International Relations and Asia's Northern Tier Sino-Russia Relations, North Korea, and Mongolia by Gilbert Rozman, Sergey Radchenko PDF

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Gilbert Rozman • Sergey Radchenko
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International
Relations and Asia’s
Northern Tier
Sino-Russia Relations, North Korea, and Mongolia
Editors
Gilbert Rozman Sergey Radchenko
The Asan Forum Department of International Relations
Washington, DC, USA Cardiff University, Cardiff, UK
Asan-Palgrave Macmillan Series

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CONTENTS
1 Introduction: Asia’s Northern Tier 1

Gilbert Rozman and Sergey Radchenko
Part 1 Sino-Russian Strategic Relations
2 The Russian Pivot to Asia 13

Gilbert Rozman
3 Evolution of Sino-Russian Defense Cooperation since

the Cold War (Part 1+ Part 2) 27
Paul Schwartz
4 Russia’s Policy Toward China: Key Players

and the Decision-making Process 59
Alexander Gabuev
5 Russia, China, and the Emerging Greater Eurasia 75

Alexander Lukin
6 Russo-Chinese Relations in Strategic Perspective 93

Stephen Blank
v
vi CONTENTS
Part 2 Sino-Russian Relations and Mongolia
7 Sino-Russian Competition in Mongolia 111

Sergey Radchenko
8 Mongolia Hangs in the Balance: Political Choices

and Economic Realities in a State Bounded
by China and Russia 127
Sergey Radchenko
9 A Stronger Korea-Mongolia Link in a Changing

Northeast Asia 147
Mark Minton
10 Mongolia’s Dilemma: A Politically Linked, Economically

Isolated Small Power 157
Mendee Jargalsaikhan
11 Mongolia’s Place in China’s Periphery Diplomacy 175

Jeffrey Reeves
Part 3 The Russian Far East and Northeast China
12 The Russian Far East: Positive Scenarios and Negative

Scenarios 193
Artyom Lukin and Gilbert Rozman
13 Northeast China and the Russian Far East: Positive

Scenarios and Negative Scenarios 215
Gaye Christoffersen and Ivan Zuenko
Part 4 Strategic Thinking toward North Korea
14 Chinese Strategic Thinking Regarding North Korea 241

Cheng Xiaohe
CONTENTS vii
15 China’s Interests, Actors, and the Implementation

of Sanctions against North Korea 253
Catherine Jones
16 Russian Strategic Thinking Regarding North Korea 267

Alexander Lukin
17 Making Sense of the Russo-North Korea Rapprochement 283

Stephen Blank
18 North Korea’s Place in Sino-Russian Relations

and Identities 301
Gilbert Rozman
Index 315
CHAPTER 1
Introduction: Asia’s Northern Tier
Gilbert Rozman and Sergey Radchenko
The four countries on the northern fringe of Asia went their separate ways
after the end of the Cold War, but strengthening Sino-Russian relations
and what may be the looming endgame in North Korea’s strategy of
threats and isolation are signs that we now need to think about this area
also through its connections. Mongolia still is rather aloof in its foreign
policy, but geography leaves it no escape from dynamics particular to the
Northern Tier. South Korea (outside of our conception of the tier) has
struggled to prevent a revival of the Northern Tier, but its leverage is
proving limited. Looking back to what existed in an earlier incarnation of
the Northern Tier and focusing on Chinese and Russian views of North
Korea, we are able to explore the implications of increasingly close Sino-
Russian relations. Tensions with North Korea have grown more serious
after its provocative moves throughout 2016, but that does not mean that
we should dismiss the strategic reasoning in 2014–15 about how China
and Russia have been approaching not only the immediate challenge
G. Rozman (*)
The Asan Forum, Washington, DC, USA
S. Radchenko
Department of International Relations, Cardiff University, Cardiff, UK
© The Author(s) 2018 1

G. Rozman, S. Radchenko (eds.), International Relations and Asia’s
Northern Tier, Asan-Palgrave Macmillan Series,
https://doi.org/10.1007/978-981-10-3144-1_1
2 G. ROZMAN AND S. RADCHENKO
coming from the North, but, more significantly, where they would like it
to head from here.
There was a Northern Tier until the end of the Cold War. For the
decade after 1949, it was unambiguously the Red Bloc of the Soviet
Union, China, Mongolia, and North Korea. Stalin and Mao chose to
support Kim Il-sung’s plan to unify the peninsula by force, making this
the front line in the Cold War. The Korean War reflected thinking that the
“east wind prevails over the west wind.” Dressing the attack on South
Korea in terms of the end justifies the means (lies about who started the
war, who was fighting in it, and what was taking place), Soviet and
Chinese commentaries set a pattern for narratives on the Korean
Peninsula and Northeast Asia that remained highly distorted during the
“cold peace” through the 1980s. They refused even to recognize North
Korea’s continued belligerence destabilizing the peninsula. The defensive
character of the US alliance with Tokyo—no thought being given to any
sort of aggressive behavior—was finally acknowledged in China after it
found common cause against the Soviet Union. Yet, its support for North
Korea remained steadfast, as did Moscow’s. The Sino-Soviet split did not
mean the end of shared (competitive) support for North Korea and its role
in opposing US alliances. In this sense, the Northern Tier survived until
the early 1990s, leaving a lasting legacy.
Northeast Asia was an unlikely focus of great power maneuvering
following the end of the Cold War. There were plans for turning it into
the centerpiece of great power coordination for a new regional and world
order: multilateral energy cooperation in the Russian Far East and Eastern
Siberia, cross-border regionalism around the Sea of Japan, and, above all,
collective security assurances to steer North Korea into a regional frame-
work conducive to reduced tensions on the Korean Peninsula but also to
great power trust. That Pyongyang would balk at such plans—demilitar-
ization, loss of its ability to play one great power against another, reforms
that threatened to shake the legitimacy of a hermit dictatorship afraid to
unseal its chamber of horrors, and a Tumen River development project
opening the country to transit movement—should have come as no
surprise. More unexpectedly, strategies to use North Korea to rekindle
splits between great powers rather than to facilitate trust as well as coop-
eration defied hopes for putting the Cold War in the past. While no
country’s blueprint for the future of North Korea was realistic, its revival
as the nexus of contestation was the predictable outcome of great power
dynamics from the 1990s.
INTRODUCTION: ASIA’S NORTHERN TIER 3
The US posture toward North Korea has repeatedly been perceived in

Beijing and Moscow as overriding potential bilateral concerns. This was
the case for Beijing in 2003 when it feared that the “axis of evil” speech
and the invasion of Iraq would be a prelude to a push for regime change in
North Korea, and it was true again in the fall of 2005 when unilateral US
sanctions against Banco Delta Asia revived the charge that regime change
was being aggressively pushed.1 Only when North Korea defied both
China and Russia in late 2006 by brazenly testing both a long-range
missile and a nuclear weapon did Beijing pressure Pyongyang, resulting
in the February 2007 Joint Agreement. Yet, after similar tests in the spring
of 2009, Beijing’s response was different, encapsulated in its three euphe-
misms: “maintaining domestic stability in North Korea, peace on the
Korean Peninsula, and social stability in China.” These were invoked in
2009–10 for “enabling North Korea’s misdeeds,” before China in late
2010 may have restrained the North from military retaliation against
planned South Korean military exercises, and they are used to justify
putting blame on US aggressiveness more than North Korea’s belligerence
and overlooking China’s own passivity, acquiescence, or enablement of
the North Korean regime’s conduct.2
THE CHINESE NARRATIVE ON NORTH KOREA IN THE 2010S

Discordant voices were heard in 2004 when a journal was closed for
its coverage, in 2006 and 2013 after nuclear tests by North Korea,
and occasionally at other times as well. Yet, the prevailing tone was in
sharp contrast to what these voices had to say. In 2002–03, when
Pyongyang broke away from the IAEA regime set by the Joint
Agreement, again in 2008–09, when it abandoned the Agreed
Framework set by the Six-Party Talks, in 2010, when North Korea
twice attacked South Korea, and finally in 2014–15, when many
thought China’s dissatisfaction with Kim Jong-un meant a sharp
shift in policy, Chinese publications overwhelmingly reaffirmed a
narrative of little comfort to those arguing for 5 vs. 1 or for reuni-
fication led by South Korea.
The Special Forum article in June 2015 of Cheng Xiaohe charac-
terizes China’s stance toward the Korean Peninsula as a “drawn-out
competition,” in which China is taking an increasing interest to the
point it may tip the balance on the peninsula, which has been tilting
toward South Korea. Treating North Korea’s nuclear weapons program
as a means to reverse the trend and South Korea’s prospect of achiev-

ing unification on its own terms as very unlikely, Cheng calls for
resuming the Six-Party Talks as a way to change North Korea’s calcu-
lus. His perspective draws equivalence between the North and the
South, treats the standoff as a struggle over the security interests of
the great powers, and assumes that balance between North and South
and among the great powers is the pathway to unification. To persist
in South Korea’s current approach to unification as a “bonanza” is an
illusion, he adds, neglecting only to note directly that China does not
view this outcome as in its interest. Without praising the North’s
nuclear program, Cheng credits it with helping Pyongyang turn the
tables in its competition with Seoul. Thus, it makes China’s goal of
pursuing a path to reunification based on equality easier. He argues
that whether Seoul can go forward with efforts aimed at reunification
depends heavily on China’s cooperation, which, in turn, depends on
Seoul not supporting the US rebalance targeted against China.
The obvious conclusion is that Seoul faces a zero-sum great power
clash, and its ties to Pyongyang, as influenced by Beijing, depend on
how it balances the two powers. Deterrence and trust building are at
odds. China can help with the latter, but efforts to bolster the former
that play into the US rebalancing will not win China’s support.
Cheng’s article in English is but the tip of the iceberg of Chinese
writings insisting that Seoul must abandon its current strategy and change
course for reunification. Even if Sino-DPRK ties are strained, Beijing sees
an alignment versus US alliances.
China appears to be seeking regime reorientation as the path to
domestic stability in North Korea. This means its readiness to work
with China on diplomacy, economic reform, and regime revitalization.
China also seems to be in pursuit of peace on the peninsula through a
balance of North and South security concerns with input from China
and other powers, but there is reason to expect that China’s input will
carry the greatest weight, given its likely impact on the North and the
South’s awareness that China has far more levers to shape the process
than any other country. Finally, success as the host of the reconvened
Six-Party Talks and the protector of the North would give a boost to
the legitimacy and stability of the Communist Party in China. In the
background, the Sino-Russian partnership in August 2015 conducting
military exercises at sea near the Korean Peninsula is a reminder of their
bilateral interests.
THE RUSSIAN NARRATIVE ON NORTH KOREA IN THE 2010S

The Russian narrative on the Korean Peninsula closely parallels the
rhetoric found in China. In the December 2014, Special Forum
Rozman analyzed the Russian “turn to the East,” emphasizing
China’s central role, but, increasingly, North Korea’s salience is also
being emphasized. Blaming the United States for trying to destroy the
regime in North Korea while also finding merit in the argument that
the September 19, 2005 agreement was violated by the United States,
South Korea, and Japan, provoking North Korea to resume its nuclear
activity, Valerii Denisov was paraphrased in The Asan Forum as sug-
gesting that the real danger to peace in the region comes from the US-
ROK alliance, not North Korea. He justifies Russia’s warming to North
Korea, mentioning the souring of Sino-North Korean relations without
putting much blame on either party. The burden is placed on
Washington and Seoul to win the confidence of Pyongyang, leading
to the resumption of the Six-Party Talks, notably of the 5th working
group headed by Russia to address a regional security framework,
which Denisov puts foremost in his analysis of what is needed to
resolve the crisis.
A strong China and a close Sino-Russian partnership are decisive factors
in reaching the kind of arrangement Denisov, and most other Russian
writers on the peninsula are seeking. They focus on reassuring North
Korea, bolstering it, transforming the US-ROK alliance, and developing
a regional economic program for a north-south corridor from Russia
through South Korea. In light of the expected hesitation of Seoul to
embrace this agenda, Russians lean more to pressure than persuasion.
Strengthening bilateral ties to North Korea both makes the North a
more viable force and puts Russia in a less marginal position. Behind the
facade of cooperative Russo-ROK relations—Park Geun-hye’s Eurasian
Initiative was still being pursued—Park offended Putin by not attending
the 2014 Sochi Olympics ceremonies and the May 9, 2015 celebration of
the 70th anniversary of victory on Red Square. Relations have cooled, as
high officials visit less often. Yet, discretely Seoul strives to sustain rela-
tions, recognizing that it needs Russia to manage North Korea. As long as
Russia affirms its support for the non-proliferation treaty and denuclear-
ization of North Korea and suspicions are not confirmed that it is, through
official or unofficial ties, assisting the North’s missile programs, Seoul is
likely to avoid giving further offense. In these circumstances, Russia has
considerable room to boost ties with Pyongyang, using the possibility of

closer military ties and arms transfers as a kind of blackmail.
Georgy Toloraya noted in his June 11, 2015 paper for the Korean
Economic Institute that Russia “is increasingly less interested in a momen-
tous Korean unification under the ROK’s guidance which would result in
a sudden shift of balance of power in the region.”3 He added that the
nuclear issue is less urgent now. What really matters are security guarantees
to North Korea and for Washington and Seoul to offer those, the regime
must be more resilient. Russian support for economic projects and appeals
for Seoul to lift sanctions and back trilateral projects serve that end.
Toloraya notes neither Moscow nor Pyongyang would accept any dete-
rioration in the strategic balance, which leaves Seoul in the position of no
prospects for unification unless it defies Washington, puts aside denuclear-
ization for the distant future, and engages Pyongyang as well as Moscow
and Beijing on a massive economic program treated as the foundation of
reconciliation, while simultaneously refocusing away from the US alliance
and security ties with Japan in order to forge the kind of power balance in
Northeast Asia conducive to regional diplomacy and regime reassurance.
Russia could be marginalized by China and wants to capitalize on
arguments aimed at Pyongyang and Seoul that the only realistic alternative
to China’s dominance is a triangular arrangement with it that accommo-
dates China, to a degree. Yet, on both the meaning of peace and stability
and the reinforcement of the Pyongyang regime, Moscow is close to
Beijing in its posture, albeit with more support for the status quo in the
regime and wariness about reform, which could play into Beijing’s strat-
egy. It is no less obsessed with preventing a blow to legitimacy at home
from a new “color revolution.” Moscow and Beijing differ somewhat, but
their overlap is substantial.
THE SINO-RUSSIAN-NORTH KOREAN TRIANGLE

Over the past decade, Chinese and Russian sources have rarely had a
critical word to say about each other’s approach to the crisis and to talks
over North Korea. There is silence also about the triangular implications of
their overlapping logic on both the nature of the problem and the steps
needed to address it. This serves to conceal prospects for a northern
triangle as well as points of contention that are anticipated.
After bolstering Pyongyang to face Seoul from strength and supporting
its regional role in a competition among great powers, Moscow and
Beijing have reason to cast doubt on each other’s long-term intentions.

Russian sources are prone to describe an ideal partnership of their country
and a united Korea, as if Russia is the natural partner and China may have
in mind some sort of sinocentric arrangement about which Koreans
should be wary. They envision a north-south corridor, strengthening the
Trans-Siberian railway and making Busan the terminus, bypassing the east-
west corridor through China. Filling the void somewhat left by China’s
tougher posture toward North Korea in 2014, Russia appeared to be
communicating to Kim Jong-un that it is an alternative that allows him
to avoid the heavy dependence on China that he fears. In these respects, it
is not simply reinforcing China’s approach to the North.
Chinese sources often appear to overlook Russia’s role on the penin-
sula. China has the stronger presence in North Korea. Its transportation
corridors are far ahead of Russia’s with access to much greater funding,
independent of what Seoul decides to support. The Korean Peninsula is a
symbol in China of Tsarist Russia’s imperialist conduct in the 1890s–
1900s. Russia situates Korea in the postwar order from 1945 to justify
its approach, but China has two millennia of sinocentric reasoning to back
its preferred outcome. While coordination is more doubtful in fast-chan-
ging circumstances than in today’s slow-moving efforts just to restart
diplomacy with North Korea, this does not mean that divergent national
interests are likely to negate the prospects for triangularity. As long as
unification is perceived as an ideological threat (one more “color revolu-
tion”); a historical travesty (reversing the outcome of 1945 if not the
harmonious order prior to Western imperialism), a civilizational defeat
(the Western approach to democracy and human rights would be
boosted); and a loss of equilibrium in the regional balance of power
(even a neutral Korea would not be trusted to remain so), China and
Russia will agree on supporting North Korea as a matter of national
identity and national interest. Given the shared obsession with identity
gaps with the West, above all the United States, there is little reason to
anticipate that Sino-Russian differences will take priority.
In 2015, Kim Jong-un refused to take the diplomatic track, preferring
unilaterally to boost his military might and threaten other states. The focus
on finding a path for restarting the Six-Party Talks centered on coordinat-
ing to put denuclearization in the forefront; however, negotiations would
proceed once the September 19, 2005 Joint Statement was reaffirmed.
South Korea had turned its focus to reunification led by it, asking for the
support of others. China found it useful to emphasize cooperation with
South Korea and the United States, aware that no issue serves this purpose
better than the North’s nukes. Russia too, however much it views the
world through the prism of a new cold war, repeated its support for the
non-proliferation treaty. All of these circumstances had distracted atten-
tion from the way China and Russia are looking at North Korea as a factor
in regional security, a reunification process on the peninsula, and the
construction of national identity to serve regime legitimation.
CONTENTS OF THIS VOLUME

In the first part, we focus on Sino-Russian relations, looking at Russia’s
“turn to the East,” and divergent views (by Russians and an American) of
the geostrategic context of this pairing. The lengthiest coverage is devoted
to how military relations between Moscow and Beijing have been chan-
ging, combining what were originally two articles by Paul Schwartz that
show the evolution of this relationship. The second part of the book
devotes as many as five chapters to the little-studied case of Mongolia,
including two by Radchenko putting that country in the Sino-Russian
context. The third part of the book focuses on ties between the Russian
Far East and Northeast China, presenting two exchanges of views. Finally,
the book concludes with five chapters on North Korea in the context of
thinking in China or Russia or both. Chinese and Russian authors review
the strategic thinking in their countries toward North Korea. Outside
analysts approach each of these countries’ thinking in a different manner.
These chapters are snapshots over about two years of how specialists
perceived the Northern Tier or parts therein taking shape. This was a
pivotal period when this northern arena in Asia acquired a different
geopolitical form through strengthened Sino-Russian relations, more
open geopolitical rivalry among the great powers over how to manage
North Korea, and new realities facing Mongolia. The trends taking shape
at this time were soon to intensify.
NOTES
1. Thomas J. Christensen, The China Challenge: Shaping the Choices of a
Rising Power (New York: W.W. Norton & Co.), p. 227.
2. Ibid., pp. 258, 271–277.
3. Georgy Toloraya, “Korean Security and Unification Dilemmas: A Russian

Perspective,” Korea Economic Institute of America, Academic Paper Series,
June 11, 2015.
Gilbert Rozman is the editor-in-chief of The Asan Forum and the Emeritus
Musgrave Professor of Sociology at Princeton University. He specializes on
Northeast Asia, including mutual perceptions and bilateral relations as well as
national identities and the quest for regionalism.
Sergey Radchenko is Professor of International Politics at Cardiff University and

Global Fellow at the Woodrow Wilson Center for International Scholars. He
specializes in the history of the Cold War, and has written extensively on
Sino-Soviet relations, as well as contemporary foreign policies of China and Russia.
PART 1
Sino-Russian Strategic Relations

CHAPTER 2
The Russian Pivot to Asia
Gilbert Rozman
Vladimir Putin’s “turn to the East” (povorot na Vostok) greatly intensified

in 2014. Of the various pivots to Asia, it is one of the most controversial,
but, at various times, was encouraged by all countries active in the region.
Compared to the others, it has the most diversified objectives, but also the
greatest contradictions among them. In the context of multiple pivots, this
one has the greatest urgency and, perhaps, the most immediate ramifica-
tions. To appreciate its significance, we need to grasp not only its stated
objectives, but also the intended impact on bilateral relations with the
other states in Northeast Asia and likely fallout from clashes with other
pivots.
Russia’s “departure from Europe and entrance into Asia”—a reversal of
the slogan used in Japan in the late nineteenth century—has the following
objectives: 1) civilizational, to clarify that Russia rejects the “universal
values” of the West and insists on its own distinctive civilization, which is
shared through “Eurasianism”; 2) geopolitical, to forge a multilateral
security framework, which stands in contrast to the US-centered alliance
system; and 3) geoeconomic, to become an integral part of Asia’s dynamic
economy, developing the Russian Far East and Eastern Siberia as a
G. Rozman (*)

https://doi.org/10.1007/978-981-10-3144-1_2
14 G. ROZMAN
manufacturing hub, transforming its transportation infrastructure to rea-

lize Eurasianism, and also supplying energy primarily to Asia rather than to
European states. The gateway to Asia for all three of these objectives is
China, with which relations, geographically, must cover the Asia-Pacific
region or the maritime zone; cross-border areas or the eastern zone; and
Central Asia with extensions to South and Southwest Asia or the western
zone. Other countries in Asia—North Korea, South Korea, India, Japan,
and Vietnam, topping the list—are often viewed through a triangular
prism with China.
Within Russia the overall direction of the “turn to the East” has
deviated from what many expected before the spring of 2014, and busi-
ness interests are raising doubts about overdependence on China. The
battle lines in the fall of 2014 are between the Putin-led establishment,
which insists that everything is going smoothly in Russia’s full-scale reor-
ientation to Asia, and the rare voices raising concerns—not about the
general wisdom of Putin’s leadership in this process, but about overde-
pendence on China as an economic strategy. The mainstream refuses to
acknowledge tradeoffs, which are discussed below, which are needed if the
current strategy long persists. As long as there remains optimism that Abe
Shinzo is eager for a breakthrough and Park Geun-hye will also defy
Obama’s pressure over Ukraine, Russians are reluctant to reconcile insis-
tence that a new cold war is taking shape in East Asia as elsewhere with
their predictions that multipolarity involving US allies is also within its
reach.
PAST WELCOMING OF THE RUSSIAN PIVOT

The United States long encouraged Russia to turn its attention to the
Asia-Pacific region and to modernization of the Russian Far East. It was
assumed that national interests overlap most fully in this vector of Russian
interest. Whereas to the west tensions existed over NATO and EU expan-
sion and to the south Russians worried about friendly dictatorships being
undermined by NGOs and “color revolutions,” the Russian Far East and
the Korean Peninsula appeared to be ideal environments for multilateral
cooperation.1 US allies, Japan and South Korea, were considered to be
positive influences, whose partnership would steer Russia toward integra-
tion into the global economy based on market principles and support for
regional stability without leaning heavily on China or reverting to close
ties with North Korea. The greatest needs were: openness, after more than
THE RUSSIAN PIVOT TO ASIA 15
a half century of closing the area, including Vladivostok, to the outside

world; capital, to develop a cornucopia of natural resources, especially oil
and gas; and diverse foreign partners, in order to avoid one-sided depen-
dence on China with its vast population of potential migrants and long-
standing resentment over the “humiliation” of territorial losses to Russia.
Both economic complementarity and balance of power favored the inter-
ests of the United States, it was assumed. As recently as 2010–2011 when
Russia was planning for the Vladivostok APEC summit—seen as boosting
integration into the Asia-Pacific region guided by Dmitry Medvedev’s
“modernization” ideals—, many thought that its regional initiatives
would breathe increased life into the Russo-US relationship.
South Korea has long been depicted as deeply interested in triangular
cooperation with Russia and North Korea as well as in investment in the
Russian Far East. There was often a lack of candor in Russia about its
reasons for caution and its inclination to give Russia hope in order to
sustain cooperation in trying to change North Korea, but Park Geun-hye’s
Eurasian initiative led to further optimism about her country’s encourage-
ment of Russia being welcomed as it expands its openness to East Asia. In
Vladimir Putin’s November 2013 visit to Seoul, this theme drew wide
attention.
Japan’s position has vacillated between giving the cold shoulder to
Russia as if it had little value for Japan’s hoped-for economic revitalization
and raising high hopes that a bilateral breakthrough would result in a close
partnership beneficial to Russia’s economic and geopolitical aspirations.
Regardless of how much Russia’s obsession with energy and investment in
the Russian Far East and beyond was viewed as an afterthought in order to
satisfy Japan’s obsession with the return of territory, in 2013 much was
written in both Japan and Russia about Abe’s interest in reaching an
energy agreement that would substitute Russian gas for closed nuclear
reactors. The message that Japan needs Russia was reinforced by a view of
China besieging Japan.2
By late 2014, the picture had changed with accusations that the United
States seeks to contain Russia in Asia, as elsewhere, and is pressuring its
allies to do so as well. In this atmosphere, discussions of South Korea and
Japan mainly stress their defiance. Meanwhile, emphasis is now placed on
China and also North Korea’s eager welcome. South Korea has beckoned
Russia to become a closer partner in Northeast Asia since nordpolitik was
launched a quarter century ago. Russian writings optimistically note pro-
spects for a spurt in economic cooperation, even in the new climate of
16 G. ROZMAN
2014. The quest for a breakthrough in relations with Japan, which is still
underway at the end of 2014, is interpreted as Abe’s recognition that
many advantages would ensue for his country by partnering with Russia in
Asia. North Korea is depicted as very eager for Russia to pursue this turn
away from the West and toward Asia, embracing it as the North’s closest
partner. China appears as extremely welcoming to Russia’s “turn to the
East” also and most vital for its success. In contrast, the United States
appears in Russian publications as intent on blocking Russia’s entry into
Asia, continuing to view it as an enemy and to contain it in order to
reinforce US hegemony here too.3
LOSING FOCUS ON THE IDEAL RUSSIAN “TURN TO ASIA”

The ideal Russian “turn to Asia,” which was repeated as if it were within
reach over many years, now seems to have been sacrificed in the sharp tilt
to China and away from the United States. It had at least six components.
First, it secured multipolarity by developing the Russian Far East and
Eastern Siberia as a manufacturing hub not just a natural resource supplier,
by building up the coastal area with access to many markets; limiting
Chinese investments in most non-manufacturing pursuits through infor-
mal controls; limiting Chinese traders and migrants to the point of insist-
ing on others filling the urgent needs in preparing for the Vladivostok
APEC summit; and investing heavily in this region to attract migrants
from various parts of Russia and make it a beacon of development under its
own economic tsar able to cut through red tape. The global financial crisis
in 2009, the slowdown in the economy of Russia in 2013, and the
sanctions by the West in the spring of 2014 led to throwing caution to
the wind on all of these points, raising the grave risk of Chinese monopoly
power.
Second, Russia sought to use the SCO and other institutional and
bilateral linkages to Central Asia to control China’s presence in Central
Asia, keeping the countries of this region primarily in Russia’s orbit.
Moscow blocked an FTA and other economic integration through the
SCO. It tried to monopolize security in the region through the CSTO and
bilateral arrangements, limiting China’s role to counterterrorism in oppo-
sition to Islamic separatists. Culturally, elites were assumed to be
Russianized and efforts were made to keep this orientation. Finally, finan-
cial, energy, and other infrastructure were to remain dependent on Russia.
When the Eurasian (Economic) Union was announced in 2011–2012,
many assumed that it would be a counterweight to China’s growing

presence in Central Asia. In 2014, Russia bowed to new realities by
agreeing that Xi’s Silk Road Economic Belt and Putin’s Eurasian Union
are joining together and Central Asia is becoming part of a larger frame-
work, not as solely the bailiwick of Russia. Long-expressed reservations
about China’s role there had faded.
Third, the myth of a “troika” of continental behemoths—Russia, India,
and China— in which Russia enjoyed the pivotal position, was exploded as
Russian-Indian ties lost even a semblance of special closeness and Sino-
Russian relations intensified. As India became more strategic in its think-
ing and more pragmatic in expanding ties of economic advantage, Russia’s
relevance declined. This was quietly acknowledged in the far scantier
references to India in Russian commentaries about turning to Asia.
Fourth, the United States stopped being included in discussions of
Russia’s pursuit of multipolarity in Asia. The notion of Asia-Pacific region-
alism had been replaced by the theme of Eurasianism. Somehow other
states in Asia would have to suffice for providing the necessary balance of
economic ties and power. In apparently echoing Xi’s 2014 call of “Asia for
the Asians,” with the twist of including Eurasians, Russia was leaving itself
vulnerable—economically, geopolitically, and even culturally.
With Northeast Asia, its primary concern, Russia had long maintained
the pretense of promising relations with South Korea expected to pay big
economic dividends. It had raised the profile of Japan after its 3/11
tsunami and especially after Putin and Abe announced their joint effort
for a breakthrough in relations. The two developed economies repre-
sented a kind of reassurance that balance in the region and large-scale
investment were within reach, but in the fall of 2014, supposedly due to
new pressure from the United States, continued talk of megaprojects
funded by either of these states seemed illusionary. This dealt a fifth
blow to Russia’s optimistic claims.
Finally, the November 2014 EAS revealed Russia’s marginal place in
Southeast Asia. After once heralding Russia’s inclusion in the EAS and its
strong ties to ASEAN, Putin did not even bother to attend the gathering
between his stops at APEC in Beijing and the G20 in Brisbane. Instead,
increasingly dire reports of Russian troop movements into Ukraine cast a
shadow on the assembly. While observers were still mentioning Russia’s
special relationship with Vietnam, especially arms sales, in defiance of
China, the idea of balancing China in this way was absent from Russian
publications.
18 G. ROZMAN
The “turn to the East” has been subjected to diverse geographical

interpretations. At one end of the spectrum is the view that it is a broadly
oriented refocusing away from Europe to Asia as a whole—no longer with
emphasis on the Asia-Pacific region. This includes South Korea and Japan,
which value improved ties to Russia despite US pressure. It involves
Southeast Asia, the countries of which have been encouraged to boost
exports of agricultural goods to fill the hole left by countersanctions aimed
at the West. A sharp contrast is drawn between the anti-Russian West and
the states of Asia, which are only seeking economic cooperation and
regional stability.
At the other extreme is the argument that not only is the “turn to Asia”
concentrated on China, which is a full-fledged partner unlike many other
states in the region, but that North Korea is second on the list of partners,
as an enemy of the United States, Russia’s principal opponent. Closing
ranks with another country subject to unfair treatment by the United
States is, we are told, an appropriate step in containing US aggression.4
The ideal path to regionalism is now replaced with what is regarded as the
necessary path, with blame centered on US containment and pressure on
allies.
On November 10, 2014, at the APEC summit in Beijing, Putin
explained his thinking on economic regionalism, stressing three points:
the importance of bilateral Sino-Russian relations, the linkage between his
Eurasian Economic Union and China’s plans for the Silk Road Economic
Belt and an FTA of the Asia-Pacific, and the need for the Russian Far East
to become a manufacturing hub for the Asia-Pacific region. Given the
recent free-fall in the ruble and rapid increase in capital flight from Russia,
Putin’s speech to the assembled CEOs first had to offer reassurance that
his country is a stable and reliable partner. On Russia’s relations with
China, agreement to build a second western gas pipeline after the USD
400 billion deal announced in May for an eastern gas pipeline showcased
continued momentum. Putin announced too that the two countries had
started implementing their agreement to use national currencies in eco-
nomic transactions. In the face of avoidant relations with Barack Obama
and Australia’s Tony Abbott and global speculation about the state of
Russia’s economy, Putin made his meeting with Xi and talk to the CEOs
centerpieces of his Beijing visit.
The main arguments he made in his speech were that opportunities
abound for new investment in Russia, especially in manufacturing in the
Russian Far East, and that Russia’s plan for the Eurasian Economic Union,
including Kazakhstan, is compatible with China’s proposal for an FTA of

the Asia-Pacific. In Beijing and a week later at the G20 in Brisbane, Putin
was the most divisive figure, pressing Russia’s own pivot.
TARGETING THE KOREAN PENINSULA

Some in Russia argue that the Korean Peninsula is a major target of
Russia’s “turn to the East.” Rather than emphasizing relations with
South Korea, with which Russia has substantial economic ties, they give
priority to relations with North Korea, with explanations that the result
will be triangular economic cooperation, drawing on South Korea’s finan-
cial strength. The assumption is that Russia is marginal to South Korea and
others active in diplomacy concerning the peninsula unless it uses North
Korea as its entry point. This was proven in 2000–2003 when Russia’s
standing rose appreciably due to Putin’s personal ties to Kim Jong-il, and
after their connection stagnated as a result of North Korea’s nuclear tests,
Russia failed to gain any further boost. Georgy Toloraya explains that it
was Medvedev’s 2011 summit with Kim Jong-il that put things back on
track. Kim Jong-un, seeking to decrease his country’s dependence on
China, has offered better terms to Russian firms, and Putin in 2014,
when communists and “national patriots” have become part of the main-
stream, has sought closer relations as the discourse on North Korea is
turning more favorable.5
Toloraya points to an upsurge in contacts with North Korea in 2014,
beginning with Kim Yong-nam, the nominal head of state, attending the
Sochi Olympics, at which Park Geun-hye was conspicuously absent. The
high point came in October when the North Korean foreign minister
visited Russia for 11 days, including travel to four regions in the Russian
Far East. Already Russia’s FDI through the Rajin-Khasan line is the largest
foreign investment and Russia has been exporting coal. By year’s end, the
Rajin terminal will be used to send transit shipments onward to Pohang in
South Korea, Russians anticipate. When Foreign Minister Ri Su Yong met
with officials in Russia, he stressed projects aimed at increased production
rather than assistance. Following forgiveness of the North’s USD 11
billion debt, apart from about USD 1 billion to be put in a fund for
humanitarian and energy projects, Russia has insisted that the North
must pay for purchases and investments with such items as coal, rare
earth elements, and other minerals. The North is seeking long-term
bilateral agricultural projects, as well as investments in infrastructure
20 G. ROZMAN
such as for transportation. This leaves room for Russia to buy coal and sell
it in the international market, assisting in modernizing the North’s mineral
industry, while playing an active role in building new roads and moderniz-
ing railroad lines and investing in special economic zones. If Russia’s plans
exceed its financial resources, hope turns to South Korean investors.
EMBRACING CHINA
Russian sources recognize that China is not interested in recreating a Cold
War atmosphere with the West, but they argue that it views the sanctions
imposed on Russia as aimed at holding back its development, much as the
sanctions against China in 1989 were intended. It also agrees that Ukraine
is an example of a “color revolution” and made clear to Russia in the
spring that it would work to nullify the effect of the sanctions. At the same
time, China is seen as welcoming the impact of the Ukraine crisis in
distracting the United States from its pivot to Asia and from containing
China to containing Russia. Russia’s tilt toward China as its strategic
orientation is also welcome,6 as is the reinforcement being offered to
China’s efforts to change the world order. Despite some Chinese restraint
regarding a precedent for separatism in Tibet and Xinjiang, Russians
appear confident that the way the Chinese view the confrontation with
the West is very similar to how Russians perceive it.
As Alexander Gabuev explains, Russia cannot fully compensate for
losses from the West, even with China’s best intentions, whether credits,
technology, or markets.7 Moreover, he observes, Russia’s elite is not clear
on its strategic intentions toward Russia. Many think it wants to colonize
Russia and get control over the resources of Siberia and the Russian Far
East. Memories of the 1969 conflict and impressions of the rise of nation-
alism in China raise doubts that it may seek tight control over a weaker
partner. Demographic factors, often filtered through the eyes of
Westerners, fuel these concerns along with misinformation on how many
Chinese are present now. The fact that Russia’s move into Crimea was
triggered by the declaration led by an ethnic group of a people’s republic
and its desire to unite with Russia leads some in conversations to suspect
that China could do the same in parts of Russia’s east. Another risk is the
absence of alternative Asian partners. As a result, Russia is obliged to select
a variant that maximally ties it to China, depriving it of other options.
Before the sanctions, Japanese and South Korean entrepreneurs were
discussing many projects, but now they have turned away or, at least,
paused. With companies weakened by sanctions and zero-economic

growth, those in need of proceeding can turn only to China. The
Ministry for the Development of the Far East and the heads of adminis-
tration in the region sought diversification before, but now only have
China. Plans to develop infrastructure on the Pacific allowing multiple
export destinations, such as Vladivostok SPG, are in turmoil, since the
signing of the massive gas deal with China in May leaves supplies in doubt.
Japan and South Korea could not provide necessary credits even if they
wanted to make the purchases, fearing the US reaction. Russia has left
itself in a market with a monopoly purchaser.
Making the absence of diversification more dangerous is the distinct
feature of China’s legal culture, Gabuev adds. A classic example of this
occurred in 2011 when the Chinese side lowered the price of oil being
sent by pipeline by USD 10 per barrel, contending that lower transport
expenses justified a lower price than for oil piped all the way to the port of
Kozmino. When Rosneft and Transneft appealed, citing the fixed price in
the contract for all oil on the pipeline, the Chinese court made it clear that
the contract could be voided, requiring Russia to repay in cash the entire
loan. After all, China could get by without the oil. In the end, Russian
companies were in luck because the Arab Spring and instability in the
Middle East led China to decide that stable oil supplies by land (the only
others coming from Kazakhstan) must be preserved and to agree to only a
USD 1.50 a barrel discount at a loss to Russia of USD 3.5 billion over the
course of the agreement. Another problem is the impossibility of securing
financing in China on as favorable terms as in London and New York.
Russian businessmen all complain about the tough stance of Chinese
bankers, especially in long-term and complex transactions. Only the big
Russian companies can count on a government guarantee. Because of
sanctions and the caution of both bankers and investors in other Asian
states, Chinese creditors are more advantaged.
The anticorruption campaign in China is shaking up the bank sector. In
light of the ties of Zhou Yongkang, Xi’s opponent, to the energy sector, it
and the banks that gave it credit are being scrutinized closely, leading to
tougher conditions for new loans. Another problem is the longstanding
conservatism of private funds in China with regard to investments in
Russia. Aware of negative ratings for doing business in Russia and the
2009 precedent of billions lost to Chinese companies in the raid on
Moscow’s Cherkizovskii market, Russians also face the exclusion of for-
eign firms from the Shanghai and Shenzhen stock markets and a bad
22 G. ROZMAN
reputation from a faulty initial public offering of Rusal aluminum in 2010

in the Hong Kong stock market. There is palpable fear that agreements in
which Chinese insist on the use of Chinese technology on Russian soil will
undercut Russian industry. There is fear for local automobile production,
maintenance of the Russian gauge for railroads, a shift from Western
telecommunications with built-in spyware to uncontrolled espionage by
Chinese telecommunications, and copying and exporting with regard to
intellectual property rights of no concern. Economic dependence appears
fraught with dangers.
The answer is that Russia must modernize its economy, making sure
that it has the budgetary resources to spend on this, including on educa-
tion and healthcare. Given that Russia is a nuclear power and the PLA
already has at least achieved parity with Russian forces in the Far East,
Russia needs to analyze the geopolitical risks, notes Gabuev, from the
angle of concentrating funds on development. Attracting Chinese labor
should be done under conditions that they return to China, following the
positive example of construction workers for the 2011 APEC summit, and
steps for effective border control. By identifying niches in the developing
Chinese market, it would be possible to diversify Russian exports. The
most obvious path is to grow the urban middle class, while opening fertile
areas of Primorskii krai for food exports. In another recommendation,
Gabuev calls for working with Japan and South Korea as well as the United
States, playing on fears of close Sino-Russian relations, while also diversi-
fying to Southeast Asia. To realize all of these goals, it is necessary quickly
to expand expertise on East Asia, including through deepening interna-
tional higher education cooperation and integration of business in the
process of preparing new experts. The final appeal is for farsighted policies
to the region, which will retain its strategic significance for a future Russia
even after accommodation with the West.
RETAINING HOPE IN JAPAN

Japan’s reliance on the United States is not conducive to a strategic
breakthrough with Russia. Its economic promise for Russia falls far short
of China’s. Also, its values do not resonate well in a country prioritizing
the recovery of historic identities, not least the legacy of the Soviet Union.
Yet, Japan’s quest for a diplomatic breakthrough in Asia and its obsession
with recovering territory leaves an opening for Putin, who has found Abe
Shnzo to be the ideal partner in keeping talks alive despite pressure.
Putin appreciated Japan’s potential in 2000–2001 when bilateral diplo-

macy was at a high pitch and never lost hope, although Russia’s tactics
ranged from encouraging a new round of talks to hardball moves to warn
Japan of the price it must pay for its rigidity. In 2013, Putin recognized
Abe’s particular promise, in light of new tensions with China, new asser-
tiveness about national identity, and a negotiating record of special inter-
est in reaching an accord with Putin. While in the late summer of 2014,
Russian publications issued warnings that Japan was crossing the line with
another round of sanctions in league with the G7, they repeated a hint that
Abe still had time to reverse course. When Abe sent former Prime Minister
Mori to deliver a personal letter to Putin in September, such a reversal
began. The road to an APEC meeting in November can be traced to an
exchange of birthday telephone greetings and a brief meeting on the
sidelines of ASEM in Italy on October 17, where the warmth in the
“Vladimir-Shinzo” relationship was on display.8
In October 2014, Iurii Raikov wrote optimistically of the surprising
possibility of Russia and Japan achieving full-scale cooperation.9 Driving
them are images of playing an active and important role in the history
of Asia, but being relegated to a secondary role in relation to the
United States and China and searching for a pathway to draw close to
each other. Harsh geopolitical realities and internal quests are making
them natural partners in East Asia, Raikov adds. Having failed in its
attempt to establish a unipolar order, the United States has left a less
manageable order, especially in the Asia-Pacific region, in which Russia
and Japan both aspire to multipolarity. While praising China’s positive
leadership role in the region, Raikov observes that it has narrowed
Japan’s options, which is eager to restore its leading role in the eco-
nomic integration and political process of the region. As a new cold war
between China and the United States becomes increasingly evident and
China’s military modernization gains in momentum, Japan has no
choice but to stay close to its ally. Yet, it sees Russia as a vital partner
in the struggle against Chinese hegemony and is casting aside existing
problems between the two countries. Russia, Raikov explains, is a great
power with vast resources and military potential, which could strongly
tip the scales in regional affairs if it joined forces with one side or the
other in East Asia. In addition, drawing close to it has advantages for
Japan’s economy and its access to natural resources and energy in the
competition with China and South Korea, Raikov notes. Moreover, it is
a large market. Finally, Japan must preempt China, the United States,
24 G. ROZMAN
and a unified Korea from strengthening and can make use of a stronger
Russia, boosted by the modernization of Siberia and the Russian Far
East. This analysis presumes Russia’s great value to other countries and
a fiercely competitive, zero-sum environment to its advantage. Japan is
depicted as in need of Russia, not the other way around.
Raikov explains that some analysts doubt that Japan is ready to play an
active role in forging a new world order, but he finds many reasons why it
will do so, notably its loss of confidence that the United States would
defend it. As for Russia, he explains that its sole motives are economic—to
attract Japanese investment, above all to the Russian Far East, and to avoid
excessive dependence on China economically. Thus, there is no acknowl-
edgment that balancing China or geopolitics matter for Russia. Drawing
on recent distortions in Russian analysis, Raikov underestimates US
power, overestimates Russia’s clout, and misunderstands Japan’s situation.
Yet, he may be right that Abe, for whatever reason, is eager for a break-
through with Putin and inclined to defy Obama. He goes too far in
arguing that both seek a regional system of security, as if the US alliance
framework is not dividing them. He exaggerates economic complemen-
tarity, as if Russia’s resources are vital to Japan, ignoring its slow economic
growth, the fall in global demand for resources, and the inhospitable
environment in Asiatic Russia apart from brief mention of Russia’s short-
comings. The main stress is on fear of China in Japan and Abe’s nation-
alism, which makes him in a rush to make a deal with Putin. On these
points, Raikov may be correct. Unlike many Russian analyses, he acknowl-
edges that a compromise on the territorial issue is required, parallel to the
agreement made with China, which allows both sides not to lose face. The
article concludes with concern about the impact of US pressure in regard
to the Ukraine crisis, but it holds out hope that if the visit of Putin to
Japan is put back on Japan’s schedule, then the optimistic scenario set
forth can go forward.
Abe’s revisionism requires not only a hard line to South Korea, but a
break with the United States in identity and diplomacy, but not in the
alliance. Yet, Putin’s defiance of the United States and the West and
increasing closeness to China leaves in doubt what Abe can accomplish.
The territorial compromise is likely to be no more than Japan was offered
in the past. The economic benefits Russia offers are losing their value at a
time of sanctions on Russia and energy abundance. The illusion of a new
multipolar regional framework is exposed by the growing reality of bipo-
larity. The contradictions between Russia’s China and US policies and its
aspirations for Japan are difficult to reconcile. A breakthrough with Japan

is desired, but not a priority.
CONCLUSION
Russia’s pivot has a geopolitical component, for which China is indis-
pensable, a civilizational component, which counts heavily on China
also, and an economic component, which depends mostly on China
but faces uncertainty as a result of problems with China and lingering
hopes that Japan and the Korean Peninsula can contribute to its goals,
especially in the development of Siberia and the Russian Far East.
Rejecting the West in all three respects, Russia has contradictory notions
of joining China in a “new cold war” and forging a multipolar regional
framework.
Russia’s actions in Ukraine can resolve this contradiction, leading to
more or less sanctions from the West and more or less need to rely
overwhelmingly on China. A pivot in desperation without a strategy
for attracting foreign investment is bound to leave Russia with no
recourse but China, which, as seen in 2014, is driving a hard bargain.
There is little prospect in courting North Korea with hopes for
increased ties to South Korea and welcoming Japan’s advances with
more demonization of the United States and endorsement of China’s
merits. The door is closing on a strategy to maximize Russia’s leverage
in the Asia-Pacific region and to develop the Russian Far East as
anything but a resource appendage for China. Russian analytic think-
ing is too heavily censored and weighed down by today’s emotions to
be strategic.
The emptiness of Russia’s claims to be finding a home in Asia to
compensate for its estrangement in Europe was on display in the
November summits. Accomplishing little apart from the outline of
another gas pipeline deal with China, Putin remained a marginal
figure. In Beijing, Xi showcased unilateral Chinese moves—including
the Silk Road Fund to be used largely in Central Asia, Russia’s back-
yard. In Brisbane, the Western leaders treated Putin as a pariah.
Despite talks with Xi and Park that left a ray of hope of renewed
diplomacy, Putin was in the shadows as Modi and Widodo were
being wooed, and Obama was demonstrating that the United States
is back.
26 G. ROZMAN
NOTES
1. Gilbert Rozman, ed., Russia and East Asia: The 21st Century Security
Environment (Armonk, NY: M.E. Sharpe, 1999).
2. Editorial Staff, “Country Report: Japan,” The Asan Forum 2, no. 5
(September 2014).
3. Editorial Staff, “Country Report: Russia,” The Asan Forum 2, no. 5
(September 2014).
4. Georgii Toloraya, “Russia-North Korea Economic Ties Gain Traction,”38
North, November 7, 2014.
5. Georgii Toloraya, “Russia- North Korea Economic Ties Gain Traction.”
6. Vladimir Petrovskii, “Rossiia i Vostochnaia Aziia v kontekste ukrainskogo
krizisa: ‘net’ sanktsiiam, ‘da’ novomu miroporiadku,” Mezhdunarodnaia
zhizn’, October 2014.
7. Aleksandr Gabuev, Rossiia v global’noi politike, November 2014.
8. Sankei shimbun, October 18, 2014, 5.
9. Iurii Raikov, “Rossiia—Iaponiia: tiaga k sotrudnichestvu,” Mezhdunarodnaia
zhizn’, October 2014.
CHAPTER 3
Evolution of Sino-Russian Defense

Cooperation since the Cold War
(Part 1+ Part 2)
Paul Schwartz
PART 1
Ever since 1989, when Russia and China agreed to normalize relations
after thirty years of hostility, defense cooperation has remained a corner-
stone of their relationship. Within this context, the two have held high-
level discussions on international security, negotiated important security-
related agreements, conducted joint military exercises, and perhaps most
strikingly engaged in large-scale arms trade. Although defense cooperation
has evolved considerably in both form and substance throughout this
period, it has remained central to the relationship.
Russian leaders frequently cite defense cooperation as an important ele-
ment in affirming their strategic partnership; however, critics assert that the
benefits are often overstated and are substantially outweighed by the costs.1
They contend especially that sending weapons to China is dangerous
because such weapons might someday be used against Russia itself. Such
arguments have tended to overstate the harm and downplay the substantial
P. Schwartz (*)
Russia and Eurasia Program, Center for Strategic and International Studies,
Washington, DC, USA

https://doi.org/10.1007/978-981-10-3144-1_3
28 P. SCHWARTZ
benefits that Russia has received from defense cooperation. In fact, given its
notable weaknesses and limited options, Russia has played a weak hand
remarkably well. Defense cooperation has assisted Russia to achieve three
critical strategic goals: 1) reestablishing and maintaining constructive rela-
tions with China; 2) averting catastrophic collapse of its defense industry;
and 3) supporting the development of China’s sea denial capability, which
has kept China strategically focused on its maritime regions and away from
Russia. This article examines the evolution and implications of defense
cooperation since the Cold War, primarily from Russia’s perspective.
Scope of Defense Cooperation

Defense cooperation here is defined broadly to encompass three distinct forms
of Sino-Russian military-related interaction: 1) bilateral trade in military assets,
including sales of military equipment and components, licensed production
rights, and technology transfer; 2) direct military cooperation, including joint
military exercises, military exchanges for education and training, and sharing
of intelligence; and 3) negotiation of agreements governing important aspects
of their military-security relationship. While Russia and China engage in other
forms of security cooperation, such as jointly opposing UN sanctions against
Syria, such activities are beyond the scope of this article. Since 1989, defense
cooperation has unfolded in three distinct phases. The first (1989 to 1995)
was characterized by force reduction agreements, confidence-building mea-
sures, and resumption of arms transfers. The second (1996 to 2005) was
highlighted by announcement of a “strategic partnership” in 1996. Arms
transfers also reached their pinnacle during this phase. The third phase
(2006 to present) saw the emphasis shift from arms transfers to direct military
cooperation, especially joint military exercises.
Phase 1—1989–1995—Normalization
Sino-Soviet defense cooperation can be traced back to the Cold War,
when the two entered into a treaty of alliance in 1950. Once the Korean
War started, the Soviets began transferring significant amounts of military
technology to China. By the mid-50s, the Soviets were delivering weap-
ons, military technology, and even technical assistance for construction of
new defense enterprises. They also supported China’s nuclear program2;
however, relations deteriorated rapidly starting in the late 1950s, virtually
EVOLUTION OF SINO-RUSSIAN DEFENSE COOPERATION SINCE . . . 29
collapsing in the early 1960s, leading to a suspension of defense coopera-

tion, which would remain in effect until 1990.3
By the mid-80s, Gorbachev concluded that Russia could no longer
afford hostile relations with both China and the West, and desperately
needed to reduce its defense spending to gain breathing space to reform its
economy.4 China’s leadership had previously signaled that it was open to
rapprochement, but only after Russia had resolved disputes over
Afghanistan, Cambodia, and border deployments—the so-called three
obstacles. By withdrawing from Afghanistan, which was completed by
February 1989, pressuring Vietnam to pull out of Cambodia, and announ-
cing significant force reductions on the Sino-Soviet border, Gorbachev set
the stage for an historic reconciliation, which came in May 1989, when he
met Deng Xiaoping in Beijing.
Normalization was followed by the resumption of defense cooperation,
which soon became the cornerstone of Sino-Russian relations. During
Phase 1, the two concluded a series of agreements to achieve force reduc-
tions and restore confidence. First, they committed to refrain from the use
of force against one another as a means of resolving disputes.5 In 1991 and
1994, the two signed landmark agreements, thereby achieving an historic
breakthrough in resolving most of their longstanding border disputes.6
Improving relations allowed Russia to unilaterally cut its forces in the Far
East by 250,000 troops, providing much needed economic relief.7 The
two also agreed to refrain from first use of nuclear weapons against one
another, and to discontinue targeting each other with such weapons.8
Russia and China also moved quickly to resume their arms trading
relationship. Drawing on its observations of the Gulf War, China was
eager to upgrade its military. Until it could modernize its defense
industry, however, it would have to rely primarily on imported weap-
ons. But after the Tiananmen Square crackdown, the West imposed an
arms embargo on China, which left it with few good alternatives.
Fortunately for China, Russia was willing to supply China with the
kinds of military equipment that China wanted. After the fall, Russia’s
defense industry had been virtually cutoff from state funding.
Desperate for alternative sources, the industry was now looking to
export markets for survival. This confluence of events created the
perfect impetus for resumption of arms sales. In April 1990, a
Chinese military delegation visited Moscow for the first time in thirty
years.9 That same year, Russia sold China 4 Su-27 combat aircraft and
24 Mi-17 helicopters.10 In December 1992, the two signed a
30 P. SCHWARTZ
“Memorandum on Principles of Military-Technical Cooperation,”

which provided a framework for future arms transfers.11 This was
followed by additional sales of Su-27 aircraft, S-300 air defense sys-
tems, T-72 tanks, IL-76 transport aircraft, and Kilo-class diesel sub-
marines.12 In 1995, Russia granted China a license to manufacture 200
Su-27 combat aircraft in China. Russia also agreed to provide spare
parts for China’s aging inventory of 1950s-era Soviet equipment.13 All
in all, China purchased, on average, nearly USD 1.2 billion per year in
military equipment during this period.14
By contrast, direct military cooperation remained limited during Phase
1. The two began a series of high-level consultations between their general
staffs. Military exchanges were also resumed between the respective service
branches.15 Russia sent military advisers to China for training purposes
and allowed Chinese military officers to attend schools in Russia.16 The
two agreed to resume intelligence sharing.17 China also admitted Russian
scientists to work on its defense programs, while sending Chinese techni-
cians to work at Russian defense plants.18 While limited, these contacts
helped to maintain good relations.
Phase 1 assessment
Russia gained much from the resolution of old disputes and improvement
in relations; however, defense cooperation also generated new problems
for it. China took advantage of Russia’s economic weakness to obtain new
weapons relatively cheaply, sometimes using barter as payment. China
also successfully pressured Russia to transfer technology, which helped
China’s defense industry narrow the gap with Russia’s. China was already
actively reverse engineering and cloning Russian equipment.19 Some
Russian politicians also worried about arming a potential future adversary.
For example, Alexei Arbatov, a deputy from the Yabloko movement,
warned that while China might seem friendly today, “at a [sic] appro-
priate moment nothing would be able to prevent China from turning to
the North.”20 Yet defense cooperation provided substantial benefits for
Russia as well. Most importantly, it helped to reinforce rapprochement,
virtually eliminating the possibility of near-term armed conflict with
China. Resolution of border disputes also enabled Russia to drastically
reduce its military forces along the border, thereby saving significant
financial resources in the process. Defense cooperation created a “safe
rear” for Russia, enabling it to focus its military resources in more
important areas, such as Chechnya. Moreover, while revenues from
arms sales were insufficient to avert a significant contraction of Russia’s

defense industry, they provided the funding needed to preserve the most
important elements of the industry. Arms sales also provided the R&D
funding needed to develop new weapons.
Furthermore, during Phase 1, the risks of selling arms to China were
still relatively manageable. Certainly, the Chinese benefitted from an influx
of more advanced Russian weapons. At this stage, however, Russia’s
military still maintained a substantial technological edge over China’s.21
Likewise, despite technology transfers, China’s defense industry remained
well behind Russia’s in many important technologies. Finally, the weapons
that China purchased during Phase 1 (primarily air and naval assets) were
not really suitable for conducting ground operations against Russia. They
were purchased primarily to support maritime operations against Taiwan.
In fact, Russian arms had already helped China to make significant
progress in improving its maritime capabilities. While S-300 air defense
systems protected the Chinese mainland against Taiwanese air strikes, Su-
27s would counter Taiwan’s recently acquired F-16 aircraft fleet.
Meanwhile, China’s new submarines and destroyers allowed it to harass
sea traffic in the Taiwan Strait. Still, at this stage, China’s power projection
capabilities remained quite limited, and wholly insufficient to alter the
strategic balance in the Taiwan Strait.
Phase 2—1996–2005—Strategic Partnership

During the early 1990s, Russian and Chinese policy began to shift in ways
that would ultimately lead to a corresponding change in the scope and
pace of defense cooperation. After the fall, despite having normalized
relations with China, Yeltsin initially decided that it would be in Russia’s
best interest to pursue closer integration with the West. He hoped that the
West would accept Russia as an equal partner and provide greatly needed
financial assistance, but when the West failed to provide the expected
support and instead began pursuing policies, such as NATO expansion,
inimical to Russia’s interests, Yeltsin reexamined his Chinese option.22
During the same period, Chinese relations with the West had also
become increasingly strained. US objections to China’s human rights
policy and US Taiwan policy were especially irksome to China’s leaders.
The denouement came in March 1996, when the United States dis-
patched two carrier battle groups to counter Chinese missile exercises
aimed at thwarting Taiwan’s growing independence movement. This
32 P. SCHWARTZ
confluence of events led to the announcement of a “strategic partnership”

between Russia and China in 1996.
During Phase 2, as befitting the new strategic partnership, defense coop-
eration intensified, as exemplified by a number of new agreements. In 1996,
the new partners agreed to refrain from entering military alliances targeted at
one another.23 Russia also signed an agreement to assist China to rebuild
manufacturing facilities constructed by the Soviet Union in the 1950s,24 and
that same year, the two agreed to a pledge of non-aggression and limitations
on military exercises within a 100 km zone of the border.25 In 1997, they
agreed to further reductions in border forces, capping them at historically
low levels.26 Subsequently, deteriorating relations with the West over
NATO enlargement, Yugoslavia, Taiwan, and missile defense led to even
closer ties. In 2001, the two concluded a Treaty of Friendship and
Cooperation, which further improved ties and led to final demarcation of
the border.27 In the same year, Russia and China established the SCO, which
would lead to a significant expansion of defense cooperation in Central Asia.
The pace of arms trade between Russia and China also quickened
during Phase 2, driven primarily by Russia’s continuing need for revenue,
China’s rapid economic growth, and its determination to enhance its sea
denial capability. In 1996, China purchased two Sovremenny-class
destroyers.28 In 2000, the two signed a 15-year Military Cooperation
Plan to expand the provision of military equipment, technology licenses,
and joint R&D.29 That same year, Chinese arms purchases totaled USD
1.7 billion.30 In 2001, arms sales reached a new high of USD 3 billion. In
2002, the two announced a major new arms sale valued at over USD 4
billion for the purchase of two additional Sovremenny-class destroyers
equipped with Sunburn anti-ship missiles, eight Kilo-class submarines,
and up to 40 Su-30MKK combat aircraft. In 2005, arms sales reached
an all-time high of nearly USD 3.2 billion. China purchased, on average,
nearly USD 2 billion per year in military equipment from 1999–2005.31
During Phase 2, Russia also continued to provide significant technology
support for China, including licenses for the production of helicopters,
anti-tank and anti-ship missiles, as well as design assistance for Chinese
airframes and avionics systems. In addition, up to 2,000 Russian scientists
reportedly were working in Chinese defense plants. Consequently, by the
end of Phase 2, China’s defense industry had made substantial progress in
modernization.
Direct military cooperation also increased during Phase 2. The two
continued to hold high-level meetings on a variety of defense-related
issues. General staff meetings were likewise held on a regular basis. In

1999, the two agreed to new exchanges of military personnel. Pursuant
to this, large numbers of PLA officers attended Russian military
schools, while Russia sent many officers to study in China.32 There
was also an increase in the exchange of Russian and Chinese scientists
and engineers.33 Such activities improved trust, strengthened ties, and
paved the way for further Sino-Russian defense cooperation.
Phase 2 assessment
Russia benefitted greatly from improved defense relations, especially
from the dramatic increase in the scale of arms trade. Yet, the conse-
quences of defense cooperation were increasingly criticized. China’s
power had grown significantly during Phase 2, leading critics to question
the wisdom of continuing to supply arms to such a formidable potential
adversary. For example, in 2003, Konstantin Makienko, a military scho-
lar, stated “we make financial gains but at the same time actually fatten
our closest neighbor and potential adversary with arms.”34 Alexander
Khramchikhin criticized China’s ongoing practice of cloning Russian
systems.35 Alexei Khazbiev worried that technology transfer had
damaged Russia’s interests by enabling China to compete more effec-
tively against Russia in the global arms markets.36 Still, defense coopera-
tion provided many benefits for Russia during Phase 2. While the
strategic partnership continued to suffer from a certain degree of mis-
trust, defense cooperation helped Russia and China to maintain a con-
structive relationship. The two made substantial progress in further
demilitarizing the border, which helped keep tensions at a low level.
Establishment of the SCO also reinforced the sense of partnership, giving
China a continuing stake in the relationship.
Moreover, revenue from arms sales had proved crucial in enabling
Russia to keep its defense industry going while state funding was still
virtually non-existent.37 Such revenue also provided the R&D funding
needed for the development of a whole new generation of weapons,
thereby setting the stage for a resurgence of arms exports and future
rearmament of its own military.38 Russia’s increased R&D also helped it
to maintain its technological lead over China in certain key weapon
categories. Certainly Chinese cloning remained a problem, but fear of
Chinese competition in export markets turned out to have been signifi-
cantly overstated. Far from falling behind, Russia maintained a substantial
lead over China in export markets during Phase 2.
34 P. SCHWARTZ
In addition, while Russia’s leaders could no longer ignore China’s

growing military power, they could take comfort in knowing that such
weapons were better suited to China’s sea denial strategy and were not
aimed at Russia.39 In fact, the large influx of Russian arms and technology
significantly improved China’s sea denial capability. China now had the
combat aircraft and missile technology to conduct large-scale precision
strikes against Taiwan. Moreover, Russian warships, armed with sophisti-
cated cruise missiles, gave China’s sea denial capability out to a range of
400 miles. China could now significantly hinder or delay US intervention
in the event of a future Taiwan crisis.40
Phase 3—2006–Present—Strategic Shift

By 2006, the strategic partnership was showing increasing signs of strain.
China had modernized much of its defense industry and was fast becom-
ing less dependent on Russian military equipment.41 Consequently, China
was now less willing to settle for anything but the most advanced Russian
systems. It increasingly demanded technology transfer as a condition of
doing business. Concomitantly, Russia had also begun to reassess the
relationship. By the start of Phase 3, Russia could no longer afford to
ignore China’s growing military power. China was still seen as a rising
competitor on the global arms markets. Russia also remained irritated by
China’s persistent cloning of Russian systems. For these reasons, Russia
was increasingly reluctant to provide China with additional military equip-
ment, especially advanced weapons, which it had yet to provide to its own
military.
The scope and level of defense cooperation shifted once again. For the
first time, the two failed to negotiate any major new defense agreements,
although they concluded several lesser compacts. For example, in 2008,
the two signed a new agreement to protect intellectual property rights.42
That same year, Russia and China proposed a draft treaty to prevent a
costly new arms race in space, but the proposal was not taken up by the
United States. In 2011, a Russian delegation visited China to discuss ways
to improve quality control deficiencies in shared production lines. Arms
trade between Russia and China declined even more precipitously during
Phase 3. The year 2006 proved to be the final year for large-scale arm
transfers, with total volume reaching USD 2.5 billion. In 2007 and 2008,
sales declined to USD 1.5 billion and USD 1.4 billion, respectively. Sales
fell even more sharply in 2009 and 2010, to well below USD 1 billion per
year. Although sales have started to edge back up recently, the nature of
Russian-Chinese arms trade has shifted. While Russia continues to offer
China new weapons, thus far China has purchased very few of them,
holding out instead for more advanced equipment. Meanwhile, Russia
continues to provide China with components and spare parts.43 For
example, China continues to purchase aircraft engines from Russia, as in
2011, when it purchased 123 AL-31FN aircraft engines from Russia
valued at USD 500 million.44
By contrast, direct military cooperation has assumed greater importance
in Sino-Russian defense cooperation. The two continue to hold high-level
military consultations on various security matters. They also have
announced plans to intensify cooperation on military education,45 but
the most significant development has been the increasing level of joint
military exercises held during Phase 3. Since 2005, the two have held
several “Peace Mission” exercises under the auspices of the SCO, which
demonstrate the growing importance of this form of cooperation. They
have also conducted military exercises outside of the context of the SCO,
such as the recent, highly publicized, series of joint naval exercises held in
the Mediterranean and East China Sea. Collectively, joint exercises have
encompassed counter-terrorism, combined arms operations, tactical air
support, anti-submarine warfare, counter-insurgency, and amphibious
warfare.46 Such exercises have provided a vehicle for the more experienced
Russian military to assist China in enhancing its military capability. To a
degree, joint military exercises have replaced arms sales as the focal point
of defense cooperation.
Phase 3 assessment
A significant shift occurred in the emphasis of defense cooperation away
from arms trade and toward joint conduct of military exercises. The
decline in arms trade represented a significant setback for Russia, both in
terms of lost revenue and in its negative impact on relations with China.
Some critics of defense cooperation felt vindicated. They had counseled
against Russia becoming too dependent on arms sales to China47 and had
argued that technology transfer would enable China to compete more
effectively in global arms trade. In fact, China recently has become the
fourth largest exporter in this market.48
The decline in Russian arms sales to China has not been the disaster some
critics proclaimed it would be. Russia has been able to absorb these cuts
because it is no longer dependent on China, having succeeded in diversifying
36 P. SCHWARTZ
its client base. During Phase 3, total revenues from other clients significantly
exceeded lost revenues from China.49 Moreover, during Phase 3, state
procurement finally resumed. Spending on new weapons for the Russian
military now surpasses total revenues from arms sales by a large margin.
Finally, Russia continues to sell China a large number of military compo-
nents, and occasionally even completed weapon systems, such as the sale of
52 Mi-171 combat helicopters, in 2011, for USD 700 million.50 It remains
possible that large-scale sales of completed weapons to China will resume.
China still struggles to produce certain kinds of military equipment, such as
aircraft engines, quiet submarine technology, integrated air defense systems,
and advanced radar systems, and its alternative sources remain limited.51 The
two continue to explore potential new sales, some sizable, such as the
proposed sale of Su-35 aircraft that has been in the works now for several
years.52 Nor has China yet supplanted Russia on the global arms market.
Although it has made inroads at the lower end of the market, Russia main-
tains a sizable lead.53 Moreover, although the pause in arms sales has
certainly generated tensions between Russia and China, it is a testament to
the strength of the relationship that defense cooperation has continued in
other areas. The increase in joint military exercises has to some degree
replaced arms trade at the center of defense cooperation.
Finally, China remained focused on its maritime regions during Phase 3.
Its sea denial capability has now matured, and this has altered the strategic
balance in the Western Pacific. China now possesses the ability to threaten
Taiwan directly with sustained air and missile strikes. It also may have
acquired the air and naval power needed to support an invasion, although
it still lacks the necessary amphibious capability. Finally, China can now use
its considerable air and naval power to strike US bases, ships and aircraft out
to the first Island Chain, which could seriously hinder US naval operations in
the region. In response, the United States announced a “pivot to Asia” and
committed to developing a new Air-Sea Battle counterstrategy.54
Final Assessment
Having followed the course of Sino-Russia defense cooperation since
1989, we can now assess the extent to which the benefits of these pro-
grams for Russia have outweighed the attendant costs. It seems clear that
defense cooperation has been a net plus for Russia and will likely remain so
at least in the short run. It has contributed enormously to helping Russia
to achieve the three objectives specified in the introduction, and, thus far,
this has more than offset the negative effects of this policy. First, defense
cooperation has proved crucial in preserving Russia’s defense industry.
Since 1989, Russia has received over USD 30 billion in revenue from
arms sales to China.55 At first, such revenues were insufficient to prevent a
major contraction of the defense industry, although they allowed Russia to
preserve its most important segments. Later, they greatly assisted Russia in
rebuilding the industry and sustaining it until procurement could be
restarted, also assisting it to develop an entire new generation of weapons,
regain a dominant position in the global arms trade, and begin the process
of modernizing its own military.
Defense cooperation also contributed to achieving better relations with
China. Resolving border disputes and achieving demilitarization helped
cement rapprochement, thereby significantly decreasing the threat of armed
conflict. Moreover, the benefits of defense cooperation, first from arms sales,
and later through joint military exercises, have given both an incentive to
maintain a constructive relationship while avoiding dangerous disputes.
Geopolitically, it, arguably, would have been better for Russia had the two
built a closer partnership. Without it, the relationship continues to be plagued
by a certain ambivalence, wariness, and mistrust. Defense cooperation has not
prevented Russia from becoming fearful of China’s growing economic, poli-
tical, and military power. Nevertheless, Russia has continually found ways to
make the partnership attractive to China, which has helped keep relations on a
solid footing, allowing Russia to continue to benefit from it.
Finally, defense cooperation has helped Russia to manage the increasing
risk imposed by China’s growing military power. Defense cooperation has
contributed to a shift in the balance of conventional military power toward
China; yet Russia has taken measures to counter this, such as limiting sales
of advanced systems. Moreover, while Russia has had very little influence
in China’s decision to focus on its maritime regions, Russia’s security has
benefitted from it. Since 1996, China has concentrated chiefly on building
forces necessary to support its sea denial strategy. Russia directly supported
these efforts by providing China with the kinds of weapons suitable for
such a strategy, which are less useful in a potential land campaign against
Russia. Moreover, China’s maritime buildup has fueled a growing arms
race with the United States, as reflected in the US “pivot to Asia” and the
development of the “Air Sea Battle” counterstrategy. This dynamic seems
likely to continue, which would keep China focused more on potential
threats to its east than on its less threatening neighbor to the north for the
foreseeable future.
38 P. SCHWARTZ
PART 2: SINO-RUSSIAN DEFENSE RELATIONS INTENSIFY

Between 1991 and 2006, Russian arms sales to China grew tremendously, as
China eagerly sought to upgrade its military capabilities by incorporating
advanced Russian military equipment and technology. During the 1990s,
total arms sales between the two often exceeded USD 1 billion per year, and
at their peak in the early 2000s, they averaged well over USD 2 billion per
year.56 After 2006, however, arms sales fell rapidly. In fact, over the past five
years, they have been averaging only USD 800 million per year.57 Moreover,
since 2006, the composition of the arms trade has changed significantly.
Instead of purchasing aircraft, submarines, and other large platforms charac-
teristic of the earlier period, recently China has limited its purchases to aircraft
engines and components of various kinds, along with the occasional helicopter
purchase. The persistence of this decline made it hard not to wonder whether
China had become a lost market for Russian weapon systems, forcing Russia to
look elsewhere to find alternative markets for its products.
Today, the situation is quite different, as Russian arms transfers to
China are once again on the rise. In April 2015, Russian officials
announced that the two had concluded a major contract for the sale of
S-400 air defense systems to China at an estimated price tag of $3
billion.58 Moreover, in November 2015, a new contract was announced
for the transfer of 24 Su-35 combat aircraft for an estimated price of USD
2 billion.59 Not only do these two transactions represent the largest plat-
form sales between Russia and China since the early 2000s, they also are
likely to drive annual arms trade numbers to levels not seen since that
period. While these large transactions have garnered most of the attention,
they have been accompanied by significant activity in other areas, includ-
ing a contract for the sale of additional aircraft engines and a spate of new
agreements for increased cooperation in the development of defense and
dual-use technologies.60
This article examines these developments in greater detail, focusing on
the current state and likely future direction of Russian arms and technol-
ogy transfers to China, cooperation on defense-related research and devel-
opment, and joint military exercises.
Rationale for Increased Defense Cooperation

Before examining how defense cooperation is likely to evolve, it is useful
to assess the factors driving Russia and China to increase their level of
cooperation in the first place. Recent increases in defense cooperation are

best explained as a consequence of broader changes taking place in their
overall relationship. Since at least 2012, Moscow and Beijing have been
gradually strengthening their bilateral ties for a variety of reasons, both
economic and diplomatic. Among these were the desire to enhance
bilateral trade and investment, to increase energy ties, to expand regional
cooperation, and to counter increased pressure they were both feeling
from Washington (e.g., collapse of the “reset” with Russia and advance
of the US pivot to Asia). Since the Ukraine crisis, relations have signifi-
cantly intensified as Russia sought to increase economic and diplomatic
ties in Asia in the face of Western sanctions. Russia has concentrated its
efforts on China, perceived to have both the wherewithal (economic and
political power) and the willingness (as a long-time strategic partner) to
provide the kind of support needed. To a significant extent, overtures to
Beijing have paid off; China has stepped up its support for Russia both
diplomatically and economically.
Diplomatically, China has helped Russia to maintain an active interna-
tional profile in the face of measures taken by the West to exclude it from
certain diplomatic venues such as the G-8. Beijing has steadfastly main-
tained a position of “benevolent neutrality” with respect to Ukraine, while
flatly refusing to join the Western-led sanctions regime.61 Xi Jinping con-
tinues to meet frequently with Vladimir Putin.62 China has also given
Russia a key role in the Asia Infrastructure Investment Bank (AIIB),63
cooperated with Russia on expanding the Shanghai Cooperation
Organization (SCO) (necessary as China maintains the leading role in the
SCO),64 and most importantly, agreed to coordinate its “Silk Road
Economic Belt” initiative with the Russian-backed Eurasian Economic
Union.65 Economically, China’s increased support has helped Russia to
offset some of the worst effects of the Western sanctions regime. While
China’s economic support may have fallen short of Russia’s expectations,
China has nevertheless helped in several ways, granting loans, establishing
credit lines, and increasing its level of investment in Russian enterprises,
providing crucial funding for Russia’s economy.66 Moreover, in May 2014,
China signed a 30-year, USD 400 billion contract to purchase natural gas
from Eastern Siberia. While some experts have questioned the economic
viability of this arrangement, much will depend on future gas prices and
potential spillover effects, such as helping Russia to develop its Far East.
Moreover, it will enable Russia to reduce its dependence on European
markets to some extent.67
40 P. SCHWARTZ
Enhanced defense cooperation has been an integral part of this process,

bringing both financial benefits for Russia’s defense industry and military
benefits to both sides, while also helping to strengthen the overall relation-
ship. While signs of this trend were already starting to emerge as early as
2012, the level of defense cooperation has increased significantly since the
Ukraine crisis. Russia and China have intensified their level of arms trade,
increased the scale and frequency of joint military exercises, and boosted
collaboration between their respective defense industries. In fact, this
process seems to be gaining momentum as the two have recently
announced several new initiatives likely to lead to further cooperation in
the military sphere.
Defense Cooperation: An Overview

So what will increased defense cooperation look like during this new
phase? For one thing, we are likely to see a further increase in arms trade
as well as continued large-scale joint military exercises. Additionally, we
will probably see an increase in the number of joint research and develop-
ment (R&D) programs to produce new military systems. Such programs
are likely to become increasingly cooperative in nature, leading to devel-
opment of new military capabilities intended for use by both sides. We are
also going to see for the first time significant arms-related transfers moving
in the opposite direction, from China to Russia, as Moscow looks to
Beijing as an alternative source of military-related items that Russia can
no longer purchase from the West.
Arms Transfers to China

Russian arms transfers to China will continue to lie at the heart of Sino-
Russian defense cooperation during the new phase. In fact, the level of
arms trade is likely to increase significantly over the next two to three
years, as China takes advantage of Russia’s newfound willingness to trans-
fer advanced military systems which it has previously withheld from China,
primarily due to concerns over China’s reverse engineering practices, but
also out of lingering worries about arming a potential future adversary.
The reverse engineering concern was addressed (at least in part) when the
two reportedly signed a new intellectual property agreement in 2012.68
Primarily, however, this newfound willingness is a symptom of Russia’s
increased dependence on China after Ukraine; in this regard, the transfer
of advanced weaponry constitutes much of the quid pro quo for China’s
increased economic and diplomatic support. As mentioned, the two have
already signed major new agreements for the sale of Russian S-400 air
defense systems and Su-35s Flanker combat aircraft. While garnering most
of the attention, these mega deals are only a part of the story. Arms trade
between the two is poised to expand into other areas as well. China is
already contemplating purchase of additional Russian submarines, and it
could well elect to purchase Russian anti-submarine warfare (ASW) sys-
tems, missile technology, and helicopters. Moreover, the two will con-
tinue to engage in a fairly high level of trade in aircraft engines,
components, sensors, and weapon systems of various kinds.
Russian-Chinese arms trading activity has actually been on the rise for
some time, even before the Ukraine crisis, although this has not always been
fully reflected in the official numbers. In 2012, for example, Beijing signed a
sizable contract for the purchase of 55 Mi-17 helicopters for a total price tag
of USD 660 million.69 This came on the heels of a USD 500 million contract
signed in 2011 for the transfer of 123 additional Saturn AL-31F aircraft
engines.70 In 2013, China agreed to buy twelve IL-76MD strategic trans-
port aircraft.71 Notably, the Mi-17 and IL-76 contracts demonstrated
China’s continuing interest in platform purchases from Russia, despite a
recent history of focusing primarily on the purchase of Russian components.
So what specific military capabilities will China seek to obtain from
Russia as defense cooperation intensifies? Such decisions will be driven
almost exclusively by China’s actual military requirements. For the near
term, China will remain focused primarily on building up its maritime
military capabilities both to better support its territorial claims in the
“nearby seas” and to give effect to its anti-access strategy, designed to
keep US forces (especially air and naval forces) out of contested maritime
theaters in time of war to allow Chinese forces to operate freely. In order
to fully carry out this strategy, China will need to overcome enduring
maritime capability gaps in the key areas covered below. While this article
focuses on Russian systems best able to help China fill maritime capability
gaps, it should be kept in mind that China may elect to purchase other
kinds of systems, including tanks and other ground combat equipment.
Air defense systems

Despite making significant progress in producing more capable air defense
platforms in recent years, China still lags behind Russia in this important
area.72 This continuing lag explains China’s recent decision to purchase
42 P. SCHWARTZ
the S-400, which is Russia’s latest and most advanced air defense system.
According to reports, China will purchase 48 systems, sufficient to equip
six battalions, for a total price of USD 3 billion.73 The S-400 will sig-
nificantly boost China’s shore-based integrated air defense system,
enabling it to better defend both the mainland and nearby maritime
regions from enemy air and missile strikes. Notably, once deployed, its
engagement zone will cover the entire territory of Taiwan. China is also
likely to be interested in the naval version of the S-400, once it completes
development, although the system might require some degree of modifi-
cation to work with Chinese vertical launch systems (VLS). The naval S-
400 would significantly extend the reach of China’s ship-based air defense
umbrella, enabling China’s fleet to operate at increasingly greater dis-
tances from shore and would also help China’s fleet defend itself against
emerging US threats, such as the long-range anti-ship missile (LRASM),
which will soon be deployed on the B-1 bomber.
Combat aircraft
China has also made significant strides in developing its domestic aviation
industry over the last two decades and now produces several capable
fourth generation combat aircraft. Yet, even its most advanced fourth
generation systems cannot match the performance of Russia’s Su-35
Flanker, a 4++ generation system, which explains China’s interest in the
system. While China is currently developing the J-20, a fifth-generation
fighter, that plane will not be ready until sometime later this decade. So,
the Su-35 will provide an immediate boost for China’s air force while it
awaits completion of the J-20. China is also interested in getting its hands
on the Su-35’s advanced technology, especially its high performance
Saturn 117S aircraft engines and its powerful Irbis-E radar system.
After extended negotiations, the two recently announced agreement on
the sale of 24 Su-35 fighters at an estimated price tag of USD 2 billion,74
giving China’s airpower a real boost in the Western Pacific. It is a fast, highly
maneuverable, and well-armed aircraft, giving it exceptional dog-fighting
capability, and it matches up well against other combat aircraft. According to
a former US Navy pilot, the Su-35 is superior to most US platforms except
the F-22 and perhaps the F-15C.75 It also has the range and fuel capacity
needed for China to conduct extended combat patrols over disputed areas in
the East and South China seas, a capability currently lacking.
Russian sales of aircraft engines to China are also likely to continue at a
high level during the new phase, because China’s aircraft industry remains
heavily dependent on Russian engines to power much of its combat fleet.

As Richard Fisher put it:
Dependence on Russian military engines has . . . been profound. Some

Chinese estimates hold that China has imported 1,000 to 1,200 [Russian]
Saturn AL-31F turbofans. . . . They power Sukhoi Su-27 s and Su-30MKK/
MKK2 s purchased from Russia, as well as the SAC J-11A, early J-11Bs and
early J-15 carrier-based fighters. . . . [T]he slightly more powerful AL-31FN
equips CAC’s J-10A, J-10S and latest J-10B. An unknown version of the
AL-31F also powers its fifth-generation J-20 prototypes.76
Thus, the bulk of China’s interceptor fleet is powered by Russian engines. Nor
is China’s dependence on Russia likely to end any time soon. China reportedly
spent over thirty years developing the WS-10, its first fourth-generation
turbofan77; yet, the People’s Liberation Army (PLA) is still dissatisfied with
the engine because of its poor reliability.78 Meanwhile, China cannot produce
enough aircraft engines to meet the military’s modernization requirements.
Consequently, China has no alternative but to continue to purchase Russian
engines for the time being. In late 2014, in fact, China agreed to purchase 100
additional Klimov RD-93 engines for its FC-17 and J-31 aircraft programs.79
Recently, Russia also agreed to supply additional AL-31 engines for use in
export versions of China’s J-10B.”80 Given China’s continuing problems in
the production of advanced aircraft engines, purchase of additional AL-31
engines from Russia seems highly likely.
Submarines
China also remains committed to improving the capabilities of its sub-
marine fleet. Aside from a few Chinese ballistic missile submarines dedi-
cated to strategic deterrence, most of the fleet is optimized for anti-surface
warfare. For this purpose, they are amply equipped with powerful anti-ship
cruise missile systems (ASCMs).81 However, as the Office of Naval
Intelligence has noted, “China’s submarines are not currently optimized
for two missions at the core of US submarines—[anti-submarine warfare
(ASW)] and land attack.”82 Moreover, Chinese submarines are all still far
too noisy to evade detection by advanced US ASW systems.
China hopes that sophisticated Russian submarine technology can help
it to overcome these deficiencies. This explains China’s longstanding
interest in purchasing Russia’s Lada-class submarine, its most advanced
diesel-electric submarine. The two have been discussing transfer of the
44 P. SCHWARTZ
Lada for several years. While talks initially centered on the joint produc-
tion and transfer of four submarines,83 since then the arrangement has
apparently evolved into a joint project to develop a new conventional
submarine for China based on the Lada.84 Given the Lada’s enduring
performance problems and its lack of an air-independent propulsion sys-
tem, a joint development project seems much more sensible.
A new submarine based on the Lada would give China’s fleet a sig-
nificant boost. The Lada is among the quietest diesel electric submarines
in the world. Moreover, it is a multirole submarine, designed for the land-
attack and anti-submarine mission as well as the anti-surface warfare role.
The Lada would be ideal for helping China to overcome the remaining
deficiencies in its conventional submarine fleet. While the new submarine
would directly boost China’s undersea capabilities, its indigenous submar-
ine programs would also benefit from access to the Lada’s sophisticated
quieting technology as well as its advanced sensors and weapon systems.
Surface warships
Over the last two decades, China has made great progress in improving the
capabilities of its surface fleet, which now compares quite favorably with
those of most other modern navies. While much of this progress has been
fueled by access to advanced Russian technology, recently China has been
producing all of its warships domestically, and most of its onboard systems
as well.85 Still, certain key deficiencies remain. While China has made
significant strides in improving its fleet air defense and anti-surface warfare
capabilities, its anti-submarine warfare (ASW) systems remain woefully
underdeveloped, leaving its fleet vulnerable to submarine attack even
when operating close to shore. Moreover, inland targets remain highly
vulnerable to attack from Tomahawk land-attack missiles hosted on quiet
US submarines. While China has finally begun to rectify its ASW defi-
ciency, its fleet could still benefit significantly from increased Russian
defense assistance in this area.
Russia has a number of ASW systems that could assist China to
overcome its perennial ASW problems. For example, China has only
recently begun to deploy towed array sonar systems, which are crucial
for detecting and tracking enemy submarines. While a step forward,
there is evidence that these Chinese systems are inadequate by modern
standards.86 The Russians, by contrast, offer several capable systems, e.
g., Morphyspribor, Russia’s leading sonar developer, recently intro-
duced the Vinyetka, a modern low-frequency towed-array sonar. In
active mode, the “Vinyetka is claimed to be capable of achieving

detections out to 15–20 kilometers in littoral waters, extending to
40–60 kilometers in deep-water conditions.”87 Such a system would
be ideal for China, which has the dual challenge of detecting both
conventional submarines operating in the littorals and near-silent US
nuclear submarines operating in the deeper oceans. To destroy the
submarine once located, China would also benefit from advanced
Russian systems such as the Klub 91RE2, Russia’s latest medium-
range ASW supersonic missile with a range of 40 kilometers. It
approaches the target submarine through the air, but once it reaches
the vicinity, it descends to sea level where it deploys a fast self-homing
torpedo. However, the 91RE2 might require modification to be
launched from a Chinese VLS.
Cruise and ballistic missiles

Since the Cold War, China’s ballistic and cruise missile programs have also
benefitted significantly from Russian defense assistance. Early on, Russia
transferred certain anti-ship cruise missile systems to China, including the
SS-N-22 Sunburn and the SS-N-27 Klub Sizzler, and these were instru-
mental in building up China’s anti-ship strike capability. Otherwise, Russia
has focused primarily on transferring specific missile technologies, such as
navigation systems, that have broad applicability to China’s missile pro-
gram. Such transfers are likely to continue. From time-to-time, however,
reports have surfaced about the potential sale of Russia’s Iskander missile
system to China.88 This is a short-range, road-mobile missile system, and
it is quite advanced, with a range of up to 500 kilometers and very high
accuracy. The Iskander also has powerful built-in maneuverability
designed to defeat US ballistic missile defense systems. While China
currently makes several capable short-range missiles of its own, the
Iskander’s advanced features make it an attractive option for the
Chinese. Even if China decides not to purchase the Iskander outright,
Beijing is likely to be highly interested in gaining access to the Iskander’s
advanced technology, especially its digital scene-mapping guidance sys-
tem, which gives it great accuracy, and its gas dynamic system, which gives
it exceptional maneuverability.
Joint research & development

Over the years, Russia and China have engaged in a number of military-
related joint R&D projects. For the most part, these arrangements have
46 P. SCHWARTZ
been designed to “facilitate Russian technology transfers to China.”89

Some of China’s most important weapon systems have been developed
through such projects, including the “PL-12 air-to-air missile, the HQ-16
SAM system . . . and the Project 054À frigate.”90 Given Russia’s increased
willingness to share its technology, and China’s enduring desire to become
more self-sufficient, such projects are likely to continue during the new
phase, and they may well increase over time. While many of these are
relatively small and receive little publicity, one exception is a new helicop-
ter project. In May 2015, the two signed a framework agreement to jointly
develop an advanced heavy-lift transport helicopter based on Russia’s
existing Mi-26, which would be produced in China and used by the
PLA.91 Final agreement is expected before the end of the year, with
production to start in 2016.
We are also starting to see the emergence of new kinds of joint R&D
arrangements, more coequal in nature, in which both seek to use the
resulting technology. For instance, in November 2014, ROSTEC and
AVIC, a Chinese aerospace company, signed an agreement to collaborate
on the development of “fixed-wing and helicopter manufacturing, engine
production, materials, avionics, and [other similar products].”92
Reportedly, the results are intended to meet both military and commercial
requirements in both Russia and China.93 A ROSTEC representative “also
stated that AVIC is considering deeper collaboration with materials spe-
cialist RT-Chemcomposite, titanium producer VSMPO-AVISMA, and
radio-electronic technologies company KRET.”94 In October 2014,
ROSTEC and CASC, a Chinese aerospace company, signed an agreement
for co-development and production of “electronic components, informa-
tion technologies, communications, automation systems, new materials,
and ‘other spheres.’”95 This came on the heels of similar agreements
signed with other Chinese companies. Not all of these projects will reach
fruition, but they do indicate the high level of interest in collaborative
R&D that has emerged recently, reflecting both China’s increased tech-
nology level and Russia’s growing desire for collaboration with China as a
means to offset its reduced access to Western technology.
Chinese Arms Sales to Russia

Over the near term, we are also likely to see for the first time significant
transfers of military-related items from China to Russia. While driven primarily
by Russia’s loss of access to advanced Western military technology, it also
reflects the considerable advances made by China’s defense industry in recent

years. Initially, Russia will be most interested in obtaining electronic compo-
nents to substitute for those it can no longer obtain from the West, especially
those needed for its aerospace programs.96 Russia also has expressed interest in
obtaining certain composite materials produced in China, as well as machine
tools, which Russia can no longer produce domestically.97
We might see Russia turn to China for more advanced military
systems, as well. For example, there is reportedly some interest in
Russia in purchasing Chinese UAVs.98 China is ahead of the Russians
in this area. Beijing has also recently attempted to sell Chinese warships
to Moscow. Earlier this year, a pair of Chinese Jiangkai II frigates were
dispatched to the Black Sea, principally to participate in joint military
exercises with Russia, but also to demonstrate their capabilities for the
Russian navy.99 While the prospects for such a sale may seem rather
remote today, they provide a glimpse of where the relationship is likely
to be heading.
Joint Military Exercises

Russia and China have engaged in a series of joint military exercises
dating back to 2005, when they conducted their first Peace Mission
exercise under the auspices of the SCO. To this day, Russia remains
China’s principal exercise partner, a position it has maintained since
2005, when the two teamed up to conduct China’s first joint military
exercise in a bid to benefit from Russia’s greater operational experience.
Since then, the two have engaged in additional Peace Mission exercises
on a near semi-annual basis, as well as annual joint naval exercises
starting in 2012. While the size of the Peace Mission exercises declined
steadily between 2005 and 2013,100 the 2014 Peace Mission turned
out to be the largest multinational exercise ever conducted under the
SCO, portending an important shift in priority for both sides.101
In 2014, they also held a sizable joint naval exercise in the East China
Sea.102
The scale and reach of joint naval exercises increased even more sharply in
2015. In May 2015, in a move fraught with political implications, the two
conducted a joint military exercise in the eastern Mediterranean.103 In
August, they followed this up with their largest joint naval exercise, held in
the Sea of Japan, with a force of 22 warships, submarines, and other ves-
sels.104 Looking ahead, sizable military exercises are likely to become a near-
48 P. SCHWARTZ
term fixture of Sino-Russian defense relations, although they may not always
match the scale of the most recent exercises. They have already announced
plans to conduct a joint naval exercise in the South China Sea in 2016 as well
as a joint Peace Mission exercise in Kyrgyzstan, both likely to be sizable.105
Joint exercises provide an opportunity for Russia and China to develop
operational capabilities, improve interoperability, and gain experience
under a variety of simulated combat scenarios. They also serve to enhance
military ties, reinforcing the overall defense relationship. In the past, China
has tended to gain more from these exercises by learning from Russia’s
more experienced military commanders.106 As the PLA has gained experi-
ence, this has become less true. Nevertheless, the increase in the frequency
and scale of joint military exercises commencing in 2014 (after Ukraine)
highlights the importance of political factors in the planning and conduct
of such exercises. At a time when both powers have been under increased
pressure from Washington, joint military exercises send a clear signal that
the two have options if pressed.
Conclusion
While it has now become clear that China and Russia have entered into a
new and intensified phase of defense cooperation, the full implications of
this development have yet to emerge into full view. In part, this reflects
certain enduring factors likely to moderate the level of defense coopera-
tion to some extent, such as China’s increasing self-sufficiency and
lingering Russian concerns about Chinese-reverse engineering practices.
Still the factors driving the two toward closer defense cooperation remain
quite strong at this point, and they are likely to endure at least over the
next few years. For Russia, enhanced arms and technology transfers are
seen as a way to maintain good relations with China at a time when
Russia needs China’s support more than ever to offset increased eco-
nomic and diplomatic pressure from the West. Moreover, Russia’s need
for Chinese defense and dual-use technologies is now greater, because of
its diminished access to Western technology. China, for its part, expects
to benefit from greater access to Russian technology. Moreover, having a
closer strategic relationship with Russia gives China another card to play
in its own geopolitical struggles with the West. The same holds true for
Russia. Whether this trend will continue over the long run, however,
remains far less clear. Underlying geopolitical differences, for example
over Central Asia, could lead to renewed tensions between the two, and
these could spillover into the defense relationship as well. Moreover,

much will depend on whether Russia can repair its frayed relations with
the West, which would give it alternatives.
In any case, we can already discern some of the key implications. With
the sale of the S-400 and Su-34, Russia has demonstrated an increased
willingness to transfer some of its most sophisticated military systems to
China. Given this shift, we could well see additional sales of high-end
platforms such as the Lada submarine and Iskander missile. We should also
expect to see an increase in the level of collaboration between the Russian
and Chinese defense industries. We are already starting to see an increase
in joint R&D programs, and this is likely to continue principally because,
after Ukraine, Russia’s need for an alternative partner has increased dra-
matically, especially one with deep enough pockets to fund expensive
programs. China will be eager to collaborate in such programs in order
to gain greater access to Russian technology.
We are also likely to see a further negative tilt in the Western Pacific
military balance as China begins to deploy some of its new Russian
weapon systems, such as the Su-35 and S-400. These will allow China
to further enhance its anti-access capabilities, which, in turn, will increase
the defense challenge for both its maritime neighbors and the United
States. Russia will be able to offset the effects of the Western arms
embargo to some extent by substituting Chinese products. Over time,
Russia’s military is also likely to benefit from joint R&D activities as the
fruits of such projects are to be increasingly shared between both Russia
and China. In the long run, closer integration between their respective
defense industries poses one of the greatest potential dangers from their
intensified defense cooperation. If such cooperation lasts for any real
duration, still far from guaranteed, the combination of Russian technol-
ogy coupled with Chinese funding and industrial capacity could lead to
developments that pose a formidable challenge.
NOTES
1. Paradorn Rangsimaporn, “Russia’s Debate on Military-Technological
Cooperation with China: From Yeltsin to Putin,” Asian Survey46, no. 3
(2006): 479.
2. Sergei Goncharenko, “Sino-Soviet Military Cooperation,” in Brothers In Arms:
The Rise and Fall of the Sino-Soviet Alliance, 1945-1963, ed. Odd Arne Westad
(Washington, DC: Woodrow Wilson Center Press, 1998), 155, 157.
50 P. SCHWARTZ
3. Elizabeth Wishnick, Mending Fences: The Evolution of Moscow’s China Policy

from Brezhnev to Yeltsin (Seattle: University of Washington Press, 2001), 8.
4. Alexei D. Voskressenski, “The Three Structural Stages of Russo-Chinese
Cooperation after the Collapse of the USSR and Prospects for the
Emergence of a Fourth Stage,” Eurasian Review, no. 5 (Nov. 2012): 3;
Kevin Ryan, “Russo-Chinese Defense Relations: The View from Moscow,”
in The Future of China-Russia Relations, ed. James Bellacqua (Lexington:
University Press of Kentucky, 2010),181.
5. Elizabeth Wishnick, Mending Fences, 104–105. Final resolution of bor-
der disputes did not occur until 2004. See Linda Jakobsen, Paul
Holtom, Dean Knox and Jingchao Peng, China’s Energy and Security
Relations: Hopes, Frustrations and Uncertainties (SIPRI Policy Paper 29,
October 2011), 2, fn. 9; Peter Ferdinand, “Sunset, Sunrise: China and
Russia Construct a New Relationship,” International Affairs83, no. 5
(2007): 846.
6. Elizabeth Wishnick, Mending Fences, 122, 126; Alexander A. Sergounin and
Sergey V. Subbotin, Russian Arms Transfers to East Asia in the 1990’s,
SIPRI Research Report No. 15 (New York: Oxford University Press,
1999), 91; Lt. Daniel W. Harkins, “Sino-Russian Relations in the Twenty-
First Century: Prospects and Issues,” (Master’s thesis, Naval Postgraduate
School, September, 2010), 13, http://www.dtic.mil/cgi-bin/GetTRDoc?
AD=ADA531615.
7. Jing-dong Yuan, Sino-Russian Confidence Building Measures: A Preliminary
Analysis, Liu Institute for Global Issues (Working Paper No. 10, University
of British Columbia, Vancouver, January 1998), 7, http://www.ligi.ubc.
ca/sites/liu/files/Publications/webwp20.pdf.
8. Elizabeth Wishnick, Mending Fences, 126.
9. Jing-dong Yuan, “Sino-Russian Defense Ties: The View from Beijing,” in
The Future of China-Russia Relations, ed. James Bellacqua, 207.
10. Jeanne L. Wilson, Strategic Partners: Russian-Chinese Relations in the Post-
Soviet Era (Armonk, N.Y.: M.E. Sharpe, 2004), 93–94; Jyotsna Bakshi,
“Russia-China Military Technical Cooperation: Implications for India,”
Strategic Analysis24, no. 4 (2000): 633.
11. Jing-dong Yuan, “Sino-Russian Defense Ties,” 208.
12. Rajon Menon, “The Strategic Convergence between Russia and China,”
Survival39, no. 2 (1997): 111; Alexander A. Sergounin and Sergey V.
Subbotin, Russian Arms Transfers to East Asia in the 1990’s,132–133.
13. Jeanne L. Wilson, Strategic Partners, 95–96.
14. FY04 Report to the Congress on PRC Military Activities, 32, http://www.
defense.gov/pubs/d20040528prc.pdf.
15. Jeanne L. Wilson, Strategic Partners, 111.
16. Jeanne L. Wilson, Strategic Partners, 95.
17. Alexander A. Sergounin and Sergey V. Subbotin, Russian Arms Transfers to

East Asia in the 1990’s,91.
Cooperation with China,”481.
19. Stephen Blank, The Dynamics of Russian Weapon Sales to China, US Army
War College March 4, 1997, 24.
20. Alexander Lukin, “Russia’s Image of China and Russian-Chinese
Relations,” East Asia 17, no. 1 (1999): 29.
Cooperation with China,”481.
22. Dmitri Trenin, “True Partners? How Russia and China See Each Other,”
Center for European Reform (February 2012): 3, http://carnegieendow
ment.org/files/Trenin_CER_Eng.pdf.
23. Elizabeth Wishnick, Mending Fences, 124.
24. Jing-dong Yuan, “Sino-Russian Defense Ties,” 204.
25. Jing-dong Yuan, Sino-Russian Confidence Building Measures, 10.
26. Elizabeth Wishnick, Mending Fences, 132. They agreed to a cap of 130,000
troops, but Russia’s quota was shared with the three Central Asian states
that bordered China, with Russia’s set at 119,400 troops.
27. Ariel Cohen, “The Russia-China Friendship and Cooperation Treaty: A
Strategic Shift in Eurasia?” Heritage Foundation, http://www.heritage.org/
research/reports/2001/07/the-russia-china-friendship-and-cooperation-
treaty.
28. Stephen Blank, The Dynamics of Russian Weapon Sales to China, 22.
Cooperation with China,” citing American Foreign Policy Council,
Washington, DC, China Reform Monitor, no. 277 (February 15, 2000):
478–479.
30. Unless otherwise stated, figures are SIPRI trade-in-value amounts taken
from Linda Jakobsen, et al., China’s Energy and Security Relations, 14.
31. Lt. Daniel W. Harkins, “Sino-Russian Relations in the Twenty-First
Century,” 66–67.
32. Jeanne L. Wilson, Strategic Partners, 99; Jing-dong Yuan, “Sino-Russian
Defense Ties,” 208.
Cooperation with China,”481; Jing-dong Yuan, “Sino-Russian Defense
Ties,” 214.
Cooperation with China,” 482, citing “Russian Official Sees China
Remaining Major Arms Buyer,” Interfax News Agency (Moscow),
November 20, 1998, in FBIS, Daily Report/Russia, document no. FBIS-
SOV-98-324, November 20, 1998.
52 P. SCHWARTZ
35. Cited in Guanyu, “Arms Sales to China: Russia in a Quandary,” March 27,
2012, http://guanyu9.blogspot.com/2012/03/arms-sales-to-china-rus
sia-in-quandary.html.
36. Writing in Ekspert magazine, cited in Gregory Feifer, “Russia Analysts Say
Burgeoning Arms Sales Pose Security Threat,” Radio Free Europe Radio
Liberty, February 17, 2003, https://www.google.com/#q=russia+analysts
+say+burgeoning+arms+sales.
37. “A 1996 report estimated that [arms sales] provided work for over 400,000
employees of defense enterprises.” Jeanne L. Wilson, Strategic Partners, 105
(referencing Anton Surikov, “Beijing is Purchasing War for Itself,” Pravda-
5, 17 (September 1996): 3 FBIS-SOV-211-S).
Cooperation with China,490. For example, funds from licensed production
of the Su-27 paid for development of the Su-35. Loro Harta, “From Russia
without Love; Russia Resumes Weapons Sales to China,” Real Clear
Defense, December 12, 2013, http://www.realcleardefense.com/articles/
2013/12/12/from_russia_without_love_russia_resumes_weapons_sales_
to_china__106998-comments.html.
39. Jing-dong Yuan, “Sino-Russian Defense Ties,” 205–206; Paradorn
Rangsimaporn, “Russia’s Debate on Military-Technological Cooperation
with China,” 481.
40. 2007 Report to Congress of the US-China Economic and Security Review
Commission, November 2007, 100, http://origin.www.uscc.gov/sites/
default/files/annual_reports/2007-Report-to-Congress.pdf.
41. Tai Ming Cheung, “China’s Emergence as a Defense Technological Power:
Introduction,” Journal of Strategic Studies34, no. 3 (June 17, 2011): 296;
Richard Rousseau, “The Tortuous Sino-Russian Arms Trade—Analysis,”
Eurasia Review, June 9, 2012, http://www.eurasiareview.com/
09062012-the-tortuous-sino-russian-arms-trade-analysis/.
42. Zachary Keck, “Putin Approves Sale of S-400 to China,” The Diplomat,
April 11, 2014, http://thediplomat.com/2014/04/putin-approves-sale-
of-s-400-to-china/.
43. Linda Jakobsen et al., China’s Energy and Security Relations, vi, 15, 6, 14, 19.
44. Richard F. Grimmett and Paul K. Kerr, Conventional Arms Transfers to
Developing Nations, 2004-2011, CRS Report R42678 (Washington, DC:
Library of Congress, Congressional Research Service, August 24, 2012), 10,
http://www.fas.org/sgp/crs/weapons/R42678.pdf.
45. Linda Jakobsen et al., China’s Energy and Security Relations, 23.
46. “Russian-Chinese Naval Training Exercise Begins in Mediterranean,” RIA
Novosti, January 25, 2014, http://en.ria.ru/military_news/20140125/
186916270/Russian-Chinese-Naval-Training-Exercise-Begins-in-
Mediterranean.html; Jane Perlez, “China and Russia, in a Display of Unity,
Hold Naval Exercise,” The New York Times, July 10, 2013, http://www.
nytimes.com/2013/07/11/world/asia/china-and-russia-in-a-display-of-
unity-hold-naval-exercises.html; Richard Weitz, “Military Exercises Under the
SCO’s Charter,” Central Asia-Caucasus Institute, May 25, 2011,http://old.
cacianalyst.org/?q=node/5565; Roger N. McDermott, “SCO ‘Peace Mission’
2012 Promotes Security Myths,” FOI Memo 4040, July 2012, http://www.foi.
se/Global/V%C3%A5r%20kunskap/S%C3%A4kerhetspolitiska%20studier/
Ryssland/Briefings/RUFS%20Briefing%20No.%2014%20-%2012070.
47. Kevin Ryan, “Russo-Chinese Defense Relations,” 184, 193.
48. Siemon T. Wezeman and Pieter D. Wezeman, “Trends in International
Arms Transfers, 2013,” (SIPRI Fact Sheet, Mar. 2014), http://books.
sipri.org/product_info?c_product_id=475.
49. Niclas Rolander, “Russia’s Arms Exports Grow,” The Wall Street Journal,
March 16, 2014, http://online.wsj.com/news/articles/
SB10001424052702303287804579443102858150332.
50. Vassily Kashin, “China’s Call for Arms,” Russia in Global Affairs, February
2014 (Russia’s defense industry receives 45 percent of its revenues from
state orders, but only 22 percent from arms sales).
51. Tai Ming Cheung, “China’s Emergence as a Defense Technological Power,”
296; Alexander Burikov and Torsten Geizer, “Maritime Strategies of Rising
Powers: Developments in China and Russia,” Third World Quarterly (July 25,
2013): 1049; Charlemagne, “The EU and Arms for China,” The Economist,
February 1, 2010; “The EU Arms Embargo on China,” SIPRI Report, last
updated on November 20, 2012, http://www.sipri.org/databases/embar
goes/eu_arms_embargoes/china.
52. Zachary Keck, “Russia to Sell China Su-35 Multirole Fighter Jets,” The
Diplomat, September 10, 2013, http://thediplomat.com/2013/09/rus
sia-to-sell-china-su-35-multirole-fighter-jets/; Putin recently approved, in
principle, the sale of S-400 air defense systems to China, although the deal
has not yet been finalized. Zachary Keck, “Putin Approves Sale of S-400 to
China,” The Diplomat, April, 11, 2014, http://thediplomat.com/2014/
04/putin-approves-sale-of-s-400-to-china/.
53. Siemon T. Wezeman and Pieter D. Wezeman, “Trends in International
Arms Transfers, 2013.”
54. See “2013 Report to Congress of the US-China Economic and Security
Review Commission,” November 2013, 232–233, 337–338; “2012 Report
to Congress of the U.S.-China Economic and Security Review
Commission,” November 2012, 144–146, 254–255.
55. David Lague, “Russia and China Rethink Arms Deals,” The New York
Times, March 2, 2008, http://www.nytimes.com/2008/03/02/world/
asia/02iht-arms.1.10614237.html?pagewanted=all; Linda Jakobsen et al.,
China’s Energy and Security Relations, 14.
54 P. SCHWARTZ
56. Data from the Stockholm International Peace Research Institute (SIPRI)
Arms Transfer Database, available at http://www.sipri.org/databases/arm
stransfers (hereafter SIPRI Arms Transfer Database); Linda Jakobsen, Paul
Holtom, Dean Knox, and Jingchao Peng, China’s Energy and Security
Relations with Russia: Hopes, Frustrations and Uncertainties (SIPRI Policy
Paper 29, October 2011), 14.
57. Date from SIPRI Arms Transfer Database, Stockholm International Peace
Research Institute, http://www.sipri.org/databases/armstransfers; Linda
Jakobsen, et al., China’s Energy and Security Relations, 14.
58. “China and Russia Sign Contract for S-400 Missile Systems,” The Moscow Times,
April 13, 2015, http://www.themoscowtimes.com/business/article/china-
and-russia-sign-contract-for-s-400-missile-systems/519010.html.
59. Dave Majumdar, “Confirmed: Russia Just Sold 24 Lethal Su-35 Fighters to
China,” The National Interest, November 19, 2015, http://nationalinter
est.org/blog/the-buzz/confirmed-russia-just-sold-24-lethal-su-35-fight
ers-china-14397.
60. Jon Grevatt, “Briefing: China and Russia Enter New Era of Industrial
Collaboration,” Jane’s Defense Weekly, September 16, 2015.
61. Artyom Lukin, “Russia’s Eastward Drive – Pivoting to Asia . . . or to China?”
Russian Analytical Digest, no. 169 (June 30, 2015): 2.
62. Ibid.
63. Angelo Young, “Russia Will Hold Key Positions in China-Led Asia
Infrastructure Investment Bank,” International Business Times, June 27,
2015, http://www.ibtimes.com/russia-will-hold-key-positions-china-led-
asian-infrastructure-investment-bank-1986824.
64. Galiya Ibragimova, “What are the Implications of India’s and Pakistan’s
Accessions to the SCO?” Russia Beyond the Headlines, July 14, 2015.
65. Alexander Gabuev, “Eurasian Silk-Road Union: Towards a Russia-China
Consensus?” The Diplomat, June 5, 2015, http://thediplomat.com/2015/
06/eurasian-silk-road-union-towards-a-russia-china-consensus/.
66. Artyom Lukin, “Russia’s Eastward Drive,” 2–3.
67. “Russia Signs 30-year Gas Deal with China, BBC News, May 21, 2014,
http://www.bbc.com/news/business-27503017.
68. Peter Dunai and Matthew Smith, “Russia, China S-400 Deal Moves
Forward,” Jane’s Defense Weekly, April 1, 2014.
69. Data from SIPRI Arms Transfer Database, Stockholm International Peace
Research Institute, http://www.sipri.org/databases/armstransfers.
70. Vassily Kashin, “China’s Call for Arms,” Russia Beyond the Headlines,
December 16, 2013, http://rbth.asia/security/2013/12/16/chinas_
call_for_arms_48971.html. Note that SIPRI numbers differ slightly, indi-
cating two distinct transactions for a total of 163 engines.
71. “China to Get Dozen of IL-76 Strategic Airlifters,” The Voice Of Russia,
June 17, 2013, http://sputniknews.com/voiceofrussia/news/2013_06_
17/China-to-get-dozen-of-Russian-Il-76-strategic-airlifters-3552/.
According to the SIPRI Arms Transfer Database, only five have been
delivered to date.
72. US Department of Defense, Office of the Secretary of Defense, Annual
Report to Congress: Military and Security Developments Involving the People’s
Republic of China 2015 (Washington, DC: 2015), 51.
73. “China and Russia Sign Contract for S-400 Missile Systems,” The Moscow
Times, http://www.themoscowtimes.com/business/article/china-and-rus
sia-sign-contract-for-s-400-missile-systems/519010.html.
74. Dave Majumdar, “Confirmed: Russia Just Sold 24 Lethal Su-35 Fighters to
China.”
75. Harry J. Kazianis, “China Nears Deal to Acquire Russia’s Lethal Su-35
Fighter,” The National Interest, August 27, 2015, http://nationalinterest.
org/blog/the-buzz/china-nears-deal-acquire-russias-lethal-su-35-fighter-
13717.
76. Richard D. Fisher, “Analysis: Can China Break the Military Aircraft Engine
Bottleneck?” Flight Global, May 27, 2015, https://www.flightglobal.com/
news/articles/analysis-can-china-break-the-military-aircraft-engine-412424/.
77. Ibid.
78. Reuben F. Johnson, “PLA and Chinese Industry at Odds over Russian
Fighter Engines,” Jane’s Defense Weekly, September 12, 2014.
79. Nikolai Novichkov, “Airshow China 2014: Russia to Supply China with
More RD-93 Turbofans,” Jane’s Defense Weekly, November 18, 2014.
80. “China May Export J-10B Fighters with Russian AL-31FN-S3 Engines,”
Want China Times, July 8, 2015.
81. Dennis M. Gormley, Andrew S. Erickson, and Jingong Yuan, A Low-
Visibility Force Multiplier: Assessing China’s Cruise Missile Ambitions
(Washington, DC: National Defense University Press, 2014), xviii.
82. Office of Naval Intelligence (ONI), The PLA Navy: New Capabilities and
Missions for the 21st Century (Suitland, Maryland: 2015), 19.
83. See for example, “China, Russia Sign Arms Sales Contract,” CCTV.com
English News, March 25, 2013, http://english.cntv.cn/program/
china24/20130325/106963.shtml.
84. Michael T. Flynn, Lieutenant General, US Army, Director, Defense Intelligence
Agency, “Annual Threat Assessment” (statement before the Senate Armed
Services Committee, United States Senate, Washington, DC on February 11,
2014), cited in “China Insights from DIA Director LtGen Flynn’s SASC
Testimony,” available at http://www.andrewerickson.com/2014/03/china-
insights-from-dia-director-ltgen-flynns-sasc-testimony/.
56 P. SCHWARTZ
85. See generally, Paul Schwartz, Russia’s Contribution to China’s Surface

Warfare Capabilities, Feeding the Dragon, (Washington, DC: Center for
Strategic and International Studies, August 2015).
86. “Plan Surface Ship Gains Towed-Array Sonar,” Jane’s Navy International,
December 8, 2011.
87. Richard Scott, “Steregushchiy Heralds a New Russian Revolution,” Jane’s
Navy International, September 24, 2007.
88. “Russia Likely to Sell Iskander-E Missiles to China and Belarus,” Defense
World, July 18, 2014, http://www.defenseworld.net/news/10825/
Russia_Likely_to_Sell_Iskander_E_Missiles_To_China_And_Belarus#.
VkXdWWBdHIU.
89. Jon Grevatt, “Briefing: China and Russia Enter New Era of Industrial
Collaboration,” Jane’s Defense Weekly, September 16, 2015.
90. Vassily Kashin, “China’s Call for Arms.”
91. Greg Waldron, “Russia, China to Develop Massive Heavy-Lift Helicopter,”
FlightGlobal, May 11, 2015, https://www.flightglobal.com/news/arti
cles/russia-china-to-develop-massive-heavy-lift-helicop-412140/.
92. Jon Grevatt, “Airshow China 2014: ROSTEC, AVIC Sign Collaboration
Agreement,” Jane’s Defense Weekly, November 12, 2014.
93. Ibid.
94. Ibid.
95. Jon Grevatt, “Russia’s ROSTEC and China’s CASC Sign Collaboration
Accord,” Jane’s Defence Weekly, October 17, 2014.
96. Matthew Bodner, “Russia-China Military Ties Deepen Amid Western
Pressure over Ukraine,” The Moscow Times, December 1, 2014, http://
www.themoscowtimes.com/business/article/russia-china-military-ties-dee
pen-amid-western-pressure-over-ukraine/512217.html.
97. “Russian and China Strengthen Rapprochement in the Military Field,
Vzglyad Online, November 19, 2014, http://vz.ru/society/2014/11/
19/716036.html.
98. “Russia May Look to China to Acquire Drone Technology,” Want China
Times, June 3, 2014, http://www.wantchinatimes.com/news-subclass-cnt.
aspx?id=20140603000005&cid=1101.
99. Sam LaGrone, “Two Chinese Warships Enter Black Sea, Reports Link Visit
to Possible Chinese Frigate Sale to Russia,” USNI News, May 5, 2015,
http://news.usni.org/2015/05/05/two-chinese-warships-enter-black-
sea-reports-link-visit-to-possible-chinese-frigate-sale-to-russia.
100. Jeffrey Mankoff, “Russia’s Asia Pivot: Confrontation or Cooperation?” Asia
Policy 19, no. 1 (2015): 77.
101. Shannon Tiezzi, “China Hosts SCO’s Largest Ever Military Drills,” The
Diplomat, August 29, 2014, http://thediplomat.com/2014/08/china-
hosts-scos-largest-ever-military-drills/.
102. Zachary Keck, “China, Russia Military Ties Deepen with Navy Drill in East
China Sea,” The Diplomat, May 2, 2014, http://thediplomat.com/2014/
05/china-russia-military-ties-deepen-with-naval-drill-in-east-china-sea/.
103. Franz-Stefan Gady, “China and Russia Conclude Naval Drill in
Mediterranean,” The Diplomat, May 22, 2015, http://thediplomat.com/
2015/05/china-and-russia-conclude-naval-drill-in-mediterranean/.
104. Jack Caravelli, “Russia, China Expand Ties with Largest Naval Exercise
Yet,” The Washington Free Beacon, September 1, 2015, http://freebea
con.com/national-security/russia-china-expand-ties-with-largest-naval-
exercise-yet/.
105. Ankit Panda, “Russia Plans South China Sea Naval Exercise with China in
2016,” The Diplomat, June 1, 2015, http://thediplomat.com/2015/06/
russia-plans-south-china-sea-naval-exercise-with-china-in-2016/; “Russian
Media: Peace Mission 2016 Exercises will be Held in Kyrgyzstan,” Secroll,
November 19, 2015, http://en.secroll.com/article/8652.
106. Linda Jakobsen, et al, “China’s Energy and Security Relations with
Russia,” 24.
Paul Schwartz is a Senior Associate in the Russia and Eurasia Program at the
Center for Strategic and International Studies, where he specializes in the Russian
military and its defense and security policy. His research focuses especially on
Russia’s military capabilities, including its recent military campaigns in Georgia,
Ukraine, and Syria, and its overall geostrategic outlook. Mr. Schwartz has also
written extensively on topics such as Russo-China defense relations, Russia’s INF
Treaty violations, Russia’s military modernization programs, Russian science and
technology, and the capabilities of selected Russian weapons systems.
CHAPTER 4
Russia’s Policy Toward China: Key Players

and the Decision-making Process
Alexander Gabuev
Analyzing the foreign policy of modern states, many scholars lean toward
describing different transactions as a result of interactions between states,
which have their own interests and will, as the sole actors in international
relations,. A more sophisticated analytical framework equates a certain
policy with decisions taken by a ruler or the ruling elite. Russia’s “turn
to the East” policy (“povorot na Vostok”), sometimes dubbed the “pivot
to Asia,” is no exception, and its relations with China are in particular
treated in this manner. Experts describe transactions with China from a
“national policy” prospective and write about “Russia’s interests,”
“Russia’s needs,” “Russia’s fears,” etc. vis-à-vis China. One critical ele-
ment is missing however: states are just analytical concepts that do not
exist in real life. “Russia’s” policy toward “China” (and vice versa) is
formed by a complicated combination of interests, calculations, and con-
cerns of individual players and groups. In order to understand the nature
of Russia’s relationship with China, one must decompose “Russia” into a
set of powerful decision makers and influence groups, whose interests and
actions (sometimes contradictory to each other) constitute the “national
policy.” It is a matter of one country, many players.
A. Gabuev (*)
Asia-Pacific Program, Carnegie Moscow Center, Moscow, Russia

https://doi.org/10.1007/978-981-10-3144-1_4
60 A. GABUEV
This article examines the players who play a key role and have a stake in
formulating Moscow’s policy toward China. Based on interviews con-
ducted with officials, managers of state-owned enterprises (SOEs), private
businesspeople, and experts in Moscow in late 2014, it describes the
players, their interests, factors which influence their decision-making pat-
terns, and decision-making mechanisms at the top political level. A full
picture also requires decomposing “China” into stakeholders with regard
to Russia as well, but this is a separate task. Russian players tend to think
about “China” as a unified entity with significant overlapping of political,
economic, and security interests, which justifies our approach in describing
the Russian part of the Moscow-Beijing equation.
FROM NEGLECT TO A BOOM IN INTEREST

As with almost every relationship with a major foreign power, Russia’s
core interest groups vis-à-vis China are represented by at least five key
players. First is the central civil bureaucracy, including the leadership of
President Vladimir Putin and his administration. They include the
Ministry of Foreign Affairs (MFA) and various governmental bodies in
charge of the economy. Given the special role Putin plays in the decision-
making process, we may consider him to be a separate player in his own
right. The third core player is the army and the intelligence community
(political SVR and military GRU), with their shared and very specific
outlook on the problems of international relations. Fourth are the man-
agers of the Russian state-owned enterprises (SOEs) – with their close
connections to the Kremlin and personal bonds to Putin, they are unique
in perceiving both commercial and political objectives. This distinguishes
them from the fifth player – owners of private companies – who view any
transaction with foreign entities through a profit-seeking lens. These four
groups are more or less equal in terms of their influence over the decision-
making process (except, of course, Putin himself). The relative weight of
one power group or another at any given moment depends on many
factors, including the international environment, personal relationships
to Putin, and the state of the Russian economy.
Two additions need to be made to this general scheme. One is the
military-industrial complex, which can be viewed as a player in its own
right vis-à-vis China, due to both the volume of its arms trade and its
unique position. The weapons-producing industry is controlled by the
state, which makes it similar to SOEs in form, but also maintains close
RUSSIA’S POLICY TOWARD CHINA: KEY PLAYERS . . . 61
institutional ties to the army, which adds concerns over national security to
its calculations in transactions with China. Second, there are also specific
interests of the regional governments – given the length of the Russian-
Chinese border (over 4200 km in two sections) and the strategic impor-
tance of the Far East to the country, regional bureaucracies (and local
business elites connected to them) also play a significant role. The expert
community, the State Duma and Council of the Federation, and political
parties do not play any substantial role in policymaking on China, being
no more than tools of the Kremlin to imitate political life in a soft
authoritarian system. This also reflects the minimal role Russia’s dysfunc-
tional civil society plays in foreign policymaking—policy on China is no
exception.
Before I describe each player in greater detail, several general observa-
tions need to be made. First, since the beginning of the crisis over Ukraine
in 2014, China is playing an increasingly important role for the Russian
elites and for Putin personally. Beijing is viewed as a political ally in
countering the West’s efforts to isolate Russia, and as a crucial market
and source of capital and technology, which may help Russia to offset the
impact of Western sanctions and falling oil prices. China is viewed in
strategic terms as the only influential partner Russia has in the interna-
tional community, but also in relative terms – every company is trying to
secure a loan in the PRC, to attract Chinese investors to its projects, to
find customers for its goods, and to develop a working relationship with
relevant decision makers in China. This explains why any transactions with
China have a domestic political dimension for the majority of Russian
players. Reaching out to China not only helps to meet informal key
performance indicators (KPIs) set by the Kremlin (growth and employ-
ment rates for the regions, taxes to the state budget for SOEs, etc.), but
any successful project with the Chinese and skillful presentation of it to
Putin may boost one’s position inside the ruling elite.
Second, and equally importantly, despite the current significance of
China for the Russian elites, the state of China-related expertise and
experience (and on Asia-related topics in general) for the majority may
be described as near-complete illiteracy. Since the establishment of a new
Russia in 1991, China (or any other Asian power) has never been their
priority. Historically Russian elites have viewed their country as European,
though not fully accepted into the Western family for a variety of reasons,
and themselves as Europeans. Eurocentrism has been deeply rooted, over
the centuries the country was facing challenges and opportunities coming
62 A. GABUEV
mainly from the West. The Cold War with its focus on the United States
added America to this worldview, but never changed it. The only desire of
the new elites after 1991 was to integrate Russia (and themselves) with the
West. Sending their kids to English boarding schools, keeping their assets
in London and Zurich, holidaying in Cote-d’Azur, and other patterns of
the new Russian ruling class made Asia look remote and irrelevant. Putin,
members of his entourage, and members of the growing middle class all
had very much in common. An additional factor was Russian sentiments of
cultural superiority over Asians in general and the Chinese in particular,
fueled by memories of the USSR being Maoist China’s “big brother.”
These factors created a worldview in which real understanding of China
was replaced by myths, of which many were Western (e.g., Zbigniew
Brzezinski’s warning that parts of Siberia may fall into China’s hands).
Many of the Russian elite fear a rising China. There are numerous factors
that distort a clear vision of China on Moscow’s part: a lack of under-
standing about Chinese goals, remote memories of Soviet-Chinese border
conflicts in 1969, a deep-rooted tradition of viewing populated countries
in the East as a danger to densely populated Siberia and the Far East
(playing on the “Yellow threat” which dates back to the nineteenth
century), and growing economic and demographic asymmetry between
the Far East and bordering Chinese provinces. One of the most significant
factors was the near-complete decimation of the China-watching commu-
nity in Russia during the economic turmoil in the 1990s and the state’s
neglect of experts.
This combination of factors explains why the Russian elite missed the
opportunities presented by China’s economic boom in the 1990s and
early 2000s. Only after the global credit-crunch of 2008–2009 did they
start paying more systematic attention to the Asia-Pacific region, including
China. But five years were not enough to bridge the knowledge gap; lack
of expertise among all key players in framing a policy toward China
remains a key problem in bilateral relations. Putin, whose views and role
in the decision-making process will be analyzed first, is no exception.
THE SUPREME LEADER

As paramount leader, Putin plays a decisive role in framing Moscow’s
course toward China. His personal role is much broader than that of
Barack Obama’s in shaping the US policy on China, as for example, the
US president cannot fully control the economic activities of American
companies vis-à-vis China, nor is he in charge of the states’ transactions

with entities in China, not to mention the role that Congress can play
limiting the executive branch’s role. Even in the areas where the White
House is in the lead, policy is formed by government agencies through a
relatively transparent process following standard procedures. In Russia,
Putin enjoys nearly full control over the other players: the civil bureau-
cracy, regions, army, SOEs, and even private oligarchs. He sets strategic
priorities for civil and military/intelligence bureaucracies, controls the
management of SOEs, and can also micro-manage particular China-
related projects. As for private businesspeople, first and foremost the
members of Russia’s Forbes list, Putin is in a position to make them an
offer that they cannot refuse. In this context, Putin’s personal outlook on
China and his approach to managing Russia’s relations with its giant
neighbor become crucial.
There are at least five factors worth noting about Putin’s worldview and
management style vis-à-vis China. First is Putin’s extreme Eurocentrism.
Throughout his tenure as a national leader Putin has tried to manage
Russia’s relationship with the EU and to integrate Russia into Europe on
an “equal partnership” basis, meaning that Moscow will negotiate the
terms of integration on an equal footing with major European players
(such as Germany, France and Italy), rather than follow the usual proce-
dure of applying for EU membership and humbly fulfilling all criteria
imposed by the European Commission. Reviving Russia’s great power
status and dominating neighboring CIS countries was not a goal in itself,
but a means to create a solid negotiating position vis-à-vis Europe. Even
the creation of the “Eurasian Economic Union” is aimed at establishing a
platform to discuss Russia’s integration with Europe and creating a com-
mon market from Lisbon to Vladivostok. This can be clearly seen in
Putin’s 2011 Izvestia article, the first official declaration of intent about
the Eurasian Union. The EU-Russia block, which would eventually com-
bine Russia’s vast natural resources with the EU’s capital and technologies,
in Putin’s worldview, would be the most powerful player in a triangle with
the United States and China. Thus, China has never played a substantial
role in Putin’s grand strategy– relations with China are viewed by Putin as
an instrument in a grand bargaining with Europe. China is also an ally in
containing a power Putin sees as a major threat to his grand plan – the
United States Perhaps the most telling example of this instrumental
approach was Putin’s visit to Beijing in 2006, when he and Hu Jintao
witnessed a signing ceremony of memoranda between Gazprom and
64 A. GABUEV
CNPC to construct two gas pipelines (30 bcm and 38 bcm per annum) by
2012. These were then used to push European customers to sign new
long-term contracts with Gazprom, as many companies in the EU were
reluctant to do so after a gas war between Russia and Ukraine. When the
goal was reached later in 2006, Putin never pushed Gazprom to finish the
job by signing binding agreements and contracts with the Chinese. Again,
at that period of time, China itself was not so important.
The second factor is Putin’s growing anti-Americanism. Suspicions
about the United States trying to encircle and split Russia are deep in
the intelligence and security community, to which the president belongs.
Putin’s personal experience with Washington is also not very encouraging.
After a brief period of cordial relations with the George W. Bush admin-
istration after the 9/11 attack, Putin witnessed US unilateral actions in
Afghanistan and Iraq, NATO eastward enlargement, American support for
“color revolutions” in Georgia and Ukraine (and to a lesser extent, in
Kyrgyzstan), attempts to create a missile-defense system in Europe and not
paying attention to Russia’s concerns. He remained suspicious during
Medvedev’s short-lived “reset” policy with Obama, and his deep belief
about malicious US intensions revived during the war in Libya, during
which the Kremlin blamed the West for overstepping the UN Security
Council mandate and thus deceiving Moscow, which had not used its veto
and thus allowed resolution 1973 to pass. Against this backdrop, China is
seen by Putin as a partner to fend off the “American threat.” In Central
Asia, Moscow and Beijing joined hands in opposing US military presence
and helped to eject the US air base from Manas. Putin has also supported
cooperation with China in the UN Security Council to protect regimes in
Iran, Myanmar, Zimbabwe, etc. With growing conflict between Russia
and the West over Ukraine, the anti-American dimension of Putin’s
attitude to China is overshadowing his Eurocentric view on cooperation
with Beijing. China is increasingly becoming a personal priority for Putin.
A crucial element in Putin’s personal attitude toward China is his
friendship with Xi Jinping. Personalizing international relations by
establishing personal bonds is a major feature of Putin’s foreign policy
(some observers trace it back to his KGB experience in recruiting
agents). During his first two terms as president, he had special relation-
ships with Chancellor Gerhard Schroeder, President Jacques Chirac,
and Prime-Minister Silvio Berlusconi. In China, Putin has worked
with Jiang Zemin and Hu Jintao, but the relationship was never very
personal – one reason being their age difference (Jiang is 26 years older
than Putin, Hu is 10 years older). But in Xi Jinping, Putin has found a

real “buddy.” Putin is only 7 months older than Xi. According to aides
of the Russian president, the first meeting between the two in 2010
was relatively formal (Putin was prime minister, while Xi was vice-
chairman of the PRC and heir-in-waiting), but their real friendship
started on October 7, 2013, when Putin celebrated his birthday at
the APEC summit in I Bali and Xi was the only foreign guest invited
to the small party. The two got drunk together, and their working
relationship acquired a personal dimension. Putin has more trust in Xi
than in any Chinese leader before him and any current Western leader
(his relationship with Angela Merkel has soured during the Ukrainian
crisis), which also informs his views on cooperation with China. People
with access to Putin say that the sincerity he feels in Xi has helped the
Kremlin to adjust many policies toward China that had been in place
for over a decade.
A fourth element which helps to understand Putin’s stance toward
China is the lack of expertise on Asia, a feature he shares with others in
the elite. His understanding is based on regular visits (at least once a year)
to China and interactions with its leadership, and also on briefs he gets
from the Russian ambassador, the Security Council, the Foreign
Intelligence Service (SVR) CEOs, and other government officials. His
foreign policy aides (Sergey Prikhodko, who is now vice-premier and
chief of staff, and Yuri Ushakov, a former ambassador to the United
States) do not have a China-watching background or significant experi-
ence with Asia. The Foreign Policy Department in the presidential admin-
istration has just one staff member on China, but its job is mainly
preparing the agenda for Putin’s foreign trips, not policy suggestions.
Those close to Putin testify that the president used to be worried about
China’s long-term intentions toward Russia, particularly in the Far East
and Eastern Siberia. After taking some initial bold steps, for example
settling the border dispute with China in 2004, a feat Putin considers as
one of his major achievements in foreign policy, his course became
increasingly tactical. A lack of understanding, rumors about secret
Chinese migration into Russia, and the absence of a clear strategy on
Asia led to some restrictive policies: informal limits on Chinese invest-
ments into infrastructure, agriculture, strategic oil and gas fields, as well as
gently pushing out Chinese investors from the Far East. Now after the
deterioration of relations with the West, Russia’s policy toward China has
reversed.
66 A. GABUEV
The final characteristic of Putin’s management style, which is important

for Russia-China relations, is the care Putin takes for the business interests
of his friends and long-time allies, even if the proposed project is not in
accordance with commercial logic or the long-term interests of the coun-
try. He has long supported Gazprom’s plans to build pipelines to China as
opposed to additional LNG capacity, because LNG projects would involve
foreign companies taking the largest part of construction contracts (the
only LNG plant in Russia on Sakhalin is built by Shell). Gazprom is known
for establishing special relations with the contractors – some controlled by
Putin’s personal friends, such as Gennady Timchenko (Russia’s 6th richest
man with assets worth $15.3 billion in 2014, according to Forbes) or
Arkady Rottenberg (27th on Russian Forbes list in 2014 with net assets
about $4 billion). Another example is the advance payments, which Igor
Sechin, president of state-owned oil giant Rosneft and long-term ally of
Mr. Putin received in 2013 from Chinese oil companies CNPC and
Sinopec in return for future delivery contracts. Rosneft managed to get
$20 billion (the overall deal will be worth $240 billion) on non-transpar-
ent terms, which, as many diplomats familiar with the matter claim, go
against national interests. Sechin needed the money to repay debt, which
Rosneft created while absorbing TNK-BP, so Putin signaled a green light
on this dubious deal with the Chinese. After the collapse of oil prices, the
possible risks from Chinese loans may be covered by the state budget.
THE CENTRAL BUREAUCRACY

A vast bureaucratic machine, which manages the relationship with China
on a day-to-day basis, provides the top leadership with analytics and
sometimes has its own agenda. The bureaucratic mechanism for coopera-
tion with China is complicated, sometimes creating new problems in
addition to the challenges it is aimed at addressing. The only two govern-
ment agencies directly in charge of the “China portfolio” are the MFA and
the Ministry of Economic Development and Trade (MEDT). Historically,
the MFA has played a decisive role, although in the USSR, strategic
decisions on relations with foreign powers were made by the
International Department of the Communist Party of the Soviet Union
Central Committee, which had a direct connection to the party leadership.
Now MFA has the largest staff supporting day-to-day work with their
Chinese counterparts, but its significance inside the system is lower than in
Soviet times. In the MFA, the First Asian Department with China
specialist Andrei Kulik at the helm oversees relations with China, the
Democratic People’s Republic of Korea, the Republic of Korea, and
Mongolia. The deputy minister in charge of Asia, Igor Morgulov, is also
a seasoned China-watcher with vast experience in the region. Despite
professional expertise, diplomats in Moscow play a technical role: they
put together internal briefs, manage letter exchanges, prepare multiple
visits of Russian officials to China, and draft some state-to-state
agreements.
There are about 30 China specialists in the MFA Moscow headquarters,
and the Russian embassy in Beijing is second only to the embassy in
Washington. Ambassador Andrei Denisov, former first deputy foreign
minister and an old university friend of Sergei Lavrov, is considered to
be the leading authority on China among Russian bureaucrats. His memos
go directly to Putin’s desk. Overall, however, insiders familiar with the
Kremlin’s workings agree that the MFA plays no central role in shaping
policy toward China and is merely a technical body.
The same goes for the MEDT, which administers the Office of the
Russian Trade Representative to the PRC, in charge of managing trade
statistics, organizing exhibitions at major Chinese trade fairs, and helping
Russian companies find partners in China. The central headquarters of
MEDT in Moscow houses a department for Asian, African, and Latin
American states, which is led by professional sinologist Evgeniy Popov
and oversees trade and economic affairs. The Department for Support of
Projects in Asia-Pacific is much smaller, and its overlapping powers pose a
problem.
Normal Russian bureaucratic practice entails just one inter-governmen-
tal commission to deal with any foreign country. In the case of China
however, there are four, all overseen by deputy prime ministers. The
dialogue on social and humanitarian issues, co-chaired by Olga Golodets
and Vice-Premier Liu Yandong of China, is of least importance – it focuses
on cultural exchanges, education, etc. The other commissions are very
powerful. The original bilateral commission (for preparation of regular
meetings between heads of government) is now chaired by Deputy Prime
Minister Dmitri Rogozin, who is in charge of the military-industrial com-
plex (his Chinese counterpart was Wang Yang). The “strategic dialogue in
the fuel and energy sector” started in 2009 by Deputy Prime Minister Igor
Sechin in charge of energy working with Wang Qishan. Sechin established
the commission in order to concentrate power in energy negotiations with
China, which he also needed as chairman of the board for Rosneft and
68 A. GABUEV
InterRAO, a state-owned power-generation company. After Sechin took

the position of Rosneft chairman in 2012, this commission was inherited
by his successor – Deputy Prime Minister Arkadi Dvorkovich (working
with Zhang Gaoli). Finally, at Putin’s request, an inter-governmental
commission was created in September 2014 to handle priority investment
projects – a measure to speed up cooperation with China in the context of
sanctions. It is co-chaired by Zhang Gaoli and First Deputy Prime
Minister Igor Shuvalov, so trusted by Putin that he is dubbed the “shadow
prime minister.” Deputy Prime Minister Yuri Trutnev is overseeing the
development of the Far East (and is also chairman of the board of dia-
mond-producer ALROSA and RusHydro, the hydropower monopoly).
Although he has no commission with the Chinese, he has a say in some
bilateral projects.
The existence of these three commissions to provide government sup-
port to corporate projects sometimes creates difficulties for companies
which have to negotiate with the secretariats of two or three deputy
prime ministers at the same time. The powers of deputy prime ministers
do not fully match their domestic portfolio. Dvorkovich is also in charge
of all infrastructure, agriculture, and civil manufacturing inside Russia, so
all projects with the Chinese must get his approval, even if many are in
Shuvalov’s commission. If the project is in the Far East (as is the Summa
Group’s project on Zarubino port), it should get permission from three
deputy prime ministers, whose inter-personal relationships are compli-
cated. This leads to delays and misunderstandings for companies, whose
projects the bureaucracy is meant to support. Things become further
complicated when regional administrations get involved.
REGIONAL AUTHORITIES
Local officials usually have no say in determining strategy on the national
level. Since Putin came to power in 2000, the Kremlin has undermined the
power base of governors and made them dependent on Moscow in both
financial and political terms. The lion’s share of regional taxes first goes to
the federal budget and then is redistributed as Moscow’s wishes. In 2012,
local governors’ elections were reinstated, but the Kremlin has full control
of the election process – deciding who is allowed to run and who is
supposed to win. A typical governor is not as influential as a US governor
or even a party secretary of a Chinese province. When it comes to Russia-
China relations, governors follow Moscow’s instructions. In 2004–2005,
Moscow informally asked them to gently push Chinese businesspeople out

of bordering regions. They did so, despite the fact that this undermined a
source of economic growth. Now management of foreign relations in
regions bordering China is conducted by Trutnev, who is also the pre-
sident’s plenipotentiary representative for the whole borderland region
except Chitinskaya oblast and the Altai Republic.
Governors of bordering regions are still important in two respects: first,
implementing business projects or cross-border cooperation projects
approved at the top level (a program of regional cooperation between
the Russian Far East and Northeast China signed in 2009 by Dmitri
Medvedev and Hu Jintao with over 100 projects was not implemented,
in large part because of mismanagement on the regional level); second,
providing information to the center about China’s economic and demo-
graphic presence in the Far East and Eastern Siberia. The job is divided
between the governors and local chiefs of the Federal’naya Sluzhba
Bezopasnosti (FSB, the domestic security service). Security is an important
concern for the Kremlin vis-à-vis China.
THE ARMY, INTELLIGENCE COMMUNITY,

AND MILITARY-INDUSTRIAL COMPLEX
The security dimension of relations with China has been important

throughout history. With a length of over 4200 km, Russia’s land border
with China is the largest with a major power (Kazakhstan is a treaty ally of
Russia). Arguably, it has been one of the most peaceful borders in Russian
history – as opposed to the borders with Europe or with Turkey, which
have always been at risk of invasion. But since the Sino-Soviet split, and
especially after the 1969 border conflict, it became a highly militarized
outpost with thousands of Russian troops ready to fend off “the Chinese
threat.” After 1989 when Mikhail Gorbachev and Deng Xiaoping normal-
ized relations, troop numbers have been sharply lowered as the border was
opened for trade. Despite the final settlement of the territorial dispute,
security concerns are still among the major drivers in Moscow’s approach
toward China, a consequence of the role the army and broader security
community plays in policymaking.
The security community nearly dominates the discussion on sales of
Russian weaponry to China. As the problem has both commercial and
security aspects, this is the area where the army leadership, the SVR, the
FSB and bosses of the defense industry need to find a delicate balance of
70 A. GABUEV
their interests, with Putin having the final say. The most influential figure
in these discussions is Sergey Chemezov, head of “Russian technologies” –
a large conglomerate of SOEs, which controls all weapon-producing
industries (except military jets, which are controlled by the state-owned
United Aviation Company). Chemezov met Putin in Dresden in the
1980s, working for the KGB, and their personal relationship can influence
his position on selling weapons to China. Other major stakeholders are
Rogozin, who is in charge of the defense industry, and Minister of Defense
Sergey Shoigu – one of the most powerful men in Putin’s inner circle.
Elite thinking on the arms trade with China went through several
stages. In the early 1990s, the military industries of these former rivals
entered a stage of mutual dependence. After the West imposed an arms
embargo on China after the 1989 Tiananmen Square massacre, Russia
became a critical source of sophisticated weapons and Chinese orders
helped troubled military plants to survive. According to expert estimates,
the share of Chinese contracts in the revenue of the Russian defense
industry in the 1990s was never less than 30 percent, and in some years
exceeded 50 percent. In the 1990s, military-technical cooperation was one
of the pillars of mutual trade and served as the basis for their bilateral
partnership.
In the 2000s, Russian arms started to face increasing competition from
Chinese manufacturers in the domestic market, and Moscow became
worried about the Chinese habit of copying Russian equipment, such as
the Su-27 jet fighter. Policymakers also became increasingly nervous about
selling their most sophisticated weapons to the growing Chinese military.
The last large orders were placed in 2007. As a leading Russian analyst of
arms trade with China, Vasiliy Kashin points out that domestic develop-
ments in the industry were also important. After Russian arms exporters
had broken into new markets in the 2000s, China’s share in the total
volume of exported Russian military equipment decreased dramatically.
For Chemezov, growing domestic demand, new export markets, and
diversification into civilian markets have lessened arms manufacturers’
dependence on Chinese contracts, while providing Moscow with a sig-
nificant degree of freedom in negotiating future contracts with Beijing.
According to a 2012 statement by Rogozin, exports accounted for only 22
percent of the defense industry’s total revenue. At the same time, China
remains a major buyer of Russian weapons, second only to India. The data
available indicate that Russian military exports to China exceeded $1.9
billion in 2011. Rosoboron export (part of “Russian Technologies”)
reports that China accounts for 12 percent of the overall $17.6 billion in
new arms sales; this puts total contracts at more than $2.1 billion.
Apart from the arms trade debate, the security community is providing
an overall assessment of the Chinese military threat to Russia and is
participating in the debate on whether Beijing harbors long-term ambi-
tions to colonize Pacific Russia. With Putin and many other members of
the current elite having a KGB background, the security community is
particularly influential. First is the SVR, which has a network of agents in
China and manages political intelligence. Reviews on the quality of intelli-
gence it provides on China are mixed. Some insiders claim that its agents
do not have good access to Chinese sources, the level of technology is
substantially behind the relevant US agencies as a benchmark, and analysts
are insufficiently paid to attract the best talent (estimates put the figure at
$18.000 a year for a mid-level analyst at current rates). Still, decision
makers are accustomed to trusting SVR memos; so clearly their service is
highly regarded in the Kremlin. Also influential is the Main Intelligence
Directorate of the General Staff of the Armed Forces, monitoring PLA
activity with particular stress on technology. Last but not least in the top
tier of influence is the FSB, which is put in charge of counter-espionage
and is very influential in debates on the possibilities of Chinese investment
into the Far East. Insiders describe this debate being “virtually hijacked by
the siloviki” in previous years, but confirm that since Western sanctions
were imposed and Putin seeks to reorient the entire economy toward
China, the civil bureaucracy and the business community now play a
more significant role.
SOES AND PRIVATE COMPANIES

As economic ties are the backbone of Russia-China relations, the Russian
business community plays an important role. They do not have a chamber
which may function as a platform to discuss common interests or to lobby
for China-relevant policies. In 2004, Moscow and Beijing created the
Russia-China Business Council (RCBC), a corporate membership organi-
zation which brings together the largest companies engaged in bilateral
projects. Since April 2014, it is chaired by Gennadiy Timchenko, who was
put on the US sanctions list after Russia annexed Crimea. Some experts
have claimed that his placement at the helm of RCBC was a signal to the
West, but the mogul himself does not have any personal interest working
on the Chinese track. RCBC remains a hollow organization with rare
72 A. GABUEV
public events during official visits and little value for participants. Russian
business does not have a coordinated agenda; every company acts on its
own. There is a major distinction between three types of corporate players.
First are the large SOEs. Governed in the name of the state by long-
time friends and lieutenants of Putin, they are the largest players in
bilateral trade from the Russian side, with Rosneft (led by Igor Sechin),
Gazprom (led by Alexey Miller, Putin’s friend from his St. Petersburg
days), Transneft (led by former KGB agent Nikolay Tokarev) and
“Russian Railways” (led by Vladimir Yakunin) in the lead. One must add
to that group the biggest Russian state-owned banks: commercial banks
Sberbank, VTB, and Gazprombank), and VEB, the “political” develop-
ment bank. Their heads have direct access to Putin and may influence his
position on particular projects. Their motivations may not be a desire to
increase the value for shareholders, but personal goals in their quest for
influence and money. A good example is Rosneft’s deal with CNPC and
Sinopec described above, where Sechin pushed the prepayment scheme
with China because he needed capital for aggressive domestic expansion,
including the merger with TNK-BP. Despite the very harsh conditions
Chinese companies imposed, Sechin proceeded to secure the amount of
cash he needed. Similarly, Gazprom has lobbied for the sale of Russian gas
to China via pipelines and has always turned down the LNG option, many
independent analysts in Russia believe, due to a desire to bring into the
project contractors with close ties to management. Gazprom does not
have its own LNG technology, so it would be dependent on foreign
contractors and have no room to allocate contracts to friendly firms.
These companies can use their directors’ connections in the Kremlin to
overcome objections raised by relevant bureaucracies (as was the case
when the MFA tried to warn about possible risks with the 2013 Rosneft
deal), and extract additional tax deductions and other benefits from the
government.
The second group is private businesspeople, who are long-time friends
of Putin. Timchenko and Rottenberg both own large infrastructure com-
panies involved in building large pipelines. Insiders believe that their
position was a factor in Gazprom’s decision to reject Chinese advance
payment for the “Power of Siberia” gas pipeline, which Beijing was ready
to provide if Chinese companies would build the pipeline. (Beijing report-
edly promised that it could be at least 30 percent cheaper for Russia and
would be executed on time). The last group is private companies, which
belong to the oligarchs of the 1990s or to some Putin-era moguls with no
direct connections to the president. These companies operate according to

pure commercial logic, and in order to push deals they use the usual
lobbying instruments, working directly with relevant governmental bodies
but with limited access to Putin (compared to Timchenko and
Rottenberg).
CONCLUSION
Decomposition of “Russia” into many players provides clues to some
aspects of the relationship between Moscow and Beijing. The analysis
shows how complex the decision-making process can be in order to
accommodate the many interests at stake. While the most important
decisions are made by Putin himself, the views and interests of other
players may influence the final policy. Personalization, bureaucratic over-
lap, the rent-seeking behavior of well-connected bosses of SOEs, and lack
of professional expertise on China can explain the awkwardness of Russia’s
moves in Asia and its unsuccessful attempts to exploit China’s growth for
its own national interests.
Alexander Gabuev is a senior associate and the chair of the Russia in the Asia-
Pacific Program at the Carnegie Moscow Center. Prior to joining Carnegie,
Gabuev was a member of the editorial board of Kommersant publishing house
and served as deputy editor-in-chief of Kommersant-Vlast.
CHAPTER 5
Russia, China, and the Emerging Greater

Eurasia
Alexander Lukin
Russia and China drawing together is an unmistakable phenomenon in

today’s international relations. Is it a result of deteriorated Russo-US and
Sino-US relations or does it have more fundamental origins? How is it
altering the evolving structure of international relations? To these ques-
tions, both in Russia and abroad, diverse, and at times, contradictory
opinions have been expressed. Russians who favor a Western orientation
express alarm that these closer relations threaten to turn a weaker Russia
into a “satellite” and natural resource supplier to a powerful and aggressive
China.1 The fact that the opposite orientation would turn it into a satellite
and natural resource supplier to a much more aggressive West is inter-
preted as “entry into the world economy” and joining the “civilized
world.” Opponents of the West, in contrast, write about the necessary
and unavoidable establishment of an alliance with China, which strength-
ens Russia’s position in its struggle for an independent course.2 Both
positions draw more from ideological preferences than from analysis of
A. Lukin (*)
Center for East Asian and Shanghai Cooperation Organization Studies, Moscow
State Institute of International Relations MGIMO-University), MFA, Russia
Department of International Relations, National Research University Higher
School of Economics, Moscow, Russia

https://doi.org/10.1007/978-981-10-3144-1_5
76 A. LUKIN
the actual situation. Advocates pay insufficient attention to China itself;

that would interfere with the construction of a simple, bipolar scheme.
In the West, one can observe a similar picture, as two positions have,
essentially, emerged. One group focuses on Russo-Chinese contradic-
tions, at times exaggerating them. Typically, belonging to it are supporters
of today’s anti-Russian foreign policy course of Washington and Brussels,
striving to demonstrate that it will not lead to a dangerous, anti-Western,
Russo-Chinese bloc.3 Seeing the danger of the formation of such a bloc,
some recommend that the West use these contradictions to draw closer to
China against Russia4; others would make peace with Russia for joint
opposition toward China, in their opinion, the greater danger ahead.5
The other group is critical of Washington’s current course because it has
already led to the formation of a Sino-Russian bloc, based on overlapping
views of geopolitical reality and an emerging ideology of the ruling
regimes, which will last a long time.6
GEOPOLITICAL FOUNDATIONS OF RUSSIA AND CHINA DRAWING

TOGETHER
The above presumptions, as a rule, are based on the authors’ political
preferences, not on the real positions and motives of the two countries.
The drawing together of Russia and China began long before the Ukraine
crisis and has continued already for more than 30 years. The causes are
much more fundamental than most observers acknowledge and consist of
gradually recognizing the similarity and even overlap of their core interests
in the international system and their geopolitical situation.
That normalization began long before today’s problems in relations
between Russia and the West does not mean that problems caused by the
Ukrainian crisis do not influence bilateral relations. Normalization, reach-
ing back to the serious crisis that accompanied armed clashes on the
border at the end of the 1960s, began already in the final years of
Leonid Brezhnev’s time in office. It had become clear to the leaders that
the continuous sharp confrontation was harming both the internal posi-
tion in each country and their international prestige. From the start of
perestroika and the deepening of China’s reforms, Moscow and Beijing
increasingly refrained from ideological arguments and ever more actively
discussed concrete questions of a bilateral partnership. Choosing an
autonomous foreign policy, Beijing shifted away from forming a united
RUSSIA, CHINA, AND THE EMERGING GREATER EURASIA 77
front against the USSR and stopped seeing Moscow as its main enemy.
For Gorbachev, normalization of relations with China became one of his
main foreign policy objectives, which inside the country was supported by
both reformers, who had seen in Chinese reforms an example for imita-
tion, and conservatives, who were pleased with the successes of a commu-
nist neighbor.
After the breakup of the USSR, Moscow, after some time subsumed in a
pro-West euphoria, turned to pragmatic policies that allowed it to tackle its
internal problems. Economic cooperation with China, especially in the
military-technical sphere, played an important role in the complex 1990s
in sustaining entire sectors of the economy. State ideology fell into disarray.
Both stopped putting before themselves global ambitions: the construction
of communism in the entire world or even in Asia. Policies became more
pragmatic, based on one’s own understanding of national interests. The
closeness of these understandings became the foundation of drawing closer
together. Agreeing with the opinions of F. A. Lyukanov and Gilbert Rozman
that the current course of drawing closer together has an ideological char-
acter, I want to make clear that what is meant is not the former totalitarian
ideology, the goal of which was to transform the entire world in accord with
a particular model, for the sake of which could be sacrificed some tradition-
ally understood national interests (e.g., to offer massive assistance to the
friendliest regimes at the expense of one’s own population), but, on the
contrary, acceptance by the ruling elites of those national interests.7 In this
very period, “ belief in democracy” in foreign policy, being expounded by
the United States and the European Union, developed to such an extent that
it practically came to fully determine their foreign policy.
To the extent Russia distanced itself from the West—connected to the
latter’s total lack of understanding of its desires and refusal to make any
compromises, which distanced Russia, according to Western analysts,
from the goal of becoming a “contemporary” country, i.e., subordinate
to the West and following its policies—, Moscow began, with ever increas-
ing energy, to establish pragmatic and mutually beneficial relations with
Beijing. This course corresponded to the intentions of Beijing, which was
growing ever stronger as a result of its successful economic reforms and
was conducting an increasingly active foreign policy. As result, there arose
a new type of Russo-Chinese relations, which were based not on ideology,
but on pragmatic interests and directed at synergistic growth of one’s own
interests in the world, not against third countries. They called it a strategic
partnership.
78 A. LUKIN
One can identify the following shared interests:
1) A general tendency to break free of a unipolar system and transition

to a multipolar world, which is explained by the fact that in a world
dominated by the United States and its Western allies they do not
see the possibility of realizing their interests in security or econom-
ics. As major countries with their own approaches to international
problems, they can more freely realize them in a world where there
is not one, but several leaders, none able to dictate its monopolistic
conditions. Cooperation with China is extremely important for
Russia in its international plan. It shares Russia’s view of the future
structure of the world, defined by “multipolarity.” Both would like
to see a world where several centers interact and are guided by
international law and UN requirements. Russia and China, as
some other states, are sufficiently great to have their own interests
and approaches to problems of regional and global development.
They find the postwar structure of the world fully suitable, where a
system of international law took shape in which the highest author-
ity is the UN Security Council. These principles are shared, above
all, with the countries united in the BRICS, which see themselves as
the leaders of the non-Western world, striving to reform the existing
system of global management, not by undermining it or destroying
it, but gradually finding a worthy place within it of the developing
economies and the “South” as a whole. The fierce opposition to this
course of the West is the basis of the growing consolidation and
activism of the BRICS.
2) A tendency to preserve a system of international law, based on the
principle of the sovereignty of states, at the core of which is the
United Nations and the Security Council. As sole representatives of
the non-Western world on the Security Council, Moscow and
Beijing are interested in the preservation of the leading role of this
organ, since the veto right equalizes their influence with that of the
West, at a time when in all other parameters, they fall far short of a
united West. The principle of the absolute sovereignty of states does
not allow the leading center of power to impose its will on other
states on matters of internal politics. Russia and China, which differ
from Western states in their internal political structure and experi-
ence, react with great caution to concepts that undermine sover-
eignty or justify “humanitarian intervention.”
3) The positions of Russia and China on regional conflicts are close or

the same. This is seen in voting together at the United Nations on
the Korean nuclear problem, the Iranian nuclear program, the
situations in Libya and Syria, and also in their tight coordination
on these and other regional conflicts.
4) Russia and China are interested in reform of the international
financial system, increasing the role of non-Western states in the
World Bank and the IMF, widening the use of regional currencies in
international trade, etc.
5) Russia and China need each other as trade and economic partners.
From 2010, China has been Russia’s first trading partner, satisfying
the market not only for consumer goods, but also, to an increasing
degree, for machines and equipment. China’s share of Russia’s
foreign trade is greater than 10 percent. It is one of the top ten
investors in Russia’s economy. Although Russia only comprises two
percent of China’s foreign trade, China receives goods it cannot
obtain from other suppliers, e.g., weapons due to sanctions from the
West. Russia also provides some items, e.g., energy, that China
cannot obtain in sufficient quantities at acceptable prices and with
maximum diversification.
6) The rapidly rising cooperation between border areas plays a signifi-
cant role in the development of Siberia and the Russian Far East and
Northeast China.
7) Russia and China cooperate in Central Asia, above all through the
framework of the SCO, achieving common aims: economic devel-
opment of this region, support for political stability, and mainte-
nance of secular regimes in power.
8) Both negatively react to outside advice on their internal political
structure, calling this “interference in one’s internal affairs,” and
also supporting each other in the battle against separatism. More
and more, they do not accept the values that the West labels “uni-
versal.” In Russia, one sees the rise of all traditional faiths, the
leaders of which sharply criticize the departure of the dominant
secular-religious ideology in the West from its Christian roots. In
China, which sees itself as leader of the developing “South,” one
finds sharp criticism of “universal” values as an ideological screen,
helping the West to preserve its dominance over former colonies
and semicolonial states. Its own traditional morality, based on
Confucian values, is gaining increasing popularity. Although
80 A. LUKIN
Confucianism differs sharply from traditional Christianity, shared

rejection of Western ideology draws the two together.8
China and Russia do not offer their model to other countries; even more,
they do not seek to impose it, unlike the West, which uses the pretext of
“democratization” to camouflage the old idea of superiority over other
races, nations, and civilizations. Moscow and Beijing decisively reject the
dictates of the West. Whatever system, in the final analysis, takes shape in
these two states, it should take shape on the basis of their internal devel-
opment. To impose on these powerful countries values and political
systems that the majority of their people are not ready to accept is a
senseless and dangerous policy, which could cause chaos, in comparison
to which the situations in Libya and Iraq, where such policies were tried,
are exemplars of stability. Russia, in principle not rejecting Western prin-
ciples of political construction, differs increasingly from the West in moral
values. There is an ever-growing influence of religious views, rejecting
homosexual marriages, euthanasia, surrogate motherhood, radical femin-
ism, and other phenomena in the West celebrated as freedom and
liberalism.
In China, with its pragmatic culture where monotheistic religions and
their absolute morality never gained wide currency, Western moral inno-
vations could be much easier to accept; however, Chinese society found it
much harder to agree with prioritizing individual rights over societal and
state goals. It splits with the West precisely in views of social ideals and
political structure, which facilitate realization of this ideal. The basic
human right is considered to be the right to life: If a person dies of hunger,
then what is the point of freedom of assembly or of conscience. First, it is
necessary to provide material sustenance, possible only through the efforts
of the entire society.
These shared interests provided a basis for China and Russia eventually
to draw closer. The way the situation in Ukraine and the Western sanc-
tions unfolded must be seen in the general context of this process over
many years. Good relations with China are necessary for Russia for poli-
tical and economic reasons. China is an important strategic partner, and
precisely owing to ties with it (as with other Asian countries), Russian
policies are able to be less one-sided, and it can turn into one of the centers
of world influence. Putin’s course for turning Russia into a more auton-
omous, mighty power naturally is understood as cultivating partner rela-
tions with all non-Western centers of power, of which China is the closest
and most necessary economic and geopolitical partner. Cooperation with

China objectively strengthens Russia’s position in the international arena
as an independent center of power.
China is also interested in Russia as a geopolitical and economic part-
ner. It prefers a stable and powerful (although possibly not a very power-
ful) Russia. A stable Russia, which can become an independent center of
power, interests Beijing as a counterweight to its complex partner-compe-
titor relations with the United States and Western Europe, a support for its
own independent foreign policy. A stable border has great significance for
China’s economic development. With this in mind, China has resolutely
and constructively approached the resolution of border problems, pro-
blems of migration and bilateral trade. China would like to see Russia
economically developed, and it is ready constructively to cooperate in the
development of Russia’s border regions. Fears regarding its intentions are
incomprehensible to it.
Both Moscow and Beijing know the significance of constructive part-
nerships with the West, necessary for strengthening their position in the
international arena, for resolving important international questions (e.g.,
the spread of weapons of mass destruction (WMD)), and for spurring
economic development. For this reason, both oppose the establishment of
an anti-West military alliance. Constructive relations of cooperation, not
going to the extreme of making enemies or an alliance, fully correspond to
the interests of both, if one understands Russia’s interests to be a strong,
stable, and economically prosperous state, conducting an independent but
responsible foreign policy, and not turning itself into a younger brother of
the “civilized world” and a frontline fighter against the “Chinese threat”;
or, on the contrary, a younger brother of a new center of the communist
movement and a frontline fighter against “world imperialism.”
THE UKRAINIAN CRISIS AND RUSSO-CHINESE RELATIONS

The coup in Kiev, supported by the United States, provoked a civil war
and responses by Russia, which led to a sharp confrontation with the West.
This situation was interpreted in Beijing as not unique. On the one hand,
the response is always alarm to any attempt to undermine the territorial
integrity of an existing state, since it is thinking about its own separatists.
Precisely this explains its support for the territorial integrity of Ukraine.
On the other hand, its leaders, recalling the chaos of the “Cultural
Revolution” and the disturbances of 1989, always prefer stability to any
82 A. LUKIN
disorder. China lays blame for undermining stability on the United States
and the European Union, considering that they were attempting to
expand their spheres of influence at Russia’s expense. It sees Russian
moves as responses. Characteristic is this Xinhua commentary: “For the
rest of the world, once again, people see another great country torn apart
because of a clumsy and selfish West that boasts too many lofty ideals but
always comes up short of practical solutions.”9 By “mess,” Beijing usually
means a situation created by Western sponsored actions aimed at under-
mining stable (often authoritarian) regimes all over the world, which in its
opinion can effectively secure the country’s economic development and
growing cooperation with China. This term was used to describe the
Tiananmen crisis in 1989, “color revolutions” in Arab states, and etc.
Countering this tendency even far from China’s borders is a means of
protecting itself since it understands that the same tactics can be used by
the West in China. From this point of view, China would only welcome
Russia’s growing will to counter Western expansionism. Although Russian
countermeasures are considered in Beijing to be extreme and not fully
conducive to stability, on the whole, the Russian position is met with
understanding and even approval. Characteristic of this is the commentary
of March 7, 2014 of Xinhua: “Russia may no longer be interested in
competing for global preeminence with the West, but when it comes to
cleaning a mess the West created in the country’s backyard, Russian
leaders once again proved their credibility and shrewdness in planning
and executing effective counter moves.”10
From the geopolitical point of view, Chinese leaders, viewing world
politics as an arena of battles for spheres of influence, even if sometimes
concealed by various ideological slogans, overall cannot approve of the
blow delivered to Russia by Western expansion by the use of force. Yet, it
delays expansion in China’s direction, and in this case, it was not China
caught in confrontation, while economic cooperation with the West has
not suffered. As for ordinary Chinese citizens, judging by commentaries
filling the Chinese Internet, many not only approve of the actions of
Vladimir Putin, they regard his decisiveness as an example to their own
leadership, which, in their opinion, is displaying unnecessary softness
toward Japan, the United States, Vietnam, and other states wishing
harm to China.
According to some experts, Obama counted on China condemning the
unification of Russia and Crimea and Russian policies in Ukraine as a
whole,11 demonstrating a complete misunderstanding of the motives for
China’s behavior, the same as the misunderstanding of Moscow’s reaction

to the expansion by the West. The Obama administration is carrying out
policy against which all American strategists had warned beginning at the
time of Nixon’s presidency: simultaneous confrontation with Moscow and
Beijing, prodding them to draw closer together.
Although Russia and China would have continued to draw closer even
without the Ukrainian crisis, the cooling of relations between Russia and
the West accelerates this process. For example, the conclusion of two,
huge agreements on the export of Russian gas to China in 2014, negotia-
tions over which had dragged on for years, could have occurred even in
different international circumstances, but they might have been prolonged
and not been so constructive. The same can be said for all other agree-
ments signed during the visits of Putin to Beijing in May 2014, Li Keqiang
to Moscow in October 2014, Putin to the APEC summit in October
2014, and Xi Jinping to Moscow in May 2015. The gas contracts are only
a small part of the overall bilateral trade and multi-sided cooperation and
are not directly conditioned on the relations of Moscow and Beijing with
other states.
The cooling of relations between Russia and the West is reflected not
only in concrete decisions but also in the awareness by diverse circles in
Russian society of the seriousness of cooperative relations with China. The
need to cultivate this cooperation is understood, to an ever-increasing
degree, as a practical necessity by both state officials and representatives
of big business. Proof was seen in March 2014 when a major businessman
close to Putin (in the very words of the Russian president12) G.N.
Timchenko, who had fallen under American sanctions, led the
Association of Russian Entrepreneurs Working with China. Further evi-
dence of the shift of business toward China was the leak to the press of
news about the plans of RusHydro to sell a block of shares in the Far
Eastern energy holding company of RAO ES Vostoka to the Chinese
company Sanxia.13 Earlier Chinese investors, in contrast to Western
ones, were not allowed to own Russian energy companies under the
pretext that this could undermine national security.
Clear evidence of the far-reaching improvement in Russo-Chinese
cooperation was the signing in Moscow on May 8, 2015 of the declaration
of cooperation on aligning the construction of the Eurasian Economic
Union (EAEU) and the Silk Road Economic Belt (SREB). Beijing sup-
ports the EAEU despite the antagonistic response to this organization in
the West and even its own doubts. It almost fully accepted Russia’s
84 A. LUKIN
proposals, first of all to the mechanism for experts, which was prepared by
experts at the Valdai Club in close cooperation with the presidential
administration.14 This shows Beijing’s interest in cooperation with
Moscow, on account of which it is prepared to make certain compromises.
It also demonstrates the growing interest of the Russian leadership in
expertise on the China question.
The basic principle of bilateral cooperation ahead will be mutual
interest and mutual benefit. The standoff between Russia and the
West creates fertile soil for a sharp turn by Russia toward China,
establishing both a physical infrastructure and a cultural and educa-
tional basis for relations. Yet, the main transformation has been in the
consciousness of Russian officials and businessmen, who increasingly
know there is no prospect for restoring and, even more, broadening
cooperation with the West. The spiritual and values rift is growing, no
prospect for resolving the Ukrainian conflict is seen, and trust in the
West as a reliable partner is shattered. None of these problems exist in
cooperation with China. Although others exist—the unaccustomed
nature of Chinese culture and psychology, the need to sever ties that
have been established with Europe, language difficulties, etc.—these
problems are considered much easier to overcome.
POSSIBLE PROBLEMS
The above does not mean that Russians do not see complexities in
cooperation with China. Neither in the government nor in the expert
community are there any illusions. Few in Russia consider that Beijing,
suddenly overcome with altruism, will suddenly save Russia at its own
expense if Russia turns out to be in a difficult financial situation. Beijing
will insist on its own interests, at times with tough terms. In negotia-
tions both over supplying oil and gas, there was hard bargaining over
conditions and prices. In Russia, it is understood that too great depen-
dence on China as a monopoly customer could create problems for
itself. Such problems arose, for example, in 2003 with Turkey, which
demanded that prices be lowered on gas that had already been supplied
after laying the pipeline for the “Blue Stream.” In a situation of shifting
imports of agricultural production from Europe to China, trade can
grow but so too can dependence on China. It is recognized that
China has its own relations with the West, cooperation with which is
necessary for economic development. It will not undermine these for
the sake of Russia’s interests. Rapidly developing, politically exceptional

China poses a challenge for economically stagnant Russia, which sees
new foreign policy activism of China arousing increased nationalism
inside the country, including in the army.
All of this is understood in Moscow, and in other circumstances, it is
possible that Moscow would have acted more cautiously. In the Russian
leadership and elite, there have always existed different approaches to
China and the West. Even now calling for preservation of closer relations
with the United States and the European Union are three groups: a post-
Gaidar bloc in the government and circles close to it; officials and business-
men close to them who have major holdings and property in Europe and
the United States; and representatives of the business elite who have
serious business interests in the West (often representatives of these sub-
groups overlap). Another group favors a tougher course toward the West
and more active Eurasian integration and ties with states of Asia. Putin
maneuvers between these extremes, striving not to fully sever ties with the
West (necessary for the economy), but simultaneously pursuing integra-
tion in the post-Soviet space and cooperation with Asia (especially with
China, but also with South Korea, India, Iran, Turkey, and the states of
ASEAN). Putin probably considers Russia to be an inalienable part of
greater Europe (about which he not rarely has spoken); however, as part
of an independent entity, not subordinate to a Euroatlantic political
center, with interests that others have to take into account. In order to
guarantee this independence, it will exert more energy for diversification
of its foreign policy and foreign economic ties, including in the Eurasian
and Chinese directions.
The anti-Russian course of the West seriously weakened the position of
the pro-West group and strengthened its opponents. Removing the sanc-
tions (which in the foreseeable future is extremely unlikely), would, to a
degree, soften Russia’s policies, leading to strengthening of the pro-
Western group and restoring ruptured relations somewhat. However,
full restoration of the pre-Ukraine will not occur. First, the ties nourished
with China and other Asian states have an irreversible character, and from
the favorable contracts with Chinese partners nobody will pull back.
Second, trust in Western partners has been seriously undermined; one
could hardly want to conclude huge contracts with companies, which
could for political reasons result in serious losses. Third, public opinion
has fundamentally changed; a large share considers the United States and
the European Union states antagonistic to Russia.
86 A. LUKIN
The general Russian strategy over the next 5–10 years will be deter-
mined by the factors identified above and the relative power among the
various groups in the leadership, but, on the whole, a significant deepen-
ing of relations with China is unavoidable. The antagonistic policies of the
West do not leave an alternative. The expansion of NATO to the east, the
approach of its military structures to the border along with support for the
anti-Russian radicals in Ukraine, who came to power through an anti-
constitutional coup that was actively supported by the West only because
they promised to withdraw Ukraine from Russia’s sphere of influence—all
of this is a real and direct threat to the very existence of Russia. In
conditions of policies of economic blackmail and an undisguised desire
to force Russia to change its position on international questions, which it
considers just, Moscow is left with no choice but to turn to Asia, first of all
China. The sanctions have played a positive role, stimulating a long
maturing process, which previously had been slowed by the inertia of elites
accustomed to a western orientation.
Challenges from China in today’s situation are considered by Russian
elites much less serious than those from the West. Russia can compensate
by the development of economic and political cooperation with other
states of Asia, among them China’s neighbors, and by frank exchange of
opinions with the Chinese, which proceeding in a spirit of cooperation,
often takes Russian desires and fears into account.
Restoration of full-scale cooperation with the West is not in sight
since mutual misunderstanding is too great and worldviews are increas-
ingly at odds. In this situation, Russia must strive for some kind of
variant of “peaceful coexistence.” This Soviet term can be interpreted
as follows: 1) no discussion of conceptual questions since that only
deepens disagreement as each side sticks to its opinion; 2) only ques-
tions about avoiding armed confrontation, e.g., the conditions for a
ceasefire in Ukraine, and possible cooperation on international issues
that pose a threat to Russia and the West, such as terrorism, are
discussed; and 3) pragmatic negotiations are conducted on mutually
beneficial trade, avoiding long-term projects, which could be used for
political pressure. This kind of relations has existed already at least
since the end of the 1970s between the West and China. Some sanc-
tions applied by the West in 1989 remain in effect, and ideological
discussions are useless on conceptual questions (such as on democ-
racy). This does not interfere with wide-ranging economic cooperation;
not a few problems and even mutual accusations occur, but they do
not interfere with joint activity on an array of international problems.

The alternative to “peaceful coexistence” would be a new Cold War,
which periodically turns into armed conflict at the boundary zones of
Russian strategic interests (of the Ukrainian type), and also in other
regions of the world where Russian influence has been sustained. As for
possible challenges and threats from China, which could arise with the
growth in Chinese power and nationalism in its foreign policy, the
following steps apply:
1) The development of Russia’s relations with Asia should not only
rely on China; economic cooperation must quickly develop with other
major powers of the region, including with states that have problems
with China—India, Japan, South Korea, Vietnam, Indonesia, Thailand,
Iran, Turkey, etc. 2) Since development of cooperation with allies of the
United States in Asia is difficult at the current time, it is necessary to
stress the restoration of traditional ties with former allies and geopolitical
friends, such as Vietnam, India, and Iran. Also possible are closer political
interactions with the DPRK, which is too much under the influence of
Beijing, although economically this does not yield much. 3) Open dis-
cussion of Russian fears with the Chinese leadership is important. 4)
Needed too is more economic integration with China, which leads to
mutual, not one-sided dependence, through which worse relations
would not be favorable to China as well as to Russia.
Russia and China drawing closer is a core example of the change under
way in the geopolitical map of the world, sharply altering its paradigm
development and how the West was able to behave in the entire period
after the breakup of the USSR. Precisely as Dmitry Trenin noted, in place
of “Greater Europe” from Lisbon to Vladivostok, which was proclaimed
by Western leaders and Mikhail Gorbachev, beginning to take shape is
“Greater Asia”15 or more precisely “Greater Eurasia” from Minsk to
Shanghai. The basis of this unity, apart from Russo-Chinese strategic
partnership, will be a range of international organizations and groups,
each increasingly active and expanding against the background of the
Ukrainian crisis.
The May 8 joint declaration on joining the construction of the EAEC
and the SREB stated that the two sides would work jointly in bilateral and
multilateral frameworks, above all the SCO.16 This document posed ser-
ious questions for the SCO, requiring concrete mechanisms of coopera-
tion of the EAEC and the SREB with the SCO. Russian and Chinese
experts are now working on this. In Russia, experts at the influential Valdai
88 A. LUKIN
club are putting forward ideas for the leadership of both countries to
adopt. In accordance with their proposals, the SCO should become the
umbrella organization for coordination, which will significantly
strengthen its economic role.
The decision in July at Ufa about the simultaneous entry into the SCO
of India and Pakistan, both until now having observer status, fundamen-
tally changes the SCO. Russia actively worked for this idea, but this step
can pose problems: small ones, such as the need to add English as the third
official language along with Russian and Chinese; and more serious ones.
Will the organization lose its character and be less effective due to the need
for decisions based on consensus? Many think that the European Union
became much less effective due to its extreme expansion. Yet, the plusses
of adding these two countries outweigh the minuses. The inclusion of
India makes the SCO a more influential international organization, with
which many will have to deal. Indeed, it will comprise most of the non-
Western world. The addition of a dynamically developing India can sti-
mulate SCO economic projects, especially in Central Asia, with which
India has deep, traditional ties.
As for another observer Iran, its entrance as a full member of the SCO
in today’s international situation would be very desirable. First, Iran is
conducting an independent foreign policy and can be an important part-
ner of Russia and China in their effort to maintain their own independence
and to oppose pressure by the West. Second, Iran, a most important
energy exporter, can be an important economic partner. Third, it is one
of the main forces opposing terrorist threats coming from ISIS. However,
for admission, the UN sanctions on it are an obstacle. In accord with the
SCO criteria of membership, a state under such sanctions cannot be a
member. Their removal, the decision about which was reached in the
negotiations of the P5+1, could lead to Iran’s admission into the SCO
in the near future.
The expansion of the SCO is heading also in other directions. In Ufa, the
status of dialogue partner was received by Azerbaijan, Cambodia, Armenia,
and Nepal (Turkey, Sri Lanka, and Belarus already have that status), and
Belarus was moved from partner in dialogue to observer, in which status to
this point were India, Pakistan, Iran, Afghanistan, and Mongolia. Admission
of India, Pakistan, and Iran can alter the agenda of the SCO from beyond
the confines of Russo-Chinese cooperation in Central Asia.
A not insignificant role will be played by an increasingly active BRICS.
Its role from the beginning has consisted of reforming the international
financial system. Encountering decisive opposition from the West to its

members’ aspirations to gain more influence in the IMF and World Bank,
it has established its own financial institutions, a pool of currency reserves,
and a development bank. Increasingly widening its activity, it can be seen
as the main engine of reform in the system of global governance, which its
members consider to be responding only to the interests of the West.
The above and other groups over time will comprise the system of
Greater Eurasia, the states of which will not be tied by alliance relations, as
are the United States and its European satellites. Some of them may turn
to different centers of power; however, on the whole, they will form a
unity, brought together by core interests. Precisely, this kind of demo-
cratic unity of Greater Europe could not be established by the United
States and its allies. Attempting to subordinate every state to their dictates,
they have united allies from most of Eastern Europe but lost Russia and
Central Asia and are increasingly antagonizing China and India, forcing
them to draw closer to each other even in spite of significant contra-
dictions. Only the future will tell who will succeed and who will not.
NOTES
1. A.A. Khramchikhin, “Pekin Moskve—partner, no ne drug: Kitaiskii vektor
ne dolzhen preobladat’ vo vneshnei politike Kremlia,” Nezavisimoe voennoe
obozrenie, November 7, 2014, http://nvo.ng.ru/realty/2014-05-16/1_
china.html.
2. V. Martyniuk, “Politicheskii soiuz Rossii i Kitaia neizbezhen, potomu chto
vygoden obeim stranam,” KM.RU, May 19, 2014, http://www.km.ru/
world/2014/05/19/vladimir-putin/740321-politicheskii-soyuz-rossii-i-
kitaya-neizbezhen-potomu-chto-vy.
3. Pavel K. Baev, “Upgrading Russia’s Quasi-Strategic Pseudo-Partnership
with China,” PONARS Eurasia, Policy Memo 337, August 2014, http://
www.ponarseurasia.org/memo/upgrading-russia’s-quasi-strategic-pseudo-
partnership-china.
4. Erik Brattberg and Bernardo Pires de Lima, “Confronting Moscow With
the Help of Beijing: The West should exploit China-Russia asymmetries to
avert an East-West confrontation,” The Diplomat, May 25, 2014, http://
thediplomat.com/2014/05/confronting-moscow-with-the-help-of-beij
ing/.
5. Samuel Charap and Ely Ratner, “China: Neither Ally nor Enemy on
Russia,” The National Interest, April 2, 2014, http://nationalinterest.
org/commentary/china-neither-ally-nor-enemy-russia-10168.
90 A. LUKIN
6. Gilbert Rozman, “Asia for the Asians: Why Chinese-Russian Friendship Is

Here To Stay,” Foreign Affairs, October 29, 2014, http://www.foreign
affairs.com/articles/142305/gilbert-rozman/asia-for-the-asians.
7. Fedor Luk’ianov, “Konservatizm sblizhaet,” Gazeta.ru, November 11,
2014, http://www.gazeta.ru/comments/column/lukyanov/6244657.
shtml.
8. Roger T. Ames, “Cong Xifang gerenzhuyi xiang Rujia?”Renmin Ribao,
November 11, 2014, 7.
9. Ming Jinwei, “Commentary: The West’s fiasco in Ukraine,” English.news.
cn, July 3, 2014, http://news.xinhuanet.com/english/indepth/2014-03/
07/c_133168143.htm.
10. Ibid.
11. Dmitri Trenin, “From Greater Europe to Greater Asia? The Sino-Russian
Entente,” Carnegie Moscow Center, April 2015, 5. http://carnegieendow
ment.org/files/CP_Trenin_To_Asia_WEB_2015Eng.pdf.
12. “Priamaia linia s Vladimirom Putinym,” April 17, 2014, http://www.
moskva-putinu.ru/#page/main.
13. Natal’ia Skorlygina and Vladimir Dzaguto, “Kitai vol’etsia v Rossiiskuiu
energosistemu: Sankhia mozhet kupit blokpaket ‘RAO ES Vostoka,”
Kommersant Vlast’, November 21, 2014, http://www.kommersant.ru/
doc/2615293.
14. “RF i Kitai dogovorilis’ o ‘sostykovke’ proektov EAES i ‘Shelkovyi put’,”
May 8, 2015, http://tass.ru/ekonomika/1956881.
15. Dmitri Trenin, “From Greater Europe to Greater Asia.”
16. Sovmestnoe zaiavlenie Rossiiskoj Federatsii i Kitaiskoi Narodno1 Respubliki o
sotrudnichestve po soprjazheniiu stroitel’stva Evraziiskogo ekonomicheskogo
soiuza i ekonomicheskogo poiasa Shelkovogo puti. 8 May. Available at:
http://kremlin.ru/supplement/4971
Alexander Lukin received his first degree from Moscow State Institute of
International Relations in 1984, a doctorate in politics from Oxford University
in 1997, a doctorate in history from the Russian Diplomatic Academy in 2007, and
a degree in theology from St. Tikhon’s Orthodox University in 2013. He worked
at the Soviet Foreign Ministry, Soviet Embassy to the PRC, and the Institute of
Oriental Studies of the Soviet Academy of Sciences. He was a visiting fellow at the
Belfer Center for Science and International Affairs at Harvard University from
1997 to 1998. From 2000 to 2001, he worked as a research fellow at the Center
for Northeast Asia Policy Studies at the Brookings Institution. In 2005, he
founded Russia-China. 21st Century - a Russian magazine devoted to China and
Russo-Chinese relations - and edited it until 2008. From 2000 to 2006, he was an
Associate Researcher at the Institute for European, Russian and Eurasian Studies at
George Washington University. He serves on the editorial board of Asian Politics

and Policy, International Problems (Belgrade, Yugoslavia), and The Asan Forum
(Korea).
Professor Lukin is the author of The Political Culture of the Russian Democrats
(Oxford University Press, 2000), The Bear Watches the Dragon: Russia’s
Perceptions of China and the Evolution of Russian-Chinese Relations Since the
Eighteenth Century (M.E.Sharpe, 2003), Pivot To Asia: Russia’s Foreign Policy
Enters the 21st Century (Vij Books India, 2017), as well as numerous articles and
policy papers on Russian and Chinese politics, the international situation in East
Asia, the Shanghai Cooperation Organization and Russo-Chinese relations. In
2009 he was awarded a medal for the “Outstanding Contribution to the
Development of Sino-Russian Relations” by President Hu Jintao and in 2012 a
medal on the occasion of the 10th anniversary of the Shanghai Cooperation
Organization for his contribution in the formation and development of SCO.
CHAPTER 6
Russo-Chinese Relations in Strategic

Perspective
Stephen Blank
Russian and Chinese leaders regularly profess an ever-growing congruence

of interests and ever-increasing economic, political, and even military
cooperation. According to Prime Minister Dmitry Medvedev in October
2013, “Bilateral relations have never reached such high levels.”1 Yet,
arguably there is much less harmony here—although what harmony
there is remains quite real—than is publicly professed. While the strong,
shared identity of anti-liberal ideological perspectives is undeniable—par-
ticularly directed against the United States on issues such as proliferation,
missile defense, democracy promotion, regime change, and America’s
presence in Central Asia and the Middle East—on other issues, we see
substantial and even in some cases growing discord. Indeed, on the crucial
issue of regional security in Asia, there is, arguably, mounting friction, and
Russia’s invasion of Ukraine has added to the tension. Yet, Moscow’s
continuing failure to undertake economic reform ensures its rising depen-
dence on Chinese support on some critical issues, thereby undermining its
overall strategy toward China. The Crimean crisis in March 2014 impels
us to reconsider Sino-Russian relations and ask how different views of
S. Blank (*)
American Foreign Policy Council, Washington, DC, US

https://doi.org/10.1007/978-981-10-3144-1_6
94 S. BLANK
self-determination at the expense of sovereignty may strain them or how

East-West polarization in Europe may strengthen them.
Russia’s strategy comprises military, ideological, economic, and politi-
cal dimensions. First, no Russian regime, whatever its orientation, can
afford a hostile China on its most-exposed border. Normalization, if not
amity, is a non-negotiable necessity unless China’s pressure on Russia
becomes intolerable and Russia has allies to counter it. Russia’s quest to
develop its Far East and Siberia and overall military buildup aims to redress
the regional balance that favors China. Therefore, Russia aims to encou-
rage other Asian states, like Japan, to invest in Russian Asia to forestall
excessive Russian reliance on China. But Moscow’s failure to modernize
its economy impedes its ability to gain two cherished objectives: the
restoration of great power status equal to that of the United States at
the global level; and resurgence as a great, independent, Asian power
capable of contributing to an equilibrium at the regional level.
Despite the significant global ideological consensus against US liberal-
ism and power, the asymmetry of interests and capabilities between Russia
and China is widening, making it ever harder for Russia to restrain the
growth of Chinese power by itself. Russian strategy has long aimed at the
fundamental goal of inducing or compelling Washington to give it
“equal” status or what might be called “an equal partnership of
unequals.”2 Washington has not, cannot, and will not deliver that partner-
ship, especially as long as Russia equates respect with fear.3 Indeed, the
terms of such an accord, silence on democracy issues in Russia, acquies-
cence to an exclusive Russian sphere of influence in the CIS, and a veto on
US military actions abroad, even before Ukraine, is unacceptable either to
Washington or to its allies and contradicts their interests. Moreover, those
terms are also unacceptable, not only to the members of the CIS but also
because Russia cannot afford them. Despite Moscow’s invasion of Ukraine
and annexation of Crimea, the Crimean Tatars are already warning about a
potential jihad if Russia disregards their interests.4 Indeed, Russia’s dom-
ination of Central Asia in many spheres may no longer be acceptable to
China, given its growing interest and presence in Central Asia and its
commercial profile there. Xi Jinping and Kazakh President Nazarbayev’s
refusal to support Moscow on Ukraine implies as much.5
Russian strategy seeks partnership with China to leverage greater stand-
ing globally vis-a-vis the United States. For years, it subordinated its
standing in Asia to its quest for a global role equal to that of the United
States, leveraging its presence, influence, and capabilities in Europe,
RUSSO-CHINESE RELATIONS IN STRATEGIC PERSPECTIVE 95
Eurasia, and the Middle East to compel US acknowledgement of its status

and demands. Until about 2008–2009, this meant subordinating, or even
neglecting, Russia’s Asian policy to global imperatives, relying on China as
a gateway to Asia.6 To some extent, this strategy continues. Current joint
Russo-Chinese naval patrols in the Eastern Mediterranean have this clear
purpose.7 Yet, this strategy highlights weakness because Russia needs
China to give it a semblance of credibility in an area of its vital interests.
Arguably, Moscow could not enforce its stance on Syria and the Middle
East in general without this Chinese support. Meanwhile, China happily
watches Moscow distract Washington with minimal Chinese participation
in an area of relative strategic unimportance to China, while it continues
intensifying pressure against Japan and ASEAN.
By 2008 to 2009, Moscow must have realized that while it needed
Chinese support against Washington, and China needs a quiet northern
frontier while it emphasizes other geographical sectors, growing Chinese
power could obstruct or even threaten Russia. China’s ability to thwart
Moscow in Central Asian diplomacy and energy emerged when the SCO
refused to give unequivocal support to its amputation of Georgian terri-
torial integrity and China’s gas deal with Turkmenistan struck at Russian
energy leverage there.8 In 2009, Russian military leaders for the first time
publicly intimated a Chinese military threat and in 2010 the Vostok
military exercises ended with a simulated tactical nuclear strike on foreign
invaders, clearly though not overtly directed at the PLA.9 The leaked
foreign policy blueprint of 2010 overtly called for “anchoring China” to
Russia through combined economic, military, and foreign means.10 Arms
sales to China fell precipitously, energy talks bogged down, and in 2010–
2011 Moscow alarmed at the prospect of a ruinous Korean War, where it
might be dragged into other people’s conflicts, launched its own initiative
toward the DPRK.11
Moscow launched a campaign of vigorous diplomacy throughout East
Asia, an increasingly intense search for sources of foreign investment in
Russian Asia, and a heightened effort to regain the status of an indepen-
dent regional great power in East Asia beyond ties with China. In tandem,
these moves represented a hedging strategy toward China, resembling
those of other Asian powers.12 In parallel with the accelerating disintegra-
tion of the “reset” policy with Washington, this strategy comprised a mix
of policies. Russia sought to engage China on a much broader economic
scale than before with Putin claiming that Russia hoped “to catch the wind
from China’s sails” to the point where China became its number one
96 S. BLANK
trading partner. It sought more investment opportunities in China (parti-

cularly in energy) and more Chinese investments in Russian Asia and
energy, especially the Arctic. Geopolitically, however, Russia sought new
and greater military bases in Central Asia and launched the Eurasian
Economic Union, whose Customs Union clearly aimed to divert Central
Asia’s trade from China to Russia.13
Moscow also responded to growing Chinese demand for Russian weap-
ons and defense technologies as the Western embargo continued, selling
weapons systems hitherto not sold that reversed past policy because these
weapons outclassed comparable systems that were sold to India. Russia
engaged China in growing joint exercises, particularly naval ones in 2012–
2013, and Moscow and Beijing continued their mutual support against
Washington on Iran and Syria. Yet for balance, Moscow sought Indian,
Southeast Asian, South Korean, and Japanese investment in Russian Asia,
limits to China’s growing Arctic presence, a rapprochement with Japan,
elevated ties to Vietnam to the level of a strategic partnership, and
increased arms sales there while refusing to vacate energy projects in the
South China Sea as China requested.14
Arguably, this policy line has failed. China continues to pocket its gains:
access to Russian oil, leverage over Rosneft, deterioration of East-West
ties, and new arms sales. Moscow has signally failed to anchor China to
anything; predictably, given the failure to modernize the Russian political-
economic system, Russia is increasingly anchored to China as energy and
arms sales policies suggest. In addition, North Korea seems to have
ignored Kim Jung-il’s 2011 agreement with Russia, leaving Russia with
no options.15 Russia has also not dented China’s intensified determination
and ability to build its Silk Road projects in Asia. Chinese officials and
businesses are not bothered by Russia’s moves, whose intent they fully
grasp,16 as Chinese policy in East Asia, driven by a growing strategic
autism, has become more aggressive toward Japan and Southeast Asia.
Perhaps, the isolation inspired by this growing aggressiveness led Xi
Jinping to invite Russia to join China “in guaranteeing security and
stability in the Asia-Pacific Region.”17
SIGNS OF DISCORD
Aggressive Chinese moves aggravate regional security tensions, endanger-
ing vital Russian interests. This explains the widening gap with China over
Japan and the continuing expansion of Russian military power in the
Eastern strategic direction.18 It is not surprising that this aggressiveness

has inspired states such as India and Australia to generate new avenues of
strategic cooperation.19 However, Russia seeks not formal but tactical
cooperation with other Asian states in order to retain a “free hand.”
Russia seeks to gain partners, boost its ability to hedge against China,
conduct an independent security policy in Asia, and, thus, strengthen a
regional equilibrium. Beijing has repeatedly demanded that it terminate
energy explorations in the South China Sea. But in 2012, Russia
announced its interest in regaining a naval base at Cam Ranh Bay, a step
probably connected to joint Russo-Vietnamese energy projects off
Vietnam’s coast, and a means of checking China. Gazprom also signed a
deal to explore two licensed blocks in Vietnam’s continental shelf in the
South China Sea, taking a 49 percent stake in the offshore blocks, which
hold an estimated 1.9 trillion cubic feet of natural gas and more than 25
million tons of gas condensate. Those actions precipitated Beijing’s
demand that Moscow leave the area. Despite its silence, presumably to
avoid antagonizing China, Moscow stayed put. Since then it has increased
support for Vietnam through energy exploration in the South China Sea
and, perhaps more ominously from China’s standpoint, in arms sales and
defense cooperation.20
Russia and Vietnam have been “strategic partners” since 2001, and they
upgraded the relationship to a comprehensive strategic partnership in
2012.21 Defense Minister General Phung Quang Thanh called Russia
“Vietnam’s primary strategic military partner in the sphere of military
and technical cooperation.”22 Russia helps Vietnam build a submarine
base and repair a dockyard to provide maintenance for other naval plat-
forms. The submarine base will host the Kilo-class subs that Vietnam
bought from Russia and will almost certainly deploy to protect its interests
in the South China Sea.23 Recently, both sides have begun discussing
regular Russian port visits to Vietnam for maintenance and rest and
relaxation, although Cam Ranh Bay will not become a Russian base.24
Meanwhile, increasing Russian arms sales embody Vietnam’s defense
modernization against threats to its offshore energy interests and deter-
rence against growing Chinese aggressiveness.25 These sales emulate other
ASEAN members’ efforts to modernize aging defense inventories and
defend against new threats.26 Even more striking is the fact that Prime
Minister Medvedev approved a draft Russo-Vietnamese military coopera-
tion pact to formalize bilateral defense cooperation, stipulating exchanges
of opinion and information confidence-building measures and
98 S. BLANK
cooperation to enhance international security and ensure more effective

action against terrorism and better arms control.27 Allegedly nothing in
the relationship is intended to target a third country.28
This relationship clearly intends to curb China’s aggressive intentions
and behavior in the South China Sea. Notably, most announcements
come from Vietnam, which has every reason to impress China with its
ability to garner support for its military buildup and political resistance to
Chinese claims. This is part of Moscow’s overall “pivot” to Asia that
actually preceded the US “rebalancing” in Asia and aims to invigorate
Moscow’s economic-military-political position as an independent major
Asian power. Recently, Moscow announced its intention to develop bases
at Singapore and in the Seychelles islands, moves that will likely irritate
China.29
Russian ties to Japan also express these “hedging trends.” Efforts to
normalize their relations, sign a formal peace treaty, and settle the terri-
torial issue, coincide with acute Sino-Japanese tensions over the Senkaku
(Diaoyu) Islands, exposing serious differences with China. At the Sochi
Olympics, Putin’s meetings with Xi failed to reach agreement concerning
Japan, while his meetings with Abe showed both sides’ determination to
achieve normalization.30 Russian media revealed that since 2010, despite a
formal agreement between Hu Jintao and Medvedev to recognize each
other’s post-1945 claims against Japan, Moscow has steadfastly rebuffed
repeated Chinese offers of support on this issue.31 Instead, officials fre-
quently have stated Russia’s neutrality on the Senkaku Islands and hope
for peaceful resolution.32
Even as Russia and China expand their military collaboration, Russo-
Japanese defense and security cooperation is also expanding, as announced
at bilateral 2+2 talks in Tokyo in 2013.33 Increased Russian efforts to elicit
Japanese investments in the Russian Far East display wariness about exces-
sive dependence upon China,34 as Japanese analysts claim to see increased
signs of Russo-Chinese discord.35 According to Foreign Minister Sergei
Lavrov, Russia is generally never friends with someone against anyone else,
and he indicated that it would not support China against Japan.36 Virtually
every assessment of Russo-Japanese relations and the current normaliza-
tion contends that both increasingly fear China’s truculent rhetoric and
military moves.37 After the Russo-Chinese naval exercises in July 2013,
the PLAN circumnavigated Japan, angering Russia and Japan, which
regard the Sea of Japan as their sea. A Chinese naval report justified this
effort to intimidate Japan, saying “the Chinese Navy not only has a
manifest right to accomplish a complete breakthrough of the so-called first

island chain, but also an inescapable obligation to ensure national secur-
ity.”38 Despite the author’s belligerence toward the United States and
Japan, no Russian could read it with equanimity or complacency. The
author also stated the following:
In terms of the relationship between naval capabilities and intentions, the

logic that China presents should be that it is in keeping with common sense
that China is working hard to address the issue of capabilities and is not
qualified yet to discuss its intentions. If anything, it is that more powerful
maritime force and its system of allies and minions that should take the
initiative to explain their intentions to China because their capabilities are
obviously making China nervous. China will interpret as malicious any move
that ignores its security concerns or even any move that takes “island chains”
which are based on an exceedingly arrogant concept for granted. The
Chinese Navy is already capable of crossing the Soya Strait and any strait
that passes through a so-called island chain on a regular basis. What it should
address next is to complete the regularization of its presence. This is an
irreversible trend. If someone does not like what he sees, he should adjust
his focus, and do so quickly.39
This is not an isolated case. Rear Admiral Yang Yi recently wrote that
China’s navy must be stronger than Japan’s navy and that Japan must
accept this. Presumably, China needs this to prevail in a local war.40 We
have also seen cases where Chinese analysts sought to co-opt Russia into
China’s aggressively anti-Japanese policies.41 China’s 2013 announce-
ment, of an Air Defense Identification Zone (ADIZ) is merely the latest
provocation whose implications probably unsettled Moscow, which has
been noticeably silent about the move.
ECONOMICS
We also see the limits of Russia’s ability to resist Chinese power in
economic issues, e.g., energy and arms sales. Increasingly China is
Russia’s only partner regarding East Asian energy projects. Rosneft’s
heavily touted deals with CNPC may actually represent cases where
Moscow has no other viable choice, and the preferences of Igor Sechin,
its chairman, demonstrate how the pursuit of personal and sectoral inter-
ests disfigures policy and subordinates the national to particular inter-
ests.42 Despite innumerable Russian claims of a forthcoming bilateral gas
100 S. BLANK
pipeline agreement, nothing has happened.43 Now, Gazprom says that it

and CNPC are drafting a contract and vow to reach agreement by the end
of 2014.44 Alternatively, Russian sources report Gazprom’s hopes to
finalize a deal when Putin visits China in May 2014 but concede that no
accord exists on prices for this gas.45 Disseminating such vague, contra-
dictory, but positive reports is a classic Russian tactic to hide bilateral
discord. Neither can we report progress regarding Russian oil or gas
sales to Japan or South Korea.
The only relatively positive area in energy sales to Asia is oil sales to
China. While the East-Siberia Pacific Ocean Pipeline (ESPO) opened in
2011, China is effectively buying Russian oil at prices below global market
levels when one counts payments on the USD 25 billion it lent to Russia
to build ESPO. It has also advanced Rosneft billions in loans. In one deal,
it lent USD 12 billion to Rosneft in 2013.46 Rosneft also agreed to supply
CNPC with 365 million tons of oil for 25 years worth USD 270 billion in
return for a pre-payment of USD 60–70 billion. This amounts to 15
million metric tons of crude oil annually for 25 years at just over USD
10 billion that will probably traverse the ESPO pipeline to Daqing,
China.47 A deal with CNPC to drill in the Pechora and Barents seas in
the Arctic also highlights CNPC’s growing clout. China got better terms
than Europe.
In subsequent deals during 2013, Rosneft won a contract to triple oil
deliveries to China to 900,000 BPD, equaling Saudi deliveries to China,48
but it did so by obtaining further huge loans of USD 25–30 billion and
agreeing to facilitate Sinopec’s acquisition of oil and gas assets in Russia.
Rosneft would consider Sinopec’s participation in its large-scale project in
the Russian Far East, the Eastern Petrochemical Refinery, jointly estab-
lished in 2007 by Rosneft and CNPC.49 While China will loan Rosneft
USD 2 billion backed by 25 years of oil supply for this, Rosneft will boost
oil exports to China by 800,000 metric tons this year, and annual exports
may reach 31 million tons annually or 620,000 barrels a day, more than
doubling present exports. Igor Sechin even hinted at going to 50 million
tons annually. A vulnerable Gazprom too may have hope for advance
payments by China when it announced its intention to conclude the
long-awaited gas deal.50
Moscow depends excessively on exports to China through those lever-
aged pipelines for lack of other Asian consumers for this oil. Arguably,
these deals come at the expense of Russia’s national interest and have
strings attached as China gains leverage over Russia’s crown jewel, its
energy sector. Absent a direct oil pipeline to Japan or South Korea and
because a pipeline to one customer is owned by the customer, not the
producer, this outcome is incompatible with Russia’s avowed energy
objectives in Asia. Indeed, since 2012 Rosneft has had to make conces-
sions to China over their disagreement on the pricing formula for pump-
ing oil through ESPO. China’s monopoly on Russian energy investments
in the Far East is because Russia has failed to diversify its customer base.51
I have previously noted China’s ability to gain what it wants from
Russian arms sellers.52 China needs Russian technology and weapons it
cannot get due to Western boycotts, and Russia needs these sales for
revenue and geopolitical purposes. Thus, the sale of the SU-35 is report-
edly still on track,53 but Russian arms sellers cannot counter China’s piracy
beyond hoping that it fulfills recent anti-pirating agreements.54 Reports
suggest that the government overrode arms sellers’ disinclination to sell
superior weapons to China,55 a decision that highlights its leverage even
though it must exert itself to get what it wants. Given Russian awareness
that China’s increasing military capability could threaten it, the sales reflect
Russia’s unresolved ambivalence that Beijing exploits.
UKRAINE
Russia’s February 27 invasion, occupation, and annexation of Crimea
revealed serious divergence on fundamental issues of world politics and
international order. Consistent with its longstanding “principled stand”
on sovereignty and territorial integrity and its opposition to any state’s
intervention in another state’s internal affairs, China has refused to
endorse Moscow’s actions, equivocating, opposing sanctions but clearly
wanting to uphold Ukraine’s sovereignty and integrity.56 Moscow’s
assertion that alleged threats to Russians in Ukraine justify an unlimited
right to intervene there or elsewhere to defend them strikes at the heart
of China’s justifications for its own untrammeled sovereignty and free-
dom to conduct its own policies in Tibet, Xinjiang, and Taiwan and
represents a second case—Georgia in 2008 being the first—of Russia
invading and annexing neighboring territory, thereby setting precedents
that unhinge security in Central Asia and, potentially, within China. In
Georgia, as here, Russia worked in advance with separatists, as Putin has
admitted.57
This suggests an ingrained Russian trend toward recklessness and
aggrandizement on issues of war and peace and disregard for basic
102 S. BLANK
Chinese interests and principles.58 China may welcome further East-West

estrangement that drives Russia closer to it, but that is not the whole story.
If economic sanctions continue to increase and intensify, as is likely, Russia
might have to turn to China for economic and political support. Beijing
might welcome and exploit that outcome, but it cannot be happy about
destruction of China’s beneficial economic and military ties to Ukraine
and disregard for China’s foreign policy principles.59 Xi’s recent reaffirma-
tion of great power relations of a new type with Obama suggests China’s
unhappiness with Russia.60 China has equivocated and even offered a
three-point solution to the crisis: establishing “an international coordinat-
ing mechanism . . . to explore means to a political settlement,” having all
parties refrain from taking escalatory actions, and asking international
financial institutions “to explore how to help maintain economic and
financial stability in Ukraine.”61 Simultaneously, China announced its
opposition to sanctions.
Western diplomats assumed that Russia was isolated and lacked China’s
support. This is emphatically not how Russia saw it. Early in the crisis, and
quite unjustifiably, Moscow announced that it had Beijing’s support.
Then at his March 18, 2014 speech justifying the annexation of Crimea,
Putin stated openly his gratitude to China and India for supporting
Russia’s actions.62 From Russia’s perspective, all that matters is that
China—its largest trading partner and the primary hope for future invest-
ments—opposed sanctions and would not formally oppose Moscow at the
Security Council. Lavrov expressed Moscow’s satisfaction with this stance,
saying, “We do not need to ask for solidarity from our economic and
strategic partners in the East. They are not going to follow the lead [of
those calling for sanctions] and our interaction with them will have an
upward trend. I have no doubt of that.”63
This crisis plainly divided the Chinese government and expert commu-
nity as Chinese reporting of this crisis shows.64 Hawkish Global Times
admitted that some fear a revival of Russian imperialism and arrogance,
making it difficult for China in the future, but concluded that, on balance,
China gains more than it loses from this crisis.65 The most pressure on
China will come from the United States, not Russia, and a multipolar
world benefits from a powerful (and implicitly anti-American) Russia.66 In
contrast, Phoenix TV complained that Russia took advantage of China by
thanking it for its support, which was not actually given,67 implying that
Russia could, for reasons of its own, lead China into a crisis on an issue of
little importance to China. Putin’s adventurism has caused other problems
for China. Phillip Bowring noted that Putin’s threats regarding ethnic
minorities also apply to Kazakhstan, a major Chinese partner in Central
Asia, and could lead to secession from Russia, as in Dagestan and
Chechnya. If it emphasized the ethnic feature of its identity and diplo-
macy, it could forget about resolving the vexing problems of Tibet and
Xinjiang, internal issues having international repercussions.68 Thus,
Russia’s actions prevent China from adopting a clear-cut position, while
posing issues for its relationship with Russia. Undoubtedly, it might make
equally serious strategic gains, but it could also sow and reap the whirl-
wind given Russia’s strategic recklessness.
CONCLUSION
Russia simultaneously asserts itself against or in defiance of China and
bandwagons with China. It pursues strategic independence in regional
security through “partnerships” with Asian governments that display
growing wariness about China while needing global strategic cooperation
with China against US power and values. Concurrently, in critical eco-
nomic sectors, Moscow’s refusal to reform entails acquiescing to China’s
demands. That ultimately redounds to China’s advantage if it can refrain
from aggressive policies that bring Asian states and the United States
closer together. China’s strongest and seemingly least threatening suit is
its economic power, which it deployed deftly to highly positive effect in
Asia in the 1997–1998 economic crisis.69 Here, it can increasingly get
what it wants from Russia and construction of a gas pipeline will ratify this
trend even more.
Moscow’s aggressive and single-mindedly self-serving policies prevent
lasting coalitions with anyone to restrain China and will merely further
polarize East-West relations in Europe, the former Soviet Union, and the
Middle East. This East-West hostility leaves Russia no option but Asia
where it is also distrusted, and less able to compete due to its weak
economic and energy leverage. It might gain points of tactical indepen-
dence from China, but strategically and economically it is becoming
China’s junior partner. Xi’s offer of cooperation in Asian security and
stability, magnanimously proposing to link the Trans-Siberian Railway to
the Chinese Silk Road, which Putin welcomed, indicates China’s readiness
to convert Russia into its economic and strategic junior partner.70
China has punctured Russia’s Eurasian and great power pretensions
graciously but decisively. Given the expansive geostrategic benefits that
104 S. BLANK
realization of China’s Silk Road vision will bring to it, this could entail a
massive and decisive Russian strategic defeat in Eurasia, rendering it as
China’s raw materials appendage.71 We see similar trends in energy and
arms sales. China’s winning strategy is restraint, not militarism, unlike
Russia’s strategy in Europe.72 If China can revive that course in Asia, as
in 1978–2009, it stands to gain in both Asia and Eurasia. If Russia spurns
this strategy, it will gain an unrelenting enemy on its eastern frontier and
may find itself sleeping alone next to a dragon.
NOTES
1. Zhang Peng, “China-Russia Relations at Unprecedented High Level:
Medvedev,” Xinhua, October 22, 2013.
2. Angela Stent, The Limits of Partnership: U.S.-Russian Relations in the
Twenty-First Century (Princeton, NJ: Princeton University Press, 2013), 69.
3. Angela Stent, The Limits of Partnership, xi.
4. Guy Chazan, “Tatars Warn Russia Risks Provoking Jihadi Backlash in
Crimea,” Financial Times, March 10, 2014, www.ft.com.
5. Xinhua Asia-Pacific Service, March 23, 2014, FBIS SOV, March 24, 2014.
6. Gaye Chrisotffersen, “Russia’s Breakthrough Into the Asia-Pacific: China’s
role,” International Relations of the Asia-Pacific10, no. 1 (2010): 61–92.
7. “Russian, Chinese Warships Start Joint Exercise in Mediterranean Sea,” The
Voice of Russia, January 27, 2014, http://voiceofrussia.com/news/2014_
01_27/Russian-Chinese-warships-start-joint-exercise-in-Mediterranean-
Sea-8067/.
8. Stephen Blank and Younkyoo Kim, “Same Bed, Different Dreams: China’s
‘Peaceful Rise’ and Sino-Russian Rivalry in Central Asia,” Journal of
Contemporary China22, no. 82 (2013): 63–80.
9. Andrei Piontkovsky, ““Island Siberia. China’s Secret Is Out,” www.grani.ru,
January 11, 2010, Retrieved from Lexis-Nexis, January 13, 2010; Aleksandr’
Anatolyevich Khramchikin, “A Total of 85 Permanent Combat Readiness
Brigades For Everything,” Nezavisimoe voennoe obozrenie, October 16,
2009, FBIS SOV, October 16, 2009; Simon Saradzhyan, “Russia’s Red
Herring,” International Relations and Security Network, May 25, 2010,
www.isn.ethz.ch; Jacob Kipp, “Russia’s Nuclear Posture and the Threat
That Dare Not Speak Its Name,” in Russia’s Nuclear Forces: Past, Present,
and Future,ed.Stephen Blank (Carlisle, PA: Strategic Studies Institute, US
Army War College, 2011), 449–505.
10. “Program of the Effective Use on a Systematic Basis of Foreign Policy
Factors With the Aim of the Long-Term Development of the Russian
Federation,” Russkii Newsweek, May 11, 2010, http://www.runewsweek.

ru/country/34184.
11. Stephen Blank and Younkyoo Kim, “The Latest Turn in Russia’s Korea
Policy,” Forthcoming.
12. Ashley J. Tellis, “Overview: Strategic Asia Continuing Success With
Continuing Risk,” in Strategic Asia 2010–11: Asia’s Rising Power and
America’s Continuing Purpose, ed. Ashley J. Tellis, Andrew Marble, and
Travis Tanner (Seattle and Washington, DC: National Bureau of Asian
Research, 2010), 9–10.
13. Iwona Wisniewska, Eurasian Integration: Russia’s Attempt at the Economic
Unification of the Post-Soviet Area (OSW Studies: Centre for Eastern
Studies, Warsaw, 2013), 15; Jeffrey Mankoff, “Eurasian Integration: the
Next Stage,” Central Asia Policy Brief (Washington, DC: Elliott School of
international Affairs, George Washington University, 2013), 2.
14. Stephen Blank, “Russia and Japan: Can Two-Plus-Two Equal More
Than Four?” Asia-Pacific Bulletin, East-West Center, March 6, 2014;
Stephen Blank, “Enter Asia: The Arctic Heats Up,” World Affairs
Journal (March–April 2014): 19–30; and Stephen Blank, “Russia’s
Growing Ties with Vietnam,” The Diplomat, September 19, 2013,
www.thediplomat.com.
15. Stephen Blank and Younkyoo Kim, “The Latest Turn in Russia’s Korea
Policy.”
16. As stated by Alexandros Petersen, at the Central Asia Caucasus Institute,
SAIS, Washington, DC, November, 2013.
17. Andrei Chang, “Who Made the Decision to Export SU-35 Fighters to
China?” Kanwa Defense Review, January 1, 2014, FBIS SOV, February 5,
2014, 27.
18. This is the formal name for the strategic concentration of all Russian military
forces in the Asia-Pacific zone.
19. Edward N. Luttwak, The Rise of China vs. the Logic of Strategy(Cambridge,
MA: Harvard University Press, 2012).
20. Stephen Blank, “Russia’s Ever Friendlier Ties to Vietnam—Are They a
Signal to China?” Eurasia Daily Monitor, November 30, 2012.
21. VOV News, May 10, 2013, Open Source Center, FBIS SOV, May 10, 2013.
22. Vladimir Mukhin, “Preferable Tariffs for Navy Ships: Vietnam and Cuba
Are Helping Russian Navy Solve Defense Missions in the World’s
Ocean,” Nezavisimaia gazeta, August 7, 2013, FBIS SOV, August 7,
2013.
23. Jon Gravatt, “Russia to Help Vietnam Build Naval Submarines,” Jane’s
Defense Weekly, March 29, 2010, http://www4.janes.com.
24. Vladimir Mukhin, “Preferable Tariffs for Navy Ships.”
25. Thanh News Online, August 23, 2013, FBIS SOV, August 23, 2013.
106 S. BLANK
26. Jon Gravatt, “Vietnam Signs Deal with Russia to Procure Additional Su-
30MK2s,” Jane’s Defence Weekly, August 23, 2013, http://www4.janes.
com.
27. Interfax, August 29, 2013, FBIS SOV, August 29, 2013.
28. Vietnam News Agency, August 8, 2013, FBIS SOV, August 8, 2013.
29. “Russia Seeks Several Military Bases Abroad—Defense Minister,” RIA
Novosti, February 26, 2014, http://en.ria.ru/military_news/20140226/
187917901/Russia-Seeks-Several-Military-Bases-Abroad–Defense-
Minister.html.
30. Toko Sekiguchi, “Abe Seeks to Build Trust With Putin in Sochi,” The Wall
Street Journal, February 6, 2014, http://online.wsj.com/news/articles/
SB10001424052702303496804579365941446331228.
31. “Moscow Rejects Beijing’s Offer to Co-Operate on Separate Territorial
Disputes with Tokyo,” South China Morning Post from Agence France-
Presse, February 7, 2014, www.scmp.com.
32. Pavel Tarasenko, “Japan Offers Draw to Russia—Moscow and Tokyo Will
Cooperate Despite Problem of South Kurils,” Kommersant Online,
November 5, 2013, Open Source Center, FBISSOV, November 2013;
Stephen Blank, “Russia Plays Both Sides Against the Middle on Senkaku
Islands,” Eurasia Daily Monitor, November 14, 2012.
33. Stephen Blank, “Japan Responds to Multiple Security Challenges,” SIRS
Monitor Relaunch Edition, February 2014, 28–33, http://issuu.com/sirs
consultancyltd/docs/monitor_magazine_issue_1.
34. Pavel Tarasenko, “Japan Offers Draw to Russia.”
35. Celine Pajon, “Japan-Russia: Toward a Strategic Partnership?” Russie.Nei.
Visionsno. 72, IFRI, September 2013, www.ifri.org.
36. “Will Japan Make Russia Give Kuril Islands Away?” www.pravda.ru,
November 6, 2013; Pavel Tarasenko, “Japan Offers Draw to Russia.”
37. Jeffrey Mankoff, “Japan-Russia Ties: An Opportunity for the U.S,” Moscow
Times, February 18, 2014, http://www.themoscowtimes.com/opinion/
article/japan-russia-ties-an-opportunity-for-the-us/494786hml.
38. “Crossing the First Island Chain,” Guoji xianqu diaobao Online, July 19,
2013; FBIS SOV, July 19, 2013.
39. “Crossing the First Island Chain.”
40. “Japan Must Accept China’s Rising Naval Power: PLA Admiral,” August 4,
2013, www.wantchinatimes.com.
41. Stephen Blank, “The Context of Russo-Chinese Military Relations,”
American Foreign Policy Interests35, no. 5 (2013): 243–253.
China?” 20.
43. Steve LeVine, ”China and Russia Seem Genuinely Close to Game-Changing
Natural Gas Deal,” Quartz, January 7, 2014, www.qz.com; “China, Russia
Agree on Terms of Multi-Billion Dollar Gas Deal,” www.rt.com, September

5, 2013.
44. Interfax, January 22, 2014, Open Source Center, FBIS SOV, January 22,
2014.
45. “Gazprom Hopes to Clinch China Deal during Putin Visit in May,”
Reuters, January 22, 2014.
46. China Daily Online, January 22, 2014, FBIS SOV, January 22, 2014.
47. “Rosneft Inks $270 BN China Oil Deal,” www.upstreamonline.com, June
21, 2013; Interfax, June 21, 2013, Open Source Center, FBIS SOV, June 21,
2013; Neil Buckley, “Inside Business: Russia’s Eastern Energy pivot Has
Limits,” Financial Times, June 28, 2013, 14.
48. “Rosneft Inks $270 BN China Oil Deal.”
49. Dmitry Zhdannikov and Vladimir Soldatkin, “Exclusive: Russia Plans
$25–30 Billion-Oil-For-Loans Deal With China,” Reuters, February
13, 2013; “China May Grant Rosneft Loan for More Oil—
Dvorkovich,” RIA Novosti, February 27, 2013, http://en.rian.ru/busi
ness/20130227/179711229/China-May-Grant-Rosneft-Loan-for-
More-Oil–Dvorkovich.html;World China Times, April 14, 2013, FBIS
SOV, April 14, 2013.
50. Rakteem Katakey and Will Kennedy, “Russia Lets China into Arctic Rush as
Energy Giants Embrace,” Bloomberg, March 25, 2013.
51. Aleksandr’ Gabuyev, “What to Expect From Russian Foreign Policy in
2014,” Russia Direct/ Kommersant-Vlast, January 7, 2014, FBIS SOV,
January 7, 2014.
52. Stephen Blank, “Cold War in Asia? China, Russia, and Asian Security,” The
Asan Forum, Vol. I, No. 1 (July-August, 2013), www.theasanforum.org.
53. Interfax-AVN Online, November 6, 2013, FBIS SOV, November 6, 2013.
54. Interfax, September 17, 2013, FBIS SOV, September 17, 2013; Interfax-
AVN Online, October 14, 2013, FBIS SOV, October 14, 2013.
China?”
56. M.K. Bhadrakumar, “India Extends Hand of Friendship to Russia,” March
7, 2014, http://blogs.rediff.com/mkbhadrakumar/2014/03/07/india-
extends-hand-of-friendship-to-russia; Shannon Tiezzi, “China Backs
Russia on Ukraine,” Thediplomat.com, March 4, 2014; John Allen Gay,
“Daylight Between China and Russia on Ukraine,” The National Interest,
March 6, 2014, www.thenationalinterest.org; Elizabeth C. Economy,
“China’s Soft ‘Nyet’ to Russia’s Ukraine Intervention,” Council on
Foreign Relations, March 6, 2014, www.blogs.cfr.org; Peter Ford, “China
to Russia: You’re Putting Us in a Tight Spot,” Christian Science Monitor,
March 7, 2014, www.csm.com; David Cohen, “With Allies Like These Who
Needs Rivals?” Jamestown China Brief14, no. 5 (March 7, 2014): 2–4;
108 S. BLANK
Richard Weitz, “Symbolism Over Substance,” Jamestown China Brief14,

no. 5 (March 7, 2014):11–14.
57. “Putin Admits Russia Trained S Ossetians Before 2008 Georgia War –
Transcript President of Russia,” www.kremlin.ru, August 10, 2012.
58. Stephen Blank and Younkyoo Kim, “Same Bed, Different Dreams,” 63–80.
59. Teddy Ng, “China-Ukraine Relations Hang in the Balance as Kiev Weighs
‘Russia or EU’ Question,” South China Morning Post, February 25, 2014,
FBIS SOV, February 25, 2014; “China is Surprise Loser in Ukraine Military
Gambit,” www.lignet.com, March 3, 2014; James Kynge, “Ukraine a
Setback in China’s Eastern Europe Strategy,” Financial Times, February
27, 2014, www.ft.com.
60. Xinhua, March 24, 2014, FBIS SOV, March 24, 2014.
61. James Kynge, “Ukraine a Setback in China’s Eastern Europe Strategy.”
62. “Address by President of the Russian Federation,” March 18, 2014, http://
eng.kremlin.ru/news/6889.
63. Interfax, March 21, 2014, FBIS SOV, March 21, 2014.
64. The author is preparing a longer article on this crisis’ impact on Russian
relations in Asia.
65. Global Times Online, March 20, 2014, FBIS SOV, March 21, 2014.
66. Global Times Online, March 20, 2014.
67. Fenghuang wei shi chungwentai, March 19, 2014, FBIS SOV, March 20,
2014.
68. Phillip Bowring, “For China, Crimea Lessons Must Be Heeded,” South
China Morning Post Online, March 23, 2014, FBIS SOV, March 23, 2014.
69. Edward N. Luttwak, The Rise of China vs. the Logic of Strategy.
70. Xinhua Asia-Pacific Service, February 6, 2014, FBIS SOV, February 6,
2014.
71. Kent E. Calder, The New Continentalism: Energy and Twenty-First-Century
Eurasian Geopolitics (New Haven, CT: Yale University Press, 2012).
72. Edward N. Luttwak, The Rise of China vs. the Logic of Strategy.
Stephen Blank is a Senior Fellow at the American Foreign Policy Council in

Washington. From 1989–2013 he was a Professor of Russian National Security
Studies at the Strategic Studies Institute of the U.S. Army War College in
Pennsylvania. Dr. Blank has been Professor of National Security Affairs at the
Strategic Studies Institute since 1989. In 1998–2001 he was the Douglas
MacArthur Professor of Research at the War College.
PART 2
Sino-Russian Relations and Mongolia

CHAPTER 7
Sino-Russian Competition in Mongolia
Sergey Radchenko
In recent years, China and Russia have presented a solid façade of

“strategic partnership,” with leaders emphasizing complementarity of
national interests and common approaches to many international pro-
blems as reasons they work hand-in-hand. Beijing and Moscow have
dismissed suggestions that their relationship is, in fact, plagued by hid-
den tensions as Western fabrications. Yet, there must be a middle road
somewhere between naïve assertions that the relationship is made in
heaven and unrealistic claims that this clay colossus is about to come
undone. This article looks at policies toward their common neighbor
Mongolia in an effort to locate this middle ground. Once a part of the
Chinese Empire, later a de facto Soviet satellite, Mongolia has not been
shy about asserting its distance from both China and Russia in pursuit of
what it calls the “third neighbor” policy. This policy entails active
engagement with Mongolia’s virtual “third neighbor”—a collective
entity that includes the United States, the EU, countries of the Asia-
Pacific rim, India, Turkey, and various international organizations.
The “third neighbor” policy adds a layer of complexity to Mongolia’s
relations with China and Russia.
S. Radchenko (*)

https://doi.org/10.1007/978-981-10-3144-1_7
112 S. RADCHENKO
Russia has tried to boost its waning influence in Mongolia by leveraging

its existing assets—mainly, its stake in the trans-Mongolian railroad—to
secure preferential access to the country’s natural resources. China, for its
part, has tried to pull Mongolia ever closer into the structural embrace of
its giant economy. Russia has had to defend its interests in a much more
assertive fashion; China has had the luxury of just waiting for the ripe fruit
to fall into its hands. Although the two have been careful not to step on
each other’s toes, their economic interests are basically at odds. In this
sense, it is appropriate to say that China and Russia have been in “compe-
tition” over Mongolia. However, in its current form, this competition is
mainly commercial and only implicitly geopolitical, and Russia’s declining
economic fortunes need not translate into tensions in the broader context
of the Sino-Russian relationship. In addition, Mongolia’s “third neigh-
bor” policy offers assurance that one’s loss is not necessarily seen as the
other’s gain.
Perhaps, the most interesting aspect of the Sino-Russian-Mongolian
relationship is the growing importance of Mongolia’s agency. Ulaanbaatar
has learned to keep both neighbors in check by playing one against the
other and both against the West. This is not new or unique. Many small
states engage in this kind of geopolitical manipulation; in Mongolia’s
neighborhood, North Korea is but one example, but the rules of this
geopolitical game are complicated by Mongolia’s unique domestic con-
text. Unlike Central Asian states, which have succumbed to authoritarian-
ism (Kyrgyzstan is still to prove that it is an exception), Mongolia has
enjoyed a high level of political contestation. Its democratic politics have
had a great impact on both China and Russia’s efforts to extend their
influence, neither of which has succeeded at the Mongolian poll box.
THE RAILROAD
Nothing better illustrates Russia’s declining fortunes in Mongolia than the
row over the upgrade of the trans-Mongolian railroad, known as UBTZ.
Russia has maintained a 50 percent stake in the railroad, which connects
Russia and China through Mongolia—a privilege dating back to the 1949
Soviet-Mongolian agreement on joint ownership. As its economic pre-
sence in Mongolia shrank in the 1990s, the railroad has assumed even
greater importance as one of Moscow’s few remaining assets in the coun-
try. Although its strategic importance is undeniable, the railroad has
suffered from serious economic woes: Russia paid scant attention to its
SINO-RUSSIAN COMPETITION IN MONGOLIA 113
upkeep in the 1990s and the early 2000s; Mongolia, too, had little money
to spare to upgrade its crumbling infrastructure, much less to expand the
railroad network. This is where matters stood when, on October 22, 2007,
President Nambaryn Enkhbayar and George W. Bush signed the
Millennium Challenge Compact, committing some US$285 million to
Mongolia’s economic development.1
The Compact, disbursed through the Millennium Challenge
Corporation (MCC), was widely perceived to be a “reward” for active
support of the US “war on terror,” for Mongolia had sent troops to both
Iraq and Afghanistan. The money was to come in the form of grants, never
to be repaid. The lion’s share of the Compact funds—more than US$188
million—was earmarked for the upgrade of the trans-Mongolian railroad,
an effort to remove the bottlenecks that an antiquated rail system posed
for Mongolia’s economic development. Enkhbayar deemed this invest-
ment “vital,”2 but a major obstacle to successful realization of the plan was
Russia’s likely reaction.
Moscow had perceived Enkhbayar as a fairly loyal politician. A fluent
Russian speaker with longstanding connections to Russia, Enkhbayar, in
Vladimir Putin’s words, “kn[ew] what Russia is like,” which was one
reason Moscow delighted in his election as president in 2005. “The
Mongolian people elected me to a large extent because I have very good
relations with the Russian leadership, with President Putin,” Enkhbayar
later told Putin to the latter’s clear satisfaction. Putin had invested himself
in a better relationship, in November 2000 becoming the first Russian
leader since Leonid Brezhnev to visit Ulaanbaatar, after which he and
Enkhbayar developed what the latter called an “intimate” relationship.3
This intimacy was bolstered in 2003 when Putin agreed to write off nearly
98 percent of the Soviet-era Mongolian debt (US$11.4 billion), a gener-
ous gesture that bolstered Russia’s standing in the eyes of Mongolian
public opinion.
Nevertheless, Moscow and Ulaanbaatar remained at odds over the
future of the trans-Mongolian railroad. The existing agreement, which
provided for a rotating chairmanship, did not suit Enkhbayar, who
resented Russia’s veto over Mongolia’s transport lifeline. Since the early
2000s, he unsuccessfully lobbied Putin to change the ratio from 50/50 to
51/49, in Mongolia’s favor.4 “The Russians said ‘OK, let’s discuss it’ but
they would not go beyond talking,” said one Mongolian diplomat
involved in the thorny negotiations. After discussing railroad issues at a
SCO summit in June of that year, Enkhbayar concluded that Russia’s
114 S. RADCHENKO
cooperation was “unlikely” and, in talks with US officials, began to “press

ahead with a Mongolian-owned second rail.”5 Such ambitious plans were
unrealistic, but he probably hoped that once the rotating chairmanship fell
into Mongolia’s hands, he could succeed in bringing in US cash to
modernize its infrastructure. Although the two countries battled for
months over the appointment, the Russians yielded in the end, allowing
for the appointment of a Mongolian citizen, V. Otgondemberel, as the
head in 2007.
At the announcement of the MCC compact, however, the Russians dug
in their heels. Bringing in US investments required opening the account
books of the joint enterprise. “Why would we do that?” wondered then-
Ambassador V.V. Samoilenko. “Why would we allow outside people to
get to the documents of a Russian-Mongolian joint enterprise? This is our
and the Mongols’ business, our documents.”6 In addition, there was fear
that the upgrade would entail purchases of US-made locomotives at the
expense of their Russian-made competitors. Underlying these considera-
tions was Moscow’s resentment at having the United States meddle with
one of its key assets in Mongolia. As a result, when the US auditing team
arrived in Ulaanbaatar in 2009 to begin implementation of the MCC
agreements, they failed to gain access. Moscow found itself in an awkward
situation. The Mongolian media, not unjustly, cast it in the role of
obstructionist bullies, hanging on obstinately to its strategic assets, under-
mining Mongolia’s long-term economic potential and effectively holding
the Mongols by their throats. In the meantime, Russian observers suc-
cumbed to conspiracy theories to the effect that the whole idea of offering
US money for the railroad—knowing that it would have to be refused—
was hatched up by strategists in the State Department, who had sought to,
and succeeded, in embarrassing Russia in the eyes of the Mongolian
public.7
Concerned by this loss of face, Russia hurried to appear generous. In
2009, Russia and Mongolia set up a new company, Razvitie
Infrastruktury, to invest in the trans-Mongolian railroad; the latter soon
advertised tentative plans for a major upgrade at the cost of billions of
dollars. At the same time, Moscow offered to add US$250 million to the
coffers of the joint enterprise and, when Ulaanbaatar failed to come up
with its 50 percent share, underwrote the entire amount. Earlier, Russia
agreed to extend US$300 million as an agricultural credit. Gifts were
bestowed in rapid succession in an unprecedented display of attention to
Mongolia.
With money came honor: Putin and Medvedev both turned up in

Ulaanbaatar in 2009, a clear sign of how important Mongolia figured at
the time in the general thrust of Russia’s Asian policy. Putin’s visit
occurred days before the Mongolian presidential elections, a gesture of
support for the incumbent Enkhbayar, whom the Russians still perceived
as someone who would look after Moscow’s interests in the region.
Medvedev came to celebrate the 70th anniversary of the Khalkin Gol
battle, which had pitted the Soviet Union and Mongolia against the
Japanese. The intended message was that Russia had always been
Mongolia’s most reliable partner, and that, as the Russian saying goes,
an old friend is better than two new ones. The message was well received,
though it did not prevent Ulaanbaatar from asking the MCC to reassign
the forfeited railroad funds to other projects inside Mongolia. In the end,
the money was used to build paved roads, proof that Mongolian policy-
makers managed to have their cake and eat it, too.
RICHES
The Russian imperial expansion in Asia in the nineteenth century arguably
pursued three interrelated goals: first, security; second, great power pres-
tige; and, third, economic interests. These goals informed Russian policy-
making well into the Soviet era. Certain legacies of this imperial past
remain even today, underpinning renewed interest in former clients, not
least in Mongolia. If, broadly speaking, prestige was the key motive for
Russia’s imperial enterprise in the nineteenth century, and security in the
twentieth century, in recent times the economic component has played the
most important role in Moscow’s regional policies (though the other two
factors are of continued relevance). Moscow is primarily interested in
Mongolia’s natural wealth, not only for the investment opportunities
that they offer but also because they would allow Russia to maintain a
“presence” in the region at a time when the law of economic gravity has
pulled Mongolia into China’s orbit.
Whereas until the late 1980s, the Soviet Union dominated Mongolia’s
foreign trade, the 1990s witnessed China’s return, as both a purchaser of
Mongolia’s natural resources and a seller of all manner of goods. Today,
approximately 50 percent of Mongolia’s total foreign trade is with its
southern neighbor, and China has practically monopolized Mongolia’s
exports.8 Russia continues to supply petroleum—its key export to
Mongolia—but even this is under the shadow of the Mongols’ recent
116 S. RADCHENKO
attempts to invest in oil exploration and refining, and the potential of oil
shale reserves. Russia’s economic position has been slipping and is sure to
slip even further, which makes it all the more eager, for commercial as well
as strategic reasons, to secure access to a share of Mongolia’s natural
resources.
Russia’s involvement in Mongolia’s mining goes back decades. Soviet
geologists did most of the groundwork in identifying key copper, gold,
and coal deposits, and the Soviet Union invested heavily in their extrac-
tion. The most important investment was the 1973 deal to build the
copper and molybdenum mining complex at Erdenetiin Ovoo. Russia
formerly owned 49 percent (to Mongolia’s 51 percent) in the joint
venture Erdenet, which has been in operation for over thirty years.9
This complex, one of the world’s largest, has not proven to be much of
an asset. Until Mongolia repealed its windfall profits tax, over 90 percent
of Erdenet’s revenues ended in the government’s coffers, leaving scraps
for the Russians. The Russian government–ever since Putin’s rise to
power signaled a renewal of interest in Mongolia—has tried to expand
its investment in the joint venture and to regain majority control.
Leading media outlets have alluded to Russia’s imminent “takeover” of
Erdenet, and, to this end, Russian shareholders made fool-hardy (and a
priori unacceptable) proposals to Mongolia about privatizing and float-
ing parts of the venture.10 Russia’s efforts to regain control proved futile.
Russia thus found itself in an awkward situation of having invested
heavily in a venture that it could not control, and that, selling most of
its produce to China, did not serve Moscow’s strategic interests in any
obvious way. All of this made Erdenet an uncertain base for extending
Russia’s economic influence in the country, which had not deterred the
Russians from trying.
Moscow worked hard to secure access to one of the world’s largest
undeveloped copper and gold deposits in South Gobi, the Oyu Tolgoi,
and proposed connecting the site to the trans-Mongolian mainline as a
quid pro quo for its investment. Enkhbayar reassured Putin as late as
January 2009 that “we [the Mongols] cannot imagine these big mining
projects without Russia’s participation.” The head of Russian Railroads
Vladimir Yakunin had reportedly been promised by Prime Minister
Sanjaagiin Bayar in 2009 that Russia would be given access in return for
building a railroad, which would connect the mining site with the trans-
Mongolian line, and, via Russia, with ports in the Far East,11 but
Enkhbayar was ousted later that year by the Western-oriented
Tsakhiagiin Elbegdorj. In October 2009, the Oyu Tolgoi contract was

awarded to the Canadian Ivanhoe Mines (now a subsidiary of the giant
multinational Rio Tinto). Russian railroad services were not required: the
mining site is only 80 kilometers from the border with China and, since
the site became operational in 2013, the copper has been taken to China
by trucks.
Having lost out on Oyu Tolgoi, the Russians have tried to gain access
to the world’s largest undeveloped coal deposit, nearby Tavan Tolgoi. The
key lever has once again been the railroad. In 2010, matters seemed to be
heading in Moscow’s direction, when the Mongolian parliament approved
a program of infrastructural development, which confirmed adherence to
the Russian railway gauge (1520 mm) instead of the narrower Chinese
standard. In November 2010, the Russians wrote off 97.8 percent of the
US$172 million of recent Mongolian debt (in addition to the massive
Soviet-era debt that it had already forgiven), in exchange for reassurances
that Russia’s interests would be taken into account in awarding the con-
tract for Tavan Tolgoi. In March of the following year, a consortium
headed by the Russian Railroads submitted an official bid to be given
access to 50 percent of the Tavan Tolgoi deposit, including a proposal to
build a rail line, which would take the coal to Sainshand (along the trans-
Mongolian railroad), at which point it could be exported south, to China,
or taken north, via Russia. Moscow appeared sure of victory, given that the
Russian Railroads’ bid entailed upgrading Mongolia’s rail infrastructure,
an ongoing concern for the Mongols ever since the unrealized promise of
MCC funding.
Once again, however, the Russians misread the situation. Only weeks
after the Tavan Tolgoi bid had been submitted, it transpired that
Mongolia had secretly conducted negotiations with South Korea’s Lotte
Group for construction of the railroad from the mine to Sainshand.12
Moscow was outraged and, later, puzzled, when in July 2011, Mongolia
announced that the winning bid for Tavan Tolgoi would be awarded not
just to the Russian Railroads or to its Chinese competitor Shenhua or the
American Peabody Energy, but to all three. Yakunin aired his frustration:
“The Mongolian side still maneuvers . . . between us, the Americans, the
Chinese, the Japanese, and all the others; the options that are being
offered are not causing us great enthusiasm.”13 He was later heard com-
plaining that he could not understand how the crawfish, the swan, and the
pike (three characters of a Russian fable) would move the cart of Tavan
Tolgoi.
118 S. RADCHENKO
The cart, to be sure, remained where it was, because Ulaanbaatar

failed to endorse the results of the bid it had announced in July 2011.
The Tavan Tolgoi discussions soon ground to a halt, partly because of
a sharp decline in the price of coal on the international market. In the
meantime, the Mongolian government has decided to construct a rail-
road directly from Tavan Tolgoi to neighboring China and has offered
Russia a chance to participate as an investor on the condition that
Mongolia would own 51 percent of the railroad. These efforts were
rebuffed by Yakunin who, in March 2013, sent a letter to Mongolian
Prime Minister Norovyn Altankhuyag, complaining about Mongolia
having broken the promises it had made to Russia.14 “You know, we
are fairly serious people, and we can count our money. It is under-
standable that such a scenario does not suit us,” noted the Russian
ambassador to Mongolia. There is reason to be disappointed. After all,
in spite of the capital (political, as well as financial) expended on
“coming back” to Mongolia since 2000, and even more since 2009,
and in spite of the personal commitment of both Putin and Medvedev
to upgrading ties with a country that Russia still considers to lie within
its immediate sphere of influence, Moscow has not attained even a
fraction of the results on which it counted.
The question is why. Part of the answer is Moscow’s poor understand-
ing of the political landscape in Mongolia. In recent years, policymakers
consistently misread the political situation, placing their bids on the wrong
players. Putin’s support for Enkhbayar, for instance, proved a costly mis-
take; Enkhbayar was not only ousted from power but ended up in jail on
charges of corruption and embezzlement of funds. His replacement
Elbegdorj, whom Putin neglected to meet when he visited Ulaanbaatar
in May 2009, proved much less inclined to make compromises with
Russia. Prime Minister and former ambassador in Moscow Sanjaagiin
Bayar, who reportedly promised to deliver mining licenses to Russia,
resigned in October 2009, ostensibly due to ill health. What Moscow
failed to realized was that Bayar had not been speaking for Mongolia but
for his party and, specifically, for himself. Lacking friends across
Mongolia’s political spectrum, the Russians invested themselves heavily
into a relationship with just one end of this spectrum, as it turned out, the
weaker end. The Mongolian People’s Revolutionary Party (MPRP), which
Putin’s United Russia had seen as its partner, split into two factions, which
benefited the more-Western leaning Democratic Party. The People’s Party
(a successor to MPRP) was unable to dislodge Elbegdorj, who was
reelected in July 2013, which guaranteed that Russia would be kept at

arm’s length at least for the following four years.
It is striking to what extent Putin had allowed his personal sympathies
and antipathies get in the way of his policymaking. Unlike Barack Obama,
who honored Elbegdorj by co-hosting with him a civil society conference
in New York and Abe Shinzo who, quite without precedent, invited
Elbegdorj to a meal at his residence, and to the latter’s astonishment,
had his wife serve dishes to the Mongolian president in a display of
intimacy and respect, Putin has basically ignored Elbegdorj, counting
perhaps on better luck with the next Mongolian leader. If so, Putin is
badly miscalculating. For Russia’s difficulties are not so much a function of
Putin’s relations with specific politicians, and more a result of a policy
consensus in Ulaanbaatar. Since the 1990s, Mongolian political elites have
internalized the policy of maneuvering between China, Russia, and the
“third neighbor,” so that even the idea of being “pro-Russian” in orienta-
tion has been discredited. No politician can afford to appear in the role of
defender of Moscow’s interests, just as no one can plausibly defend a one-
sided orientation toward China, or toward the West. Over the last twenty
years, Ulaanbaatar has perfected the skill of playing their neighbors against
one another, something that the Russians—with their mindsets still par-
tially rooted in the colonial past—have been unable to fully grasp.
THE CHINESE
If Russia has suffered from Mongolia’s changing political circumstances,
China has taken a hit as well. On the one hand, Mongolia’s hopes of
economic growth are rooted in recognition that, China, as the main buyer
of its resources, has been the engine behind its spectacular economic
performance in recent years. On the other hand, hopes are counterba-
lanced by apprehension of China’s penetration of the economy and the
long-term economic and political consequences of such penetration for
the fiercely independent nation. The potency of the China threat theory in
the Mongolian political context has given rise to a number of counter-
productive policies, which have taken a toll on Mongolia’s international
reputation as a reliable investment partner. At the same time, however,
these policies have, to some extent, frustrated China’s efforts to turn its
economic leverage to political advantage.
One characteristic example of China’s setbacks in Mongolia has been
the experience of Chalco, the Chinese aluminum giant. Like the Russian
120 S. RADCHENKO
Railroads, Chalco has long eyed the coal of South Gobi. In July 2011, it
signed a contract with Mongolia’s state-owned Erdenes Tavan Tolgoi
worth US$250 million for supplying coal from the Tavan Tolgoi deposit,
which set it up as the key customer at a time when Yakunin and others
were just dreaming of gaining access. Separately, in April 2012, Chalco
made a takeover bid for South Gobi Resources, then majority owned by
the Canadian Ivanhoe Mines, whose main asset is a coal field just 45
kilometers on Mongolia’s side of the Sino-Mongolian border.
Describing negotiations with Chalco to international media, the overly
confident South Gobi CEO Alexander Molyneux claimed the deal was
basically done and did not even mention the possible reaction of
Mongolia’s authorities. This was a fatal mistake.
The Mongolian media were outraged. It was one thing that a Canadian
company owned an important coal deposit in the country, and quite
another to have this sold to a Chinese state-owned company without
any consultation with Ulaanbaatar at a time when the same company
was also buying coal from Tavan Tolgoi for what many Mongolian pundits
believed was a very low price in comparison with the world market price.
Fears of real economic loss from China’s ability to dictate prices were
augmented by nationalist sentiments at having been completely ignored in
such a major transaction. “They are insulting us,” fumed one editorial.15
“Which is more powerful, Chalco’s money or the Mongolian law?” ran
another headline.16 The political controversy caused by the proposed
takeover happened at the worst possible time for Mongolian policy-
makers—just ahead of the parliamentary elections of June 2012. “Selling
out” to China was just the kind of publicity that could ruin its chances at
the polls, the ruling party recognized. As a result, the parliament hurried
to pass a law, which required Mongolia’s official approval for any acquisi-
tion of controlling stakes in the “strategic” sectors of the economy by
foreign entities. South Gobi’s mining permits were suspended. The com-
pany promptly fired Molyneux in a bid to appease public sentiment and
restart production. Chalco had to beat retreat.
Chalco suffered another unexpected setback in January 2013 when
Erdenes Tavan Tolgoi announced that it would stop delivery of coal to
the Chinese because Mongolia did not like the price the Chinese were
paying and, moreover, the company was facing transportation hurdles in
the absence of a railroad. Prime Minister Altanhuyag suggested that the
contract with Chalco should be “cancelled,” so that the Mongols could
get a better price. The Chinese, who, unlike the Russians, had been usually
tight-lipped about their dealings with Ulaanbaatar, openly voiced their

frustration, threatening to sue. Ulaanbaatar tried to play Chalco against
China’s biggest coal producer Shenhua, but the ploy did not work. In the
end, Chalco agreed to a small increase in the price of exported coal, and
the supplies resumed, proving, perhaps, that there were strict limits to
Mongolia’s ability to alter the rules of the game that China had set.
The quarrel with Chalco, which coincided with the government’s
efforts to revisit the 2009 investment agreement with Rio Tinto for
the development of Oyu Tolgoi and also overlapped with continued
wrangling with the Russians over the railroad, tarnished Mongolia’s
international reputation, amid accusations of the dangers of “resource
nationalism.” Mongolia experienced a severe drop in foreign investment
and a decline in the rate of economic growth in 2012–2013. To allay
these concerns, Parliament passed a new foreign investment law, which
promised to offer equal treatment to foreign and domestic investors.
Ulaanbaatar has also tried to appear friendlier to Beijing. To this end,
in October 2013, Altanhuyag, on an official visit, called on the Chinese
businessmen to invest in Mongolia and promised that the legal environ-
ment, “changeable” in the past, would now be “stable.” In what must
have pleased Beijing, he also pledged active participation in Xi Jinping’s
proposed “Silk Road Economic Belt” and voiced support for Chinese
companies’ involvement in the construction of Mongolian infrastruc-
ture, including railroads, so that Mongolia may connect Europe with
China.17
CONCLUSION
Ironically, Altanhuyag’s visit to Beijing coincided with the visit there by
Prime Minister Medvedev. Just as Altanhuyag carried away an agreement
to supply China with coal for twenty years, so Medvedev, too, signed a
deal to increase supplies of oil to China. In a strange way, then, Mongolia
and Russia were indirectly competing for a share of China’s favors. This
does not bode well for Russia’s position. In fact, these relationships are
more and more reminiscent of the sort of relationships the Qing Empire
had with vassal states before China’s encounter with the West.
China first encountered Russia’s presence along the line that roughly
corresponds to today’s northern Mongolian frontier in the seventeenth
century. The Qing were strong back then and easily checked Russian
encroachments through the treaties of Nerchinsk (1689) and Khyakhta
122 S. RADCHENKO
(1721). But in the late ninetieth to early twentieth centuries, imperial

Russia moved aggressively to secure its position in Mongolia at China’s
expense. China’s ouster from Outer Mongolia in 1921 determined the
outcome of that competition in Russia’s favor, allowing Russia to dom-
inate Mongolia politically, economically, and militarily. There was a brief
period in the 1950s, at the height of the Sino-Soviet alliance, when China
and the Soviet Union cooperated in Mongolia, investing funds, building
the infrastructure (including the railroad), not at all in competition with
each other but as partners, helping a junior ally. But the collapse of Sino-
Soviet relationship obliged Mongolia to choose friends; its leadership
sided with the Soviets.
One-sided reliance on the Soviet Union ended with the Soviet collapse
and Russian retrenchment from Asia. In its place, Ulaanbaatar developed a
fresh approach to international relations, which emphasizes balancing
Russia, China, and the “third neighbor.” When Putin attempted to reas-
sert Russia’s influence, he found it much more challenging than his Soviet
predecessors had. The Russians would have to compete fiercely with other
players for Mongolia’s loyalties. Russia has performed quite poorly in this
competition.
In view of the “strategic partnership” between Moscow and Beijing,
both the Russians and the Chinese have been very careful with respect to
each other’s positions in Mongolia; neither is openly calling the other a
“competitor.” The Russians, for instance, have been much more vocal in
their criticism of US activities in Mongolia, as the MCC railroad funding
debacle revealed. Instead, the Sino-Russian competition is more like sha-
dow boxing, with each trying to undercut the other’s interests but only
indirectly. Unfortunately for Russia, it is almost certain to lose this match,
simply because it is in the wrong weight category. The Sino-Russian
relationship today is a throwback to Nerchinsk and Kyakhta and will
certainly not change in Russia’s favor.
Russia’s method for advancing its interests has been to use the leverage
afforded by its stake in the trans-Mongolian railroad backed by the belief
that Mongolia needs Russia’s cooperation in checking China’s growing
influence. Moscow’s strategy backfired, however. First, it created the
impression that Russia was holding Mongolia hostage, using its veto over
the railway to sabotage projects deemed unsuitable for Russia, even when
such obstructionism also retarded Mongolia’s economic development. At a
time of rising nationalism in Mongolia, Russia’s bulldozer tactics certainly
hampered its image as a self-proclaimed friend of the Mongolian people.
Second, the Russians were unwise to place all their eggs in one basket
—that of the defunct MPRP—which fell apart in the morass of
Mongolian factional politics, leaving Moscow scrambling to under-
stand who its allies were. And third, Moscow does not seem to fully
grasp that Mongolia’s “third neighbor” policy and its constant man-
euvering between different players are not so much an evil ploy of
Western-oriented Mongolian politicians, but a product of elite con-
sensus that transcends party division. Russia, moreover, is not just
Mongolia’s neighbor—it is an “issue” of domestic importance, an
issue that matters at the polls to such an extent that it can often
trump all other issues, except for one: China.
Unlike Russia, which has had to pursue an active policy, bestow gifts
(in the form of loan forgiveness), and apply naked pressure, just to stay
in the game, China has not had to do much of anything, certain as it is
that it will ultimately win. In spite of its relatively passive position, it
has come to control Mongolia’s external trade. Only in recent years has
Beijing shown interest in pushing its agenda more forcefully. Its policy
toward Mongolia is part and parcel of what China has also tried to
accomplish with many other countries, notably in Central and
Southeast Asia, in Africa, and in Latin America. Takeover bids, hard-
bargained purchase of raw materials through state-owned companies,
and like assertiveness are relatively new tools in China’s arsenal of
economic diplomacy. The fact that it is now more willing than ever
to deploy these instruments not just half-the-world away but in Russia’s
immediate neighborhood, raises further questions about the future of
the Russia-Mongolia-China triangle. But Mongolia’s ever-closer con-
nection to the Chinese market will not necessarily translate into
Beijing’s increasing political influence.
China, like Russia, cannot escape being a domestic issue on Mongolia’s
heated political landscape. This issue can and will be exploited during
elections, as exemplified by the Chalco case. “Unchangeable” foreign
investment laws are certain to change when political expediency so
requires. Previous agreements may be breached or denounced as selling-
out by unpatriotic politicians. Mongolia is thus both an object of a
geopolitical competition and an important player in its own right, whose
motivations are often hard to discern, because they are a product not only
of successful strategic triangulation but also of a complicated domestic
political environment, which allows Mongolia neither permanent friends
nor permanent enemies, nor, indeed, permanent interests, but supports
124 S. RADCHENKO
unstable coalitions with unstable policies, as Mongolia’s three proverbial

neighbors have found out all too often to their frustration and dismay.
NOTES
1. The text of the Compact may be found at: http://www.mcc.gov/docu
ments/agreements/compact-mongolia.pdf.
2. Nambaryn Enkhbayar’s remarks in a meeting with George W. Bush on
October 22, 2007, http://www.gpo.gov/fdsys/pkg/WCPD-2007-10-
29/pdf/WCPD-2007-10-29-Pg1393.pdf.
3. “N. Enkhbayar: Dunt shatnyhan sain ajilladag bol hoyor Erunhiilugch neg
huviin asuudal yariad suuj baihgui” Zuuny Medee, November 11, 2006,
http://www.olloo.mn/modules.php?name=News&file=print&sid=42338.
4. “N. Enkhbayar: Dunt shatnyhan sain ajilladag bol hoyor Erunhiilugch neg
huviin asuudal yariad suuj baihgui.”
5. “Mcc Eurasia Director Reid’s Meetings With Mongolian Leadership,” June
29, 2006, Wikileaks cable 06ULAANBAATAR499.
6. “Interview with V.V. Samoilenko,” April 8, 2012, Mongoliia segodnia,
http://www.mongolia.mid.ru/press_152.html.
7. Vladimir Berezhnykh, “Rossiia i Mongoliia: Mesiats spustia posle vizita
Medvedeva,” Rossiia-Mongolia, September 29, 2009, http://pribaikal.ru/
standpoint/article/3170 .html?cHash=c7a6033a654c09aa8da0
f45461a472b9&print=1.
8. Mongolia’s foreign trade review, May 2013, http://www.mongolbank.
mn/documents/statistic/externalsector/tradebalancereview/2013/
201305e.pdf.
9. The original deal was the Soviet Union 51percent to Mongolia’s 49percent,
but that was changed in 1991.
10. See, for instance, Sergei Kulikov, “Rossiia otberet u Mongolii ‘Erdenet,’”
Nezavisimaia gazeta, June 1, 2007.
11. A. Gabuev, “Bitva za step’: parlamentskie vybory ne dali otveta na vopros,
kto budet upravliat’ stranoi,” Kommersant, July 9, 2012.
12. “Mongolia TT mine IPOI may come by year end,” Reuters, March 25,
2011, http://mobile.reuters.com/article/companyNews/
idUSL3E7EP14S20110325?irpc=932.
13. “Mongoliia otdast OAO RZhD polovinu,” Kommersant, June 22, 2012.
14. “Tumur zamyn talaarkh manai sanalyg orosuud huleej avsanhui,” Unuudur,
March 21, 2013, http://www.mongolnews.mn/p/40539.
15. Yuun songuul’, tsaana chin’ Mongoloo taviad tuuchikhlaa . . . ,” Shuud
Medee, April 11, 2012, http://www.shuud.mn/?p=86717&cpage=
1&replytocom=81441.
16. J. Tsogzolmaa, “Chalkogiin munge, Mongolyn huuliin al’ n huchtei ve?”

Time (Mongolia), May 1, 2012, http://tsogzolmaa.essay.time.mn/con
tent/3790.shtml.
17. “Mengguguo zongli shuo Mengzhong jingmao hezuo jiang shang xin
taije,“ Xinhua, October 20, 2013, http://news.xinhuanet.com/world/
2013-10/20/c_117789151.htm.
Sergey Radchenko is Professor of International Politics at Cardiff University and

Global Fellow at the Woodrow Wilson Center for International Scholars. He
specializes in the history of the Cold War, and has written extensively on Sino-
Soviet relations, as well as contemporary foreign policies of China and Russia.
CHAPTER 8
Mongolia Hangs in the Balance: Political

Choices and Economic Realities in a State
Bounded by China and Russia
Sergey Radchenko
Year 2015 marked the twenty-fifth anniversary of Mongolia’s democratic

revolution. Ever since it escaped the protective embrace of its northern
neighbor, Mongolia maintained an astute foreign policy, pursuing positive
dialogues with China and Russia and also reaching out to its so-called
collective third neighbor, usually understood to be Western countries plus
Japan. The election of ostensibly “pro-Western” President Tsakhiagiin
Elbegdorj in 2009 gave a new impetus to Mongolia’s search for global
recognition through sponsorship of multilateral dialogue, participation in
international coalitions, and, of course, developing bilateral relations with
both China and Russia but especially with the “third neighbor.” Elbegdorj’s
first term in office (2009–2013) also saw Mongolia registering unprece-
dented economic growth. China’s appetite for natural resources briefly
made Mongolia the world’s fastest-developing country, even as growing
sentiment of resource nationalism clouded the horizons for global investors.
In recent years, the positive dynamic has been reversed, and the eco-
nomic outlook remains very uncertain. The changing business climate has
S. Radchenko (*)

https://doi.org/10.1007/978-981-10-3144-1_8
128 S. RADCHENKO
contributed to domestic political instability. In the meantime, Elbegdorj

has had to navigate a much more complicated foreign scene, characterized
by a deepening conflict between Russia and the West and menacing
tendencies in Sino-American and Sino-Japanese relations. Elbegdorj’s
answer to these challenges has been to engage closer than ever before
with Russia and China. Xi Jinping recently called Sino-Mongolian rela-
tions the “best ever” in their bilateral history.1 Putin, too, has shown a
greater trust in the Mongolian leader. In the meantime, Western observers
have begun to question whether Mongolia still has the willingness or the
ability to maintain its “third neighbor” policy. As Russia and China close
ranks, will Mongolia, too, toe the line drawn by its more powerful neigh-
bors, or will it be able to continue exploiting existing contradictions
between the two, which it has so successfully done in the last 25 years?
This article is an attempt to answer this question by evaluating Mongolia’s
response to Russia’s conflict with the West, reflecting on the ups and
downs of Sino-Mongolian and Russo-Mongolian relations, and analyzing
the particulars of the Mongolian domestic political scene.
MONGOLIA REACTS TO CRIMEA

Russia’s annexation of Crimea in February and March 2014 was closely
followed in Mongolia. Ulaanbaatar’s interest was not colored by the same
sort of alarm, as for instance, the reaction in the Baltic states or even by
cautious apprehension of the sort exhibited in Central Asia. This is because,
notwithstanding the lengthy historical record of Russia’s meddling in
Mongolia, the northern neighbor is not seen today as a threat to the
country’s sovereignty and territorial integrity. Indeed, there were even voices
of active support for the Russian position in the conflict with Ukraine. For
example, a former deputy of the Great Khural Delegiin Zagdjav called a press
conference to condemn hideous plots of Western intelligence services in
Ukraine.2 But Zagdjav hails from the margins of the political scene. His
views, though promoted by the Russian embassy in Mongolia and attracting
positive commentary in Russia, were basically inconsequential.3 More cur-
iously, some form of support for Russia was expressed by Mendsaikhany
Enkhsaikhan, the former prime minister and now the head of the (relatively
minor) Mongolian National Democratic Party, and even by the Deputy
Speaker of the Great Khural Logiin Tsog.4 The line taken by these politicians
was that Crimea’s residents demonstrated their preferences by overwhel-
mingly voting to accede to Russia and that this choice must be respected.
MONGOLIA HANGS IN THE BALANCE: POLITICAL CHOICES . . . 129
Much greater controversy erupted when the Minister of Industry and

Agriculture and Parliament Deputy “Jenko” Khaltmaagiin Battulga, in an
interview with the Russian media, stated that “of course, we support
Russia as neighbors” on the question of Crimea.5 As one commentator
noted, “who is this ‘we’. Is he talking about the government position?”
These comments, as Battulga’s detractors suggested, clearly violated
Mongolia’s third neighbor policy.6 “It is important,” noted a well-
known Mongolian journalist L. Narantugs, “to approach the situation
by measuring seven times before cutting” so that “instead of cheering
for the bear who had caught a squirrel [in reference to Crimea],”
Mongolia would consider where its own interests lie.7 Battulga, a world
sambo champion, was accused of being an agent of Russian influence if
not a Russian spy. “You can’t insult our national intelligence agency like
this,” was Battulga’s reply.8 Battulga, who is also a billionaire and one of
his country’s richest men, could more accurately be described as
Mongolia’s Donald Trump, a firebrand politician who thrives on contro-
versy. While popular with the public, his views have not represented the
outlook of the political mainstream.
In the meantime, the mainstream remained extremely cautious with
regard to Crimea and the broader Russian-Ukrainian crisis. “Everyone
criticized Battulga because our position was not to take a position,”
recalled one insider.9 This was a similar attitude to that of the Chinese
who also treaded carefully and very different, for instance, from the
Japanese, for whom Mongolian policymakers had long advertised special
affinity. Pressed on the question during his May 2015 visit to Japan,
Elbegdorj replied, tellingly: “First, we are neighbors [with Russia].
Second, we hope that the conflict will be resolved by peaceful means.”10
This logic and the order of priorities underpin most of the informed
Mongolian discussion of the Crimean situation and the Ukrainian crisis.
The media coverage of the Russian moves in the lead-up and in the
immediate aftermath of the contentious March 16 referendum generally
omitted words such as “aggression” or “occupation.” Pundits reasoned
that Mongolia could not afford to alienate its powerful northern neighbor:
The country heavily relies on Russian imports, particularly energy. “If the
Russians raise the price of petrol or won’t supply it for a few days, it’s hard
to contemplate what will happen in Mongolia,” argued Gombojavyn
Otgonbayar, a respected public affairs commentator, noting that for
Mongolia the real lesson of the crisis was that the country was overly
dependent on its neighbors.11 Another concern that crept up repeatedly
130 S. RADCHENKO
was the potential consequences of endorsing a change of borders for a

country that has its own minority nationalities, especially the Kazakhs of
the western provinces, whose long-term commitment to Mongolian state-
hood could not be taken for granted. There was also a strongly negative
public reaction in Mongolia to reports that the annexation of Crimea
could encourage irredentist thinking in China with regard to Mongolia
that had once been part of the Qing Empire.12 These kinds of underlying
connotations made it a politically costly proposition to show sympathy for
the Russian cause.
More importantly still, Mongolian policy elites concluded that Russia’s
international isolation, and, in particular, anti-Russian sanctions imposed
by the European Union, the United States, and Japan, offered a potential
opening to Mongolia for making significant economic gains. This thinking
was facilitated by two developments. First, Mongolia’s gross domestic
product (GDP) experienced serious decline from its highpoint of 17.5
percent annual growth in 2011 to 7.8 percent in 2014. Decline in foreign
direct investment (FDI) was even more precipitous: from USD 4.7 billion
in 2011 to USD 644 million in 2014.13 Some economic difficulties were
self-imposed. Protracted conflict over the operation of the massive copper-
gold Oyu Tolgoi mine, legislative action to ward off potential Chinese
ownership of mining projects in Mongolia, and repeated reversals and
uncertainty over the disposition of one of the world’s largest coal reserves
at Tavan Tolgoi, scared off foreign investors. Even if the investment
climate had been much better, the Mongolian economy would still have
been hit by the falling prices of copper and coal on the global markets (the
two are among its key exports). The result of these travails was that the
government has had to rely on external financing, including through the
issue of “Chinggis Khaan” bonds, and on hugely unpopular domestic
austerity measures.
The second development was the emergence of China’s agenda of
regional economic development along the “Silk Road Economic Belt.”
First articulated during Xi Jinping’s visit to Central Asia in September
2013, the idea expanded into “One Road, One Belt,” a road in every
direction, including the sea, promising a (still largely unrealized) bonanza
of Chinese commerce and investments to all. What made this idea espe-
cially interesting, from the Mongolian perspective, was China’s promise to
take into account Russia’s interests in extending this belt (the promise was
formalized in a May 2015 Sino-Russian agreement on coordinating the
“Silk Road” with the Russia-led Eurasian Economic Union). These
initiatives were discussed in the context of Vladimir Putin’s “pivot to the

East,” which was greatly facilitated by economic sanctions against Russia.
Whether Russia pivoted to the East or China to the West, Mongolia
offered the shortest distance for Sino-Russian collaboration with the pro-
spect of considerable windfall for a country in dire economic need. In view
of Mongolia’s difficulties and hopes, it is not surprising that the country
reacted as it did to Russia’s war in Ukraine and to the annexation of
Crimea: by following strict neutrality. It was a characteristically astute
choice for a country that is often short of choices. But Ulaanbaatar went
further than simply refusing to participate in the Western effort to isolate
Russia; it proactively exploited Russia’s growing isolation to gain impor-
tance in the Kremlin’s eyes and bring Russo-Mongolian relations to a new
level.
THE CORRIDOR TO HAPPINESS

Russo-Mongolian relations today are at their closest since the late 1980s.
In some ways, this is unexpected, especially that the key proponent of
closer ties between Moscow and Ulaanbaatar is Tsakhiagiin Elbegdorj,
one of the founding fathers of Mongolian democracy, who had previously
enjoyed a reputation as something of a pro-Western politician.14 Moscow
was not particularly enthused by Elbegdorj’s election as president in 2009:
Russian sympathies were with his predecessor and rival Nambaryn
Enkhbayar, who had developed a close personal relationship with Putin.
Russia’s disappointment deepened when the Mongolian government
rebuffed attempts of the state-owned company Russian Railways (until
recently led by a close Putin ally Vladimir Yakunin) to gain access to the
Tavan Tolgoi coal deposit. Moscow also had no patience for Mongolian
efforts—begun under Enkhbayar but continued by Elbegdorj—to attract
US financing in the modernization of the trans-Mongolian railroad,
jointly owned by Mongolia and Russia. Putin had long eyed with suspicion
Mongolia’s participation in the US-led wars in Iraq and Afghanistan, and
the US involvement in the multinational Khaan Quest military exercise in
Mongolia (held since 2003), all indicative of Washington’s alleged efforts
to draw Mongolia into a security relationship with the United States.
Elbegdorj’s advocacy of democratic governance and human rights (high-
lighted in Mongolia’s Presidency in the Community of Democracies in
2011–2013) only deepened Russia’s unease about Ulaanbaatar’s political
trajectory.
132 S. RADCHENKO
The spring of 2014 brought important changes. In the wake of Russia’s

widening rift with the West over Ukraine, Putin redoubled his efforts to
open up to Asia. His most immediate target was China. The opening
gambit was Putin’s May 2014 trip to Shanghai, from which he managed
to carry a long-delayed contract on the construction of a gas pipeline to
China. This was an important personal victory for Putin, a sign that Russia
had other friends and markets and did not fear Western economic sanc-
tions. While pundits debated the merits of the gas deal, Putin was busy in
bilateral meetings, including one with Elbegdorj on May 20. Elbegdorj
used the opportunity to advertise Mongolia as a transit corridor. This was
not a new idea: Mongolian policymakers had long called for establishing a
number of Sino-Russian transport corridors, including rail, highways, oil
and gas pipelines, and energy.15 But even as Putin’s visit to Shanghai
demonstrated that pipelines would be built around Mongolia and not
through it, the Mongolians persisted, playing up their country’s geo-
graphic advantages. Days after Elbegdorj’s meeting with Putin, Prime
Minister Norovyn Altankhuyag turned up at that year’s St. Petersburg
Economic Forum. He, too, met with Putin, assuring the Russian leader
that relations with the northern neighbor was a priority for Mongolian
foreign policy and restating Ulaanbaatar’s preparedness to accept Russian
pipelines and increased railroad traffic.16
Altankhuyag’s trip to St. Petersburg had an important symbolic dimen-
sion: He was the most senior foreign government official to participate in
the economic forum at a time Russia was practically stonewalled in the
West. The Russian leadership clearly appreciated this token of support. In
the following months, the intensity of bilateral contacts increased signifi-
cantly. In June 2014, Mongolia welcomed the chairwoman of the Russian
Federation Council Valentina Matviyenko.17 The speaker of the Russian
Parliament Sergei Naryshkin came to Ulaanbaatar in February 2015 then
again in September 2015 (to participate in a session of the Organization
for Security and Cooperation in Europe (OSCE) Parliamentary
Assembly).18 The latter visit was especially symbolic and politically sig-
nificant: It came shortly after the same Naryshkin was banned from
attending an OSCE session in Helsinki (the Finnish government refused
to grant him a visa). Naryshkin devoted most of his speech at the
Ulaanbaatar session to denouncing Western immorality and duplicity in
the Ukrainian and Syrian crises.19 But he also praised Mongolia for
“maintaining a position of independence in international relations.”20
Among other Russian celebrities visiting Mongolia was the viciously
anti-American and highly corrupt head of the National Security Council

Nikolai Patrushev who praised Ulaanbaatar for its position in the
Ukrainian conflict. Naryshkin and Patrushev both highlighted that
Russia now regarded Mongolia as “one of its leading strategic partners.”
One interesting new element of the relationship has been Ulaanbaatar’s
rediscovered willingness to emphasize its historical links with Russia. In
the past, it was mostly the Russians who harped on the historical themes.
The Mongolians, by contrast, have not been so keen to advertise
the heartwarming legacies of Soviet-Mongolian friendship. This time,
though, Elbegdorj proved a lot more willing to engage in the diplomacy
of historical commemoration, seen, for instance, in the celebration of the
seventy-fifth anniversary of the Khalkhin Gol/Nomonhan battle of 1939.
The border conflict, which pitted the Japanese and their unrecognized
client state of Manchukuo against the Soviets and their unrecognized
Mongolian client, would seem like an unlikely cause for commemoration
in today’s Mongolia. Yet it was not only widely commemorated but also
discussed in terms reminiscent of the bygone days of the socialist era. In
his anniversary speech, Elbegdorj highlighted the “heroic achievements of
the humble Mongolian-Soviet warriors [who] did not spare [their] flesh
and blood [haluun am’, buleen tsus] for the sake of the protection of
Mongolia’s sovereignty and independence.” Tellingly, Elbegdorj charac-
terized the Russians as Mongolia’s “brothers” (akh duu), a formerly
omnipresent term that fell into disfavor after Mongolia’s democratic revo-
lution.21 “The Khalkhin Gol battle is a special page in our relationship,”
Elbegdorj explained in an interview. “The [fact that] our country’s free-
dom was defended by Soviet citizens who did not spare their lives will
forever remain in our hearts. This cannot be compared to any help by any
other country.”22
By far Elbegdorj’s most symbolic move was to attend the seventieth
anniversary victory parade held in Red Square on May 9, 2015. The
symbolism was in the fact that Putin’s invitations to Western leaders
were mostly turned down. Elbegdorj found himself in a rather colorful
company that included Cuba’s Raúl Castro, Turkmenistan’s Gurbanguly
Berdimuhammedow, and even Zimbabwe’s Robert Mugabe. Not only did
Elbegdorj attend in person but Mongolian troops marched in Red Square,
alongside troops from some other countries that Russia regards as its close
friends or allies. “Neighbors must help each other,” Elbegdorj empha-
sized, speaking in Russian, in an interview on Russian television. Asked
what he thought of those world leaders who turned down Putin’s
134 S. RADCHENKO
invitation, Elbegdorj replied that it was “their business. It is our right:

Where we go and who we meet.” He continued: “When we had difficul-
ties we always turned to our northern neighbor. Also, only one country,
only one nation spilled blood for our independence.” Elbegdorj explained
that, as he had graduated from a Soviet military school, he considered it a
matter of personal honor to be present at the parade.23
Mongolian commentary on the Russian parade was very positive, with
the media mostly highlighting the performance of the Mongolian troops
and staying well clear of any criticism of Russian militarism that was so
prominent in the Western coverage of the anniversary. One point did
cause some consternation: It was the fact that Elbegdorj was not given
the prominence that the Mongolians felt he deserved during the official
ceremonies.24 Although seated in the front row at the parade, he was far
removed from Putin (who was instead flanked by China’s Xi Jinping and
Kazakhstan’s Nursultan Nazarbayev). Some Mongolian observers were
quick to note that their country’s contribution to the defeat of Germany
was at least as great as Kazakhstan’s and certainly greater than China’s.
Others argued that Mongolia itself was partly to blame, because certain
aspects of its foreign policy, e.g., the Khaan Quest military exercises, gave
the Russians reasons to doubt Mongolia’s sincerity. G. Otgonbayar, for
instance, noted that it was Mongolia’s own past unreliable record as a
“friend” that has decreased its importance in Russia’s eyes. “It’s impos-
sible to develop by dealing over the heads of the two neighbors, by
ignoring them and linking up with others.”25 To be fair to Elbegdorj,
however, he has anything but ignored Russia. Improbably, the long-time
leader of the Democratic Party, the allegedly pro-Western Elbegdorj has
done more to improve relations with Russia than any Mongolian leader of
the last 25 years.
Even as Mongolia’s relations with Russia have improved, so have rela-
tions with China, both in terms of the multiplicity of the angles of
engagement and the depth of political and economic cooperation. The
closeness of the relationship was on full display in August 2014 when Xi
Jinping came to Mongolia on a state visit after a hiatus of 11 years. Xi was
given an opportunity to speak to the Great Khural (Mongolian
Parliament). His historic speech almost went disastrously wrong when
he began by reciting, in Chinese, the famous poem of D. Natsagdorj,
“My Land,” which says at one point: “This is the land where I was born —
beautiful Mongolia.” This literary exercise was not taken lightly by
Mongolian commentators, only too happy to suspect China of irredentist
sentiment.26 Fortunately, these (likely well-intentioned) remarks were

followed by a firm assurance that China “will always respect Mongolia’s
independence, sovereignty, and territorial integrity.”27
Xi’s visit to Mongolia inaugurated a new stage of the bilateral relation-
ship, “a comprehensive strategic partnership.” Most important, however,
was Xi Jinping’s assurance that China had a “positive and open attitude”
(jiji he kaifang taidu) toward Mongolia’s “steppe road” initiative. This
“steppe road” idea is central to Elbegdorj’s hopes for cashing in on
Eurasian integration, and he had lobbied both Xi and Putin to endorse it
(they did). However, supporting ambitious plans is not quite the same as
paying for them. The infrastructural price tag is a projected USD 50 billion,
well beyond the means of the Mongolian budget.28 Elbegdorj’s repeated
visits to Beijing (in May 2014, November 2014, September 2015 and,
again, in November 2015) each offered occasions to discuss how China
may help. Elbegdorj also initiated the idea of trilateral Sino-Russian-
Mongolian summit meetings. The first of these took place in September
2014 in Dushanbe, the second in July 2015 in Ufa, and the third in June
2016 in Tashkent. These were intended not as political coups for Elbegdorj
(placing Mongolia front and center in Sino-Russian relations) but as oppor-
tunities to advertise Ulaanbaaatar’s hopes for becoming a regional transit
hub. As Elbegdorj told Putin and Xi at the July 2015 meeting, “adding
economic content to our exceedingly favorable political relations is in the
interest of all three parties.”29 Mongolia’s quick agreement to join the
China-sponsored Asian Infrastructure Investment Bank (AIIB) was moti-
vated by similar considerations. During his November 2015 state visit to
China, Elbegdorj secured China’s support for the prospect of financing the
“steppe road” via AIIB or the recently created Silk Road Fund.30
Elbegdorj’s brave gambit—closer engagement with Russia and China—
raised questions elsewhere. Mongolia watchers have claimed that “the
country’s future is [being] mortgaged to solve short-range problems” or
that Mongolian policymakers are increasingly driven by the “bottom-line
mentality.”31 Elbegdorj on occasion has found himself in a rather uncom-
fortable role of being a spokesman for his neighbors, as during a May 2015
visit to Japan, when he defended China’s record as a “responsible” power by
invoking, perhaps not very appropriately, Mongolia’s own past experience
as an empire. “When you are big, you have great responsibility. You have
the responsibility to respect others’ interests and the responsibility to
take the initiative.”32 Even Xi Jinping could not have put it better. In
September, Mongolia sent troops to participate in the Chinese military
136 S. RADCHENKO
parade, something the Japanese (who skipped the honor) could not have
liked, especially after all the effort that Abe Shinzo had spent on courting
Elbegdorj in recent years. Of course, once Mongolian soldiers made their
appearance in Moscow, it would have been a serious snub to China if these
soldiers did not show up in Beijing (never mind that during World War II,
Mongolia’s help to “liberate” China was primarily animated by expectation
of expanding Mongolian territory at China’s expense).
The new policy direction also met with serious internal criticism.
National security experts, including Elbegdorj’s former (2009–2012) for-
eign policy adviser Migeddorjiin Batchimeg, have flagged the rather
unfortunate precedent for trilateral Sino-Russian-Mongolian diplomacy,
the 1915 Kyakhta Treaty, when Mongolia, having only recently pro-
claimed independence from China, was arm-twisted by the Chinese and
the Russians into accepting Beijing’s sovereignty. What sort of leverage
could Mongolia hope to achieve in trilateral discussions with its two
immeasurably more powerful neighbors, and what are the benefits of
such trilateral meetings that are not vastly outweighed by underlying
dangers of being compelled into endorsing positions that Ulaanbaatar
would rather not endorse? Batchimeg’s departure from the president’s
office (she was elected a Member of Parliament (MP) of the Great
Khural) meant that some of these questions were left unanswered and
the tone of policy discussion in Elbegdorj’s circle of advisers turned in
favor of “trilateralism.” Still, according to the knowledgeable insiders, the
recent experience of trilateral meetings proved that some of these concerns
were well-founded: Mongolia did find itself increasingly under pressure to
back Russia over Ukraine and China in its disputes with Japan and in the
South China Sea. There also have been indications that Ulaanbaatar came
under pressure to join the Shanghai Cooperation Organization, some-
thing that Elbegdorj had long made clear he did not want to do
(Mongolia is presently an observer).
These recent experiences highlight just how exceptionally difficult it has
become for Elbegdorj to tread the ground between Mongolia’s different
neighbors without causing jealousy, suspicion, and apprehension. His
September 2015 announcement that Mongolia would pursue “neutrality”
in international politics can be seen as an answer to these concerns, and an
effort to keep Mongolia away from too tight an embrace with either China
or Russia. In the announcement made in the course of his speech to the
United Nations General Assembly, Elbegdorj cited Switzerland and
Turkmenistan as role models for what Mongolia hoped to achieve.
However, the neutrality proposal has raised new questions about

Elbegdorj’s foreign policy. According to one insider familiar with recent
Russian-Mongolian discussions, Moscow voiced displeasure with the idea,
seeing it, predictably, as some sort of a Western ploy. Russian policymakers
are reportedly concerned what this new status could mean for the annual
Russian-Mongolian military exercises and for the prospects of Russia’s
supplies of weapons to Mongolia (currently, the country relies entirely
on Russian arms, including refurbished tanks and personnel carriers).
China’s views on Elbegdorj’s latest maneuver remain unknown.
DOMESTIC POLITICS AND FOREIGN POLICY

The numbers 1435 and 1520 have become familiar to any attentive
observer of Mongolian politics. They are railway gauges: The first, 1435
milometers, is the standard gauge used in much of the world, including
China. The second is the wider Russian gauge, 1520 milometers. The
trans-Mongolian railway, built between 1947 and 1956, uses the Russian
gauge. The wheels on all carriages headed for China are changed at the
border, and vice versa, a time-consuming procedure that has the practical
benefit of, quite literally, derailing an enemy invasion, which is why the
broad gauge was originally adopted by the Russian empire. The Russian
gauge of the Mongolian railroad is a legacy of the country’s long history of
Soviet domination. It is also one of the most contentious issues in con-
temporary Mongolian politics.
In June 2014, Mongolian television audiences were treated to a curious
special. Produced by Hero Entertainment, the nearly 1 hour 40 minute
long film broached an explosive topic: Mongolia’s growing dependence
on China. The central argument was that building railroads using the
standard (Chinese) gauge was a dangerous proposition for Mongolia.
Chinese settlers would follow the railroad tracks, and Chinese armies
would follow the settlers. At one point, the film showed a video of
purportedly Russian tanks transported on rail carriages into Ukraine (in
fact—ironically—they were Ukrainian tanks transported eastward toward
Donbass). The viewers were shown maps of Mongolia, with China’s color
spreading menacingly northward, along the projected railroad tracks. The
intended message was clear: Mongolia’s future was at stake. Pro-Chinese
policies, pursued, allegedly, by mixed-blood politicians (former Prime
Minister M. Enkhsaikhan was specifically named as one of these half-
blood pro-Chinese traitors) would 20, 30, or 40 years down the road
138 S. RADCHENKO
lead Mongolia back into the Chinese fold. Toward the end, the poet
L. Galsansukh, wearing a golden swastika on a necklace, offered some
final reflections: “the Mongolians are dumb. They’ll be fried and eaten . . .
[If it goes like this], one morning you wake up to find yourself hung up on
a hook in a prison.”33
The man behind the scandalous film was the billionaire Kh. Battulga,
already known to us from his support for the Russian annexation of
Crimea. The production was part of a broader controversy about the rail
development strategy. In June 2010, the Mongolian Parliament already
addressed this problem, adopting a resolution to continue building 1520
milometer tracks. This concept was very much in line with Russia’s pre-
ferences, because Russia jointly owns the Ulaanbaatar Railroad (which
operates the trans-Mongolian railway). Russia, in fact, repeatedly tried to
use the leverage afforded by this railway to gain access to mineral deposits
in Mongolia, all to no avail. Despite the resolution, the legislative battles
over the railroad gauge continued and intensified. The key point of con-
tention was the building of a railroad to one of the world’s largest coal
deposits, the Tavan Tolgoi. The Russians have long offered to build a
railroad track to take the coal eastward to Saishand (on the trans-
Mongolian line), from which it could be exported either north or south
(they asked for access to coal in return). But many in the Mongolian
business community and political circles believed that a much better idea
was to build a narrow gauge rail track from Tavan Tolgoi directly to the
Chinese border, only 267 kilometers away. In May 2013, the contract to
build the railroad was awarded to South Korea’s Samsung C&T.34
On April 30, 2014, Minister for Economic Development Nyamjavyn
Batbayar submitted a draft bill to the Mongolian Parliament, requesting
approval for the construction of three 1425 milometer railway sections:
one, from Tavan Tolgoi to the Chinese border (where Samsung had
already carried out preparatory work), one from Khuut (in the East) to
the Chinese border, and one from Saishand (on the existing trans-
Mongolian line) to the Chinese border.35 This proposal seriously angered
the Russians. Vladimir Yakunin wrote a letter to Prime Minister
Altankhuyag, suggesting that the proposed legislation “threatens the pro-
spects of creation of an attractive transit route, which in the future will
assure Mongolia’s key role in Eurasian integration.”36 Yakunin’s diplo-
matically phrased but clearly very acrimonious letter arrived just weeks
after Altankhuyag’s controversial trip to the St. Petersburg Economic
Forum, discussed above. Yakunin’s point was that no amount of newly
rediscovered warm sentiment for the Russian brothers could blind

Moscow to geopolitically unacceptable ploys—that is, construction in
Mongolia of a Chinese-gauge railroad.
Yakunin’s reservations were expressed privately. Battulga, though,
made a highly public gesture. His film caused such uproar that
Elbegdorj summoned him for a televised meeting, telling the stone-
faced MP that his politics stirred domestic conflict and were out of tune
with Mongolia’s foreign policy. “Mongolia must not fall behind the
development of the infrastructure that connects Europe and Asia. We
must definitely participate in it,” Elbegdorj said, explaining to Battulga
that there were competitors out there, notably Kazakhstan and even
Turkey, which could leave Mongolia out in the cold. For Elbegdorj—
who used every one of his meetings with the Chinese and the Russian
leaders to call for creation of transport corridors—, statements like
Battulga’s were exactly the wrong kind of message, the sort of thing that
was a serious liability for the “intimate” relationship that the president
claimed he had developed with Xi Jinping. It did not matter that
Battulga’s views were in this case more or less aligned with Russia’s
concerns. “One cannot have a good neighbor policy and speak badly
about a neighbor. You cannot have a policy of speaking badly about
someone next to you,” Elbegdorj said. Battulga was unrepentant, tweet-
ing after his meeting with the president: “[He] says I am speaking badly
about a neighbor . . . Can we forget history?”37
In the end, Battulga and Yakunin’s attempts to sabotage the proposed
legislation did not succeed. The Great Khural voted in October to adopt
the Chinese gauge for two railroad sections, including the railway from
Tavan Tolgoi to the Chinese border.38 It was, in a sense, a pyrrhic victory
for supporters of the narrow gauge: Construction of the railroad came to a
halt in February 2015, ostensibly because the money ran out (this
prompted an ongoing corruption investigation). In the meantime, parlia-
mentary sentiment turned against bringing China’s Shenhua and Japan’s
Sumitomo as stakeholders in the Tavan Tolgoi project. New prime min-
ister Chimediin Saikhanbileg (N. Altankhuyag was toppled in November
2014 in a vote of non-confidence) has recently tried hard to trump up
investor confidence, promising that Mongolia was “back in business” and
that it was ready to welcome investors and push forward with large-scale
projects. It is unlikely, however, that such projects will have a smooth ride
in the parliament in the face of hostile nationalism exemplified by politi-
cians like Kh. Battulga. In the meantime, Mongolia’s worsening economic
140 S. RADCHENKO
fortunes have already prompted acts of radicalism, such as that of the head
of the miners’ labor union, S. Erdene, who set himself on fire in the middle
of a press conference, in which he protested declining fortunes of the
Tavan Tolgoi miners. Mongolia’s worsening economic situation amid
ongoing wrangling over investment projects will contribute to political
volatility for the foreseeable future.
CONCLUSION
Mongolia’s closer engagement with its two neighbors, Russia and China,
is not a strategic change of direction but a tactical move. It is based on the
realization that, with Mongolia’s economy in increasingly dire straits,
political engagement could bring increased economic benefits. Elbegdorj
hopes to catch the wind of China’s “One Road, One Belt” initiative even
as Russia’s “pivot” to the East brings prospects of additional investment
and economic cooperation. Unfortunately, some of Elbegdorj’s calcula-
tions have clearly fallen far short of his initial expectations. The most
worrisome development has been China’s economic slowdown. As growth
in the world’s second largest economy slows, there is also decreasing
demand for Mongolia’s key exports, especially coal. M. Enkhsaikhan
who had fought protracted battles with Kh. Battulga, among others, on
the width of the railroad gauge and the terms of engagement with China,
noted “We lost six to seven years talking about wide and narrow gauges,
tanks, and geopolitics.”39 Now, he added, Mongolia is hopelessly behind
as other countries — including, notably, Russia, are rushing to fulfill
China’s energy needs at a time China needs less than expected.
Enkhsaikhan is certainly right to lament the time that had been lost in
endless debates. But the broader picture is even more disturbing than he is
willing to allow.
The basic problem of the Sino-Russian rapprochement that was sup-
posed to give such great impetus to Mongolia’s infrastructural development
is that in economic terms it has generally failed to deliver. For instance,
Russian experts are now increasingly skeptical that the ambitious plans for
pumping gas from Western Siberia will be realized in the foreseeable
future.40 Doubts have crept in with regard to the May 2014 gas agreement,
which was at the time hailed as Putin’s major victory. China’s slowing
economy may not need all that gas after all.41 Recent studies of Sino-
Russian regional cooperation suggest the operation of “One Belt, One
Road” is confined primarily to rhetoric. Chinese businessmen are wary of
underwriting political projects.42 For all the political proclamation and

meetings between Xi and Putin with or without Elbegdorj, Sino-Russian
trade has remained stagnant since 2013 and Russian-Mongolian trade
experienced what is best called a precipitous collapse (32.5 percent decline
in the first 11 months of 2015).43 In the meantime, Russia’s hopes that it
will itself become a transit corridor between China and Europe are facing
political obstacles, not least Moscow’s tense relationship with the West and
the ongoing economic malaise. So the basic problem for Mongolia is that its
resources are worth less and less, and its transport corridor leads to a dead-
end — Russia. Even if today Mongolia miraculously found (or, unfortu-
nately, more likely, borrowed) the billions of dollars that are required to
upgrade its aging railroad infrastructure and even if there was a political
consensus (at last) to build mighty railroads of whatever gauge or lay
pipelines in every direction, it is far from clear that the promised bonanza
would materialize. After all, Mongolia’s successes or failures are largely
defined by the fortunes of its neighbors, and both of its neighbors are
feeling the heat, Russia, of course much more than China.
Finally, Mongolia’s foreign policy is limited by the degree of the
domestic political consensus. In the past, Mongolian parties, whatever
their internal disagreements, generally shared a similar outlook on foreign
policy. The astute maintenance of the “third neighbor” policy under
successive presidential administrations points to a considerable degree of
support for the policy. This remains the case even today. However, as
Mongolia continues to limp economically and political struggles intensify,
foreign policy will become hostage to domestic debates. Battulga’s
attempt to derail the Chinese railway gauge proposals is but one example
of the sort of dramatic scenarios that may play out on the Mongolian
political scene in the months and years ahead, never ceasing to surprise
even the most seasoned observers of Mongolian politics and society.
NOTES
1. “Xi Jinping Holds Talks with President Tsakhiagiin Elbegdorj of Mongolia,
Stressing to Promote China-Mongolia Comprehensive Strategic Partnership
for Continuous Development,” Ministry of Foreign Affairs of the People’s
Republic of China, November 10, 2015, http://www.fmprc.gov.cn/mfa_
eng/zxxx_662805/t1314449.html.
2. “Organizatsiya Mira i Druzhby Mongolii Obvinila Zapadnye Spetssluzhby v
Provotsirovanii Besporyadkov na Ukraine,” Baikal-media.ru, March 16,
2014, http://www.baikal-media.ru/news/society/265925/.
142 S. RADCHENKO
3. Press Release, Russian Embassy in Mongolia, March 13, 2014, http://

www.mongolia.mid.ru/press_316.html.
4. “Statement of the Mongolian National Democratic Party,” Twitter post,
6:27 p.m., March 19, 2014, https://twitter.com/enkhsaikhan_pm/sta
tus/446458090045444096; and Aagii, “Mongolyn Erkh Barigchid Krym
Orost Negdseniig Demjij Ekhlev,” March 21, 2014, http://gashuun.mn/
356.
5. “Khaltmaa Battulga: My Podderzhivaem Rossiyu Kak Sosedi,” NM, March
17, 2014, http://www.newsmongolia.net/news/odin-iz-liderov-demokra
ticheskoj-partii-mongolii-khaltmaa-battulga-podderzhal-tovarishha-po-
kovru-vladimira-putina-i-zhitelej-kryma/.
6. “Kh. Battulga Saidyn Khelsen Ug Olon Ulsyn Ankhaarlyg Tataj Ekhlev,”
24Tsag.mn, March 19, 2014, http://www.24tsag.mn/content/52108.
shtml.
7. “Хэрэм рүү дайрсан баавгайн талд Х.Баттулга,” SONIN.MN, March 20,
2014, http://sonin.mn/news/politics-economy/24982.
8. “Kh. Battulga: Bi Ulaisaar Duusna. Ulairakh baitugai yum khiine. Khair
Khairtsa Nevtruuleg,” YouTube video, 25:51, broadcasted by Mongol HD
TV, posted by “мэдээ мэдээлэл,” July 1, 2014, https://www.youtube.
com/watch?v=B-WPubOJs7E.
9. Author’s interview.
10. “Erunkhiilugch Ts. Elbegdorj Qpony ‘BS Fuji’ televiziin ‘Prime News’
shuud nevtruulegt yariltslaga uguv,” YouTube video, 1:27:20, broadcasted
by BS Fuji Television Prime News, posted by “Elbegdorj Tsakhia,” May 25,
2015, https://www.youtube.com/watch?v=saG3rf8preU.
11. G. Otgonbayar, “Ukrainaas Irsen Khoyor Messej,” Baabar.mn, March 12,
2014, http://otgonbayar.niitlelch.mn/content/5926.shtml.
12. V. Kherlen, “Jirgeegeer Ilersen Khyataduudyn Sanaarkhal,” Shuud.mn,
March 25, 2014, http://www.shuud.mn/content/read/339383.htm.
13. “2015 Investment Climate Statement,” US Embassy in Mongolia, May
2015, http://mongolia.usembassy.gov/ics2015.html.
14. See Andrew Higgins, “In Mongolia, Lessons for Obama from Genghis
Khan,” The Washington Post, June 15, 2011, https://www.washington
post.com/world/asia-pacific/in-mongolia-lessons-for-obama-from-gen
ghis-khan/2011/06/15/AG7JrOWH_story.html.
15. “Монгол улс ОХУ болон Хятад улсад тээврийн таван хонгил байгуулах
санал тавьж байна,” November 28, 2013, http://mongolian.ruvr.ru/
news/2013_11_28/253290364/.
16. “V. Putin Altankhuyagtai Uulzlaa,” Udriin Sonin, May 24, 2014, http://
dnn.mn/post/834/.
17. Press Release, Russian Embassy in Mongolia, June 23, 2014, http://www.
mongolia.mid.ru/press_358.html.
18. “Naryshkin: Mongoliya – Odin iz Vedushchikh Strategicheskikh Partnerov
Rossii,” Regnum, February 16, 2015, http://regnum.ru/news/polit/
1895598.html.
19. For the recording of the first session of the PA OSCE Meeting in Ulaanbaatar,
see “ 11:00–13:30 Session 1, 16 September 2015,” YouTube video, 2:46:00,
posted by “OSCE Parliamentary Assembly,” September 16, 2015, https://
www.youtube.com/watch?v=8QK1eg2vSbk&index=2&list=
PLWSg38GfTQV8w5F6voWybuJmARF23mLGR.
20. “Naryshkin: ‘Mongoliya Uzhe Davno Uspela Pokazat’ Cernost’
Tsennostyam i Metodan Raboty OBSE,” AsiaRussia.ru, September 17,
2016, http://asiarussia.ru/news/9145/.
21. “Ts. Elbegdorj’s Speech on the Occasion of the Seventy-fifth Anniversary of
the Khalkhin Gol Events,” Office of the President of Mongolia, August 23,
2014, http://www.president.mn/content/4122. Similar terms made their
appearance in Elbegdorj’s seventieth anniversary speech in 2009, but not in
such a pervasive manner, see http://www.president.mn/content/160. The
term “brothers” (akh duu) was not used on an earlier occasion.
22. “Ts. Elbegdorj: Bid Orost Shine Zelandyn Niiluuldgees Bagagui
Khemjeenii Makhan Buteegdekhuun Khudaldaj Chadna,” Olloo.mn,
August 22, 2014, http://www.olloo.mn/n/5223.html.
23. “S. Brilev’s Interview with Tsakhiagiin Elbegdorj,” YouTube video, 17:09,
broadcasted by Vesti v Subbotu, posted by “Россия 24,” May 6, 2015,
https://www.youtube.com/watch?v=gKD46IZ1rZU.
24. “Pochemu Mongoly Nedovol’ny Tem, Kak Proshel Den’ Pobedy v
Moskve,” AsiaRussia.ru, May 6, 2015, http://asiarussia.ru/news/7387/.
25. G. Otgonbayar, “Kremliin Suudlyn Khuvaarilalt ba Mongold Ugsun
Moskvagiin Messej,” IToim, May 11, 2015, http://www.itoim.mn/
index.php/site/news/525.
26. See “Si Zin’pinii Aichlalyg Uur Untsguus Ingej Dugnev,” Gogo.mn, August
26, 2014, http://news.gogo.mn/r/145541.
27. “Xi Jinping’s Speech at the Great Khural,” YouTube video, 32:55, broad-
casted by CCTV, posted by “梦溪新园,” August 22, 2014, https://www.
youtube.com/watch?v=aPeKl9EE_EQ.
28. “Spetsial’nyi Reportazzh: Kitaiskaya Initsiativa ‘Poyas i Put’ . . . ,” Xinhua-
Russia, May 2, 2015, http://russian.news.cn/economic/2015-05/02/c_
134203776.htm.
29. Speeches by Vladimir Putin, Xi Jinping and Ts. Elbegdorj at the Ufa
Trilateral Meeting, YouTube video, 17:32, recorded by RT, posted by
144 S. RADCHENKO
“RT на русском,” July 9, 2015, https://www.youtube.com/watch?v=

4yZzsAmSgQs.
30. “Joint Sino-Mongolian Statement,” Xinhua, November 11, 2015, http://
news.xinhuanet.com/world/2015-11/11/c_1117113918.htm.
31. Michael Kohn and Yuriy Humber, “Mongolia Seeks Economic Lifeline with
Pivot to China, Russia,” Bloomberg, August 20, 2014, http://www.bloom
berg.com/news/articles/2014-08-20/mongolia-seeks-economic-lifeline-
with-pivot-to-china-russia.
32. “Erunkhiilugch Ts. Elbegdorj Qpony ‘BS Fuji’ televiziin ‘Prime News’
shuud nevtruulegt yariltslaga uguv,” YouTube video, 1:27:20, broadcasted
by BS Fuji Live Prime News, posted by “Elbegdorj Tsakhia,” May 25, 2015,
https://www.youtube.com/watch?v=saG3rf8preU.
33. “100 Chukhal Sedev: Tusgaar Togtnol,” YouTube video, 1:38:17, posted
by “Монгол Тулгатан,” June 20, 2014, https://www.youtube.com/
watch?v=X386vXt2ecQ.
34. Michael Kohn, “Mongolia Embraces China with Compatible Rail to Cut
Costs,” Bloomberg, October 24, 2014, http://www.bloomberg.com/
news/articles/2014-10-24/mongolia-embraces-china-with-railway-to-
lower-transport-costs.
35. “Tumur Zamyn Shine Shugam Barikh Tuhai,” The Great Khural of Mongolia,
April 30, 2014, http://www.parliament.mn/laws/projects/370.
36. “N. Altankhuyagt ilgeesen V.I. Yakuniny nuuts zakhidal,” Mongolcom.mn,
September 11, 2014, http://mongolcom.mn/read/13447.
37. BattulgaKh, Twitter post, June 26, 2014, 1:11 a.m., https://twitter.com/
BattulgaKh/status/482028315687919616.
38. Michael Kohn, “Mongolia Embraces China with Compatible Rail to Cut
Costs,” Bloomberg, October 24, 2014, http://www.bloomberg.com/
news/articles/2014-10-24/mongolia-embraces-china-with-railway-to-
lower-transport-costs.
39. Enkhsaikhan_PM, Twitter post, November 3, 2014, 10:50 p.m., https://
twitter.com/Enkhsaikhan_PM/status/529480812748476419.
40. “Novak: Zamedlenie Peregovorov po Sile Sibiri-2 Svyazano s VVP Kitaya,”
Ria, November 16, 2015, http://ria.ru/economy/20151116/
1321981383.html.
41. Mikhail Sergeev, “Sila Sibiri Uze Ne Nuzhna Kitaitsam,” Nezavisimaya
Gazeta, October 6, 2015, http://www.ng.ru/economics/2015-10-06/
1_silasibiri.html.
42. Ivan Zuenko, “Kak Kitaiskie Regiony Reshayut Problemy Zaschet Sosedstva
s Rossiei,” Carnegie.ru, http://ceip.org/225sTe7.
43. “Trade Balance Review,” Mongolian Central Bank, November 2015,
http://www.mongolbank.mn/documents/statistic/externalsector/trade
balancereview/2015/11e.pdf.
Sergey Radchenko is Professor of International Politics at Cardiff University

and Global Fellow at the Woodrow Wilson Center for International Scholars.
He specializes in the history of the Cold War, and has written extensively on
Sino-Soviet relations, as well as contemporary foreign policies of China and
Russia.
CHAPTER 9
A Stronger Korea-Mongolia Link in a

Changing Northeast Asia
Mark Minton
As the constellation of relationships that has dominated Asia for decades

begins to evolve toward a new dynamic, the vocabulary of change has
begun to foreshadow a very different regional map, with some new trends
holding the promise of stronger regional integration while others,
perhaps, suggest increasing stresses and frictions. Of course, there is
the still-emerging US “pivot” to Asia, which seems to confirm a long-
standing, albeit enhanced, American military presence in the region, but
there is also the opportunity for a new and more vital economic network
among America’s regional trading partners through the Trans-Pacific
Partnership (TPP). China, in its own way, appears to be following the
same dualistic strategy: strengthening military capabilities but reaching
out to other Asians (and beyond) with new economic structures, such as
the Asian Infrastructure Investment Bank (AIIB). Japan, for the first time
in decades, is designing a significantly strengthened military alliance with
the United States, while taking a higher diplomatic profile throughout the
region as well. Smaller-sized nations are all scrambling to fit into these new
patterns, while trying to resist dominance by the bigger players or to avoid
M. Minton (*)
School for Global and International Studies, Indiana University, Bloomington,
IN, USA

https://doi.org/10.1007/978-981-10-3144-1_9
148 M. MINTON
being caught in the middle of major-power competition. And challenging

any new potential for greater regional rapport is a strong upsurge in
populist nationalism in almost all countries, often expressing itself in
conflict over interpretations of history, territory, or national identity.
North Korea remains the outlier, an autarchic state, a potential spoiler of
any sense of inclusive community, and a danger through its nuclear
weapons to the interests of almost all of its neighbors.
Amidst this fast-moving scene, both the Republic of Korea and Mongolia
find themselves in similar strategic circumstances, despite many differences in
size, economic development, and global influence. As nations with a surpris-
ingly close history and newly-minted democracies, both would benefit from
greater space to maneuver among assertive larger players as well as an effort
to promote the values for which both stand. In some very specific instances—
especially as concerns North Korea—the two might work together advanta-
geously to manage the region’s most intractable problems.
AN 800-YEAR-OLD CONNECTION
Korea and Mongolia have been part of each other’s universes for at least
800 years.1
Korea was impacted by the great expansion of the Mongol Empire from
the thirteenth century through the early fourteenth century, invaded and
used as a staging ground for the unsuccessful Mongol assault on Japan. As
the Ming Dynasty displaced the Mongol (Yuan) Dynasty in China,
Koreans and Mongolians often found themselves on common ground,
resisting that reassertion of Han Chinese rule. In the centuries afterwards,
both the Mongolians and the Koreans developed a healthy suspicion of
Chinese expansion and domination, and, of course, today China occupies
both ethnic Mongolian and ethnic Korean areas within its borders.
In modern times, Mongolians also looked with apprehension at
Japanese moves into Korea, Manchuria, and even Mongolian territory
before World War II, and fought beside the Russians to repel Japanese
advances into Northeast Asia. After the war, Mongolia was one of the first
nations to recognize North Korea, in 1948, and sent food supplies to
support Pyongyang during the Korean War. Kim Il-sung visited Mongolia
at least twice during the Soviet era.
With the fall of the Soviet Union, however, Mongolia quickly turned to
democracy, and a warming of relations began with South Korea, which
Mongolia recognized in 1990. In the subsequent quarter-century,
A STRONGER KOREA-MONGOLIA LINK IN A CHANGING NORTHEAST ASIA 149
relations between Seoul and Ulaanbaatar have flourished. South Korea has
become Mongolia’s third largest aid donor and its fourth most important
trade partner. Seoul also hosts the largest overseas Mongolian guest-
worker community, and several thousand South Koreans with diverse
occupations—Christian missionaries, small businessmen—are long-term
residents of Mongolia. Mongolia has rendered a great humanitarian ser-
vice to South Korea as well in quietly facilitating the relocation of a large
number of North Korean refugees in recent years. (Surprisingly, this has
been done with certain North Korean knowledge, but has not disrupted
relations between Pyongyang and Ulaanbaatar.)
These extensive historical, economic, and social connections are rein-
forced by cultural and linguistic affinity. Mongolian and Korean are part of
the same linguistic family and are mutually easier to learn than almost any
outside language, certainly Chinese or English. South Korean television
dramas and movies are popular in Mongolia, and Korean scholars have
done extensive academic work on Mongolia. Frequent flights connect the
two capitals in just a few hours, and two-way tourism is significant.
THE DIPLOMATIC EQUATION

Surveying the current diplomatic situation in Northeast Asia, one can find
a promising environment for greater South Korea-Mongolia engagement,
and the common American connection provides impetus for that. The US
diplomatic perspective is that all three countries share something valuable:
strong democratic institutions. American political leaders are well aware
that Mongolia is the only true democracy between the Pacific coast and
Eastern Europe north of the Himalayan range. This is well worth exploit-
ing in several directions, inasmuch as established democracies have good
reason to help new ones with best practices and advice, while Mongolia’s
experience confirms the universal appeal and applicability of democratic
principles.
A close observer would also notice the diversity of the democratic
experience. Korea has long served as a model of democratic development,
following its economic development and taking account of its rising
middle class. This has been taken by many as the classic formula for
success, but then Mongolia’s experience has been just the opposite: first
came a commitment to democracy 25 years ago and only now is the
country struggling with the development of its economy. Facing this
unusual challenge, Ulaanbaatar both needs and deserves the strong
150 M. MINTON
support of more economically mature democratic societies. In large mea-

sure, Washington’s recognition of this circumstance inspired the award of
a Millennium Challenge Account (MCA) program worth several hundred
million dollars to Mongolia in 2007. To emphasize the symbolic point,
President Bush took the unusual step of signing the compact himself in the
White House during a summit meeting with Mongolian President
Enkhbayar. Mongolia now is a candidate for a second MCA grant,
which, if realized, will serve as a significant symbolic and practical spur
to bilateral relations.
This commonality of values among the three countries has created
extensive diplomatic cooperation. Both Korea and Mongolia supported
the United States in Iraq and Afghanistan, and both have contributed
generously to United Nations peacekeeping operations on several conti-
nents. In fact, each year Mongolia hosts a peacekeeping military exercise,
named Khaan Quest, in which the US Pacific Command plays a large role.
Many other Asia countries also participate, and, in 2009, South Korea sent
a contingent for the first time.
Mongolia has worked hard to reach out, especially to other democra-
cies, as part of its “third neighbor” policy of building links with countries
beyond the two (Russia and China) on its borders. Its “third neighbor”
partners are overwhelmingly powerful democracies: the United States,
Canada, Japan, Korea, Australia, and Europe. In concrete steps,
Mongolia has become a participating state in the Organization for
Security and Cooperation in Europe and, along with South Korea, a
member of the Community of Democracies. Both Ulaanbaatar and
Seoul have served in the rotating presidency of the second organization
in recent years.
Ulaanbaatar’s “third neighbor” policy applies to economics as well. For
example, in February of this year Mongolia signed its first-ever Economic
Partnership Agreement, with Japan, which is expected to reduce tariffs on
about 96 percent of combined total trade within the next decade. At the
same time, Korea’s economic complementarity with Mongolia makes the
two ideal trading partners. On the one hand, Mongolia has enormous
resources of copper, coal, uranium, rare earths, and other resources—all of
which are now open for bidding to foreign investors and buyers. Korea, on
the other hand, is a mature manufacturing nation with very few natural
resources or land for agriculture. It needs a dependable source of such
commodities, and in recent years, it has even gone abroad to secure land
for raising crops to be exported home. Mongolia is a perfect fit for Korea’s
trading needs, especially inasmuch as the Mongolians are sure to develop

an increasing taste for Korean consumer products as their own economy
matures.
As noted above, there are also compelling strategic reasons driving the
two governments toward greater economic interaction. Both wish to
diversify their economic contacts to avoid the “geographic trap” of their
locations between more powerful or richer neighbors. If allowed, China
would virtually “buy out” Mongolia’s resources, and Mongolia has always
been dependent for energy on Russia, which also retains partial ownership
of Mongolia’s railway system and a major Soviet-era copper mine.
Although Mongolians must maintain positive relationships with their
two huge near-neighbors to the south and north, they nevertheless seek
options. Korea also is fixed permanently between China and Japan: the
former, its major trading partner and increasingly a competitor in export-
ing manufactured products, and the latter, the source of many of the high-
tech components for its electronics exports. Thus, both countries face the
necessity to diversify for strategic as well as economic independence.
Neither by itself is the solution to the other’s problem, but each has a
role in a strategy to gain “breathing room.” This common need reinforces
the political and social values they share.
Then, there is the question of North Korea. Ulaanbaatar’s and Seoul’s
complementary and shared interests in relations with Pyongyang also draw
them together. China’s economic and diplomatic profile has grown rapidly
in North Korea, so the Republic of Korea has to use every lever it has to
maintain contact and leverage with the North. Such an imperative is
behind many of the policy pronouncements of the Park administration
in Seoul, such as “trustpolitik” and the recent emphasis on reunification.
As noted above, Mongolia has long placed itself in a position to have
cordial relations with both North and South, and at one time or another,
has provided aid or policy support to each in a sort of low-key balancing
act. In addition to the initiatives already mentioned, Mongolia has
launched an Ulaanbaatar Dialogue on Northeast Asian Security, which
nicely dovetails with the Park administration’s own initiative, the
Northeast Asia Peace and Cooperation Initiative (NAPCI), as a way of
drawing North Korean representatives into the larger Asian community.
As a recent paper from the Brookings Institution indicates, these separate
initiatives could be “mutually reinforcing” and could serve to promote
Mongolia’s role as either go-between or a neutral venue for North-South
communication.2
152 M. MINTON
Such diplomatic outreach serves Mongolia’s interest in raising its dip-

lomatic profile in Asia as a way of integrating itself within the broader
Northeast Asian community and leveraging its role in mediation to under-
pin its own national independence. Mongolia’s recent role in hosting
Japan-North Korean normalization talks in Ulaanbaatar as part of the
six-party process as well as its serving as a venue in 2014 for a reunion of
families of Japanese who were abducted to North Korea are likewise
intended to brand Mongolia as a force for regional reconciliation.
Mongolia has developed a near pitch-perfect ability to navigate the
treacherous currents between North and South Korea. For years, it has
helped North Korean refugees transit the country for resettlement in
South Korea; yet President Elbegdorj was one of the first international
leaders to visit Pyongyang after the accession of Kim Jong-un. While there,
he delivered a public speech praising the virtue of a free society. The
Mongolians have made their unhappiness with North Korean nuclear
weapons tests clear and have long promoted a nuclear-weapons-free
Northeast Asia, but these views have not harmed the bilateral relationship
with the North. Indeed, few countries, if any, have managed to walk the
North-South tightrope quite so skillfully. For all its aid to Pyongyang, the
Chinese leadership remains clearly at odds with the North Koreans, and
President Xi Jinping has yet to visit the country. If rumors are to be
believed, China has even turned down Pyongyang’s recent request to
join the AIIB.
CREATING CLOSER RELATIONSHIPS

The foregoing stresses the reasons for bringing Mongolia more system-
atically into an inclusive Northeast Asian community as well as some of the
concrete benefits that might ensue, including improving contacts between
North and South Korea. However, several practical steps need to be taken
to ensure that this potential is realized.3
1) US policymakers should recognize their own role as a catalyst in

promoting a strengthened and more inclusive Northeast Asian com-
munity. The first step would be to exploit the natural affinity
between the United States and Asian democracies. Washington
should be a persistent advocate of a higher regional profile for fellow
democratic states, including Mongolia. It is strange that Xi Jinping
has advocated publicly long-delayed APEC membership for
Mongolia, but that Barack Obama has not. This is an oversight to

remedy as soon as possible. Moreover, Washington should endeavor
to promote, in a low-key way that does not threaten other countries,
a deeper consultative process with Asian democracies. Over the
years, for example, the State Department’s Policy Planning Staff
has extended consultations from Japan, to Korea, to trilateral con-
tacts among the three countries. Since both Seoul and Tokyo are
deeply involved in Mongolia, perhaps American diplomats should
now take the initiative to design periodic quadrilateral policy con-
sultations among the region’s democracies, including Mongolia. In
addition, the United States should make completion of a second
MCA program the centerpiece of bilateral relations with Mongolia
over the next year or so.
2) More serious work needs to be done by Seoul, as well, to extract the
potential of its strong connections with Ulaanbaatar. Korean diplo-
mats, for example, could immediately initiate negotiations with
Ulaanbaatar about coordinating the efforts of their own NAPCI
concept with Mongolia’s Ulaanbaatar Initiative. A central focus of
such consultations surely must be a common effort to draw North
Korea into the regional conversation. Perhaps one useful idea would
be to fund a permanent secretariat for the Ulaanbaatar Initiative in
the Mongolian capital and invite North and South Korean diplomats,
along with those of other participating nations, to assign permanent
staff to it.
3) Seoul should continue vigorously to fulfill the intentions announced
in President Lee Myung-bak’s visit to Mongolia in August 2011.
The communique issued on that occasion called for greater coop-
eration in natural resource development, electricity, and renewable
energy, as well as joint development of uranium ore and rare earth
materials.4 The health ministers also signed an MOU on coopera-
tion in the medical sector. Korea agreed to invest in Mongolia’s
infrastructure and construction sectors, including a project to build
100,000 apartment units in Mongolia, to expand air routes, and to
simplify the visa process between the two countries. Implementing
and then building further on this commitment would benefit both
countries and greatly enhance their ability to act together diplo-
matically in the entire region.
4) Likewise, it might well be beneficial for Japan to institutionalize its
own periodic meetings with the North Koreans in the Mongolian
154 M. MINTON
capital, as a means to maintain a permanent dialogue about issues

such as resolution of the abductees’ problem, potential normaliza-
tion, or even legitimate Japanese concerns about North Korea’s
nuclear and missile capabilities. Tokyo and Ulaanbaatar should
move swiftly as well to exploit the potential of their recent
Economic Partnership Agreement.
5) Finally, it would seem that the time has come to strengthen the use
of Mongolian diplomacy within the UN system. Mongolia has
played an increasing role in UN peacekeeping efforts, far out of
proportion to its modest population. These efforts comprise not
only participation in peacekeeping missions around the globe, but
also hosting of the annual “Khaan Quest” exercises.
There is no reason that the United Nations itself could not host much-
needed conferences on Northeast Asian security, inviting all relevant
member states (including North Korea), as a way of moving beyond
frozen bilateral and multilateral negotiations with Pyongyang.
Ulaanbaatar would be the most widely acceptable venue for such an
initiative. Moreover, it might not be too fanciful to hope that such new
consultative architecture would somewhat alleviate the many bilateral
frictions among the countries involved over security issues. Also, to the
extent that Northeast Asian nations are enmeshed in such new multilateral
arrangements, smaller- and mid-sized participants can create some balance
to the current tilt toward one or another of their powerful neighbors.
The prospect of such diplomatic interaction would strengthen
Mongolia’s ability to contribute as a fellow democracy to the stability of
Northeast Asia, allowing Ulaanbaatar to join Seoul, Tokyo, and Washington
in laying the foundation for a more prosperous and secure region.
NOTES
1. I am indebted to Christopher Atwood, formerly of the Central Eurasian
Studies Department, Indiana University, whose talk at The Korea Society in
New York on October 6, 2011, was a source for much of the detail in the
summary of this section. His full remarks are available online at koreasociety.
org.
2. David L. Caprara, Katharine H.S. Moon, and Paul Park, “Mongolia:
Potential Mediator between the Koreas and Proponent of Peace in
Northeast Asia,” Brookings East Asia Commentary, no. 84, January 2015.
3. These recommendations are the views of the author alone and do not
represent policy positions of The Korea Society, of which he is the former
president.
4. Gadaad Hariltsaa, “The Joint Communique of Mongolia and the Republic
of Korea,” Foreign Relations, no. 10 (225), August 2011, 7–10.
Mark Minton is currently Professor of Practice at Indiana University’s School of

Global and International Studies; he is a former president of the Korea Society of
the United States. For 35 years a career as US diplomat, he served in Japan, Korea,
and at the United Nations, before retiring in 2009 from his last post as US
Ambassador to Mongolia. He has a BA from Columbia University and an MA
from Yale University.
CHAPTER 10
Mongolia’s Dilemma: A Politically Linked,

Economically Isolated Small Power
Mendee Jargalsaikhan
Mongolia operates under the geopolitical and economic forces of rising

China, reactive Japan and Russia, and retrenching America. It strives to
preserve its nomadic, democratic, and Buddhist identities while accom-
modating currents of Western, Chinese, Russian, and Islamic civiliza-
tions. Thus, like other small powers, it faces new opportunities and
uncertainties as the over-arching geopolitical, economic, and cultural
dynamics shift. This article takes Mongolia as a prototype buffer state,
discussing its three options: 1) riding the Chinese high-speed train; 2)
accommodating Russia’s interests; and 3) embracing Japanese geopo-
litics. I argue that Mongolia needs to exploit all three options, but it
should keep its heated domestic politics out of major economic
projects.
Despite geographical isolation from proximate regions, Mongolia is
politically linked as a member of the United Nations, NAM (the Non-
Aligned Movement), G77, ARF, and OSCE, while partnering with the
European Union and NATO. Its initiative of a nuclear weapons-free zone
was unanimously endorsed by the five nuclear powers and later spread into
Central Asia. Mongolia is the second largest peacekeeping contributor
M. Jargalsaikhan (*)
Political Science Department, University of British,
Columbia, Canada

https://doi.org/10.1007/978-981-10-3144-1_10
158 M. JARGALSAIKHAN
from Northeast and Central Asia after the PRC, while running the only
annual peacekeeping exercise, Khaan Quest, which welcomes the militaries
of historic and current rival states.1 It hosted the seventh ministerial
meeting of the Community of Democracies in 2013 and launched modest
Helsinki-type diplomacy by welcoming city mayors, female parliamentar-
ians, and track-II scholars from Northeast Asian states, including North
Korea in 2014. It hosted the 2016 Asia-Pacific Europe Meeting (ASEM),
as it is fighting to join APEC and to become a dialogue partner of ASEAN.
For a country with a meager population, its diplomatic role is impressive.
Yet, Mongolia’s wide-ranging political ties do not result in diverse
global and regional economic links. About 90 percent of exports are
China-bound, while Mongolia relies heavily on Russian fuel and oil pro-
ducts. In spite of much economic liberalization, diversification, and inte-
gration rhetoric in Ulaanbaatar, it is economically a regionless state. A
long-lasting peaceful neighborhood, abundant natural resources, proxi-
mity to East Asian markets, and ideological appeal to developed econo-
mies do not satisfy its aspirations for global and regional economic
connections. To be sure, there are on-again, off-again discussions with
neighbors and western investors about trans-Mongolian railroads, pipe-
lines, roads, grids, logistics hubs, and economic corridors, but none of
these proposals has been realized, mostly due to Mongolia’s “crabs in a
barrel” type of politics, the conflicting interests of its neighbors, and
global market dynamics. Even so, as regional power dynamics shift, oppor-
tunities may be emerging for an economically isolated small power, such as
Mongolia. The prospect that the door is open to new initiatives guides this
article, despite awareness of multiple challenges.
Events in 2014 reveal the new regional power dynamics. While
acknowledging the importance of economic interdependence, China and
the United States have avoided direct confrontations, but apparently are
preparing for strategic uncertainties. China and Russia, despite traditional
mistrust, are committing themselves to an unusual, long-term, strategic
partnership, confronting the United States and its allies as they expand
their geostrategic assertiveness in the eastern littoral and Eastern Europe
respectfully. They also struggle to suppress secessionist movements in their
restive regions, while worrying about Islamic extremism as the United
States withdraws from Afghanistan. Under these circumstances, China and
Russia need to keep their strategic rears—Central Asia, especially
Kazakhstan, Kyrgyzstan, and Tajikistan, Mongolia, and North Korea—as
neutral, stable, and peaceful as possible. Even though they see economic
MONGOLIA’S DILEMMA: A POLITICALLY LINKED . . . 159
integration, in general, as a solution, Russia does not want to lose its

“privileged status” in Mongolia and Central Asia through integration
that centers on China, and Mongolia faces the dilemma of yielding to its
neighbors’ influence in order to become economically connected to wider
markets. This is similar to dilemmas faced by other landlocked small states.
Apart from reaching out to Japan, Mongolia has limited options, but that
does not mean it cannot benefit from strategizing about the possibilities
that are appearing.
A PROTOTYPE SMALL, BUFFER STATE IN A NEW GLOBAL ORDER

Mongolia is a prototype buffer state. Like Finland and Poland in Europe
or Kazakhstan in Central Asia, Mongolia sits between two traditional rival
states, maintains an independent statehood, and possesses lesser economic
and military capability than its neighbors do. Nevertheless, a buffer state
bears strategic importance either to upset the balance of power or to
facilitate constructive interactions between buffering rival states. In con-
temporary international relations, a buffer state can choose among three
main strategies: 1) institutionalizing its neutrality; 2) leaning to one of the
buffered powers; and/or 3) relying on third powers.2 In the post-Cold
War period, Mongolia has pursued the first and third strategies.
Mongolia institutionalized its neutrality and non-alignment unilater-
ally through its 1992 Constitution and its National Security Concept and
Foreign Policy Concept as well as domestic laws; bilaterally with China
and Russia by concluding friendly relations and cooperation treaties; and
multilaterally through the United Nations and other international orga-
nizations. As a result of its non-alignment policy, Mongolia along with
another non-aligned state, Turkmenistan, has remained outside of the
Shanghai Cooperation Organization (SCO). Even though Mongolia’s
reliance on third powers is constrained by its geographic isolation and
lack of historic, cultural, and economic ties, it has pursued a soft-balancing
strategy of reaching out to distant powers, namely the United States,
Japan, Germany, and India.3 Democracy and peacekeeping have been
the main currencies in Mongolia’s appeal for political, economic, and
cultural support from these powers. Mongolian democracy has never
regressed, while its military is making steadfast contributions to US and
NATO operations in Afghanistan, Iraq, and Kosovo. But, in reality,
Mongolia has very limited geostrategic and economic value, not only for
its neighbors, but also its so-called third neighbors.
Unlike Kyrgyzstan, Mongolia is far away from land and air routes to
South Asia and the Middle East. It neither poses a nuclear/conventional
threat nor raises refugee concerns for major powers, as North Korea does.
Despite its cultural ties to Central Asia and the Xinjiang Uyghur region of
China, Mongolia is not considered relevant to Chinese, Russian, and
American military campaigns against religious extremism. Similarly,
Mongolia is economically less attractive for major powers because it does
not possess large oil and gas deposits, it lacks the supporting infrastructure
for mineral exploitation, and it is not seen as providing a stable political
and regulatory environment for foreign investment. But, these conditions
in the post-Cold War setting are, arguably, about to change. China has
started proactively pushing a series of potentially transformative regional
initiatives, while the United States, Japan, and Russia are reacting, making
strategic adjustments in their own policies.
China is institutionalizing a “new type of major power relations” with
the United States, while deferring, to some degree, to the interests of
other major powers, especially India and Russia, and implementing
renewed peripheral diplomacy to its neighbors.4 These proactive moves,
presumably, will enable China to prevent conflict with the United States,
reduce misperceptions or confrontation with regional challengers, espe-
cially India and Russia, and increase political, economic, and even security
dependency of smaller neighbors on China. Whereas a China-centric
economic order has already become a reality, a China-centric regional
political and security order is still being pursued.
In reaction to Chinese moves, the United States has reinvigorated its
maritime strategy with special focus on the Asia Pacific region, reassuring
its allies and reinforcing its hedging strategy against China’s military
buildup. Despite its domestic economic troubles and geopolitical distrac-
tions in the Middle East and South Asia, the United States is gradually
retrenching from the Eurasian heartlands while consolidating its capabil-
ities in the maritime Asia-Pacific (Indo-Asia-Pacific region).5 At the same
time, a key ally, Japan has begun to advance its global and regional
influence under Prime Minister Abe’s watch. “Abegeopolitics” appears
to be responding to US retrenchment and also to China’s attempts to
institutionalize the China-centric order.6 Russia is also re-visiting its strat-
egy in the Asia-Pacific region to reassert its major power status, while
developing Siberia and its Far East region, and to integrate with China’s
economy and other East Asian economies too.7 Russia’s “Look East”
strategy gained momentum as tensions with Ukraine escalated in 2014,
and its eagerness for political and economic partnership with China has
risen to counter Western economic pressure. Although China is its key
partner, Russia has been attempting to diversify its economic interactions
with other Asian states, i.e., Japan, South Korea, India, and Vietnam, as
well as to maintain its “privileged status” in Mongolia, the Central Asian
states, and North Korea.
The new dynamics of the major powers have already begun to affect
Mongolia. In 2014, during President Xi Jinping’s visit, China included
Mongolia in its list of comprehensive strategic partners with which to
develop “win-win” relations in all areas of cooperation.8 So far, Chinese
leaders have not expressed any concerns about US support for
Mongolia’s democracy, while they have often acknowledged Russia’s
special relations with it. Therefore, Mongolia is not a proxy state for
rivalry with either great power. Concurrently, Russia is attempting to
revive its ties with Mongolia. President Putin visited several times
during the 2000s. Although Mongolia, unlike Kazakhstan or North
Korea, is not geopolitically and economically significant, Russia is pres-
suring it to become an SCO member, to join in the Eurasian Economic
Union, to reject both Western and Chinese involvement in its uranium
mining and railways, and to gain “privileged” access to major mining
and infrastructure projects in Mongolia. In 2014, Putin celebrated
the victory against Japan in 1939, endorsed closer military-to-military
cooperation, and approved long overdue visa-free travel with Mongolia.9
Compared to China, Russia is more assertive and more focused on regional
rivalries.
Unlike Mongolia’s neighbors’ interests, the United States appears to be
losing interest in Mongolia following the successful consolidation of
electoral democracy, presumably due to its geopolitical and economic
insignificance for Washington at a time of falling prices for natural
resources. While defense and Peace Corps programs continue, USAID
closed its assistance program in 2014, a bilateral investment transparency
agreement was stuck for a while in the Mongolian parliament, and US
investors have failed to secure investment opportunities. However, amidst
the Ukraine conflict, Secretary of Defense Chuck Hagel made a surprise
visit and concluded a joint vision statement—a key pillar of the US
comprehensive partnership with Mongolia.10 In contrast, Japanese inter-
ests in Mongolia have surged. Recognizing its geopolitical and ideological
importance, Prime Minister Abe started his first foreign travel with a stop
in Mongolia in 2013. Within a short period of time, Japan entered into a
“strategic partnership” and it became the first OECD country to conclude

an FTA in 2015.11
The emerging constructive, albeit cautious, interaction of major powers
opens a new set of opportunities as well as challenges for a buffer state such
as Mongolia. It certainly appreciates how an over-arching, stable external
environment would facilitate the country’s desire to become an economic
corridor and serve outside integration. Mongolia now must weigh three
opportunities to expand its economic linkages: 1) capitalizing on China’s
economic power and growth (bandwagoning) for East Asian linkages; 2)
accommodating Russia’s assertive behavior for more European linkages;
and/or 3) balancing with Japan and its allies for global linkages.
THE CHINA OPTION: “BOARDING THE CHINESE BULLET TRAIN”

The China option is the most available and is seemingly inevitable, but
domestically it is highly complicated. It is available because only China has
the ability to finance and to provide technology, materials, and labor in
building large-scale projects, such as railways, roads, power plants, and
processing factories in Mongolia. It appears inevitable for Mongolia, a
frontline country, which cannot escape the growing political and eco-
nomic clout of China. For China, Mongolia sits on the roads to Russia,
shares the longest land-border, and has strong historical, ethnic, and
cultural ties with its autonomous Inner Mongolian, Xinjiang Uyghur,
and Tibetan regions. For Mongolia, China is the only gateway to the
Asia-Pacific region. Yet, this option is the least desirable in a country
where anti-Chinese sentiments easily override any developmental dis-
course. Mongolian politicians are keen to avoid the demeaning experience
of being labeled huaqiao, danjaad, erliiz, hurliiz, or even a Chinese spy,
given that public opinion toward China is the least favorable among its
neighbors.12
Despite this complexity, bilateral events over the last few years indicate
attitudinal changes at the government level. Within a short period, both
countries declared a “strategic partnership” in 2011 and upgraded to a
“comprehensive strategic partnership” in 2014. Consequently, Beijing
and Ulaanbaatar concluded substantive mid- and long-term action plans
and set up an annual strategic dialogue to monitor the implementation of
these plans. A few changes are worth noting. In 2013, the Mongolian
government welcomed Chinese state-owned enterprises, i.e., Shenghua
Group, Sinopec Group, China National Petroleum Corporation, and
Chalco, investing in major mining and developmental projects. It had

previously been reluctant to approve large-scale investments from China.
The revised National Security Concept (2010) limits investments originat-
ing from one country to a third of overall FDI. The government blocked
the sale of the SouthGobi Resources mine to Chalco in May 2012.
Subsequently, the Mongolian parliament passed a law restricting foreign
state-owned enterprises investing in strategically important sectors.13
The government also approved construction of narrow (Chinese)
gauge rails linking the Tavan Tolgoi mine to Chinese railways and agreed
to establish the first-ever Sino-Mongolian joint railway venture.14
Previously, parliament had prioritized connecting this mine to the trans-
Mongolian (north-south) railway and further to the Russian Pacific rail-
ways while rejecting any direct links to Chinese rails. The main rationale of
this policy was as follows: 1) to maintain the one country, one rail
standard, which is the Russian broad gauge; 2) to expand the domestic
rail network; 3) to diversify the buyers of Mongolian mineral exports; and
4) to produce value-added products.15
Another change was Mongolia’s request for China’s support in realiz-
ing its foreign policy objectives, especially for membership in APEC and
the East Asia Summit and participation in such emerging regional frame-
works as the China-Japan-South Korea trilateral grouping, the Silk Road
Economic Belt initiative, and the Asian Infrastructure Investment Bank,
while also asking China to help to implement Mongolia’s Ulaanbaatar
Dialogue, Helsinki-type initiative for Northeast Asia. At the same time,
Mongolia also seeks Beijing’s assistance in promoting itself as an economic
corridor between China and Russia through trans-Mongolian railroads,
roads, pipelines, and grids. Mongolia is used to looking for support from
its “third neighbors” to implement its foreign policy objectives. Now its
foreign policy is shifting to its real neighbors and the architecture for
Northeast Asia.
These changes could be explained differently from Chinese and
Mongolian perspectives. For China, its strategy appears to be driven by a
geopolitical rationale for sensitive terrain used by rival powers. The with-
drawal of the Russian political, and especially military, presence from
Mongolia was one of the conditions for Sino-Soviet rapprochement.
Today, US, Japanese, and Indian political and security engagements
with Mongolia could be perceived by Beijing as part of their democracy
promotion or strategic encirclement strategies. At the same time,
Mongolia serves as an influential signaling post for leaders to project a
benign, peaceful, major power image. China concluded a border treaty

with Mongolia while conducting the Sino-Indian war in 1962. President
Hu Jintao started his first foreign travel from Mongolia in 2003, and Xi
Jinping repeatedly expressed the importance of a win-win principle in
China’s neighborhood diplomacy during his visit in 2014. Xi became
the first Chinese leader to publicly state in Ulaanbaatar that “China will
respect Mongolia’s territorial integrity, independence, and developmental
choice forever.”16 Under this geopolitical rationale, China’s policy has
been progressive, tolerant, and particularly accommodative to Mongolia’s
requests. Besides Mongolia’s economic importance for the Inner
Mongolian Autonomous Region (linking to Tianjin port), China has
limited economic interest in Mongolia.
From the Mongolian perspective, changes are driven mostly by eco-
nomic need. China is the closest market and also the shortest gateway to
East Asia. Whereas Russia has basically closed its market to Mongolia and
not considered its requests for preferential tariffs and access to Russian
transit facilities and ports, China has been accommodating its need for
transit facilities, visa-free travel arrangements, and markets for meat pro-
ducts. Following the normalization of Sino-Mongolian relations, China
offered 30-day visa-free travel while Russia imposed visa requirements for
Mongolian travelers. This arrangement has basically changed the travel
patterns for Mongolians given shorter travel hours to Beijing than
Moscow, more access to foreign embassies not present in Ulaanbaatar,
and the multiple airline and rail connections that Beijing offers. Russia
closed its markets for Mongolian meat exports, while China recently
opened its. Mongolia needs to be part of the Silk Road Economic Belt
and the Asian Infrastructure Investment Bank. Otherwise, it would remain
isolated from subregional economic integration bypassing it through the
Russian Far East on the east and Kazakhstan on the west.
Overall, China is the most available option to connect with Chinese,
East Asian, and even Central Asian economies. It will remain supportive of
closer ties to project its benign, peripheral diplomacy, to neutralize the
influence of its strategic rivals, and to attract Mongolia to its regional
order. However, a few factors complicate the China option. First, more
Chinese developmental investment will increase the presence of Chinese
nationals (mostly male labor), which could easily provoke a historic,
nationalist, and protectionist backlash in Mongolian society. Second, the
infusion of money through Chinese FDI would complicate the ongoing
anti-corruption campaign in Mongolia, unless the Chinese government
increased its scrutiny over investment, businesses, and projects. This

would trigger public discontent and media outrage over Chinese invest-
ment along with domestic corruption. Third is the Russia factor. Unless
enmeshed in domestic turmoil and/or major external conflicts, it would
not stand still for rising Chinese influence in Mongolia at the expense of its
traditional geopolitical and economic interests.
THE RUSSIA OPTION: “ACCOMMODATING TRADITIONAL

INTERESTS”
The Russia option requires Mongolia to compromise to accommodate its
traditional geopolitical and economic interests. Russian political and eco-
nomic elites want their old privileged status in Mongolia, which is not
supported by their Mongolian counterparts. In general, Russia’s relation-
ship with Mongolia is ad hoc and reactive mostly to geopolitical contexts.
Russia asserts its influence in Mongolia when it perceives a threat from its
rivals, earlier Japan, but now China and the United States; however, it is
the only potential partner to check China’s influence while reviving its role
as a traditional trading partner and a gateway to Europe. Although Russia
abandoned Mongolia in the late 1980s, it maintains leverage, providing
about 90 percent of Mongolia’s fuel imports and a significant portion of
the electricity to Central and Northern Mongolia. A shortage of either
could upset Mongolia’s economy, society, and politics. It co-owns the
trans-Mongolian railway, the Erdenet copper and molybdenum factory,
and the Mongolrostsvetment fluorspar factory. All three joint enterprises,
especially the railway and copper factory, are vital for Mongolia’s econ-
omy; therefore, Russia retains the ability to be a game-changer for
Mongolia’s strategy and policies.
In the post-Cold War period, Russia’s policy toward Mongolia has been
more consistent with its traditional geopolitical calculations than any
economic rationale. Mongolia’s requests for reviving bilateral trade and
upgrading joint ventures were simply ignored, while Russians should be
partially blamed for the delays in the major mining and infrastructure
projects discussions in Ulaanbaatar. From 2000, Mongolia was included
in Putin’s strategy to revive Russia’s traditional great power image by re-
engaging in its traditional geopolitical strongholds in Asia. Putin visited
Mongolia and North Korea in 2000 and Vietnam a year later. Russia
solved the Soviet-era debts with Vietnam and Laos in 2001, Mongolia in
2003, and North Korea in 2012. Its debt solution with Mongolia came
right after Mongolia’s military deployment to Iraq from 2003 as well as
increased American assistance to Mongolia. Moscow intensified political
and military exchanges, including the provision of military hardware and
the start of bilateral military exercises.
In 2008, Russia demonstrated another mostly geopolitically driven
reaction, rejecting the use of US assistance (USD 188 million) to increase
traffic and efficiency on the Mongolian railway.17 Instead, it agreed to
establish a joint company, Mongolian Infrastructure Development, and
provided Russian engines and trucks. Since then, Russian officials and
state-affiliated oligarchs have been actively and openly engaged in heated
railroad debates on whether to connect to the Chinese railway first,
following efficiency logic, or the Russian Pacific railway, in accord with
diversification logic, and whether to use Russian gauge or Chinese gauge
in railroad extension projects. As a result, Mongolian railroad expansion
remains hamstrung, much as the situation in Kyrgyzstan.
The reassertion of interest in uranium mining appears to be driven by
Russia’s geopolitical strategy of securing uranium deposits in Central Asia
and Mongolia, where it operated a uranium mine in the 1970s. After high-
level exchanges between Ulaanbaatar and Moscow in 2008 to 2009,
Mongolia quickly enacted a new law on nuclear energy development,
which cancelled the Canada-based Khan Resources Company’s license
and resulted in establishing a joint uranium mining venture with Russia.
It established a Nuclear Energy Agency and reported Russia’s promise to
build a nuclear plant and resume training Mongolian nuclear specialists. As
a result, the uranium mining projects were delayed, and the Mongolian
government is required to pay a USD 100 million arbitration award to
Khan Resources.18
Besides Russia’s engagement in defense, railroads, and uranium, state-
affiliated oligarchs have expressed an interest in major mining, infrastruc-
ture, and banking projects. After the Mongolian government began the
bidding process for operating the largest coking coal deposit, Tavan
Tolgoi, Russians established a joint venture with Mongolia and managed
to be included in the multinational consortium, which includes China’s
Shenghua Energy and American Peabody, in 2009. Because of Japanese
and South Korean complaints, the bidding process was cancelled and
resumed again in 2014. Russia proposed in 2008 to operate 100 gas
stations, but the proposal was immediately declined in the protectionist
and nationalist atmosphere in Ulaanbaatar. Because Russian elites seek
“privileged status,” new business deals or projects in which Russians

express interest are delayed.
There were some changes in Russia’s attitude toward Mongolia in
2014. First, for the first time, it agreed to join a trilateral summit initiated
by Mongolia in Dushanbe.19 Second, at Mongolia’s and also Russian
republics’ request, Moscow agreed to resume visa-free travel arrangements
between Mongolia and Russia.20 Third, Rosneft chief Sechin visited
Mongolia and agreed to build a pipeline to a new oil refinery, concluding
a five-year supply agreement.21 Finally, Russia for the first time welcomed
a Mongolian military contingent to a victory parade in Moscow. However,
Russia has remained silent on Mongolia’s request to build a trans-
Mongolian railroad, roads, hydroplant, and pipelines, to open its market
to meat products, to reduce transit tariffs, and to increase Mongolia’s
share of joint ventures, especially the trans-Mongolian railway. Russia
supports bilateral military cooperation, especially an annual military exer-
cise, and it now pressures Mongolia to join the SCO and Eurasian
Economic Union. Despite sympathy for Ukraine, Mongolian discourse
has concentrated on taking advantage of Russia’s shifting economic inter-
ests to China and Asia, not on European issues.
With public opinion generally positive toward Russia, Russia is still
considered an important, even inevitable, option to reach the Russian
and European economies, but there are complications. First, Moscow
does not want to reduce its influence, whereas Ulaanbaatar does not
want to grant it “privileged status.” Any Russian bullying to include
Mongolia in its “new cold war” order would push Mongolia into the
Beijing-centric regional order, although Mongolia’s domestic politics,
overwhelmed by short-termism, could neutralize Russian assertive beha-
vior by not locking-into long-term commitments. Second, it is unlikely
that Russia would support proposals for Mongolia to become an economic
corridor between China and Russia. Russia would rather build natural gas
and oil pipelines, railroads, and roads through its Far East to develop its
own local economies and lower transit risks. It does not want an increase
of Chinese or Western influence in Mongolia, unless all parties accommo-
date Russian interests. Russia would rather see North Korea as a vital
economic corridor to East Asian economies. Third, Russia and Mongolia
are now economic competitors; both are trying to reach Chinese and East
Asian markets with the same products, e.g., copper and coal.
Even if Mongolia wholeheartedly welcomed Russia’s involvement in
developing its natural resources and infrastructure projects, Russia is
unlikely and unable to invest into an economic corridor proposal jointly

framed by Beijing and Ulaanbaatar.22 Its state-affiliated entrepreneurs
would complicate any major developmental project until either Beijing
or Ulaanbaatar accommodate the Kremlin’s desire. This makes the Russia
option the most complicated one.
THE JAPAN OPTION: A CARD OF ABEGEOPOLITICS?

For Mongolia, Japan is the only proximate major power that could poten-
tially serve as an external balancer against a rising China and an alternate
source of technology, capital, and markets. On the Japanese side, the
relationship seems to be driven by geopolitical and ideological factors.
Japan became a strategic partner in 2010 and the first G7 as well as OECD
country to enter into a free trade arrangement with Mongolia from 2015.
It is another option for global and regional economic linkage. Amid
tensions with China and South Korea, Abe’s decision to begin his geopo-
litical and economic offensive from Mongolia was regarded as a “wake-up
call” for China in the Japanese and Western media, but warmly received in
Mongolia.23 Amid talks about Japan’s interest in Mongolia’s mineral
resources, especially coking coal, uranium, and rare earth minerals,
Japanese support for Mongolia is geopolitical and ideological. Abe’s first
official tours hopscotched across China’s worrisome neighbors, including
India, Vietnam, and the Philippines. During his visit to Mongolia, the two
governments agreed to increased collaboration in many areas, including
military-to-military relations. Japan’s Ministry of Defense concluded an
MOU to expand cooperation in military medicine and peacekeeping
operations, especially around the Khaan Quest exercise.24 Japan has
been the largest donor for Mongolia’s political and economic transition;
over 70 percent of its foreign loans and aid have come from Japan.25
Assistance to Mongolia is driven by the ideological value of liberal democ-
racy rather than alternatives to war reparations elsewhere. Japan values
Mongolia’s geopolitical importance as well as its commitment to
democracy.
Japan and China have avoided open competition over Mongolia. After
all, Japan and Mongolia need China to facilitate their relations. Japan has
been showing restraint; it advanced mostly cultural and economic (huma-
nitarian/developmental aid) ties while holding back on political and
security interactions with Mongolia. Even though Japan is now broad-
ening relations into the political and security sphere, it has not
demonstrated any interest in using Mongolia as an outpost for democracy

promotion (unlike the US approach) or part of a military encirclement
strategy. The Japanese SDF has begun participating in the Khaan Quest
exercise, but is limited to peacekeeping and engineering.
Mongolia’s proactive diplomacy toward Japan is explained by its soft-
balancing strategy and great need for capital, technology, and markets. As
US and EU interest in Mongolia declined, Mongolia’s third neighbor
policy began to lose momentum. Apart from Japan, India and Australia
appear to have kept their ties with Mongolia in this emerging order.
Despite its long-standing political and spiritual ties, India is geographically
isolated from Mongolia, and its partnership remains limited to small-scale
military exchanges and Mongolians’ holy pilgrimage to Buddha’s birth-
place in India. Australia is emerging as another important distant player,
but its interests are restricted to mining investments rather than political
and security ties.26 This makes Japan the primary potential third neighbor
in a soft-balancing strategy. Both share historical concerns about China,
the values of liberal democracy, and interest in nuclear non-proliferation
and human security. Both are also NATO Global Partners.
The other driving factor of Mongolia’s proactive diplomacy to Japan is
economic. It needs Japanese capital to finance infrastructure—the inter-
national airport, exploitation of mining deposits, and industrialization
projects, and it has secured samurai bonds and requested ODA.
Mongolia needs Japanese technology in urban development, the agricul-
tural sector, and tourism. Japan is considered the most likely buyer of its
mineral resources and livestock products. Welcoming the Sumimoto
Corporation in the operation of the Tavan Tolgoi coking coal project
sets an example.
There are other important foundations for an amicable partnership
between Mongolia and Japan. Mongolia is the only Northeast Asian
state that was not colonized by Japan. Following its own geostrategic
calculations, Russia defended Mongolia from Japanese aggression in the
undeclared war of Khalkhyn Gol (also known as Nomunhan) in 1939. In
the 1990s, the Mongolian government facilitated the repatriation of
Japanese POW remains from 16 locations. Unlike China and the two
Koreas, it is not concerned with Japanese nationalism, Yasukuni visits,
and other war-related matters. Rather, Mongolia supports Japan playing a
larger role globally and regionally. Japanese sumo has also contributed to
strong cultural ties between the two. Mongolian wrestlers have been in the
forefront of Japanese sumo since 2003, numbering four Yokozuna Grand
Champions and more than 30 wrestlers competing in five divisions, from

makuuchi to jonidan. Mongolians in Japan now constitute the second
largest Mongolian diaspora in Asia, after 40 thousand Mongolians in
South Korea. Japan has provided extensive scholarships for Mongolian
students; over 1000 are studying in Japan. These factors have built a
strong foundation for bilateral relations and for Japan as a global and
regional linkage.
Overall, the Japanese option is critical for Mongolia—to balance against
rising Chinese influence, to consolidate its democratic identity, and to
strengthen its political and economic engagement globally and regionally.
Economic relations are limited, but there is potential given Mongolia’s
mineral and livestock resources and Japan’s advanced technology and
expertise. As outlined in the EPA agreements, more focus will be given
to agricultural development, mining (rare earth minerals/uranium/coal),
and tourism.
CONCLUSION
Regional dynamics are changing as all major powers, including China, are
pivoting and readjusting their overall strategies. Because none of the major
powers wants a conflict, Mongolia, like many other smaller states, will
likely operate in a favorable geostrategic environment, which could pro-
vide new opportunities for forging economic linkages. Russia and China
want to have their strategic rear Mongolia peaceful and stable while trying
to manage tensions elsewhere, to suppress ongoing separatists move-
ments, and to focus on more volatile neighbors in Central Asia. Neither
wishes to trigger a security dilemma. China is more eager to offer eco-
nomic linkages to its Silk Road Economic Belt, while Russia seems to be
reluctant until it finds more economic benefits in Mongolia. Within this
complicated picture, Japan provides an additional option for Mongolia’s
economic linkages, but it has to go through Beijing. In this emerging
scenario, taking sides would be extremely costly for a small state; Mongolia
needs support and understanding from all major powers and to avoid
being caught in their geopolitical rivalries.
In order to implement pragmatic economic policies, Mongolia needs to
put its “crabs in a barrel” type of politics in order. Intensive competition
among political parties, factions, and interest groups has resulted in a weak
bureaucracy, a vulnerable judiciary, and an unstable legal and regulatory
environment. In pursuit of short-term and parochial interests, domestic
actors delay developmental projects and attempt to shake up the political

landscape even before the four-year election cycle to improve their
bargaining position. This intensifies mismanagement of resources,
bonds, loans, and debts and undermines the democratic political order.
Unless domestic political stability and the rule of law improve,
Mongolia’s desire for economic linkages will be difficult to realize even
if different options are becoming available for linkages to the markets of
its neighbors.
NOTES
1. United Nations, “Ranking of Military and Police Contributions to UN
Operations,” March 31, 2015, www.un.org/en/peacekeeping/contribu
tors/2015/mar15_2.pdf.
2. Tornike Turmanidze, Buffer States: Power Politics, Foreign Policies and
Concepts (New York: Nova Science Publishers, 2009), 50.
3. Sarlagtay Mashbat, “Mongolian National Security Concept and Limits on
Third Neighbor Policy,” in Third Neighbor Policy of Mongolia (Ulaanbaatar:
Mongolian Institute for Strategic Studies, 2011), 5–15.
4. Ren Xiao, “Modeling a ‘New Type of Great Power Relations’: A Chinese
Viewpoint,” The Asan Forum 1, no. 3 (2013); Paul Mancinelli,
“Conceptualizing ‘New Type Great Power Relations’: The Sino-Russian
Model,” China Brief 14, no. 9 (2014); Bonne Glaser and Deep Pal,
“China’s Periphery Diplomacy Initiative: Implications for China
Neighbors and the United States,” China-US Focus, November 7, 2013.
5. Michael Green et al, Assessing the Asia-Pacific Rebalance, CSIS, 2014.
6. Takashi Inoguchi, “The Rise of ‘Abegeopolitics’: Japan’s New Engagement
with the World,” Global Asia 9, no. 3 (2014): 30–36.
7. Gilbert Rozman, “The Russian Pivot to Asia,” The Asan Forum 2, no. 6
(2014); Alexander Gabuev, “Russia’s Policy towards China,” The Asan
Forum 3, no. 2 (2015); Andrew Kuchins, “Russia and the CIS in 2014,”
Asian Survey 55, no. 1 (2015): 148–156.
8. “The Joint Declaration of the Comprehensive Strategic Partnership between
Mongolia and PRC,” August 21, 2014, www.president.mn/content/4116.
9. “Олон талын хамтын ажиллагааг хөгжүүлнэ,” News.mn, September 4,
2014, accessed October 2, 2014, http://politics.news.mn/content/
188466.shtml; “Russia, Mongolia to sign visa-free travel agreement as part
of Putin’s visit,” ITAR-TASS News, September 2, 2014, accessed January
24, 2015, www.itar-tass.com/en/russia/747697.
10. “Hagel, Mongolian Defense Minister Agree to Deepen Ties,” DoD News,
April 11, 2014, www.defense.gov/news/newsarticle.aspx?id=122044.
11. Ministry of Foreign Affairs of Japan, “Japan-Mongolia Relations,” February

10, 2015, www.mofa.go.jp/region/asia-paci/mongolia/index.html.
12. The terms huaqiao (overseas Chinese, in Mongolian “hujaa”), danjaad, and
luhaan (traditional labels for Chinese) are derogatory terms in Mongolia.
According to quarterly public opinion surveys of the independent, non-
profit Sant Maral Foundation, Russia is always picked as the best partner
for Mongolia (about 80 percent) and Mongolians see better communica-
tions with Russians (over 55 percent) than China (25 percent±) and Chinese
(below 50 percent) www.santmaral.mn/en/publications. The attitude
toward China is most negative in Mongolia, according to the Comparative
Barometer series (Japanese AsiaBarometer and Taiwanese Asian Barometer).
See Jargalsaikhan Mendee, Anti-Chinese Attitudes in Post-Communist
Mongolia: The Lingering Negative Schemas of the Past (Vancouver: UBC,
2011), 45–50.
13. The Strategic Entities Foreign Investment Law was passed by parliament in
May 2012 and invalidated in October 2013 with the passage of the new
investment law.
14. “A Consortium of China’s Shenhua Energy, Japan’s Sumitomo and
Mongolia’s Energy Resources wins the tender to develop Tavon Talgoi
coal deposit,” InfoMongolia.com, December 23, 2014, http://www.info
mongolia.com/ct/ci/8766.
15. Jargalsaikhan Mendee, “Mongolia: Gauging Inner Asian Tensions over
Railways,” Asia Pacific Memo, http://www.asiapacificmemo.ca/mongolia-
gauging-inner-asian-tensions-over-railways;“End the rail gauge debate,” M.
A.D. Mongolia Newswire, December 3, 2014, http://mad-intelligence.
com/end-the-rail-gauge-debate/.
16. He made this statement in his address to the Mongolian legislature and at a
press conference in Ulaanbaatar.
17. Sergey Radchenko, “Sino-Russian Competition in Mongolia,” The Asan
Forum, November 22, 2013, http://www.theasanforum.org/sino-rus
sian-competition-in-mongolia/.
18. Julian Dierkes, “Arbitration Award to Khan Resources,” March 2, 2015,
http://blogs.ubc.ca/mongolia/2015/arbitration-award-to-khan-
resources/;“Khan Announces US$100 million International Arbitration
Award,” Khan Resources Inc., http://khanresources.com/investors/
news/150302.pdf.
19. “First Mongolia-Russia-China trilateral meeting held during SCO Summit,”
The UB Post, September 14, 2014, http://ubpost.mongolnews.mn/?p=
11910.
20. “Mongolia-Russia visa-free travel regime effective on Friday,” newnews.mn,
November 13, 2014, http://english.news.mn/content/195285.shtml.
21. “By Pipe and Rail: Russia in Search of Shorter Routes to Asian Markets,”
Asia Pacific Memo, June 3, 2014, http://www.asiapacificmemo.ca/by-
pipe-and-rail;“Mongolia Makes Moves to Reach out to Russia in Reaction
to Ukraine Crisis,” The Jamestown Foundation, May 30, 2014, http://
www.jamestown.org/single/?tx_ttnews%5Btt_news%5D=42449&no_
cache=1.
22. “Xi proposes to build China-Mongolia-Russia economic corridor,”
Xinhuanet, September 12, 2014, http://news.xinhuanet.com/english/
china/2014-09/12/c_126977111.htm.
23. “Abe strikes energy deal with Mongolia in a bid to curb China’s clout,” The
Asahi Shimbun, March 31, 2013, http://ajw.asahi.com/article/behind_
news/politics/AJ201303310033.
24. Ministry of Defense, “Japan–Mongolia Defense Ministerial Meeting,” www.
mod.go.jp/e/jdf/no25/leaders.html;“Mongolian-Japanese Economic
Partnership Agreement: Counterbalancing China and Russia,” The
Jamestown Foundation, August 8, 2014, http://www.jamestown.org/sin
gle/?tx_ttnews%5Btt_news%5D=42733&no_cache=1.
25. “Japan top donor of Mongolia for 22 years,” UB Post, October 1, 2012;
“Statements and Basic Data on Japan-Mongolia Relations,” http://www.
mofa.go.jp/region/asia-paci/mongolia/data.html.
26. Australia-Mongolia Program Strategy (2012–2016).
Mendee Jargalsaikhan is a political science PhD candidate at the University of

British Columbia. His research interests include geopolitics, democratization, and
small states. Mendee was formerly a senior fellow at the Mongolian Institute of
Strategic Studies. He served as a Mongolian defence attaché to the United States
and senior representative at the US Central Command, Tampa, Florida. He
graduated from the US Naval Postgraduate School (MA) and Mongolian
Defense University (BA) and published on civil-military relations, peacekeeping,
anti-Chinese sentiments, and small state foreign policy. Currently, he is working
on his dissertation, comparative analysis of democratization in Mongolia and
Kyrgyzstan, 1984–2010.
CHAPTER 11
Mongolia’s Place in China’s Periphery

Diplomacy
Jeffrey Reeves
China has enabled Elbegdorj to strengthen the executive branch’s role in

ways that are largely unconstitutional and has aroused worries about the
country’s ability to maintain a “third neighbor” policy of multi-directional
diplomacy. Concerns exist about the effect that trilateralism with China
and Russia has on Mongolia’s room for maneuver, particularly as China is
seen to dominate the trilateral framework. The sense of vulnerability in
Mongolia resulting from closer security cooperation with China is
palpable.
Under President Xi Jinping, the People’s Republic of China (PRC) has
reprioritized the country’s peripheral relations within its larger foreign
policy portfolio. This marks a break with foreign policy since Deng
Xiaoping, which placed a decided premium on great power relations, parti-
cularly with the United States, to ensure China’s growth and security.1
While the Xi administration continues to view great power relations as
critical to China’s foreign policy strategy, the elevation of peripheral rela-
tions as a top priority is a paradigm shift that suggests China is working to
consolidate its position in Asia, in line with millennia long practices.2 To
support this shift, it developed the One Belt, One Road (OBOR) grand
J. Reeves (*)
Daniel K Inouye Asia Pacific Center for Security Studies, Honolulu, Hawaii, USA

https://doi.org/10.1007/978-981-10-3144-1_11
176 J. REEVES
strategy in 2013, which focuses first and foremost on the establishment of

linkages between China and its peripheral states. China seeks to use OBOR
to establish more robust policy, facilities, trade, financial, and social ties with
its peripheral partners that ensure greater connectivity, greater interdepen-
dence, and a shared “destiny” with neighboring states.3
For the small, underdeveloped states on China’s borders, the new
approach to periphery relations has the potential to fundamentally trans-
form their domestic situations. Greater engagement and connectivity with
China, for instance, translates into more opportunity for many under-
developed neighbors; opportunity these same states would otherwise not
have; however, involvement with China carries a certain degree of risk for
these states, as China’s influence can have negative spillover effects on
issues ranging from governance to economic stability. For many states,
effectively managing the engagement with China is a top domestic and
foreign policy challenge, now growing as China seeks to deepen its per-
iphery relations through OBOR engagement.
Nowhere is this dynamic between China’s peripheral engagement strat-
egy and a small state’s domestic development situation clearer than in
Mongolia. The two states’ engagement has increased at pace, largely in
line with China’s OBOR strategy to facilitate linkages between its domes-
tic institutions and those of its peripheral states. Mongolia has clearly
benefited from greater Chinese attention and support. Closer engagement
has not, however, been cost free.
This article outlines China’s approach to peripheral relations under the
Xi administration and considers the implications for Mongolia, a state
China has identified as a key partner in OBOR and an “artery” in
China’s overall regional diplomacy.4 As such, the article contributes to
larger discussions of contemporary Chinese foreign policy, to a better
understanding of China’s effect on smaller Asian states, and to discussions
on regional order in Asia.
CHINA’S PERIPHERAL RELATIONS AND ONE BELT, ONE ROAD

The Xi administration has regularly highlighted the importance of periph-
ery diplomacy for China in the state’s principal foreign policy discussion
forums. In October 2013, for instance, the Communist Party of China
(CPC) held an unprecedented work forum, where senior leaders collec-
tively raised periphery relations as central to China’s domestic stability and
growth.5 In November 2014, the CPC held its fourth Central Conference
MONGOLIA’S PLACE IN CHINA’S PERIPHERY DIPLOMACY 177
on Work Relating to Foreign Affairs where Xi again stressed the impor-

tance of periphery relations in responding to a changing global environ-
ment.6 Xi also used the conference as a platform to call on peripheral states
to establish a “community of common destiny,” with China at its center.
Prime Minister Li Keqiang similarly highlighted China’s growing focus on
peripheral relations in a 2014 speech to the Bo’ao Forum, equating the
concept with regional stability and security.7
Senior officials have also repeatedly raised the importance of periphery
diplomacy during travel within the Asian region. By the end of 2015, Xi
and Li had travelled to over 14 neighboring states to demonstrate the
state’s prioritization of its peripheral relations and to elicit their coopera-
tion.8 Specialists such as Yan Xuetong have argued that these develop-
ments show that China under the Xi administration has reformulated its
foreign policy thinking away from the “great powers are key, periphery
relations are important” (大国是关键、周边是首要) paradigm toward a
strategic conception where periphery relations are valued above great
power relations.9
Parallel to the strategic refocus on peripheral state relations, the admin-
istration developed the OBOR grand strategy in 2013 as a policy directive
aimed foremost at cementing peripheral relations.10 While OBOR remains a
fluid concept, it most fundamentally consists of a collection of institutions
best summarized as “two belts, three banks, three corridors, and two free
trade agreements (FTAs).”11 The two belts are the Silk Road Economic
Belt (concentrated on Northeast and Central Asia) and the Twenty-first
Century New Maritime Silk Road (concentrated on Southeast Asia). The
three banks are China’s new Asian Infrastructure Investment Bank (AIIB),
the Silk Road Fund, and the New Development Bank headquartered in
Shanghai. The three corridors are the China-Pakistan economic corridor,
the China-Mongolia-Russia economic corridor, and the China-Myanmar-
India-Bangladesh economic corridor. The two proposed FTAs are the
China-ASEAN FTA and the China-Japan-South Korea FTA. OBOR’s
basic institutions are entirely in line with the Xi administration’s reprioriti-
zation of periphery relations both in scope and in geographic focus.
The administration first presented OBOR to establish win-win policy
linkages with neighboring states.12 The National Development and
Reform Commission—the lead agency for OBOR—has called on periph-
eral states to engage within the framework to establish greater govern-
ment-to-government ties, to coordinate on macro-level policy decisions,
to develop deeper political trust, and to develop mechanisms for
178 J. REEVES
cooperative consensus.13 China has also proposed that periphery states

cooperate under OBOR to link their economic development strategies
and policies and to ensure pragmatic cooperation on large-scale project
development.14
China has also proposed facilities linkages with neighboring states
within the OBOR framework, arguing the need for greater physical inter-
connectedness and interoperability to achieve optimal win-win out-
comes.15 This includes construction of the following: transportation
nodes within China’s neighboring states, fast track customs ports to facil-
itate trade between states, maritime and air shipping routes, cross-border
optic cables and sea cables, and deep harbors. China has pledged to use
OBOR to finance and facilitate construction of a “transportation web”
linking it to the rest of Asia, while assuring its OBOR partner states that
facilities linkages will be mutually beneficial and undertaken in line with
their domestic infrastructure needs.
China also intends to use OBOR to expand mutually beneficial free
trade linkages.16 To support free trade, it has proposed streamlining
customs, lowering trade/customs costs, sharing information on trade
and intelligence on smuggling, and improving supply chain security.
China has also suggested expanding e-commerce with its neighboring
states and undertaking joint research and development, offering to finance
and construct industrial clusters/complexes within them to contribute to
growth in their domestic manufacturing and service sectors. Chinese
officials argue that support through OBOR will help develop their econo-
mies in line with their comparative economic advantages, i.e., bilateral
trade will be equitable and sustainable.
China has also pledged to use OBOR to expand neighboring states’
access to capital.17 It has proposed to establish an Asian currency
stabilization mechanism to foster bilateral currency exchange between
participating states, to develop an Asian bond market, and to expand
access to capital through the AIIB, the BRICS Development Bank, the
Silk Road Fund, and a financial mechanism in the SCO. Officials have
declared their desire to use OBOR to establish a financial risk early-
warning system and to increase financial oversight cooperation with
these states.
Lastly, China has stated its intention to use OBOR to establish closer
ties between the people within participating states and “popular sentiment
linkages” (民心相同). To accomplish this, it has proposed expanding
cultural exchanges, educational contacts, skilled-person exchanges,
media cooperation, and youth exchanges with its peripheral states.

Chinese officials also want to develop person-to-person exchanges on
public health issues, ethnic relations, and religion.18
CHINA’S PERIPHERAL DIPLOMACY: THE MONGOLIAN CASE STUDY

Examination of China’s bilateral relationship with Mongolia since 2013
provides insight into how its strategic focus on peripheral relations and its
stated intentions through OBOR translate into outcomes at the state level.
While Sino-Mongolia relations have been robust since the early 1990s,
engagement between the two states has clearly deepened over the past
several years in line with Beijing’s intention to use policy, facilities, trade,
finance, and social linkages to better integrate China and its peripheral
states.
POLICY
In August 2014, China and Mongolia elevated their formal bilateral
relationship from a strategic partnership to a comprehensive strategic
partnership, in line with China’s overall efforts to raise bilateral relations
with peripheral states. For Mongolia, the comprehensive strategic partner-
ship is the highest level partnership short of a formal political and/or
military alliance the state can establish. To support the elevation in rela-
tions, Xi and President Elbegdorj announced a series of policy alignments
aimed at increasing linkages between the two states’ political, economic,
military, and social sectors. These included, but were not limited to, the
establishment of a strategic dialogue mechanism for closer coordination of
foreign affairs, the development of party-to-party exchange and training,
the deepening of military engagement and joint-training, the construction
of a high-level mechanism for coordination between law enforcement
agencies, judges, border policy, and anticorruption agencies, and engage-
ment on counterterrorism.19
To support their new policy linkages, China and Mongolia undertook a
series of high-level meetings in late 2014 and 2015. In October 2014, top
Chinese legislator Zhang Dejiang and Chairman of Mongolia’s Great
State Hural Zandaakhuu Enkhbold met in Beijing to sign a memorandum
of understanding (MOU) to establish a formal mechanism for regular
exchanges between the two political bodies.20 In April 2015, deputy
chief of the General Staff of the People’s Liberation Army (PLA) Lt.
180 J. REEVES
Gen. Wang Guanzhong and Mongolian army commander Sukhbaatar

discussed greater coordination between the two states’ armed forces on
peacekeeping, counterterrorism, border defense, and troop training.21 In
May 2015, the secretary of China’s Central Political and Legal Affairs
Commission Meng Jianzhu and general secretary of Mongolia’s National
Security Council Tsagaandari Enkhtuvshin met in Beijing to sign an MOU
on bilateral law enforcement cooperation focused on combating the
“three evil forces” of terrorism, separatism, and extremism.22 In a
November 2015 meeting in Beijing, Xi and Elbegdorj agreed to further
link their policies within the comprehensive strategic partnership frame-
work by coordinating China’s OBOR with Mongolia’s domestic develop-
ment strategy, the Steppe Road Initiative. Xi stressed China’s desire to link
the development strategies across the mining sector and with regard to
infrastructure development and finance.23
TRADE
China and Mongolia agreed to expand trade in their 2014 comprehensive
strategic partnership statement, specifically exports of natural resources to
China. To support this commitment, China incorporated the Inner
Mongolia Autonomous Region (IMAR) into its national integrated regio-
nal customs clearance regime, which uses a simplified customs declaration
procedure to streamline imports and exports through the region, and
established Erenhot as a pilot city with preferential taxation and trade
policies toward Mongolia. The Xi administration then initiated two meet-
ings with the Mongolian government in June and August of 2014 to
propose a special cross-border trade zone.24 Xi and Elbegdorj met in
March of 2015 to sign an MOU for the establishment of a nine square
kilometer cross-border trade area straddling the two states and agreed to
sign a separate FTA in support of the area in the near future.25 In
anticipation of greater trade, the IMAR local government undertook
construction of advanced port facilities in Erenhot.26
China has also sought to increase trade with Mongolia through a
2015 transit agreement by which one-third of Mongolia’s exports to
the country are taxed at a lower rate and given subsidized transporta-
tion costs, according to senior Mongolian officials and scholars.27 As
part of a broader agreement for trilateral rail development between
China, Mongolia, and Russia, China pledged continued use of the
Port of Tianjin for Mongolian exports abroad. For China, the benefit
is a greater volume of exports to the country and increased overall

trade with Mongolia. For Mongolia, the benefits are greater competi-
tiveness of pricing of their exports to China. Mongolian exporters
hope the transit deal will lead to greater access to the world market
through Chinese ports and decreased Mongolian dependency on the
single Chinese market.
More controversially, China signed a 500,000 hectare land lease agree-
ment with the local Mongolian government in Dornod Aimag (province)
in 2015 for production and export of an unspecified food crop. Still in the
development phase, the plan has come under intense criticism from
Mongolian academics, financial sector analysts, and policymakers who
are worried China might use the lease as a means to gain control over
Mongolian territory.28 The Xi administration is also working with
Mongolian private sector companies and the Mongolian government to
develop mechanisms for inspection of Mongolian abattoirs and to lower
phytosanitary trade barriers for the export of raw Mongolian meat to the
IMAR.
The two states also established an annual Sino-Mongolian Expo, which
had its inaugural meeting in the IMAR in October 2015. The stated
purpose is to link their development strategies through expanded trade
and commercial engagement, primarily through the IMAR and
Mongolia.29 In separate letters presented to the participants, Xi and
Elbegdorj both identified the Expo as a mechanism to deepen trade
relations between the two states.
FACILITIES
Following the establishment of the comprehensive strategic partnership,
China announced it would develop the port at Erenhotinto a world-class
trade logistics hub focused on expanding trade to Mongolia. From July
2015, China also established direct flights from Erenhotto Ulaanbaatar
with the purpose of facilitating more rapid trade integration.30 It pledged
financial and technical support for development on the Zamiin Uud side
of the Sino-Mongolia cross-border trade zone in the form of container
shipping and vehicle detection equipment.31
The Xi administration also announced in 2014 extensive development
aid and concessional loans for Mongolia to develop a nationwide system of
roads designed to increase trade and facilitate internal transportation in
Mongolia. Key projects include the construction of a new expressway
182 J. REEVES
linking Ulaanbaatar to Mongolia’s new international airport, a six-lane

highway (“Beijing road”), expressways in Bayankhongor and Zavkhan,
and bridges and traffic stations in the capital.32
Along with port and road development, China has committed since
2013 to develop rail lines to increase trade between the two states. In
2013, Xi and Elbegdorj signed an MOU to explore development of rail
links between China’s Ceke border crossing and Mongolia’s Shivee Kuren
border crossing, China’s Ganqimaodu port and Mongolia’s Gashuun
Sukhait port, China’s Zhu’engadabuqi port and Mongolia’s Bichigt
port, and China’s A’ershan and Mongolia’s Dornod province.33 China
offered funding through its Development Bank with the condition that
Mongolia use international gauge rails in line with China’s domestic rail
system, as opposed to Mongolia’s domestic gauge, which adheres to
Russian standards. China and Mongolia both see increased rail ties as
essential to expanding trade, particularly trade in natural resources from
Mongolia’s southern mines such as Oyu Tolgoi and Tavan Tolgoi.
FINANCE
Xi Jinping identified Mongolia’s financial sector as one of three primary
areas for economic cooperation in a 2013 statement on Sino-Mongolian
economic and trade relations.34 Financial cooperation has proceeded in
line with Xi’s intentions, in terms of both bilateral relations and as part of
China’s larger OBOR approach to Asia. Bilaterally, the two states agreed
in 2014 to double a 2011 currency exchange swap mechanism between
the People’s Bank of China (PBOC) and Mongolia’s Central Bank to
RMB 20 billion.35 Mongolia has drawn an estimated USD two billion in
credit to help it maintain reserve levels and to avoid a collapse of the
country’s Central Bank. While the exact terms of agreement are not
public, Mongolian financial analysts suggest that interest for Mongolia’s
Central Bank is set in line with the Singapore Interbank Offered Rates
(SIBOR), which currently is around six percent for short-term borrowing
and much higher for annualized rates.36 China has become Mongolia’s
principal source of foreign financial assistance.
China has also established a PBOC exploratory office in Ulaanbaatar as
a first step toward establishing a PBOC branch in Mongolia, which would
be the first foreign-owned bank there, a prospect that has drawn signifi-
cant opposition from domestic banks and some Mongolian politicians.
However, this development seems likely as Mongolia’s government looks
to finance small and medium company development and expand mortgage

opportunities for the Mongolian people.37 In 2014, Sun Weiren, China’s
economic and commercial attaché to Mongolia, also noted that the
Industrial and Commercial Bank of China (ICBC) was preparing to
establish an exploratory presence there, noting that Chinese capital will
be central to Mongolia’s future economic growth.38
China has also committed to supporting Mongolia through loans from
its Silk Road Infrastructure Fund and the AIIB, in which Mongolia is a
founding member. In 2014, Ambassador Xing Haiming pledged unspe-
cified aid and preferential loans through both financial bodies to support
Mongolia’s Steppe Road Initiative priorities of roads, rails, pipelines (oil
and natural gas), and electricity line development.39 Some Mongolian
government-affiliated researchers suggest that Mongolia may be the first
recipient of AIIB funds of USD 200 million.40
Lastly, Chinese foreign direct investment (FDI) to Mongolia has con-
tinued to grow, while FDI from other sources, such as Canada, Russia,
and the United States, has collapsed. While overall levels have dropped
over 75 percent since 2014 due to a number of domestic and international
factors, Chinese investment in small- and medium-sized projects in
Mongolia increased 66.2 percent in the first nine months of 2015, largely
driven by government-backed financing in support of China’s OBOR.41
SOCIAL SECTORS
China has also expanded its social or person-to-person linkages with
Mongolia through collaboration in education and health development.
In 2013, the Confucius Institute announced funding for 200 volunteer
Chinese language teachers to teach in Mongolia.42 They are dispersed
throughout the country, including in remote provincial (aimag) capitals,
small towns (sums), and villages (bags), in direct support to the compre-
hensive strategic partnership’s call for greater bilateral social ties. The
scope and scale of China’s volunteer teacher force in Mongolia now
exceeds that of the Peace Corps, which has been an important public
diplomacy tool for the United States toward Mongolia since 1991.
The Chinese government has also established funding for greater
university-level exchanges between Chinese and Mongolian students.
In 2015, the Chinese embassy in Ulaanbaatar announced scholarships
for 1,000 Mongolian students to study in China and for 150 Chinese
students to study in Mongolia.43 Also starting in 2015 and scheduled
184 J. REEVES
to continue until 2020, the Chinese government will provide funding

for training in China for 500 youth, 500 military officers, and 250
reporters.44 It has likewise committed to translate 25 prominent tele-
vision programs and movies into Mongolia per year to further people-
to-people exchanges.
China also committed in 2015 to construct a handicapped children’s
center and children’s hospital in Ulaanbaatar. In 2016, it has already
provided Mongolian hospitals with modern electronic medical equipment
for administration, diagnosis, and treatment.45 Xing Haiming pledged
greater Chinese support to Mongolia across the health domain in 2016,
noting the importance of public health cooperation in overall relations and
social linkages.
IMPLICATIONS FOR MONGOLIA

Chinese engagement with Mongolia as part of Xi’s focus on periphery
relations and OBOR has clear benefits for the country. China has increased
its financial and developmental commitments at a time when other states
are disengaging and/or limiting their support to Mongolia. China’s sup-
port is critical as global prices for its commodities fall and massive debt due
to budget shortfalls and bond repayments have led to extreme economic
difficulties in 2015/2016 that will likely worsen in 2017. From aid to
assistance through the currency swap mechanism, China has emerged as
an economic lifeline for Mongolia. By failing such engagement, Mongolia
would be far worse off fiscally and, perhaps, politically than it is today.
Engagement has also, however, come with a price for Mongolia one
cannot overlook when considering the two states’ relations. Ties with China
since 2013 are affecting domestic political institutions and foreign policy
relations in ways that challenge Mongolia’s long-standing commitment to
democracy and multi-directional diplomacy. Some Mongolian experts sug-
gest, for instance, that China’s reliance on elite relations to conduct foreign
policy has enabled Elbegdorj to strengthen the executive branch’s role in
ways that are largely unconstitutional. His approach to foreign policy, where
he often acts impetuously and without prior consultation, is the most salient
example of such behavior.46 Concern in Mongolia is widespread that
Elbegdorj has adopted a “China model” for leadership, consolidating
power in the presidency to allow greater control over the country’s devel-
opment. High-level Mongolian politicians are now calling for constitutional
reform to weaken the president’s power to restore balance in political

institutions.
Similarly, Mongolian senior officials are worried about China’s
growing effect on the country’s ability to maintain a “third neighbor”
policy of multi-directional diplomacy. Concerns exist about the effect
that trilateralism with China and Russia has on Mongolia’s room for
maneuver, particularly as China is seen to dominate the trilateral frame-
work. Analysts and officials are similarly apprehensive that trilateralism
may force Mongolia to apply for permanent membership in the SCO,
an institution many Mongolians are hesitant to join for fear of greater
dependency on China. Similar anxiety exists over Elbegdorj’s unilateral
declaration of Mongolia’s “sustainable neutrality” foreign policy, which
Mongolian officials argue negatively affects the state’s relations with
Russia to China’s overall benefit.47
Financial analysts are uneasy over Mongolia’s growing debt to China
under the currency swap agreement, particularly as the terms of
Mongolia’s line of credit are exceedingly murky.48 Those in Mongolia’s
banking sector are upset about the PBOC and ICBC’s attempt to pene-
trate Mongolia’s market; some officials note that Mongolian banks cannot
compete with China’s large state-owned banks in terms of capital and
would face insurmountable competitive pressure from the banks. Distress
also exists over China’s influence on Mongolia’s macro-level growth, as
some analysts argue Mongolia is exceedingly vulnerable to changes in
China’s domestic economic system, such as the country’s current attempt
to rebalance its economy away from growth dependent on investment in
fixed assets toward consumption-led growth. Perhaps unfairly, these ana-
lysts ascribe China’s influence as a primary factor in Mongolia’s own
political system, as a force contributing to political corruption, ineffi-
ciency, and illegitimacy.49
Security analysts are similarly concerned about the effects greater mili-
tary and police cooperation with China will have on Mongolia’s national
security, particularly in regard to counter-terrorism. There is a clear fear of
a “Ukraine scenario” with China, where Beijing would annex territory in
Mongolia’s southern and western regions out of “concern” for terrorist
activity in Mongolia aimed at China. One Ministry of Foreign Affairs
official noted that China had already used counter-terrorism as an excuse
to detain a Mongolian diplomat on the Sino-Mongolian border in 2015 in
a breach of diplomatic protocol.50 While one can debate the likelihood of
China using terrorism as an excuse to violate Mongolian sovereignty, the
186 J. REEVES
sense of vulnerability in Mongolia resulting from closer security coopera-

tion with China is palpable.
CONCLUSION
Given these negative or potentially negative scenarios, China’s approach to
Mongolia is not unproblematic. Despite what are, arguably, Beijing’s best
intentions, structural conditions exist between the two states that portend
unfortunate outcomes. While a single case study in China’s larger portfolio
of peripheral relations, the Sino-Mongolia case does provide insight into the
challenges inherent in China’s focus on periphery diplomacy and outreach
through the OBOR grand strategy. As Mongolia shares many characteristics
with other small states on China’s border—a developing economy, eco-
nomic dependency on China, an unstable political system, and state-society
issues compromising political legitimacy—one might expect to see similar
dynamics at play within China’s bilateral periphery relations in general.
For China, managing the negative outcomes inherent in its approach to
periphery diplomacy is an increasingly pressing challenge, as failure to do
so will result in diminished appetite among its partner states for closer
engagement. Chinese experts have identified this need within the OBOR
approach, although, to date, Beijing has largely ignored calls to slow
engagement to ensure an entirely “win-win” outcome for all states
involved.51 Rather, it has chosen to move ahead with its periphery rela-
tions with, perhaps, the intention to deal with problems as they arise.
This approach has significant implications for China’s position within
Asia, for China’s peripheral states, and for Asia’s overall security architec-
ture. So long as the benefits of Chinese engagement continue to over-
shadow negative outcomes, China’s approach to periphery relations
through OBOR is sustainable for both China and partner states. The
moment the negative aspects of engagement become symbolically more
important than the benefits, partner states will alter their perception of
China’s engagement. Should they come to view China’s approach as
aggressive or exploitative, what today analysts view as a source of stability
could quickly become a source of threat.
NOTES
1. Yan Xuetong, 整体的“周边”比美国更重要, Huanqiu Shibao, January 13,
2015.
2. Liang Haiming, 中国也要重返亚洲吗, Sina Economic, January 5, 2015.

3. 推动共建丝绸之路经济带和21世纪海上丝绸之路的愿景与行动, National
Development and Reform Commission, March 30, 2015, http://www.
ndrc.gov.cn/gzdt/201503/t20150330_669162.html.
4. Huang Rui, “一带一路”构想助蒙古国打通“草原之路,”Xinhua, April 23,
2015.
5. 习近平在周边外交工作座谈会上发表重要讲话, Embassy of the People’s
Republic of China in the Republic of China, October 28, 2013, http://
www.fmprc.gov.cn/ce/cekor/chn/xwxx/t1093366.htm.
6. 习近平出席中央外事工作会议并发表重要讲话, Xinhua, November 29,
2014.
7. 李克强谈周边外交:中国人讲求“以德报德,”Cankao Xiaoxi, April 11, 2014.
8. Yue Feifei, 重视周边外交十八大后习近平李克强已访14个邻国, Beijing
Youth Daily, November 23, 2015.
9. Xuetong, 整体的“周边”比美国更重要, Huanqiu Shibao.
10. Tian Huimin, Tian Tian, and Zheng Wanyun, “中国‘一带一路’战略研究,”
China Market 21, no. 836 (2015): 10–12.
11. Li Yihu, 对“一带一路”的国际政治考察, China Review, May 9, 2015.
12. 推动共建丝绸之路经济带和21世纪海上丝绸之路的愿景与行动, National
Development and Reform Commission.
13. Wang Ruifan, 外交官眼中的“一带一路”:加强政策沟通与协调, Crin.cn,
June 19, 2015.
14. Li Yihu, 对“一带一路”的国际政治考察, School of International Studies,
Peking University, March 8, 2015, http://www.sis.pku.edu.cn/cn/
ResearchManagement/ResearchNews/0000000074/do.
15. Fang Ningdeng, “Rapid development of the ‘One Belt, One Road’ depends
on smooth and convenient information sharing,” Global Times, July 16,
2015.
16. Yao Hui, “一带一路”:贸易畅通最核心, Renmin Ribao, June 26, 2015.
17. 给梦想插上翅膀,让“一带一路”通向美好未来, Ministry of Foreign Affairs
of the People’s Republic of China, April 30, 2015.
18. Sun Cunliang, “一带一路”人文交流:重大意义、实践路径和建构机制,
Guoji Yuanzhu, no. 2 (2015): 14–20.
19. “PRC-Mongolia Joint Declaration on the Establishment and Development
of a Comprehensive Strategic Partnership,” Xinhua, August 21, 2014.
20. “China, Mongolia To Improve Legislative Cooperation,” Xinhua, October
27, 2014.
21. “China, Mongolia Vows to Deepen Military Cooperation,” Xinhua, April
21, 2015.
22. “China, Mongolia Pledge Enhanced Security Cooperation,” Xinhua, May
11, 2015.
188 J. REEVES
23. 中华人民共和国和蒙古国关于深化发展全面战略伙伴关系的联合声明(全
文),Xinhua, November 11, 2015.
24. Hu Sumin, 二连浩特获批设重点开发开放试验区,布局自贸区, Economic
and Trade Area Linkage, June 13, 2014, http://m.thepaper.cn/
newsDetail_forward_1250511.
25. An Lu, “China, Mongolia meet on cross-border trade zone,” People’s Daily,
March 27, 2015.
26. “China Advances Construction of China-Mongolia-Russia Economic
Corridor,” CNTV, June 8, 2015.
27. Author’s interview, senior official, Great State Hural, Ulaanbaatar, 2016.
28. Author’s interview, senior financial analyst, Ulaanbaatar, 2016.
29. Zhang Yu, ‘首届中国—蒙古国博览会在呼和浩特隆重开幕,’Inner Mongolian
News, October 25, 2015.
30. 二连浩特恢复直飞乌兰巴托航线, Economic and Commercial Counselor’s
Office of the Embassy of the People’s Republic of China in Mongolia, July
23, 2015, http://mn.mofcom.gov.cn/article/jmxw/201507/
20150701057059.shtml.
31. Sun Weiren, ‘中国的“一带一路”倡议再助中蒙经贸合作上新台阶, Economic
and Commercial Counselor’s Office of the Embassy of the People’s Republic of
China in Mongolia, November 11, 2015, http://mn.mofcom.gov.cn/article/
ztdy/201511/20151101161198.shtml.
32. Zhang Yan, ‘中国援蒙项目——蒙古国乌兰巴托“北京街”开通,’People’s
Daily, August 23, 2014.
33. 中华人民共和国和蒙古国战略伙伴关系中长期发展纲要(全文), Xinhua,
October 25, 2015.
34. 中国和蒙古国战略伙伴关系中长期发展纲要(全文), The Central People’s
Government of the People’s Republic of China, October 26, 2015,
http://www.gov.cn/jrzg/2013-10/26/content_2515790.htm.
35. Michael Kohn, “Mongolia’s Central Bank Plans to Double Currency Swap
with China,” Bloomberg Business, March 29, 2014.
36. Multiple author’s interviews with Institute of Strategic Studies, Ministry of
Foreign Affairs, and National Security Council, Ulaanbaatar, 2016.
37. 中国和蒙古国战略伙伴关系中长期发展纲要(全文), The Central People’s
Government of the People’s Republic of China.
38. Weiren, ‘中国的“一带一路”倡议再助中蒙经贸合作上新台阶,’ Economic
and Commercial Counselor’s Office of the Embassy of the People’s
Republic of China in Mongolia.
39. 邢海明大使在蒙古大型中资企业践行“一带一路”战略高峰论坛上的讲话
稿, Economic and Commercial Counselor’s Office of the Embassy of the People’s
Republic of China in Mongolia, December 12, 2015, http://mn.mofcom.
gov.cn/article/jmxw/201512/20151201209015.shtml.
40. Author’s interview, senior financial analyst, senior banker with Golomt
Bank, and Mongolian Institute for Sustainable Economic Development,
Ulaanbaatar, 2016.
41. Weiren, ‘中国的“一带一路”倡议再助中蒙经贸合作上新台阶,’ Economic
42. 蒙古国举办首届汉语志愿者教师临岗培训, Xinhua, September 13, 2013.
43. 驻蒙古大使邢海明与蒙古国立大学师生交流互动实录, Chinese Embassy in
Mongolia, February 25, 2016, http://www.fmprc.gov.cn/web/dszlsjt_
673036/t1343131.shtml.
44. Weiren, ‘中国的“一带一路”倡议再助中蒙经贸合作上新台阶, Economic
45. 中国政府优买贷款项下实施的蒙古国电子医疗项目设备交接仪式在乌兰
巴托成功举行, Economic and Commercial Counselor’s Office of the
Embassy of the People’s Republic of China in Mongolia, January 8, 2016,
http://mn.mofcom.gov.cn/article/jmxw/201601/20160101230886.
shtml.
46. Multiple author’s interviews with Institute of Strategic Studies, Ministry of
Foreign Affairs, Ministry of Defense, and National Security Council,
Ulaanbaatar, 2016.
47. Author’s interview, senior official, Ministry of Defense, Ulaanbaatar, 2016.
48. Author’s interview, senior financial analysts, Ulaanbaatar, 2016.
49. Author’s interview, Mongolian Institute for Sustainable Economic
Development, Ulaanbaatar, 2016.
50. Author’s interview, senior official, Ministry of Foreign Affairs, Ulaanbaatar,
2016.
51. Zhu Feng, 不仅要从中国看世界更要从世界看中国, Suzhou Ribao, March
11, 2016.
Jeffrey Reeves is an Associate Professor in the College of Security Studies with the
Daniel K. InouyeAsia Pacific Center for Security Studies in Honolulu, Hawaii. He is
the author, most recently, of Chinese Foreign Relations with Weak Peripheral States
(Routledge, 2015) and co-editor of Chinese-Japanese Competition and the East
Asian Security Complex (Routledge, 2017).
PART 3
The Russian Far East and Northeast China

CHAPTER 12
The Russian Far East: Positive Scenarios

and Negative Scenarios
Artyom Lukin and Gilbert Rozman
POSITIVE SCENARIO I—ARTYOM LUKIN

The Russian Far East (RFE) constitutes both an asset and a liability for
Russia. Stretching from east of Lake Baikal to the shores of the Pacific
Ocean, this huge expanse of northeastern Eurasia contains all kinds of
natural resources—oil and natural gas, coal, iron ore and copper, gold,
diamonds, uranium, pristine freshwater, timber, and fish stocks. The RFE
boasts 15,000 miles of Pacific coastline and controls the eastern reaches of
the Arctic. The RFE also gives Russia direct access to the Pacific Ocean,
which makes it a truly transcontinental nation spanning the Euro-Atlantic
and the Asia-Pacific. At the same time, its location, remote from and with
tenuous transportation links to the country’s core, as well as its under-
population, underdevelopment, and the lack of basic infrastructure make
the RFE a source of constant concern for Moscow. Since Russia acquired
these lands, it has faced a recurring risk of losing control over them as a
A. Lukin (*)
Far Eastern Federal University, Vladivostok, Russia
G. Rozman

https://doi.org/10.1007/978-981-10-3144-1_12
194 A. LUKIN AND G. ROZMAN
result of external aggression, foreign encroachment, internal separatism,

or combination of all three.
Around 2007, Moscow initiated an array of measures and policies
designed to significantly accelerate the development of the RFE. This task
was proclaimed by the Kremlin “a national priority,” and featured large-scale
state-funded investments, mostly in infrastructure projects. Heightened
attention to the RFE was linked with Moscow’s broader strategic priorities
such as the enhancement and expansion of economic cooperation with East
Asia to take full advantage of the rise of Asian economies and diversify away
from stagnating Europe. Yet, the results of the strategy to invigorate the RFE
and advance economic interaction with Asia have been mixed. The RFE’s
economic and social situation improved, compared to what it was a decade
before, but it remains an economic backwater that accounts for only five to
six percent of Russia’s gross domestic product (GDP) and about four
percent of its population. The number of permanent residents continues to
decline, mostly due to out-migration.
The herculean task of revitalizing the RFE grew much more difficult
after the Kremlin’s attention and resources became distracted because of
the Ukraine crisis and associated Western sanctions. Add to that the dra-
matic fall in oil prices, whose high levels had hitherto helped finance
Moscow’s priority projects, including those in the RFE. That said, there
are still reasons for cautious optimism regarding the RFE’s prospects.
A Far Eastern Viceroyalty?

Despite the deteriorating situation in Russia’s economy and external crises
in Ukraine and Syria, the Putin administration still treats the RFE as a
priority. This is reflected in special governance, regulatory, and fiscal
regimes that Moscow has been instituting for the region. In August
2013, Vladimir Putin appointed Yuri Trutnev, who previously served as
minister for environment and natural resources and later as Putin’s aide, as
the man in charge of affairs in the area. Concurrent with the position of
presidential representative to the Far Eastern Federal District, Trutnev was
given the rank of a deputy prime minister, reporting directly to the prime
minister and president. The Far East became only the second region of
Russia, after the North Caucasus, for which a deputy prime ministerial
office was established. Trutnev was given expansive powers, becoming a de
facto viceroy, overseeing nine provinces as well as the federal Ministry for
the Development of the RFE. A Kremlin insider, he enjoys direct access to
THE RUSSIAN FAR EAST: POSITIVE SCENARIOS AND NEGATIVE SCENARIOS 195
Putin with a reputation for being a tough guy and one of the most efficient
officials in the Russian government.
Under Trutnev’s watch, a package of measures has been adopted to
improve the RFE’s business climate and attract private investors. In
December 2014, the federal law on special economic zones was passed
that made it possible to designate areas in the Far East as “territories of
accelerated development” (sometimes also translated into English as “ter-
ritories of priority development”). Such territories will offer investors,
both domestic and foreign, streamlined administrative procedures, low-
ered taxes, a privileged customs regime, and easier rules for hiring foreign
labor. They will also get access to infrastructure, such as electricity and
transportation, to be built at the government’s expense. So far nine
“territories of accelerated development” have been inaugurated, even
though investors have yet to start large-scale production on designated
sites. Another landmark event was the designation of Vladivostok,
Nakhodka, and their environs in the southern Primorsky Territory as a
“free port.” The law on the “free port of Vladivostok” was adopted in
July 2015, featuring benefits of regulatory liberalization similar to the
“territories of advanced development.” Additionally, the free port was
granted a very significant privilege of visa-on-arrival entry for foreign
visitors (they can stay in Russia for up to eight days). A de facto free travel
regime is a revolutionary move for Russia with its traditionally difficult and
prohibitive visa regulations. Trutnev is now pushing for extending a free
port regime to other ports in the RFE.
Being part of Russia’s national economy, the RFE was not spared the
recession the country entered from 2014; however, the RFE’s basic per-
formance indicators look slightly better compared to Russia’s average.1 As
one reason, the region may be favored by the fact that most of its external
economic links are with Asia and thus are not as much affected by the
European Union’s sanctions and Russia’s counter-sanctions that cause
damage to the economy of the European part of Russia.
China’s Growing Interest in the RFE

The RFE historically has had an ambivalent relationship with its giant
neighbor. Certainly, China is perceived as an indispensable economic
partner—a provider of essential goods and services as well as a major
consumer of the RFE’s staples. Yet, China has always simultaneously
been perceived as a potential threat. After all, the southern part of what
is now the RFE used to be under the nominal sovereignty of the Qing
dynasty. Even though the border issue between Moscow and Beijing is
considered fully settled by legal treaties, concerns linger in Russia that
China might seek to reclaim these lands in the future.
China’s interests in the RFE combine economic and strategic impera-
tives. First and foremost, China needs the RFE as a proximate overland
supplier of vital raw materials. Of course, China can get these resources
elsewhere, but its geoeconomic stake in the RFE is directly related to its
intensifying contest with the United States for primacy in the Asia-Pacific.
Beijing is increasingly worried that, if this rivalry comes to a head,
Washington may use its trump card—launching a naval blockade of the
sealanes through which China receives most of its imported primary
products.2 If anything, these concerns have increased in recent years and
so has the priority that China attaches to the RFE as a secure and reliable
source of some essential commodities.
In the 1990s and 2000s, China’s economic presence in the RFE was
mostly represented by the northeastern province of Heilongjiang and
limited to primitive trade exchange—with little investment and few, if
any, big Chinese players operating in the region. Yet, China’s economic
footprint in the RFE and eastern Siberia has begun to grow quantitatively
and qualitatively in recent years. Reflecting Beijing’s newfound interest in
the RFE, Vice President Li Yuanchao called for the linking up of the RFE
with northeast China to create “a single economic integration zone” and
“a new economic bloc for Asia.”3 The RFE is highlighted in Beijing’s Silk
Road blueprint, which claims to strengthen cooperation between China’s
Heilongjiang, Jilin, and Liaoning provinces and Russia’s Far East.”4 For
its part, in a significant departure from previous policies, Moscow has lifted
informal restrictions on Chinese investments in the RFE and has begun to
actively court Chinese capital.
Over recent years, a number of major Russian-Chinese projects, cen-
tered on the RFE, were announced. The largest of these deals was the
signing of a USD 400 billion natural gas deal in May 2014 between
Gazprom and the China National Petroleum Corporation (CNPC) that
would supply northeast China with pipeline gas from fields in the RFE and
eastern Siberia starting from 2019. Other recent Chinese investments in
eastern Russia have targeted oil, copper, iron ore, coal mining, gold,
forestry, ports, and electric power generation. In 2014, Russia and
China also began construction of a railway bridge—the first permanent
link between the two countries across the Amur River—which will connect
the RFE’s hinterland and Heilongjiang province. Chinese companies have

also become the principal investors in a large casino resort complex near
Vladivostok, which was opened in November 2015. The complex primar-
ily targets the millions of would-be gamblers in northeast China.
China’s economic slowdown that we are beginning to witness will not
make the RFE less significant for the PRC. Even with the slowing eco-
nomic growth, China will still remain a country of 1.4 billion people and
will continue to demand huge volumes of natural resources and energy
that need to be imported. The incipient change of priorities in Chinese
economy and society in favor of quality of life, as opposed to sheer GDP
growth, will make the RFE even more important to China in some
respects. As one example, the extreme air pollution in northern areas of
China, including Beijing, cannot be effectively tackled unless coal, its
primary cause, is replaced with cleaner energy.5 The most realistic alter-
native is natural gas from the nearby RFE.
Another case in point is China’s growing appetite for imported foods.
The RFE, with its uncontaminated land and rich fish stocks, can be an
important component in China’s food security strategy.6 Chinese traders
have shown increasing interest in importing various foodstuffs from the
RFE, especially because they are considered more organic compared to
Chinese-produced foods. The devaluation of the ruble makes Russia’s
agricultural products even more attractive. Russia’s agribusiness corpora-
tions are planning to launch production of pork, soybeans, sugar, and
seafood aquaculture in the RFE, specifically targeting China’s market. In
December 2015, the Russo-Chinese Fund for Agriculture Development
was established, which will focus on projects in the RFE, with most of the
investments coming from Chinese sources.7
Japan and Korea: Alternatives to China?

Even though Russia and China are close “strategic partners,” and perhaps
even quasi-allies, Russia is uncomfortable with becoming overdependent
on China and shows obvious interest in promoting ties with two other
Northeast Asian neighbors—Japan and South Korea. Apart from being
geopolitical hedges against China, they are also valuable as sources of
advanced technologies and expertise for the RFE—something that
China still lacks.
Japan looks like the most obvious option as a regional counterweight
to China. Some prominent Russian analysts suggest it could become
“Russia’s Germany in the East,” a reliable source of technologies and

capital.8 Japan is the Asia-Pacific country that shows the most alarm
concerning the rise of China, and this alone should make it predisposed
to take steps countervailing the growth of Chinese influence in the neigh-
boring RFE. However, the dispute over the Kuril Islands/Northern
Territories still poisons the bilateral relationship and stands in the way of
expanding Russian-Japanese collaboration. Furthermore, even though
Japan is still interested in the RFE’s natural resources, the stagnant
Japanese economy makes Tokyo a less attractive partner. In particular,
energy consumption in Japan is flat, which puts basic limitations on the
prospects for Russian-Japanese energy cooperation. Finally, Tokyo’s alli-
ance with Washington and its membership in the Group of Seven (G7)
place restrictions on how far it can advance cooperation with Moscow, at
least for the time being. That said, Prime Minister Abe Shinzo is eager to
improve relations, which is being reciprocated by the Kremlin. He and
Putin seem to have established rapport, and the two sides continue to
quietly negotiate the territorial issue.
Like Japan, the Republic of Korea is important as a source of capital and
modern technologies for the RFE as well as a major consumer of its primary
products. It is also significant that, in contrast to Russian-Japanese or
Russian-Chinese relationships, there is no negative historical legacy between
Russia and Korea. As opposed to China, which is viewed as a strategic
challenge by many in Russia, and unlike Japan with which Russia has an
unresolved territorial dispute, Korea is not considered a geopolitical concern
for the RFE, making it much easier for the two sides to cooperate in vital
economic areas. The ties are assisted by the presence of a fairly large and
active community of Russian-speaking ethnic Koreans in the RFE. There are
also political motives why Seoul wants a strong presence in the RFE. This is
viewed as a way of gaining additional leverage over North Korea, which
borders the RFE and thus facilitating prospective reunification.
However, South Korea’s economy is relatively small—just one-fourth
the size of Japan’s and one-seventh that of China. Also, like Japan’s, South
Korea’s economic growth is slowing down, thus moderating the country’s
demand for the RFE’s commodities exports. Additionally, South Korea,
though not a G7 member and not theoretically required to join in anti-
Russian sanctions, is allied with the United States. Hence, Seoul cannot
but take into account the state of US-Russian relations in developing
cooperation with Moscow. The absence in recent years of substantial
Japanese and Korean business deals in the RFE indicates that Tokyo and
Seoul are unlikely to compete with Beijing for economic influence in

Russia’s eastern territories.
Conclusion
Even though the RFE is getting special treatment from Moscow, the
region remains part and parcel of a huge country, which has the govern-
ance system generally characterized by low efficiency and incompetence.
Unless the Russian state as a whole successfully modernizes its institutions,
there will be no bright future for the RFE. Thus, the domestic factor—
developments within Russia itself—will be most crucial.
On the external side, China will be by far the most important determi-
nant of the RFE’s future trajectory. For various reasons—from geoeco-
nomics to environment to food security—China’s interest in the RFE is
likely to grow. China’s tightening embrace of the RFE will provide the
region with much needed cash infusions and give it access to one of the
world’s biggest markets. Yet, such benefits will come with the significant
risk of the RFE becoming China’s natural resource periphery.
POSITIVE SCENARIO II—ARTYOM LUKIN

Gilbert Rozman has good reason to be skeptical about the Russian Far
East (RFE). In my first installment, I advanced a similar argument that the
root cause of the RFE’s troubles lies in Russia’s own shortcomings,
particularly the rampant inefficiency of government institutions. A sad
reminder of how inept bureaucracy can compromise Moscow’s own
well-intentioned measures to develop the RFE came just recently, when
the widely advertised visa-on-arrival regime for foreign visitors to the
Vladivostok free port area did not materialize, despite high-ranking offi-
cials’ earlier promises that the procedure would start working on January
1, 2016. Lack of inter-agency coordination and failure to set up necessary
infrastructure have delayed introduction of the simplified entry regime for
the RFE, with July 1, 2016, now set as a new launch date.
Is Russia on the Brink of Structural Reforms?

That said, it is not all doom and gloom. Russia’s notoriously difficult
business climate seems to be getting better. According to the World
Bank’s latest Doing Business rating, which evaluates whether the national
regulatory environment is conducive to starting and operating a local firm,

Russia rose by eleven positions and now ranks 51st among 183 economies.
This puts Russia ahead of all the other BRICS countries.9 Furthermore,
Bloomberg’s Innovation Index, which scored economies using factors
including research and development spending, tertiary education, and
concentration of high-tech public companies, gives Russia a comparatively
high twelfth place, just between Israel and Austria.10
The collapse in commodity prices, above all hydrocarbons, has
seriously undercut Russia’s ability to finance modernization programs,
including those in the RFE. At the same time, the oil crisis presents a
blessing in disguise as it may finally galvanize Russia into action on the
long-overdue reforms. As it is becoming increasingly clear that petro-
leum prices are not going to rebound any time soon and can stay at
low levels for a very long time, more and more members of the
Russian political class are coming to the conclusion that the existing
model—state capitalism with elements of neo-feudalism—is no longer
viable and in need of profound changes. Reflecting this mood are very
blunt assessments publicly voiced by some prominent figures in the
Russian establishment. For example, German Gref, the head of state-
owned Sberbank, Russia’s largest bank, and a person close to Putin,
recently declared that Russia had descended into the ranks of “losing,
downshifter countries.” He said that the era of oil was over and called
for radical overhaul of state institutions.11 The head of Russia’s central
bank Elvira Nabiullina called for “structural efforts to diversify the
economy.”12 Even official documents, such as the latest edition of
Russia’s National Security Strategy, signed by Putin in December
2015, admit that Russia’s economy is characterized by low competi-
tiveness, technological backwardness, and dependence on commodity
exports.13
Has Russia Really Failed in its China Gambit?

Rozman argues that China utterly failed to meet Russia’s high expecta-
tions concerning trade and investment, particularly with regard to the
RFE. Yet, the picture may be somewhat more nuanced and complex. It
is true that in 2015 Russia’s trade with China dropped significantly—by
27.8 percent.14 At the same time, Russia’s trade with the European Union
plunged by a whopping 40 percent.15 This means that, in relative terms,
China’s share in Russian foreign commerce has increased.
Importantly, trade statistics reflect the dollar-denominated value of

international commerce. Russia’s principal exports are commodities,
such as hydrocarbons, whose prices substantially declined in
2015 — hence, the shrinking value of Russia’s foreign trade. Yet, the
physical volume of Russian exports to China, as measured in tons and
barrels, has largely remained stable. Indeed, when it comes to oil exports,
Russia has even increased its share of China’s market, rivaling Saudi
Arabia.16 In 2015, Russia sold to China over 41 million metric tons of
oil, an increase by some 25 percent against 2014.17
Low hydrocarbon prices have not reduced Beijing’s interest in Russian
oil and gas. As I argued in my first piece, China is attracted to the RFE’s
resources not only for commercial but also for strategic reasons. Even
though oil supplies via cross-border pipelines—like the pipeline from the
RFE into Northeast China—are normally more expensive than seaborne
shipments from the Middle East, Beijing continues its “continental pet-
roleum strategy” as an insurance against a wartime contingency or
blockade.18
In another significant development, after ten years of negotiations,
Beijing began to lift restrictions on exports of Russian grain to China.
Of note, Chinese regulators have opened the domestic market specifically
to the wheat, rice, corn, and soybeans produced in Siberia and the RFE.19
Russia’s vast agricultural potential is relevant not only to China, but also
to much of the rest of Asia, whose food security looks increasingly
precarious.20
Year 2015 also saw a surge in Chinese tourism to Russia, including the
RFE. In 2015, the border regions of Primorsky Krai and Amur Oblast
reported a doubling of the number of Chinese visitors compared to the
previous year. The main attraction for Chinese tourists has been the
favorable exchange rate due to the ruble’s drastic devaluation against the
yuan. More and more Far Eastern hotels, restaurants, and shops roll out
the red carpet for Chinese travelers, customizing services to their tastes.
The RFE’s cities, particularly Vladivostok, also hold cultural appeal to the
Chinese, being the places of European civilization nearest to China.
Rozman is right to point out that big Chinese investments in Russia
largely did not materialize. As of the end of 2014, China’s cumulative
stock of direct investment in Russia stood at USD 3.37 billion. Compare
this to Japan’s USD 14.4 billion and India’s USD 3.6 billion.21 There
were only a few major deals in 2015. China’s Silk Road Fund obtained a
9.9 percent stake in the Yamal liquefied natural gas (LNG) project in the
far north of Siberia.22 Sinopec bought a 10 percent stake in Russia’s

petrochemical giant Sibur.23 A consortium of Chinese companies acquired
a 13.33 percent stake in the Bystrinskoye gold and copper field in eastern
Siberia.24 In the RFE, China’s officially recorded foreign direct investment
(FDI) continues to be in the range of one to two percent, albeit this figure
does not include “grey area” investments, when, for example, Chinese
business people use Russian companies and citizens as fronts to conduct
acquisitions and other commercial transactions.
One reason why—despite Moscow’s newfound willingness to let the
Chinese into the strategic and most prized sectors like oil and gas—
relatively few investment deals have been completed may be disagreements
over price. For example, price differences between Russia’s Metalloinvest
and China’s Hopu Investments led to suspension of negotiations on the
sale of a stake in the giant Udokan copper field in Zabaikal Krai, even
though, in May 2014, a preliminary agreement was reached for the
Chinese company to buy 10 percent of the shares in Udokan and finance
the field’s development.25 A similar fate befell Rosneft’s agreements with
CNPC on the sale of stakes in Taas-Yuryuakh and Vankor oil fields in
Eastern Siberia, MoUs on which were signed in 2013 and 2014, respec-
tively. Neither deal has been finalized because the parties are still haggling
over price.26 By contrast, Russia found it easier to cut a deal with India,
selling it a 15 percent stake in Vankor.27 The Chinese are seeking to buy
Russian assets on offer as cheaply as possible, biding their time and betting
that cash-strapped Moscow would eventually surrender to China’s terms.
Besides, there are more and more cases in which the Chinese condition
their investments on acquiring an enterprise’s controlling stake, some-
thing they have not demanded before.28 We are likely to see an increasing
number of investment deals, with Russia selling to China minority, and
even majority, stakes in its most valuable assets, particularly in Eastern
Siberia and the Far East.
Russia’s Pivot to the East Still Needs the West

If Moscow ever had any illusions about replacing the West with China,
they are almost gone now. China may be a huge market for Russia’s
natural resources, but it lacks advanced equipment, technologies, and
expertise needed to tap the riches of the RFE. These can often be found
only in the West and its allies like Japan and South Korea. Furthermore, as
a rule, Western lenders and investors offer more generous financial terms,
such as lower interest rates. Whereas China often attaches extra conditions
to its funding, especially insisting that Chinese equipment and workers be
used in Chinese-financed projects, Westerners do not have any such
requirements.
Not surprisingly, Moscow’s loss of access to Western technological and
financial markets has enabled China to drive an increasingly hard bargain
with Russia. Tellingly, in recent months Moscow’s senior officials have
started to emphasize that Russia’s “pivot to the East” should not be at the
expense of the ties with Europe whom Russia continues to see as its most
important economic partner.29 According to Minister of Economy Alexei
Ulyukaev, it is, after all, the European Union that is the world’s biggest
economy.30
The RFE does feature some ongoing positive examples of Western
business involvement. ExxonMobil and Rosneft continue their strategic
partnership in the Sakhalin-1 oil and gas project, even though new ven-
tures between them have been largely put on hold due to the sanctions.
Kinross, Canada’s major gold mining company, owns and operates two
gold and silver mines in Chukotka, with an accumulated investment of
over USD 2.2 billion. The share of Russian production exceeds 20 percent
in Kinross’s worldwide business operations. Kinross has earned a favorable
reputation in the RFE, providing jobs to local people, introducing
advanced mining technologies, building infrastructure, and maintaining
solid environmental standards. The Australian Tigers Realm Coal has
invested in developing rich deposits of high-quality coking coal in
Chukotka and plans to start coal shipments to Japan, China, and other
Asia-Pacific countries from 2017.31 However, if the current climate of a
“new cold war” between Russia and the West persists, the RFE will mostly
be shunned by major Western companies. There are some grounds for
modest optimism as relations between Moscow and Washington have
lately improved somewhat, with Secretary of State John Kerry even sug-
gesting that the anti-Russia sanctions could be removed in the next few
months.32
Conclusion
The Russian Far East’s future will be determined by Russia’s own evolu-
tion, relations with China, and relations with the West. Russia’s internal
trajectory remains profoundly uncertain, but there are growing signs that
the country’s political elite may be willing to embrace necessary structural
reforms. This gives reasons for cautious optimism. China will remain the
most important external factor for the RFE, even though Moscow seems
to have adjusted downward its China-related economic expectations,
which were riding high in the immediate wake of the Ukraine crisis, and
has begun to stress the enduring importance of close ties with Europe.
Nevertheless, if a “new cold war” with the West persists, Russia may have
no choice other than to accept the tough conditions imposed by its quasi-
ally China, such as the prime Far Eastern assets being handed to Chinese
investors at fire sale prices. Eventually, this may lead to the RFE becoming
an area of China’s predominant geoeconomic influence, followed possibly
by a degree of geopolitical control.33
If the RFE becomes a kind of “Outer Manchuria,” whose fate is being
decided in Beijing and Harbin rather than in Moscow and Vladivostok,
the main loser, of course, will be Russia itself. However, this will also have
strategic implications for the United States and its allies. If nothing else,
this alone should give the West a stake in the future of the RFE.
NEGATIVE SCENARIO I—GILBERT ROZMAN

For a quarter century after the collapse of the Soviet Union, the Russian
Far East (RFE) has been caught between Moscow’s failed promises,
bureaucratic barriers of a local nature, and unrealized appeals for invest-
ment from neighboring countries. The response at every turn has been
that, despite earlier problems, things are changing. At the beginning of
2016, the optimistic case for the RFE is again being advanced. In this
negative scenario, I concentrate on four reasons why optimism is unwar-
ranted. They are as follows: 1) commodity prices; 2) China’s actions and
Sino-Russian relations; 3) the relations of Russia with Japan, South Korea,
and the United States; and 4) policies of the Russian government and local
governments in the RFE.
Commodity Prices
After falling to about USD 30 a barrel, oil, as the bellwether of commod-
ities for export, is casting a dark shadow on the RFE. Low prices mean that
global energy companies will have no funds and no incentives to invest. At
the same time, the government in Moscow will continue to cut funding
for infrastructure and other projects, letting its “priority” programs in the
RFE wither, as in the past. If prices over USD 100 a barrel did not suffice
to generate foreign investment, why would much lower prices and great
uncertainty about future economic prospects give investors a reason to
proceed?
There is now a glut of many of the commodities that the RFE wants to
develop and export. Start-up costs in a region with difficult climatic
conditions, vast distances, and a lack of infrastructure remain a formidable
obstacle. Moreover, the sharp drop in the value of the ruble and frequent
adjustments in policies and personnel do not give investors confidence in
the stability of Russia and the RFE. Russia has missed its chance to take
advantage of China’s boom and high prices. This could be seen in the
dashed hopes of the 2012 Asia-Pacific Economic Cooperation (APEC)
summit in Vladivostok and in the paltry results of the September 2015
Eastern Economic Forum in that same city, where China’s presence
proved disappointing and Japan’s presence was given prominence by
Putin in the outside hope that Abe’s political calculations might trump
new realities.
China’s Actions and China-Russia Relations

Optimism generated in 2014 by the Putin-Xi summits coupled with
grandiose claims about joining the Eurasian Economic Union (EEU)
and “Silk Road Economic Belt” has given way to frustration that Sino-
Russian trade declined by 30 percent in 2015 and Chinese investments in
Russia did not materialize. Analyses in Russian sources place much of the
blame on the economic forces buffeting China, while also faulting the
flawed environment for investment in Russia. In any case, the high hopes
generated of late for an infusion of Chinese cash have completely col-
lapsed. This applies to the RFE, where a casino in Vladivostok is now
thought to be the main magnet for drawing funds from China.
Since the “turn to the East” had become the “turn to China,” and
Siberia and the Far East of Russia had been prioritized as the test case for
success in this turn, failure of China to meet expectations generated when
Russia “put all of its eggs in one basket” is a tremendous blow. While some
local residents were preoccupied with the fear of Chinese expansionism
(the “yellow peril”), the real problem proved to be Chinese “indiffer-
ence.” As the ruble lost value, Russia lost its financial pull even for small-
scale Chinese businessmen. Andrei Ivanov, as noted in “Country Report:
Russia,” sees “friendship without trade.” Some talk of the model, which
brought 15 years of rising bilateral trade, as exhausted, speculating about
some new model appearing without any reckoning of what China would
hope to gain from Russia, especially from its Far East. Alexander Gabuev is
particularly skeptical of the ideas being raised in Russia after examining
misconceptions about China held by those doing business with it. Viktor
Tarusin, who directs the Russia-ASEAN Business Council, expects a
rough year in 2016 for bilateral economic ties with China, pointing even
to Chinese banks that are observing the sanctions imposed by the West
even thought that is not the policy.
Relations of Russia with Japan, South Korea, and the United States
A December 23, 2015 article in Yomiuri Shimbun was headlined,
“‘Development of the Far East’ Is the Key to Negotiations.” It found
Putin’s preference for Japan at the Eastern Economic Forum to be not
only a message to Japanese firms but also a sign of his interest in intensify-
ing talks with Abe with economic cooperation in Russia’s Far East in the
forefront. When Putin and Abe met two months later in Turkey, the
linkage between more Japanese investment and progress toward a peace
treaty and resolution of the territorial issue was reinforced. According to
the newspaper, this is a good time for Japan to proceed with talks, since
Russia’s economy is reeling and the country is isolated internationally over
the Ukraine question. Russia seeks a big increase in Japanese imports of its
natural gas but also an automobile factory to give jobs to Russians, who
otherwise might join the migration away from this region. The article
concludes, however, that Japanese companies have little interest in an area
with such a small market, high transport costs to other markets, and a lack
of any transparency in commercial regulations. Any economic agreement
would appear to be a concession that the Japanese government would
have to press on business in return for benefits it seeks in negotiations, not
a sign of the Far East’s real appeal.
South Korea under Park Geun-hye has showcased its Eurasian initiative
with scant results. It has not imposed sanctions on Russia, seeking coop-
eration in managing the North Korean threat and in preparing for possible
reunification. Despite talk that Park and Putin had a good relationship,
there has been little mention of late of how the South might contribute to
development in the Russian Far East. Indeed, failure to take seriously
North Korea’s fourth nuclear test is harming Russia’s image there.
At one time, Russian leaders sought US cooperation in developing its
Asiatic flank. Now it is assumed that turning to the East is linked to a
“Cold War” atmosphere with the West. Indeed, Russian policy appears to
be aimed at splitting Tokyo and Seoul from Washington, e.g., on sanc-
tions and on missile defense. This is not the ideal way to develop the
Russian Far East, given the interconnected business interests in these
countries and the need for a welcoming tone to the international com-
munity. Acting as if West and East are two separate spheres is unlikely to
work with close US allies.
Policies of the Russian Government and Local Governments in the RFE

Amazingly, recent Russian articles have eschewed the old quest for “who is
guilty,” targeting various foreign entities, in concentrating on self-criti-
cism of Russia’s own shortcomings for the troubles in the Russian Far
East. True, there have recently been a series of changes aimed at addres-
sing some of these, but writings about the lack of investment from China
and others are insistent—not that they are ignoring the changes, but that
the environment has not changed nearly enough. Generalized analysis of
Russia’s economy is no less insistent that reforms were overlooked in favor
of just raking in the money from high commodity prices. There is no sense
of a vigorous reform program in Russia today to reassure investors at a
time of massive capital flight. Under these circumstances, we can expect
depressed conditions in the Russian Far East and more depopulation.
Opportunities have been squandered with undue optimism about how
things were about to change. Instead of more optimism, realism about
ongoing troubles would provide a better foundation for real change.
NEGATIVE SCENARIO II—GILBERT ROZMAN

Key terms over the past quarter century in strategizing about the Russian
Far East include the following: complementarity, geoeconomic competi-
tion, modernization, intimidation, and geostrategic competition.
Reflecting on them, I revisit the limited optimism in the Positive
Scenario II posted in this issue of the journal. There may be grounds for
some positive outcomes, but I argue the barriers are more serious than
indicated.
Artyom Lukin sees a basis of hope in an improved business climate, a
blessing in disguise from low oil prices that galvanize modernizing
reforms, and China’s strong interest in Russian oil and gas and eventual
investment deals despite delays of late over pricing. He further credits
Russia’s need for Western technology and strategic implications for the
United States in preventing an “Outer Manchuria” as bolstering recent
signs of some improvement in Russian ties to the West. This puts part of
the burden on Russia for, at last, taking modernization seriously, and part
on the United States for taking the geostrategic competition seriously. It
also assumes continued salience of complementarity in the economy of the
Russian Far East and those of its neighbors. Looking at bilateral relations,
one-by-one, and at reform prospects, I cast doubt on such optimism while
holding open just a ray of hope only if all things fall into place. Russia’s
interest in modernization is too much in doubt, its antagonism toward the
United States too intense, and economic conditions too dire to expect the
cycle of rosy plans for the Russian Far East followed by gloomy results to
be broken in 2016.
Key Terms behind Russian Policies to Boost the Russian Far East
Complementarity has been the guiding logic of Russian reasoning
about the Far East throughout this period. This assumes three things:
rapid increases in demand across East Asia for Russia’s resources;
competitive pricing and investment protection for those interested in
these resources; and a premium for proximity of these natural resources
to markets due to strategic considerations. While Russia’s neighbors
have each endorsed this logic at times—and some in Japan and China
are doing so now—the case for complementarity is looking increasingly
doubtful. First, Russian prices and investment protection have not been
reassuring. Second, a glut of oil and other commodities plus a slow-
down in economic growth in Northeast Asian states leaves the demand
for Russian resources in greater doubt. Finally, infrastructure costs are
high, undermining the benefits of proximity despite some security
advantages at a time of uncertainty about the Middle East. China’s
slowing demand for resources and the world’s lower commodity prices
put complementarity under a dark cloud.
The Russian Far East has long counted on geoeconomic competition,
warning states that unless they acted quickly they would be left on the
sidelines. The Sino-Japanese rivalry in the 2000s gave Russians confidence
that they could play one off against the other. Even as China and Japan
consider new projects in the Russian Far East, it is unlikely that geoeco-
nomics has a large role. Talk of Russia having the clout of an energy
superpower is no longer heard. There may be economic deals ahead, but
the rationale in a world with a surplus of energy is far less likely to be

geoeconomics.
When Dmitry Medvedev was president, the buzzword was moderniza-
tion, as plans grew more serious to develop the Russian Far East and use
the 2012 Asia-Pacific Economic Cooperation (APEC) summit in
Vladivostok to jumpstart the area’s transformation. Yet, state-centered
projects were not consistent with stimulation of the private sector, and
the large investments by the state in the city of Vladivostok fell far short of
making it into a locomotive of its region or a center driving change in
Northeast Asia. Later, Vladivostok was given priority as Russia’s first “free
port” with visa-free commerce anticipated. The earlier plans have not
materialized; so a new stage of supporting the city has been needed.
In the 2010s, riding a massive military buildup and a more assertive
foreign policy, Russia turned to neighbors anew, applying more pressure.
The message to South Korea was understood to be that Russia would keep
increasing its support for North Korea unless South Korea cooperated
more on joint projects linked to the North, such as the Khasan-Rason
transportation corridor. By boosting ties to Pyongyang at a time it was
growing more belligerent, Moscow was sending a message to Seoul. The
message to Tokyo was similar: Moscow was drawing closer to Beijing and
could forge a Russo-Chinese axis if the Japanese did not act to divert it,
especially through an economic breakthrough for the Russian Far East,
which would be linked to a deal on a peace treaty, perhaps including a
territorial compromise. There was an element of intimidation in these
efforts to secure commitments for developing the Russian Far East. Russia
was back and could now negotiate from a position of strength. If no
intimidation was directed toward China, the very notion that Russia was
countering the United States and its allies could be cited as a rationale for
why China should do more to assist it economically, not least of all in
unrealized plans for the Far East.
The Current Situation

Since 2014, Russian leaders have viewed foreign relations largely
through the lens of geopolitics, even considering this the foundation
for geoeconomic objectives. Only when Sino-Russian relations are close
can Russia project the geopolitical strength it desires. Criticism of
China is, thus, muted. Despite expectations that the linkage of the
Silk Road Economic Belt and Eurasian Economic Union would have
two vectors, both a western route through Central Asia to European

Russia and an eastern route from Northeast China through the Russian
Far East and across Siberia, Chinese seem to be doing little to make the
eastern vector a reality. Low energy prices make them wary of invest-
ments. Western sanctions leave Chinese banks hesitant to move their
capital into Russia. Complementarity, when Northeast China suffers
from industrial closures, may be in doubt. While some Chinese agree-
ments may reflect an attitude of giving a geopolitical partner—Putin
and those in his close circle—some gifts, they do not indicate genuine
interest in developing the Russian Far East as an industrial center—
competing with China—or Vladivostok as a regional hub—also com-
peting. In the larger geopolitical picture, the Russian Far East is an
arena for solidifying the Sino-Russian relationship, even if some call for
economic ties to balance China.
South Korea’s complete cutoff of economic relations with North Korea
dealt a blow to Russia, which has long insisted that economic ties should
be separated from steps to bring about denuclearization—indeed, that
closer North-South economic ties are a path toward denuclearization. At
the last minute, at Moscow’s insistence, sanctions related to Russian coal
transported through Rason were removed from the Security Council
resolution 2270, although the plan to export the coal to South Korea is
now frozen. Even so, talk continues of Russia “playing the North Korea
card,” as it awaits a new opportunity and warns Seoul against deploying
the THAAD (Terminal High Altitude Area Defense) missile defense. A
new round of pressure on Seoul to assist Russia’s Far East may follow such
defiance.
Japan is a more promising partner in the short term for developing the
Russian Far East. Already in his brief stint as prime minister nearly a decade
ago, Abe pursued this objective through an initiative with eight parts, the
first two of which were energy and transportation. Resuming his wooing
of Putin in 2013, Abe made sure to put such cooperation on the agenda,
as Japanese suggested that Japan, unlike China, has no geopolitical ambi-
tions in the Russian Far East, i.e., its investments have particular value.
Indeed, talk of geopolitical complementarity and a new, balanced foreign
policy is widely associated with calls for Japan to assume a large role in this
area. If sometimes it is said that Japan has superior technology to China for
assisting the Russian Far East, increasingly the case is made mostly on
geopolitical grounds—Japan must support Russia or lose out to China and
be left with a Sino-Russian axis.
Russia’s military buildup on the Southern Kurile Islands and provocative

forays causing Japan to scramble its planes are signs that intimidation is
present. This is not the only aspect to a possible breakthrough in relations.
There is some hope that with Japan’s investments in the industrial sector of
the Russian Far East, there will finally be modernization. Given Japan’s
replacement of nuclear energy with liquefied natural gas (LNG) since the
Fukushima disaster and Russia’s urgent need for capital, complementarity is
also a theme. China and Japan are competing for infrastructure projects in
both Southeast Asia and India; so geoeconomic competition still has a place
in the Far East of Russia. There are lots of reasons for Tokyo and Moscow to
agree on a deal that encompasses the Russian Far East. But the single
greatest driving force today is geopolitics, as Japan’s leadership seeks to
forestall even closer Sino-Russian ties and Russia’s leaders are eager to use
the “China card” to elicit Japan’s assistance, when other approaches have
failed over many years. Often missing from discussions of these various
factors, individually or together, however, is analysis of whether Japan in
today’s environment and with its companies wary would boost economic
ties much, even if a breakthrough is reached between Abe and Putin leading
to a peace treaty, or of whether Russia in light of geopolitical realities would
be dissuaded by a deal with Japan from close ties to China and growing
reliance on China for the Far East. Geopolitics may be misinterpreted to
suggest more reason for optimism than is justified in the environment that
now prevails in both Russia and Northeast Asia.
NOTES
1. “Vladimir Putin: The RFE Showed the Best Rates of Growth,” December
29, 2015, http://minvostokrazvitia.ru/press-center/news_minvostok/?
ELEMENT_ID=3978.
2. Judging from the debate among US security specialists, economic strangu-
lation of China by means of a naval blockade may be emerging as the
optimal strategy for dealing with China in a major conflict. See, for example,
Sean Mirski, “Stranglehold: The Context, Conduct and Consequences of an
American Naval Blockade of China,” Journal of Strategic Studies36, no. 3
(2013): 10–11. See also T. X. Hammes, “Offshore Control is the Answer”
(US Naval Institute, December 2012), http://www.usni.org/magazines/
proceedings/2012-12/offshore-control-answer.
3. “China’s Vice President: China Should Invest More in Russia,” ITAR-
TASS, May 24, 2014, http://itar-tass.com/ekonomika/1212483.
4. National Development and Reform Commission, Ministry of Foreign

Affairs, and Ministry of Commerce of the People’s Republic of China,
“Vision and Actions on Jointly Building Silk Road Economic Belt and
twenty-first-Century Maritime Silk Road,”March 2015, http://en.ndrc.
gov.cn/newsrelease/201503/t20150330_669367.html.
5. Zheng Jinran and Wang Yanfei, “Low-grade Coal is Cheaper, but Poses
Pollution Challenge,” China Daily USA, December 21, 2015, http://usa.
chinadaily.com.cn/epaper/2015-12/21/content_22763854.htm.
6. Zhang Hongzhou, “China is Marching West for Food,” RSIS
Commentaries, February 4, 2014, www.rsis.edu.sg/rsis-publication/rsis/
2148-china-is-marching-west-for-foo/#.VVqlg5PmUqM.
7. Interview with Minister for Far East Development Alexander Galushka,
December 28, 2015, http://www.eastrussia.ru/material/dalnevostoch
nyy-trillion-i-dalnevostochnyy-gektar/.
8. Dmitri Trenin, interviewed by Kommersant, September 25, 2012, www.
kommersant.ru/doc/2029312.
9. “Ranking of economies,” Doing Business, http://www.doingbusiness.org/
rankings.
10. “These Are the World’s Most Innovative Economies,” Bloomberg Business,
January 19, 2016, http://www.bloomberg.com/news/articles/2016-01-
19/these-are-the-world-s-most-innovative-economies.
11. “‘Downshifter’ Russia Is Losing Global Competition, Warns State Bank
Chief,” The Moscow Times, January 15, 2016, http://www.themoscow
times.com/business/article/downshifter-russia-is-losing-global-competi
tion-warns-state-bank-chief/555889.html.
12. “Oil wealth a blessing, energy dependence a curse for Russia’s economy,”
Yahoo News, January 24, 2016, http://news.yahoo.com/oil-wealth-bles
sing-energy-dependence-curse-russias-economy-051707259.html.
13. National Security Strategy of the Russian Federation, December 31, 2015,
http://www.garant.ru/hotlaw/federal/688504.
14. “ТорговыйоборотмеждуКитаемитРФсократилсяократилгодуна 27,8% до
$64,2 млрд
Подробнее на ТАСС,” TACC, January 13, 2016, http://tass.ru/ekonomika/
2581332.
15. “Товарооборот России осЕС Сссииобгоду упал по сравнению
равненигодом на 40%,” TKS.RU, January 14, 2016, http://www.tks.ru/news/
nearby/2016/01/14/0001.
16. “Russia is now China’s biggest oil partner—and it’s a huge problem for
Saudi Arabia,” Business Insider, February 2, 2016, http://www.businessin
sider.com/russia-vs-saudi-arabia-in-chinas-oil-market-2016-2.
17. “Китай стал клиентом лиендля российских нефтяников,” Экономика,
January 19, 2016, http://www.1prime.ru/articles/20160119/823073650.html.
18. Oystein Tunsjo, Security and Profit in China’s Energy Policy: Hedging
Against Risk (New York: Columbia University Press, 2013).
19. “Спустя 10 лет Россия добилась разрешения на экспорт зерна ерКитай,”
ВЕДОМОСТИ, December 17, 2015, http://www.vedomosti.ru/business/articles/
2015/12/17/621497-eksport-zerna-kitai.
20. “Food security: Asia’s critical balancing act,” East Asia Forum, February 2,
2016, http://www.eastasiaforum.org/2016/02/02/food-security-asias-
critical-balancing-act/.
21. Alexei Lossan, “Japan, India top Asian investors in Russia - Eurasian
Development Bank,” Russia Beyond the Headlines, January 19, 2016,
http://rbth.com/international/2016/01/19/japan-india-top-asian-inves
tors-in-russia-eurasian-development-bank_560475.
22. “China insurance fund to invest in Russia’s Yamal LNG,” Reuters, January
5, 2016, http://af.reuters.com/article/energyOilNews/
idAFL3N14P1JG20160105; “Инвестиции Фонда Шелкового пути в
Россию превысят $2 млрд после покупки 9,9% в «Ямал СПГ»,”
ВЕДОМОСТИ, January 22, 2016, https://www.vedomosti.ru/business/news/
2016/01/22/625050-fonda-shelkovogo-puti-yamal-spg.
23. “Владельцы ‘Сибура’ довольны нынешним составом акционеров
кцШамалов,” euronews, January 20, 2016, http://ru.euronews.com/news
wires/3130965-newswire/.
24. “Быстринскому ГОКу нашли покупателя,” ВЕДОМОСТИ, December 29,
2016, http://www.vedomosti.ru/business/articles/2015/12/29/
622870-bistrinskomu-goku.
25. “«Металлоинвест» такитайская Hopu приостановили переговоры по
Удокану,” ВЕДОМОСТИ, July 14, 2015, http://www.vedomosti.ru/busi
ness/articles/2015/07/14/600427-metalloinvest-i-kitaiskaya-hopu-prios
tanovili-peregovori-po-udokanu.
26. “У ‘Роснефти’ и CNPC возникли разногласия по условиям продажи доли
олВанкоре,” Интерфакс: новости, May 5, 2015, http://www.interfax.ru/
business/440074. See also, “Interview with Rosneft CEO Igor Sechin,”
Vesti Ekonomika, June 22, 2015, http://www.vestifinance.ru/articles/
59048.
27. “Индия идет на Ванкор,” Kommersant.ru, November 2, 2015, http://
kommersant.ru/doc/2845836.
28. “Уроки китайского,” Kommersant.ru, February 6, 2016, http://kommer
sant.ru/doc/2910600.
29. “Улюкаев: говорить о переориентации российской экономики на Восток
неверно,” NEWSru.com, February 1, 2016, http://newsru.com/finance/
01feb2016/ulyukaev.html.
30. Ibid.
31. Kommersant.ru, http://kommersant.ru/doc/28965556.
32. “Russian sanctions could be gone in a few months, John Kerry says,” CNN,
January 22, 2016, http://money.cnn.com/2016/01/22/news/russia-
ukraine-sanctions-john-kerry-davos/.
33. Rens Lee and Artyom Lukin, Russia’s Far East: New Dynamics in Asia
Pacific and Beyond (Boulder, CO: Lynne Rienner, 2016).
Artyom Lukin is Associate Professor and Deputy Director for Research at the
School of Regional and International Studies, Far Eastern Federal University,
Vladivostok, Russia.
CHAPTER 13
Northeast China and the Russian Far East:

Positive Scenarios and Negative Scenarios
Gaye Christoffersen and Ivan Zuenko
NEGATIVE SCENARIO I — GAYE CHRISTOFFERSEN

Beijing’s initiative, the Silk Road Economic Belt (SREB), is meant to
contribute to China’s economic rise by creating markets for surplus
production of such goods as steel and cement, putting Chinese compa-
nies to work building infrastructure, and integrating China’s economy
with its periphery. It also was meant to develop comprehensive relations
with countries along the SREB in Central Asia, South Asia, West Asia,
the Middle East, and Eastern Europe, broadly defined as Eurasia.
Russian rejuvenation depends on Vladimir Putin’s Eurasian Economic
Union (EEU) initiative, which officially came into existence on January
1, 2015. It is an economic union to create an integrated single market.
Putin believes that the EEU is absolutely necessary to restore Russian
greatness and influence in the “near abroad,” which will then restore
Russia as a great power in the world and that development of its Far
G. Christoffersen (*)
International Politics, School of Advanced and International Studies,
Johns Hopkins University, Nanjing Center, Nanjing, China
I. Zuenko
Russian Academy of Sciences, Far Eastern Branch, Vladivostok, Russia

https://doi.org/10.1007/978-981-10-3144-1_13
216 G. CHRISTOFFERSEN AND I. ZUENKO
East is essential for rejuvenation. Xi and Putin agreed to integrate their

initiatives—a new impulse for cross-border cooperation.
Whether these two initiatives are compatible may depend on reconcil-
ing differing concepts of the economic and physical integration of China’s
Northeast and Russia’s Far East (Dongbei-RFE integration). Dongbei is
the industrial rust belt of China with unemployed and unpaid workers, and
slowing economic growth on a scale that stands out across China. The
RFE is a region that has been used by Moscow as a raw materials base with
insufficient investment in its industrialization—a problem that Putin has
found increasingly troubling. Chinese speak of raw materials as Russia’s
comparative advantage, while Russians reject this. In the 1990s, Sino-
Russian bilateral border trade, driven by small-scale trade and shuttle
traders, contributed to Heilongjiang’s economic growth. In 2004,
Beijing launched the “Revive the Northeast” initiative, due to
Heilongjiang’s lobbying, which included plans to export to the RFE.
Trade with Russia skyrocketed, but Russia was not satisfied that it largely
consisted of energy and raw material exports, while Heilongjiang has
continued to see the RFE as a market for its industrial exports and key
to its economic growth. With energy prices depressed, Russia is even more
eager to find a new model for the development of its Far East, while China
is newly intent on linking the Northeast to Russian regions. Are the two
sides finding common ground?
Heilongjiang is eager to participate in SREB not so much linked to
Central Asia as heavily based on integration with the RFE. The Chinese
map of “One Belt, One Road,” as it is now drawn, links the RFE with
Mongolia and, beyond, Central Asia. If Vladivostok had hoped to inte-
grate with the Asia-Pacific and to cultivate a “Pacific Russia” identity, that
is not in the “One Belt, One Road” plan. In fact, it would be discouraged
if it pulled the RFE away from China’s orbit. Russia has in mind multi-
lateral linkages, while China is pressing for greater bilateral integration
where the proximity of the two countries is greatest and it anticipates a
clear payoff from infrastructure investments and economic complementa-
rities rather different from Russia’s aspirations. Even so, the emphasis on
both sides is coordination, not rivalry.
Infrastructure projects are beginning to intensify Dongbei-RFE physi-
cal linkages. People’s Daily on May 12, 2016, announced planning had
started for a high-speed railway linking China’s Hunchun, on the Tumen
River, with Russia’s Vladivostok. This will be important infrastructure
enabling realization of Dongbei-RFE economic and physical integration.
NORTHEAST CHINA AND THE RUSSIAN FAR EAST: POSITIVE . . . 217
A long delayed railroad bridge is finally being constructed across the Amur
River between Heihe and Blagoveshchensk. Russia’s East Siberia-Pacific
Ocean (ESPO) oil pipeline has a spur at Skorovodino that moves oil to
China’s Daqing. Such infrastructure building assumes the existence of a
natural economic territory that spans the Sino-Russian border between
Heilongjiang and the RFE. Chinese have long claimed that China’s
Northeast and Russia’s Far East form a natural economic territory that
has a long history, if at times disrupted by political borders. It is assumed
that a natural economic territory with commercial exchange existed prior
to the formation of nation-state borders.
Chinese have touted for this territory an international division of labor
based on “comparative advantage”—China is a supplier of labor and
industrial goods and Russia is a supplier of raw materials. This is their
respective comparative advantage, but this idea of Russia’s comparative
advantage within a natural economic territory and Russian ideas of resur-
gence are incompatible. When Chinese first spoke of the Dongbei-RFE
natural economic territory in the late 1980s, the international division of
labor was as follows: China supplied labor, Japan supplied investment, and
Russia supplied raw materials. Twenty-five years later, China has sup-
planted Japan as a source of investment capital. Chinese workers have
long been employed in farming and construction in the RFE, but the
numbers fall far short of the hyperbolic alarm at times aroused in Russia.
For economic plans to succeed, it is widely assumed that those numbers
will have to rise substantially—still a source of concern on the Russian side.
Russia is more intent on China supplying the investments and more
tolerant of China supplying some of the labor, but it is also resistant to
the notion of the RFE as just a source of raw materials for Chinese
industrialization. It does not fit with the identity of a “resurgent Russia”
reestablishing itself as a great power. Russians want Chinese investment to
be focused on industrial production that will contribute to Russia’s resur-
gence, while also hesitating about a large influx of Chinese labor.
A recent (2015) Chinese history on the RFE, intent on discursively
incorporating the RFE into the SREB, has reconstructed the RFE’s iden-
tity as a region situated on the Northeast Asian frontier of Eurasia. This
history shrinks the time frame of Russian residence in the RFE and situates
it in a Chinese dynastic history with transregional exchanges at a time that
lacked borders. The narrative credits transboundary exchanges in the early
twentieth century as the driver of economic growth. It is a constructed
historical narrative suitable for supporting the logic of Dongbei-RFE
integration.1 This is not a comforting narrative for Russians who fear that
loss of barriers to China economically would be a precursor to social and
political integration too.
Russian resistance has not deterred Chinese planning. In March 2015,
the Chinese Foreign Ministry issued Vision and Actions on Jointly Building
Silk Road Economic Belt and Twenty-first Century Maritime Silk Road.
The RFE was included in SREB’s action plan, in cooperation with
Heilongjiang, Jilin, and Liaoning in transportation networks on land and
sea. It was presented as a fait accompli that Dongbei-RFE economic
integration would be incorporated into the SREB. The SREB and the
EEU were formally linked during the May 8–9, 2015 visit by Xi Jinping to
Moscow. Moscow and Beijing also agreed to link SREB with the RFE
Development Program. However, a year later, Chinese and Russians are
still contemplating how to link these two, still rather amorphous projects
SREB and EEU. Linking the RFE to the SREB is less abstract because it
builds on years of discussing Dongbei-RFE integration.
Moscow’s expectation of Chinese investment is to supply capital and
technology for the RFE, building industrial capacity for exported manu-
factures to markets in East Asia. Russia hosted the 2012 Asia-Pacific
Economic Cooperation (APEC) forum in Vladivostok hoping to attract
foreign investment to the city from all over the Asia-Pacific. The first
Eastern Economic Forum (EEF) in Vladivostok, September 3–5, 2015,
was meant to attract investors to priority projects in the RFE. It is
Moscow’s hope that Chinese investment will finance RFE development.
The EEF was followed by the First Meeting of Regional Cooperation
Council of Northeast China and Russian Far East, chaired by Vice
Premier Wang Yang and Deputy Prime Minister and Presidential
Plenipotentiary Envoy to the Far Eastern Federal District, Yury Trutnev.
The meeting demonstrated that Dongbei-RFE integration would be state-
led and top-down. It was not yet clear, however, which side’s notion of
how to achieve integration would prevail, especially given the low com-
modity prices and the low level of Chinese investment that has followed
the high-sounding plans of 2014 and 2015.
Twenty-five years ago, Heilongjiang hoped the Tumen River Area
Development Program, now called the Greater Tumen Initiative, would
facilitate Dongbei-RFE economic integration. However, Tumen faced
stiff resistance from local Russians in the Russian Far East. Chinese spe-
cialists still believe that Tumen had potential if only there had not been
local Russian opposition in the 1990s. They believe Tumen could still be
successful if China’s Northeast could be integrated with the RFE, which

may leave the role of North Korea vague.
In October 2009, Premier Wen Jiabao had proposed regional eco-
nomic integration of the RFE and Chinese Northeast, as a side agreement
of the Sino-Russian negotiations over ESPO. Called the Program of
Cooperation between the Northeast of the People’s Republic of China and
the Far East and Eastern Siberia of the Russian Federation (2009–2018),
the regional integration agreement received less attention than the oil
pipeline. There were several Chinese publications that were published
before and after the pipeline agreement was signed. Most of these pub-
lications assume Russia’s comparative advantage is raw materials. In 2009,
one Russia specialist, Lu Nanquan, published Research Issues on Promoting
Regional Economic and Trade Cooperation between China and Russia,2
and participated in a symposium on RFE energy development and China’s
interaction and cooperation: Sino-Russian International Regional
Cooperation and Development. It covered oil and gas cooperation and
ways to deepen regional cross-border economic integration.3 Others
explored the feasibility of a free trade zone along the border.4 Yet,
Russia failed to implement more than 200 projects in the 2009 agreement
on Dongbei-RFE economic integration, which continued to exist only on
paper, ceased functioning before completion, and caused Chinese eco-
nomic losses. Chinese are disappointed with the 2009 agreement and
suspect this might be a pattern that will be repeated by Russia in the
SREB, blocking or delaying projects. In 2015, Chinese specialists noted
that the Dongbei-RFE initiative had been incorporated into China’s
SREB and that integration would contribute to China’s rise and globali-
zation.5 There was no discussion whether it would contribute to Russia’s
rejuvenation.
Although there has been limited progress in implementation, it has
been a continuous act of faith by the Chinese over several decades that
“China’s drive to rejuvenate its northeastern industrial bases tallies favor-
ably with Russia’s eastern Siberia and Far East development strategy.”6
The change in 2015 was the framing of this border integration as part of a
larger joining of regional schemes—SREB with the EEU centered on
Central Asia. Chinese persist with ideas of comparative advantage, creating
a conceptual hurdle that impedes further cooperation. Russians have never
accepted the logic of comparative advantage in Dongbei-RFE economic
relations because it situates the RFE as a source of raw materials for
Chinese industrialization. It is possible that numerous infrastructure
projects will facilitate Dongbei-RFE integration, but there is still not a

meeting of the minds.
NEGATIVE SCENARIO II — GAYE CHRISTOFFERSEN

Russia pursues a top-down, state-led policy formulated in Moscow to
promote economic development of the Russian Far East and its economic
relations with the Asia-Pacific. Can this policy be considered state-led
industrialization with characteristics similar to Japanese, Chinese and
South Korean models of state-led industrialization and export-led growth?
Given Russia’s asymmetric economic relations with these economies, will
Asia’s economies accept and adapt to Russian policies? Russia’s state-led
efforts include the following: 1) a vision of Russian Far East development
and integration with the Asia-Pacific; 2) trade promotion activities to
introduce the opportunities in the Russian Far East to Asian audiences;
and 3) geopolitical maneuvering to demonstrate Russia’s military and
political importance in East Asia. Each of these themes is discussed in turn.
Visions of Russian Far East Development and Asia-Pacific Integration

The Valdai Discussion Club in June 2016 issued a vision for the Russian
Far East and Russia in the Asia-Pacific, its fourth report on Toward the
Great Ocean. Although the Russian Far East economy is based on com-
modities, the development model for it is to set up export-oriented
manufacturing, and to attract foreign investors who will finance this
industrialization. Offering priority development areas was criticized as
insufficient. What was needed was a more radical restructuring of the
way business was done there. Ivan Zuenko mentions the “inflexibility of
the Russian bureaucratic machine” and state institutions that are ill-suited
to successful state-led industrialization. If the Russian Far East were to
model its development on the East Asian experience, the Valdai group
suggests it would need to emulate Hong Kong’s low profit tax,
Singapore’s efficient customs clearance, and South Korea’s connections
to a power grid.7
Russia’s primary partner in East Asia, China, may be the least receptive
to Russian state-led industrialization. China is currently behaving in East
Asia as if it were reconstructing a Sinocentric order in the sense that it
expects Russia, as a weaker state, to bandwagon with Chinese political
initiatives. A Sinocentric order assumes asymmetrical economic relations
with China’s periphery, using trade and investment to benefit the Chinese
economy. China will export industrial goods to markets in the periphery,
and the periphery will be a source of raw materials for Chinese industria-
lization. Chinese consider this each side’s comparative advantage and
expect Russia’s comparative advantage to be energy and raw materials.
New state institutions were created for the governance structure guid-
ing Russian Far East development. The Ministry for the Development of
the Russian Far East, established in 2012, is the state institution in charge
of its industrial policy. The ministry selected nine priority development
areas, issued a list of investment projects, and created several development
institutions:
• Far East Development Fund

• Far East Development Corporation
• Agency for the Development of Human Capital in the Far East
• Far East Agency for Investment Promotion and Export Support
These new state institutions exist next to old institutions where corrup-
tion is pervasive throughout the bureaucracy such as the office of the
Vladivostok mayor. Some clean-up was required. On June 1, 2016, the
mayor of Vladivostok was detained, charged with corruption, bribery, and
embezzlement and brought to Moscow. Vladivostok has seen this before.
A previous mayor, whose prison name was “Winnie-the-Pooh,” had a
similar fate. Removing a few corrupt individuals does not strengthen
state institutions. The Valdai Discussion Club calls for a wider decrimina-
lization of key industries—fisheries, forestry, construction, and minerals
extraction—which would increase foreign investor confidence.
Russian Trade Promotion with Asia

A good example of Russian promotion of export-led industrialization
through trade and investment was the “Access Meeting China-Russia:
Annual Investment Road Show” (中俄项目路演接洽会) in Shanghai,
June 8, 2016. The trade show was supported by Russian banks Sberbank
and VTB Bank, the Russia-China Financial Council, and the Ministry for
the Development of the Russian Far East. The meeting claimed to offer a
new paradigm in China-Russia cross-investment cooperation. Topics cov-
ered included: investments in regional projects; cross-border import-
export cooperation; cross-border investment projects in the New Silk
Route Initiative; Russian strategic investment projects and Chinese invest-

ment potential; cross-investment projects in energy, mining, and natural
resources; export of Chinese equipment and technology; and Chinese
investment in infrastructure, port construction, and agriculture.8
The trade show brochure included pithy quotations from key officials
raising some of the key, perennial issues in Sino-Russian cooperation.
Zhang Guobao, former vice-chairman, National Development and
Reform Commission, stated when he was in Vladivostok: “On the one
hand, Russia is saying they have made a decision; on the other hand, they
are saying that no decision has been made yet. There hasn’t been any final
information until now. This is regrettable.” Zhang Yujing, president of the
Chamber of Commerce for Import and Export of Mechanical and
Electrical Products in China, mentioned that to increase Chinese invest-
ment, Russia needed to improve its business climate and the transparency
of its economic legislation. Alexei Gruzdev, head of the trade representa-
tion of Russia to China, mentioned the need to create industrial parks near
the border for manufacturing products for export, exporting to those
markets where China already has a strong position. Sino-Russian discus-
sions have become more open in recognizing problems. It is a healthy sign
that they can engage in problem solving.
The brochure mentioned that Shanghai was chosen because it is an
international financial center, where it is possible to find investment and
business partners, and where decisions get made.
The trade show was promoting investment and trade with the Russian
Far East. It is not clear that there was any mention of the 2009 agreement
on Northeast China-Russian Far East economic integration projects. It
was held in Shanghai to attract investment from China’s wealthier coastal
area. However, the Silk Road Economic Belt (SREB) was one of the
themes of the trade show.
Geopolitical Strategy
The asymmetric Sino-Russian economic relationship leads to Russian
behavior to demonstrate its geopolitical importance to China. This
means that Putin attempts geopolitical balancing between China and
Japan to obtain investment from both for the Russian Far East. This
strategy reflects a fundamental disregard for appropriate behavior that
might increase investor confidence in the Russian economy. Russia’s
geopolitical strategy takes advantage of China’s effort to create the
appearance of an alliance without bearing any real costs. Yan Xuetong is a

major advocate, whose book envisions a bipolar structure in the Asia-
Pacific region between the United States and China, with Russia bandwa-
goning with China. Although Yan is criticized by Chinese Russia specia-
lists as misunderstanding Russian thinking, other Chinese also believe that
Moscow should bandwagon with Beijing against Tokyo and Washington.
Previous work by the author has demonstrated how vocally disappointed
Chinese were when Russia did not side with China against Japan in 2012.9
Putin’s visit to Beijing in late June 2016 was an opportunity to demon-
strate Russia’s geopolitical importance to China and to gain greater lever-
age in negotiations that led to several joint statements and numerous
commercial deals. Although Russians seek to avoid the Senkaku/Diaoyu
issue, Putin made a geopolitical statement by placing three Russian navy
warships near the Senkaku/Diaoyu Islands on June 9, 2016, at the
moment a Chinese PLA (People’s Liberation Army) frigate entered the
contiguous zone around these islands for the first time. The Russian
Foreign Ministry claimed their ships were in international waters, while
the Japanese Foreign Ministry claimed the Russian ships were also in the
contiguous zone. Both the Japanese and Russian foreign ministries chose
to downplay the Russian presence, while Beijing would claim Russia had
sided with China in the Senkaku/Diaoyu dispute. A Global Times editorial
further threatened that a closer Sino-Russian military partnership would
emerge if Japan or the United States “crossed any lines.”10
From the Sinocentric point of view, Russia was bandwagoning with a
Chinese initiative. Also from the Sinocentric view, China expects Japan, as
a weaker state, to recognize China’s rise. The official Chinese phrase is
“Japan should recognize China’s development,” which is code for China’s
rise, and by recognizing it, be more accommodating to Chinese demands
and interests.
Conclusion
There are signs of potential success for Russian state-led industrialization.
The Valdai Discussion Club has envisioned what success would look like.
The trade promotion show in Shanghai demonstrated determination to
structure Chinese trade and investment in Russia’s preferred areas.
However, there is room for skepticism. A strong state using state-led
industrialization with a carefully crafted industrial policy implemented by
a well-trained and dedicated cadre of economists might try to overcome
asymmetric economic relations. However, Putinism has weakened Russian

political institutions, leaving Russia lacking many of the characteristics
necessary for successful state-led industrialization.
Skepticism remains as to whether intensive economic integration of
Northeast China and the Russian Far East will support Russia’s goal of
state-led industrialization. Moscow first became aware of the East Asian
model of development in the late 1980s as it puzzled over South Korean
economic development, and began discussions on how Russia might adapt
the model. More recently, Russians have discussed adapting the China
model of development.
Northeast China-Russian Far East integration has already been incor-
porated into the SREB and is probably the most detailed and planned
section. Ivan Zuenko suggests that by 2015 everybody had forgotten
about this integration, but it is more likely that the Chinese have incorpo-
rated it into the SREB. There is also widespread Russian skepticism of the
SREB. The official Moscow-Beijing agreement to link SREB to the
Eurasian Economic Union (EEU) has not yet been seriously
implemented.
On the Chinese side, the year 2015 was the year of the social construc-
tion of “One Belt, One Road” (OBOR) through hundreds of OBOR
books and articles published and hundreds of conferences held. Every
university, research center, state-owned enterprise, and provincial govern-
ment contributed to the discourse on OBOR. This rich outpouring of
ideas helped to socially construct China’s Silk Road-based regional order.
Some Russians have participated in these conferences but not in sufficient
numbers to spread “Silk Road fever” in Russia.
Ivan Zuenko mentions that local authorities from both sides of the
border talk a lot about economic cooperation but have no real interest
in it, unclear what the benefits would be and considering the risks very
large. For these authorities, keeping the status quo is their main
intent.
However, the status quo in the Russian Far East is not a stable equili-
brium. According to National Human Development Reports done by the
United Nations Development Program (UNDP), Primorski krai’s Human
Development Index (HDI) in 2013 measured 0.841, lower than
Moscow’s 0.931 and St. Petersburg’s 0.887, but close to the national
average.11 A previous UNDP report in 2009 had found the Russian Far
East to have a much lower HDI. According to the UNDP report, regional
inequality in Russia is well-established and, no doubt, contributes to
migration to wealthier areas. In Russia’s 2010 census, the Far East’s

population was 6.3 million, down from 7.9 million in 1989.
On May 31, 2016, the Russian International Affairs Council hosted a
Russia-China conference that openly discussed problems in economic
integration. Chinese believe that the lack of progress in Sino-Russian
economic integration and the majority of obstacles are due to the nature
of the Russian state bureaucracy and its inability to think in market terms.
Russians agree that the way the Russian state apparatus works impedes
progress.12 However, a stronger and more responsive Russian state using
state-led industrialization might more directly challenge some Chinese
assumptions regarding the Russian Far East-Northeast China integration
rather than implement the 2009 agreements.
The geopolitical maneuvering between China and Japan is not part of
the East Asian model of development, but rather reflects Vladimir Putin’s
preferred strategy. Russian geopolitical maneuvering is self-defeating as it
makes Russia appear to bandwagon with Beijing as the weaker partner.
Japan chose to de-emphasize the June 2016 incident but it does not boost
Japanese investor confidence in the stability of the Russian economy and
foreign policy. This will increase Russian economic dependence on China.
POSITIVE SCENARIO I — IVAN ZUENKO

At present, the level of regional cooperation between Russia and China
clearly does not correspond to the level of relations between the leadership
of the two countries, which is described as “the best relations in all of
history.” In actuality, the observer would be stunned by the absence in
cities of the Russian Far East of Chinatowns or Chinese factories. The scale
of Chinese investments in the economy of the region falls significantly
below that of countries such as the Netherlands, the Bahamas, and
Cyprus. Most of all, Chinese investors would like to put their funds into
the extraction of resources and also in agriculture; however, precisely in
those sectors is where the activism of Chinese business arouses staunch
opposition in Russian public opinion, even at the stage when initiatives are
only being discussed. Given these obstacles, a positive scenario applies to
overall national relations and, at best, to uncertain prospects at the local
level, but there are recent signs of improvement.
Positioning itself as a “great power,” Russia does not know or
understand China, and, as a result, does not trust it. The mass media
and populist politicians still shout about the “yellow peril” as a way to
arouse emotions and pretend to resolve the day-to-day problems of the

people. The inertia of imperial consciousness, which is actively revived
by contemporary Russian ideologues, may be significant for the popu-
lated regions of European Russia, but not for residents of the Russian
Far East, who without central budget financing can be left to live in a
sparsely populated desert with beautiful nature and favorable ecology,
but almost without production, roads, and intellectual infrastructure.
The new Russian elite soon will have to make a choice between the
threat of weakening administrative control over outlying regions and
the risk of losing the Russian population of the Far East, which without
a more lively economy or subsidies will simply disappear. Judging
rationally, the choice should favor the first variant, especially if one
considers that China, with further reexamination, turns out to be not
so foreboding.
In the 1990s, against the background of the weakening state role in
Russia’s Far East, the informal economy, based on entrepreneurship of the
local residents and using contraband and illegal schemes with the partici-
pation of local, corrupt officials, was actively developed. One of the main
elements was practically uncontrolled import into Russian border areas of
cheap goods from China, the presence of which “killed” the possibility of
establishing local industry, which from the time of the Soviet Union had
been uncompetitive in civilian production, although it did and still does
produce for the armed forces higher quality goods. Vast sums of capital,
which passed through corrupt officials, could not develop the territory,
since to invest in industry was unprofitable.
From the beginning of the new century, the main source of income in
the region became allocations from the federal budget. Entire sectors
became “prisoners” of this easy, guaranteed money, which was used to
buy the loyalty of the local officials and population without exerting
special effort to develop the economic potential of the region. The situa-
tion changed in dramatic fashion after the sharp fall in price of oil in 2014
to 2016. The culmination of Moscow’s investment in the region remained
two bridges and the university campus in Vladivostok—objects, which by
themselves, could not earn money and bring this region international
investment. Regional budgets fell into deficit, from which the center no
longer was able to drag them away. It became necessary to search for other
ways out of the situation and understand that “pride and prejudice” are
not the best sources of guidance in international relations. This process
may take considerable time, but below I point to possibilities that are
beginning to alter the status quo in the region and might, in a positive
scenario, make a profound difference.
Russia: Changes that May Follow from Shifting Exchange Rates

The collapse of the ruble in relation to the yuan in 2014 to 2016 has the
potential to fundamentally change the situation on the border. Busses
loaded with local produce, could reverse direction: from Russia to
China. It could become clear that Russian goods not only are cheaper
but are more attractive for customers from China than are Chinese goods.
Imported ecologically clean products (in the Russian Far East, compara-
tive to China, there is practically no industry) could find their niche in
China, becoming the favored goods for the rapidly expanding middle
class.
A significant number of people, who earlier were busy with contraband
and with siphoning off budget revenue, have been left without their
customary income. This could force them to redirect their energy to the
establishment of small-scale industries or farms, which make products for
export to China. Previous ties with “business partners” in China could
again prove useful, but now their effect would be to begin the develop-
ment of production. Often Chinese capital would, one presumes, be
invested under the guise of being Russian, which would make possible
churning out goods to meet the demand in China, such as for wheat, soy,
beer, chocolate, and maritime products. Many of the new enterprises
would open in areas of Primorskii krai newly endowed with special privi-
leges (“territories of advancing development” and the free port of
Vladivostok). Tourism could become another important source of income
in the region. By Chinese standards, the scale of the “new production”
would not be large, but for the Russian economy, it would become
substantial. Stable work would change the relationship between society
and the local authorities to these businesses. Local residents, who earlier
had dreamed of moving to Moscow or a small settlement in its environs,
would stop moving away. When, subsequently, a shortage of labor would
be felt, and the main regional centers—Vladivostok, Ussuriysk,
Khabarovsk, and Blagoveshchensk—would become magnets of attraction
for residents from across eastern Russia. Especially, thriving would, pre-
sumably, be Vladivostok, which might begin to be called the “eastern
capital of Russia” and the “new Constantinople.” In 2022, in the new
complex of government buildings on Russky Island, some federal
ministries and even the administration of a vice president (whose charge

would be the management of the Asian part of Russia) would be trans-
ferred. Such administrative changes are a fantasy now, but they are sug-
gestive of what one could imagine to be a far-reaching shift toward the
region.
Fear-concerning Chinese labor migration might, in these conditions,
disappear. It may well turn out that Russian wages are not appealing even
for those leaving China’s border regions, and it is cheaper for locals to hire
migrants from Uzbekistan, Tajikistan, and also North Korea and Vietnam.
Against the background of an increase in ”foreigners” from these coun-
tries, xenophobia in this region’s public opinion would turn negative
toward them, while, in contrast, Chinese would become accepted as
desired, rich clients and reliable partners. Chinese digital technology and
even automobiles would become popular among the local population,
who are finding European and American products much less accessible.
China: In Search of a New Model of Development

By mid-2016, China stood before serious challenges connected to the
drop in tempo of its growth in gross national product (GNP), a crisis of
“bad debts” of regional administrations, and the tired condition of its state
sector and the necessity to conduct painful reconstruction of its main
enterprises, firing huge numbers of unqualified workers. In response to
these challenges, Beijing has turned to a continuation of its “big build-
ing,” developing infrastructure in China and striving to boost orders
abroad for constructing roads, railroads, airports, and entire cities in return
for credits offered from China. Contracts from Russia could include con-
struction of an absolutely new, contemporary highway, Vladivostok-
Moscow, a high-speed railroad, Hunchun-Vladivostok-Khabarovsk, and
new urban regions in the biggest cities of the Russian Far East. In the near
future, the two sides might expect to complete construction of the bridge
across the Amur between Blagoveshensk and Heihe, which would signify
that, finally, Russian local officials will discard a policy of “braking”
cooperation with China.
Another “recipe” to overcome a reduction in loyalty of the Chinese
population to the ruling party may be artificially to arouse a rise in
nationalism and militarization of the society. Against the background of
aggressive rhetoric regarding the United States, China may be putting its
trust in strengthening itself as the leader of all of eastern Asia. Military
reforms in early 2016 prioritize the navy over land forces, and Russia may
now become essential for China as a reliable partner, which allows it to
employ on its northern borders only a small amount of armed forces,
designated mostly to fight against terrorists, separatists, and suppression
of oft-occurring public disturbances. This, however, would deprive the
“power lobby” of Russia of its last arguments tied to the “yellow peril.”.
Putin and Xi Jinping, both strengthening their regime through perso-
nal authority, have maintained good personal relations, based on trust and
mutual respect. In China, applying censorship, sharp and provocative
statements in the mass media could be avoided in order “not to frighten”
their Russian partners. Gradually, Russia could do the same thing. In order
to tie Russia to itself, Beijing would find it helpful to attract some big
companies to the economy of eastern Russia. At first, this would occur
solely by administrative means, and even by covering losses that companies
suffered; however, in this way the important task of establishing “success-
ful cases” would be achieved. Subsequent investments would occur
through a “snowball effect.” It would suffice to apply the pressure of
Chinese and Russian authorities at the central and regional levels in
order to realize some successful projects so that Chinese investors,
attracted by the example of their compatriots, would begin to expand
their business in Russia. In the Russian Far East, there would appear farms
with marine culture, hotels, resorts, casinos, plants for production of
complex digital technology, and data centers.
Main Obstacles in the Path of a Positive Scenario and Required

Conditions
1) Negative public opinion in Russia regarding “opening” eastern regions
for full-scale cooperation with China; 2) the absence of motivation for
local authorities for two-sided cooperation in the face of other priorities
(in Russia, problems of national security and ensuring the victory of the
“party of power” on its territory; in China, ensuring a high rate of growth
in gross domestic product [GDP], which in the current situation of
cooperation with Russia still cannot be met); 3) high expenses for produc-
tion and logistics in the eastern regions of Russia, where the population is
sparse and the local market is on a tiny scale; 4) the absence in Russia of
laws on separate aspects of cooperation (e.g., in marine culture) and the
incompleteness of laws tied to attracting international labor and foreign
investors; 5) the absence of a “history of success stories” of Chinese
investments in the eastern regions of Russia; 6) the desire of regional elites

in Northeast China for “closed” cooperation with eastern Russia in the
absence of real possibilities for increasing the quality of investments; and
7) the insufficient level of expertise in Moscow and Beijing on problems of
development of regional cooperation. These are main obstacles standing
in the way of a positive scenario.
For realization of a positive scenario, these are essential steps: 1) con-
tinuity of the high leadership and maintenance of authoritarian regimes in
Russia and China, under which the state has the possibility to overlook
public opinion, which at present is negatively inclined toward cooperative
relations between the two states, and to inculcate their visions of relations
through the mass media and “politicians in their pocket”; 2) gradual
replacement of the political elite in Russia, transitioning from “conserva-
tives” acting from nostalgia for the imperial and Soviet past of Russia to
“pragmatists” supporting the use of all available means for improving the
socioeconomic situation; 3) nationalization of the elites in Russia and
China, no longer under the spell of extreme dependency on the West; 4)
maintenance of the current competitive prices and exchange rate (weak
ruble, strong yuan), which makes Russian production competitive and
Russian goods and services attractive to the Chinese market; and 5)
maintenance of the current demographic tendencies in China, which are
leading to a reduction in labor resources and the end of a realistic chance
for massive labor migration out of China.
Conclusion
Most necessary conditions for movement toward a positive scenario
already exist; however, they are not being used in Russo-Chinese regional
cooperation. This is explained by the fact that Russia, as before, does not
trust China, and China is not very interested in Russia since there are
other, more profitable and convincing targets for investment and migra-
tion. All could change only if the current crisis forces both sides to take
bold steps. If Russia in the face of economic degradation of entire regions
were to decide that it is necessary to turn away from interpreting the world
through the prism of its historical greatness, it could use the might of the
Chinese economy for its own good fortune. China could provide Russia
with both investments and technology that it needs. However, if Russia
were to agree to full-scale cooperation with China, it would have to
recognize the fact that, in the new model of bilateral relations with its
southern neighbor, it would be relegated to the role of junior partner.

This is the current economic reality and the facts of life for a sparsely
populated, depressed region in the east of Russia without an alternative
apart from developing cooperation with China.
China will never be successful in its cooperation with Russia if it does
not grasp the simple fact that Russia is fearful of allowing into its territory
millions of Chinese workers and outdated, ecologically dangerous produc-
tion. China should offer to Russia massive investments and contemporary
production and try to reorient ties only to the supply of Chinese workers
and the use of its equipment. If it acts in this manner, it will find a reliable
partner.
POSITIVE SCENARIO II— IVAN ZUENKO

In 2009 in New York, a vast program for cooperation between the regions
of the Russian Far East and Eastern Siberia, on one side, and Northeast
China, on the other, extending to 2018, was adopted by the leaders of
Russia and China (Dmitri Medvedev and Hu Jintao). For the realization
of this program, they were to carry out economic integration of these two
border regions on a qualitatively new level and facilitate economic growth
on both sides of the border. The first reaction of the Russian media and
expert community to this document was painful, giving vent to the fear
that the “Far East would be sold to the Chinese.” Moreover, the program
lacked concrete content and appeared to be an “agreement about inten-
tions” without referring to the mechanisms for their realization. The
projects on the Chinese side, on the whole, would have been realized
even without this program, being part of the strategy for “restoration of
the old industrial base of Northeast China.” But the projects on the
Russian side amounted to a list of objectives, the realization of which
would require the attraction of Chinese investments.
The problem here is that attracting Chinese investment in the economy
of a Russian region is associated with a large number of obstacles, includ-
ing negative sentiments of the public, inflexibility of the Russian bureau-
cratic machine, the presence of unwritten conditions within the
controlling organs for not allowing Chinese business into the strategic
sectors of the economy, and most important, the low level of attractiveness
of the Russian Far East for Chinese investors, who with much more ease
and profit put their funds in the economies of Southeast Asia and Africa.
As a result, Chinese investments, without which the designated objectives
could not be realized, did not take place. Not one of the major objectives
foreseen in the program on Russian territory was achieved.
By 2015, everybody had forgot about the above-mentioned program,
although the formal timeline for its realization is still under way. By this
time, another idea had begun to be actively propagated by the authorities
of the two countries—the idea of “convergence” of the projects of the Silk
Road Economic Belt (SREB) and the Eurasian Economic Union (EEU),
about which the leaders (Vladimir Putin and Xi Jinping) spoke in Moscow.
Despite the active exchange of opinions about this over the past year, this
idea still has no concrete contents and lends itself to slogans and mantras.
Moreover, a large proportion of politicians and experts in Russia again are
skeptically inclined, considering the SREB to be a neo-colonial policy of
Beijing unfavorable to Russia. In short, all the conditions are in place for
the convergence of the SREB and EEU also not to be transformed from
mere declarations to real actions and, with time, to be forgotten and
replaced with another idea.
Alas, these examples are characteristic of cooperation between Russia
and China as a whole, and cooperation between border regions, in parti-
cular. In spite of the presence of potential for cooperation and agreement
at high levels, actual economic integrations are not visible in the border
region. From the point of view of cultural affinity, Russians and Chinese
are still very far apart and, more importantly, do not trust each other. This
is the objective reality, and it corresponds to the level of economic devel-
opment of the Russian Far East and Northeast China and to the motiva-
tions of the residents of the two regions. It is hard to imagine that in the
coming decade anything fundamental will change. Below, I offer my
analysis of the sectors that experts view as most promising for cooperation.
Investment and the Attractiveness to Labor

The main characteristic of which it is necessary to be aware in order to
understand the problems of regional cooperation is the fact that both the
Russian Far East and Northeast China are peripheral regions of their
countries with depressed economies. They lack potential to invest their
own resources in the other’s economy. Over a long time, the Northeast
China provinces held a monopoly position in seeking cooperation with the
Russian Far East, amassing significant experience in working with repre-
sentatives of local authorities and business. However, the activities of the
border area Chinese authorities, serving as middlemen in trade, did not
result in serious investments from Northeast China. Even less can be

expected to occur now, when the tempo of growth of the Chinese econ-
omy has slowed, and in some cities of the “rust belt” (as Northeast China
is sometimes called), growth is now negative.
Now China, according to official data, does not figure even into the top
seven of foreign investors into the Russian Far East.13 Chinese investments
are directed at small- and middle-sized enterprises, at agriculture, construc-
tion, and in the sphere of services. As a rule, they rely on outdated
technology and are inclined to violate migration and environmental legis-
lation of the Russian Federation. Naturally, the local population has mixed
reactions to these investments, considering that those from Japan, South
Korea, and countries of the West have more promise. Big business from
Beijing, the Yangtze Delta, and Guangdong province still is only examin-
ing the initiative of the Russian government on creating special economic
zones (the “Free port Vladivostok” and “territories of priority develop-
ment”); however, they are in no hurry to invest their money. This is
explained by the fact that there is not yet an example of successful investing
by a major international business, and there is little trust in the behavior of
Russian officials, who too often show a lack of economic expediency.
Chinese investors would like to establish enterprises in the Russian Far
East in conditions that would permit them to bring Chinese equipment
into Russia tariff free, to utilize unlimited numbers of Chinese workers, and
to lessen control by law enforcement organs. These conditions will never
prevail in Russia. Chinese are patient negotiators, and they are prepared to
wait for a long time until in the future, to the degree the economic position
in Russia worsens, Russian officials will be more persuadable. However,
Russia is in no hurry to put its state interests under “threat.”
To now, the major share of investments in “Free port Vladivostok” and
“territories of priority development” comes from Central Russia and off-
shore, which also, more likely than not, are controlled by Russian busi-
nessmen.14 They are not able to provide what is needed for a qualitative
leap in the development of the Russian Far East. In conditions of a short-
age of labor and weak development of infrastructure, production in the
Russian Far East is inadequately profitable. The local market cannot
provide the demand, and to take consumer goods to European Russia,
equal to taking them to neighboring countries of Asia, given the cost of
tariffs, is unprofitable. All could change in the event of the flow into the
region of a large volume of foreign (above all, Chinese) investment
through conditions capable of interesting investors. However, the local
population and, likewise, local authorities prefer the preservation of the

status quo rather than widespread access to the region by foreign business
and foreign labor, which would have unforeseeable and poorly controlled
consequences.
Transport
Apart from reserves of national resources, access to which Russia strives to
limit for foreigners, other competitive attractions of the Russian Far East
are considered to be its geographical situation and the presence of trans-
port infrastructure able to fulfill the function of a bridge between Asia and
Europe. For a long time, this was the ports of the Russian Far East and the
Trans-Siberian Railroad—which had a monopoly position in transconti-
nental logistics. It turned out that the transport infrastructure developed
very slowly, which makes Russian ports quite expensive and the railway
quite slow. In this situation, the vast majority of merchandise from East
Asia to Europe is carried by sea, and all that is allocated to overland
transshipment is one percent of the total traffic.15 Considering the volume
of trade, this, all the same, would be quite a lot if it created conditions for
earning a good return from the transit service.
In the mid-2010s, the Russian Far East lost its unique position on the
transcontinental
logistics map, since through the efforts of Beijing and Astana the transit
route through the western regions of the People’s Republic of China
(PRC) and Kazakhstan exiting in European Russia began to be used.
Analysis of data for transshipments shows that at present the transit loads
across Kazakhstan carry more than those across the Russian Far East and
Eastern Siberia.16 In light of the active role of Beijing in economic
expansion into Central Asia, one can surmise that the logistical infrastruc-
ture there will develop even more dynamically, which will have a tendency
to assume an irreversible character. Thus, one can agree with existing
calculations that transshipments across the western regions of China and
Kazakhstan will, all the same, be losers for Chinese logistical companies
and will be subsidized by the government through local budgets.17
Against this background, the appeal of using the “Far Eastern corridor”
has, of course, risen (the fall of the ruble has made the added costs in using
Russian transport not so high, but the increase in transit across Russia is
being restrained by the catastrophic condition of border area infrastruc-
ture and the slow process of border and customs procedures).
The authorities in the northeastern provinces of the PRC in accord with

the strategy of Beijing for establishing SREB regularly declare their inten-
tions to convert their provinces into “centers of transcontinental logistics.”
According to their plans, from central China shipments should move into
Northeast China in order, then, to enter the routes of Russia and Mongolia.
In this respect, their interests correspond to the wishes of Russian autho-
rities, who also are advancing various projects for the development of transit
potential (the big port of Zarubino, the transport corridors “Primor’e-1 and
Primor’e-2”). However, all such slogans are uttered for the sake of attract-
ing attention from the center and receiving subsidies to realize their intent.
The prospect that they will materialize is minimal—at present, transport by
sea or through Central Asia is more profitable and cheaper (at least, as long
as the PRC government is ready to subsidize such shipments).
Considering the economic crisis, Russia has no resources of its own for
qualitative modernization of the existing logistical infrastructure, and
attracting Chinese capital is wrought with a whole range of difficulties,
about which I commented above. Besides, Russia would prefer to utilize
its own roads and ports for transshipment of its own goods, and not for
transit transshipments. In the opinion of many experts, the advantages
from such borrowed use of its infrastructure are low, and the side effects,
including problems of the environment, are high.
Agriculture and Industry

For the economic development of the Russian Far East, Russian authorities
undoubtedly would like to see contemporary, technologically advanced pro-
duction. The idea that this region could be used only as a supplier of natural
resources to foreign economies and as a transit bridge for transshipment of
foreign goods frightens Russian society, and Russia is not prepared to accept it.
Besides, for reasons noted above (as well as high costs of starting and servicing
production, a shortage of qualified cadres, and high labor costs for existing
workers), only a dreamer would speak of founding such contemporary firms.
Much more realistic is the variant of utilizing the land of the Far East for
developing cooperation in agriculture. At present, the region lacks its own
resources—labor and financial—for realizing the spread of agricultural pro-
duction. Russian farmers with whom this author happened to talk in the
course of field research in 2014–2015 complained about the fact that wages
in agriculture are so low that the local population does not want to work in the
fields and prefers to leave for the cities to work in the service sector. At the same
time, farmers lack the financial resources to expand production, and proce-
dures for attracting foreign labor are severely complicated by bureaucracy.
Nearby lies the vast, rich China, ready to invest in Russian agriculture,
the output from which, thanks to low prices and environmental quality, is
becoming more and more popular on the Chinese market. At present, the
most successful examples of Chinese investment in the Russian Far East
are found precisely in agriculture; however this activity is seriously com-
plicated by a variety of factors. First, these are the very same problems with
which Russian farmers are confronted: a shortage of labor resources and
bureaucratic difficulties in attracting foreign workers. Today, in conditions
where the value of the ruble has fallen by half in relation to the yuan, wages
in Russia have stopped being appealing even for poor peasants in border
districts of China. This has even more complicated the position of inves-
tors. Second, public opinion in Russia reacts negatively to the behavior of
Chinese farmers, considering them to cause harm to the surrounding
environment and their production to be harmful. Such conclusions have
some truth, since Chinese farmers now work in Russia in a “temporary
existence.” They rent land for a short period (often illegally, working the
land in the guise of hired laborers), can easily be deported from the
country, or will not receive permission when new workers are hired for
the following year. All this leads them to live “only for today,” striving to
extract maximum profit here and now. They would behave more respon-
sibly if they had confidence in the long-term nature of their work, having
long contracts for land rental. Yet, analysis of the mass media in 2015
demonstrates that this is practically impossible in light of the level of
xenophobia and feelings of “yellow peril” in Russia. In response to the
declaration of one border region of its intention to rent to Chinese
investors 115,000 hectares of unfarmed land for 49 years, public opinion
went hysterical, and it was backed by deputies in the State Duma.18 As a
result, these plans were not realized (at least, officially), and authorities in
other regions were given to understand that they would be subject to
severe criticism should they rent out land to Chinese on a long-term basis.
The results of sociological surveys testify to a gradual change in public
opinion regarding China and Chinese investments: Russia would be
pleased with Chinese investments, but only in contemporary sectors and
without attracting Chinese labor.19 Unfortunately, for economic reasons,
this is not profitable. Thus, one fears what would be beneficial for all in the
attraction of Chinese capital into Russian agriculture; the perspective for
the development of cooperation in this direction is still cloudy.
Conclusion
The skeptical tone of the prognoses above is based on the multi-year
experience of the author in analyzing existing agreements and their reali-
zation in practice. The Russian Far East and Northeast China are places
where lots of words are spoken, but they almost never turn into actions.
The two areas are developing on separate plains, not paying much atten-
tion to each other. Although Northeast China is one of the least developed
regions in China, on all parameters it is ahead of the Russian Far East in
development due not to its cooperation with Russia, but its integration
into the Chinese market and the subsidies it gets from Beijing. Those
economic successes that are present in the Russian Far East have been due
to the sell of energy resources or from huge financial inputs by Moscow.
The local authorities on both sides of the border talk a lot about interna-
tional cooperation because they should talk about this, but they do not
have real interest in it, since the benefits from such cooperation are not
apparent, and the risks (especially for the Russian side) can be very great.
The absence of trust between partners leads to the fact that, in practice,
for local authorities imitating being active is more advantageous than actu-
ally being so. While I do not conclude that things will get worse, I do not
expect them to get much better when for a large part of the population (and
perhaps for the state), keeping the status quo is a desired result.
NOTES
1. Nianshen Song, “Northeast Eurasia as Historical Center: Exploration of a
Joint Frontier,” The Asia- Pacific Journal 13, no. 1 (November 2, 2015).
2. 陆南泉, 推进中俄区域经贸合作若干问题的研究, 黑龙江社会科学, no. 1,
2009.
3. 朱显平, 陆南泉, 俄罗斯东部及能源开发与中国的互动合作:中俄国际区域
合作与发展学术研讨会论 (Changchun: Changchun chubanshe, 2009).
4. 赵传君, 创建中俄自由贸易区问题探索 (Beijing: Shehuikexue wenxian chu-
banshe, 2010).
5. Zhang Keyun and Cai Zhibing, “Globalization 4.0, Regional Coordinated
Development 4.0, and Industry 4.0: The background to the ‘One Belt, One
Road’ strategy and its intrinsic nature and critical power,” ERINA Report,
no. 127 (December 2015), http://www.erina.or.jp/wp-content/uploads/
2015/02/se12719_tssc.pdf.
6. Li Xin, “Silk Road can find common ground with Eurasian Economic
Union,” Global Times, April 26, 2015.
7. Towards the Great Ocean 4: Turn to the East: Preliminary Result and New
Objectives (Valdai Discussion Club Report, Moscow, June 2, 2016), http://
valdaiclub.com/files/10920/, 17–22.
8. Additional information on Access Meeting China-Russia: Annual
Investment Road Show can be found at: http://www.cn888ru.com/cn.
9. Gaye Christoffersen, “The Sino-Russian Partnership in the Asia-Pacific,”
Russian International Affairs Council, September 19, 2013, http://russian
council.ru/en/blogs/dvfu/?id_4=693.
10. “Why does Japan fear close Sino-Russian ties?” Global Times, June 12,
2016, http://www.globaltimes.cn/content/987736.shtml.
11. United Nations Development Program, National Human Development
Report for the Russian Federation 2013 (Moscow: 2013).
12. Ksenia Zubacheva, “Re-thinking Russia’s pivot to China,” Russia Direct, June 2,
2016, http://www.russia-direct.org/analysis/re-thinking-russias-pivot-china.
13. Alexander Gabuev and Vita Spivak, “Perenosstrakhov: stoit li opasat’sia
Kitaiskikh zavodov na Dal’nem Vostoke?” Moscow Carnegie Center,
http://carnegie.ru/commentary/2016/05/12/ru-63550/iy6s.
14. “Russian Far East witnesses an investment boom—officials,” Russia Beyond
the Headlines, May 6, 2016, http://rbth.com/business/2016/05/06/rus
sian-far-east-witnesses-an-investment-boom-officials_590989.
15. A. K. Ordabaev, Geopolitika transportnykh koridorov v Tsentral’noi Azii
(Astana-Almaty, 2015), 9.
16. For details see: I. Zuenko, “Is Russia losing its logistics edge?” Moscow
Carnegie Center, http://carnegie.ru/commentary/2016/05/10/is-rus
sia-losing-its-logistics-edge/iy5b.
17. “各路中欧班列靠政府补贴艰难维生几乎全线亏损,” Huanqiuwang,
September 2015, http://finance.huanqiu.com/roll/2015-09/7552303.html.
18. A. Gabuev, “Medved’ na sene: chem opasna sdacha v arendu Kitaiu zemli
Russkoi,” Moscow Carnegie Center, http://carnegie.ru/2015/06/22/ru-
60453/ijsb.
19. V. L Larin and L.L. Larin, “Vostochnaia Aziia v obshchestvennom mnenii
Tikhookeanskoi Rossii (po itogam oprosa 2013),” Rossiia i ATR, no. 2
(2014): 5–19.
Gaye Christoffersen has written on Sino-Russian energy relations, US-China energy

cooperation, Northeast Asian potential energy regimes, and Russia in the Asia-Pacific.
Ivan Zuenko is a research fellow at Center for Asia Pacific Studies of the Russian
Academy of Sciences Far Eastern Branch.
PART 4
Strategic Thinking toward North Korea

CHAPTER 14
Chinese Strategic Thinking Regarding

North Korea
Cheng Xiaohe
In 2013, China is faced with the challenge of weighing the alternative

goals of a favorable balance of power in Northeast Asia, a process of
reunification on the Korean Peninsula that pays suitable attention to
China’s national interests, and denuclearization. Of these, the oldest con-
cern is the region’s balance of power, which is best seen through a brief
overview of how it had changed since the nineteenth century. It is again in
the midst of rapid transformation, resulting in close consideration of how
China can have an impact.
The Korean Peninsula occupies a central position in China’s strategic
considerations, in keeping with attitudes deeply rooted in Chinese history.
China dominated East Asia for more than two thousand years. As a
regional hegemony, it carefully cultivated a complex tribute system, in
which China’s security was protected as long as tributary states, such as
Korea and Vietnam, served as buffer zones on its periphery. The first
Opium War ended this hegemony. As Li Hongzhang acknowledged,
China began to face strong enemies, on a scale not seen in three thousand
years.1 As it clumsily adapted to the new situation, it fell victim to dramatic
changes in the balance of power in Northeast Asia. Invasions by Western
C. Xiaohe (*)
School of International Studies, Renmin University, Beijing, China

https://doi.org/10.1007/978-981-10-3144-1_14
242 C. XIAOHE
powers, coupled with massive internal turmoil, brought China down from
its pedestal of supremacy in this region. Russia and Japan rose in a three-
way grand game, leading to wars between China and Japan in 1894–1895
and Japan and Russia in 1904–1905.
In the wake of the Sino-Japanese War, the three-way rivalry gave way to
competition between Japan and Russia, and a decade later Japan’s victory
forced Russia from the Korean Peninsula as well as Manchuria, leading to
Japan’s dominance for the next four decades. This unipolar regional
system unraveled rapidly after Japan attacked Pearl Harbor, drawing the
United States into the war together with China and into a proactive
foreign policy following the war. With Japan’s complete transformation
from a militarist nation to a constitutionally-based peaceful one, it no
longer posed a security threat to China or its neighbors. In the absence
of unipolarity, the Korean Peninsula became a test of the balance of power
again. After the establishment of the PRC, China was no longer on the
sidelines, as the Soviet Union and the United States championed the
DPRK and the ROK, respectively, leaving Japan as the base from which
US forces reached Korea.
Many Chinese look to their country’s experience for lessons on how a
changing balance of power is intrinsically related to the vicissitudes of
China’s history. First, they observe that balance of power was an alien
concept, which Chinese were ill prepared to embrace. As its hegemony in
East Asia was ending, it failed to balance rising powers. In 1896 in an
effort to cope with Japan’s rise, following its wartime success, China joined
Russia in a secret alliance, but Russia proved untrustworthy. Remaining
neutral when Russia and Japan went to war, China was helpless at the end.
In the wake of the September 18, 1931 Japanese invasion in Northeast
China, China was alone, although it desperately sought outside help.
These memories drive home the importance of a balance of power strat-
egy. This especially applies to the Korean Peninsula, which was a pawn in
past competition.
Second, China has become acutely sensitive to rising powers on its
periphery. This dates well back, when its hegemony and even its territorial
integrity made a convenient target for emerging frontier powers in Inner
Asia. The experiences with Russia and Japan from the second half of the
nineteenth century, ruthlessly encroaching on China’s territory along with
Western powers, reinforced this concern. Russia adroitly used a combina-
tion of coercion, deception, and military acquisitions, where Japan single-
mindedly resorted to military conquest. China became intensely sensitive
CHINESE STRATEGIC THINKING REGARDING NORTH KOREA 243
to changes in the balance of power in East Asia, which carried over in the
1950s to the Korean War and continued over the following decades to the
standoff between the rival governments on the peninsula.
Third, Chinese became sensitive also to the role of intervention from
beyond East Asia in reconstructing the balance of power there. Great
Britain and France helped to break up the tribute system. The Anglo-
Japanese alliance supported Japan’s victory against Russia. Soviet assis-
tance in China’s war with Japan lent China a helping hand when total
collapse was possible, at the same time that US entry into the war along-
side China helped to overwhelm Japan. In 1945, a divided Korean
Peninsula became the centerpiece in the new struggle over the balance
of power in the region. Chinese recalled that both it and the area known as
Indochina, former security buffers of China, were the first places where the
power balance had changed and that when tributary states there fell victim
to colonizers China’s homeland security became increasingly vulnerable.
With these historical lessons in mind, China views the emerging situa-
tion on the Korean Peninsula in the following ways: 1) China’s rise
fundamentally reshapes the power structure around the peninsula, affect-
ing, above all, the position and political will of the United States; 2) in the
new power structure, China and Japan are locked into a heated rivalry for
regional leadership and influence on the peninsula, heightened by China’s
sense of grievance and Japan’s frustrated leadership ambitions; 3) the
United States, accustomed to being the mastermind of the security archi-
tecture in the region, is poised to act as an offshore balancer, leaning
toward Japan in its competition with China and viewing the Korean
Peninsula as essential to this struggle; and 4) two competing blocs, one
led by China and Russia, and the other by the United States and Japan,
appear to be on the horizon, with the implications for the strategies of
these states toward North Korea.
THE KOREAN PENINSULA IN CHINA’S CALCULUS OF THE

EMERGING BALANCE OF POWER
A debate is under way in China on how the balance of power is changing
in East Asia. In 2009–2010, many scholars argued that the balance was
tilting in China’s favor, encouraging policies to take advantage of this
trend. Recently, one finds many publications insisting that the balance is
turning against China. This position is supported by arguments that the
US “rebalance” is a more assertive strategy to limit China’s rise, that US
244 C. XIAOHE
strengthening of alliance and defense partner ties with countries opposing

China over the South China Sea has poisoned China’s relations with some
Southeast Asian nations, and that Japan is at fault for the tensions over the
East China Sea and is abetted by US policies. Analysis of the Korean
Peninsula proceeds against the background of these widespread assertions.
Looking back, China has reason to be concerned about the ROK-US
alliance and recent efforts to widen its scope and strengthen it.
Historically, the security of China and Korea has been interdependent;
China offered protection when Korea faced an external threat, and
Korea served as a buffer zone between China and potentially hostile
powers. Suffering from frequent attacks and harassment from Japanese
pirates, China had begun to see Japan as a direct threat to its security
and also to appreciate Korea’s role, what the Ming dynasty called a
“protective screen” (pingzhang),2 recognizing that the loss of Korea
to Japan would open the door to further invasion. “When the lips are
gone, the teeth will be exposed to the cold.” China drove Japan out of
the Korean Peninsula in the 1590s, but it failed to protect its sphere of
influence in the 1890s, disastrously losing its last critical buffer zone,
and also losing its capacity to compete with Japan and Russia in the
region, as its loss exposed its vulnerability and China’s homeland bore
the brunt of subsequent Japanese aggression. The Korean War posed a
similar dilemma. As US forces crossed the 38th parallel and approached
China’s border, China decided to intervene for two basic reasons: 1)
The United States, which had sided with the nationalist government and
had recently been driven out of the Chinese mainland, was the head of
the Western camp and the number one enemy with the capability and
political will to topple the regime; so it could not tolerate the presence
of such hostile forces in its vital buffer zone; and 2) viewing history as a
mirror, China saw the United States through the lens of what Japan had
done on the Korean Peninsula, fearing a repeat performance. It secured
the survival of North Korea, with which it shared an ideology and
membership in the communist camp. Chinese strategic thinking is
heavily influenced by its history.
History may be losing some of its salience as China gains in confidence,
finds that as the second largest economy in the world it can be more
aggressive, and no longer is afraid of being invaded by any country. The
strategic value of the peninsula has been declining, but the peninsula still
poses a number of challenges to China. First, the balance of power is
changing in favor of South Korea, as the economic gap between North
and South keeps widening and South Korea is enjoying enlarged diplo-
matic space, where North Korea is suffering unprecedented isolation in the
international community, subject to sanctions by the UN Security
Council. This fuels speculation that South Korea will win in the drawn-
out competition with its northern counterpart and achieve national uni-
fication on its own terms. Second, North Korea’s development of nuclear
weapons as a way to redress the unfavorable change in the balance of
power also has a disruptive effect, causing deep concern among China’s
elites. Already having conventional forces that could hold Seoul hostage,
the North’s nuclear capacity can serve many purposes: to boost morale and
the authority of the leadership, thereby increasing social cohesion; to deter
any invasion from a hostile power(s); to allow downsizing of conventional
forces, cutting the heavy burden of military expenses; and to extract more
concessions from negotiating partners in future talks on denuclearization
or stabilization. Thus, its nuclear weapons program strengthens
Pyongyang’s position in the competition with Seoul. While this may pro-
long the division of the peninsula and whet the appetites of South Korea
and Japan for nuclear weapons, its effect on the balance of power counters
the changes noted above that favor South Korea. This is relevant for
China’s calculus about how to shift the balance of power in the region
in a direction favorable to its long-term preferences in a rapidly evolving
environment.
CHINA’S GOALS FOR REUNIFICATION AND THE PROCESS LEADING

TOWARD THAT OBJECTIVE
China has faced a divided Korean Peninsula before. Three kingdoms once
were entangled in fierce competition for supremacy, inviting external
interference from China and Japan, which fought each other on the
peninsula for their respective clients. After the establishment in 918 by
Wang Kon of the Koryo dynasty, Korea was united in 936, steadily
expanding its territory to the Yalu River. Despite invasions from time-to-
time by China and Japan, the Korean state remained united. After Japan’s
brutal colonial rule, the end of the Second World War saw the United
States and the Soviet Union rush to fill the power vacuum, arbitrarily
dividing the Korean Peninsula at the 38th parallel. As the Cold War
unfolded, with support from the two superpowers, two competing
Korean states were established. War on the peninsula hardened this divi-
sion. The root causes of the Korean War are in dispute, but one of the key
246 C. XIAOHE
motivations was the ambition of each side to unify the peninsula on its
own terms.
Although the war hardened the geopolitical divide on the peninsula,
both Koreas did not cease their pursuit of national unification. In the
past sixty years, they have been pitted against each other in a drawn-
out military confrontation and political competition, but they have
shared a common aspiration for ultimately achieving national unifica-
tion. Some generalizations apply to their interactions in this regard: 1)
In the first three decades, North Korea was on the offensive, proposing
a series of unification proposals, but in the last three decades, South
Korea gained the initiative; 2) the idea of achieving unification through
peaceful means has been embraced by the ruling classes in both
Koreas, although from 1965, encouraged by Vietnam’s war of unifica-
tion, Kim Il-sung entertained for a time the idea of launching a
military campaign to achieve this goal; 3) the principal dilemma is
that the two sides want to realize unification on their own terms,
failing to find middle ground; 4) under the shadow of the Cold War,
the major powers, whose motives may not correspond to those of
either side, interfered in interactions aimed at unification; 5) the uni-
fication initiatives from both sides became entangled in other conten-
tious issues, ending in a deadlock; and 6) once North Korea’s nuclear
weapons program took center stage, the unification issue took a back
seat, as denuclearization became a critical precondition for its realiza-
tion. What the above list demonstrates is that Chinese analysis appor-
tions blame rather equally, faults Seoul for not finding a “middle
ground” enticing to Pyongyang, and attaches importance to Seoul
distancing itself from Washington and setting aside issues that are
deemed contentious to break the deadlock.
Chinese analysts see the on-and-off interactions between the two
Koreas entering a new stage. North Korea now faces extraordinary diffi-
culties: the sudden succession of an inexperienced, untested young man in
a country where the top leader’s personality and ability are critical to the
survival of the Kim dynasty; the new toll on the economy from the
Security Council sanctions, as the people’s hardship is still not alleviated;
and even greater diplomatic isolation due to international reactions to
recent satellite launches and a nuclear test. Relations with Seoul and
Washington remain hostile, while those with Beijing ran into trouble.
Clearly, Chinese strategic thinking has responded to events in 2012–
2013 by putting more blame on North Korea, and this may be having
an effect, given some adjustments in the North’s policies over the past
summer.
The precarious situation of North Korea inevitably fuels speculation
that the regime may collapse before long. Chinese analysts see no such
prospects. Although Kim Jong-un faces significant challenges, he has
consolidated his power base, including gaining firm control over the
military. As long as he keeps this grip on the military, these analysts expect
the economic and political situation to remain relatively stable in the
foreseeable future. The drive toward unification cannot be stopped, as
Koreans on both sides share this goal, but regime collapse does not
provide the answer. Reviewing different models of national unification,
we can get a clearer idea of Chinese strategic thinking at work.
The Vietnam model of military unification: In comparison to South
Vietnam, established and shored up by outside powers, North Vietnam
found its strength in popular support, long-time military experience, and
unwavering political determination. It always kept on the offensive in
promoting national unification, playing the peace card from time to time
but never succumbing to the illusion that this would bring unification.
Assistance from China and other communist countries played a critical role
in driving out France and then the United States, whose withdrawal
offered Hanoi the chance to reach its goal. It is no surprise if some are
asking whether there is some prospect that this scenario will apply.
The Yemen model of integration: Yemen’s division is attributed to
internal struggle, colonial legacy, and external interference. Its unification
demonstrates the following: 1) Even though the North was stronger in
population and economically, both sides had small populations and were
prone to outside influences; 2) not only the two superpowers, but regional
powers such as Egypt and Saudi Arabia, played a big role; 3) recognizing
their vulnerability to power politics, the two Yemens demonstrated a
strong desire for national unity, in 1992 agreeing to achieve this within
a year; 4) strong leadership in ending the civil war in 1994 and the
termination of outside support to South Yemen due to the collapse of
communist regimes, made unification possible. Few expect this model to
be applicable to Korea.
The German model of absorption: The sudden reunification of
Germany demonstrated a number of features: 1) The power of East and
West was asymmetrical, the West being much bigger and richer, allowing
it to take the helm in the unification process; 2) its superior resources
allowed West Germany peacefully to absorb East Germany offering
248 C. XIAOHE
generous material benefits; 3) even more important were deep-seated

aspirations for reunification; 4) East Germany’s internal crisis and Soviet
changes, loosening its grip on the East, gave the West its opportunity; 5)
leadership by Helmut Kohl and others played a critical role in facilitating
this process; 6) the four powers, the Soviet Union, the United States,
Great Britain, and France were highly restrained in this process; and 7) the
two sides moved swiftly, minimizing external interference. While the huge
wealth gap would favor South Korea taking the lead, as West Germany had
done, few in China expect this model to apply. Given the North’s military
power, conventional and nuclear, it is difficult for South Korea to follow
the German model of absorbing it. Even if a sudden change in leadership
could lead to large-scale chaos, jolting into motion a unification process,
more violence and more involvement of outside powers are anticipated.
China is not in a position to define the circumstances of unification. As
a neighbor, it has a keen interest in stability and peace on the peninsula. It
is also a divided nation and has shown its own way of dealing with this with
a patient, three-stage strategy, promoting economic integration in the first
stage, political consultations for the second stage, and one nation, two
systems as the approach to the third stage. China’s strategy is similar for
Korea, a step-by-step, gradual unification that is less disruptive, costly, or
unpredictable.
HOW NEGOTIATIONS OVER NORTH KOREA WILL SHAPE THE

BALANCE OF POWER
The end of the Cold War caused significant change in the power
structure of Northeast Asia. After the collapse of the Soviet Union and
its disintegration into 15 independent states, China and Russia shook
hands and set in motion their rapprochement. Already, the Sino-US
entente had come to a sudden end, as Washington rallied Western
nations to impose sanctions against China and the two states disputed
human rights, trade, and the Taiwan issue. While in the new millen-
nium, the United States was preoccupied with the war on terrorism and
the war in Iraq, the simmering rivalry between China and Japan grew
increasingly evident, symbolized by historical issues and associated grie-
vances as China’s rise and Japan’s pursuit of normal statehood aggra-
vated the tensions. Recently, disputes over the Diaoyu (Senkaku) Islands
have militarized the rivalry. With the US rebalancing strategy, the Sino-
US rivalry in this region revived, spilling into a chain reaction. Although
the Sino-Japanese competition is more narrowly focused on the regional

level, the two rivalries are converging in Northeast Asia for two reasons:
The United States and Japan are traditional allies, and both are facing
China as competitors; and in order to confront this collaboration,
symbolized by the islands dispute, China is strengthening its relations
with Russia, which also is at odds with the two states, to the point that a
de facto Sino-Russian alliance looms with increased mutual domestic
support and institutionalized military cooperation. Despite growing
economic interdependence of China and Russia on one side, and the
United States and Japan on the other, political and security trust have
been declining. Two competing political-security blocs are on the hor-
izon, repeating the basic power structure witnessed when the inter-
Korean rivalry arose and could again be the source of regional instability
with ramifications for the policies toward the Koreas.
China could reap a number of benefits from the division on the
peninsula. Both Koreas would seek China’s support, allowing it to
enjoy considerable room to maneuver. North Korea could serve as
China’s buffer zone, even though its geopolitical value declines as
China grows stronger and more confident. Finally, North Korea
could serve as China’s counterweight against the US strategy of reba-
lancing, even if it may not want to, since its missile launches, nuclear
tests, and attendant provocations can consume US resources, diplo-
matic and military, alleviating pressure on China. This kind of strategic
thinking is predicated on prioritizing questions about the balance of
power in responding to issues related to North Korea’s nuclear weap-
ons program and negotiations to curtail it.
Chinese elites know that the split on the Korean Peninsula is unsustain-
able. The issue of unification is not about “if,” but about “when” and
“how.” For China, the desired path to unification is gradual and peaceful,
in order to secure its national interests. With this in mind, China welcomes
the convening of international conferences to address a number of issues:
border arrangements, international obligations, nuclear weapons, recon-
struction in the aftermath of reunification, neutrality and the end of the
US military alliance, and how to secure Chinese properties and businesses
on the Korean Peninsula. In the process, this unified Korea should agree
to be nuclear free, dismantling all nuclear weapons and other nuclear
facilities under the supervision of the IAEA. China’s strategic goals do
not call for perpetuation of the divided peninsula, but its transformation
into a neutral country.
250 C. XIAOHE
In the short run, Chinese are not prepared to embrace a unified Korea,
since the above conditions would not be met. The balance of power on the
peninsula has tilted toward South Korea, and a drive to unification led by it
would not satisfy these conditions. It also would be troubled by two missing
elements: outstanding leadership, and the appropriate historical balance of
external support. As for leadership, it is not clear that Park Geun-hye is the
badly needed, outstanding leader with the political will to promote a uni-
fication agenda that would rally both domestic and international support and
to seize any chance to get the job. What is meant by the appropriate
historical balance of external support is circumstances that would suffice to
meet China’s strategic imperatives. One would be Sino-US relations that
have been put on solid footing, leading to a Sino-US condominium and to
North Korea ceasing to function as a counterweight. The other would be the
North going too far, causing harm to China’s core national interests unless
policy towards it changed. In the absence of either of these extreme possi-
bilities, for the foreseeable future, it is unlikely that China’s policy toward
North Korea will undergo significant change. As a result, China would
continue to be North Korea’s principal source of assistance, the likelihood
that North Korea can weather all sorts of hardships will grow, and the rivalry
between the two Koreas will drag on. So far, there is no evidence that
Chinese decision makers have any other notion of the delicate relationship
between the balance of power on the peninsula and in Northeast Asia. They
probably believe that keeping the status quo on the peninsula is bearable and
preferable to the uncertainties of unification at this time.
ALTERNATIVE VIEWS AND THEIR INFLUENCE IN 2013

Among the factors that could determine how the balance of power in
Northeast Asia will change, inter-Korean interactions are a wild card with
potential to make a difference. The balance of power is still fluid, subject to
change in the near future. Mainstream thinking in China about the Korean
Peninsula consists of a number of interconnected elements. If some of
these are questioned, then different judgments about the balance of power
could be drawn. Yet, alternative thinking so far is not leading to wavering
in mainstream views:
• The division of the Korean Peninsula is a historical product and

history will witness the accomplishment of ultimate unification on
the peninsula.
• The masters of the future destiny of the peninsula are the Korean
people; outside powers’ interference, no matter what the motive,
cannot stop unification.
• For China, which also faces national division, it is immoral to stand in
the way of eventual unification of the peninsula; at the same time, it
is strategically unwise for China to take a hands-off policy toward
Korean affairs.
• Even though North Korea causes troubles that undermine China’s
interests or puts China in a difficult diplomatic situation, Beijing has
no strong reasons to cut off its traditional relations with Pyongyang.
• The old appeasement policy toward North Korea seemingly did not
work. North Korea did as it pleased in launching satellites and
conducting nuclear tests, China has added sticks to its diplomatic
toolbox, using them to make North Korea feel some pain.
• Coupled with its long-range missile technology, North Korea’s nuclear
weapons have the potential to alter the nuclear balance in this region.
Japan and South Korea may follow suit. In order to stop nuclear
proliferation in this region, China formulated its “Three Insistence”
policy, in which the denuclearization of the Korean Peninsula is on top.
• As long as Sino-US relations remain uncertain and South Korea
sticks to what are regarded as its post-unification arrangements,
China is not in a hurry to push for unification on the peninsula,
even though unification will effectively eliminate a source of friction.
Mainstream thinking does not go without any challenge. On the main-

stream view that a divided Korean Peninsula serves China’s interest best,
Jin Jingyi and Jin Qiangyi insist that unification should be China’s pre-
ference on the grounds that this could eliminate a source of instability in
Northeast Asia and reconstruct this region’s political structure.3 They
believe that unification would deprive the United States of its right to
station military forces on the peninsula and in Japan, reducing the US
regional influence, and promoting China’s Northeast Asia strategy, which
emphasizes cooperation instead of confrontation. In contrast to the
silence of mainstream thinkers on who should lead the unification process,
one sometime hears comments by academics that South Korea should do
so because it is prosperous and democratic, what one would conclude
from previous unification cases.4 For Chu Shulong, North Korea is a failed
state. As its people struggle to escape hunger, North Korea has no moral
basis or economic means to lead the unification process, they argue. Also,
252 C. XIAOHE
contrary to mainstream opinion that China should maintain good rela-

tions with North Korea in order to gain more leverage over inter-Korean
affairs, Deng Yuwen, then deputy-editor-in-chief of the Central Party
School’s Study Times, wrote in Financial Times an article entitled,
“China Should Abandon North Korea.”5
Deviating from the official line, these three writers strike a tone that
may resonate with a growing number of Chinese: 1) cool-headed analysts,
who have little faith in the survival of North Korea and suggest that China
should bet on a winner rather than a loser to keep its favorable position; 2)
pro-South Korean Chinese, who have been heavily influenced by its
culture or reaped benefits from doing business with that country; and 3)
critics of the Chinese Communist Party, whose anti-communism predis-
poses them to have a strong aversion to the North Korean regime and
would love to see a reversal of current policy. In the foreseeable future,
there is no prospect of a change of regime in China that would give voice
to this outlook, nor do the other extreme circumstances noted above that
might lead to a sharp turn in Chinese policy toward North Korea have any
realistic possibility. Strategic thinking in China supports current policy and
is not tilting in a new direction.
NOTES
1. Wang Dingan and Liang Qichao, Ze Huofan zhuan and Li Hongzhang
zhuan (Chongqing: Chongqing chubanshe, 1998), 161.
2. Zhang Peiheng and Yu Suisheng, Ershisishi quanyi—Mingshi dishice
(Shanghai: Dazhongguo chubanshe, 2004), 6681.
3. “‘Chaoxian Bandao de tongyi youli yu Zhongguo’ de jielun shi zenme
dechude?” http://blog.sina.com.cn/s/blog_5f5efbb40100dax8.html.
4. Comments made at the international seminar titled, “60th Anniversary of
the Korean Armistice: A Pursuit of a Peace Road,” July 24, 2013, Beijing.
5. Deng Yuwen, “China Should Abandon North Korea,” Financial Times,
Feb. 27, 2013, http://www.cbsnews.com/8301-202_162-57577927/
north-korea-threats-lead-many-in-china-to-question-decades-old-alliance/.
Dr. Cheng Xiaohe serves as Associate Professor at the School of International

Studies and Deputy Director of Center for China’s International Strategic Studies,
Renmin University of China. His main research focuses lie in the fields of China’s
foreign relations in general and China’s relations with the United States and some
neighboring countries in particular.
CHAPTER 15
China’s Interests, Actors, and the

Implementation of Sanctions against North
Korea
Catherine Jones
Following the first nuclear test by North Korea in 2006, sanctions were
unanimously authorized by the UN Security Council (UNSC). Their
stated aims were to dissuade North Korea from its development of nuclear
capabilities and promote its return to dialogue with regional actors in the
Six-Party Talks.1 Since 2006, further resolutions have extended the scope
of sanctions: 1874 in 2009, 2087 in February 2013, 2094 in March 2013,
2270 in March 2016, and 2321 in November 2016. In each case,
China voted in favor and verbally condemned actions by the DPRK,2
(albeit with differing degrees of enthusiasm).3 Nevertheless, questions
have persisted regarding China’s commitment to achieving the stated
aims of these sanctions, particularly concerning its approach to implemen-
tation (these concerns were also evident in the implementation of resolu-
tion 2270 and persist after the limitations of coal exports were included in
resolution 2321, even though China has agreed to these limits). They
continue because of statements which emphasize “sanctions in themselves
are not the end”4 and the way to resolve the nuclear issue and pursue
C. Jones (*)
University of Warwick, Coventry, UK

https://doi.org/10.1007/978-981-10-3144-1_15
254 C. JONES
peace and security on the peninsula is through dialogue and diplomacy.5

Furthermore, China stated objections to the inspection of cargos travel-
ling to and from the DPRK,6 which raise doubts over the extent of China’s
dedication to implementation.
Running in parallel to discussion of China’s approval of sanctions is a
literature specifically addressing China’s relationship with North Korea.
Within this group of works, it has become a part of the cannon of knowl-
edge to acknowledge that China has many interests with respect to this
particular neighbor. However, these two literatures rarely substantively
come together; how these interests play out once sanctions are approved
by the UNSC remains a missing link in the discussion. Reflections on these
multiple interests—more often than not—serve as a means of “explaining”
China’s divergent behavior, comprehending that the many interests in the
mix are as much as many seem to understand about China’s behavior.
Rather than being co-opted into this approach, this article suggests that
by exploring China’s post-UNSC actions, a clearer understanding of the
relationship between these interests and activities can be gained. Feeding
into this argument is the idea that it is similarly insufficient and inaccurate
to describe China’s approach toward implementation of these sanctions as
a clear case of sanctions busting. To do so implies (intentionally or not) a
singular mens rea at work in China’s approach. Rather, it is more accurate
to underscore that—as is well documented—“China’s” many interests
regarding North Korea are played out in how implementation of sanctions
happens. Crucially, it is also fundamental to acknowledge that some of
these interests are held by different actors within Chinese foreign policy-
making; so it would be rational to acknowledge that they enter the
political space at different stages of the process. Thus, it is necessary not
only to recognize China’s many interests, but also to seek to understand
the practical outcome of these interests in implementing these sanctions.
CHINA’S INTERESTS
According to the literature, sanctions are intended to compel a target state
into compliance with international norms.7 In this case, they have been
imposed with “a view to convincing the Democratic People’s Republic of
Korea (DPRK) to comply with its Security Council-imposed obligations, to
return to the Six-Party Talks, and to take significant irreversible steps to carry
out its undertakings pursuant to previous Six-Party Talk agreements.”8
Moreover, the resolutions state that it should denuclearize and return to
the Non-Proliferation Treaty.9
CHINA’S INTERESTS, ACTORS, AND THE IMPLEMENTATION . . . 255
Based on the existing wisdom on sanctions, China, having approved

sanctions against the DPRK, has the same aims in authorizing them as
other states in the UNSC. However, given the criticism over China’s
implementation of those sanctions,10 we should take seriously the argu-
ment that China’s purposes in authorization diverge from the statements
in the resolution and that articles asserting China’s manifold interests are
more significant than offering readers a catch-all argument to explain
multi-faceted behavior. One reason for avid discussion of China’s votes
in favor of sanctions is the assumption that these votes reflect a change in
China’s approach toward the aims of sanctions against the DPRK, but,
surely, this logic is overly reductive in treating expressions of China’s
interests. This section briefly outlines the range of Chinese interests before
the following section explores how these interests may continue to be
expressed in the post-acceptance stage of sanctions activities. China has to
walk a tightrope between differing and often competing interests. In a
necessarily simplistic outline, I indicate that there are at least seven inter-
ests that it may at any time seek to pursue11:
(1) China does not want a nuclear-capable DPRK.12

(2) China does not want the DPRK to collapse, triggering a flow of
refugees or regional instability.13
(3) China is the DPRK’s closest ally and seeks to “protect” it from
interference by the United Nations or the Western powers.14
(4) China needs to demonstrate that it is a responsible power.15
(5) China needs a stable periphery.16
(6) China has become increasingly frustrated and angry with the
DPRK over missiles and nuclear capabilities.17
(7) China does not want another great power (the United States) on
the peninsula18 (nor is it likely to want a unified Korea that has the
potential to be a strategic threat to China and Chinese growth).19
Despite the use of the word “China” at the start of each of these
interests, it does not necessarily follow that they are all interests equally
held within the same sphere of Chinese foreign policymaking. Indeed, it is
clear that some of them may clearly be the purview of one particular force
or another within the Chinese regime. If this assertion is correct, then it
would naturally follow that at the stage that each grouping or set of actors
within China’s foreign policy architecture engages directly with the imple-
mentation of sanctions there may necessarily be some “tweaking” of which
particular interest is at the forefront of the agenda.
256 C. JONES
CHINA’S INTERESTS, ACTORS, AND THE IMPLEMENTATION OF

SANCTIONS
This section seeks to establish that China’s many interests in relations with
North Korea persist after the acceptance of sanctions in the UNSC; hence,
discussions of China’s position in that particular forum should be properly
situated within a broader context, and that there are many actors not only
in the making of foreign policy20 but also in the interpretation and
implementation of those policies. In seeking to make these points, I
focus on three areas of implementation and, in each, highlight that differ-
ent interests continue to be served.
(a) China in New York: Post-UNSC actions in specifying the mandate
After a resolution on sanctions has been passed by the UNSC, a committee

is created in order to monitor, manage, and oversee their implementation.
In the case of some sanctions, a panel of experts is also formed to inves-
tigate and make recommendations to the committee. These offer oppor-
tunities to shape and modify elements of the sanctions criteria. For
example, depending on the specifications in the resolution, sanctions
committees can determine or add to the list of sanctioned entities or
persons. Importantly, these committees and panels function in secrecy,
and disclosure of their activities can vary in terms of both the number and
regularity of their publications. Hence, in contrast to the mostly public
realm of the Security Council, activities in these groupings are only open
to a narrow audience.
As a result, whereas one of China’s interests may be fulfilled through a
public vote and statement in the UNSC, i.e., being seen as a responsible
power supporting sanctions against North Korea, this is not the only
avenue within the UN structures for other interests to be fulfilled. Of
course, this is a tool not just open to China but also may be used by all
states involved in these post-UNSC activities. In the case of sanctions
against North Korea, China is a member of both the committee pursuant
to resolution 171821 and the panel of experts created through resolution
1874.22 Within both, China has the ability to make the sanctions more
effective at achieving the stated goals of the resolutions or preventing
additions from being made. Because of the lack of transparency within
these groupings—for sound reasons, such as the collection and analysis of
information and confidence in the confidentiality that draws out such
evidence—it is difficult to identify what measures were on the table and

blocked, and, importantly, which states were responsible for failure to
adopt a recommendation.
Despite the difficulties, there are a number of instances in the open
source data that indicate the pivotal role that China has played in prevent-
ing the expansion of the list of sanctioned persons and entities—even
when these expanded lists only seek to add different renderings of the
names of the same individuals. Within the committee stage of implemen-
tation—where suggestions from the Panel of Experts (henceforth PoE)
can be accepted or rejected—China has been noted to play an active role.
For example, in the 2015 committee meetings, the PoE set out a list of
suggested additions to the list of sanctioned persons and entities. These
additions are predominantly a list of alternative renderings of names that
are already on the list, e.g., an alternative romanization of a name. At the
meeting scheduled for August 2015 (actually held in September 2015),
this list included names associated with the company Ocean Maritime
Management Company (OMM)23 that has been under investigation by
the PoE for many years and against which sanctions have already been
approved. However, as noted in a report released before the scheduled
committee meeting:
“China has made clear it will not support designating entities or individuals
that are close to the government and has reservations about the number of
entities (34) linked to the OMM that the Panel has proposed be added to
the sanctions list, it has expressed willingness to continue discussions on
implementation of the Panel’s recommendations.”24
Despite the fact that this is a statement within an open source document,
the audience for these reports is not the same as the audience of UNSC
resolutions. As such, it is possible for China to maintain its very visible
public presence within the formal vote in the UNSC that conforms to its
interest in being a “responsible power,” but also to ensure the stability of
the regime in Pyongyang by not allowing sanctions to reach too close to
key government figures. A further point to note about this revelation is
that there is a representative from China on the PoE, which approves
reports and recommendations before being sent to the committee for
consideration. In the 2012 report of the PoE, it is noted that the 2011
report was not publically released because the Chinese representative
would not sign off on it, despite having been involved in the drafting of
258 C. JONES
its contents.25 It is possible to read too much into such small details:
however, they may suggest that in China’s engagement within the details
of the sanctions regime foreign policy actors are important, and there are
different levels of discretion open to them. This claim is supported by the
use of phrases including “my capital says.” It may be the case that there is a
sequencing of the order in which China’s interests are achieved as well as
different groups of actors able to achieve different interests. Even within
the Chinese mission to the United Nations, the individuals acting in each
forum are different. In this case, it is not only that there is a sequence for
pursuing interests, but that different actors hold different interests.
(b) China in its Capital: Translation of sanctions mandates into in-state

actions
The capacity of states to implement sanctions regimes is an obvious factor

in their effectiveness.26 As one interviewee noted, sanctions can be effec-
tively implemented in North America or the European Union; however,
for other regions of the world, sanctions are more difficult to implement.27
Indeed, to some extent, the type of regime also plays a part in this
difficulty; it is often noted that although a common Western perception
of China is as a monolithic state with firm central control, this image is
misleading. The organization of the state and its ability to control some
companies is much more limited than would be expected by the West.
Frequently in Africa, the Chinese government receives condemnation for
the actions of some companies, but it has little ability to actually control or
change their behavior. Similar problems may occur regarding shipping
companies and banks within China.28
There are two key questions to be considered: How does the Chinese
government translate or interpret the sanctions listings into domestic laws
and procedures at a national level and then report information back to the
PoE and committee? And how effectively can China control companies,
provinces, and individuals with an interest in trade with North Korea? In
looking at the first of these, it is important to emphasize that China does
not agree with the inspection of cargo going to or from North Korea. This
is the first hurdle for claims that China is fully supporting sanctions. Since
Beijing has stated its objections to the inspection of vessels going to or
from the DPRK, its commitment to the sanctions regime is obviously
questionable. This is particularly important for determining whether sanc-
tions will be effective in achieving the goal of a non-nuclear DPRK, but it
is a significant indicator also of the power of diverse interests that are

served at different stages of the implementation of the sanctions regime.
The bulk of cargo travelling to or from the DPRK is passing through a
Chinese port, which places significant responsibility on customs officers to
inspect and interdict items and people on the sanctions list. In addition, it
is necessary for the government to provide a list for these border agents to
use of sanctioned items, e.g., of “luxury goods”; however, what counts as
a luxury good is left to each state to determine. Some states have created a
list of items they consider to be “luxury goods,”29 but others—including
China—had not. However, there are indications of what China counts as a
luxury. For example, it has not counted a ski lift as a luxury good, but
Canada counted snowmobiles as a luxury.30 Such goods can help to
maintain the stability of the regime in North Korea; therefore, a liberal
interpretation of what counts as a luxury can contribute to meeting a key
Chinese interest, despite its UNSC vote.
One should not conclude that China has not implemented the letter of
the sanctions approved against the DPRK. Indeed, in some cases, it has
implemented the exact letter of the sanctions regime and provided addi-
tional evidence of its compliance to the PoE, e.g., in the case of the
provision of lumber trucks to Pyongyang that were subsequently used in
the birthday parade for Kim Jong-il in 2013 to carry long-range missiles,
China had gone as far as to get an end-user certificate to show it was told
these trucks were to be used for the transport of lumber.31
The second hurdle is that different states have different codified rela-
tionships between international and domestic law.32 In some states, inter-
national law requires no domestic legislation to be enforced; in others, this
is necessary—China is among the latter. So far there have been no indica-
tions that China has developed the corresponding laws to fully implement
sanctions consistently at the national level. This is a responsibility of the
government in Beijing—as is the creation of a list of luxury items—that if
not achieved can undermine the consistency with which sanctions are
implemented and, therefore, be used to achieve China’s interests in ensur-
ing the stability of the regime in Pyongyang and “regional stability.”
(c) China in the Provinces: On the border implementation actions
In looking in more detail at the relationship between China and North

Korea, we should not pay attention only to country to country eco-
nomic relations that show North Korea is only a very small economic
260 C. JONES
partner for China;33 provincial economic relations with the DPRK tell a
different story, especially when viewed from the position of potential
economic collapse in the DPRK if trade were interrupted.34 Thus, the
decentralization of China’s economic development has a knock-on
effect for China’s ability to control the implementation of sanctions
across its land border with North Korea, especially for small- or med-
ium-sized businesses or those operating as a front for a sanctioned
North Korean entity.
In looking in more detail at the cross-border relations, the image
becomes even more complex. In a study published in 2012, Noland,
Lee, and Haggard explore the nature of this trade and the potential
limiting factor of a lack of institutional frameworks for facilitating
trade.35 Indeed, within their study, they highlight that the majority of
trade is done by firms with fewer than 100 employees and with revenues of
less than USD 12 million.36 More significantly, the lack of state-based
institutional facilitation that their paper highlights as a limiting factor (or
provides as a ceiling) for increased trade across the border suggests that
there is a generally low level of control by Beijing in regulating these trade
flows. Additional corroborative reports indicate that Beijing lacks control
over trade across this border.37
Although these sources indicate permeability of the border area, sug-
gesting difficulties for Beijing to implement sanctions, there are reasons
for considering that more could be done. For example, since the publica-
tion of the 2012 report, the third Dandong China-North Korea trade fair
has been held in October 2014, and a number of companies cited in the
PoE’s reports have been participants.38 The creation of these fairs (largely
by local government offices) firstly suggests that there are elements of
institutionalization or at least collective organization of businesses to
facilitate and overcome the ceiling of trade the writers of the report high-
light. Secondly, these fairs suggest that controlling or influencing busi-
nesses may be easier than previously indicated, because there is an event at
which communications can clearly take place, and these events are orga-
nized at least in part by the provinces in China. However, this calls into
question the relationship between Beijing and local governments influen-
cing businesses in this forum—especially as significant trade deals take
place within the structure of the trade fair. The existence of such an avenue
for Chinese control may be seen to undermine or at least weaken claims of
the limited potential control of Beijing.39 A further event that may be seen
to undermine the prospect of Beijing’s limited control is the involvement
of foreign ministers’ statements and engagement with the development of

the Dandong special economic zone in Liaoning province.40
In the border areas, interests regarding the flows of migrants from
North Korea may assume the greatest importance. Indeed, for the local
government officials, this may be a primary concern in their relationship
with North Korea. However, trade and the opportunities to develop these
provinces are also of importance. As a result, the actors holding these as
key interests are different from those pursuing other interests in Beijing or
in New York. Additionally, these interests can be fulfilled through the way
sanctions are implemented on the ground long after they have been
approved in the UNSC.
CONCLUSIONS AND CAVEATS

China’s multiple interests in relation to North Korea do not disappear
after the approval of sanctions. Rather the actors championing different
interests and the stage in implementation of sanctions that these interests
can be achieved are sequenced in the processes that take place after votes in
the UNSC. Awareness of this fact should contribute to overcoming some
shortcomings in the existing discussions of China’s relationship to North
Korea. One of the initial critiques of the literature on this topic is the need
to understand the many phases and elements of “China’s” approaches to
implementing sanctions.
Of the seven interests that this article listed at the start, at least four of
them seem to be satiated through post-Council actions. Two of the three
remaining interests have been already satisfied within the UNSC: The
desire/need to publically rebuke the DPRK for testing missiles and
nuclear capabilities and the need to be seen as a responsible power. The
final interest listed—the desire not to have the US military on the Chinese
border—is not directly achieved through the approaches to implementa-
tion discussed here. However, it is indirectly fulfilled by ensuring there is
not a rapid collapse of the regime in Pyongyang.
This article has continued to use “China” as a singular entity, while
expressing the multiple roles that this usage may envisage, suggesting the
variety of forms that its foreign policy actors can take in respect of the
DPRK. In addition to bringing together often segregated literatures on
China and North Korea, Chinese foreign policymaking, and the imple-
mentation of sanctions, this article has demonstrated the benefits that can
be derived from focusing on a sequencing to the fulfillment of China’s
262 C. JONES
multiple interests. Rather than seeking to show a hierarchy among these

interests, it, in part because of the process of implementation, points to a
sequencing of these potentially contradictory interests over time. Without
any statements from China as to whether its position on North Korea will
change, we have a tangible basis to test behavior. Instead of looking for
one instance of a vote in favor of sanctions, we have a series of behaviors to
compare.
Potentially a more significant contribution of this approach is the
suggestion that there is a way to deepen understanding of the problems
that China faces in implementing sanctions and at what stages they may be
managed. With this in mind, a deeper and more extensive study along
these lines may enable more concrete and achievable policy recommenda-
tions for states engaging with China on this issue.
NOTES
1. United Nations Document S/RES/1718 (2006).
2. “China resolutely opposes DPRK nuclear test,” Xinhua, October 9, 2006,
http://news.xinhuanet.com/english/2006-10/09/content_5180203.
htm, accessed August 8, 2013; see also “China urges North Korea not to
test missile,” China Daily, June 29, 2006, http://www.chinadaily.com.cn/
china/2006-06/29/content_628845.htm accessed Nov 1, 2013; Joseph
Kahn, “Angry China is likely to toughen its stand on Korea,” The New York
Times, October 10, 2006, http://www.nytimes.com/2006/10/10/
world/asia/10china.html, accessed November 1, 2013.
3. In 2006, China’s condemnation of the DPRK was almost immediate, and
resolution 1718 was passed within days of the nuclear test. In contrast,
resolution 1874 in 2009 took two weeks for China to approve. “Shades of
Red: China’s debate over North Korea,” Asia Report, No. 179, Crisis
Group, 2009.
4. United Nations Documents: S/PV.5551, 4; SC/8853, 4; United Nations
Yearbook 2006, 446, http://unyearbook.un.org/2006YUN/2006_P1_
CH4.pdf, March 13, 2013.
5. United Nations Documents S/PV.5551, 4; S/PV.6141, 3.
6. “China does not approve of the practice of inspecting cargo to and from the
Democratic People’s Republic of Korea. We therefore have reservations
about the relevant provisions of the resolutions,” United Nations
Document S/PV.5551, 4; “I wish to stress that the issue of cargo inspection
is complex and sensitive. Countries need to act prudently and in strict
accordance with domestic and international law and on the condition of
reasonable grounds and sufficient evidence.” United Nations Document S/

PV.6141, 3.
7. David Cortright and George Lopez, “Bombs, Carrots, and Sticks: The use
of incentives and sanctions” Arms Control Today 35, no. 2 (March 2005):
19–24 (full text also available from http://legacy.armscontrol.org/act/
2005_03/Cortright, accessed September 23, 2015); George Lopez and
David Cortright, “Economic Sanctions and Human Rights: Part of the
problem or part of the solution,” International Journal of Human Rights
1, no. 2 (1999): 1–25.
8. United Nations Document S/2010/571 (2010), 11 (paragraph 18).
9. See United Nations Documents: S/Res/1718 (2006); S/Res/1874
(2009); S/Res/2087 (2013); S/Res/2094 (2013); S/Res/2270 (2016);
S/Res 2321 (2016).
10. China has been cited as being the key to success of sanctions against North
Korea; however, it has failed to act on the resolutions with sufficient vigi-
lance to ensure the sanctions are successful. Marcus Noland, “The (non)
impact of UN sanctions on North Korea,” East-West Centre Working
Papers, no. 98 (2009): 3–4; for a more extensive look at the trade links
between China and the DPRK see: Stephan Haggard and Marcus Noland,
“Engaging North Korea: the efficacy of sanctions and inducements,” in Etel
Soingen, ed., Sanctions, Statecraft, and Nuclear Proliferation (Cambridge:
Cambridge University Press, 2012), 241–243.
11. This synthesis is derived from a number of sources. Key documents that
discuss China’s multiple interests include Ren Xiao, “Rowing Together: A
Chinese Perspective,” Issues and Insights 13, no. 9 (2013).
12. Dick K. Nanto and Mark E. Manyin, “China-North Korea Relations,” (CRS
report No. R41043) (Washington, DC: Congressional Research Service,
2010), fn10; “Top DPRK leader meets Chinese vice-president on rela-
tions,” Xinhua, July 26, 2013.
13. Abanti Bhattacharya, “North Korean Nuclear Crisis: Challenges and
Options for China,” Strategic Analysis 30, no. 4 (October 2006); Gregory
J. Moore, “How North Korea Threatens China’s interests: understanding
China’s ‘duplicity’ on the North Korean Nuclear issue,” International
Relations of the Asia-Pacific 8 (2008):1–29; North Koreans that are cur-
rently in the border area are already perceived to be potential problems for
China’s security. See: Carla Freeman and Drew Thompson, China on the
Edge: China’s Border Provinces and Chinese Security Policy (Centre for the
National Interest and Johns Hopkins SAIS, April 2011), 25; Nanto and
Manyin, 2010, 5.
14. China “offers diplomatic cover and minimizes any punishment that might
be agreed upon by the international community,” Ralph A. Cossa and Brad
Glosserman, “The ‘illogic’ of China’s North Korea policy,” Asia Times
264 C. JONES
Online, May 19, 2012, http://www.atimes.com/atimes/China/

NE19Ad02.html; see also Jane Perlez, “China says it won’t forsake North
Korea, despite support for UN sanctions,” The New York Times, March 9,
2013; Jasper Kim, “Will the China-NK alliance remain stable?” Global
Times, February 17, 2013; Moore, 2012, 19; furthermore, this relationship
is described by some as being “sealed in blood,” Freeman and Thompson,
2011, 5.
15. This is seen by some to be a prestige issue for China; Ding Gang, “More
open North Korea an asset to China,” Global Times, May 1, 2013.
16. As China stated at the meeting on July 15, 2006, its first objective is to
maintain stability on the Korean Peninsula rather than preventing the devel-
opment of nuclear capabilities, United Nations Document S/PV.5490
(2006), 5. Xi Jinping is quoted as saying in April 2013, “No one should
be allowed to throw a region and even the whole world into chaos for selfish
gain,” Jane Perlez and Choe Sang-Hun, “China Hints at Limits to North
Korea Actions,” The New York Times, April 7, 2013; Malcolm Moore,
“China and Russia urge North Korea to step back from missile launch,”
The Telegraph, April 10, 2013; “Russia, China urge North Korea to drop
rocket launch plan,” Reuters, December 3, 2012; “China urges North
Korea not to test missile,” China Daily, June 29, 2006; David McNeill,
“China warns North Korea it will not tolerate ‘troublemaking,’” The
Independent, April 11, 2013.
17. Ben Blanchard, “China’s anger at North Korea overcomes worry over US
stealth flights,” Reuters, April 1, 2013; Joseph Kahn, “Angry China is likely
to toughen its stand on Korea,” The New York Times, October 10, 2006;
also Moore, 2008.
18. Moore, 2008.
19. Bhattacharya, 2006.
20. The argument that there are many actors in Chinese foreign policymaking
can be found in a number of works, e.g., Linda Jacobsen and Dean Knox,
New Foreign Policy Actors in China, SPIRI Policy Paper No. 26, September
2010; Gilbert Rozman, ed., Chinese Foreign Policy: Who Makes It, and How
Is It Made? (New York: Palgrave Macmillan, 2013); and, Shaun Breslin,
“China and the South: Objectives, Actors and Interactions,” Development
and Change 44, no. 6 (2014):1273–1294.
21. United Nations Document S/Res1718 (2006).
22. United Nations Document S/Res1874.
23. The Ocean Maritime Management Company has been investigated by the
PoE since 2013 when the ship the Chong Chon Gang was interdicted in
Panama and found to have sanctioned items on board encased in sugar.
Since the interdiction, the PoE have continued their reports.
24. UN Security Council Report 2015, Monthly Forecast August 2015,

http://www.securitycouncilreport.org/monthly-forecast/2015-08/,
accessed September 18, 2015, 10.
25. United Nations Document S/2012.422, fn. 12.
26. The problems and costs of controlling private companies are highlighted in
Daniel W. Drezner, “Bargaining, Enforcement, and Multilateral Sanctions:
When is cooperation counterproductive?” International Organization 52,
no. 1 (2000): 73–102.
27. Personal interview with the author, New York, February 1, 2013.
28. Breslin, 2014.
29. Both Japan and Australia keep Open access lists of “luxury goods.” For
Australia’s list see: Department of Foreign Affairs and Trade, “Democratic
People’s Republic of Korea (North Korea),” http://dfat.gov.au/interna
tional-relations/security/sanctions/sanctions-regimes/pages/democratic-
peoples-republic-of-korea-north-korea.aspx%20, accessed September 23,
2015; for a more detailed discussion of the implications of China’s approach
to luxury goods see: Kevin Stahler, “In the lap of luxury” North Korea:
Witness to Transformation, Peterson Institute, published April 29, 2015 at
http://blogs.piie.com/nk/?p=14078, accessed September 23, 2015.
30. United Nations Document S/2015/131, 42.
31. United Nations Document S/2013/337, para. 54.
32. It falls on the PoE in this case to find out whether appropriate laws are “on
the books” in each country around the world; in many countries, there are
anti-terrorism laws fit for this purpose, and in some countries, international
laws are, a priori, domestic laws.
33. Nanto and Manyin, 2010, 15–16.
34. Freeman and Thompson, 2011, 24.
35. Stephan Haggard, Jennifer Lee, and Marcus Noland, “Integration in the
absence of institutions: China-North Korea Cross-Border exchange,” Asian
Journal of Economics, no. 23 (2012): 130–145.
36. Ibid., 132.
37. Drew Thompson, Silent Partners: Chinese Joint Ventures in North Korea,
US-Korea Institute at SAIS Report, February 2011.
38. An example is Ryonha Company and its various partners and alias, United
Nations Documents S/2015/131, 66–67.
39. “DPRK woos investors at China expo,” Xinhua, October 20, 2014,
http://news.xinhuanet.com/english/china/2014-10/20/c_133729778.
htm, accessed May 14, 2015; “North Korea wins $1.3 billion investments
pledges from China,” Chosun Ilbo, October 22, 2014, http://english.cho
sun.com/site/data/html_dir/2014/10/22/2014102201179.html,
accessed May 14, 2015.
266 C. JONES
40. “China, North Korea to open border trade zone —media,” Xinhua, July
13, 2015, http://uk.reuters.com/article/2015/07/13/uk-china-north
korea-trade-idUKKCN0PN1C820150713%20, accessed September 23,
2015.
Catherine Jones is an East Asia Research Fellow at the University of Warwick.

She has published in International Politics, the Pacific Review, and the Pacific
Focus. She is currently working on a book on the durability of international order.
CHAPTER 16
Russian Strategic Thinking Regarding

North Korea
Alexander Lukin
For Russia, the DPRK is not a normal state. The two facts that it is one of
Russia’s nearest neighbors and it was founded by the Soviet Union exert
unquestionable influence on the current thinking about this country
among Russia’s political elite. In this issue of The Asan Forum, there is
extended discussion in the Country Report: Russia of an August article by
Evgenyi Bazhanov on Russia’s strategy toward the Asia-Pacific region.
Reviewing how past strategy toward North Korea evolved, the article
below emphasizes how strategic thinking in 2013 fits into current debates
over Russia’s broader regional strategy.
THE SOVIET PERIOD

The DPRK was established by Stalin in 1948 within the scope of policies
for extending the sphere of influence of “world socialism,” i.e., regimes
subordinate to Moscow. While this victory of “socialism” was less notable
A. Lukin (*)
Center for East Asian and Shanghai Cooperation Organization Studies, Moscow
State Institute of International Relations (MGIMO-University), MFA, Russia
Department of International Relations, National Research University Higher

School of Economics, Moscow, Russia

https://doi.org/10.1007/978-981-10-3144-1_16
268 A. LUKIN
than that in China, in that period, it was all the same just the second
“socialist” state in Asia. The idea of extending the authority of North
Korea to South Korea was never abandoned by Stalin and those he put in
power in Pyongyang, which was reflected in the eruption of the Korean
War in 1950, which, as documents demonstrate, was begun with the
direct approval of the Soviet leader.
Over a long time, the Soviet Union strongly supported the Pyongyang
regime, which was close to it. The alliance status was strengthened with the
conclusion in 1961 of the Soviet-North Korean treaty of friendship, coop-
eration, and mutual assistance, in which the two sides were bound by mutual
obligations not to participate in coalitions, actions, or measures directed
against the other, to consult on all important international questions touch-
ing on their interests, and, in case of need, to provide the other side without
delay military and other assistance with all means at their disposal. Yet, some
problems arose after the start of the Sino-Soviet split, when Pyongyang, not
firmly supporting Moscow, began to maneuver between the two.
Dissatisfaction with the Soviet Union led to a purge of the “pro-Soviet”
faction in the DPRK leadership, with which Moscow decided not to quarrel,
lest Pyongyang fully go over to Beijing’s side. Moscow kept extending
substantial assistance while receiving practically nothing materially in return,
but strategically it had an ally in the global confrontation with the United
States, which it strove to keep from drawing too close to Beijing.
After the death of Leonid Brezhnev, in the midst of a deepening eco-
nomic crisis, Soviet policies turned more pragmatic. Many specialists—
researchers and employees in economic organs—tried to turn the attention
of the leadership to South Korea, as a very promising economic partner.
They argued that Japan had moved far ahead of the USSR, but its business-
men, as seen then in their caution to the PRC, were very cautious about
investing in unstable communist states. In contrast, South Korea not only
was not so far ahead in economic development, moreover for political
reasons, it might be ready to offer Moscow certain economic benefits.
At that time, the situation in the “Far East” did not improve, and in
relations between the USSR and South Korea, there remained, it seemed, an
insurmountable obstacle, much more significant than the territorial problem
with Japan. The North Korean regime would react vehemently to any Soviet
gestures toward Seoul. Besides, when a Soviet military plane shot down a
Korean civilian airliner, the gap widened further with Seoul. Yet, when
Mikhail Gorbachev transformed the geopolitics of the world, abandoning
ideological conceptions and looking for economic partners, his acceptance of
RUSSIAN STRATEGIC THINKING REGARDING NORTH KOREA 269
full independence for the states of Eastern Europe opened the way for them
to establish relations with South Korea after rejecting communist ideology,
which had earlier bound them to the North. As Gorbachev also deideolo-
gized foreign policy, the logic of developing relations with Seoul was that the
USSR had too many internal problems to permit staying very active abroad
and to pour resources into the troubled economies of ideologically close
regimes. Foreign policy now had to create favorable conditions for reform
and raising the living standards of the people. It followed that Seoul came to
be seen as a more beneficial partner than Pyongyang, which symbolized all
that Gorbachev wanted to escape in his utopian desire to establish humanis-
tic and effective socialism distinct from the Stalin model, which had been
borrowed by the “great leader” Kim Il-song. There is a basis to assume also
that the political system of South Korea, combining strong authority with
effective state controls over the economy, was seen in the Kremlin as an
example from which it could learn.
THE 1990S–2000S
The main reason for growing interest in the late 1980s undoubtedly was
South Korea’s economic prosperity. Local governments and businessmen,
who were given more autonomy by Moscow to trade in natural resources
in order to acquire consumer goods, led the way, as pressure from the elite
in Siberia and the Russian Far East on Moscow prepared the soil for
normalization. After the fall of the Soviet Union, the new leadership
turned foreign policy on its head, ending assistance to Pyongyang for
ideological reasons, above all, and insisted on economic cooperation on
a purely commercial basis, leading to a serious economic crisis in the
North, as it developed economic ties with the South. Yet, as dissatisfaction
grew with the policies of the West, Moscow shifted to a more balanced
approach, weighing non-economic factors more after its interest in Asia
had declined due to the pro-Western ideological and political orientation
of Yeltsin’s Kremlin. In the late 1990s and especially after Vladimir Putin
came to power, attention to Asia grew. On May 15, 2000, Putin declared,
“Historically and geopolitically, the Korean peninsula always has been
included in the sphere of Russia’s national interests.”1 In his book pub-
lished that year, Foreign Minister I. S. Ivanov wrote, “In its policies
toward the Korean peninsula, Russia starts from the need to support
good-neighbor and partner relations with both Korean states.”2 These
270 A. LUKIN
remarks reflected a more active foreign policy with both sides with aspira-
tions for stimulating inter-Korean dialogue.
On February 9, 2000, Moscow and Pyongyang signed the Treaty on
Friendship, Cooperation and Good-Neighborly Relations, which, according
to Ivanov, “drew a line under the decade of coolness in the relations between
the two countries.”3 In July during one of his first trips abroad as president,
Putin paid a state visit to Pyongyang. This was the first visit of Moscow’s
highest leader to the capital of the DPRK in the history of that country. A joint
declaration consolidating the new level of relationship was signed. In August
2001, Kim Jong-il paid a bizarre almost one month long train visit to Russia.
The 2000 treaty replaced that of 1961, signifying a qualitatively new stage of
relations, which Russians saw as devoid of ideology and considered to be the
formal end of the alliance since there was no longer in the treaty a requirement
of mutual defense. Since 2000, the two sides signed more than 40 official
agreements, including in 2007 an agreement on labor from one side tempora-
rily working on the territory of the other, and a 2012 treaty on customs and
the border regime. In meetings on the highest level in 2000–02, leaders built a
solid legal foundation for deepening cooperation, which the Russian side has
used in developing relations. As the Ministry of Foreign Affairs report indi-
cated in 2007, they preserved the potential for good-neighborly relations,
although Russia’s opposition to the nuclear test of 2006 and support for
Security Council resolutions elicited a critical response.4
The Russo-DPRK relationship is not about trade, since the level has
hovered at $100–150 million a year, a pittance compared to trade figures
with South Korea. In 2012, Russia wrote off much of the North Korean
debt, which was one barrier to closer economic ties.5 Russian hopes for
economic cooperation center on widely advertised triangular projects:
construction of a gas pipeline through the DPRK to South Korea, joining
the trans-Siberian railroad to trans-Korean lines, and construction of
electric transmission lines all the way to South Korea. These themes
drew further support when Kim Jong-il visited Russia in August 2011,
but they are seen less as commercial plans than as political means to
improve the situation, stimulating an increase in trust on the peninsula.6
EXPERTS AND POLITICIANS ON NORTH KOREA

Today in Russian society and the political elite, there are different,
even contradictory, views of the DPRK. The most positive, naturally,
are found in the Communist Party of the Russian Federation and
circles close to it, who continue to see the world as an arena for a
struggle between capitalism and world “socialism.” This party supports
inter-party relations with the ruling party in the DPRK (the Workers’
Party of Korea). Despite all of the differences among them, communist
parties in the PRC, the DPRK, and Vietnam give Russian communists
some degree of hope about the movement’s reincarnation on a world
scale. In holding these views, they prefer to close their eyes to the
repressive character of the North Korean regime and its economic
problems, as if the situation is normal. Typical are remarks by party
secretary Kazbek Taisaev in an interview summing up the results of the
visit of a party delegation at the invitation of the Workers’ Party of
Korea, on the occasion of the 60th anniversary of the “victory of the
Korean nation in the Fatherland Liberation War.” “This wonderful
country, he declared, is not at all like what Western propaganda tries
to describe in its mass media. It is a country of great possibilities,
general wellbeing, dynamically developing its economy.” On Russian
relations with it, he said, “Long ago it was time to change the vector
of these relations. It is necessary to draw the countries closer, indeed in
Asia the DPRK can become our most important strategic partner.”7
Similar opinions, but without the stress on the “socialist essence” of the
Pyongyang authorities, are propounded by supporters of great power
nationalism, who see world politics as an unending battle from the period
of the Cold War with the West opposed by all anti-Western forces. Since
Russia cannot by itself compete, they call for all enemies of the West to
unite, treating North Korea as one of the most important Asian links in
this scheme. Its acquisition of nuclear weapons is seen as corresponding to
the interests of Russia as an important weapon in the battle with a
common enemy. Characteristic of this are the remarks of the former
director of the main directorate of international military cooperation in
the Ministry of Defense and now the president of the independent
Academy of Geopolitical Science, Colonel-General Leonid Ivashov.
“The Korean Peninsula is the forward area in which the global interests
of two geopolitical systems confront each other: the West and, above all,
the United States, and Japan, participating in this Western coalition, and a
different geopolitical model of the world . . . Moreover, with the collapse
of the USSR, there were attempts to destroy North Korea as a socialist
state . . . And now the DPRK is a space power, a rocket power . . . and
today’s Korea demonstrates development that is not inferior to us—
today’s Russians.”8 Evaluating the situation in the DPRK and its politics,
272 A. LUKIN
Ivashov affirms, “North Korea is spared from the vices that exist in South
Korea and with us . . . They have kept their pride, not going on their knees
before anyone.”9
Representatives of liberal parties and groups hold opposing views. They
see the West as the center of the “civilized world,” with which Russia, as other
countries, should, as fast as possible, unite, advancing world progress. From
this point of view, the “totalitarian” and radically anti-Western Pyongyang
regime not only interferes with Russia, it also stands in the way of world
progress generally. Adherents of this direction call on Russian authorities to
stop all cooperation with Pyongyang and take a more decisive position in
condemning it, supporting the USA, Japan, and the more conservative forces
in South Korea. They would welcome without qualification the regime’s
collapse and unification of the country under the aegis of Seoul. One leader of
the pro-Western opposition Boris Nemtsov describes North Korea as a closed
country in which people are shot for communicating with foreigners, and
citizens by the millions die of hunger. In his opinion, Russia has no interests
in the DPRK.10 In February 2013, reacting to the new nuclear test, the
regional division of IaBLOKO in Amur oblast’ declared, “Cooperation of
representatives of central and regional authority in Russia with the DPRK
regime is dangerous not only because, to a great degree, thanks to Russian
economic assistance, the families of the North Korean dictators acquired an
instrument of nuclear blackmail, but also because Russia unwittingly
becomes an abettor of the state that is destroying its own nation.” The
party called for “reconsidering policies toward the DPRK. The realization
of all the economic projects without exception can be continued only after
the full and uncompromising rejection by the North Korean region of the
nuclear program and the liberation of political prisoners.”11
An array of experts on non-proliferation considers North Korean
nuclear weapon a serious threat to Russia.12 Similar disagreements exist
among Russian experts on Korea. Few of them adhere to an openly
pro-communist orientation; however, the support by some of them for
the position of Pyongyang is based on both a traditional view of the
world and analysis of the actual behavior of the various sides. Russian
experts can be divided into three schools. The first fully considers the
actions of the DPRK logical and looks at them as a justified reaction to
the policies of the USA. These experts usually describe the situation in
the DPRK positively, affirming that beginning with Kim Jong-il the
country was taking the path of reform, close to China’s, the standard
of living of the population is increasing, and the economy is becoming
livelier.13 In this group, one can include the head of the department of
Korea and Japan at the Institute of Oriental Studies of the Russian
Academy of Sciences, Aleksandr Vorontsov, and the director of the
Center for Korean Studies at the Institute of the Far East of the
Russian Academy of Sciences, Aleksandr Zhebin. Noting that the basis
of the conflict on the Korean Peninsula is the absence of normal relations
between Pyongyang and Washington, Vorontsov sees the main cause of
this to be US policies, “Pyongyang variously proposed to end this striking
anachronism of the Cold War, but in vain: Washington firmly rejects both
normalizing interstate relations and replacing the Armistice with a funda-
mental document, which established a solid peace on the peninsula . . . Its
plan is not peaceful coexistence with the DPRK, but the liquidation of
this state. Precisely this accounts for the existence of permanent conflict
on the Korean peninsula.”14
Another group of experts takes an intermediate position, laying blame
for the permanent crisis on the peninsula on the DPRK and also on its
opponents. One hears the opinion that the DPRK and its regressive state
are showing durability and are hardly likely in the near future to disappear
from the map of the world; therefore, Russia needs to have normal rela-
tions with them as with its other neighbors. This underscores the necessity
of peaceful resolution of the conflicts through negotiations with the
participation of the DPRK, and on the whole in relations with
Pyongyang, they recommend cooperation, gradually luring it into inter-
national cooperation, welcoming the South Korean Sunshine policy. In
support of this approach, one finds, for example, the former ambassador to
the DPRK and the principal researcher of the Center for East Asian and
Shanghai Cooperation Organization Studies of MGIMO Valerii Denisov
and the director for Korean programs at the Institute of Economy in the
Russian Academy of Sciences Georgii Toloraya. Thus, assessing the level
of threat caused by Korean nuclear weapons, Toloraya says, “It is clear that
this is an extremely negative example for the non-proliferation regime,
which attempts to prevent the ‘spread’ of nuclear weapons, but that has
already occurred. Therefore, now it is important, it seems to me, to find
the best way out of this situation, to reduce the tension on the Korean
peninsula, to reduce the danger of a military conflict, which, in the end,
could lead to the use of nuclear weapons.”15
A third group of experts takes a stridently anti-North Korean position,
blaming its regime for “trading in threats,” i.e., intentionally fomenting
tension in order to obtain economic assistance from the West and South
274 A. LUKIN
Korea. Explaining the vitriolic remarks of Pyongyang in April 2013,

deputy director of IMEMO of the Russian Academy of Sciences, Vasilii
Mikheev said, “First, this is a continuation of an old tactic of causing a
situation and trying to extract more money from the USA and South
Korea in order then to return to the normal track. Second, the population
has nothing to eat, and this requires some kind of explanation. But war is
an easy explanation: ‘What do you want, we are at war.’ Against this
background, an inter-clan battle is raging, since Kim Jong-un is weaker
than Kim Jong-il.” According to Mikheev’s evaluation, the North Korean
regime “is generally overburdened. Many in this country now recall the
end of the Soviet regime with the example of Gorbachev.”16
NUCLEAR WEAPONS
Support for the international regime against the proliferation of weapons
of mass destruction is repeatedly affirmed as an official goal of Russian
foreign policy. At the same time, Moscow’s reaction to one or another
country acquiring or testing nuclear weapons depends greatly on relations
with it and rarely is severe. For instance, taking into account the interna-
tional situation and its own relations with India and Pakistan, Russia did
not impose or propose any sanctions, just formally condemning the
nuclear tests in those countries in 1998. Since that time, Russia only in a
soft manner has recommended that the two states reject nuclear weapons.
The understanding is spreading that new more active international actions
are needed to prevent proliferation. Russia’s inclusion in international
sanctions toward Iran and the DPRK, despite its tendency to weaken
them, is the strongest reaction in its history to the fact of proliferation or
its possibility. This is connected to three factors. First, as it officially
declared, Russia as one of the most influential members of the nuclear
club and a major world power bears special responsibility for maintaining
world security and not tolerating efforts to undermine it through the
proliferation of WMD. Second, Moscow well understands that countries
that are acquiring or could acquire these weapons, above all Iran and the
DPRK, are its neighbors, and their entry into the nuclear club creates a
direct threat to the territory of Russia. Third, in connection with reduc-
tions in the fighting capacity of its conventional forces, nuclear weapons
have become ever more important for Russia as a means of containment.
Moreover, in conditions of reduced economic and political influence in
comparison to Soviet times, nuclear parity with the United States remains
the only attribute of a superpower, putting Moscow on a par with

Washington. The spread of nuclear weapons significantly devalues
Russia’s role and influence in the world.
Moscow continues quite actively joining in the political process to resolve
the nuclear crisis on the peninsula, condemning the DPRK’s rocket and
nuclear ambitions, supporting international efforts in the United Nations on
this question, as when North Korea in July 2006 launched rockets and in
October of that year conducted a nuclear test. It took a direct hand in
preparing Security Council resolutions 1695 and 1718, which applied sanc-
tions and contained calls for Pyongyang to stop these programs, and also
resolution 1874 (2009) and 2094 (March 2013) in which these sanctions
were made harsher. In the negotiations on the conditions of sanctions,
Russia, as China, usually tried to soften the sanction regime. This is linked
to two factors. First, in the Russian leadership, there is real fear that the
sanctions will lead to an uncontrollable breakdown of the North Korean
regime. In that case, Russia, as a neighboring state, will face a whole range of
problems, from the possibility of a nuclear threat caused by North Korean
nuclear weapons falling into the hands of uncontrolled groups to a massive
flood of refugees onto its territory. To these problems, one can add that
military actions on an even larger scale could occur on the peninsula. Second,
within the ruling elite, there still exists strong emotions from the time of the
Cold War, in accord with which the DPRK is, whether irresponsible or not, a
partner in confronting attempts by the USA and its allies to dominate Asia.
From this point of view, its complete disappearance from the map of the
world is seen as harmful.
The actual course of Moscow is intermediate between these groups. It
supports international forces to restrain the nuclear program of the DPRK,
but takes a comparatively soft position. This ambivalence is clearly
expressed in the commentary of the official representative of the Foreign
Ministry A.K. Lukashevich on the situation on the Korean Peninsula,
given on April 4, 2013 in connection with the official decisions of the
Pyongyang leadership on strengthening the nuclear status of the country.
Russia “as a permanent member of the Security Council of the UN, a state
signer of the treaty against the proliferation of nuclear weapons, is cate-
gorically unreceptive to such disregard by Pyongyang of the decisions of
the Security Council of the UN, which were based on the regimes in the
sphere against the proliferation of WMD.” At the same time, in words
directed to all interested sides, he expressed confidence that “the way to a
healthy situation in Northeast Asia does not lie in escalation of military
276 A. LUKIN
rhetoric and actual military activity, but through a joint search for a way
for keeping the situation within the political-diplomatic area.”17
KOREA AND RUSSIAN APPROACHES TO EAST ASIA

According to the reasons given above, Russia actively participates in order
that conflicts on the Korean Peninsula are resolved through negotiations.
Not standing in opposition to direct negotiations between Pyongyang and
Washington in case they lead to normalization, it prefers a multilateral
process, since that assumes the active role of Moscow. Russia pays special
attention to Six-Party Negotiations on the nuclear problem of the DPRK,
the significance of which must be seen in the context of the general
approach of Moscow to problems of security in the Asia-Pacific region.
Speaking at the plenary session of the sixth EAS on November 19, 2011,
Minister of Foreign Affairs Sergei Lavrov declared, “The strategic aims of
Russia in East Asia consist of helping to bring peace, stability, and prosper-
ity, to strengthen mutual trust, to work together for sustained economic
development. Realization of this positive agenda, in its turn, is recognized
as enabling the integration of Russia in the regional architecture of security
and cooperation, the resolution of problems of the modernization of the
Russian economy and the rise of Siberia and the Far East.”18
In this way, for Russia, the maintenance of security and stability in East
Asia is not only a purely foreign policy goal, it is directly connected with
the resolution of an internal strategic question—the development of its
Far Eastern regions. Russians express concern that in this region, contra-
dictions are intensifying between traditional and newly rising players, but
there is lacking an all-encompassing system of security, as exists in Europe.
A year later at the 7th EAS, Lavrov introduced the idea of a multi-
lateral dialogue on questions of the formation in the Asia-Pacific region
of a sustained, reliable architecture of security and cooperation, the
result of which would be worked out a range of framing principles for
the conduct of interstate relations.19 According to the explanations of
Deputy Foreign Minister Igor Morgulov, in planning a corresponding
document, Russia would rely on “existing international and regional
instruments in the sphere of security, utilizing widely recognized inter-
national norms, and also the principled positions of the treaty of friend-
ship and cooperation in Southeast Asia of 1976 and the declaration of
6th EAS on the principles of mutually beneficial relations. In the text
are incorporated the main ideas of the joint Russo-Chinese initiative for
strengthening security in the Asia-Pacific region, issued in 2010 . . . We

see a prospective outcome in a legally binding treaty on security in the
«enlarged Asia-Pacific region.”20
Thus, Russia aims not to create a new structure on security in the
region, such as the OECD, but to work out some principles on the basis
of the experience of the existing structures. Yet, none of these directly
covers Northeast Asia. During the course of the Six-Party Talks, Russia
had big hopes for working out measures for security in Northeast Asia for
the working group it headed on a mechanism for peace and security. It
assumed that after resolving the Korean nuclear problem, this group could
turn into a continuously functioning mechanism in support of security in
this region important for Russia. The interruption of these talks naturally
buried these hopes. Russia insistently calls for the continuations of the Six-
Party Talks, seeing in them not only a means for resolving a concrete
problem, but for a wider perspective in support of security in Northeast
Asia as part of the future structure of security in the Asia-Pacific region as a
whole, in which it could play the leading role. Of course, Moscow would
welcome any resolution of the North Korean nuclear problem, including
direct negotiations between Pyongyang and Washington; however, the
six-sided mechanism would be most desirable in all respects.
OPINIONS ON THE PROSPECTS FOR UNIFICATION

It would be an exaggeration to say that the Russia leadership is seriously
thinking about the prospects and consequences of the possible unification
of Korea. As any other government, it is weighed down deciding about
current problems. The official position is to support the establishment of
one, democratic Korea, for which it considers that Koreans themselves
must determine through which scenario unification will proceed and how
it will occur. Perhaps, the clearest expression of this position came from
ambassador to South Korea, K.V. Vnukov at a conference at the Institute
of National Unification:
“The situation on the Korean peninsula directly affects the security of the
Russian people who live very close on the neighboring Russian Far East as
well as influences the large scale, rapid-development plans of my govern-
ment for Siberia and the Russia Far East region. From this point of view, the
establishment in the future of a democratic, prosperous and friendly-toward-
us united Korea fully reflects Russian political and economic interests.”21
278 A. LUKIN
The prospects for Korean reunification are widely discussed by experts

with various opinions. The dominant view is that for Russia as a whole, the
establishment of a single, powerful Korean state is beneficial. From an
economic point of view, this would be a trade partner, the level of devel-
opment of which would be more favorable for cooperation with Russia,
than, for example, with more developed Japan, but at the same time
possesses more contemporary technology than China. In the political
sphere, Russia has never had serious conflicts with Korea, and also it has
no border problems. Besides, there are no fears about Korean migration to
Russia (as opposed to China), since Korea, on the whole, is more devel-
oped, and in the past Korean migrants showed their best side: They
quickly assimilated and contributed significantly to the Russian economy.
From the point of view of geopolitics, a more powerful, united Korea can
become a useful counterweight to rising Chinese influence and, probably,
will conduct a more independent foreign policy since the threat of war
from the north would disappear as would the need to rely on Washington
for its defense.22
The majority of experts note that unification is a matter for the distant
future, since the governments of both Korean states using nationalist
slogans for propagandistic aims, in fact, fear unification. They remark
that since unification, more likely than not, would proceed in the form
of South Korea swallowing the North, as was the case, for example, in
Germany with the West absorbing the East, the North Korean elite is
fearful of losing their power and privileges and even of being charged with
crimes against their nation. The South Koreans do understand that uni-
fication with such an extremely backward state would require enormous
outlays and, possibly, lead to political and social instability.23 It is also
noted that unification would hardly be allowed by China, not willing to
lose a “socialist” ally and gain in its place a rather strong economic and
geopolitical competitor.24 Only a small percentage of experts with the
most pro-West and anti-North Korean attitudes consider that the crisis in
the DPRK is so deep that unification can occur in the near future. There
are, however, some doubters on whether a unified Korea would be useful
for Russia.25 Above all, these are politicians and experts close to commu-
nists and nationalists, who do not want to lose one of the last fortresses of
world communism and a determined battler with the hegemony of the
West. As a model of unification, should it happen all the same, they
suggest various forms of confederation and speak of the need for unity
through a new state which would include both the South and the North.
NEW EVENTS IN 2013 AND THE REACTIONS OF RUSSIA

New tension in the situation on the Korean Peninsula in the spring of 2013,
caused by the hardening of the position of the DPRK, was acknowledged in
Russia with consternation. Although official Russian rhetoric was little dif-
ferent from what preceded, this time one felt serious concern about an
unpredictable young North Korean leader. On the whole, the virulent
actions and declarations, as before, were evaluated in Moscow as the con-
sequence of an internal struggle, and, more precisely, as the inclinations of
the young leader to prove himself decisive and in control of the situation.
Pyongyang’s behavior was explained as the usual inclination of the North
Korean leadership to exchange threats for material concessions. In this sense,
there is hardly any doubt that Pyongyang has no plan to commit suicide by
entering a war. However, many Russian politicians and experts felt that it
went too far, and at some point, events could get out of control. This attitude
can be felt in the words of Sergei Lavrov in an interview with RTVi television
on April 9. He blamed Pyongyang, which “openly and flagrantly is violating
the Security Council resolution,” calling its actions “unwelcome,” and he
expressed concern that “at some moment mutual accusations, threats, and
warnings can reach a crisis point, when people drive themselves into a corner
and have to do something in response to public opinion.”26
During the crisis, the leaders of the Russian Foreign Ministry met
several times with the ambassador of the DPRK and communicated to
him their concern, and there were issued several rather sharp statements.
In the ministry, an around-the-clock watch was set up, answering to the
Korean desk. Efforts were taken with partners in the Six-Party Talks to
coordinate the Russian position. During a meeting with Secretary of State
John Kerry in London on April 10, Lavrov publicly expressed full solidar-
ity with the American position.27 The results of the talks in June of
Chinese leader Xi Jinping with President Barack Obama when Xi was in
the United States and with the new South Korean president Park Geun-
hye were positively evaluated in Russia. In both cases, positions on the
DPRK drew closer and there was agreement on joint actions for relaxing
tensions and, probably, they agreed on measures to pressure Pyongyang.
In the future, Russia welcomes an easing of the situation and the begin-
ning of talks between the DPRK and the ROK.
On the whole, Pyongyang’s behavior was once again interpreted in
Russia as an attempt to “sell” a threat for material assistance. However, the
very unusual depth of the crisis and the danger of the situation, probably,
280 A. LUKIN
strengthens skepticism in Moscow toward its former ally and will contri-
bute to some movement in the Russian position in the direction of a
tougher posture toward the DPRK.
NOTES
1. V.V. Putin, “Vystuplenie na tseremonii vrucheniia veritel’nykh gramot,”
http://194.226.80.159/events/33.html.
2. I.S. Ivanov, Novaia Rossiiskaia diplomatiia: deciat’ let vneshnei politiki
strany (Moscow: Odma-press, 2001), 158.
3. I.S. ivanov, Novaia Rossiiskaia diplomatiia, 158.
4. Vneshnepoliticheskaia i diplomaticheskaia deiatel’nost’ Rossiiskoi Federatsii v
2007 gody: Obzor MID Rossii март, 2008, www.mid.ru.
5. “Rossiia spisala KNRD dolg v 11 milliardov dollarov,” September 12, 2012,
http://grani.ru/Politics/Russia/m.206508.html.
6. “Interv’iu Posla po osobym porucheniiam A. A. Timonina gazete
Kommersant,’” November 30, 2011, http://www.mid.ru/bdomp/ns-
rasia.nsf/1083b7937ae580ae432569e7004199c2/
c32577ca00174586442579590022c7ab!OpenDocument.
7. “KNDR: strana bol’shikh vozmozhnostei i narodnogo edinstva,’ K.K.
Taisaev o svoei poezdke v Severnuiu Koreiu,” August 8, 2013, http://
kprf.ru/international/new-world/121626.html.
8. Leonid Ivashov, “Severnuiu Koreiu ne slomit’,” http://www.pravda.ru/video/
pravdablog/11695.html.
9. Leonid Ivashov, “Severnuiu Koreiu ne slomit.’”
10. TV Channel 1, “Suditesami” Program, October 12, 2006 (Transcript),
http://www.nemtsov.ru/?id=705032&PHPSESSID=1d417e1d4e584
dafaacf40b173cc3626.
11. “Zaiavlenie Amurskogo regional’nogo otdeleniia partii ‘IaBLOKO,’”
February 12, 2013, http://www.eco-nomos.ru/2013/03/yabloko-11/.
12. Channel 1, “Sudite sami,” October 12, 2006, http://www.nemtsov.ru/?
id=705032&PHPSESSID=1d417e1d4e584dafaacf40b173cc3626.
13. Аleksandr Vorontsov and Vladimir Evseev, “Severnaia Koreia: vyiti iz
tupika,” Rossiia v global’ noi politike, no. 5 (Sept.-Oct. 2005), http://
www.globalaffairs.ru/number/n_5751; and “KNRD gotova poiti po puti
Kitaiskikh reform,” http://www.nakanune.ru/articles/16782/.
14. Аleksandr Vorontsov, “O prichinakh krizisa na Koreiskom poluostrove,”
April 4, 2013, http://www.fondsk.ru/pview/2013/04/11/o-prichinah-
krizisa-na-korejskom-poluostrove-19996.html; See also, Aleksandr Zhebin,
“KNDR ne khochet sud’by Livii,” http://rus.ruvr.ru/2013_05_22/
KNDR-ne-hochet-sudbi-Iraka-i-Livii/.
15. “Pkhenian stremit’sia v ‘iadernyi klub,’” April 23, 2013, http://rus.ruvr.

ru/2013_04_23/Phenjan-stremitsja-v-jadernij-klub/; See also V.I.
Denisov, “Koreiskaia iadernaia problema: vozmozhnosti politicheskogo ure-
gulirovaniia sokrashaiutsia,”Analiticheskie zapiski nauchno-koordinatsion-
nogo soveta po mezhdunarodnym issledovaniiam MGIMO(U) MID Rossii, 8
(20), September 2006. http://www.mgimo.ru/files2/y12_2011/
216762/az-20.pdf.
16. “Voiny ne budet, idet bor’ba elit,” Gazeta.ru, April 11,. 2013, http://
www.gazeta.ru/politics/2013/04/11_a_5252037.shtml.
17. “Kommentarii ofitsial’nogo predstavitelia MID Rossii A. K. Lukashevich po
situatsii na Koreiskom poluostrove,” April 4, 2013, http://mid.ru/
b d o m p / n s - r as ia. nsf / 1 0 8 3 b7 9 3 7a e 5 8 0a e 4 32 5 6 9 e7 0 0 4 19 9 c 2/
44257b100055e10444257b43004608bc!OpenDocument.
18. “Vystuplenie Ministra inostrannykh del Rossiiskoi Federatsii S.V. Lavrova na
plenarom zasedanii 6-go Vostochno aziatskogo sammita, o. Bali,
Indoneziia,” November 19, 2011, http://www.mid.ru/bdomp/ns-rasia.
nsf/3a0108443c964002432569e7004199c0/
c32577ca001745864425794d00328e92!OpenDocument.
19. “Vystuplenie Ministra inostrannykh del Rossii S.V. Lavrov na plenarnom
zasedanii 7-go Vostochno aziatskogo sammita, Pnompen’, November
20, 2012 goda,” http://www.mid.ru/bdomp/brp_4.nsf/
997e7b027bbf661cc3256f6d00540731/5fcfa53c9c52b32244257ab
c003a55e6!OpenDocument.
20. “Vystuplenie zamestitelia Ministra inostrannykh del Rossii I.V. Morgulov na
zasedanii 27-go Aziatsko-Tikhookeanskogo ‘kruglogo stola’ po bezopas-
nosti,” Kuala-Lumpur, June 5, 2013, http://www.mid.ru/bdomp/ns-
rasia.nsf/3a0108443c964002432569e7004199c0/
44257b100055e10444257b82003e03d0!OpenDocument.
21. “U.S., Japan, Russia on Reunification: Good!” The Wall Street Journal,
August 18, 2013, http://blogs.wsj.com/korearealtime/2011/04/08/u-
s-japan-russia-on-reunification-good/.
22. S.V. Khamutaeva, “Problema ob’edineniia Korei v Rossiiskoi istoriogra-
fii,” Vestnik Buriatskogo gosuniversiteta, no. 8 (2010): 252–55, http://
www.bsu.ru/content/pages2/1073/2010/HamutaevaSV2.pdf;
Alexander Lukin, “Russia’s Korea Policy in the Twenty-first Century,”
International Journal of Korean Unification Studies 18, no.2 (2009):
43–46.
23. Andrei Lankov, “Tsugtsvang Pkhen’iana: Pochemu Severnaia Koreia ne poidet
Kitaiskim putem,”Rossiia v global’noi politike 11, no. 2 (2013): 187–97, http://
www.globalaffairs.ru/number/Tcugtcvang-Pkhenyana-15962.
24. “Komu nuzhna edinaia Koreia?”Radio “Golos Rossii,” August 16, 2010,
http://rus.ruvr.ru/2010/08/16/15981397/.
282 A. LUKIN
25. Konstantin Asmolov, “Ob’edinenie Koreia—kakie problemy stoit ozhidat’,

Part 2,”NEO, April 15, 2013, http://ru.journal-neo.org/2013/04/15/
korean-unification-what-problems-should-we-expect-part-2/.
26. “Otvety Ministra inostrannykh del Rossii S.V. Lavrov na voprosy telekanala
RTVi po situatsii vokrug KNDR,” Moscow April 9, 2013, http://www.
mid.ru/bdomp/ns-rasia.nsf/1083b7937ae580ae432569e7004199c2/
44257b100055e10444257b480053cba3!OpenDocument.
27. “Replika Ministra inostrannykh del Rossii S.V. Lavrov v otvet na vopros SMI
otnositel’no situatsii vokrug KNDR pered nachalom vstrechi s
Gossekretarem SshA Dz. Kerri,” London, April 10, 2013, http://mid.ru/
b d o m p / n s - r as ia. nsf / 1 0 8 3 b7 9 3 7a e 5 8 0a e 4 32 5 6 9 e7 0 0 4 19 9 c 2/
44257b100055e10444257b49005aba8c!OpenDocument.
Alexander Lukin received his first degree from Moscow State Institute of
International Relations in 1984, a doctorate in politics from Oxford University
in 1997, a doctorate in history from the Russian Diplomatic Academy in 2007 and
a degree in theology from St. Tikhon’s Orthodox University in 2013. He worked
at the Soviet Foreign Ministry, Soviet Embassy to the PRC, and the Institute of
Oriental Studies of the Soviet Academy of Sciences. He was a visiting fellow at the
Belfer Center for Science and International Affairs at Harvard University from
1997 to 1998. From 2000 to 2001, he worked as a research fellow at the Center
for Northeast Asia Policy Studies at the Brookings Institution. In 2005, he
founded Russia-China.21st Century - a Russian magazine devoted to China and
Russian-Chinese relations - and edited it until 2008. From 2000 to 2006, he was
an Associate Researcher at the Institute for European, Russian and Eurasian
Studies at George Washington University. He serves on the editorial board of
Asian Politics and Policy, International Problems (Belgrade, Yugoslavia) and The
Asan Forum (Korea).
Professor Lukin is the author of The Political Culture of the Russian Democrats
(Oxford University Press, 2000), The Bear Watches the Dragon: Russia’s
Perceptions of China and the Evolution of Russian-Chinese Relations since the
Eighteenth Century (M.E.Sharpe, 2003), Pivot To Asia: Russia’s Foreign Policy
Enters the 21st Century (Vij Books India, 2017) as well as numerous articles and
policy papers on Russian and Chinese politics, the international situation in East
Asia, the Shanghai Cooperation Organization and Russian-Chinese relations. In
2009 he was awarded a medal for the “Outstanding Contribution to the
Development of Sino-Russian Relations” by President Hu Jintao and in 2012 a
medal on the occasion of the 10th anniversary of the Shanghai Cooperation
Organization for his contribution in the formation and development of SCO.
CHAPTER 17
Making Sense of the Russo-North Korea

Rapprochement
Stephen Blank
Although the Six-Party Process about North Korean nuclearization is

moribund if not dead, ongoing informal discussions among those parties
are robust and ever-evolving. Because these multi-party relationships are
so protean, they force us to devise an analytic framework for them. After
all, these talks are about much more than Korean denuclearization. They
represent an embryonic or miniature version of the multipolarity that
characterizes contemporary Asian international relations. In addition to
non-proliferation, they are really about the relationships among the key
actors in East Asia, the future of both Koreas, and the shape of the
regional, if not Asian, order.
To understand relationships among these six actors, notably the recent
Russo-DPRK rapprochement, we cannot ignore the fact that each actor
acutely grasps the larger issues at play here as well as his individual state’s
interests. We may visualize interrelationships among the six actors as a
dynamic 5+1 game, where each move any actor makes affecting another
one immediately alters the dynamics affecting the relations among all the
others, forcing them to adjust accordingly. Thus, the process becomes a
kind of perpetual motion, where any new rapprochement among two or
S. Blank (*)
American Foreign Policy Council, Washington, DC, USA

https://doi.org/10.1007/978-981-10-3144-1_17
284 S. BLANK
more players drives the others to act in turn, thus generating a new
pattern. The Russo-DPRK rapprochement fits that pattern for it grew
out of Russia’s particular interests in the Korean Peninsula and overall
position in Asia as well as North Korea’s perception of its larger relation-
ships among the other players.
THE RUSSO-DPRK RAPPROCHEMENT: ORIGINS

It began in 2011, growing out of the tensions of 2010 from namely
the Cheonan incident and DPRK’s shelling of Yeonpyeong Island. These
incidents injured Russian interests by raising tensions near its borders,
causing the suspension of the Six-Party Talks, the only venue where
Moscow could formally assert itself in the region, and severely strained
relations with the Koreas, the United States, and China. War on the
peninsula would be disastrous to Russia, raising the possibility of the
following: a Sino-American clash on its frontier, potential nuclear strikes,
state collapse in North Korea with uncertain command and control over
nuclear weapons, refugees, and complete disruption of large-scale Northeast
Asian investment and technology transfer into the Russian economy.
Actions that generate heightened tensions or outright conflict must be
avoided at all costs, Russians decided,1 as seen in a 2010 article quoting
Chinese analyst Zhou Feng, who starkly underlined the dangers of war.
The aggravation of the North Korean nuclear issue is one of the long-
standing problems leading to new ones. This issue cannot be expected to
be settled easily because difficulties have emerged in relations among large
East Asian states. The settlement process can subsequently lead to a redis-
tribution of roles of large states on the Asian political field— that is a new
regional security problem.2
Due to Russia’s weakness in Asia, restructuring of the Asian political order

could easily occur at Russia’s expense and by means over which Russia has
little or no influence. While Moscow has long said that it does not fear
Korean unification and might actually welcome that outcome, it could
only do so if it happened through a peaceful process, not war.3
In September 2010, Russian Deputy Foreign Minister Alexei
Borodavkin, Moscow’s delegate to the talks, said that the Korean
Peninsula was on the brink of war.4 A major conflict might break out
affecting Russia’s vital interests when it has little or no leverage over any of
MAKING SENSE OF THE RUSSO-NORTH KOREA RAPPROCHEMENT 285
the players and, therefore, cannot safeguard itself. Facing marginalization

both in the talks and to some degree regionally despite having stakes there,
Russia saw this as reflecting not so much an identity of approaches with
China but rather the fact that everyone looked to China not Russia for
solutions.
Therefore, Moscow launched its 2011 initiative to bring Kim Jong-il to
Russia and win his assent for the longstanding Russian program of a trans-
Siberian-trans-Korean gas pipeline and railway (TSR-TKR). Although he
agreed to these proposals, his death in December 2011 suspended every-
thing. Having made no progress by late 2013, President Putin, while
visiting Seoul, warned Pyongyang that if it did not respond, Moscow
might move unilaterally with Seoul, even sending Deputy Prime
Minister Dmitry Rogozin to Seoul to discuss new arms sales to South
Korea.5 However, Aleksandr’ Zhebin pointed out that North Korea had
often disregarded Russian interests, and that this was happening again
with its nuclear and missile programs. These processes created crises that
almost approached in intensity the Cuban missile crisis (a red flag to any
Russian writer). Consequently, North Korea’s policies could trigger the
“most unexpected developments.” Zhebin also argued that for North
Korea, it is still important to demonstrate the existence of the “Moscow
alternative to the United States and its allies and also to China,” indicating
that he sees Russia pursuing Korean objectives that are distinct from both
of these states. He warned Pyongyang, “The degree of support and
understanding that the DPRK can expect from Russia must clearly be
directly proportionate to Pyongyang’s readiness to consult with Moscow
on questions directly affecting our security interests.”6 This warning
reflected the Russian government and analytical community’s chagrin at
North Korea’s disregard for Russia’s vital interests and their alarm that
North Korean nuclear and space satellite tests and generally provocative
behavior could generate risk-taking that threatened these interests.
Aggravating the situation was the fact that Moscow had no influence
over North Korea’s behavior.7
By 2013, Russia aimed to assert its independent status as a major
potential contributor to stabilization on the Korean Peninsula, to prevent
a war or direct involvement in a Sino-American rivalry, and to avoid
marginalization by standing apart from the joint-Sino-American effort to
restrain North Korea that developed after the 2013 Sino-American sum-
mit in California. The Korean Peninsula’s increasing importance to Putin’s
“pivot to Asia” lay in the fact that Moscow thought it could and felt it
286 S. BLANK
must make gains here lest it be excluded by its supposed Chinese partner
and its American rival. Even though Russia and China regularly proclaim
the identity of their interests, arguably this identity exists at the global level
of relations with Washington, while at the regional level, we actually see
more rivalry and discord. Moscow’s standing and capabilities have also
grown steadily weaker from the point of view of Central Asia to Japan if
not also Korea.8 Furthermore, Russia’s self-assertion as an independent
great Asian power is partly driven by its desire to reduce America’s global
and regional power.
RUSSIAN MOTIVES
As Bobo Lo argues, containing and counterbalancing the United States is
a fundamental motive of Russian foreign policy everywhere, not least of all
in Asia. While some of this sentiment derives from the visceral and
manipulated anti-Americanism of 2000–2015, its roots lie in the elite
perception that “Russia can reassert itself as a global great power only if
it is able to limit American influence.” Therefore, Moscow identifies with
China on an anti-American and anti-liberal program in Asia, despite its
mounting concern about rising Chinese power, and seeks its own line of
influence in North Korea, as seen in the 2011 summit with Kim Jong-il.9
Meanwhile, Russian analysts, if not officials, see South Korea’s 2008–2013
harder line and US policies as being primarily responsible for North
Korea’s admitted adventurism and believe Washington still seeks regime
change under the guise of coerced denuclearization.10 They blame
Washington and Seoul as much if not more than Pyongyang for the
impasse since 2010, want to find more fault in America especially given
the deterioration of East-West relations since Russia’s invasion of
Ukraine,11 seeing it as continuing to frustrate all efforts at inter-Korean
diplomacy in lieu of a North Korean commitment to denuclearize.
President Obama’s recent reckless statements that North Korea will ulti-
mately collapse hardly change thinking in Moscow or Pyongyang.12
There is a second dimension to Russian policy. At the regional level, it
consists of trying to free Russia from China’s shadow and, consonant with
the drive to establish itself as a recognized great independent Asian actor,
restrain China. These motives comport with those of other Asian states.13
China’s rising power has forced them to expand their own regional power
and influence across Asia either to counter China or as the result of states’
natural tendency toward power-maximization. These processes generate a
more multipolar Asia-Pacific that is more contentious with frequently

shifting alignments and power dynamics and potential threats posed by a
growing number of actors (not only states.) Since China is the central
Asian actor, much of this diplomatic jockeying amounts to coalition-
building against China as a hedge, just as Sino-US understandings on
North Korea are a hedge against deterioration of that bilateral relationship
and unforeseen North Korean threats.14 The rise in China’s power has
begun to loom as a challenge if not threat to Russia’s “Ostpolitik” even as
Russia, thanks to its reckless adventure in Ukraine, has slipped into ever
greater dependency on and inability to compete with China, e.g., in
Central Asia.15
While China’s rising power relative to all Asian actors, including Russia,
affects all of them, it affects them differentially, which allows China to
exploit its superior capabilities by enhancing technological and economic
interdependence with those powers less concerned about a Chinese threat.
This renders more vulnerable states increasingly susceptible to Chinese
pressure.16 As Russia has become steadily more vulnerable to Chinese
pressure in 2013–2014 (reflected in Chinese advances in Central Asia,
economic leverage over Russia, membership as an observer in the Arctic
Council, threats directed against Vietnam and Japan, and its ability to
demand and obtain ever better weapons systems and technologies from
Russian arms sellers), it possibly dawned on Moscow if not Russian
analysts that following in China’s wake in North Korea was not an optimal
policy.17 Clearly distancing itself from China, Moscow perceived an open-
ing where it might advance regionally and promote long-held dreams of
railway and pipeline projects.
As Victor Cha has written, Russia’s railway and pipeline proposals are
the cornerstones of its negotiating position on the Korean crisis, in con-
ditions where neither the US nor others see Russia’s presence in the Six-
Party Process as of importance. He characterizes Russia as the forgotten
partner or bit player of “peripheral” importance.18 As such, its diplomats
obsessively invoke the idea of a gas pipeline and railway as the solution to
any problem in these talks that would also reestablish Russia’s influence in
North Korea. Similar to others in this process, Russia has few means of
leverage on North Korea, while also suffering from two fundamental
disadvantages. First, if the parties actually reached a meaningful rappro-
chement, Russia’s relevance to the outcome would steadily decline.19 To
retain enduring influence upon either or both Koreas, agreement on this
pipeline would have to precede any general agreement. Second, if the
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pipeline deal collapses, however, it is a clear demonstration of Russia’s lack

of leverage, and Russia will lose face. On the other hand, the DPRK can,
by its actions, wreak enormous “collateral damage” upon Russia and its
interests. As Cha suggests, absent such an agreement, Russia will lose even
the influence it now has, which is dangerous given its lack of leverage over
North Korea and North Korea’s capacity to generate “collateral damage”
without Moscow being able to respond, much as Zhebin has warned.20
RUSSIAN POLICY IN A BROADER CONTEXT

Arguably, in 2013, Russia felt marginalized by Sino-American cooperation
to pressure the DPRK and DPRK refusal to commit itself to Russian
proposals—hence, Putin’s threats to abandon North Korea. Given
Pyongyang’s falling out with China and habitual instinct to exploit Sino-
Russian tensions, this ultimatum actually offered it a lifeline that it promptly
seized, leading to a series of high-level meetings, economic agreements, and
the invitation to Kim Jong-un to attend the VE day celebrations in Moscow
in May 2015.21 Having also invited President Park Geun-hye, Moscow
apparently hopes to stage an inter-Korean summit and reap the benefits.22
The disjuncture between the global and regional aspects of Russo-
Chinese relations was explicitly invoked in Putin’s July 1, 2014 speech
to Russian ambassadors. On the one hand, Putin proclaimed Sino-Russian
relations as a kind of example for others to follow.
We need to strengthen overall partnership and strategic cooperation with

the People’s Republic of China. We can say that a strong Russian-Chinese
connection has taken shape on the international arena. It is based on a
coincidence of views on both global processes and key regional issues. It is
of primary importance that Russian-Chinese friendship is not directed
against anyone: We are not creating any military unions. On the contrary,
this is an example of equal, respectful and productive cooperation between
states in the twenty-first century.23
Yet, Putin emphatically demanded an independent and stronger Russian

policy in Asia, implicitly contradicting the belief that Russo-Chinese rela-
tions are a paragon of international relations.
We also need to continue strengthening the eastern vector of our diplomacy,

to more intensively use the impressive potential of the Asia-Pacific region in
the interests of the further development of our country, primarily, of course,

of Siberia and the Far East. We should continue to direct Russia’s policy in
Asia and the Pacific at maintaining the security of our eastern borders and at
supporting peace and stability in the region. The coming leadership of
Russia in the Shanghai Cooperation Organization and the SCO and
BRICS summits to be held in Ufa in the summer of 2015 work to support
this. We intend to further develop our relations with our traditional partners
in this area of the world; with India and Vietnam, who are playing an ever-
greater role in the world; with Japan and other countries, including the
ASEAN states.24
Russian analysts have long argued that Beijing might sell Russia out to
Washington and advocated a more independent line toward Korea.
Georgy Toloraya and Aleksandr Vorontsov in particular maintain that
the mere fact of Sino-American collaboration on UN resolution 1718 in
2012 to prohibit North Korean nuclear and missile tests represents an
unpleasant surprise for Russia. They speculate about a deal where Beijing
would “surrender” Pyongyang to Washington in return for reduced US
support for Japan over the Senkaku Islands—a collaboration that makes
Russia’s position look bizarre. Consequently, Russia can no longer afford
to let China lead the two governments’ policy in North Korea.25
When North Korea offered exclusive terms to Russian investors to
support priority projects in 2014, Aleksandr Galushka, minister for the
Development of the Far East and the chairman of the Inter-Governmental
Committee for Cooperation, Trade, Economics, Science, and
Technology, emphasized that Chinese investors do not enjoy these ben-
efits, clearly signaling rivalry with China.26 Toloraya and Vorontsov
openly advocate overt competition with China here rather than the pre-
vious passivity that they argue prevents Russia from realizing its regional
goals in Asia.
This kind of behavior will not contribute to a more active Russian policy in
the Asia-Pacific region, where people closely follow Russia’s reactions to
crisis situations and draw their conclusions accordingly. The cooling in
relations between North Korea and China over the Chang Song-thaek affair
gives Russian diplomats an opportunity to cultivate closer relations with the
elite in Pyongyang. With a new generation just having come to power in
Beijing too, a warming in relations between China and its unpredictable
neighbor is unlikely in the near future. This gives Russia a “window of
opportunity” to establish a more trusting relationship with Kim Jong-un
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and his new leadership, using traditional diplomatic methods, economic

levers, and “soft power.”27
This example illustrates Moscow’s ingrained paranoia concerning the

constant danger of abandonment or even betrayal that lurks under-
neath the supposedly halcyon Sino-Russian relationship. Despite the
deep estrangement with Washington and the West prompted by
Ukraine, Russian officials still desire to work with Washington lest
Russia be isolated. Similarly, Xi Jinping reminds his American and
Chinese interlocutors that conflict with America would be disastrous
for China.28
Another regional aspect of the Sino-Russian dyad is that neither side
wants either the other or Washington to succeed more than they do in
dealing with a common challenge if not threat, e.g., North Korea’s
nuclearization. In 2009, when President Bill Clinton attempted to obtain
the release of US prisoners from North Korea, Russian commentary
asserted that Clinton’s meeting with North Korean leader Kim Jong-il
actually represents a form of bilateral bargaining. This press report then
argued that:
In China, influential analysts clearly had a negative attitude toward

Washington’s possible rejection of the multilateral approach to resolving
the North Korean nuclear conundrum. “I think the United States should
decisively reject bilateral talks. This position will not be accepted by the
countries of East Asia,” Zhang Liangui, an expert in Korean affairs at the
Central Party School in Beijing, said. Zhang’s colleagues explain that the
PRC would, with matters panning out this way, be moved into the
background, and this is unacceptable to Beijing. Russia has also said
more than once that the path to freeing the Korean Peninsula from
nuclear weapons lies through six party talks. The reaction of the Russia
Federation Foreign Ministry to the former head of the White House’s
visit is not yet known.29
Here again, Sino-Russian regional competition coexists with a shared

desire to prevent US unilateral activity, but that rivalry undermines the
benefits of agreeing to curtail Washington’s global role and leaves a
situation that unanimously puts vital interests of all three states at risk
and in a state of unmitigated tension, which benefits nobody. Regional
discord between Moscow and Beijing weakens their global and bilateral
partnership.
NORTH KOREAN MOTIVES

North Korea, too, reacts to the imperatives generated by the rise of China,
the seeming Sino-American collaboration, and the dynamism of Asian
international relations. Kim Jong-un learned from his predecessors the
need to exploit Sino-Russian tensions. His father exploited this rivalry in
the 2011 accords with Russia to get more Chinese military aid. One classic
way to react to disappointment with China is to upgrade ties with Russia.
Thus, China’s announcement that it would strengthen military ties and
practical, though unspecified, exchanges with North Korea that nullified
its previous refusal to do so in 2011 probably owed something to Russia’s
earlier success in August 2011.30
We should avoid thinking that China can or will “deliver” North Korea.
The last few years exemplify resistance by an Asian state to China’s effort
to use its power more openly than before, and the results are not encoura-
ging. China’s influence upon North Korea’s economy was already predo-
minant by 2011 and, if anything, has subsequently grown.31 North
Korean officials clearly resent this dependence, which contradicts the
autarchic Juche ideology, even though Chinese assistance and support
for the succession to Kim Jong-il was necessary.32 Pressure from Jang
Song-thaek to reform along Chinese lines may have also helped generate
the recent North Korean purges that angered Beijing.33 Much of this
erosion in Sino-DPRK relations may be connected to the purge of Jang
Song-thaek, probably the point man for Sino-DPRK relations, and to the
nuclear and missile tests of 2013. This purge has deprived North Korea of
a valued interlocutor with China and alarmed Chinese concerning the
trajectory of its policies, since it no longer has a strong, experienced
hand at the till in Sino-DPRK relations.34
North Korea’s turn toward Russia, as well as its talks with Japan, is, to
some degree, bound up with both nations’ respective tensions with China.
Arguably, despite the professed identity of Sino-Russian positions on
many issues, North Korea assumes the existence of and is, therefore,
exploiting a latent Sino-Russian rivalry in Northeast Asia. This is presum-
ably driven by mutual suspicion and heightened mistrust in Sino-North
Korean relations,35 as also observed by Chinese analysts. Zhang Liangui
noted that because North Korea’s relations with China, Russia, and the
United States “have remained at a standstill,” the DPRK has consequently
“shifted its focus to Japan and the ROK.”36 However mistaken he may be
about Russia and, in retrospect, the ROK and even Japan, the visible
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deterioration of North Korean-Chinese relations has apparently had many

causes and manifestations. As Sangsoo Lee reported in 2014:
Whereas the North Korean regime’s durability has owed much to China’s
support, Pyongyang has long feared becoming overly dependent on Beijing.
Xi Jinping’s relatively “hard” stance toward North Korea after the country’s
third nuclear test, among other signs of cooling relations, has illuminated
the growing distrust between the two countries. As such, China’s customary
provision of financial support to the DPRK has significantly decreased. On
April 24, the Korea Trade Investment Promotion Agency (KOTRA)
revealed that oil exports (based on Chinese customs data) from China to
North Korea stood at “zero” for the first quarter of 2014. While not
verified, it is likely that China cut oil supplies for a while as a way of exerting
pressure on Pyongyang not to conduct a fourth nuclear test.37
North Korea subsequently imposed restrictions on Chinese traders doing

business in North Korea so that they are allowed just one visit for 15 days a
year.38
Pyongyang’s provocative missile and nuclear tests not only solidify the
US-ROK alliance that Beijing wants to attenuate, they also justify the
missile defense program of Japan and the United States and facilitate
enhanced trilateral US-ROK-Japan cooperation, reducing China’s oppor-
tunities to exploit ROK-Japanese tensions. Moreover, they disregard
China’s own interests and defy China’s continuing efforts to settle the
nuclear issue and persuade North Korea of the desirability of major
domestic reforms.
Even analysts who dispute that relations have cooled between Beijing
and Pyongyang concede that there has been much speculation that China
is rethinking its policy, and that the DPRK has become a source of
immense frustration to it.39 Those analysts who argue that for strategic
and political reasons, despite frustrations, Beijing will never abandon
Pyongyang, hardly characterize the relationship in positive terms. One
recent study says the two states are locked in a mutual hostage relation-
ship, and that North Korea’s 2013 missile and nuclear tests greatly
angered China.40 Other analyses pointing to the erosion of the relation-
ship argue that Beijing has formally downgraded ties by conducting them
through the Ministry of Foreign Affairs rather than inter-party organiza-
tions, supported UN sanctions against North Korea, harshly criticized the
2013 tests, and tightened customs procedures to disrupt the transfer of
Chinese dual-use items that might benefit North Korea’s nuclear pro-
gram.41 They charge that North Korean “brinksmanship” disrupts
China’s security environment, strengthens US-ROK-Japanese military
collaboration and disrespects China by ignoring warnings not to test
nuclear weapons. They even speculated that North Korea might be losing
its strategic value for China.
While there is a debate in China on North Korea, it is rash to say that
North Korea is losing its strategic value or that China will abandon the
careful and multi-dimensional strategy it has followed since at least 2009
to sustain North Korea and to use the Six-Party Process, if not for nuclear
disarmament than for the process of mitigating the many risks in this
region.42 The evidence of diplomatic and economic moves among the
six parties strongly points to growing estrangement between Pyongyang
and Beijing. Liu Jianchao, assistant minister of foreign affairs, recently told
correspondents that China does not have a military alliance with North
Korea and that, on principle, it does not conclude military alliances with
any other country.43 This public declaration may only further irritate
North Korea.
A South Korean website run by defectors from North Korea has argued
that the DPRK government decreed in April 2014 that its elites should
”abandon the Chinese dream,” accusing the Chinese government and
party of being selfish, renouncing ideology, being critical of North
Korea’s self-defense capabilities, and being in bed with the imperialists.
Allegedly this led to an edict ordering state sanctioned trading companies
to decrease trade with China and increase trade with and flights to and
from Russia.44 It apparently was accompanied by a press campaign to
emphasize Juche ideology that warns against “the pressure from big
countries.”45 If true, this would go far to explain why North Korea signed
all these accords with Russia, even as it is unwilling to make its decisions
public, leaving it to Moscow to announce these deals. This would confirm
our argument that the Russo-North Korean rapprochement meets the
interests of both sides, as tenser Sino-DPRK ties drive North Korea to
seek not only to balance China in its overall foreign relations, but to play
the time-tested game of leaning toward other powers to obtain diplomatic
and economic support.46
These DPRK gambits confirm Luttwak’s observation that China’s
aggressive policies drive Asian states, including North Korea, to find new
ways of collaborating to check those policies.47 Yet, North Korea can still
count on China to uphold certain of its vital interests because they also
294 S. BLANK
comport with China’s longstanding perception of North Korea as a vital

strategic buffer that it must support despite repeated bad behavior. Thus,
both China and Russia advocate speedier resumption of the Six-Party
Talks on the basis of Pyongyang’s demand for no preconditions—a non-
starter for the other parties—and China insists on not excluding North
Korea.
A similar logic appears to be working in Pyongyang’s concurrent efforts
to improve ties with Japan, even though the scope for doing so is more
limited.48 Not only would this show China it cannot boss North Korea
around and that Pyongyang has other options, it would also inflame
Japanese-South Korean tensions, frustrating allied cohesion against
Pyongyang.49 Both Moscow and Pyongyang would dearly like to rupture
US alliance bonds and arrange a bilateral or inter-Korean summit in
Moscow, excluding the United States; Moscow needs all the diplomatic
support it can get, especially in Asia. Furthermore, North Korea and
Russia hope to expand the scope of Russia’s economic presence in North
Korea. For Pyongyang, this would keep Russia in its corner, balance
China, and help it avert reform, while Russia stands to gain access to
North Korea’s rare earth minerals and to continue pushing its pipeline
and railroad plans.50
CONCLUSION
The logic of hedging and efforts to build coalitions to use but also confine
China’s rising power and capabilities is clearly a shared Russo-DPRK
interest. Both states also crave a fully independent status in Asia, though
North Korea cannot and does not expect to play a great power role. Yet,
their actions add to tensions as Moscow’s anti-Americanism permits North
Korea to continue its military buildup, secure in the fact that both China
and Russia, despite their regional rivalries, will preserve the “northern
alliance” against Washington and its allies and give it space, if not
resources, to proceed.51 A similar logic can also explain both states’
ongoing efforts to improve relations with Japan. Not only do they join
Japan in chafing at Chinese power but they also stand to make handsome
economic gains if they can move Japan closer to their viewpoint.
We can duly expect that this kind of maneuvering and the 5+1 game as
well as the larger Asian patterns of hedging and balancing alongside self-
assertion will continue. In North Korea’s case, China apparently has gotten
the message and is ready to move toward improving relations, despite all the
insults it has had to swallow.52 Neither will it give up the Russian card that
has been of such immense value to it, especially as Russia’s isolation forces it
into ever-greater dependence on China in Central Asia and on issues like
arms sales and the bilateral energy and economic relationship.53 Russia, too,
will continue playing this game in the belief that it actually is making gains
in Asia, but such beliefs are a delusion as are the pretenses of its officials and
ambassadors that Moscow needs support but not help from China.54
Moscow may be able to maneuver in the Six-Party Process, but China will
not rupture ties with Washington simply to please Russia. Signs of the
revitalization of US alliances, e.g., in the intelligence-sharing accord with
Tokyo and Seoul, are likely to grow, especially as American economic and
thus military power rebound.55 It is unlikely that North Korea has changed
its strategic course significantly. Indeed, it sought to obtain the advanced
Russian fighter SU-35 jet in November 2014 just as it similarly sought and
failed to obtain Chinese fighter jets in 2010.56 Recent articles are again
calling for a “military-first” policy line.57
By invading Ukraine, Moscow may have sealed its regional fate in Asia
for as long as it sees regional security issues through an American prism.
Consequently, it will have to depend on China, fundamentally contradict-
ing the drive toward an independent great power status in Asia. But even if
Russian leaders grasp this contradiction, they are trapped since Putin cannot
withdraw from Ukraine without risking his power and system. Russia and
North Korea may make temporary gains, but they do so at the risk of losing
the larger strategic contest. The price of realizing those larger issues and of
acting to minimize the costs of past and present policies may take a long
time. The longer that recognition and corrective action take, the greater will
be the corresponding costs and risks of those remedial actions.
NOTES
1. Stephen Blank, “Russia and the Six-Party Process in Korea,” in Korea
Economic Institute, ed. Tomorrow’s Northeast Asia (Washington, DC:
2011), 207–226.
2. M. Nikolaev, “The Asia-Pacific Region and Russia’s National Security,”
International Affairs 56, no. 3 (2010), 68–69.
3. Interfax, Open Source Center Foreign Broadcast Information Service Central
Eurasia, (Henceforth FBIS SOV), September 24, 2007.
4. Andrew Osborn, “North and South Korea On the Brink of War, Russian
Diplomat Warns,” telegraph.co.uk, September 24, 2010, http://www.tele
296 S. BLANK
graph.co.uk/news/worldnews/asia/northkorea/8020972/North-and-
South-Korea-on-the-brink-of-war-Russian-diplomat-warns.html.
5. “Vladimir Putin Took Part in the APEC CEO Summit” http://eng.krem
lin.ru/transcripts/6086, October 7, 2013; “Russian President Addresses
South Korea Business Forum,” FBIS SOV, November 13, 2013, www.
kremlin.ru; Interfax, FBIS SOV, November 12, 2013; Yonhap, FBIS
SOV, November 12, 2013.
6. Aleksandr’ Zhebin, “Russia-DPRK: People Do Not Choose Their
Neighbors. Pyongyang Ready to Be Friends with Moscow Again,”
Nezavisimaya Gazeta Online, October 14, 2013, FBIS SOV, October 14,
2013
7. Alexander Vorontsov and Georgy Toloraya, Military Alert on the Korean
Peninsula: Time for Some Conclusions, Carnegie Moscow Center (June
2014): 19–25.
8. Stephen Blank, “Triangularism Old and New —China, Russia, and the
United States” (presentation, “New Perspectives on Sino-Russian
Relations” conference, Oslo, September 22–23, 2015).
9. Bobo Lo, “Russia: the Eastern Dimension,” in Piotr Dutkiewicz and Dmitri
Trenin, ed. Russia: the Challenges of Transformation (New York: Social
Sciences Research Council and New York University Press, 2011), 361;
see also Vladimir Shlapentokh, “Are Today’s Authoritarian Leaders
Doomed to Be Indicted When They Leave Office? The Russian and Other
Post-Soviet Cases,” Communist and Post-Communist Studies 39, no. 2
(Autumn 2006): 462–63; Cathy Young, “From Russia With Loathing,”
The New York Times, November 21, 2008; Fedor Lukyanov, “Political No-
Road Map,” Gazeta.ru, FBIS SOV, April 3, 2008; Mikhail Tsypkin,
“Russian Politics, Policy-Making and American Missile Defence,”
International Affairs 85, no. 4 (2009), 784–787.
10. Georgy Toloraya, “The Security Crisis in Korea and Its International
Context: Sources and Lessons from a Russian Perspective,” Korean
Journal of Defense Analysis 23, no. 3(September 2011), 346–347.
11. Aleksandr’ Zakharovich Zhebin, “Not to Miss an Opportunity for Detente
on the Korean Peninsula: United States Not interested in Pyongyang’s
Moratorium,” Nezavisimaya Gazeta Online, FBIS SOV, January 20, 2015.
12. Kyodo World Service, FBIS SOV, January 23, 2015.
13. Edward N. Luttwak, The Rise of China vs. the Logic of Strategy (Cambridge,
MA and London: The Belknap Press of Harvard University Press, 2012);
and Van Jackson, “The Rise and Persistence of Strategic Hedging Across
Asia: a System-Level Analysis,” in Ashley J. Tellis, Abraham M. Denmark,
and Greg Chaffin, ed. U.S. Alliances and Partnerships at the Center of Global
Power (Seattle: National Bureau of Asian Research, 2014), 317–342.
14. Richard J. Ellings, “Preface,” in Ashley J. Tellis, Abraham M. Denmark, and

Greg Chaffin, ed. U.S. Alliances and Partnerships at the Center of Global
Power, x.
15. Alina Terekhova, “Moskva distantsiruetsia ot Kitaiskogo proekta novogo
shelkovogo puti,” Nezavisimaya Gazeta, January 20, 2015; Paul Goble,
“Ruble’s Decline Seen Helping China to Supplant Russia As Dominant
Power in Central Asia,” Window on Eurasia New Series, January 17,
2015.
16. Ashley J. Tellis, “Seeking Alliances and Partnerships: The Long Road to
Confederationism in U.S. Strategy,” in Ashley J. Tellis, Abraham M.
Denmark, and Greg Chaffin, ed. U.S. Alliances and Partnerships At the
Center of Global Power, 19.
17. Stephen Blank, “Russo-Chinese Relations in Strategic Perspective,” The
Asan Forum 2, no. 2 (April 11, 2014).
18. Victor Cha, The Impossible State: North Korea Past and Future (New York:
Harper Collins Books, 2013), 345–369.
19. FBIS SOV, November 29, 2011; Victor Cha, The Impossible State, 345–369.
20. FBIS SOV, October 14, 2013.
21. “Russia Says North Korea Sent Positive Signal On Kim Visit in May,”
Reuters, January 21, 2015.
22. Georgy Toloraya, “Kim Jong Un’s Diplomatic Debut: a View From
Russia,” www.38north.com, January 22, 2015.
23. “Conference of Russian Ambassadors and Permanent Representatives,” July
1, 2014, http://eng.kremlin.ru/transcripts/22586.
24. Ibid.
Peninsula, 21 and 27–28.
26. Interfax, FBIS SOV, June 5, 2014 (CER2014060530021881).
Peninsula, 27–28.
28. Neil MacFarquhar, “Putin Angling to Restore Ties With the West While
Keeping an Eye on Ukraine,” The New York Times, July 11, 2014; Simon
Denyer, “U.S., China Try to Emphasize Potential for Cooperation,” The
Washington Post, July 9, 2014.
29. Vladimir Skosyrev, “Clinton’s Success Could Split the Six,” Nezavisimaya
Gazeta Online, FBIS SOV, August 9, 2009.
30. “China to Boost Military Ties with North Korea,” Straits Times, November
19, 2011, C8.
31. L. Zakharova, “North Korea’s International Economic Ties in the twenty-
first Century and Prospects For Their Development Under Kim Jong Un,”
Far Eastern Affairs 41, no. 3 (2013), 131–138.
298 S. BLANK
32. Snyder; Seung-Yul Oh, “China’s Strategic Shift and North Korea’s Open
Door to China Policy,” EAI Issue Briefing, no. MASI 2011-05, www.eai.or.
kr (September 6, 2011), 5.
33. “Analysis: North Korean Execution Points to Instability, Wide Purge,” BBC
Monitoring, December 12, 2013; Choe Sang-Hun, “Execution Raises
Doubts about Kim’s Grip on North Korea,” The New York Times,
December 13, 2013.
34. Mathieu Duchatel and Phillip Schell, China’s Policy on North Korea:
Economic Engagement and Nuclear Disarmament (Stockholm, SIPRI,
2014), 18; Han Sukhee, “China’s Charm Offensive to Korea: A New
Approach to Extend the Strategic Buffer,” The Asan Forum 2, no. 3 (June
13, 2014).
35. Choe Sang-Hun, “North Korea Fires 2 Missiles in Defiance of a U.N. Ban,”
The New York Times, June 30, 2014.
36. Yazhou zhoukan Online, April 20, 2014; FBIS SOV, May 12, 2014.
37. Sangsoo Lee, “North Korea’s Diversifying Diplomatic Ties,” Institute for
Security and Development Policy, Stockholm, Policy Brief, no. 157 (June
26, 2014), 2.
38. Ibid; Yonhap, June 16, 2014; FBIS SOV, June 26, 2014.
39. Andrew Scobell and Mark Cozad, “China’s North Korea Policy: Rethink or
Recharge,” Parameters 44, no. 1 (Spring 2014), 52.
40. Christopher K. Johnson with Ernest Z. Bower, Victor D. Cha, Michael J.
Green, and Matthew P. Goodman, Decoding China’s Emerging “Great
Power” Strategy in Asia, (Washington, DC: Center for Strategic and
International Studies, 2014), 35–36.
41. JoongAng Daily Online, June 25, 2014; FBIS SOV, June 25, 2014; Ippei
Kamae, Virginia Marantidou, and Nanae Yamashiro, “Keeping Stability in
the Peninsula: Old Problems, New Dynamics,” Issues & Insights 14, no. 6
(2013), 20–21.
42. Mathieu Duchatel and Phillip Schell, China’s Policy on North Korea.
43. Yonhap, FBIS SOV, May 27, 2014; Interfax, FBIS SOV, May 20, 2014;
JoongAng Daily Online, FBIS SOV, June 19, 2014.
44. New Focus, June 2, 2014; FBIS SOV, June 5, 2014.
45. Choe Sang-Hun, “North Korea Fires 2 Missiles in Defiance of a U.N. Ban.”
46. Sangsoo Lee, “North Korea’s Diversifying Diplomatic Ties,” Institute for
Security and Development Policy, Policy Brief, no. 157 (June 26, 2014), 2.
47. Edward N. Luttwak, The Rise of China vs. the Logic of Strategy
48. Jung-Chul Lee, “Making Sense of North Korea,” www.foreignaffairs.com,
January 21, 2015.
49. Sukjoon Yoon, “A Trilateral Intelligence Sharing Accord Between Japan,
Korea, and the United States: Implications and Challenges,” Pacnet 6a,
2015, www.csis.org, January 22, 2015.
50. Georgy Toloraya, “Kim Jong Un’s Diplomatic Debut: a View From
Russia.”
51. Seongji Woo, “Pyongyang and the World: North Korean Perspectives on
International Relations Under Kim Jong-il,” Pacific Focus 36, no. 2
(August, 2011), 196.
52. Yonhap, January 9, 2015; FBIS SOV, January 9, 2015.
53. Stephen Blank, “Russo-Chinese Relations in Strategic Perspective.”
54. “Interview By Ambassador to China Andrei Denisov With the Chinese
Newspaper Global Times,” Ministry of Foreign Affairs of the Russian
Federation, FBIS SOV, January 19, 2015.
55. Sukjoon Yoon, “A Trilateral Intelligence Sharing Accord Between Japan,
Korea, and the United States.”
56. JoongAngDaily Online, January 8, 2015; FBIS SOV, January 8, 2015.
57. Rodong Shimbun Online, January 5, 2015;FBIS SOV, January 19, 2015.
Stephen Blank is a Senior Fellow at the American Foreign Policy Council in

Washington. From 1989–2013 he was a Professor of Russian National Security
Studies at the Strategic Studies Institute of the U.S. Army War College in
Pennsylvania. Dr Blank has been Professor of National Security Affairs at the
Strategic Studies Institute since 1989. In 1998–2001 he was the Douglas
MacArthur Professor of Research at the War College.
CHAPTER 18
North Korea’s Place in Sino-Russian

Relations and Identities
Gilbert Rozman
Sino-Russian relations and the attitudes of each toward the Korean

Peninsula have drawn close scrutiny of late, including recent writings by
me.1 The Asan Forum has carried relevant articles.2 On China’s attitudes
toward reunification, Bonnie Glaser and Yun Sun and Cheng Xiaohe have
written in detail.3 Yet, as we take a fresh look at Sino-Russian relations in
triangular context, the theme of the Special Forum, Vol. 1, No. 3, we
would be remiss not to revisit the salience of North Korea to their bilateral
relationship. Much has changed in two years: The Sino-Russian relation-
ship clearly is drawing much closer, Vladimir Putin and Xi Jinping are both
asserting their national leadership much more forcibly; Kim Jong-un’s
thinking is coming unmistakably into focus; and the historical and national
identity context is now more vividly in relief in light of the seventieth
anniversary commemorations on May 9 in Moscow, on September 3 in
Beijing, and on October 10 in Pyongyang. The North Korean situation
remains in limbo, as Kim Jong-un largely eschews diplomacy, but, on the
basis of the reasoning found in Chinese and Russian sources,4 we have
reason to look beyond this impasse. After all, North Korea looms as one of
G. Rozman (*)

https://doi.org/10.1007/978-981-10-3144-1_18
302 G. ROZMAN
the biggest tests of where their relationship is heading: toward Six-Party

multilateral cooperation or three versus three regional polarization.
Northeast Asia was an unlikely focus of great power maneuvering
following the end of the Cold War. Indeed, there were much-trumpeted
plans for turning it into the centerpiece of great power coordination for a
new regional and world order.5 Hopes centered on multilateral energy
cooperation in the Russian Far East and Eastern Siberia, cross-border
regionalism around the Sea of Japan, and, above all, collective security
assurances to steer North Korea into a regional framework conducive not
only to reduced tensions on the Korean Peninsula but also to great power
trust. That Pyongyang would balk at such plans—demilitarization, the loss
of its ability to play one great power against another, reforms that threa-
tened to shake the legitimacy of a hermit dictatorship afraid to unseal its
chamber of horrors, and the Tumen River development project opening
the country to transit movement—should have come as no surprise. More
unexpectedly, strategies to use North Korea to rekindle splits between
great powers rather than to facilitate trust and cooperation defied hopes
for putting the Cold War behind this region. While no country’s blueprint
for the future of North Korea was realistic, its revival as the nexus of
contestation was the predictable outcome of great power reasoning dis-
cernible from the early 1990s. In the early 2000s, Chinese and Russian
publications left little doubt about this logic.6 The Six-Party Talks kept
alive hopes for multilateralism only if one ignored how the two, long-time
defenders of Pyongyang were reasoning and reinforcing each other.
The recent leadership of Vladimir Putin and Xi Jinping has brought to
fruition the divisive thinking that posits resumption of the Six-Party Talks
as the foundation for a regional architecture, claiming that it can promote
stability but actually pursuing a far-reaching transformation in what long
has guaranteed that stability. A November 2015 article is typical of recent
Russian publications that blame the United States or the West for starting
a new cold war and appeal for closer Sino-Russian relations as the only way
to counter moves to extend US dominance in the Asia-Pacific region.7 In
this strategy, North Korea resumes its Cold War role as a bulwark against a
shift in the balance of power. Indeed, more circumscribed in its reach and
more aware of the perilous state of North Korea, Moscow has even more
reason to oppose changes that could lead toward reunification, in line with
the views of its vocal experts.8 Xi is playing a more nuanced game, but
sending Liu Yunshan to Pyongyang on October 10 can serve as a wake-up
call to those who saw his hosting of Park Geun-hye a month earlier and his
NORTH KOREA’S PLACE IN SINO-RUSSIAN RELATIONS AND IDENTITIES 303
summit with Barack Obama in the interim as signs of willingness to

abandon Kim Jong-un’s regime or even to put increased pressure on it
without new provocations. Chinese writings may call for denuclearization,
but they are adamant (despite occasional exceptions no longer to be
found) about regime preservation. If Kim Jong-un were to be more
flexible about negotiations with the ostensible goal of denuclearization,
he could count on Chinese and Russian support for other goals. At
present, he stubbornly rejects diplomacy, but the logic of his situation
and the warm welcome he could expect for this sort of shift, exposing the
wide divide among those who have supported UN sanctions, suggest that
eventually Kim will come around.
REIMAGINING THE NORTHERN TRIANGLE

US, South Korean, and even Japanese policy have attracted much of the
attention in the diplomacy toward North Korea, but their contacts with
the regime there pale in comparison to Chinese and Russian high-level
interactions. There has been much discussion about coordination between
the United States and its two allies, as US interest in increasing triangu-
larity often figures into policy discussions, but talk of triangularity among
China, Russia, and North Korea is rarely heard. This missing element in
analysis has the potential to skew our understanding of the dynamics of
Northeast Asia, excessively raising hopes, especially among South Koreans.
As long as the focus is limited to denuclearization, as if it were a simple
matter of agreeing on a goal, rather than the complex, diplomatic give-
and-take aimed at coexistence on the peninsula and satisfying the security
and identity interests of four great powers as well as the two Koreas, we are
bound to misjudge the challenge ahead. Ignoring the triangular barrier of
the Cold War era as if it were gone likewise is deceptive.
Two triangles have the potential to redefine the contours of Northeast
Asia. One is the well-recognized, but at times elusive, alliance triangle of
the United States, Japan, and South Korea. The other is, arguably, the
reviving “Northern Triangle” of China, Russia, and North Korea. Both
are taking shape as a result of China’s rise and are testing the “pivot” to
Asia of the United States. Changes in one reverberate in the other, Beijing,
Washington, and Tokyo, are increasingly conscious of the linkages.
Questions last posed about half a century ago are resurfacing in the
mid-2010s. Are Moscow and Beijing allies or rivals? Are they competing
over Pyongyang in a way that opens the door to diplomacy by others or in
304 G. ROZMAN
a way that reinforces that state’s obstinacy? Do Washington or Tokyo have

leverage to split them further apart or are overtures to one or the other
more likely to disrupt the US-led alliance system? How do changes in
relations between Tokyo and Seoul impact their aspirations to change
course with Moscow, Beijing, or Pyongyang? There was a Northern
Triangle during the Korean War, and it persisted until the end of the
Cold War—lasting four decades in spite of the Sino-Soviet split and the
Sino-US normalization. The degree of revival is debatable, as we search for
evidence in the reasoning revealed in recent sources.
This article takes a closer look at Chinese and Russian thinking about an
old ally and about their bilateral relationship within the changing archi-
tecture of Asia with an eye to the prospects for revival of the triangle. It is
divided into four parts. First, it takes a long-term historical view of North
Korea’s place in the way Moscow and Beijing view Northeast Asia. Then,
it focuses on recent Chinese and Russian national identity narratives and
their implications for thinking about North Korea. Next, it turns to how
the security situation in 2015 affects policies in these two countries and in
the region with regard to North Korea. The conclusion probes the pro-
spects for the reemergence of the “Northern Triangle” in opposition to
the US-led alliance triangle, i.e., a “virtual alliance” similar to what long
existed after the Korean War.
ACCURATELY ASSESSING CHINESE AND RUSSIAN REASONING

ABOUT NORTH KOREA
An enduring source of misunderstanding, the course of international

relations in Northeast Asia has been succumbing to the temptation to
interpret the outlooks of both China and Russia (the Soviet Union) in
accord with theories that pay scant heed to what they are saying in
internal discussions and writings while relying on deductive reasoning.
Realist theory continues to serve as a crutch to overstate the divide
between Moscow and Beijing, while liberal theory long has exaggerated
their growing integration into the existing international order. Since
the 1970s, decade-by-decade, one or both of these perspectives have
caused observers to misjudge what would happen next in this relation-
ship.9 Of late, many realists argue that China and Russia are bound to
turn against each other before long because of clashing national inter-
ests, as in Central Asia and the Korean Peninsula, while liberal theorists
stick to the optimistic outlook of closer ties to the West, given their
economic calculations. A wake-up call was slow in coming until the

Ukrainian crisis exposed Russian thinking just as Sino-US relations
were deteriorating. Sino-Russian rhetoric is being taken more seriously,
as realist analysis is recast, liberal thinking is fading, and a case for
constructivist convergence in thinking about identity issues is gaining
credibility.
The US posture toward North Korea has repeatedly been perceived
in Beijing and Moscow as overriding potential bilateral concerns. This
was the case for Beijing in 2003 when it feared that the “axis of evil”
speech and the invasion of Iraq would be a prelude to a push for
regime change in North Korea, and it was true again in the fall of
2005 when unilateral US sanctions against Banco Delta Asia revived
the charge that regime change was being aggressively pushed.10 Only
when North Korea defied both China and Russia in late 2006 by
brazenly testing both a long-range missile and a nuclear weapon did
Beijing pressure Pyongyang, resulting in the February 2007 Joint
Agreement. Yet, after similar tests in the spring of 2009, Beijing’s
response was different, encapsulated in its three euphemisms: “main-
taining domestic stability in North Korea, peace on the Korean
Peninsula, and social stability in China.” These were invoked in
2009–2010 for “enabling North Korea’s misdeeds,” before China in
late 2010 may have restrained the North from military retaliation
against planned South Korean military exercises, and they are used to
justify putting blame on US aggressiveness more than North Korea’s
belligerence, and rather than on China’s passivity, acquiescence, and
enablement of the North Korean regime’s conduct.11
Chinese anger over Kim Jong-un’s defiance coupled with invigorated
diplomacy with Park Geun-hye and Russia’s rationalizations for over-
tures toward Kim Jong-un well beyond previous ties with Kim Jong-il
should not obscure the logic of their strategic analyses of the overall
situation on the Korean Peninsula and what should be done. The
United States and South Korea rightly continue to prioritize their
cooperation on denuclearization and non-proliferation, crediting
Chinese and Russian behavior with a positive contribution to trying
to change North Korean views on those issues. Yet, to repeat the
mantra of “five versus one” would make us complicit in neglecting
and even misunderstanding what China and Russia are trying to achieve
on the peninsula and, through negotiations over North Korea, for
national interests and national identity.
306 G. ROZMAN
RECALLING TRADITIONAL SOVIET AND CHINESE COMMUNIST

THINKING ABOUT NORTHEAST ASIA
As the Cold War was beginning, the division of Germany proved con-
tentious, as seen in the Berlin blockade and airlift. The division of Korea
was no less so, as Stalin and Mao weighed whether to support Kim Il-
sung’s plan to unify the peninsula by force, sending his army into South
Korea. Looking back at the Korean War from the record of overall stability
(the “cold peace”) of this era, it is easy to overlook the thinking that the
“east wind prevails over the west wind” that preceded Khrushchev’s
notion of “peaceful coexistence.” Dressing the attack on South Korea in
terms of the end justifies the means (lies about who started the war, who
was fighting in it, and what was taking place), Soviet and Chinese com-
mentaries set a pattern for narratives on the Korean Peninsula and
Northeast Asia that remained highly distorted through the 1980s. They
refused to recognize North Korea’s continued belligerence destabilizing
the peninsula. Although after China normalized relations with Japan, it
grew silent on some aspects of Japan’s regional role, there was stunning
disregard for the very peaceful nature of Japan’s foreign policy. The
defensive character of the US alliances with Seoul and Tokyo—no thought
being given to any sort of aggressive behavior—was finally acknowledged
in China after it found common cause against the Soviet Union. Yet,
Beijing’s support for North Korea remained steadfast, as did Moscow’s.
The Cold War stabilized, China welcomed the US-Japan alliance in
opposition to the Soviet Union, and South Korea focused on its “eco-
nomic miracle” with no aggressive intentions toward North Korea. Yet,
the Chinese and Soviet narratives in the face of North Korea’s massive
bombing in Burma in 1983 and bombing of a South Korean airliner in
1987 refused to blame the North. Relations were finally changing, and the
behavior of their ally caused embarrassment in the late 1980s, but their
Cold War narrative survived. It was questioned with uncertain conse-
quences for a time in the 1990s, although by the end of the decade,
there was a backlash indicating that errors in thinking about North
Korea after the end of the Cold War needed to be addressed. The justice
of the Korean War served as a test case for historical national identity.
Chinese and Russian reasoning in the Cold War regarding North Korea
revived in the 2000s. As they boosted civilizational exceptionalism, it was
natural to repeat that the North Korean regime also faces a civilizational
threat, implying that South Korea poses such a threat, i.e., a color
revolution, despite shared “Koreanness.” Also, North Korea’s critical

position in the regional balance of power drew attention once more.
The fact that North Korea was long the object of considerable sacrifice
raised its salience too, as not only an object of sunk costs but also as a
product of the status quo settlement at the end of the war, which must not
be overturned. This logic has far outweighed the occasional voices in
Russia and China demurring. Censorship has tightened, as seen in the
articles that have been paraphrased in The Asan Forum.12
One does not have to question the sincerity of calls for denuclearization
in Beijing and Moscow, as reported from diplomatic meetings as well as
official statements, to recognize that it is one of several goals and often
regarded as not the first one to be realized. For over a decade, there has
been considerable consistency in articles that consider denuclearization
resolvable only within the regional security framework. When China did
not denounce North Korea’s acts of aggression in 2010, it reminded
veteran observers of failure to condemn such acts during the Cold War.
The context of regional and peninsular transformation remains critical to
the way the general picture is portrayed in Beijing and Moscow in our time
as was true thirty years ago. South Korea’s legitimacy in reunification is left
in doubt. The case for human rights is left unmentioned. And the value of
North Korea ceasing its belligerence is rarely indicated. Instead, North
Korea’s role is stressed in future regional transformation.
THE CHINESE NARRATIVE ON NORTH KOREA IN THE 2010S

Dissident voices were heard in 2004 when a journal was shut down for its
coverage in 2006 and 2013 after nuclear tests by North Korea, and
occasionally at other times as well. Yet, the prevailing tone was in sharp
contrast to what these voices had to say. In 2002–2003, when Pyongyang
broke away from the International Atomic Energy Agency (IAEA) regime
set by the Joint Agreement, again in 2008–2009, when it abandoned the
Agreed Framework set by the Six-Party Talks, in 2010, when North Korea
twice attacked South Korea, and finally in 2014–2015, when many
thought China’s dissatisfaction with Kim Jong-un meant a sharp shift in
policy, Chinese publications overwhelmingly reaffirmed a narrative of little
comfort to those arguing for five versus one or for reunification led by
South Korea.
The Special Forum article in June 2015 of Cheng Xiaohe characterizes
China’s stance toward the Korean Peninsula as a “drawn-out
308 G. ROZMAN
competition,” in which China is taking an increasing interest to the point

it may tip the balance on the peninsula, which has been tilting toward
South Korea. Treating North Korea’s nuclear weapons program as a
means to reverse the trend and South Korea’s prospect of achieving
unification on its own terms as very unlikely, Cheng calls for resuming
the Six-Party Talks as a way to change North Korea’s calculus. His per-
spective draws equivalence between the North and the South, treats the
standoff as a struggle over the security interests of the great powers, and
assumes that balance between North and South and among the great
powers is the pathway to unification. To persist in South Korea’s current
approach to unification as a “bonanza’ is an illusion, he adds, neglecting
only to note directly that China does not view this outcome as in its
interest. Without praising the North’s nuclear program, Cheng credits it
with helping Pyongyang turn the tables in its competition with Seoul.
Thus, it makes China’s goal of pursuing a path to reunification based on
equality easier. He argues that whether Seoul can go forward with efforts
aimed at reunification depends heavily on China’s cooperation, which, in
turn, depends on Seoul not supporting the US rebalance targeted against
China. The obvious conclusion is that Seoul faces a zero-sum great power
clash, and its ties to Pyongyang, as influenced by Beijing, depend on how
it balances the two powers. Deterrence and trust building are at odds.
China can help with the latter, but efforts to bolster the former that play
into the US rebalancing will not win China’s support.
While many in Seoul have taken comfort in the troubled relationship of
Xi Jinping and Kim Jong-un and in the “honeymoon” closeness of Xi and
Park Geun-hye, they have paid little attention to China’s strategy. This has
led to over-optimism about China’s support for unification, the possibility
of South Korea taking the lead in a new regional security format called the
Northeast Asia Peace and Cooperation Initiative (NAPCI), and a win-win
situation of balancing ties to the United States with a strengthened alliance
and ties to China with coordination on North Korea. In the Special Forum
of June, I questioned the high hopes Koreans are pinning on middle
power diplomacy, centering on China and the United States. Cheng’s
article in English is but the tip of the iceberg of Chinese writings insisting
that Seoul must abandon its current strategy and change course for
reunification.
China appears to be seeking regime reorientation as the path to
domestic stability in North Korea. This means its readiness to work
with China on diplomacy, economic reform, and regime revitalization.
China also seems to be in pursuit of peace on the peninsula through a

balance of North and South security concerns with input from China
and other powers, but there is reason to expect that China’s input
will carry the greatest weight, given its likely impact on the North
and the South’s awareness that China has far more levers to shape the
process than any other country. Finally, success as the host of the
reconvened Six-Party Talks and the protector of the North would
give a boost to the legitimacy and stability of the Communist Party in
China.
When Liu Yunshan represented China at the October 10 Pyongyang
military parade, he delivered a letter from Xi Jinping, which was widely
interpreted as reaffirming that “stability” takes priority over denucleariza-
tion and that Xi is not tilting toward Park, as South Koreans had
asserted.13 Misperceptions were corrected, but the word “stability” con-
tinued to give the wrong impression. It made China’s aims seem quite
modest, as if it were a status quo power, ignoring demands on the United
States and South Korea for changes that allegedly would be conducive to
peninsular stability.
THE RUSSIAN NARRATIVE ON NORTH KOREA IN THE 2010S

The Russian narrative on the Korean Peninsula closely parallels the rheto-
ric found in China. In the December 2014 Special Forum, I analyzed the
Russian “turn to the East,” emphasizing China’s central role, but North
Korea’s salience also needs to be emphasized, as reported in “Country
Report: Russia” in February 2015 where the views of Valerii Denisov,
former ambassador to North Korea, are noted. Blaming the United States
for trying to destroy the regime in North Korea while also finding merit in
the argument that the September 19, 2005 agreement was violated by the
United States, South Korea, and Japan, provoking North Korea to resume
its nuclear activity, Denisov suggests that the real danger to peace in the
region comes from the US-ROK alliance, not North Korea. He justifies
Russia’s warming to North Korea, mentioning the souring of Sino-North
Korean relations without putting much blame on either party. The burden
is placed instead on Washington and Seoul to win the confidence of
Pyongyang, leading to the resumption of the Six-Party Talks, notably of
the fifth working group headed by Russia to address a regional security
framework, which Denisov puts foremost in his analysis of what is needed
to resolve the crisis.
310 G. ROZMAN
A strong China and a close Sino-Russian partnership are decisive

factors in reaching the kind of arrangement Denisov, and most other
Russian writers on the peninsula are seeking for the Korean Peninsula.
They are focused on reassuring North Korea, bolstering the regime,
transforming the US-ROK alliance, and developing a regional eco-
nomic program for a north-south corridor from Russia through South
Korea. In light of the expected hesitation of Seoul to embrace this
agenda, Russians lean more to pressure than persuasion. Strengthening
bilateral ties to North Korea both makes the North a more viable force
and puts Russia in a less marginal position. Behind the facade of
cooperative Russo-ROK relations—Park Geun-hye’s Eurasian
Initiative is still being pursued—Park offended Putin by not attending
the 2014 Sochi Olympics ceremonies and the May 9, 2014 celebration
of the seventieth anniversary of victory on Red Square. Relations have
cooled, as high officials visit less often, and South Korea is joining in
the sanctions imposed on Russia. Yet, discretely Seoul strives to sustain
relations, recognizing that it needs Russia to manage North Korea. As
long as Russia affirms its support for the non-proliferation treaty and
denuclearization of North Korea and suspicions are not confirmed that
it is, through official or unofficial ties, assisting the North’s missile
programs, Seoul is likely to avoid giving further offense. In these
circumstances, Russia has considerable room to boost ties with
Pyongyang, using the possibility of closer military ties and arms trans-
fers as a kind of blackmail.
Georgy Toloraya noted in his June 11, 2015 paper for the Korean
Economic Institute that Russia “is increasingly less interested in a momen-
tous Korean unification under the ROK’s guidance which would result in
a sudden shift of balance of power in the region.”14 He added that the
nuclear issue is less urgent now. What really matters are security guarantees
to North Korea, and for Washington and Seoul to do what is necessary,
the regime must be more resilient. Russian support for economic projects
and appeals for Seoul to lift sanctions and back trilateral projects are means
to that end. Neither Moscow nor Pyongyang would accept any deteriora-
tion in the strategic balance, which leaves Seoul in the position of no
prospects for unification unless it defies Washington, puts aside denuclear-
ization for the distant future, and engages Pyongyang as well as Moscow
and Beijing on a massive economic program treated as the foundation of
reconciliation, while simultaneously refocusing away from the US alliance
and security ties with Japan in order to forge the kind of power balance in
Northeast Asia conducive to diplomacy and regime reassurance, Toloraya

says.
Russia could be marginalized by China and wants to capitalize on
arguments aimed at Pyongyang and Seoul that the only realistic alternative
to China’s dominance is a triangular arrangement with it that accommo-
dates China, to a degree. Yet, on both the meaning of peace and stability
and the reinforcement of the Pyongyang regime, Moscow is close to
Beijing in its posture, albeit with more support for the status quo in the
regime and wariness about reform, which could play into Beijing’s strat-
egy. It is no less obsessed with preventing a blow to legitimacy at home
from a new “color revolution.” Moscow and Beijing differ somewhat, but
their overlap is substantial.
THE SINO-RUSSIAN-NORTH KOREAN TRIANGLE

In the Six-Party Talks, Moscow switched in 2004 from trying to act
independently as a broker between Pyongyang and the outside world to
largely supporting Beijing’s stance. Over the past decade, Chinese and
Russian sources have rarely had a critical word to say about each other’s
approach to the crisis and to talks over North Korea. There is silence also
about the triangular implications of their overlapping logic on the nature
of the problem and the steps needed to address it. This serves to conceal
prospects for a northern triangle as well as points of contention that are
anticipated.
After bolstering Pyongyang to face Seoul from strength and supporting
its regional role in a competition among great powers, Moscow and
Beijing would have reason to doubt each other’s long-term intentions.
Russian sources are prone to describe an ideal partnership of their country
and a united Korea, as if Russia were the natural partner. It seeks a north-
south corridor, strengthening the Trans-Siberian railway and making
Busan the terminus, bypassing the east-west corridor through China.
China may well have in mind some sort of sinocentric arrangement
about which Koreans should be wary. Filling the void somewhat left by
China’s tougher posture toward North Korea in 2014, Russia appeared to
be communicating to Kim Jong-un that it is an alternative that allows him
to avoid the heavy dependence on China that he fears. In these respects, it
is not simply reinforcing China’s approach to the North.
Chinese sources often appear to overlook Russia’s role on the penin-
sula. China has the stronger presence in North Korea. Its transportation
312 G. ROZMAN
corridors are far ahead of Russia’s with access to much greater funding,
independent of what South Korea’s decides to support. The Korean
Peninsula is a symbol in China of Tsarist Russia’s imperialist conduct in
the 1890s–1900s. Russia situates Korea in the postwar order from 1945 to
justify its approach, but China not only has this as its reference point but
also has two millennia of what could be called sinocentric reasoning to
justify its preferred outcome on the peninsula. The chances are high that
developments on the peninsula will lead to unilateral Chinese moves or a
focus on a smaller number of actors than the Six-Party Talks comprise,
leaving Russia with Japan on the sidelines.
While Sino-Russian coordination is more doubtful in fast-changing
circumstances than in today’s slow-moving efforts just to restart diplomacy
with North Korea, this does not mean that divergent national interests are
likely to negate the prospects for triangularity. As long as unification is
perceived as an ideological threat (one more “color revolution”); a histor-
ical travesty (reversing the outcome of 1945 if not the harmonious order
prior to Western imperialism); a civilizational defeat (the Western
approach to democracy and human rights would be boosted); and a loss
of equilibrium in the regional balance of power (even a neutral Korea
would not be trusted to remain so), China and Russia will agree on
supporting North Korea. This is a matter of national identity even more
than national interest. Given the shared obsession with the national iden-
tity gap with the West, above all the United States, there is little reason to
anticipate that Sino-Russian differences will take priority.
CONCLUSION
In 2015, Kim Jong-un refuses to take the diplomatic track, preferring
unilaterally to boost his military might and threaten other states. The
focus on finding a path for restarting the Six-Party Talks has centered on
putting reaffirmation of the goal of denuclearization in the forefront; how-
ever, negotiations might proceed once the September 19, 2015 Joint
Agreement was revived. South Korea has been stressing reunification led
by it, asking for the support of others. China has found it useful to
emphasize cooperation with South Korea and the United States, aware
that no issue serves this purpose better than the nuclear weapons and missile
development of the North. Russia too, however much it views the world
through the prism of a new cold war, has repeated its support for abiding by
the non-proliferation treaty. All of these circumstances have distracted
attention from the way China and Russia are looking at North Korea as a
factor in regional security, in a reunification process ahead on the peninsula,
and in construction of national identity to serve regime legitimization.
The “Northern Triangle” is latent because Pyongyang prefers an autono-
mous course for now. Even so, Moscow is more supportive than several years
ago, and Beijing has reasserted its refusal to tilt toward Seoul. Should
Washington and Seoul decide to step up pressure on their own, they could
expect a backlash of renewed backing for Pyongyang from both Moscow and
Beijing, whose actions would be influenced by views of the desired regional
security balance and the ideal process for shaping the way reunification
proceeds or is prevented. Given similar reasoning in Beijing and Moscow
today and during the Cold War about the importance of North Korea, we
can expect that they will, at a minimum, revive the virtual triangle that had
survived until the end of the Cold War. Should Sino-Russian relations con-
tinue to strengthen as their tensions with the United States intensify, then
even stronger support for North Korea is likely to follow. Countering the US-
Japan-ROK alliance triangle could appear, a northern alliance triangle—per-
haps, a “virtual triangle” as during the Sino-Soviet split when direct coordina-
tion between the two great powers was absent, but, no less likely, an active
triangle involving the close consultation of these powers on geostrategic and
geoeconomic developments along their shared border with a country mean-
ingful for national interests and identities. Secondary clashes in interests and
identities should not be exaggerated to obscure the powerful forces driving
Beijing and Moscow closer and, eventually, to jointly support Pyongyang.
NOTES
1. Gilbert Rozman, The Sino-Russian Challenge to the World Order: National
Identities, Bilateral Relations, and East vs. West in the 2010s (Washington,
DC and Stanford, CA: Woodrow Wilson Center Press and Stanford
University Press, 2014); Gilbert Rozman, “Asia for the Asians: Why
Chinese-Russian Friendship Is Here to Stay,” Foreign Affairs, November
3, 2014; Gilbert Rozman, “The Intersection of Russia’s ‘Turn to the East’
and China’s ‘March to the West,’” Russian Analytical Digest, no. 169 (June
30): 6–8; Gilbert Rozman, “Chinese Views of Chinese-Russian Relations
and the U.S. Pivot,” in Stephen Blank, Alexander Lukin, and Gilbert
Rozman, Uneasy Triangle: China, Russia, and the United States in the
New Global Order (Washington, DC: Center on Global Interests, October
2015), 19–26; Gilbert Rozman, “Russia’s Reassessment of the Korean
314 G. ROZMAN
Peninsula,” International Journal of Korean Unification Studies 24, no. 2

(2015): 41–70.
2. In The Asan Forum 3, no. 4, Alexander Lukin, “Russia, China, and the
Emerging Eurasia,” and the continuation of “Alternative Scenarios: the Sino-
Russian-North Korean Northern Triangle” by Sergey Radchenko and me.
3. Bonnie S. Glaser and Yun Sun, “Chinese Attitudes toward Korean
Reunification,” International Journal of Korean Unification Studies 24,
no. 2 (2015): 71–98; Cheng Xiaohe, “Chinese Strategic Thinking
Regarding North Korea,” The Asan Forum 1, no. 2 (2013); Cheng
Xiaohe, “South Korea’s Foreign Policy Options—Option 4: Resuming the
Six-Party Talks,” The Asan Forum 3, no. 3 (2015).
4. See “Country Report: China” and “Country Report: Russia” in successive
issues of The Asan Forum, where articles discussing North Korea are reg-
ularly presented.
5. Gilbert Rozman, Northeast Asia’s Stunted Regionalism: Bilateral Distrust in
the Shadow of Globalization (Cambridge: Cambridge University Press, 2004).
6. Gilbert Rozman, Strategic Thinking about the Korean Nuclear Crisis: Four
Parties Caught between North Korea and the United States (New York:
Palgrave MacmIllan, 2007, rev. ed. 2011).
7. Iurii Belobrov, “Geopoliticheskie ambitsii i intrigi SShA v ATR,”
Mezhdunarodnaia zhizn’, November 2015.
8. See writings by Valerii Denisov, Alexander Zhebin, Georgy Toloraya, and
Alexander Vorontsov.
9. Gilbert Rozman, Misunderstanding Asia: International Relations Theory and
Area Studies over Half a Century (New York: Palgrave Macmillan, 2015).
10. Thomas J. Christensen, The China Challenge: Shaping the Choices of a
Rising Power (New York: W.W. Norton & Co.), 227.
11. Ibid., 258, 271–277.
12. See the coverage in “Country Report: Russia” and “Country Report:
China” updated bi-monthly in The Asan Forum.
13. Andrea Chen, “China Shifts Focus in North Korea to Regional Stability as
Denuclearisation Takes Backseat,” South China Morning Post, October 12,
2015.
14. Georgy Toloraya, “Korean Security and Unification Dilemmas: A Russian
Perspective,” Korea Economic Institute of America, Academic Paper Series,
June 11, 2015.
INDEX
A Asia-Pacific Economic Cooperation

Abbott, Tony, 18 (APEC) summit, 15, 18, 22, 65,
Abe, Shinzo, 14–15, 22–24, 119, 205, 209, 218
160–161, 205 Asia-Pacific Europe Meeting
ADIZ, see Air Defense Identification (ASEM), 158
Zone (ADIZ) ASW, see Anti–submarine warfare
Afghanistan, 29, 113 (ASW)
AIIB, see Asian Infrastructure “Axis of evil” speech, 3
Investment Bank (AIIB)
Air Defense Identification Zone
(ADIZ), 99 B
Air defense systems, 41–42 Batbayar, Nyamjavyn, 138
Air Sea Battle counterstrategy, 36, Batchimeg, Migeddorjiin, 136
37 Battulga, Khaltmaagiin, 129, 138
Altankhuyag, Norovyn, 118, 120, Bayar, Sanjaagiin, 118
132, 138 Berdimuhammedow,
Anti-ship cruise missile systems Gurbanguly, 133
(ASCMs), 43 Berlusconi, Silvio, 64
Anti-submarine warfare (ASW), 41, Bilateral agricultural projects, 19–20
43, 44 Blue Stream, 84
supersonic missile, 45 Borodavkin, Alexei, 284
APEC summit, see Asia–Pacific Bowring, Phillip, 103
Economic Cooperation (APEC) Brezhnev, Leonid, 76, 113
summit death of, 268
Arms transfers to China, 40–46 BRICS, 78, 88–89
Asian Infrastructure Investment Bank BRICS Development Bank, 178
(AIIB), 39, 135, 147, 177 Bush, George W., 64, 113

https://doi.org/10.1007/978-981-10-3144-1
316 INDEX
C crisis, 93–94
Cambodia, 29 Mongolia reaction to, 128–131
Castro, Raúl, 133 Russian annexation of, 94, 101,
Central Asia 102, 128
defense cooperation in, 32 Cuban missile crisis, 285
institutional and bilateral linkages
to, 16
Cha, Victor, 287
Chechnya, 30–31, 103 D
Chemezov, Sergey, 70 Democratic People's Republic of
Cherkizovskii market, 21 Korea (DPRK), 242, 254–255,
China, 14, 15, 19, 20–22, 28, 31, 34, 258–260, 267
61, 71, 76–81, 175–176, Democratization, 80
228–229, 248, 250, 293, 301 Deng Xiaoping, 69
anticorruption campaign in, 21 Denisov, Andrei, 67
arms trade, 35–36, 40–47, 70 Denisov, Valerii, 5, 273, 309
economy, 6, 84–85, 197, 215 Denuclearization, 241, 246, 286, 303
food security strategy, 197 Dongbei-RFE economic
intellectual property agreement, 40 integration, 218, 219
labor migration, 228 Dvorkovich, Arkadi, 68
military, 23, 34, 36, 70–71
nationalism in, 20, 59–60, 241, 304
natural resources and energy, 23–24
China National Petroleum E
Corporation (CNPC), 196 Eastern Economic Forum (EEF), 205,
Chinese investments 218
attraction of, 231 Eastern Petrochemical Refinery, 100
informal; limits on, 65; restrictions Eastern Siberia, 13–14, 16, 39, 65, 69,
on, 196 202, 219, 231, 234, 302
into infrastructure, 65 East-Siberia Pacific Ocean Pipeline
in Russia, 201 (ESPO), 100, 217
Russian; Far East, 236; strategic EEF, see Eastern Economic Forum
investment projects and, 222 (EEF)
Chirac, Jacques, 64 EEU, see Eurasian Economic Union
Clinton, Bill, 290 (EEU)
CNPC, see China National Petroleum Elbegdorj, Tsakhiagiin, 127–128,
Corporation (CNPC) 131, 133–136, 139, 152,
Cold War, 1, 20, 61–62, 245, 275 179–181, 184
triangular barrier of, 303 foreign policy, 137
Color revolution, 14, 20, 82, 311 Enkhbayar, Nambaryn, 113, 116–118,
in Georgia and Ukraine, 64 131, 150
Crimea, 20, 71, 72 Enkhsaikhan, Mendsaikhany, 128
INDEX 317
ESPO, see East–Siberia Pacific Ocean I

Pipeline (ESPO) IAEA, see International Atomic Energy
Eurasian Economic Union Agency (IAEA)
(EEU), 16–19, 63, 83, 96, 205, ICBC, see Industrial and Commercial
215, 231 Bank of China (ICBC)
Eurasianism, 13, 14, 17 IMAR, see Inner Mongolia
Eurocentrism, 61–63 Autonomous Region (IMAR)
European Commission, 63 Industrial and Commercial Bank of
European Union, 85 China (ICBC), 183
Inner Mongolia Autonomous Region
(IMAR), 180
International Atomic Energy Agency
F (IAEA), 307
Far East development strategy, 219 Iraq, 113
Federal'naya Sluzhba Bezopasnosti invasion of, 3, 305
(FSB), 69 ISIS, terrorist threats of, 88
Fisher, Richard, 43 Iskander missile, 45
Foreign Intelligence Service (SVR), 65 Ivanhoe Mines, 117, 120
FSB, see Federal'naya Sluzhba Ivanov, I. S., 269
Bezopasnosti (FSB) Ivashov, Leonid, 271
G J
Galsansukh, L., 138 Japan, 2, 6, 243
Galushka, Aleksandr, 289 economy, 15, 23
Gazprom, 66, 72, 97, 100, 196 nuclear energy, 211
Georgia, 101 3/11 tsunami, 15
color revolutions in, 64 Japan-North Korean normalization
German model of talks, 152
absorption, 247–248 Jiang Zemin, 64
Glaser, Bonnie, 301 Joint Agreement, February 2007, 3
Global arms markets, 33 Joint research & development, 46–47
Global credit-crunch of 2008–
2009, 16, 62
Golodets, Olga, 67 K
Gorbachev, Mikhail, 29, 69, 268–269 Kashin, Vasiliy, 70
Gulf War, 29 Kazakhstan, 18–19, 103
Kerry, John, 279
Khalkhin Gol battle, 133
H Kim Jong-il, 19, 96, 270, 274, 285,
Hu Jintao, 63–64, 98 290, 291
318 INDEX
Kim Jong-un, 7, 152, 247, 274, 288, Military Cooperation Plan, 32

291, 301, 307, 308, 311 Military exercises
Korean War, 2, 28, 148, 244, Khaan Quest, 131
245–246, 304 in Mongolia, 131
Northern Triangle during, 304 Sino-Russian, 36, 47–48
Kyrgyzstan, 159, 160 South Korean, 305
Vostok, 95
Millennium Challenge Account
L (MCA) program, 150, 153
Lada-class submarine, 43–44 Millennium Challenge Compact,
Lavrov, Sergei, 67, 98, 102, 276, 279 113
Lee Myung-bak, 153 Millennium Challenge Corporation
Li, Keqiang, 177 (MCC), 113, 114
Liberal theory, 304 Ministry of Economic Development
Li Hongzhang, 241 and Trade (MEDT), 66
Liquefied natural gas (LNG), 66, 211 Mongolia, 1, 113–115, 118–122,
Liu Jianchao, 293 127–128, 130–138, 149–154,
Liu Yunshan, 309 157–168, 181–185
LNG, see Liquefied natural gas (LNG) in China's periphery
Long-range anti-ship missile diplomacy, 175–186
(LRASM), 42 Chinese foreign direct investment
Lukashevich, A. K., 275 (FDI) to, 183
Lyukanov, F. A., 77 democracy, 131, 133, 184
economic growth, 113, 119, 140,
162
M Economic Partnership
Makienko, Konstantin, 33 Agreement, 150
MCA program, see Millennium Foreign Policy Concept, 159
Challenge Account (MCA) NAPCI concept, 153
program National Security Concept, 159
MCC, see Millennium Challenge Third neighbor policy, 111, 128,
Corporation (MCC) 150, 159, 185
MEDT, see Ministry of Economic railroad, 112–115, 138
Development and Trade (MEDT) reaction to Crimea, 128–131
Medvedev, Dmitry, 15, 93, 97, 98, relations with Pyongyang, 151
115 Mongolian National Democratic
2011 summit, 19 Party, 128
Meng Jianzhu, 180 Mongolian People's Revolutionary
Merkel, Angela, 65 Party (MPRP), 118
Mikheev, Vasilii, 274 Morgulov, Igor, 67, 276
INDEX 319
N P
NAPCI, see Northeast Asia Peace and Park Geun-hye, 5, 14, 15, 19, 250,
Cooperation Initiative (NAPCI) 288, 308
Narantugs, L., 129 Eurasian Initiative, 151, 310
Naryshkin, Sergei, 132 Patrushev, Nikolai, 132–133
National Development and Reform PBOC, see People's Bank of China
Commission, 177 (PBOC)
NATO, 14, 31, 64, 86, 159, 169 Peace Corps programs, 161, 183
enlargement, 32, 86 Peace Mission exercises, 35, 47
Nazarbayev, Nursultan, 94 in Kyrgyzstan, 48
Nemtsov, Boris, 272 People's Bank of China (PBOC), 182
9/11 attack, 64 Political development bank, 72
Nixon, Richard, 83 Popov, Evgeniy, 67
Non-Proliferation Treaty, 254 Power of Siberia gas pipeline, 72
Northeast Asia Peace and Cooperation Putin, Vladimir, 5, 13, 22, 24, 39, 60,
Initiative (NAPCI), 151, 308 62, 65–66, 70, 71, 82, 113, 115,
Northern Tier, 1–9 131–133, 194–195, 229, 269,
Northern Triangle, 304 301
North Korea, 1–2, 5, 253, 261–262, anti-American dimension of, 64
270–274, 287, 291–294, 302 on economic regionalism, 302
domestic stability in, 305, 308–309 Eurasian Economic Union (EEU)
nuclear weapons, 3, 152, 245, 249, initiative, 16–17, 215
272, 274–276, 290 grand strategy, 63
sanctions, 253–254, 256–261, 292 pivot to Asia, 285
Sino-Russian-North Korean Six-Party Talks, 302
Triangle, 311–312 support for Enkhbayar, 118
in Sino-Russian relations and visit to Seoul, 15
identities, 301–307
O R
Obama, Barack, 18, 24, 102, 119, Raikov, Iurii, 23–24
279, 303 Realist theory, 304
and Ukraine, 14, 82–83 Regional authorities, Russia, 68–69
One Belt, One Road Regionalism, 2, 17, 18, 302
(OBOR), 175–179, 182, 184, RFE, see Russian Far East (RFE)
216 Rogozin, Dmitry, 67, 70, 285
Organization for Security and Rosneft, 21, 66–68, 72, 96, 99–101,
Cooperation in Europe 167, 202, 203
(OSCE), 132, 150 Rottenberg, Arkady, 66, 72
Otgonbayar, Gombojavyn, 129 RusHydro, 83
320 INDEX
Russia, 13–14, 16–20, 29, 59, 67–69, Russo-Vietnamese energy projects, 97

101, 229, 286–288 Russo-Vietnamese military
arms trade, 31, 40, 46–47, 70–71 cooperation, 97
Asian policy, 13, 115, 221–222,
276–277 S
border deployments, 29 Sechin, Igor, 67
China-watching community in, 62 Senkaku (Diaoyu) Islands, 98
Chinese military threat to, 71 Seychelles islands, 98
democracy issues in, 94 Shoigu, Sergey, 70
economy, 6, 16, 18, 22, 39, 77, Shuvalov, Igor, 68
195, 276, 284, 310 Silk Road Economic Belt
election process, 68 (SREB), 16–18, 39, 83, 87, 121,
geopolitical foundations of, 76–81 130, 205, 215, 216, 231
sanctions, 20, 24, 71, 274 Silk Road Fund, 177, 178
Russia-China Business Council Silk Road projects in Asia, 96
(RCBC), 71–72 Singapore Interbank Offered Rates
Russian Far East (RFE), 13–14, 18, (SIBOR), 182
24, 193–211, 215–237, 302 Sino-Japanese War, 242
agriculture and industry, 235–237 Sino-Mongolia cross-border trade
China relations, 195–199, 205–206, zone, 180–181
231, 233, 236 Sino-Mongolian Expo, 181
commodity prices, 204–205 Sino-Russian defense
economy, 194, 226, 231, 232 cooperation, 27–40
foreign investors into, 233 arms trade, 28, 30, 32–33, 40–47
population, 225 joint military exercises, 36, 47–48
regional budgets, 226 Sino-Russian-North Korean
structural reforms, 199–200 Triangle, 6–8, 311–312
transport, 234–235 Sino-Soviet split, 2, 304
Russian International Affairs Sino-US normalization, 304
Council, 225 Six-Party Talks, 4, 6, 7, 253, 254, 277,
Russian Railways, 131 279, 302, 307, 308, 311, 312
Russian strategic thinking, 267–274, resumption of, 309
277–280 suspension of, 284
approaches to East Asia, 276–277 Sochi Olympics, 19
nuclear weapons, 274–276 Socialism, 267–268
Russian submarine technology, 43–44 South Korea, 1, 2–4, 148, 151, 152,
Russian-Ukrainian crisis, 129 261, 268–277, 303–304
Russo-Chinese Fund for Agriculture economy, 17, 269
Development, 197 military, 3, 305
Russo-DPRK Soviet-North Korean treaty of
rapprochement, 283–284 friendship, 268
origins, 284–286 Sovremenny-class destroyers, 32
INDEX 321
Special economic zones, 195 alliance, 2, 6, 13, 24, 304, 310

Stalin, 268 Pacific Command, 150
State-owned enterprises (SOEs), 60, pivot to Asia, 37, 147
70, 71–73 policymakers, 152
St. Petersburg Economic Forum, 138 sanctions, 3, 71
Syria strategy of rebalancing, 249
crisis, 132 support for Mongolia's
UN sanctions against, 28 democracy, 16
Taiwan policy, 31
UN Security Council (UNSC), 64, 78
T sanctions, 245, 246, 253
Taisaev, Kazbek, 271 Ushakov, Yuri, 65
Taiwan, 31
precision strikes against, 34
Tavan Tolgoi, 119–120, 138–140 V
THAAD (Terminal High Altitude Vietnam, 29
Area Defense) missile military unification, 246, 247
defense, 210 Vnukov, K. V., 277
Thanh, Phung Quang, 97 Vorontsov, Aleksandr, 273, 289
Tiananmen crisis, 29, 70, 82 Vostok military exercises, 95
Timchenko, Gennady, 66, 71, 72
Toloraya, Georgy, 6, 19, 273, 289,
310 W
Trans-Mongolian railroad, 112–115 Wen Jiabao, 219
Transneft, 21, 72
Trans-Pacific Partnership (TPP), 147 X
Trans-Siberian railway, 7 Xi Jinping, 17, 18, 21, 39, 65, 94,
Trenin, Dmitry, 87 128, 130, 152, 175, 179–181,
Trutnev, Yuri, 68, 69, 194–195 229, 279, 290, 301, 308, 309
Tumen River Area Development Six-Party Talks, 302
Program, 2, 218, 302 visit to Mongolia, 134–135, 161
Xing Haiming, 183, 184, 196
U
Ukraine Y
color revolutions in, 64 Yakunin, Vladimir, 116, 138–139
diplomatic perspectives, 149 Yellow threat, 62
integrity of, 81, 101 Yeltsin, Boris, 31
Ukraine crisis, 24, 41, 61, 132, 305
and Russo-Chinese relations, 81–84
Ulaanbaatar Initiative, 153 Z
United Nations (UN), 28, 150, 292 Zhang Dejiang, 179
United States (US), 94, 98, 147, 290 Zhang Gaoli, 68

International Relations and Asia's Northern Tier Sino-Russia Relations, North Korea, and Mongolia by Gilbert Rozman, Sergey Radchenko PDF

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International Relations and Asia's Northern Tier Sino-Russia Relations, North Korea, and Mongolia by Gilbert Rozman, Sergey Radchenko PDF

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Asan-Palgrave Macmillan Series

Asan-Palgrave Macmillan Series

Library of Congress Control Number: 2017949526

© The Editor(s) (if applicable) and The Author(s) 2018

Cover illustration © kosmozoo / Getty Images

Printed on acid-free paper

This Palgrave imprint is published by Springer Nature

1 Introduction: Asia’s Northern Tier 1

Part 1 Sino-Russian Strategic Relations

2 The Russian Pivot to Asia 13

3 Evolution of Sino-Russian Defense Cooperation since

4 Russia’s Policy Toward China: Key Players

5 Russia, China, and the Emerging Greater Eurasia 75

6 Russo-Chinese Relations in Strategic Perspective 93

Part 2 Sino-Russian Relations and Mongolia

7 Sino-Russian Competition in Mongolia 111

8 Mongolia Hangs in the Balance: Political Choices

9 A Stronger Korea-Mongolia Link in a Changing

10 Mongolia’s Dilemma: A Politically Linked, Economically

11 Mongolia’s Place in China’s Periphery Diplomacy 175

Part 3 The Russian Far East and Northeast China

12 The Russian Far East: Positive Scenarios and Negative

13 Northeast China and the Russian Far East: Positive

Part 4 Strategic Thinking toward North Korea

14 Chinese Strategic Thinking Regarding North Korea 241

15 China’s Interests, Actors, and the Implementation

16 Russian Strategic Thinking Regarding North Korea 267

17 Making Sense of the Russo-North Korea Rapprochement 283

18 North Korea’s Place in Sino-Russian Relations

Introduction: Asia’s Northern Tier

Gilbert Rozman and Sergey Radchenko

© The Author(s) 2018 1

The US posture toward North Korea has repeatedly been perceived in

THE CHINESE NARRATIVE ON NORTH KOREA IN THE 2010S

as a means to reverse the trend and South Korea’s prospect of achiev-

THE RUSSIAN NARRATIVE ON NORTH KOREA IN THE 2010S

considerable room to boost ties with Pyongyang, using the possibility of

THE SINO-RUSSIAN-NORTH KOREAN TRIANGLE

Beijing have reason to cast doubt on each other’s long-term intentions.

CONTENTS OF THIS VOLUME

3. Georgy Toloraya, “Korean Security and Uniﬁcation Dilemmas: A Russian

Sergey Radchenko is Professor of International Politics at Cardiff University and

Sino-Russian Strategic Relations

The Russian Pivot to Asia

Vladimir Putin’s “turn to the East” (povorot na Vostok) greatly intensiﬁed

© The Author(s) 2018 13

manufacturing hub, transforming its transportation infrastructure to rea-

PAST WELCOMING OF THE RUSSIAN PIVOT

a half century of closing the area, including Vladivostok, to the outside

LOSING FOCUS ON THE IDEAL RUSSIAN “TURN TO ASIA”

many assumed that it would be a counterweight to China’s growing

The “turn to the East” has been subjected to diverse geographical

including Kazakhstan, is compatible with China’s proposal for an FTA of

TARGETING THE KOREAN PENINSULA

paused. With companies weakened by sanctions and zero-economic

reputation from a faulty initial public offering of Rusal aluminum in 2010

RETAINING HOPE IN JAPAN

Putin appreciated Japan’s potential in 2000–2001 when bilateral diplo-

aspirations for Japan are difﬁcult to reconcile. A breakthrough with Japan

Evolution of Sino-Russian Defense

© The Author(s) 2018 27

Scope of Defense Cooperation

collapsing in the early 1960s, leading to a suspension of defense coopera-