Carnegie Endowment for International Peace
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China has no port of its own on the Sea of Japan, and Russia could use this to its advantage. But for Russia to attract Chinese cargo, it is essential to simplify customs controls and seriously invest in roads and ports. Considering that both of these factors are Russia’s responsibility, the completion of the Primorye transport corridors has been stalled for a long time.
The Kremlin is still anxious about the expansion of Chinese influence in Central Asia, which is why it has turned the Shanghai Cooperation Organization, set up in order to work out widely accepted rules of the game for Eurasia, into a useless bureaucracy. Now, Beijing can develop relations with other SCO members without worrying about what Moscow thinks.
The recent Belt and Road Forum for International Cooperation that took place in Beijing is China’s claim to a more prominent role in determining the rules of the game on a global stage. But in the unpredictable world of Chinese politics, the forum was as much about President Xi Jinping’s standing and an attempt to curtail speculation that he is not in total control.
It will take years for Russia to increase trade with China. To do so, Russia will need to strengthen its institutions, overcome non-tariff barriers to the Chinese market, and enhance its reputation among Chinese investors.
Transporting Chinese goods to Europe by rail is far less profitable than sea transport, yet China subsidizes it to achieve its geostrategic goal of making a cluster of countries in the wide Eurasian space from China to Europe dependent on the Chinese economy and capital.
There is no reason to expect any serious changes in the Russian economy in 2016. The coming year is likely to see a behind-the-scenes struggle between two special interest groups: those who will profit if industries are nationalized, and those who will benefit from foreign investment.
Turkey is one of Russia’s strongest trade partners. Imposing economic sanctions on yet another country is likely to hurt Russia itself the most.
A new proposal to extend repayment of a Russian intergovernmental loan to Ukraine may ultimately suit all parties.
The 2016 budget openly declares that Russia will not compete with the rest of the world in science and technology—at least not outside the defense sector. It suggests that the Kremlin has chosen to wait for oil and gas prices to increase (regardless of the likelihood of this actually happen) while continuing to support the military-industrial complex.