Russia’s Pivot to Asia-Pacific
27.12.2014
Julia Lyubova,
Sergey Strokan
Disillusioned with America and Europe, Russia is going eastwards, placing high stakes on the relations with China, India and other regional powers. A change of priorities in its foreign policy should enable Russia to battle Western sanctions and explore lucrative oriental markets, capitalizing on its unique geographical position in Eurasia.
Studio guest
Vladimir Sotnikov, Director of the East-West Strategic Studies Center, Moscow independent think-tank (studio guest),
Dr. Taisuke Abiru, Research Fellow, Tokyo Foundation think-tank,
Brian Yeung, an independent contributor to Chinese and English media in HK, AsiaGamingBrief contributing editor (Hong Kong), and
Alexander Lomanov, leading research fellow, Institute of Far East, Russian Academy of Science, shared their opinions with
Radio Sputnik.
This Russia's pivot to Asia- Pacific, is this a new reality?
Vladimir Sotnikov: Yes, this is a new reality and, at the same time, this is an old reality. We should make some review of what was the real reason and what the consequences were. So, the reason was actually emanating from President Putin’s third term.
I think, disillusioned with the West in general, with Russia's relations in general, President Putin decided that this is high time to look eastwards. The Ukrainian events were a catalyst, but the real policy of changing the West for the East was laid down a little bit earlier, to my mind.
How do you assess Russia's potential in the region?
Dr. Taisuke Abiru: From my point of view there are two strategic objectives for Russia to make a pivot to the Asia-Pacific. That would be the two diversifications.
One is from Europe to Asia, and the other diversification is not to be dependent on China, but to also have good cooperation with Japan, Korea and other countries. That will be a difficult diversification. And I think that in this sense Russia's pivot to Asia is positively assessed among the Japanese experts.
And despite some US pressure to apply more sanctions against Russia, Japan, along with other countries, like the South Korea, is actually reluctant to apply more sanctions on Russia. So, where do you put Japan in this political situation?
Dr. Taisuke Abiru: This Russia's pivot to Asia started before the Ukrainian crisis, as far as I understand. So, Japan has kind of a nuanced approach for Russia, not only in the cooperation with the G7 countries, but also Japan has a soft approach towards the Russian sanctions. In this sense Japan is trying to take an independent line from the US because of the strategic contest in this region. I mean, the rise of China.
And how important Russia is for the countries like Japan and South Korea?
Dr. Taisuke Abiru: I think that from the Japanese point of view, especially in the energy cooperation Russia has already taken the important role. I mean, that Russia exports 10% of oil and gas of the whole Japan’s import. So, in this sense Russia has already taken an important role in this region. And Russia could increase this share. We very welcome Russia taking a more important role in this region.
How important is it for China and how is it seen in China – this new direction that Russia is taking?
Brian Yeung: I think from the Chinese perspective, we really welcome the Russian ambition to develop a more close relation particularly with China. We have a long history of partnership and friendship.
And both of us actually have the largest defense spending budget after the US. So, the idea of an alliance is very compelling to both of us. But we believe that we need to develop the economic collaboration, not just only the military perspective.
Russia offers vast natural resources, China is growing and needs more natural resources, like energy. So, that is why we signed the natural gas deal earlier this year. And we do believe that Russia does has an advantage in terms of geographical proximity, in helping the Chinese companies not just to target the Russian market, but also the Chinese market.
However, some Chinese companies do feel some difficulties in terms of investing in Russia, because the financial infrastructure isn’t that ready. For example, we do invest in Russia through an agent, usually broker or an investment bank and we don’t directly negotiate with the Russian counterparts. So, that is some of the direct links between Russia and China in terms of financial infrastructure. Another difficultly is the better currency of financing. So, we do feel excited about the future opportunity to work closely to Russia. But we do hope that the financial infrastructure and other things could be more customized to the Asian audience.
The talk of the year was this multibillion gas deal between Russia and China. There were quite opposite opinions. The critics were saying that Russia is turning into sort of a new colony of China, others were saying that it is Russia who would make China dependent on its energy resources. Where are you in this dispute?
Dr. Taisuke Abiru: From the Chinese perspective, we don’t really feel that there is a political connotation to that deal. Basically, China is growing, our manufacturing sector is growing. So, we do need more energy. It will actually be a fairly good deal from the commercial perspective.
With this new Russia's strategy eastwards, in your opinion, is there anything that Russia is set to lose?
Dr. Taisuke Abiru: I'm not sure whether we would lose something from working closely together. But I think we do have a lot of obstacles. And you look at not just the investment, but you look at the trade deals. Russia and China really want to boost their trade and target 200 billion by 2020, but the thing is that the economic structures of the two countries are not so parallel. Russia exports energy and natural resources, and China only exports manufactured goods to Russia.
Now China is actually moving away from manufacture to the more high-tech technology and other sectors, like the innovation. So, our costs are getting high and we are not sure whether Russia is able or is interested in importing this kind of stuff from China. And on the other hand, if we want to boost the economic cooperation, we need more diversified trade, not just natural resources and energy.
And one of the risks is that Russia and China could be kind of competitors in the Central Asia, because many Central Asian countries used to be part of the Soviet Union. But now the investment from China is increasing over the years. This year we had the Eurasian Economic Union signed in Astana. The union itself didn’t really show as promising, as the Chinese investment in the Central Asia. So, for the two countries to work more closely together there are some obstacles in terms of mutual trust and whether we can turn the competition in the Central Asia into trust and collaboration, and also to diversify the economies more.
This new Russian strategy with China and other countries in the east – is this something that is to stay?
Alexander Lomanov: I think it is a new global reality. And no would-be reconciliation between Russia and the West could delete or annihilate the would-be reality of the economic leadership of China in the global world. China is developing rapidly and there is no reason to see that this development will stop or decline. So, what we will see by the middle or by the end of the next decade is China number one in the global economy. And actually, everyone wants to be a friend of the new leader, including Russia, including other Asian countries or the European nations. It is all the same.
So, I would indicate that the Russia's orientation on the friendship with China, on the economic cooperation with China and with the Asia-Pacific region, it is a long-term goal which will not be undermined by the possible reconciliation between Russia and the West. And searching for the new friends in other parts of the world, like India, I think it is promising, because India still has a great potential for development which is not fully used yet. Russia has a very good and positive tradition of friendship with India, which lasts for more than 50 or 60 years. So, the friendship traditions will not be interrupted in the future.
