Argument

Russia Loosens Its Belt

Russia’s foreign minister bowed out of China’s high-level Belt and Road meeting. Is Moscow finally signaling its discontent over the initiative?

The Vladimir Rusanov, a liquefied natural gas tanker ship, arrives in China from Russia
The Vladimir Rusanov, a liquefied natural gas tanker ship, is seen following its arrival in Nantong City, eastern China's Jiangsu province, on July 19, 2018, following its journey from Russia's Arctic Yamal peninsula. AFP via Getty Images

Last month, China held a virtual conference on the Belt and Road Initiative. Hosted by Foreign Minister Wang Yi, the high-level meeting was, in the words of Chinese President Xi Jinping, “an opportunity to discuss a collective response to COVID-19, advance Belt and Road cooperation, and strengthen international solidarity.”

As a testament to the infrastructure and investment project’s clout, the event was attended by ministerial-level officials from 25 countries. Even the director-general of the World Health Organization was present to parrot the party line about turning the Belt and Road Initiative “into a true ‘Health Silk Road’”—central to Xi’s efforts to position China as a global leader in health care.

But one face was noticeably missing: Sergei Lavrov, Russia’s foreign minister. To the dozens gathered virtually, Lavrov delivered a written statement, and an ambassador at large attended in his place.

In truth, Russia could barely be counted among the participants to begin with. Though both nations have spent years claiming a close relationship and commitment to the project, Russia has long been an absent partner. But Moscow’s unwillingness to even put in a proper appearance at the latest forum suggests a subtle change in approach: It no longer feels obliged to bow before Beijing’s Belt and Road. This leaves China in a difficult position. As Beijing continues to roll out infrastructure and investment in Russia’s backyard and undermine its influence in the former Soviet Union, it needs, at the very least, tacit acceptance of the initiative from Russia. The last thing China wants is any hint of backlash from Russia over the Belt and Road, especially at a time when so many of its other partners are pushing back against the initiative. Any step back from Moscow also reveals to the United States and Europe a vulnerability in an otherwise maturing Sino-Russian entente.

Russia’s diluted attendance shows where its true interests lie. “Russia is not part of the BRI. It is only a supporter of Chinese global outreach as long as it is in Russia’s interests,” said Igor Denisov, a senior research fellow at the Moscow State Institute of International Relations.

This standpoint contradicts the official narratives that both countries have long spun about the Belt and Road Initiative. Since 2014, Beijing has consistently framed Moscow as its most integral partner. In 2019, an influential Chinese think tank named Russia the most involved partner country in the program, ranking highest in “political coordination” and “facilities connectivity.” Even in the context of the current coronavirus pandemic, which has created friction at the land border between the two neighbors, Chinese state media has continued to promote Belt and Road connectivity between China and Russia for helping to increase Chinese trade with Europe.

For its part, Russia rarely turns down superficial opportunities to showcase its ties with China. President Vladimir Putin is a regular attendee at Beijing’s biennial Belt and Road Forum. At last year’s Valdai Discussion Club, Putin for the first time described ties with China as “alliance-like,” enjoying “an unprecedently high level of trust and cooperation.” He has primarily pushed for economic and political engagement with the Belt and Road Initiative by promoting its compatibility with the Russia-led Eurasian Economic Union, an economic union in the post-Soviet space. In what was then considered a landmark agreement, in 2015 the countries agreed to integrate the two initiatives.

By 2019, China had yet to deem any of the union’s projects worthy of the “Belt and Road” label. But despite the public rhetoric harmonizing Xi and Putin’s premier foreign-policy projects, there is little tangible evidence to show that Russia is even an official partner country of the Belt and Road Initiative. Of 40 transportation projects proposed by the Eurasian Economic Union to China in 2017, every single one was rejected. By 2019, China had yet to deem any of the union’s projects worthy of the “Belt and Road” label. A senior Russian government official interviewed in July 2019 told Bobo Lo, a nonresident fellow at the Lowy Institute, that the needle has barely shifted since the political declaration.

The strategic ties that do exist between the two countries exist almost entirely outside the Belt and Road framework—in spite of the branding to the contrary. Yamal LNG, a liquified natural gas project in northern Russia, is a case in point. In 2016, the Silk Road Fund, a Chinese government investment vehicle for Belt and Road, acquired a 9.9 percent stake in the project, and it has since been repackaged as part of what’s known as the Polar Silk Road. Still, Lo said in an interview: “Yamal LNG has precious little to do with BRI. It is simply a bilateral project between China and Russia.”

Simultaneously, China is also able to acquire access to key strategic sectors of Russia’s economy in a way that was inconceivable a decade ago. For Russia’s part, Chinese investment is much needed to fill the gap left by Western firms since sanctions were enforced in 2014. But for all of the bluster around the Belt and Road Initiative, the overall rate of Chinese investment in Russia remains very low. In 2017, China’s total foreign direct investment into Russia totaled just $140 million, a minute portion of Russia’s total $25.3 billion inflows. This pales in comparison to the $50 billion China has offered to pump into neighboring Pakistan through the Belt and Road.

The contradiction between China’s continual celebration of Russia’s importance to the Belt and Road and the lack of opportunities it affords it has become a source of frustration among the Russian business community. Apart from flagship projects that gain momentum after being endorsed by the political elite, especially members of Putin’s inner circle, projects that are not high-profile often fail to draw Chinese interest and investment. A look back at the second Belt and Road Forum in 2019 confirms China’s restraint, showing that of China’s 283 tangible deliverables, only 15 are related to Russia. Russia’s corruption and its underdeveloped infrastructure have long kept away foreign investors. Now, those same shortcomings are discouraging Chinese investment, according to Jonathan Hillman, the director of the Reconnecting Asia Project at the Center for Strategic and International Studies. Of 91 projects launched as part of a Program of Cooperation between Northeast China and Russia’s Far East, which began in 2009 and was shut down in 2018, only 15 were in the implementation phase as of 2015. According to Hillman, shortcomings such as these may be discouraging Chinese investment.

After years of patchy participation, Russia’s public distancing from the Belt and Road program comes at a time when the initiative is already suffering major setbacks. A recent survey by the Chinese Ministry of Foreign Affairs found that 20 percent of Belt and Road projects have been “seriously affected” by the global pandemic, with a further 30 to 40 percent “somewhat affected.” Fears of a global recession have provoked China’s partners to review the viability of Belt and Road projects in their countries. This may lead to renegotiations, or even project cancellations.

Whether Russia’s involvement in the Belt and Road Initiative will diminish further is unclear. Lo believes that there is an internal understanding that Moscow must not get any closer to Beijing in order to signal on the world stage that it is still an independent strategic actor. China is well aware of Russia’s potential to be a spoiler in international relations. Having become the increasingly dominant partner in the bilateral relationship, Beijing will have to be even more careful in managing Moscow within the Belt and Road.

Ankur Shah is a British Indian writer focused on China and Russia. He has written for the Economist, UNESCO, and the Center for Strategic and International Studies.

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