Russia, Japan and China’s “One Belt, One Road” policy



Russia, Japan and China’s “One Belt, One Road” policy

Dr. Abdul Ruff

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President Xi Jinping’s “One Belt, One Road” program the new name for old trade route “Silk Road” could be thought of as “killing three birds with one stone”. Foremost, it is an effective alternative strategy to face US dominance in regions where China traditionally plays the key role.  Economically, the initiative aims to help Chinese companies explore overseas markets along the ancient trade route that linked the Middle East with the larger part of Eurasia, formally established during the Han dynasty. The program is also an effort to tackle overcapacity in many industries at home, nurture domestic structural reform and boost growth.

 

President Xi’s recent whirlwind trip to Iran, Saudi Arabia and Egypt was one such mission: his aim, to rebuild the “Silk Road” routes while also seeking to promote China’s image and influence as a global power. But such a massive spending spree in politically unstable regions has raised questions about the potential risks for this investment.

 

Armed with more than US$3 trillion in foreign reserves, Beijing has dramatically scaled up its loan book to foreign nations, mostly developing economies that are largely ignored by international investors and Western lenders.

Russia since the end of so-called Cold War has been the most important ally of China. China uses the Kremlin as a powerful shield against any possible reversals from the western powers led by US super power.

Chinese Premier Li Keqiang has made it amply clear that China’s relations with Russia cannot be affected by changes in the international situation or leadership changes in Beijing and Moscow,  or pressure from any third party. He lamented that though Sino-Russian ties are solid, Sino-Japanese relations, however, remained fragile and not yet solid, despite signs of improvement. Li told the media after his wrap-up speech following the National People’s Congress that China and Russia had a “comprehensive strategic cooperative partnership” – the highest level in China’s diplomatic tier. “The relationship is an all-dimensional one,” he said, adding that President Xi Jinping and his Russian counterpart Vladimir Putin had met “quite often”. The two leaders met five times last year – the most that Xi met any head of state. Their increasingly upgraded partnership has prompted fears in Washington of a possible Sino-Russian axis that share much common ground on such testy international issues as Syria, Ukraine, Iran and North Korea.

Russia and China have extensively enhanced economic, security and diplomatic ties in recent years as Moscow faces Western sanctions for its unilateral annexation of Crimea. There have been concerns in western capitals that the closer bond could pose a challenge to the Western-led world order. Prez Li made the remarks when responding to a Russian journalist’s question over whether China’s lack of investment in Russia was due to Western countries’ sanction and pressure from powers like Washington. “China-Russia relations will not be affected by changes in the international situation. We will continue to push for the progressive development of China-Russia relations,” Li said, ties with Moscow were improving, pointing to China’s increased oil imports from Russia, which topped eight million tonnes last year. Although overall trade volume had declined, Li attributed the fall to weaker commodity prices and not any change in relations. Due to the unlucky decline of major commodity prices, our whole export sector, not only to Russia, was falling. Trade turnover with Russia fell 27.8 per cent to US$68.07 billion last year, while exports dropped 34.4 per cent.

On Sino-Japanese relations, Li said both should uphold the consensus in principles on treating historical issues, and demonstrate consistency between words and actions.”I don’t want to see us retrace our steps again,” he said.

Chinese Li, Japanese Prime Minister Shinzo Abe and South Korean President Park Geun-hye are to meet this year for a trilateral summit, which was resumed last November after a nearly four-year halt due to tensions among the countries. “As to whether the [trilateral] format will enjoy a smooth development in the future, it’s much up to interaction among the three countries,” he said.

 

The presence of President Xi Jinping and People’s Liberation Army troops at Russia’s Victory Day parade in Moscow underscored a new era of warming ties between the two nations. While the two giant neighbours shared close relations through the 20th century, China’s high-profile participation at this month’s event was as revealing as the notable absence of many invited leaders from around the world. The line-up of leaders viewing the parade alongside Xi and Putin was a walking representation of an emerging order against the US-led Western alliance – with Xi and Putin sandwiched between Robert Mugabe of Zimbabwe, Raul Castro of Cuba, and Nicolas Maduro of Venezuela.

 

Xi himself lauded the mutual support of China and Russia during the Second World War, which cost both nations more casualties than any others. “Xi’s presence and the unprecedented participation of Chinese soldiers in the parade delivered a clear message,” said Xinhua. “China and Russia are seeing eye to eye on upholding the post-war international order and safeguarding world peace.” Russia would celebrate the 70th anniversary of the defeat of Nazi Germany alone, adding that changes in global affairs had pushed Beijing and Moscow closer together.

 

The scenes of Xi taking pride of place next to his host Russian President Vladimir Putin at the event stirred up memories of the past when Mao Zedong first met his communist big brother Joseph Stalin in Moscow for his 70th birthday. But Xi’s treatment was in stark contrast to that in 1949, when Mao felt snubbed by the Russian leader. And the rivalry between Mao and Stalin’s successors over who would lead global communism led to the acrimonious breakdown of the Sino-Soviet alliance and the rapprochement with the US following President Richard Nixon’s historic visit to Beijing in 1972. The new détente helped defeat the Soviet Union in the cold war.

The upgraded ties have involved a series of joint naval exercises and a revival of arms purchases apparently designed to complicate US-led efforts to counter both nations’ military expansions. Some observers described closer Sino-Russian political and military ties as a “marriage of convenience”, but such an alliance would help shore up Beijing and Moscow’s position in their rivalry with the US-led West.

The cold shoulder given by Western leaders to the historic celebrations also underscored the tensions between Russia and the West, led by the US, over the Ukraine crisis. For Beijing, forging a closer partnership with Russia is a diplomatic gesture in response to growing military ties between the USA and Japan, plus American support of China’s regional rivals in their territorial disputes in the East and South China seas.

 

Many Western heads of state stayed away in protest over Russia’s support for separatist fighters in Ukraine. The only other foreign countries to send troops to the parade were Mongolia, Serbia, India and six former Soviet states. China’s state media heralded the attendance of Xi and the PLA as a significant step forward in the strategic partnership of the two big powers.

 

Both giant nations realize they need to set aside their differences to counter the global dominance of the USA. The theorem of realpolitik in such partnerships of conveniences simple:  individually China and Russia are  weak to challenge USA in the quest for global influence in all domains and both need a permanent alliance with a powerful friend.

 

Right now, Beijing’s relationship with most Silk Road countries, from Central Asia to the Middle East, is largely defined by its energy imports, as China gets more than half its crude oil from the region. However, oil can be bought with cash anywhere in peacetime.

Chinese companies are eager to explore overseas markets elsewhere, not least along the Silk Road. But the geographical concept of the Silk Road is irrelevant when it comes to solving China’s economic problems: one cannot compare today’s economically integrated world to the age when camels and horses were the main mode of transport to carry goods for trade through Central Asia to West Asia and Europe.

In economics, the philosophy of investment is about the trade-off between risk and return, which is not necessarily what political leaders are good at.

In many ways, “One Belt, One Road” resembles the 4 trillion yuan (HK$4.7 trillion) stimulus package launched in 2008; it is another political project that will be dominated by state-led investment, rather than private, as few investors will choose to gamble in politically unstable environments where governance and rule of law are weak and infrastructure is lacking. That is why Hong Kong billionaire Li Ka-shing chose to invest heavily in Britain and Canada rather than nations along the belt and road, despite the government’s call to support such projects.

Politically, such investments won’t help the atheist Communist-ruled nation win the hearts and minds of people from countries where religion dominates. China’s regular and often harsh repression of any belief other than communism – from Christianity and Islam to Buddhism and the home-grown,– makes it difficult to forge close relations with countries where religion is an integral part of ideology, culture, politics and everyday life. China’s tensions with India are not based on religions or ideology but on territorial disputes.

 

Though a UNSC veto member, enjoying a special status in international power, sharing, among other matters, intelligence with top powers, China needs true friends and political allies to offset its ideological isolation in a post-cold-war world dominated by the USA, following the demise of socialism in the early 1990s. Beijing wants to resume its leadership status in the developing world through reviving the once widely known non-aligned movement. Diplomatically, China’s aggressive economic expansion is part of a strategy to expand its sphere of influence to forge a status equal to that of the United States and to resume China’s position as the global centre of trade, culture and politics, as it was some 2,000 years ago.

Despite maintaining good relations with most countries in the region, China is an outsider in global regional affairs as it has long maintained a diplomatically neutral stance and has taken no sides in any conflict unless it hurts national interest. Under this non-interventionist diplomacy, Chinese money can boost its influence, but it won’t buy true friends or love. Though both Russia and China have conveniently abandoned ideology to gain entry into western economic system of profit making, the relations may not stay solid forever.

USA is searching for new “threat perceptions” to pursue its imperialist goals.

 

 

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