Country Report: Russia (January 2020)

An aura of bravado pervaded Russian publications at the end of 2019. Putin had succeeded in diplomacy around the world, reestablishing Moscow as a decisive voice in world affairs. The relationship with China was solid with scant concern and that with the US was indefinitely on the rocks. Strategic stability had again risen to the top of the global agenda, resuscitating an environment in which Washington had to deal with Moscow as an equal, this time with Beijing a third force. Completion of the Power of Siberia gas pipeline gave new reason to boast of ties with China, just as the Sino-US trade war, whatever the short-term ups and downs, reassured authors that this relationship would remain confrontational to Russia’s advantage. Moscow and Beijing were taking charge on North Korea, siding with Pyongyang on the need to ease sanctions and awaiting Trump’s next move. The China-Japan-ROK summit in late December had positive implications for Moscow in weakening the US position in the region. There was no sign of dark clouds on the horizon, as both the US and China appeared unidimensional in such narratives.

External success but internal challenges

Konstantin Kosachev in Rossiiskaya Gazeta on December 31 summed up 20 years of Putin’s foreign policy with the heading “Russia is changing the world.” He traces an evolution from first restoring Russia as a sovereign great power, then strengthening its international position, and finally going on the initiative to advance the country’s interests. A big step was the October 2004 border agreement with China, despite strong opposition in the State Duma when 80 deputies voted against it. This led to unprecedented trust and the 2015 agreement to dock the EEU with the Silk Road Economic Belt. Putin later proposed the concept of a Greater Eurasian partnership without Russia losing its place as an organic part of greater Europe. Without any economic breakthrough Russia has risen in the 2010s to what has been called the second most influential world power. The G7 is diminished without Russia. Institutions where the influence of the West is limited are gaining a bigger role. Without stressing the Sino-Russian relationship, this homage to Putin by a leading official is testimony to newfound confidence in Russia’s global authority.

Sergey Karaganov on December 26 in Rossiiskaya Gazeta wrote about foreign policy on the eve of a new decade, calling the 2010s the most successful period since at least the 1970s in the USSR, when it was at the peak of its foreign policy influence and military security. Russia stopped the expansion of Western alliances, restored Syria from the color revolutions, forged a de facto alliance with China, and became the center of a new, Greater Eurasian space with a Russian Eurasian identity, while preserving its own European culture. It has revived its military, hoping to restore military superiority, while destroying the foundation of five centuries of Western domination. It enabled tens of country to have freer, more sovereign development. A window of possibilities has been created for Russia’s development, but already for 3-4 years Russia has failed to use it, given internal stagnation and the lack of objectives of national development, warns Karaganov. Many now think Russian will weaken due to economic-technological as well as demographic factors. Two cyber and technological platforms exist—a US one and a Chinese one (West and East). Russian hopes to create a third one have been dashed. Disappointment is building in the population, compensation for which is becoming harder and harder through foreign policy successes and propaganda. The threat of war is increasing. China needs Russia now, but its reasons for taking Russian interests into account could diminish objectively. The danger of falling behind in science and technology is growing, one reads.

In the new decade problems must be resolved. Russia has a small market, and it is behind the West in all but a narrow group of critical technologies, endangered by US sanctions policies. Russia has to turn to the friendlier East without excessive dependence on it. There is no big project around which to unite the elite. Former international institutions are weakening. The world economy faces crisis over protectionism. Russia must establish itself as the greatest supporter of peace, defender of sovereignty, and backer of free choice for countries against hegemony. Simultaneously, a great national project “Siberia” could encompass all Siberian regions, not only the Far East. The idea of the “turn to the East” needs to be fleshed out; if not it is bureaucratic and is slowing down or could be at a dead-end. Carefully draw closer to China and balance it with institutions of Greater Eurasia. If this does not happen, if Beijing does not want it, some cooling of relations is almost inevitable, even if we must keep friendly relations. Karaganov concludes with calls for fighting internal problems inside Russia. Grandiose in his thinking, Karaganov mixes heady optimism with a dose of steely warnings.

Strategic stability

On November 12 Mezhdunarodnaya Gazeta carried an exchange on the new understanding of strategic stability, which was based on presentations in May at the Foreign Ministry. Karaganov led the way followed by Dmitrii Suslov. Stressed was the need for: a national idea or Russia would perish; no longer relying on the US for intellectual formulations from which mistakes were drawn in the 1970s-80s in Moscow; not repeating past concentration on how to control strategic weapons, which was misplaced, taking seriously the rising threat of military conflict among the great powers as the quality of the political elite in the leading Western country is falling; and developing new thinking on how to prevent such a confrontation. Now there is no political will or methodology, he adds, for a new strategic agreement in a transformed military-technological situation. The primary threat is the escalation of a non-nuclear clash into a nuclear one. The rules of the game need to be addressed on cyber, military behavior in a regional theater, and resolution of grey zone problems—through multilateral dialogue on strategic stability and bilateral talks on the most dangerous weapons of escalation. Karaganov concludes that Russia has ended the 500-year world reign of the West in politics, economics, and culture. Russia along with the Soviet Union stopped being part of the West, changing the fate of human history. He concludes the two biggest mistakes in the history of the 20th century were Hitler’s attack on the Soviet Union and the West’s refusal to admit Russia into NATO.

Also in the article was commentary from Vasily Kashin turning the focus to China, emphasizing how it weighs heavily on US behavior. Only once in 2004 has China declared the size of its nuclear arsenal, and today there is no reliable information. Yet on parade on October 1 were three families of ICBMs, now being simultaneously produced and improved. No other power has that. Past declarations by China of an intention to keep its nuclear weapons to a minimum do not correspond to reality, given how much effort has gone into its ICBMs. Kashin observes that we have no sense of the limits and goals of China’s build-up. China says it will not enter talks until it has reached the right level of development, but it has not said what that is. The US behavior is heavily influenced by China’s, not wishing to tie its own hands, and that was probably the reason the US left the INF treaty. Hypothetically, this will permit the deployment of intermediate-range US rockets to Japan or South Korea; they will soon be in Japan, Kashin said.

Sino-Russian relations

In on December 2 an article appeared on the “Power of Siberia,” which opened for operation on December 2, as an historical project. During an interview, Mikhail Krutikhin from RusEnergy said that next year’s deliveries to China of natural gas will be 5 billion cubic meters, and the anticipated 38 billion per year will require ten more years as well as the inclusion of the Kovytinskoe deposits in Irkutsk and Iakutiia, to be connected by a 900 km extension of the pipeline—and that is assuming the Chinese still need the supplies, which Krutikhin doubts. The Sakhalin-Khabarovsk-Vladivostok pipeline of 2011 has not succeeded, since there has not been enough gas or enough demand, and the fate of a show project (pokazukha) awaits the Power of Siberia too. It is not acknowledged as a commercial project, bringing profit to Russia. Why then have Gazprom stocks risen of late? It just wasted its money, never to receive profits from this project. Krutikhin’s institute examined the project and concluded that there would be losses.

When the “contract” was signed in May 2014 it was not really a contract but a memorandum, and when it was said that the Chinese would give $20-25 billion for the construction, there was no such promise. In the end, nothing was given. Gazprom, using taxpayer money, paid everything. The pipeline is not needed, and only the companies constructing it benefited, owned by Rotenberg and Timchenko. Only the leaders of China were left smiling. They are the only buyers—a monopsony—and can dictate conditions. Russia cannot change anything. China dictated conditions for oil from Rosneft’, getting a discount that could not be rejected. A Chinese official explained two years ago that if a military situation in the Pacific Ocean does not permit natural gas deliveries in the necessary quantity, then this reserve variant would be useful. Reducing its imported gas volumes, China is not in need of the new gas, but it is convenient at Russia’s expense.  China has already agreed to two projects for LNG in the Arctic as partners, not purchasers, under a special tax regime that will not pay taxes to Russia for 12 years. Costs are kept secret, and access to the construction areas is tightly restricted. One cannot know how much is being spent. China is moving slowly to transit from coal to gas, and its economy is slowing. It is building LNG terminals in the regions where the Power of Siberia gas will reach, enabling it to dictate prices and, if relations worsen, to apply political pressure.

On December 6 Alexander Gabuev wrote in Kommersant about what awaits after the gas pipeline with China has opened. He asked how much would Gazprom have gained if the 2006 memorandum with China had taken effect and a pipeline had been finished in 2012, but he finds the timing unexpectedly favorable now due to a combination of internal and external factors. China has long tried to raise the share of gas in place of coal, has been pressing for environmental reforms, and is persistent about increasing gas imports. This leads China in a deal with the US to quiet the trade war to import more agricultural products and LNG. It cannot keep subsidizing gas prices, given the difference between domestic and world prices, since this is becoming too costly. It needs to deepen market reforms, which would make the Power of Siberia gas more advantageous and even raise realistic possibilities for a new pipeline across Manchuria.

Vladimir Egorov in November’s Mezhdunarodnaya Zhizn’ wrote about the historical-cultural foundation for Russia-China cooperation, observing that such factors are often overlooked in research. In the case of Sino-Russian relations and Russia’s turn to the East, this is the case, and some warn that Russia is making a strategic mistake that will lead to one-sided dominance by China; others insist that Russia and China historically were completely different civilizations. Yet Egorov finds the obschina (strong village community)—a tradition of collectivism—in common. Individualism was strangled, private property evolved along a different vector, the Chinese economic miracle drew on consolidation of people around tasks strengthening the state with ethnic groups successfully brought together, and Russia shares in the conservative character of political modernization preserving traditions as the foundation of social development. Unlike the depiction in Western studies of modernization as overcoming traditions, Russia has kept Christian values in opposition to secularization, argues Egorov. Chinese and Russians are less ready to see the political process through the prism of formal procedures, accepting traditional authority structures and not authority as a result of free elections. This effort to find strong commonality between Confucianism and Russian traditions with both shaping outcomes that bring China and Russia together and serve as a basis for Eurasian commonalities flies in the face of efforts 50 years earlier in Russia to prove that China’s clashing traditions led to the Sino-Soviet split and to a distorted path of historical development. History serves today’s ideology.
Whereas the Western model failed in Russia in the 1990s, China succeeded in reforming socialism and showing that the Western model is not universal. Russia is also proving that with its return to a national orientation accepting of market forces but overcoming their socially destructive effects with a strong state role. This is the obvious conclusion drawn from analogies.

Sino-US relations

On December 15 carried an article on the cold war between the US and China, charging that the US with its tariffs has attacked China, much as invaders who crossed the Great Wall or Germany attacked the Soviet Union without warning in 1941. The aim is to contain China, which is shared by Republicans and Democrats with no similar unity in China on what to do, given close ties to the American market. Yet the US approach to China reminds us of the Cold War against Russia, and Russian and Chinese bombers carrying nuclear weapons in July flew by Japan and South Korea, where there are US bases. The two are drawing closer militarily as Putin authorized the sale to China of the super-secret technology of the early warning missile defense system. Strategic cooperation accompanies the Power of Siberia gas supplies and the bridge for automobiles across the Amur. Chinese are not very militaristic, and they would not have pushed military cooperation with Russia if they had not perceived a direct security threat, as in the US decision to leave the INF treaty, which will lead to rockets aimed at China in Japan, South Korea, and islands in the Pacific, and a repositioning of US troops. Chinese experts are commenting on the possibility of a major US-China military confrontation. The US is driven by ideology, which excludes the possibility of peaceful coexistence. China’s successful model is an existential threat to the liberal-democratic model. US support for forces in Hong Kong and Taiwan has to be seen through an ideological prism. The author cites as examples of the ideology racist actions from the end of the 19th century toward Chinese. The conclusion is that the US cold war against China will be crueler than the one against the USSR, since it is civilizational and racist in its essence.

Alexander Gabuev in Kommersant on November 8 wrote about the new stage in Sino-US confrontation. The text of an agreement was almost ready in mid-October, putting off later stages of negotiations and not resolving their fundamental contradictions. Xi Jinping would be able to quiet exporters and counter somewhat a halting economy, and Trump would calm the markets and farmers before the elections. But then the APEC summit was cancelled, and talks were reopened. Beijing saw any delay as positive; the closer to the new year, the more pressure on the White House. Any internal deadline for reaching an agreement with China will embolden the Chinese to wait and not make concessions, but this may be an exception due to the utility for Trump of appearing tough on China to sway public opinion.

North Korea

In Rossiiskaya Gazeta Oleg Kir’ianov on December 27 discussed Sino-Russian thinking on North Korea. Seoul is stressing the importance of diplomatic efforts with the DPRK and an interim agreement between Washington and Pyongyang with the goal of moving toward a compromise, which parallels what the joint Sino-Russian proposal of December 16 suggested for loosening sanctions and resuming the negotiating process. Seoul has indicated that it is studying this proposal carefully. An anonymous ROK official indicated that many South Korean offices are ready to support this proposal, as a way to avoid a return to the situation in 2017, but he added that Seoul has obligations to the United States. South Koreans are especially interested in Russian and Chinese proposals for developing rail and auto infrastructure in North Korea, but UN sanctions and the US stance stand in the way. 

On January 4 in NEO Konstantin Asmolov wrote about the attempt by Russia and China to relax what are called “anti-North Korean” sanctions, pointing to their proposal to the Security Council on December 16. The resolution claimed that the DPRK has fulfilled its obligations in accord with the UN resolutions. It specifies removing prohibitions on the export of marine products and textiles and on the use of North Korean workers abroad. The sanctions have hit the civilian sector and not spheres supposedly connected to the rocket and missile programs. Equipment useful for building infrastructure but not for nuclear and rocket programs should be removed. Projects for inter-Korean cooperation should be excluded from sanctions, especially those tied to modernizing the transportation network. Sanctions affecting the lives of North Koreans need to be removed.

At the same time the two sides supported North Korean-US dialogue to reduce military tension. Steps for a formal declaration or peace agreement to end the Korean War are noted with the explanation that the South Korean press did not mention them. Moscow and Beijing also called for resumption of the Six-Party Talks or other multilateral consultations. The media in South Korea is accused of distorting the appeal, as if it was for removing all sanctions against the DPRK. In fact, this appeal was anticipated at the end of 2018, when Russian and Chinese representatives spoke of relaxing sanctions to the degree the DPRK changed its behavior. At the UN in December the Russian representative said that the path to denuclearization should not be through sanctions but through strengthening confidence measures. The current level of sanctions reminds one of an economic blockade. The fate of Otto Warmbier, it is suggested, was decided by the absence in the DPRK of the equipment needed to diagnose his illness and to help get him out of his coma, but medical technology is on the sanctions list. North Korea has already for two years observed a moratorium on nuclear tests and rocket launches, undertaken out of good will. Naturally, sanctions should be eased in this context.

 The way sanctions are perceived by Moscow, Beijing, and Washington is completely at odds. The US aim is to use pressure to bring the economic situation in the country to the point the ruling regime has to shift positions or collapse. The internal political situation in the US is such that opponents of Trump would not accept open concessions. As South Korean media asserted, there was little chance that the Sino-Russian resolution would be accepted, but it demonstrated their serious support for the North. Should the North take “new provocations” and the US and its allies decide to respond with a new wave of sanctions, the article leaves uncertainty about how Russia and China would react except to say we are still at the stage limited to discussion about the level of sanctions pressure. Much may depend on what North Korea does. A nuclear test or ICBM launch could lead to a repeat, but a lesser move, such as the launch of a satellite, might lead the two to vote against a response. This split between with the US on the DPRK could become an important feature of the year 2020.

South Korea

On November 22 Kommersant covered how Russia is winning in the Seoul-Tokyo conflict. Sergei Strokan’ wrote that there is “chemistry” between Moscow and Seoul, that GSOMIA is dead, that the US has failed to revive it, and that Russia will be the alternative source of materials and technology for South Korea. Wrongly concluding that there was no chance of GSOMIA being extended on the eve of its expiration, Stokan’ saw the US upset with the impact on its own security and Japan also warning of bad consequences for security. A source in Seoul is cited as identifying Russia as an alternative supplier if the trade war escalates. Given that Seoul has not joined the anti-Russian sanctions, this involves suggestions of combining Russia’s fundamental technology and South Korea’s designs in commercialization of it. Cooperation with Russia serves the goal of diversification of supplies, which South Korean firms are seeking. Yet Russian experts differ on the possibility of supplying these items needed in Korea. Products are narrowly specialized and produced on order. Time is needed to work out the technology and ensure quality, and Russian equipment is not ready for Korean requirements. Seoul is seeking to press Japan, not turn to Russia. Also, Russia would not find it easy to compete with China on the Korean market, and Russia lacks qualified workers to do so. The article starts hopefully but ends gloomily in a manner that is eerily contradictory after raising hopes for a major breakthrough.

The Sino-Japan-South Korea (CJK) summit

On December 22 Vladimir Skosyrev in Nezavisimaya Gazeta assessed the results of the CJK summit on economic cooperation in East Asia and the prospects for an FTA with more than 10 countries, while in the shadows concern centered on a possible North Korean missile launch. The article reviews foreign coverage of this three-way summit, noting China’s hopes that Japan would stay in the RCEP agreement, as both China and Japan deal with a drop in exports due to the Sino-US trade war. With India declaring it will not join, Tokyo may be next to pull out. Note is taken of China’s disappointment with the US response to North Korea’s freezes, failing to weaken economic sanctions. A way out of the dead-end would be the joint proposal by Russia and China for the Security Council to lessen the sanctions, but the US threatens a veto. South Korea considers that China could play a key role in the resumption of negotiations, but it has yet to respond to Russo-Chinese proposal, while Japan always strongly backs the sanctions. The article offers no challenge to the view that the US is at fault in the talks to date, says little about the CJK economic talks, and leaves in doubt what North Korea’s next steps are likely to be.

On December 25 Kommersant assessed how Seoul, Beijing, and Tokyo are maneuvering on the Korean Peninsula, reflecting on the CJK summit. Sergei Strakhan’ wrote that the main themes in Chengdu were the situation on the peninsula and problems of security in the Indo-Pacific region. The three have taken the initiative on themselves after the US-North Korean dialogue hit a dead-end, aiming to restart talks and end the threat of a hot phase to the crisis. Although two are US allies, now they prefer to unite with Beijing rather than be the US “containment belt” of China. Separate meetings of Abe and Moon with Xi occurred in Beijing. It was a sensation that the center of diplomatic activity in the region had shifted to China for two days, soon after Defense Secretary Esper had visited countries seeking a sharp anti-Chinese turn for “undermining the international order in the region.” Talks in China demonstrate that the US efforts are failing. A new motive for drawing closer to China is the threat of a return of a Korean crisis. Xi stressed how the positions of Beijing and Seoul overlap, and the two should combine forces to renew dialogue. Moon stressed that he sees no threat in China, and, on the contrary, highly values its role in managing matters on the peninsula. It was necessary to remind the Korean leader of the impact of THAAD, seen in China as undermining the strategic balance in the region. Beijing appears to have moved away from attacking the two US allies to trying to draw maximally close to them and turn them to its side. Talks also covered a three-way FTA and RCEP, which is expected to be signed in February. South Korea’s interest is to turn the Indo-Pacific into a zone of free and secure trade, which requires improved Sino-US relations as well as a positive advance in relations with North Korea, explained a Korean official, it was reported.

Oleg Kir’ianov in Rossiiskaya Gazeta on December 26 wrote about Moon Jae-in’s summit with Chinese and Japanese leaders, saying that despite positive official evaluations in Seoul there were diplomatic scandals. Japanese interrupted Moon, not allowing him to finish his talk, and China distorted his remarks. The three-way summit was used as an opportunity for two-way talks. Those between Moon and Abe drew special attention in Seoul, where the leaders sought a way to normalize relations. Unofficial Korean sources said that Japanese later expressed “deep regrets” and insisted that the incident had happened accidentally. In the Chinese Foreign Ministry account of the Moon-Xi meeting, Moon had stated that the situations in Hong Kong and Xinjiang are “exclusively internal matters of China.” However, Seoul quickly declared that this is not what was said. Xi had made the remark, and Moon responded, “Okay, I understand you,’ without speaking further on the issue beyond this polite comment. Seoul is trying to maintain good relations with both the US and China, the author adds, keeping its neutrality in disputes, and only clarifying when China has misled people, as if it was trying to damage ROK-US ties, especially when the Japanese media appeared quick to find Moon leaning to the Chinese side. Seoul handled this incident more quietly than the one with Japan, only mentioning that it would be raised with Beijing at a suitable time.

Hong Kong

Ol’ga Zav’ialova on November 26 in Nezavisimaya Gazeta wrote about attitudes in Hong Kong on the PRC, stressing the domination of Cantonese as a factor in a separate identity as well as the long-standing role of English as the language for official documents, business, and science. The fact that Cantonese is incomprehensible to Mandarin speakers without a translator must be considered, too. When the 1997 reversion occurred, only one-fourth of the people knew the common language. One country, two systems left two written languages and three spoken ones, even as the common language was introduced in schools, as about 1.1 million arrivals from continental China have settled in Hong Kong. Yet Cantonese prevails as an oral language. When rumors spread in 2010 that Guangdong’s Cantonese TV station would be curtailed, protests erupted in Guangdong. Even so, the common language is eclipsing Cantonese. Nearby Hong Kong in Shenzhen the common language dominates. Social status is linked to its use. The Internet and inter-regional migration dialects are losing ground in the PRC. If the government eased its official pressure to use the common language, this might change for fear of localism and separatism.  The article implies that language defensiveness is a force driving the identity gap with the PRC and, as a result, the demonstrations In Hong Kong but without real evidence.