Can China’s Belt Save the Eurasian Economic Union?

Ever since Russian troops began infiltrating the Crimean peninsula, the brightest economic prospects within Russian policy circles have emerged from Beijing. While the European Union, Australia, the United States, and others ratcheted up sanctions following Moscow’s invasion of southern Ukraine, China held its nose. Indeed, a report from Evan Osnos in early 2015 noted that Chinese President Xi Jinping appeared buoyed by the seeming success Russian troops found in seizing Crimea. Although Xi’s assessment soured as Moscow lost troops, and face, in the grinding conflict in eastern Ukraine, it seemed that Beijing nonetheless remained the clear winner from what many consider the first war the European continent has seen in years.

Eighteen months later, China remains the closest thing to a major partner Moscow knows. While Beijing has not yet recognized Moscow’s annexation of Crimea, neither has Beijing outright condemned the act. And perhaps understandably so. When considering Chinese claims in the South China Sea – to say nothing of Xinjiang and Tibet – it behooves Beijing to refrain from criticizing extraterritorial grabs elsewhere. And it certainly doesn’t hurt that 19th-century irredentism still runs in certain circles in Beijing, looking northward at Siberian tracts ceded to Russia through purportedly unfair tsarist policies. But any discussion of border shifts in northwest Asia remains in the distance. For the time being, Beijing is still eager to reap the fruits of Moscow’s misadventure, with sanctions, monolithic economics, and depressed oil prices all clogging Russia’s fiscal outlook.

Of course, the fallout from Russian President Vladimir Putin’s decision to challenge – or fracture – the post-Cold War security order isn’t limited to economics. Russia’s territorial aggrandizement has sent clear shudders through the entire post-Soviet sphere. Central Asia, especially Kazakhstan, has not been immune. Just a few weeks ago, one of Russia’s more prominent anti-Putin voices joined the claque clamoring for special treatment for Russians in northern Kazakhstan, highlighting the similarities between Pavlodar and Petropavlovsk and those found in eastern Ukraine. Putin’s irredentist policies don’t exist in a vacuum – a recent poll from the Pew Research Center showed more than 60 percent of Russians want to expand their borders. As such, Russia’s southern neighbors now look at Moscow with a weather eye; where once they saw a partner, now Central Asian governments perceive something darker, something tilted more toward a threat.

The consequences of this shift have been seen most acutely within the Eurasian Economic Union (EEU), Putin’s putative “geographic pole” that Russia hopes will return Moscow to global preeminence. The Diplomat has covered the EEU’s foibles at length, but it is worth highlighting just how Moscow’s policies have impaired, perhaps mortally, the EEU’s prospects moving forward. In addition to Russia enacting a trade war with both Belarus and Kazakhstan, Astana has continually torpedoed any expansion of the EEU beyond the economic sphere, keeping the union limited to policies that are at best watered down, and at worst ignored outright.

All the while, as the EEU’s prospects fade that much further, China has continued to expand its presence in the region. Purely from a geopolitical standpoint, that makes sense; Central Asia presents the lone neighboring region without flares of animosity, territorial or otherwise, directed toward Beijing. Economically, the partnerships between China and Central Asia also work to either’s discernible benefit, with Central Asia providing nearly half of China’s imported natural gas. In infrastructure terms, too, China couldn’t have picked a more fortuitous time to make inroads in the region. Russian investment in Central Asia, as well as remittances sent to Kyrgyzstan and Tajikistan – their economic lifeblood – have collapsed during Putin’s third term. China, meanwhile, has laid the groundwork for its Silk Road Economic Belt (SREB) – railways, pipelines, transit corridors – in Central Asia. The SREB plans have already begun taking root, as seen in China’s ability to stitch together all five Central Asian states in its pipeline network, or in the recent $300 million loan for road construction for Kyrgyzstan, or in the $6 billion pledged to Tajikistan for infrastructural development. Looking forward, barring unforeseen circumstances – say, Russian meddling in northern Kazakhstan, or Islamist spillover from Afghanistan – there seems little likelihood that Chinese investment and regional expansion will cease anytime soon.

Enter the patrons behind the Eurasian Economic Union. Those in Moscow aren’t blind to the EEU’s failures and fractures. Kyrgyzstan’s accession in May highlights the issues bogging down the EEU. Indeed, no one is quite sure where the accession currently stands: Is Kyrgyzstan a full member, as some have claimed? Or is further protocol ratification required? Will Bishkek force yet another delay? These basic questions highlight the EEU’s current hollowness, and have ever since its inception. It appears Russia has now decided to salvage what it can of the EEU by hitching it to China’s SREB.

To be sure, the recent rhetoric out of Moscow – just as with most rhetoric directed at and with Beijing – places the decision to latch the EEU onto China’s SREB as one of mutual partnership. According to Xinhua in June, Russian and Chinese officials have decided to “dock” the EEU with the SREB. Per Xinhua, “This would help establish a common and integrated economic space in Eurasia and finally lead to the building of an ‘Eurasian heartland,’ deputy director of the Far East Institute of the Russian Academy of Sciences Sergey Luzyanin [said].” As Dmitri Trenin, director of Carnegie Moscow Center, added, Putin’s vision of a “greater Europe” stretching from Lisbon to Vladivostok has been dropped, replaced by a “greater Asia” stretching from Shanghai to St. Petersburg. Trenin’s colleague, Alexander Gabuyev, was even more effusive: “The logic of the Russia-China relationship has changed. A strategic partnership between the two has become a reality. Other states will have to learn how to deal with this new reality.”

Of course, the rhetoric is far easier to manage than the details. Anyone examining the Russia-China gas deals – the details of which are far from finalized, let alone the projects completed – can attest to as much. But the rhetoric does signal a shift: a willingness, or a realization, on Russian officials’ part that the EEU can’t subsist on its own, that a partnership is required. And while the rhetoric remains couched in partnership and equality, only the most blinkered in Moscow would think this is anything other than the Kremlin hitching its pet project to Beijing’s behemoth. China, on its end, is likely pleased to co-opt one of the more prominent obstacles standing in its westward SREB push. Those in Bishkek are presumably thrilled that there may be a legal out for resuscitating their re-export trade with China, one of the main pillars of Kyrgyzstan’s economy hampered through EEU regulations.

Again, the technicalities of “docking” the EEU with the SREB remain to be seen. Any inconvenient details will likely be overlooked, just as others have throughout the entirety of the EEU’s existence. If the Russian-Chinese gas deals are a metric to go by, any excitement should be tempered for the time being. But if this plays out as Moscow and Beijing have pledged, China may yet prove the primary reason for the EEU’s continued existence. Just as China has helped bail out Central Asia’s economic needs over the past few years, now Beijing can help bail out a vanity project that fell victim to Putin’s wayward policies.