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George Magnus

April 7th, 2022

Sinostan and the Sino-Russian axis

0 comments | 11 shares

Estimated reading time: 9 minutes

George Magnus

April 7th, 2022

Sinostan and the Sino-Russian axis

0 comments | 11 shares

Estimated reading time: 9 minutes

  • Sinostan: China’s Inadvertent Empire by Raffaello Pantucci and Alexandros Petersen offers illuminating and relevant insights into the Sino-Russian relationship.
  • The authors show that in spite of suspicions and resentment about Chinese lending and infrastructure terms, the goods and infrastructure that used to flow from Moscow have switched meaningfully to Urumqi.
  • China has opted at least for now to make its bed with Putin. But at some point, Chinese policymakers will have to weigh its politics-versus-economics contradiction more carefully, and may come to see Putin as a fly in the ointment of their own interests and ambition.

 

If Russia’s invasion of Ukraine had resulted in a speedy victory, decapitation of the Kyiv government, and the establishment of a pro-Moscow puppet government, we can only wonder how different things might now be. In the event, things have not turned out as Vladimir Putin intended. Instability and unpredictability prevail, and not least for Russia and China, bound together to make the world safe for autocracy. They have pledged to exploit this moment, as they see it, of terminal decline in America’s global role, and in the system of law- and rule-based governance favoured by the west, defined to include liberal leaning democracies and supporters.

We don’t know for sure what Xi Jinping knew by the time Russia ordered the invasion to begin, but its limp protestation of neutrality is widely, though not completely, dismissed as bunk. By bonding with Putin’s Russia, Xi Jinping has set a number of cats among a lot of spooked pigeons.

Xi has only encouraged speculation about China’s intentions towards Taiwan, which is something not even he wants centre-stage right now. He has created a contradiction between his political interests to support Putin on a visceral anti-US platform and his economic ambition for China bearing in mind that China’s economic interests are firmly in the US and the west, and far away from what is now a Russian pariah. To fulfil China’s economic ambition through enduring engagement with the rich world and many emerging countries, Xi has to find a way of putting some blue water between himself and Putin. He has invited a laser-type scrutiny over the value and significance of China’s global role, responsibility and reputation.

Last but not least, he has clearly become the indomitable partner in a Sino-Russian relationship which is the mirror image of the way things once were. Russia has contributed in many ways to its own vassal status but for China, a weak and dependent Russia is not a bad outcome for China, not least for geopolitical, and access-to-resource reasons. Yet, looking beyond the immediate future, can this new relationship be stable?

A focus on Central Asia

A new book, Sinostan: China’s Inadvertent Empire by Raffaello Pantucci and Alexandros Petersen offers some illuminating and relevant insights into the Sino-Russian relationship with its focus on a geographic area that Russia has traditionally considered its backyard, and in which China has had centuries-old interests. China certainly has contemporary interests that pre-date the BRI by a long way but over time, its role has been increasing, partly by design and partly by default, as that of Russia and the US has declined.

Central Asia comprises 5 states sandwiched between China and Russia. Kazakhstan, Tajikistan and Kyrgyzstan all have borders with the western Chinese province of Xinjiang, which also shares borders with Pakistan and Afghanistan. Turkmenistan and Uzbekistan both have borders with Afghanistan. The authors travelled extensively through the entire region, talking with and interviewing a wide range of people from senior officials and ministers to mere folk. Pantucci, well known for his geopolitical work at RUSI and in Singapore, finished and updated the book in the years following Petersen’s sad and untimely death in a terrorist attack in Kabul in 2014. The unique blend of travelogue and geopolitics, which makes for an accessible read, was captured in a review of Sinostan which was recently written up on this blog here.

All about Xinjiang

Sinostan emphasises how the significance of Central Asia to China derives not just from history and geography, but also directly from the importance of Xinjiang, which is not only an economically important province but one which has achieved a notoriety in recent years for mostly bad reasons. For Beijing, stability and prosperity in Xinjiang is indistinguishable from and dependent on accomplishing the same goals in Central Asia, but also at least stability in Pakistan, Afghanistan, Mongolia and Russia too. And so, China’s national interests, for which read also interests of the Chinese Communist Party, require Beijing to curry favour, influence and good relations in Central Asian countries, which are in turn mostly reluctant to criticise China’s actions or policies in general, or its hard line and allegedly genocidal policies towards the Uighur people in particular over the last few years.

That said, and in part the source of the subtitle ‘inadvertent empire’, Pantucci has argued while China has become the dominant player in Central Asia, it has stepped up to the role without thinking through the consequences. Xinjiang is a central concern, but the ‘stans, while important, are not. They fit into and have been beneficiaries of the BRI framework, but there is no real strategic development plan in which China is involved. There has been a blossoming of China-focused Silk Road study programmes and exchanges but no mapping of what kind of power China is to be in its own western neighbourhood.

Bilateral ties abound, but Russia has been the driver of the only substantive economic block, known as Eurasian Economic Union, set up in 2014 and now comprising Belarus, Kazakhstan, Russia, Armenia and Kyrgyzstan. The similarities to EU arrangements are not coincidental. Indeed, in recent years when the BRI was a bigger focus than it has become of late, it was not uncommon for analysts to compare and contrast the EU’s way of regionalising its relationships with the Chinese way as practiced in BRI countries. Here, the Chinese domestic local government-state enterprise-infrastructure-bank financing model was simply replicated on a country-by-country basis. There have sometimes, but not always, been favourable consequences – and increasingly, BRI countries, like Chinese local government and banks at home, have been left with a legacy of opaque lending, bad debt, and misallocation of capital.

Sino-Russia relations in the ‘stans

One of the other major themes that Pantucci and Petersen explore is the role of Russia in the region, and its relationship with both the ‘stans but especially China. Readers will find much else here to learn and reflect on, but Sino-Russian relations with one another are reason alone to read this book.

They acknowledge that in spite of the build up in commerce and trade between China and Central Asia, suspicions and resentment linger about Chinese lending and infrastructure terms, but that nevertheless, the goods and infrastructure that used to flow from Moscow have switched meaningfully to Urumqi, capital of Xinjiang. They note how China is hardwiring the region with infrastructure loans and projects, but China’s strategy goes far beyond this to include cultural and educational exchanges, trade, and digital infrastructure and telecommunications. These are mostly things not in Russia’s diplomatic or economic bag.

China’s approach to investment and loan programmes are also quite different from Russia’s. The former is designed mainly to enhance the energy capacity of the country or sector within the country without specific regard for whether they will be commercially viable for China. To be fair, and as we have learned in other BRI project work and lending, one would have to be quite familiar with the structure of the financing agreements to be able to judge commercial viability, penalty clauses, and the extent to which the financing provided by China’s development banks was sound. Such information lacks transparency, and often only comes to light in times of crisis.

Yet the authors’ main point is to contrast with the Russian approach in which large Russian energy firms work in cahoots with Russian diplomats to arrange what they call divide-and-rule strategies which have the simple objective of ensuring that Russia is the principal beneficiary of oil sales at the highest prices.

Russia’s economic role in the region is eroding, and It has come to look with both angst and ambition at Chinese economic activity in the Russian Far East too, where competition with China is rising. Russia has also come to resent a loss of control in the functioning of the main regional organisation – principally about security – the Shanghai Cooperation Organisation (SCO). Set up in 1996, the SCO now comprises China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, India, Pakistan and Iran. It is a large grouping, representing about three-fifths of the landmass of Eurasia, two-fifths of global population, and about a third of world GDP, but it is also a place, as Pantucci and Petersen say, where anti-democrats can thrive and show they have international support. Beyond this, it’s hard to escape the conclusion that it’s essentially designed to enable China to be the principal beneficiary as it seeks, at Russia’s expense, to bring its own coherence and influence to bear on the organisation’s and region’s governance.

A friendship without limits?

Notwithstanding historical tensions, and competitive, if not, divergent economic, commercial and strategic interests, China has opted at least for now to make its bed with Putin and exploit what they both regard, rightly or most likely wrongly, as an opportunity to push back against the US and liberal leaning democracies, and establish new multipolar spheres of influence where territorial gain by force is par for the course. For China, a distracted US and a weakened Russia both serve the national interest as Xi sees it.

China’s confidence in the former may be misjudged. We should not expect Xi’s position to alter though, unless Putin’s actions should become too toxic even for China. Yet, if Xi is prepared to run the risk of ‘disengagement’ from the global economic system as corporations and governments, including in Beijing, move to de-americanise and de-sinify supply chains and emphasise national security matters over commerce, China’s economic interest will unquestionably be harmed. And this would be on top of what is already a difficult economic year for China. In time, it will have to weigh its politics-versus-economics contradiction much more carefully. Russia has nothing to offer China by way of compensation. Quite the contrary, in fact.

At some point, Chinese policymakers may well come to see Putin as a fly in the ointment of their own interests and ambition. Western policymakers may be limited in what they can do but they can try to force and reinforce those perceptions. Pantucci didn’t set out to expand the book to take on this vexed and complicated question, but his and his co-author’s insightful views about Sino-Russian competition in Central Asia open a widow on to the rocky foundations under today’s show of unity.


This article gives the views of the author, and not the position of the China Foresight Forum, LSE IDEAS, nor The London School of Economics and Political Science.

The blog image, “SCO summit (2018-06-10) 2“, is licensed under CC BY 4.0.

About the author

George Magnus

George Magnus is Research Associate at the China Centre, Oxford University, School of Oriental and African Studies, and a member of the China Foresight Forum. George was the Chief Economist, and then Senior Economic Adviser at UBS Investment Bank from 1995-2016. He had previously worked as the Chief Economist at SG Warburg (1987-1995), and before that at Laurie Milbank/Chase Securities, Bank of America and Lloyds Bank.

Posted In: Diplomacy

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