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Russia, China & US Geopolitics: Cooperation & Competition

Russia, China & US Geopolitics: Cooperation & Competition

April 12, 2017
Leah Sherwood
Leah Sherwood Deputy Director of Research

Internationally, geostrategic shifts are occurring that Russia, the US and China are forging, contesting and benefiting from – almost all at once. This triad, as a new lens to interpret drivers in today’s international relations, reflects bilateral and multilateral cooperation and competition. Indeed, a new geopolitical landscape has emerged out of the increased multipolarity created by the so-called post-world WWII order global environment. Within the triangular paradigm, there are a series of ‘push-pull’ factors driving relations in military, political and economic realms, but whether the nature of interaction is competition or cooperation in these realms depends on the state. The international security axes presented by Russia, China and the US is a geopolitical construct that is veritably one to ‘wait, watch and see’ as it evolves in a new world order. As the nature of these bilateral and multilateral strategic partnerships develop, transform and morph into new forms of interaction likely under new-fangled conditions, the increasingly complex web of global interdependencies induces a higher likelihood that competition will bring tensions. Heightened tensions ratchet up opportunity for conflict, which is more probable in the peripheral regions of triadic power, rather than between triad states themselves.  This article sheds light on the dynamics of the geopolitical constructs as they stand today and suggests it is a key space to watch.

The tripartite construct is illustrated in several ways. For example, Moscow and Beijing cooperate economically in Eurasia through the Eurasian Economic Union (EEU) and the One Belt One Road (OBOR) initiatives, yet they compete politically for influence across Eurasia.  Moscow and Washington under President Trump are likely to ‘reset’ diplomatic relations and the US is currently politically cooperating on Syria by not interfering with Russia’s leading role to end active conflict. However, military tensions are high as a result of Russia’s annexation of Crimea, which has NATO on edge, and political challenges linked to Russia’s covert activities inside the US continue. Beijing and Washington cooperate economically as it is in both their interests to avoid a trade war, yet rising military tensions between then in the South China Sea are stoking competition between them. This all happening against a backdrop of high levels of military spending in all three states.

Eurasia is emerging as a key strategic zone where western interests are being met by those of China and Russia. China is making striking economic investments in its One Belt One Road Initiative (OBOR). This has a geopolitical dimension alongside economic cooperation, particularly between Beijing and Moscow.  In economic terms, over the coming decade, the OBOR will bring enormous resources and capital to a region that requires roughly $8 trillion in investment according to McKinsey & Co., which confers a political influence to China in the region. The OBOR is projected to include 890 highways, pipelines, railroads, power grids, ports and logistics projects worth between $800 billion and $1 trillion USD. These projects, designed to benefit China primarily, capitalize on Central Asia’s energy resources to fuel its economic development and intensify Chinese engagement in a region Russia perceives to be its sphere of privileged interest. This is coupled with the introduction of new social conditions, actors and networks, which may amplify existing tensions or create new ones and Moscow is rightly cautious of the political effects.[1] Beijing’s Eurasian ambitions thus boil down to political risks for Moscow.  As a result, currently high levels of cooperation between Beijing and Moscow should be read as a marriage of convenience as their interests are currently aligned in several areas.

Convergent interests between Russia and China bring benefits, but it is not consequence free as China also competes with Russia in Eurasia. China’s economic expansion plans include building its own Greater Eurasia, from the South China Sea its New Silk Road Economic Belt crosses Eurasia to connect China with Europe, the Middle East and South Asia – at Russia’s expense and with its cooperation. Although China is Russia’s number one state trading partner, Moscow is China’s 14th  demonstrating the asymmetrical relationship. The wins are mainly all for China. Geo-economically, in Eurasia Russia risks being outdone by China – serving as the region’s creditor and leveraging economic clout, which is why Moscow reluctantly supports regional multilateral institutions – which require its involvement due to its political power. Thus, Moscow is less enthusiastic about politically investing in the Shanghai Cooperation Organization (SCO) or China’s proposed economic initiatives within it than  mechanisms that it leads like the EEU. China endorses the EEU, which is creating a single, integrated market with a combined GDP of 4 trillion USD among its 5 member states so far. Beijing seeks to conciliate Moscow’s unease by supporting its economic empowerment initiatives and channeling its Eurasian security activities primarily through the SCO.

Historically, China and Russia relations have seen more acrimony than amity, but today several regional and international factors are converging to allow their interests to merge. Low oil and gas prices coupled with sanctions have given Russia considerable economic woes and a desire to sell its energy resources, which China needs and Europe seeks less of in part due to a recession and in part for political reasons. Added to this, China’s economy is slowing and economic cooperation is a ‘win-win’ for both states. Economic cooperation has become political cooperation on foreign policy, for example on Syria, with China backing Russia six times with vetoes at the United Nations Security Council, but also on North Korea, Afghanistan and the Iran nuclear agreement. China and Russia also agreed to ramp up military cooperation. Russian Defense Minister Sergey Shoigu said in April 27 2016 “We highly appreciate a high level of Russian-Chinese contacts both at the state and defense levels. This year we are going to hold more exercises and events than in the past years,” the Russian defense minister said. “Here I would like to underscore that we will conduct both ground and naval exercises,” Shoigu added. Beyond this, they have concluded successful negotiations over goods and duties, the evolving role of the SCO and promotion of the BRICS association (Brazil, Russia, India, China, and South Africa).

Granted, this level of cooperation between China and Russia is new, but cooperation is not. It dates back to 1992 when they announced their intention to have a “constructive partnership” which four years later was upgraded to a “strategic partnership” and most recently described as a “strategic cooperative framework,” illustrating the extent of the bilateral relationship. For instance, in February 2017, Russia and China launched the Council for Strategic Interaction within the Chinese Academy of Social Studies (CASS) to promote bilateral and multilateral intergovernmental discussion. Moscow is also enjoying more Chinese investment. At the 2015 St. Petersburg International Economic Forum, 29 investment agreements worth over $20 billion were signed, for instance. Today, Beijing is Moscow’s biggest state trade partner. Indeed, political and economic agreement in Russia and China is occurring on “energy, arms production, trade in national currencies and strategic projects in transport and supporting infrastructure.”  Ultimately Moscow wants to work with Beijing and Beijing wants to work with Moscow. They agreed to integrate the EEU Eurasian transport corridor with China’s Silk Road Economic Belt. Efforts to reconcile the EEU with OBOR are now a key policy focus,[2] but final settlements will be difficult so long as  objectives differ – even collide. The Russia-led EEU is a regional bloc to preserve Moscow’s geopolitical and geo-economic influence in Central Asia and Eurasia while the OBOR aims to link China to this market and beyond challenging Moscow’s influence. Thus, Russia and China have different perceptions of Eurasia[3] and their initiatives show it.

For geopolitical reasons, both Moscow and Washington support the OBOR, but for opposite reasons. Russia views it as a challenge to Western Eurasian influence and the US supports it as an alternative to Russian influence. Paradoxically, China views it as an alternative to the maritime routes. An utter reliance on one trade passageway is a strategic vulnerability and in the South China Sea a strong US military presence could potentially block China’s ships, if direct conflict between China and the US arose. Thus, competition between US and China has led to increased cooperation between China and Russia. Paradoxically, the Russian and the US support for the OBOR is despite both being concerned – to an extent – about the rise of China and what it may mean to their long term political interests. It is possibly more threatening than either Moscow or Washington are to one another. This sheds light on the deep entrenchment of zero sum politics between the US and Russia in Eurasia and China’s role in it. In short, the stepped up cooperation between Beijing and Moscow is tied to international events, largely the US-led sanctions imposed on Russia following the 2014 annexation of Crimea, and US foreign policies that reduced American leadership in the Middle East and Asia-Pacific. The reduction of military spending under former-President Obama coupled with President Trump’s abandonment of the Trans Pacific Partnership (TPP) contributed to this rising partnership. To Washington, the close working relationship between China-Russia is a foreign policy challenge in the Asia Pacific region – and beyond.

Strategic alliance formation is a particularly pronounced issue for President Trump as US –China relations are strained at a time when it wants to improve US-Russia relations without sacrificing US-China bilateral cooperation. Israel’s military base in Azerbaijan, strategically located on Iran’s northern border, is an example of what Beijing may interpret as a challenge to its energy and economic development plans, for example. Despite this, US-China relations have come a long way since Nixon opened relations with China in 1972 and over four decades they have inched toward broader cooperation. Yet, China’s rise has prompted competition between them on a number of fronts. For instance, President Trump openly stated his desire to contain China to protect American jobs, implying a change in US trade policy toward China. He also vowed to rectify  unfair trade practices he said existed between the US and China citing a $347 billion USD trade surplus for China. Aggravating relations further, President Trump threatened to change US policy toward Taiwan – a clear red line for Beijing – and stated the US would block China’s access to islands it claims in the South China Sea. A Chinese newspaper claimed this would mean war, which according to Deng Yuwen, a public affairs commentator in Beijing heightens Beijing’s discomfort as “Trump might act on his words… [and] China must take his other warnings more seriously.”

In general, US-China cooperation is undermined under President Trump’s more hawkish foreign policy despite the recent presidential summit between the US and China ending on a high note with an agreement to launch a 100-day plan to improve strained trade ties and cooperation. The rival nations do not have a clear path forward on North Korea and they have considerably different views on Syria made dramatically clear when President Trump launched a missiles into Syria during the Summit. Some view this as a message to the Chinese regarding North Korea’s missile plans and the US willingness to use its military power. However, Secretary of State Rex Tillerson said “President Xi expressed an appreciation for the president letting him know [about the missile attack]  and providing the rationale.”  The key here is that the US acted unilaterally and then notified the Chinese.

Certainly, global economic competition is intensifying as too many companies in rising economies chase too few consumers elsewhere and this is magnifying strategic competition between China and the US in particular. This dimension of open contestation for economic influence can be done vis-à-vis material capability and this would escalate tensions, insecurity and harm trade relations. In the worst case scenario, hostilities boil down to the proverbial game of ‘chicken.’ Added to these challenges is North Korea’s recent military activity, which has led the US to place a ballistic missile shield in South Korea, which Beijing strongly opposes as it undermines its nuclear deterrent. Despite these hurdles in cooperation, China’s Premier, Li Keqiang says “This relationship is crucial for not just China and the United States, but also for regional and global peace, security and stability, and we have to protect its progress.” He continued to say “We hope that through the efforts of all parties the tense atmosphere can be eased and the parties can return to the track of dialogue.” Although China says a trade war would hurt the US more than it, the US says the opposite. The truth is, it would be damaging to both states and as such there remains strong incentives for cooperation. This is to an extent because China and Russia are not natural allies, unlike the potential for China and the US, if power sharing agreements can be worked out that allow some flexibility for Beijing and other non-western players on economic governance.

President Trump’s decision to axe the TPP, which was the US’ global leadership strategy for the Asia-Pacific, may in the short-term have the net effect of promoting China-US cooperation as the US seeks bilateral trade deals with Asia-Pacific nations. The scrapped TPP gives Beijing the regional power it seeks. At the January 2017 World Economic Forum in Davos, in the post-TPP context, President Xi stated China was willing to assume global leadership and champion free trade under the China-led Regional Comprehensive Economic Partnership, for instance.  In terms of international leadership, “Trump is surrendering this opportunity…[and] This is indeed a big win for China” said Zhang Baohui, Director of the center for Asia Pacific studies. Yet, in the long run, the US is essentially leaving its regional allies to be increasingly tied to China’s economy while relying on the US as a security provider; President Trump is unlikely to accept that arrangement given his public statements about the US only giving out what it receives back. This tension between economics and security will likely drive some states in China’s periphery to hedge seeking to balance relations with Washington and Beijing, but will ultimately “bandwagon” with China as the balance of power – real or perceived – shifts in China’s favour. As economic ties deepen between former-staunch US allies and China, it can be expected that they will gradually increase defence and security ties with China, too. Therefore, in the long-term, a tangible shift in power is likely to generate more competition between the US and China rather than cooperation unless the multipolar world order continues to emerge to balance these big states.

Russia may play a role. During Obama’s presidency US-Russia relations deteriorated and President Trump campaigned upon improving understanding and cooperation with Moscow.  President Trump’s sympathies toward Russia are such they arouse suspicion, yet to date he has left President Putin waiting impatiently to make good on his pledge to improve ties and cooperate more broadly. For right now, the US is letting Russia take the lead in Syria’s peace talks, by accepting it does not have a seat at the table and not directly opposing its activities in Ukraine. Yet, creating a platform to significantly improve bilateral relations appears to be running into domestic roadblocks as US-Russia rapprochement cannot be helped by the ongoing investigation into Russia’s effect on US elections and his former national security adviser Michael Flynn resigning over links to the Kremlin.  Beyond rhetoric, tangible progress on the Moscow-Washington relationship is elusive and there is trouble on the horizon. Washington must address Moscow’s unknown plans for the Arctic, its challenges to the EU and NATO and Middle East foreign policies, which all potentially challenge US power. Arguably, Russia will seek to compete with US interests in a zero sum way and leverage its recent recognition and power displays. This competition, combined with its strategic partnership with China, is liable to strain Washington’s efforts to forge a significantly more cooperative relationship with Moscow.

Yet, despite more Chinese cooperation with Russia over the last few years, they are not cementing a collective challenge to US power – perhaps because China sees it as a bad strategy. Beijing’s cooperation with Moscow is more tactical than long-term strategy for several good reasons. First, high level, long-term cooperation is unlikely because their post-Cold War world views are different and this matters. China is also more economically powerful than Russia so cooperation is not among equals and Beijing has less to gain ultimately. Third, Beijing not a zero sum international actor like Russia and it conducts a different international relations. Harvard Professor and former U.S. government official Joseph Nye argues, “Today’s China is strong, and unlikely to get too close to a Russia.” Furthermore, Foreign Affairs quoted Deputy Foreign Minister Fu Ying saying that Russia and China enjoyed a “stable strategic partnership” and not an alliance. Russian foreign policy experts support this assessment that a (military) alliance is not sought because Moscow wants to retain sole authority over its decision-making. As such the degree of China-Russia cooperation today is limited in time and scope although they will continue to work together in Eurasia – and in opposition at times. This characterization of ongoing relations is an apt description for US-China relations and Russia-US relations, too.

This complex construct of ‘push-pull’ factors for cooperation and competition is occurring against a backdrop of all three states spending big on defence. In 2011, Russia started a 10 year 1.2 trillion USD military modernization program and opened new military bases in Tajikistan, Kazakhstan and Kyrgyzstan. In March 2014, Russia annexed Crimea and has since been militarily engaged by backing separatist forces. The US’ has tabled a proposal for a ten percent increase in its defence budget spending an extra $54 USD billion on its military capability in addition to another request for $34 USD billion in supplemental military spending for fiscal year 2017. This is evidence Washington intends to assert its military dominance and should be interpreted in conjunction with President Trump’s public statements about defending US interests with more rigor, including challenging Beijing in the South China Sea. Thus, a more aggressive US military posture would constrain Beijing in zero sum conditions.  Shortly after, China announced a seven percent increase in its military spending, yet it is notable that this is the second year below 10% following almost two decades of double digit figures. Plus, seven percent represents 1.3% of China’s projected GDP in 2017 while in 2016 the US currently spend 3.6% of its GDP – and now it is set to increase further.

In closing, Russia, China and the US have plenty to cooperate on and equally a lot to compete over. The type of cooperation between whom is highly instructive. Indeed, China-Russia cooperation represents a challenge to the Western Alliance, perceived to be distracted by challenges facing it. These challenges range from anemic economic growth, cultural division, populist politics, NATO’s future and the US under President Trump generally. The Beijing and Moscow partnership’s strength is bolstered by Russia’s recent new geopolitical gains in the Middle East, particularly with Egypt and Turkey, and the new business opportunities it consequently developed in Qatar, Egypt and Iran – to name a few. China is making strategic military inroads in the South China Sea and as of yet, it has been tolerated. That may not always be the case, however, as the US may opt to aggressively defend its position there – and maybe even its economic partnerships with the host of Asia-Pacific states disappointed by the US’ withdrawal from the TPP. US foreign policy orientation under President Trump remains unclear, but rhetorically Washington will be tough on those that challenge US interests. Defining what those are under the new administration outside its own borders is key. Indeed, there are opportunities to transform relations through heightened or new cooperation in this tripartite international geopolitical construct. However, under certain conditions where forms of competition are stacked up, the construct may be conflict-producing. Triads can be peaceful when balanced, but power within the three states is unbalanced as it is located in different realms. Depending in the situation, the US’ brute military power may be deterministic or Moscow’s political influence may be more influential. For example, if the issue is in Eurasia a military solution is unlikely so Moscow or Beijing with its vast economic power may prevails as supreme. As it was said, the outcomes of this tripartite geopolitical construct are a ‘wait and see’ in international relations.

[1] Cooley, A. (2016). The Emerging Political Economy of OBOR: The Challenges of Promoting Connectivity in Central Asia and Beyond. October 24, 2016. Center for Strategic and International Studies, p.7.

[2] Cooley, A. (2016). The Emerging Political Economy of OBOR: The Challenges of Promoting Connectivity in Central Asia and Beyond. October 24, 2016. Center for Strategic and International Studies, p.9.

[3] Cooley, A. (2016). The Emerging Political Economy of OBOR: The Challenges of Promoting Connectivity in Central Asia and Beyond. October 24, 2016. Center for Strategic and International Studies, p.4.

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