As Beijing monitored the BRI progress as an essential element for its economic expansion, Russia’s political elite worked on the concept of Greater Eurasia
In the current Ukrainian conundrum, how geo-economic developments related to Russian sanctions have unfolded often raises doubts over the future of Chinas Border Road Initiative (BRI) projects and related investments. If the entente proceeds to further the anti-American stand attracting more trade wars, route blockages and sanctions, can the BRI projects then be called strategic myopia on the part of China? Alternatively, was the no limit declaration between the two a diplomatic trap laid down by Russian President Vladimir Putin so as not only to test China but also to have strong financial and military security assurances while it fulfils its Eurasian dream?
The Crimean takeover had earned Putin the praise of “gatherer of Russian lands” and increased his domestic acceptability, increasing Russias push for its great power status. For this, China needed to be positively engaged in the East. As Beijing was busy self-advertising its BRI progress and kept viewing the transport corridors as an essential element for its economic expansion, the Russian political elite was rapidly working on the concept of Greater Eurasia that focussed on the western borders.
In Central Asia, Russia by 2015 was able to unite Armenia, Belarus, Kazakhstan and Kyrgyzstan within the framework of EEU, which actively functioned for a free
trade area, customs union and a strongly integrated common economic policy. Simultaneously reeling under the western sanctions tried to build a factor of commonality between EEU, SCO and ASEAN and projected itself as an essential regional integrator. For this purpose, Russia joined the AIIB, and the Sino-Russo ties strengthened. In May 2018, the EEU members and China signed the trade and economic cooperation agreement, and China allocated a total of 77 billion Chinese Yuan to Russia for various Projects under the EEU-BRI framework and the development of the Russian Northern Sea Route.
During the last few years, China was busy advocating the China-Europe route as an anchor of stability while adopting wolf warrior diplomacy in its East and South. In the game between the two, China focussed only on the economic aspect of Eurasia, in which it could find a transport corridor for its surplus domestic production and jobs for its citizens. On the other hand, Russia created the illusion of interdependencies while simultaneously working on the concept of Greater Eurasia and the consolidation of the same. An important point to be noticed is that wherever China strained its relations in the East and South, Russia ensured that it maintained its goodwill - be it Japan, India or its neutrality in the South China Sea Dispute. Hence, Russia was able to focus on engaging the West through its energy resources apart from Belarus and Ukraine. In addition to the significant financial investments in Central Asia, in 2019, China National Oil and Gas Exploration and Development Company Ltd (CNODC) acquired a 10 per cent stake under the BRI framework in the Arctic LNG 2 project, increasing its economic entanglement, much to the liking of Putin.
Russia well understands the importance of its land route. In 2021, container traffic transported between Europe and China via Russia increased by 47 per cent, and various logistical agencies estimated that the cargo shipment via the Trans-Siberian corridor could have reached a million TEUs (Twenty-foot Equivalent Units) in 2023 had the current crisis been not there. With the sanctions, the current route via Russia, Belarus, and Poland is blocked for the next few years, and it becomes pertinent for China to switch over to some other options for its trade.
China was slightly cautious as it did not want to put all its eggs in one basket; the Central Asia-West Asia corridor is a glaring example. China also made strategic inroads in Turkey through the Baku-Tbilisi-Kars (BTK) railway route that transports cargo from Asia to Europe in just 15 days and bypasses Russia. This is the current first option that Beijing now has. The Middle or the Trans-Caucasus transport corridor via Turkey, Georgia, and Azerbaijan is now critical to China given the sanctions on Russian Railways. One of the associated problems with it is the infrastructural and logistical limitations. Even half of the cargo load the Trans-Siberian route handles can choke this route, and hence the problem would persist.
Currently, Turkey, Azerbaijan and Armenia use the Igd?r -Dilucu-Nakhchivan via Kars Railway Project that was encouraged by Russia, European Council and NATO under the International North-South Corridor (INSTC) as it was a win-win situation that brought not only regional peace but also saved transit costs for all. Before the outbreak of the crisis, Turkey further proposed the extension route to connect it to the Southern Corridor through BRI funding, i.e., Iran and Pakistan. And this is the second option that China has. Before reaching Turkey for further transportation, it would involve transit through Kyrgyzstan, Uzbekistan, Turkmenistan, and Iran. One of the main infrastructural bottlenecks is the differences in the rail spacing or gauge of the railway tracks. At the moment, the intersecting point of the BTK railway route is in Ahilkelek, Georgia. The new option geographically bypasses Azerbaijan, Armenia and Georgia, resulting in a possible clash of interests.
Geopolitical issues seem to come into the Chinese way to connect the Middle and the South corridors. The pertinent question is where Chinese-funded BRI roads lead if the US decides to act tough on both Iran and Pakistan or either of them? Already China has committed $400 billion and $62 billion, respectively, for Iran and Pakistan. If China continues to support Russia over the Ukrainian issue, it could perhaps be inviting financial countermeasures for itself. On the other hand, given the fragile economic situation and the current political discontent, any turmoil in Pakistan could result in its blacklisting in the FATF having financial implications. Also, the Baluchistan Liberation Army (BLA), apart from Islamabads strained relations with Iran over issues such as the treatment of Hazara Shias in Pakistan, can create potential risks for Chinese investments.
In case the US decides to revive the Iran nuclear deal just for the time being but does not compromise on the politically most sensitive issue, i.e., lifting terrorism sanctions on Revolutionary Guards, the deal cannot survive for long. If China pursues its BRI projects during this phase, it might soon find itself in the midst of the breakdown of the Iran nuclear deal. It will be tough for Beijing to make Pakistan and Iran financially stable besides taking care of its finances and other OBOR Projects. The US would not go soft on Russia, Iran, and Pakistan simultaneously. Then there is the Taliban factor in Afghanistan which can ruin its connectivity dreams by either sabotaging it or blackmailing Beijing for recognition, grants and financial assistance. In either case, China can soon find itself in a financial overstretch. In case of evolving geopolitical uncertainties, Beijing has to rely on its Oceanic route, which is longer, more expensive, and dominated by its Malacca Dilemma. The current geopolitical conundrum enhances the geopolitics around the transhipment container hubs while having implications that will reshape the South Asian security architecture. At the juncture, one can recall Putins words- “Anyone who doesnt regret the passing of the Soviet Union has no heart. Anyone who wants it restored has no brains”.
(The writer is an Assistant Professor at Central University of Punjab, Bathinda. The views expressed are personal.)