Valdai Club

China is a powerful factor constraining possible partnership between Russia and ASEAN.

In last week’s address to the Russian parliament, President Putin suggested that Russia, jointly with other members of the Eurasian Economic Union, should hold consultations with the member-states of the Shanghai Cooperation Organization and ASEAN with a view of potentially forming an economic partnership. “Such a partnership could initially focus on protecting investments, streamlining procedures for the cross-border movement of goods, joint development of technical standards for next-generation technology products, and the mutual provision of access to markets for both services and capital,” Putin said.

Valdai club expert Alexei Fenenko, associate professor at the Moscow State University School of World Politics, believes that this proposal might signal the beginning of a course on diversification of Russia’s ties with the East Asian states. “The president wanted to demonstrate that now, as the Trans-Pacific Partnership is taking shape, Russia has other options [in Asia] apart from China,” he told Valdaiclub.com in an interview.

However, such a partnership would be hard to establish, Fenenko pointed out.

“ASEAN is a difficult partner, because all their decisions are taken by consensus. All the member-states work out a single decision and uphold it at the international level,” Fenenko said. Moreover, ASEAN is very cautious in its dealings with Russia. “The bloc has cooled Russia’s ardour twice. First, in 2005, when Russia was denied membership in the East Asian summit, and next, in 2011, when Russia was invited to become an EAS member together with the United States. Thus ASEAN demonstrated that no privileged partnership was envisaged for Moscow.”

This is no accident, Fenenko said, as so far Russia and ASEAN have no real technical capabilities for large-scale partnership, primarily because Russia has no developed sea trade logistics infrastructure on its Pacific coast. “Russia is too remote from the ASEAN states and we have no large seaports except for Vladivostok and Nakhodka. Other ports, like Vanino, are yet to be developed,” the scholar said.

At the same time, Russia needs alternative markets for buying goods after it imposed sanctions on imports from the EU and Turkey and in this sense partnership with ASEAN makes sense. Still, the fact that Russia has no powerful Pacific merchant fleet means that China will remain its principal trade partner in Asia in the near future, Fenenko added.

China is a powerful factor constraining possible partnership between Russia and ASEAN, Fenenko said. The 2001 Sino-Russian Treaty of Friendship stipulates that Moscow and Beijing shall not enter “any alliance or be a party to any bloc nor shall they embark on any such action, including the conclusion of such treaty with a third country which compromises the sovereignty, security and territorial integrity of the other contracting party”. Due to the territorial disputes in the South China Sea, Beijing’s relation with the ASEAN states are rather strained, Fenenko reminded.

The Trans-Pacific Partnership, which Russia sees as a potential threat to its economic interests, provides an important context to President Putin’s proposal, Fenenko said. “Russia is apprehensive about the TPP primarily because it has conflict potential vis-à-vis China. If the TPP causes confrontation between China and other East Asian states, Beijing can demand Russia to choose between China and ASEAN. Of course, Russia will prefer China, thus severing all cooperation opportunities with ASEAN.”

In this context, Vietnam can become a bone of contention, Fenenko said. The US is working hard to widen the rift between China and Vietnam, which in the long term can be dangerous for Russia, which maintains close economic and political ties with both states, he explained.

Russia has actively developed economic and political ties with ASEAN over the past two decades. Although the share of the ASEAN states in Russia’s overall foreign trade is not so prominent (2 to 3 per cent), the turnover grew in 2014 despite worsening economic conditions to constitute $21.5 bn against $19.9 in 2013. While mineral products (predominantly carbohydrates) dominate Russia’s exports to the ASEAN countries, its imports from these states are centered on equipment and vehicles as well as food and agricultural stuff. At the same time, Russia views the ASEAN states as an important market for its power plant engineering, aerospace industry, oil and gas extraction industry. A number of high-profile deals on the sale of Russia’s hi-tech production to these states have been struck in the recent years.