The Silk Road Logic and the Eurasian Economic Union

The Silk Road Logic and the Eurasian Economic Union

By D. Rozanov

 

The turn to the East announced in Russia after the beginning of Western sanctions is supported by participation in various forums and even by the growth of international trade turnover. However, Russia is wary of large-scale economic and infrastructure expansion in China, which is part of the One Belt, One Road project, announced in 2013, also known as the New Silk Road. Experts, however, note that formally the Russian Federation is not yet a participant in the New Silk Road project, and the turn to the East has not shifted from the declarative stage.
Russia is formally not a participant in the project, but it is a member of the EAEU, which in May 2018 signed an agreement on trade and economic cooperation with China. On the docking of the EEU and this Chinese megaproject, the leaders of the Russian Federation and the People's Republic of China agreed in May 2015. “Conjugation” of projects was presented as a way to a new level of partnership and almost the creation of a common economic space on the continent. Officials positioned it as a turn of Russia to the East in spite of Western sanctions.

 

The Chinese are happy that Russia will deliver gas on the eastern branch of the Chinese-Russian gas pipeline on schedule, nuclear cooperation agreements are signed, a wide-body passenger aircraft is being jointly developed, Yamal LNG project liquefied natural gas is being shipped with Chinese investments, and expanding this cooperation in the Arctic.
Experts note that the more widely the concept of “Belts and Paths” is distributed in the world, the less clear it becomes. It turns out that any interaction with Beijing can be recorded in the implementation of the Silk Road idea. And the idea itself, as it turns out, requires an explanation of its goals, detail.
In the logic of the Silk Road in Russia, the creation of the first cross-border railway and automobile bridges is under way, and test trains on the China – Europe route through Russia have passed. In the Comprehensive Plan for the Modernization and Expansion of the Trunk Infrastructure until 2024, approved by the Russian government, it is planned to reduce the delivery times of transit container traffic in the Europe-Western China direction from the current 3.2 days to 1.6 days in 2024 due to the modernization of old railways. But the idea of ​​building a high-speed highway from Moscow to China, even to Nizhny Novgorod, seems to have been completely abandoned by the Russian authorities.
Russia, it seems, is not ready to become part of the Chinese mega-region or simply to provide its territory for the transit of Chinese goods to Europe. The Russian Federation is trying to create its own mega-region in the form of the EEU, one of the participants of which - Kazakhstan - has gone far ahead along the Silk Road.

Russia assesses the Chinese project as very successful, but so far has not joined it, since the Russian Federation has its own project - the EAEU. Russia proceeds from the agreement on the conjunction of two projects, but it does not work, there is no combination of projects.
According to some experts, Russia has a rather cautious attitude to the project. Moscow does not want to be just a bridge, a transit territory. Beijing sees the project as an opportunity to create a macro-region with the participation of border countries, but Russia is trying to create its own macro-region, it wants products to be created on its territory. Russia needs to raise its status in this project, and, most importantly, there are opportunities for this. Now the main land route of the Chinese initiative passes through Kazakhstan and enters Russian territory only in the Kurgan area. As a result, Eastern Siberia and the Far East of Russia are cut off from one of the main land transportation routes of the Chinese megaproject. High-speed rail traffic across the territory of the Russian Federation can fix this. Logistical interchange in northeast China is more efficient. The industrial potential of the PRC is concentrated on the east coast of the country, and cargo does not need to be transported through the whole of China. In addition, due to access directly to the direct transit route through the Russian Federation, it will not be necessary to undergo additional customs procedures in Kazakhstan.
From a political point of view, Russia participates in the initiative not as a separate state, but as a representative of the EAEU. After all, the agreement on trade and economic cooperation was signed precisely between the EEU and China. However, these initiatives have certain differences. In particular, the EAEU involves the protection of the domestic markets of the participating countries, while the Chinese project is focused on broader free trade areas. And Russia for China is a key partner in the integration of both initiatives.

 

Kazakhstan participates both in the EAEU and in the Silk Road, locating Chinese production in its southern regions. In turn, Kazakhstan supplies not only oil to China, but also consumer goods, whose production is even cheaper than in China, . According to Russian experts, this also leads to contradictions, internal disputes between the northern regions, where China’s influence is less, and the southern ones, which are reproached for their dependence on their neighbor.
There are risks from the non-participation of the Russian Federation in the Chinese project, but it is necessary to fear and too much dependence. Many private small and medium-sized businesses have the illusion that trade with China is developing, they are trying to get into this market, but only waste time.
It is noted that the Chinese are making demands to distinguish them from other partners, they are asking for government guarantees of investments, which is simply not the case in Russia now. Russia does not agree to work in the way Central Asian and Central Asian countries work with China. Moscow is not ready to fully open. For her, it is important not to increase trade with them, but to create high-tech start-ups, joint productions to sell products to third countries.

 

24.04.2019

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