Beijing’s new Silk Road may extend to Eurasian Union

_ Wendy Wu. Bejing, 2 July 2017.

China and Russia will study linking China’s trade and infrastructure plan with the Eurasian Economic Union.

China and Russia are working to connect their flagship economic diplomacy projects, a move that could potentially reduce tensions between Beijing and Moscow as they jostle for regional influence.

China’s Ministry of Commerce said that the two countries would sign an agreement for a study on the feasibility of linking China’s “Belt and Road Initiative” to the Eurasian Economic Union. As President Xi Jinping visits Russia today, the link will be on his agenda during his talks with his counterpart, Vladimir Putin.

While Xi and Putin have shown friendship, the Kremlin has always been wary about China’s growing influence in Central Asian countries which are traditionally Russia’s backyard, and the deep-rooted mistrust has hindered progress in cooperation.

“The rhetoric … has not been matched by progress on the ground,” said Jonathan Hillman, a fellow at the Washington-based Centre for Strategic and International Studies. The feasibility study was “just the latest expression of interest in improving ties” and not any big breakthrough between Russia and China, Hillman added.

The Eurasian Economic Union was proposed by Kazakhstan, Belarus and Russia in 2014, aiming to create a single market with a free flow of labour, capital and goods by 2025 in the former Soviet Union. Kyrgyzstan and Armenia joined the intercontinental union in later years. The Central Asian countries also happen to be on the map of China’s new Silk Road scheme, a massive infrastructure and trade plan.

Russia shares a common language and Soviet history with the region, but Beijing offers deeper pockets. At the same time, Western countries’ sanctions against Russia over the conflict in Ukraine in 2014 pushed Moscow closer to Beijing.

In 2015, the two countries issued a joint statement on linking the two economic strategies.

Ahead of Xi ‘s visit, Beijing said it expected trade ties with Russia to grow deeper. “I believe the quality and quantity of economic and trade cooperation between the two countries will continue to rise,” Xinhua quoted ambassador to Russia Li Hui as saying.

According to China’s General Administration of Customs, China-Russia trade grew 33.7 per cent in the first five months of this year, to 223.1 billion yuan (US$33 billion).

Cui Hongjian, head of European Union research at the China Institute of International Studies, said the connectivity statement released in 2015 indicated “a political consensus”. “This time, the two sides are expected to seek detailed cooperation in … policies and regulations,” Cui said.

Hillman said the Shanghai Cooperation Organisation, of which both China and Russia are members, might serve as the platform through which the countries could link larger efforts. “China is not going to join the Eurasian Economic Union. Russia isn’t a very attractive destination for China’s excess capacity,” Hillman said. “Rhetoric is free, which is why it’s important to track what’s really happening – or in this case, not happening – on the ground.”

Cui was more upbeat on the outlook. “China doesn’t want the belt and road strategy to be seen as a tool of geopolitical competition, but a platform for regional economic cooperation. China does not rule out possible cooperation with countries with shared interests there,” he said.


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