Carnegie Moscow Center
Perhaps the most important document signed by Vladimir Putin and Xi Jinping on May 8 in Moscow is the joint declaration on the unification of the Moscow-backed Eurasian Economic Union and the Chinese Silk Road Economic Belt.
China has the capacity to fulfill Russian needs for technology, capital, and markets, but Beijing remains wary of Russia’s faltering economy.
The story with the Asian Infrastructure Investment Bank, which ended to the benefit of Russian national interests, nevertheless exposes the weakness of the Russian decisionmaking process in relation to the Asia-Pacific.
The post-Soviet elites use the system that Lee Kuan Yew constructed in Singapore to justify political crackdown. However, Lee himself believed that resource-based dictatorships will fail to replicate Singapore’s success, since restricting freedoms is not the cornerstone of his model.
Russia should give the green light to the establishment of an SCO Development Bank where China takes dominant positions in the authorized capital and management bodies. In exchange, Moscow could coordinate investment principles on terms that would be most favorable to itself and its partners.
Despite numerous statements declaring Russia’s “pivot to Asia,” the country still faces challenges connecting the goals of the government with the needs of foreign investors.
Decomposition of “Russia” into many players provides clues to some aspects of the relationship between Moscow and Beijing. While the most important decisions are made by Putin himself, the views and interests of other players may influence the final policy.
The danger for the EU in the rapprochement between Russia and China lies in the fortification of the Russian economy against sanctions and in an increased assertiveness for China.
When Russian diplomats talk about Ukraine, they are actually speaking to just one man—Vladimir Putin. Moscow does not see any value in reaching out to the broad policy community in the West. The scary thing is that this behavior is not a consequence of the Ukrainian crisis, but one of its major sources.