveralgreatpowers,moreor lessequalasregardsstatusandstrength,eachwithitsown zone of influence, and each interactingwith the others aspartofa‘concertofpowers’.Moscowhasemphasisedforseveralyearsnowthatthiskindoforderprovidesnotonlyforaplural-ismofpolitical andeconomicdecision-makingcentres,butalsoforapluralismofvaluesystems(civilisations).

Some Russian experts view East Asia as an attractive politicalmodel,providinganalternativetothatoftheWest.AsVyacheslavNikonov10,aleadingRussianexpertininternationalaffairs,hassaid,Asia today is“themost importantglobal testinggroundof

themainplatformforglobalinternationalrelationsinthe21stcentury.Theglobalorderanditsmostimportantcomponent,thelinksbetweenthekeypowers,willbedefinedby thesituation in theAsia-Pacificregion,whichischangingprimarilyundertheinfluenceoftherelationshipbetweenthepresentgloballeader,theUnitedStates,andtheemergingglobalpower,thePeople’sRepublicofChina.”‘RossiyskiySovetpoMezhdunarodnymDelam,Interesy Rossii v Aziatsko-TikhookeanskomRegione: Bezopasnost’ i Raz-vitiye’,2012,p.18;a“sharpeningofChinese-UScontradictionsoverabroadspectrum of issues” was also mentioned in another report from RSMD,‘Aziatsko-TikhookeanskiyeOrientiryRossiiposlesammitaATESvoVladi-vostoke’,2013,p.13.

10 Nikonov is currentlyamemberof the lowerhouseof theRussianparlia-ment,andthedirector(nominatedbythePresident)ofthestate-controlledRusskiy MirFoundation.

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amodelforpoliticalmodernisation,whichdoesnotinvolveWest-ernisationbutrepresentsauniquepathofdevelopmentbasedonthesynthesisofdemocraticformsofgovernmentandlocalpoliti-calculture.”11ItissymptomaticofthemoodprevailinginMoscowthatthe‘Asianmodel’ispresentlyalsoappealingtosuchmoder-ateWesternisersasSergeyKaraganov,whoregardRussiaasanintegral part of European civilisation.A report he edited char-acterisesthe“Asianpathofdevelopment”as“anexampleofthemostsuccessfulstrategyforimprovingcompetitivenessinglobaleconomy”andemphasisesthe“objectiveadvantagesoftheAsianstategovernancemodel and socio-economicdevelopment.”ThispositivepictureofAsianmodelsisjuxtaposedinthereportwithassertions about a crisis of “traditionalWestern economic andpolitical institutions”andtheincongruityoftheexistingmodelof“developeddemocracy”,whichisincapableofcopingwiththehighlycompetitivenatureofthecontemporaryinternationalen-vironment12.

AdistinctivefeatureofRussianforeignpolicyisitsextremefocusonrelationswithgreatpowers;thisisaconsequenceofthinkingin terms ofRealpolitik,which is characteristic of the post-Sovi-etpoliticalelite.For this reason, thisanalysisofRussianpolicyconcentrates onMoscow’s relationswith its three largest East-ernpartners,China,IndiaandJapan.ThiswillallowustodrawanumberofconclusionsregardingthenatureandtheresultsofRussia’sEasternpolicyasawhole.

11 VyacheslavNikonov,‘Russia’sForeignPolicyinthePacificRegion’,Index Be-zopasnostiNo.2(97)(2011),p.90.

12 SergeyKaraganov,OlegBarabanov,TimofeyBordachev,K Velikomu Okeanu, ili novaya globalizatsiya Rossii,Moscow,July2012,pp.12and16.

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ii. thE policy of EngagEmEnt – thE russian rEaction to thE risE of china’s powEr

Over thepast fewyears, relationsbetweenMoscowandBeijinghaveacquiredaspecial,privilegednature.TheRussianpresidenthasbeenmeetingwithChineseleadersmorefrequentlythanwithleadersofanyothercountry(withtheexceptionofCIScountries)as frequentlyashedoeswith leadersof thePeople’sRepublicofChina. In2013, theChineseandRussian leadersmetonfiveoc-casions,as theywill in201413.Thenetworkofcontactsbetweenhigh-rankingofficialsandpoliticiansfromthesetwocountriesissimilarlydense.Overthirtymeetingsatthelevelsofprimemin-isters,ministers,parliamentaryspeakersandseniormilitaryof-ficialswereheldin201314.Since2003,thearmedforcesofthetwocountrieshaveheldjointexercisesalmostannually(theseexer-ciseshavebeeneitherbilateraloraspartoftheShanghaiCo-op-erationOrganisation)15.Theseevercloserdiplomaticandmilitarycontactshavebeenaccompaniedbytheintensificationofeconom-icrelations.Symptomatically,since2010ChinahasbeenRussia’slargesttradepartner,outpacingGermany.

TheKremlinclearlyviewsitsrelationswithBeijingasincompa-rablymoresignificantthancontactswithanyotherAsianpart-ner.MoscowisincreasinglyinstrumentalisingitsrelationswiththeotherAsiancountriesinordertoenhanceitspositionindeal-ingwithBeijing.OnecouldevenriskthethesisthatrelationswithChinaaregraduallybecomingthemainpivotinRussianforeignpolicyingeneral.

13 An interviewwith the ambassador of the Russian Federation to Beijing,AndreyDenisov;http://www.rg.ru/2014/03/31/obmen.html

14 CalculatedonthebasisofdatacompiledbyYuBininComparative Connec-tions. A Triannual E-Journal on East Asia Bilateral Relations,vol.15,no.1,pp.146–147;vol.15,no.2,pp.142–144,vol.15,no.3,pp.133-135.

15 Theexerciseswerenotheldin2006,2008and2011;howevertheywereheldtwicein2009,2012and2013.FordetailsseeYuBin,‘SummerHeatandSino--Russian Strategizing’ in: Comparative Connections. A Triannual E-Journal onEast Asia Bilateral Relations,volume15,no.2,p.141.

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RussianelitesareimpressedbytherapidgrowthofChina’seco-nomic, political andmilitary power seen over the past decade.Theyarealsoawareofthereversalinthepowerratiobetweenthetwocountries.Bearingthis inmind,theKremlinhasapparent-lycometotheconclusionthatavoidingopenconfrontationwithChinashouldbeanabsoluteimperativeinRussianpolicy.Forthisreason,itformulatedanofficialsloganthatthepolicyofpartner-shipandbuildingcloserbondswithChinahas“noalternative.”Moscow officially stresses that presently its bilateral relationswithBeijingareexemplary,anddenies that increasingChinesepowercouldposeanydirectthreattoRussia.VladimirPutinhasonseveraloccasionsemphasisedinpublicthatgrowingChinesepowerdoesnotconstitutea threat toRussia. InNovember2011,while answering a question concerning the Chinese threat, heexplainedthatalthoughthenaturalresourcesinSiberiaandtheFarEastcouldbeveryattractive,the“mainstruggleisforgloballeadership,andwedonot intendtogointodisputeswithChinaover this.Chinahasothercompetitors in thisarea.So let themcontendwithone another.”16 In otherwords,hewas suggestingthatChinadidnotposeathreattoRussiabecauseitwasengagedinrivalrywiththeUnitedStates.Putinreiteratedthisdiagnosisafewmonthslater,arguingthat“China’sbehaviourontheglobalarenahasgivennocausetospeakaboutitsaspirationstodomi-nance”andaddedthatthegrowingChineseeconomydidnotposea threat,but insteadcreated theopportunity “tofill ourecono-my’ssailswiththeChinesewind.”17BeforetheShanghaisummitinMay2014,theRussianpresidentdescribedrelationswithChi-naas“exemplaryco-operationwhichshouldserveasamodeltogreatglobalpowers.”18

16 AninterviewfortheRussianmedia,17November2011;http://archive.pre-mier.gov.ru/events/pressconferences/16755/

17 ‘Rossiyaimenyayushchiysiamir’,Moskovskie Novosti,27February2012.18 AninterviewfortheChinesemedia,19May2014;http://news.kremlin.ru/

transcripts/21031.

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ExpertsclosetotheKremlinbackthethesisthatChinaposesnodirectthreattoRussia.VyacheslavNikonovevenclaimsthat“di-rectdiktatanddominancearenotpartoftheChinesetradition.”19Similarly, inareportpreparedfortheValdaiClub,thegroupofauthors ledbySergeyKaraganovmaintainthatChinawillposenomilitary,politicalordemographicthreattoRussiaintheshortormediumterm20.

WhiledownplayingorevennegatingtheexistenceofthethreatsposedbyChina,theRussianleadersseemtobeapplyingastrat-egytowardsBeijingbasedonthreeelements:

(1) developing economic co-operation with China, especially intheenergysector;

(2) searching for a diversification of economic andpolitical tieswith China by developing contacts with other Asian countries(India,Japan,VietnamandSouthKorea);

(3)ostentatiouslydistancingitselffromWashington’sattemptsorintentionstoconductapolicyofsoft,letalonehard(military)con-tainmentwithregardtoBeijing,whileatthesametimepromot-ingaregionalsecurityconceptwhichboilsdowntoremovingtheUSmilitarypresencefromtheregion.

Ithasbecomealmostaritualfortheleadersofthetwocountriesto emphasise that economic co-operation is the foundation ofRussian-Chineserelations.Asmentionedalready,ChinahasbeenRussia’slargesttradepartnersince2010.Bilateraltradehasbeengrowing rapidly over the past few years (43% in 2010, 42.7% in2011,11.2%in2012and1.7%in2013)toreachavolumeofUS$88.8

19 ‘TikhookeanskayastrategiyaRossii’,8July2010,p.6.20 SergeyKaraganov(ed.),K Velikomu okeanu–2, ili rossiyskiy ryvok k Azii,Mos-

cow,February2014,p.25.

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billionin201321.However,thesetraderelationsareasymmetricalinawaywhichisunfavourabletoRussia.China’sshareinRussiantradeis10.5%,whileRussia’sshareinChina’stradeonlyslightlyexceeds2%.Atthesametime,despiteRussia’sfrequentlyreiter-ateddeclarations,Russiahasbeenunabletochangethestructureof bilateral trade where it predominantly supplies oil and gas(in2012,theyaccountedfor70%ofthevalueofRussianexports,whilemachinesandequipmentonly0.7%)22,andimportsindus-trialgoods,including,increasingly,machinesandequipment.

Energyco-operationhasbeyondanydoubtbecomethestrategiccoreofRussian-Chineseeconomicrelations.Themostimportantelementofthisco-operationisthelong-termcontractssignedbyRussia’s state-controlled company Rosneft, which envisage oilsupplieswithprepayments(seeTable1).

Table 1.Rosneft’scontractsforsupplyingoiltoChina

Year Partner timeframeoilquantity(millionsoftonnes)

estimatedcontractvalue(US$billions)

prepaymentvalue

(US$billions)

2009 CNPC 2011-2030 180 65 15

2013 CNPC 2013-2038 360 270 60

2013* SINOPEC 2013-2023 100 85 20

*Aframeworkagreement

As regards the gas sector, in contrast, larger-scale Chinese--Russian co-operation had until recently remained at the plan-ning level. Russia would sporadically export relatively small

21 http://en.ria.ru/business/20130110/178687770/China-Russia_Trade_Up_11_to_88_Bln_in.html;10January2013.

22 YevgenyNovozhilov,Vneshniaya torgovla Rossii i Kitaya: polgoda i tri kvartala,17October2013.

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amounts of liquefiednatural gas toChinaunder spot contracts(e.g.around500millionm3in2012).Thelong-term,30-yearcon-tractsignedbyGazpromandCNPCon21May2014inShanghai,whichprovides for supplyofup to38bcmofnaturalgasannu-allyfromtheKovyktaandChayandagasfieldsinEasternSiberia,markedarealbreakthrough.Thecontract’stotalvaluestandsatUS$400billion,andenvisagesa total supplyof 1032bcmofgas.Deliveriesareplannedtostartin2018,buteachofthepartieshasthe right topostpone the start ofdeliveriesby twoyears23.ThecontractprovidesfortheoptionofprepaymentatUS$25billion24.Onedaybefore this contract,Russia’sNovatek signeda 20-yearcontracttosupply3milliontonnesofliquefiednaturalgas(start-ingin2017).ItisworthnotingthattheChinesepartner,ChinaDe-velopmentBankCorporation,isexpectedtoplaythemainroleinfinancingtheproject,andisreadytoinvestUS$20billion25.InhisaddressattheSaintPetersburgInternationalEconomicForumon23May2014,PresidentPutinsuggestedthatChinahadagreedtostarttalksonthepossibilityofsupplyingRussiangasfromWest-ernSiberianfields“viathewesternroute”)26.

ThefactthatGazpromandCNPCfinallystruckthedealaftertenyearsofnegotiations,whichwerestillongoing thenightbeforethedateof itssigning,wasundoubtedlyduetopolitical factors,namely Russia’s ongoing conflict with the West over Ukraine,and especially the associatedWestern sanctions and the threatthat theycouldbeextendedfurther,aswellas the intensifying

23 http://www.vedomosti.ru/companies/news/26938871/kontrakt24 http://www.vedomosti.ru/companies/news/26876561/gazprom-i-kitaj-

predvaritelno-soglasovali-avans-na-25-mlrd25 www.vedomosti.ru/newsline/news/26697541/novatek-dogovorilsya-s-cn-

pc-o-postavkah-3-mln-t-szhizhennogo;www.vedomosti.ru/newsline/news/26837031/yamal-spg-mozhet-poluchit-do-20-mlrd-ot-kitaya. It isworthaddingthatCNPCholdsa20%stakeintheYamal-LNGproject.

26 http://news.kremlin.ru/transcripts/21078. Lack of confirmation from theChinesesidesuggeststhatthisstatementwasaimedatputtingpressureonEuropeanbuyersofRussiangas,andtheprojectitselfremainsattheplan-ningstage.

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discussionontheneedforEuropeanUnionmemberstatestore-duceimportsofRussianoilandgas.Giventhissituation,Russiawantedespecially strongly todemonstrate its capabilitiesofdi-versifyinggasexports.Furthermore,thesigningofthecontractwasmeanttosendapoliticalsignaltotheWest,provingthattheWesternrhetoricof‘isolating’Russiawasunrealistic.

OnecouldputforwardthethesisthatRussiaisgraduallybuildingupanenergyalliancewithChina.Thisalliancewillbebasedonlong-termcontractsforsuppliesoflargequantitiesofoilandgas,whichwill bepartlyprepaidbyChina.Russia also seems tobeinterestedinhavingtheChineseprovideinvestmentsforthede-velopmentofRussianoilandgasfieldsasanintegralpartofsuchanalliance27.Traditionally,thisalliancewillalsoincludeRussia’sparticipationinconstructingnuclearpowerplantsinChina28.

TheeconomicdealsstruckduringRussianPrimeMinisterDmit-ryMedvedev’smostrecentvisittoChinainautumn2013suggestthatChinaandRussiaaretryingtograduallyshifttoamodelofeconomicco-operationinwhichChinesecompanieswouldinvestin projects located in the Russian Federation29. The recent an-nouncementbythechairmanoftheChinaChamberofCommerceforImportandExportofMachineryandElectronicProductsthat

27 AsapartofthecontractwithNovatekforLNGsupplies,China’sstate-con-trolledcompanyCNPCboughta20%stakeintheYamalSPGproject,whichis planned to provide the natural gas to be supplied under the contract;Rosneft reached an agreement with CNPC in autumn 2013 under whichajointventurewasestablishedtooperatetheoilandgasfieldsintheSred-nebotuobinskoyeprojectinEasternSiberia.Rosneftwouldown51%oftheshares,andCNPC49%.

28 An intergovernmental agreement on the construction of two nuclear re-actors(worthUS$1.8billion)fortheTianwannuclearpowerplantbuiltbyRussia in 1997–2007 was signed in December 2012; http://en.ria.ru/busi-ness/20100209/157817046.html

29 ThefirmMetallyVostochnoySibirisignedanagreementwithChina’sNFContheconstructionandjointoperation(on50:50basis)oftheOzernoyerareearthmetalsmineandprocessingplantinBuryatia;inturnVneshekonom-banksignedthreeloanagreementswiththestate-controlledChinaDevel-opmentBankworthUS$1.9billionintotal.

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ChinawouldliketoincreaseitsinvestmentsinRussiatoalevelofUS$12billionby2020(thepresentlevelofChinesedirectinvest-mentsisUS$3.5billion)indicatesthatChinaisreadytointensifyitsinvestmentinvolvementinRussia30.

The development of co-operation in the energy sector and thespectaculargrowthinbilateraltradevolumeshavetosomeextentovershadowedRussian-Chinesemilitary-technicalco-operation,whichusedtoformthemostimportantcomponentofmutualeco-nomicrelationsinthe1990s.Still,Chinacontinuestobethethirdlargest client of theRussian arms industry. It canbe estimatedonthebasisofavailabledata that thevalueofRussianmilitaryexports toChina in 2008–2011 stoodonaverage atUS$800–900millionannually(thisaccountedforaround10%oftotalRussianarmsexportswithinthistimeframe),androsetoUS$1–1.5billionannuallyin2012–2013.Negotiationsontwomultibillioncontractsforcombataircraftandsubmarinesareunderway31.

The scope ofmilitary-technical co-operationbetweenMoscowandBeijinghasbeenquitenarrowoverthepastfewyears.Rus-sia exports mainly aircraft engines and helicopters. Further-more, a programme envisaging the production in China onRussian licenceof theTigr armouredvehicle isnowbeing im-plemented32.However,twohigh-valuecontractsarebeingnego-tiatedatpresent:oneonthesaleof24Su-35fourth-generationcombataircraft;andanothertosupplytwosubmarines,aswell

30 http://itar-tass.com/ekonomika/69557531 Tsentr Analiza Mirovoy Torgovli Oruzhiyem, Kitay v strukture mirovogo

importa vooruzheniy, 2012, table 7, p. 5; http://www.armstrade.org/files/analytics/304.pdf;http://www.armstrade.org/includes/periodics/main-news/2012/1120/103015758/detail.shtml,20November2012;VassilyKashinfromtheCentreforAnalysisofStrategiesandTechnologies,quotedbyIn-terfax-AVN,13 January2013;DavidLague, ‘Chinaeyes$3.5billionRussianarmsdealdespiteireoverSukhoicopy’,27March2013;http://www.reuters.com/article/2013/03/27/us-china-russia-arms-idUSBRE92Q0PE20130327

32 http://www.armstrade.org/includes/periodics/mainnews/2012/1120/103015758/detail.shtml,20November2012.

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asthelicencetobuildmoreinChina.IthadbeenannouncedthattheSu-35contract,wortharoundUS$2billion,wouldbesignedinNovember2013,butRussian sources reported inSeptember2013 that thiswould not happen before 2014. The contract forsubmarine construction is expected to befinalised in 2015; itsestimatedvalueisUS$1.5billion33.

However, Chinese-Russian military co-operation extends farbeyond the export ofRussian equipment and technologies. It isworth noting the frequency and the scale of Russian-ChinesemilitaryexercisesconductedeitherundertheaegisoftheShang-haiCo-operationOrganisationoronabilateralbasis.Withregardtonootherstate(outsidetheCIS)doesRussiademonstratesuchadegreeofopennesstomilitaryco-operation.Between2003and2013,RussiaandChinahaveheldtogethertenmilitaryexercisesinwhichbetween1300and10,000militarypersonnelparticipatedeachtime.Twolargetrainingeventswereheldin2013:maritimeexercises(inthePacificOcean)withtheparticipationofnineteenships; and land exercises at the Chebarkul training ground inRussia.TheChinesePresidentXi Jinping’stourofthecommandcentreoftheRussianarmedforces,unprecedentedforaforeignleader, duringhisvisit toMoscowinMarch2013wasmeant todemonstrateRussia’sopennessandthespecialnatureofmilitarycooperationbetweenthetwocountries.Althoughbothsideshaveemphasisedtheyhavenointentionofenteringamilitaryalliance,onemaycomeacrosstheopinionthat“basicconditionsarebeingcreatedforsuchanallianceinthemilitaryandtechnicalspheresthroughholdingmoreandmorecomplexandextensivejointmili-taryexercisesandthroughenhancementofcontactsbetweenthemilitarypersonnelofthetwocountries.”34

33 Interfax-AVN,6March2013;http://ria.ru/defense_safety/20130907/961478852.html,7September2013.

34 VassilyKashin, ‘Summavsekhstrakhov.Faktorkitayskoyugrozyvrossi-yskoypolitike’,Mirovoy Poryadok,March-April2013,p.78.

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Itisworthnotingthatforthesakeofmaintaininggoodrelationswith China, the Russian political establishment is ready to ac-ceptakindofcondominiuminCentralAsia35.AlthoughMoscowisawareofChina’sincreasingeconomicpresenceintheregion36andisconcernedthatthiscouldleadtoanunderminingofRus-sia’spoliticalinfluencetheretoChina’sbenefit,ithasstrenuouslyavoidedvoicingitsconcernsinpublic.TheKremlinseemstoas-sumethatbothRussia itselfandChinaaresufficiently interest-edinmaintaininggoodmutualrelationstolimittheirrivalryinthisregionandtofindamutualaccommodationoftheirintereststhere37. Although the Kremlin has not given up its attempts tocounteracttheChineseeconomicpenetrationofCentralAsia,andhasbeenmakingeffortstoincludeKyrgyzstanandTajikistanintheEurasianUnion,atthesametimeitappearstohaveacceptedtheneed to tolerate it. It seemsdetermined tofindamodus viv-endiwithChinainthisregion,basedonadivisionofresponsibili-tiesandoffieldsofactivity:Russiawouldmaintainitsprevalentpolitical influenceanditspredominanceintheareaofsecurity,whileChinawouldpredominateintheeconomicarea,eveniftheregionremainsinstitutionallyboundtotheRussianeconomybymembershipoftheEurasianUnion.DuringVladimirPutin’smostrecentvisittoBeijing,RussiaandChinasignalledtheirreadinesstoaccommodatemutualinterestsinCentralAsia,byincludingina joint declaration a positive evaluation of each other’s flagshipeconomicintegrationprojectsintheregion,i.e.Russia’sEurasian

35 SeeforexamplethereflectionsinthememorandumK Velikomu Okeanu, ili novaya globalizatsiya Rossii, pp. 57–58 and60–61,writtenbypolitical ana-lystscloselylinkedtotheRussianestablishmentandpublishedundertheauspicesoftheValdaiClub.

36 SeeAleksandra Jarosiewicz,KrzysztofStrachota, ‘Chinavs.CentralAsia.Theachievementsofthepasttwodecades’,OSW Studies,4November2013.

37 Theauthorhasbeenledtobelieve,onthebasisofconversationsheldinBei-jing(9–10June2014)withChineseexpertsfromtheChinaInstitutesofCon-temporary International Relations and the Eurasian Social DevelopmentResearchInstitute,thattheKremlin’sopinionthatChinaisreadyforamu-tualaccommodationofinterestsinCentralAsiaand,likeRussia,doesnotwantaconflictofinterestsintheregiontounderminethe‘strategicpart-nership’ofMoscowandBeijing,isaccurate.

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UnionandChina’s ‘SilkRoadEconomicBelt.’38Furthermore,theChinesesidemanifesteditsreadinesstosootheRussianconcernsbypromisingtotakeRussianinterestsintoconsiderationduringthepreparationandimplementationofitsproject.

38 Sections20and21ofthe‘Jointdeclaration’signedon20May2014,http://news.kremlin.ru/ref_notes/1642

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iii. moscow–dElhi: a gEopolitical consEnsus

Russia’s relations with India draw upon the strategic alliancewhichexistedduringtheColdWarbetweenIndiaandtheSovietUnion.Thesecanbesummedupasextremelycomfortable–withnoothercountrydoesRussiaenjoysuchunproblematicpoliticalrelations. To emphasise this state of affairs, Russian diplomacyreferstothemasa“speciallyprivilegedstrategicpartnership”39.Russia and India have no conflicting interests in internationalpolitics, while having converging regional interests. The twocountriesareinterestedinthestabilisationofCentralAsia,andespeciallyofAfghanistan;andtheybothviewtheintensificationofIslamicradicalismintheregionasaseriousthreat.Theyalsoboth perceive China’s growing power as a problem in the longterm.RussiaformallysupportsIndia’saspirationstoapermanentmembershipontheUNSecurityCouncil.VyacheslavTrubnikov,aformerambassadoroftheRussianFederationtoIndiaandcur-rentlyakeyfigureontheRussianInternationalAffairsCouncil,which is closely linked to theRussianestablishment, intimatedpubliclyduring thevisitby the IndianprimeministerManmo-hanSinghtoMoscowinautumn2013thatIndiashouldbegrantednotonlyapermanentmembershipintheUNSecurityCouncilbutalsotherightofveto40.ThismightportendarevisionoftheofficialstanceofRussiandiplomacy,whichhassofaropposedthevestingofpossiblenewpermanentmembersoftheSecurityCouncilwiththe power of veto, as increasing the number of such countrieswouldmeanarelativeweakeningofRussia’sownposition.

Russia’seconomicrelationswithIndia,whencomparedwithRus-sia’s relations with China, display both similarities and differ-ences.Whatissimilaristhatinbothcasesitistheenergysectorandmilitary-technicalcooperationthatplaythecentralrole.The

39 Seeforexample:Osnovnyie vneshnepoliticheskiye sobytiya 2013 goda,section13,www.mid.ru.

40 Krasnaya Zvezda,29.10.2013.

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differencesincludethescaleoftrade,whichinthecaseofIndiaismuchsmaller:in2012,Russian-IndiantradevolumereachedonlyUS$11billion.Thetradestructureisalsodifferentand(fromRus-sia’spointofview)healthier.ThetradebalanceispositiveforRus-sia,andRussianexportsconsistpredominantlyofproductsofthemachine-buildingindustry(almost49%in2012)41.TheexportofweaponsandmilitarytechnologiesplaysamuchmoreimportantroleineconomicrelationswithIndiathaninRussian-Chinesere-lations.IndiahasbeentheRussianarmsindustry’sbiggestclientforyears:thevalueofcontractsimplementedin2008-2011stoodatUS$7.2billion,andin2012aloneitreachedUS$7.3billion42.ThissumnearlyequalledthevalueofcivilianRussianexports(US$8billion).TheportfolioofordersforMarch2013wasworthUS$10.3billion43.Accordingtosomeestimates,Indiaaccountsforaround30%oftotalRussianarmsexports.Theestimatedannualvalueofsupplies is aroundUS$3billion.The contractswhichhavebeensigned and are currently being implemented areworth aroundUS$20billion44.

To no other country, except for India, does Russia sell equallyadvanced military technologies and an equally broad range ofweapons,fromsmallarmstowarships.InNovember2013,theIn-dianflagwashoistedonanaircraftcarrierboughtfromRussia,after it had been thoroughlymodernised and re-fitted. In 2012,India leased aRussiannuclear-powered submarine.Russia alsosupplies India with shipborne fighter jets (MiG-29K/KUB) andMi-17B-5transporthelicopters.

Furthermore,co-productionbasedonhightechnologiesoccupiesa significant niche in the areas of both military-technical and

41 Torgovo-ekonomicheskoye sotrudnichestvo mezhdu Rossiyskoi Federatsiyei i Indiyei za 2012 g.,http://www.ved.gov.ru/files/images/kai/TES_Rus_Ind_2012.pdf

42 Tsentr AnalizaMirovoy Torgovli Oruzhiyem, Osnovnyie programmy mod-ernizatsii VS Indii v 2011-2012 gg.,2012,pp.3-4.

43 RSMD,Tezisy o rossiysko-indiyskikh otnosheniyakh,p.18.44 Interfax-AVN,15November2013.

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‘civilian’ co-operation.Currently,anumberof jointprojectsarebeing implemented, involving jointdesignand futuremanufac-tureofcombataircraftandguidedmissiles.Indiaalreadymanu-facturesSu-30MKIfighterjetsandtanksonRussianlicence.

Co-operationintheenergysectorinRussia’srelationswithIndiaplaysa significantly smaller role compared to its relationswithBeijing.Thenatureofthisco-operationisalsodifferent.Indiaim-portsonlysmallamountsofRussianoil,but itsstate-controlledcorporationONGCVideshLtd.hasinvestedaroundUS$4.3billioninoilextractioninRussia.Videshhasacquireda20%stakeintheSakhalin-1 project, and has bought Imperial Energy, a firm en-gagedinoilproductioninWesternSiberia.Gazpromisplanningtostartexporting liquefiednaturalgasunderacontract signedwithIndianfirmsenvisagingannualsuppliesofbetween7.5and10bcm45.

During the most recent visit by then-PMManmohan Singh toMoscow in autumn 2013, Russia suggested building a gas pipe-linethatwouldrunfromWesternSiberiatoIndiaviatheChineseprovinceofXinjiang.TheestimatedvalueofthisprojectisUS$30billion;aRussian-Indiangrouphasbeenestablishedtostudythisproposal,andIndia’slargestoilandgascompany,ONGC,hasex-pressedinterestintheproject46.

45 This informationcanbe foundonthewebsiteof India’sembassy inMoscow;http://www.indianembassy.ru/index.php/en/economic-cooperation/overview

46 JohnDalym, ‘Russia,IndiaPlanning$30BillionOilPipelineThroughXin-jiang’; http://oilprice.com/Energy-General/Russia-India-Planning-30-Bil-lion-Oil-Pipeline-Through-Xinjiang.html

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iv. russian-JapanEsE rElations: a fruitful ‘stratEgic patiEncE’

Unlike the warm and close political contacts with Beijing andDelhi,Moscow’s relationswith the third regionalAsianpower,Japan,have longbeen overshadowedby theunresolved territo-rial dispute over the Kuril Islands. Russian-Japanese relations,albeit correct, have remained cold. The Russian side, followingPresidentPutin’sunsuccessfulattemptin2001toresolvethedis-putethroughacompromisebasedonthejointdeclarationsignedin 1956 and envisaging the division of the disputed archipelagobetweenRussiaandJapan47,hasevidentlyadoptedthemethodof‘strategicpatience’,hopingthatTokyowillsoonerorlaterbecomereadytoacceptthecompromise.Moscowhasnotseemedparticu-larlyconcernedthattheunresolvedconflicthashamperedthede-velopmentofeconomicco-operation,andinparticularrestrictedtheopportunitiestouseJapanesecapitaltoimprovetheeconomicsituationinRussia’sFarEast.Instead,ithasconsistentlysuggest-ed to Japanthateconomicco-operation issuesshouldbeviewedseparatelyfromtheterritorialdispute.

TheKremlinappearedtohopethat,asChina’spowergrewandtheJapanese-Chineseterritorialdisputebecamemoreserious,TokyowouldbecomesufficientlyinterestedinimprovingrelationswithMoscowthatitwouldbereadytoaccepttheRussianterms.

The Russian strategy has turned out to be successful. A ‘smallbreakthrough’ regarding the disputed islands was seen dur-ing the visit by Japan’s primeminister, ShinzoAbe, toMoscowinApril2013.GiventhegrowingChinesethreat, Japanacceptedthe Russian terms for resolving the dispute: the parties agreedto separate the issuesof economicco-operation from territorialproblems,toresumeformalconsultationsprecedingthesigning

47 Accordingtothisdeclaration,twoisletsinthedisputedarchipelago,Shiko-tanandHabomai,couldberelinquishedbytheSovietUnion.

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ofapeacetreaty,andtoraisethelevelofmutualrelations.Itwasalsoagreedthattheministersofdefenceandforeignaffairswouldmeetperiodicallytoholdconsultations(inthe2+2format)48.

The first consultations since 2006 concerning the peace treatywereheldinAugust2013,andthefirstministerialmeetinginthe2+2formatfollowedinNovember2013.

Inhiscommentonthismeeting,whichwasasignofasignificantimprovement of relations betweenMoscow and Tokyo, Russia’sforeign minister Sergey Lavrov characteristically denied out-right that a Russian-Japanese rapprochement could in anywaybedirectedagainstBeijing.However,heimpliedthatbybuildingconstructiverelationswithTokyo,MoscowishelpingJapantore-duce itsdependenceonWashington. Inotherwords,MoscowisstrengtheningitspositionwithregardtoBeijing,butatthesametimeitisalsoactinginitsowninterestbylooseningtheUS-Japa-nesealliance49.

Despitetheongoingterritorialdisputeandcoolpoliticalrelations,economic co-operation has been developing very dynamically.Mutualtradevolumeincreasedby59%in2010,by29%in2011,by5%in2012andby6.6%in2013,reachingUS$33.2billion.However,thetradestructureisextremelyunfavourableforRussia,atleastfromthepointofviewofMoscow’sdeclaredambitionstomakeitsexportsmore‘sophisticated’.Russianexportsconsistalmosten-tirely(98%)ofrawmaterials:crudeoil,naturalgas,coal,metals,woodandmaritimeproducts. Inturn,mostof its imports(85%)areproductsoftheautomotive,machine-buildingandelectronicindustries.

48 Dmitry Kosyrev,‘Yaponsko-rossiyskaya perezagruzka s perezapuskom’,Nezavisimaya Gazeta,29April2013.

49 ITAR-TASS,2November2013, ‘TokyoishchetkompromissMoskvoi’,Rossiys-kaya Gazeta, 27December2013;http://www.rg.ru/2013/12/27/peregovory.html

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Paradoxically,whilepoliticalrelationsbetweenMoscowandTo-kyohavebeenfarfromthelevelMoscowhasachievedinitsrela-tionswithBeijingandDelhi,JapanisthelargestAsianinvestorinRussia. In 2012, total Japanese investments reachedUS$10.7billion50.

Co-operationintheenergysectoristhecoreofRussian-Japaneserelations.ThemajorityofJapaneseinvestments(86.3%)aremadeinthissector51.Japan’slargestinvestmentshaveincludedpartici-pationinoilandgasproductionconsortiumsinSakhalin:Sakha-lin-1 (30%) andSakhalin-2 (22.5%).As a consequence, Japanhasbecome the main recipient (76%)52 of Russian liquefied naturalgasexportsandamajorimporterofRussiancrudeoil.Between2005and2010,RussianoilexportstoJapanincreasedbyoverfivetimes,reaching13.1milliontonnes(7%ofJapaneseoilimports)53.

Bothsideshaveshowninterest inenhancingtheirco-operationinthisarea.GazpromneftrevealedinJune2013thatJapan’sstate-controlled company JOGMEC had acquired a 49% stake in theChonskoyegasfieldsandwouldinvestUS$100millionintheop-erationofthesefields54.InMay2013,RosneftsignedanagreementwithJapan’sstate-ownedcompanyINPEXsettingupajointven-ture inchargeofoperatingoilfieldson theSeaofOkhotsk55. InJune2013,GazpromandtheJapanFarEasternGasCo.consortiumsignedamemorandumofco-operationtostartanLNGprojectinVladivostok.Thisplantwillproduce15milliontonnesofgasan-

50 ‘O rossiysko-yaponskikh ekonomicheskikh otnosheniyakh’, 7 November2013;http://www.russia-emb.jp/embassy/economic.html

51 According todata for2010;http://www.ved.gov.ru/exportcountries/jp/jp_ru_relations/jp_rus_projects/

52 http://www.eia.gov/countries/cab.cfm?fips=rs53 StanislavZhukov,‘Vostochnyazimutrossiyskoienergetiki’,17January2012;

http://www.ecpol.ru/2012-04-05-13-42-46/2012-04-05-13-43-05/144-vostoch-nyj-azimut-rossijskoj-energetiki.html

54 http://ru.reuters.com/article/businessNews/idRUMSE95602C2013060755 ITAR-TASS,29May2013.

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nually,beginningin2018,70%ofwhichwillbesoldtotheJapanesemarket56.Inturn,theCEOofRosneft,IgorSechin,declareddur-ingthefourthRussian-JapaneseinvestmentforuminApril2014thathis companywas ready toprovide Japanese investorswithaccesstoitsoilandgasfieldsaspartofanassetsswap57.

56 Céline Pajon, ‘Japan-Russia: Toward a Strategic Partnership?’,Russie.Nei. Visionsno.72;September2013,p.8.

57 RustemFalakhov,‘JaponiiKrymnepomekha’,19March2014,http://www.gazeta.ru/business/2014/03/19/5955961.shtml

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v. russia and thE multilatEral structurEs in thE rEgion

Moscow’s consistent efforts to join themultilateral regional or-ganisations, or establish a formal partnership with them (theAsia-PacificEconomicCo-operation (APEC) forum, theASEAN–ARFRegionalForum,theDefenceMinistersMeetingASEAN+8,theEastAsiaSummit(EAS),the‘Asia-Europe’Forum),havebeenanotherelementofRussia’sstrategyaimedatreinforcingitspo-sition in the Asia-Pacific region. Formally, Russia has achievedspectacularsuccessesinthisarea:in2011it(alongwiththeUnitedStates)wasgrantedmembershipintheEAS,thelastmultilateralorganisationitwasstillnotamemberof,andithostedtheannualAPECsummitinVladivostokin2012.

Regardlessoftheseformalsuccesses,andofRussia’sundoubtedlymoreactivepresence intheregionalstructures,onecouldhavetheimpressionthatRussiahasnoclearvisionofhowitcouldtakeadvantageof this engagement.Russiandiplomacyhasbeenun-abletogenerateanymajor initiativestomakeRussiatobeseenasa“modelcitizenof theregion” forothercountries,andasanintegralpartoftheAsia-Pacificregion58.

The onlymajorRussian initiativewas the 2010 proposal to im-prove regional security through developing framework proce-duresbytheregion’scountriesinthisfield.Howevertheserules,whicharebythewayverysimilartothoseputforwardbyRussiandiplomacyfortheEuro-Atlanticarea,seemabovealltobeaimedatweakeningUSmilitaryalliancesintheregion.Thisinitiativecannotbeappealingtomostcountries inthisregion,whichareconcernedaboutChina’sgrowingpower,includingmilitarypow-er,sinceitfailstoofferthemanysecurityguaranteesasopposedto those theyhavebeengivenby theUSA.For this reason, this

58 AnapttermandobservationbyBoboLo,‘Russia’sEasternDirection-Distin-guishingtheRealfromtheVirtual’,January2014,p.21.

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initiative–which(notcoincidentally)wasannouncedjointlywithBeijingandreiterated(alsowithBeijing)in2012attheEASsum-mitintheformofaproposaltostartmultilateraldialogueinor-dertocreatea‘securityarchitecture’intheregion59–hasputRus-siainthepositionofBeijing’sassistant,ratherthanthatofastatewhichcouldhelpresolvetheproblemscausedbythedisturbanceoftheregionalbalanceresultingfromChina’sgrowingpower.

59 Speechby theRussiandeputyminister of foreign affairs, IgorMorgulov,5 July2013;http://www.mid.ru/bdomp/brp_4.nsf/fa711a859c4b939643256999005bcbbc/9668ef80b55334ad44257b82003e03d0!OpenDocument; Speechby the Russian minister of foreign affairs, Sergey Lavrov, 20 November2012; http://www.mid.ru/bdomp/brp_4.nsf/997e7b027bbf661cc3256f6d00540731/5fcfa53c9c52b32244257abc003a55e6!OpenDocument

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vi. thE russian rEsponsE to thE asian challEngEs

RussiaseesthenewbalanceofforceswhichhasbeguntoemergeontheinternationalarenaasaconsequenceofthespectaculargrowthoftheAsiancountries’,andaboveallChina’s,economicpotential,aspresentingbothnewchallengesandnewopportunities.

OneofthechallengesistheincreasingcontrastbetweentheRus-sianFarEast,whichisstuckineconomicstagnation,andtherapid-lydevelopingcountriesinthisregion(withtheexceptionofNorthKorea),whichhascreatedtheriskofeconomicmarginalisationforRussia.TherapidgrowthofChina’spowerisseenasanotherchal-lenge. The deepening asymmetry – to Russia’s disadvantage – ofthetwocountries’potentialsgivesrisetotheriskthatinthelongrunRussiamightbecomeunilaterallydependentonChina,andasaconsequenceloseitspositionasanequalpartnerofBeijing.

Ontheotherhand,Russiahasbeenofferedtheopportunitytoex-ploittheeconomicdynamismoftheAsia-PacificregionnotonlytoboosttheeconomicdevelopmentofitsFarEastregionbutalsotodiversifyitssourcesofinvestmentsandtrademarkets;thismightreduce Russia’s economic dependence on itsWestern partners.ThegrowingpowerofChinahasalsoopenedupnewopportuni-ties forRussia.Anever strongerChinesepartnercouldbecomeakindofaninsurancepolicyagainsttheWest.Furthermore,in-tensifyingdisagreementsbetweenBeijingandWashingtonhaveputMoscow ina convenientposition; even ifboth rivalpowersarenotcompetingforRussia’sfavours,atleasttheycannotallowthemselvestotreatitinawaywhichcouldpushitintotheirri-val’sarms60.IntheAsia-Pacificregionitself,risingChinesepowerautomaticallymakesRussiamoreappealingasapartnertoother

60 See for example statements by Gennady Chufrin (IMEMO RAN), SergeyLuzyanin (RAS Institute of Far Eastern Studies), Igor Zevelev (MoscowbranchoftheMacArthurFoundation),‘ProtivoborstvoKitayaiSShAvAzii:VyvodydlaRossii’,Index Bezopasnostino.2(101),vol.18,pp.104,108,111,112.

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countriesinthisregion:India, Japan,theRepublicofKoreaandtheASEANcountries(aboveallVietnam).

TheKremlin’s response to this situationhas been equally com-plex, and consists of three parts. Firstly, theKremlinhas beenmakingeffortstodeepenitspoliticalandeconomicrelationswithBeijing,inordertosafeguardRussiafromthepossibilityofcon-flictwithChina.BybecomingBeijing’svaluedpartner,MoscowhasbeenmakingChinamoreandmoreinterestedinmaintaininggoodmutual relations,andhasbeen increasing thecostBeijingwouldhavetopayshoulditcomeintoconflictwithRussia.Sec-ondlytheKremlin,bycapitalisingontheotherAsiancountries’concernwithChina’sgrowingpower,hasbeenactivelydevelop-ingpoliticalandeconomicrelationswiththem,aboveallwiththeregionalgreatpowers,IndiaandJapan.ThusithasbeenstrivingtowordsgeopoliticalandgeoeconomicdiversificationinordernottobecomeunilaterallydependentonBeijing.Thirdly,theKrem-linhasbeenmakingattemptstouseitsrelationswithAsianpart-ners,aboveallChina,togiveitselfmoreroomformanoeuvreinitsrelationswiththeWest,includingfirstofallwiththeUnitedStates.Inotherwords,bydevelopingitsrelationswithitsEasternpartners,Moscowhasbeenaimingatachieving thegoal that ithadalreadyproclaimedinthe1990s: theconstructionofanew,polycentric international order to replace the US-centric post-ColdWarorder.

FromtheKremlin’spointofview,relationswithBeijingandDelhireflecttothegreatestextentitsvisionofwhatrelationsbetweengreatpowersshouldbelikeintheneworder61.Itispreciselyin

61 Forexample,seethecharacteristicsofRussian-Chineserelationspresent-ed in the statement from the Russian ambassador in Beijing, Sergey Ra-zov: ‘Pragmatizm vmesto pretenzii i nedoveriya’,Mezhdunarodnaya Zhizn11(2009),orthedeclarationmadebytheRussiandeputyministerofforeignaffairs, IgorMorgulov,duringthe ‘roundtable’meetingregardingthese-curityoftheAsia-Pacificregion,5June2013,andRussian-Chineserelationswhich“canbecomeamodelforinterstaterelationsoftwogreatpowersinthe21stcentury”;www.mid.ru.

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itsrelationswiththekeyAsianpartnerswhereMoscowwantstodevelopthe‘exemplary’modelforthecoexistenceofthemainpo-liticalcentresoftheemerging ‘polycentric’ internationalorder.Thismodelprovidesforamutualrespectofstrategicautonomy(i.e.notbeingboundby formal obligations as allies) andzonesofinfluence,mutualnon-interferenceineachother’sinternalaf-fairs,refrainingfrom‘exporting’one’sownvaluesandpoliticalsystems, pragmatic economic co-operation (i.e.without regardto any ideological restrictions), and the search for compromiseinregional issues. In its relationswithBeijingandDelhialike,Moscow has emphasised the complete political harmony andsimilarityofinterestsandviewsonboththefundamentalrulesof operationof thenew international order aswell as regionalcrisesandproblems.ThusMoscowhasbeensuggesting,moreorlessobliquely,thatthemainthreattothenewinternationalor-derwhichisdesiredbyallthreecountriesisposedbyWashing-ton’saspirationstohegemony,andmorebroadly,by ‘messianic’impulses from the West. In practice this means coordinatingtheirpositionsattheUNandotherinternationalorganisations.Forexample,RussiaandChinause theirvetopower in similarsituations,andusuallyjointly,intheUNSecurityCouncil.Overthepastfewyearsallthreestateshavedemonstratedthedesireto create international formats and organisations: BRICS, theShanghai Cooperation Organisation and RIC (trilateral Russia-China-India consultations), with an intention of making theminto alternatives to the institutions created and dominated by“theWest”.Moscowvestsparticularhopes in theBRICS struc-tureasa“platformforpromotinganon-Westernagenda”intheglobalcontext62.Atthesametime,allthreecountrieshavebeenpressing forreformof internationalorganisations like the IMFandG20,sothattheirrulesofoperationincreasinglycorrespondtotheinterestsofthenewnon-Westernpowers.

62 Dmitry Trenin, ‘New era of Sino-Russian tandem begins’, Global Times,21March2013;www.globaltimes.cn

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vii. thE lamE Economy

IftheRussianpolicyof‘turningtotheEast’canberecognisedashavinghadmoderatesuccessintheareaofpoliticsanddiplomacy,ithasfailedtobringtheexpectedeconomicresults.Eveninvest-ingUS$21billioninthespectacularpreparationoftheAPECsum-mitinVladivostokin2012hasnothelped63.

RussiahasnotsucceededinsignificantlyincreasingtheshareofAsiancountriesinitsforeigntradeorinimprovingitsstructure.In2008–2013,theshareofcountriesfromtheAsia-PacificregioninRussianforeigntrade(excludingthetwoAmericasbutinclud-ing India) rose from 17.1% to 21.9%,while theEuropeanUnion’sshare fell from52% to49.4%64.Asianmarkets still absorba rel-ativelysmallpartofRussianoilandgasexports.In2012,15%ofRussianoilexportsweresoldtoAsianmarkets (ascomparedto6%in2009),7%ofnaturalgas,10%ofpetroleumproductsand23%coalexports65.TheAsianmarkets’shareinexportshasbeenin-creasing,butquiteslowly,andeventhefactthatthelargegascon-tractwassignedwithChinainMay2014willnotradicallychangethepicture.

TheRussianeconomicoffertoAsianpartnersdoesnotseemtobechangingeither.Itisstillrestrictedtotheenergysector(oilandgasexports,oilandgasproductionandprocessing,theconstruc-tionofnuclearpowerplants)andthearmstrade.

ItseemsthatMoscowhopesthattheAsianeconomicgiantswillbecomeanimportantalternativetoWesterneconomicpartners,

63 SeetheevaluationsinthereportoftheValdaiClub:SergeyKaraganov(ed.),K Velikomu Okeanu–2, ili rossiyskiy ryvok k Azii,Moscow,February2014,pp.5,11and13.

64 MyowncalculationsbasedonforeigntradestatisticsfromtheFederalSta-tisticalServiceoftheRussianFederation;www.gks.ru

65 Aleksandr Panov, Integratsiya Rossii v Aziatsko-Tikhookeansky region. Pers-pektivy 2020,2April2013;http://russiancouncil.ru/inner/?id_4=1641#top

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offeringoutlets thatwill guarantee a growing revenueflow fortheRussianbudgetaswellastheinvestmentcapitalnecessarytoexploitanddevelopRussiannaturalresources. In theKremlin’sopinion,theintensificationofeconomicrelationswithIndiaandChina, unlike its co-operationwithWesternpartners, doesnotentail any political risk in the form of open or covert pressureon Russian elites to adoptWestern rules in business and poli-tics(democratisation),orofWesternvaluespermeatingRussianelitesandsocietyatlarge.Itisprobablyrelevantthatthemodelofstate-businessrelationsinallthreecountriesprovidesforamuchgreaterdegreeforthe‘manualsteering’oftheinternationaloper-ationsoflargecorporationsthanisthecaseinWesterncountries.TheRussianelitemaythusfeelmoreathomedoingbusinesswithpartnerswhichoperatewithinasimilarbusinesslogic,whereinpoliticsiscloselyintertwinedwiththeeconomy.

The lackofa solideconomic foundationmaymean that theun-doubted achievements of the Russian policy of ‘turning to theEast’,suchasthereinforcementofRussia’spoliticalanddiplomat-icposition,mayinthelongertermprovetobeillusory.

witold rodkiEwicz