Morality and Law
The New Wave of COVID in the World: The China Challenge

The new wave of the COVID-19 pandemic has highlighted one critical global development:  the rise of China. It is the only major economy that will grow this year. The IMF forecasts growth at 1.9 percent, a sharp drop from the 6-plus percent China is used to, but well above the -4.3 percent forecast for the United States, -8.3 percent for the Eurozone, -5.3 percent for Japan,  -10.3 percent for India, and -4.1 percent for Russia. The IMF projects that most of the disparities in growth will continue in the next year, even as these economies recover from the pandemic-induced recession (only India is projected to outpace China).  

Whether the current rising waves of COVID-19 infections will change the forecasts remains to be seen, but it is noteworthy that China itself—at least so far—has been spared a massive second wave, unlike other major countries. (See the IMF, World Economic Outlook, October 2020: A Long and Difficult Ascent, Chapter1, Table 1.1) 

Global Governance
The COVID-19 Pandemic: An X-Ray of Today’s World
Thomas Graham
The lack of a genuine international community and true global leaders underscores the absence of a universal world order, writes Valdai Club expert Thomas Graham. The American effort to expand the liberal international order, which structured post-World War II relations in the West, to the entire world after the end of the Cold War has ended in failure.

No major country will remain unaffected.  All will have to make hard decisions about how to adjust to this emerging superpower.  The United States has already identified China as its primary strategic competitor. The Trump administration has challenged it on a broad front, including trade and investment, technological development, and geopolitical ambition.  Even if Joe Biden is inaugurated as the new American president on January 20, 2021, the strategic thrust of US policy will not change, although the tactics might. Meanwhile, the European Union has grown much more concerned about the participation of Chinese companies in the development of its information and communications infrastructure.  India has long seen China as a rival for preeminence in its neighborhood. And Japan and South Korea ponder how to guarantee their security vis-a-vis a geopolitically assertive China when that country has become integral to their economic prosperity.

But no country will face a greater quandary than Russia.  Just thirty years ago, the Russian and Chinese economies were roughly the same size.  Today’s China’s is 8.5 times larger in nominal terms, or 6 times as large in terms of purchasing power parity, and the gap is increasing rapidly as China’s economic growth exceeds Russia’s by a wide margin.   China is slowly overtaking Russia in the development and deployment of high technology, if it hasn’t already. It has an active space program with ambitions to send human beings to the moon and beyond, something that is well beyond Russia’s reach.  With the Belt and Road Initiative, it is extending its commercial and geopolitical reach across Eurasia, including in areas of great strategic importance to Russia.  

China’s rise poses two existential challenges for Russia.  First, how will Russia preserve its strategic autonomy and sustain itself as a great power in the face of a robustly growing China?  Second, how will Russia maintain its territorial integrity when confronted with the growing economic influence of China to its East and the still significant economic weight of Europe to its West?  

The Challenges of Russia’s Turn to the East
Thomas Graham
As Russia pursues its turn to the East, it needs to nurture a diversity of positive relationships that will give it the room to maneuver it needs to reduce the risk of devastating conflict while advancing its own interests.

The future prosperity of the Russian Far East depends on its integration into the Northeast Asian regional economy, in which China is the major player, while that of European Russia is linked to deeper integration into the European economic zone.  When two parts of a country—separated by thousands of miles and poorly linked to each other—look in opposite directions for their economic well-being, can they continue to be governed by a single political center? Or will political orientation ultimately follow economic realities?

Russia has dealt with the challenge to its great-power status in several ways. At the top of the list is strategic alignment with China.  Moscow’s decision in the late Soviet period to rebuild relations with Beijing made eminent good sense. It enhanced Russia’s strategic position vis-a-vis the United States, stripping Washington of the “China card” it had once adroitly played to manage its relations with Moscow.  More recently, Russia’s “pivot to the East” made equal strategic sense. It opened up opportunities for Russia to integrate into the economic dynamism of East Asia, provided a potential commercial counterweight to Russia’s over-reliance on Europe for trade and investment, and used China as a strategic counterweight to the United States.  In addition, strategic alignment with China, which has included regular high-level meetings to exchange views on global affairs, has provided Moscow with a modicum of influence over Beijing’s decisions.  

The problem is that close strategic alignment in the absence of strong relations with other major powers jeopardizes Russia’s strategic autonomy, given the growing asymmetries in power and fortune in China’s favor.  What can Moscow do to rectify the situation? One option would be to normalize relations with the United States, still the world’s pre-eminent power, to create a strategic triangle, in which Moscow could maneuver between the two giants to assert its strategic autonomy on the global stage.  

But that option appears out of reach for at least two reasons.  First, the profound divide between Russia and the United States in worldview, geopolitical interests, and values precludes a quick or easy relaxation in tensions that have escalated sharply since the eruption of the Ukraine crisis in 2014.  Second, and more important, Washington has shown no interest in working with Russia to constrain China. Washington is convinced that historical antagonisms, China’s potential economic domination of Russia, and xenophobia in both countries preclude an enduring strategic alignment.  Moreover, Washington does not believe that Russia’s alignment with China adds significantly to the challenge it faces from China alone. Washington therefore sees no need to make any concessions to distance Moscow from China. Indeed, it pursues a policy of dual containment and looks to its partners in the Indo-Pacific region—Japan, South Korea, Australia, and India—to contain China’s geopolitical advance and to those powers and its European allies to counter what it sees as China’s drive for technological dominance.

US-China Rivalry in a Post-Covid Scenario
P.S. Raghavan
It is still premature at this stage to forecast the contours of post-Covid US-China relations. Covid itself is in a strong second wave in many countries, with its economic and humanitarian consequences yet to fully play out. The US is on the cusp of one of its most important Presidential elections in recent history, whose outcome will influence domestic politics, transatlantic relations and relations with both Russia and China.

Absent an American option, Russia could turn to second-tier powers—India, Japan, Germany, France, and the United Kingdom, among others—all of which are worried about the preservation of their own strategic autonomy amid fears that Beijing and Washington will pressure them to choose sides in their increasingly bitter global competition.  India is perhaps the most promising partner, with its long history as the leader of the Non-Aligned Movement, its good relations with Moscow, and its economic potential. Indeed, Moscow’s successful effort to bring India into the Shanghai Cooperation Organization is indicative of its desire to create a hedge against China; so is the BRICS.  But so far at least, India will not prove sufficient for Moscow’s purposes; it lacks sufficient geopolitical weight. Moscow needs to expand its list of potential partners. European powers, with their long-standing alliance relationship with the United States, appear unlikely to fill the gap. But the growing voices advocating for European strategic autonomy, led by French President Emmanuel Macron, suggest that the ground might be shifting in ways favorable to Moscow.  Meanwhile, relations with Japan, which is eager to work with Russia in counterbalancing China, have stumbled over the resolution of the Northern Territories/Southern Kuriles dispute. But Moscow could reenergize ties with a show of greater flexibility on that sensitive issue.

The challenge for Moscow is, of course, how to develop these options without unduly souring relations with Beijing—Moscow cannot afford troubled relations with such a powerful neighbor.  The goal should be not to contain China, an impossible task for Russia, but to level the playing field so that agreements with China are more balanced than they currently are. Achieving that will require deft, multi-vectored diplomacy.  But there is no other reliable path to continuing strategic autonomy.

The question of Russia’s territorial integrity is not an immediate one, but it needs to be addressed  now since it will take considerable time to put the necessary safeguards in place. In brief, the solution requires the simultaneous pursuit of three integrative processes:  As Russia integrates into the Northeast Asian regional economy, it needs to enhance the economic and political integration among the Far Eastern provinces while ensuring that the entire Russian Far East is fully integrated into the Russian Federation as a whole.  The ties among the Far Eastern provinces must outweigh ties with foreign neighbors, and the entire Far East must be firmly linked back to European Russia through lines of communications and a common sense of political community. 

Moscow understands the challenge, even if it never expressed it so bluntly in public.  In his Annual Address  to the Federal Assembly in 2013, President Putin declared the development of Siberia and the Far East to be “a national priority for the entire 21st century.”  The Ministry for the Development of the Russian Far East and the Arctic was set up in 2012 to develop and oversee the implementation of strategies to foster the integrated development of the region. Important work has been done in this regard, but implementation so far has been inadequate. The economic difficulties accompanying the pandemic will only slow down whatever progress is being made at this point, and the continuing unrest in Khabarovsk underscores the political challenges.  But this is an effort that Moscow cannot afford to abandon, as Russia has done with so many past Far Eastern development projects, stretching back into the Tsarist period.

China, along with the United States, will remain at the center of Russian foreign policy throughout this decade and likely beyond.  Getting relations right will test the wisdom and skill of Russia’s strategic thinkers, but it will also require well-crafted domestic policies to boost economic capacity and reinforce national unity.  Russia’s future as a great power lies in the balance.

Thomas Graham: Improving Relations Between Russia and the West is Possible
Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.