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CHINAS GROWING INFLUENCE IN THE BALKANS: CHALLENGES AND PERSPECTIVES


DU?AN PROROKOVIC


Head of the Center for Eurasian Studies at the Institute of International Politics and Economics, Associate Professor, Faculty for Diplomacy and Security, Belgrade, Serbia


dusan@diplomacy.bg.ac.rs

The emergence of China as a regional policy actor in the Balkans is a completely new phenomenon. Chinas influence has been growing, both in economy and in politics, and initial steps have been taken to improve military relations. To date, Chinese companies have become indispensable investors, on which economic growth in the region depends, and banks are important lenders that finance the construction of some of the most important infrastructure projects. The offensive of Chinese institutions in the field of cultural diplomacy is also visible, with the expansion of scientific cooperation with research centers in the Balkans. Given that the EU and NATO have recognized China as a geopolitical challenger and Chinfluence as a threat, it is undoubted that they will use institutional mechanisms and economic leverage to attempt to limit or squeeze China out of the Balkans. From the perspective of the ten-year development of relations between China and the Balkan countries, this format has a perspective. At the same time, looking at the long-term interests of the EU and NATO, there are many challenges ahead.

Keywords: China, Balkans, Western Balkans, Chinfluence, EU, NATO.




Introduction


The emergence of China as a regional policy actor in the Balkans is a completely new phenomenon. Namely, from 1958 to 1978, China established special ties with Albania. China returned to this region 30 years later. Since 2009, Chinas influence has been growing, both in economy and in politics.

The growth of Chinese influence in the Balkans has been recorded since the implementation of the ambitious Belt and Road Initiative (BRI). Intensified political contacts and first investments emerged in 2009, at the stage when the BRI was being prepared. Since 2013, we have been witnessing a kind of eruption [Dimitrijevic, Ping, 2017].

The Balkan Peninsula is an integral part of the European (Maritime) Route. Chinese Premier Li Keqiang described the port of Piraeus as a pearl in the Mediterranean Sea and said it could become one of the most competitive ports of the world[1 - Renee Maltezou. Greece seeks role as Chinas gateway to Europe // Reuters, June 20, 2014. URL: https://www.reuters.com/article/greece-china-assets/update-1-greece-seeks-role-as-chinas-gateway-to-europe-idUSL6N0P14DW20140620 (date of access: 01.09.2019).]. Also, the Balkans is well connected (transport and economic ties) with Western Turkey (CAWA route) and Central Europe (NELB).

As a result, in September 2019, a direct railway connection was established via NELB from Jinan (Shandong Province) to Belgrade (Serbia)[2 - Ljudmila Cvetkovic?. Prvi teretni voz iz Kine putuje ka Srbiji // Radio Slobodna Evropa, oktobar 1, 2019. URL: https://www.slobodnaevropa.org/a/srbija-kina-teretni-voz/30193560.html (date of access: 02.10.2019).]. In this context, the initiative to modernize the BelgradeBudapest railway should also be considered. In 2014 governments of China, Serbia, Hungary and Macedonia signed an agreement on the modernization of railroad traffic with the intention to extend the Budapest-Belgrade railway to the south towards Macedonia and Greece through a North-South vertical. Thus, the new transport corridor would connect the port in Piraeus and the most important traffic junctions of Central Europe, which are part of the NELB.

he CEE (Central  Eastern Europe) region is attractive to China thanks to its strategic geographical position for the New Silk Road project, its high-skilled yet cheap labour, and its open trade and investment environment. [Stanzel, 2016. P. 1].



able 1: Land and Maritime routes  Belt and Road Initiative[3 - According to: Bala Ramasamy, Matthew Yeung, Chorthip Utoktham, Yann Duval, Trade and trade facilitation along the Belt and Road Initiative corridors, Working Paper Series, No. 172, Asia  Pacific Research and Training Network on Trade  UN Economic and Social Commission for Asia and the Pacific, Bangkok, 2017, pp. 922; Richard Ghiasy, Fei Su, Lora Saalman, The 21 st Century Maritime Silk Road: Security implications and ways forward for the European Union, Stockholm International Peace Research Institute  Friedrich Ebert Stiftung, Stockholm, 2018, pp. 431.]











Table 2: Chinese firms major construction contracts in the Western Balkans, 20102017 [Holzner, Schwarzhappel, 2018. P. 17]











The number of major Chinese projects contracted in the Western Balkans (shown in Table 2) since the outbreak of the global financial crisis is non-negligible. Overall, Chinese infrastructure projects make up about USD 9.1 billion (EUR 7.8 billion). Almost 90% of these, however, have been initiated only since 2013. The most important transport sector contractor is the predominantly state-owned China Communications Construction Company. In the energy sector, the state-owned China National Machinery Industry Corporation  known as Sinomach  is the leading contractor. Geographically, the prime target of Chinese construction contracts is Serbia. [Holzner, Schwarzhappel, 2018. P. 17]. The increased interest of Chinese investors and banks in investing in Greece is also evident (shown in Table 3).

In Bulgaria In the realm of infrastructure, the China Machinery Engineering Corporation (CMEC) signed in 2019 a 120 million contract with the joint stock company Logistical Center-Varna for the joint development of port infrastructure in Bulgarias largest seaside city of Varna. This is the first project of its kind that Beijing is going to realize in Bulgaria and is part of the Belt and Road Initiative. China has also made a major investment in innovative Bulgarian business. The China-CESEE Investment Corporation Fund (a $500 million private equity fund launched in 2014 through financing provided by the Exim Bank of China) acquired a 10% share in Walltopia  a world leading Bulgarian manufacturer and installer of mounting walls. Moreover, the China National Nuclear Corporation (CNNC) has expressed interest in the construction of the Belene nuclear power plant in cooperation with Russias Rosatom.[4 - Rumena Filipova. Chinese Influence in Bulgaria: Knocking on a Wide Open Door? // China Observers in Central and Eastern Europe, September 09 2019. URL: https://chinaobservers.eu/chinese-influence-in-bulgaria-knocking-on-a-wide-open-door/ (date of access: 02.10.2019.] Chinese companies are also increasingly present in Romania: The Dutch multinational company Nidera, the largest trader in commodities for agricultural markets with operations in Romania, which was taken over in 2017 by COFCO, China; The American company Smithfield Foods, a global leader in pig farms and pork production, with a branch in Romania that manages 46 farms in the counties of Timi and Arad, which was taken over in 2013 by Shuanghui International, in the largest ever Chinese acquisition of an American company (over USD 7 billion); The famous Italian tyre maker, the worlds fifth largest, Pirelli, which was taken over in 2015 by the Chinese state conglomerate ChemChina in a USD 7.7 billion deal, including two factories in Romania. [Pencea, 2017. P. 24]. Curiosity is the fact that Chinas most modest activities have been detected in Albania. In 2016 Chinas Everbright Group bought Tiranas N?n? Tereza International Airport Company and it has a concession on the airport until 2027. The aim is to set up a logistics centre to transport Chinese goods into Europe and to promote tourism in Albania, especially tourists from China[5 - Anne-Marie Brady, Hiromichi Higashi. Are we real friends? Albania-China relations in the Xi Era, Sinopsis  China in Context and Perspective, Institute of East Asian Studies at Charles University // NGO AcaMedia. Prague. 2019. URL: https://sinopsis.cz/en/are-we-real-friends-albania-china-relations-in-the-xi-era/ (date of access: 02.10.2019).].

Of course, some authors are right to state that these projects are not FDI, but mostly public investment contracts financed by Chinese banks; not all the projects might be realised. [Holzner, Schwarzhappel, 2018. P. 17]. So the data presented in Tables 2. and 3. can also be deceiving.

Several major projects announced in Bulgaria and Romania have failed or have been delayed.[6 - Mario Tanev. Bulgarias Bulstrad files petition for bankruptcy proceedings against Litex Motors // SEENews, March 29, 2017. URL: https://seenews.com/news/bulgarias-bulstrad-files-petition-for-bankruptcy-proceedings-against-litex-motors-563353 (date of access: 10.10.2019).]



Table 3: Major Chinese Investments in Greece 20092017. [Bastian, 2017. . 10]






In Romania The Cernavoda Nuclear Power Plant is one of the most important Romanian  Chinese projects that have not been implemented. Because of the quick succession of Romanian governments, the negotiations were delayed for more than two years. // The project was estimated to cost around 6.4 billion euro (8 billion dollars). [Popescu, Br?nza, 2018. P. 32]. A preliminary investors agreement has been signed in May 2019, but now, after five years of negotiations, a new problem has arisen: The fact that the Chinese partner is under US sanctions would make this subject very politically sensitive for Nuclearelectrica[7 - Fondul Proprietatea: Romanias Nuclearelectrica should not invest in more nuclear units // Romania Insider, 06 September 2019. URL: https://www.romania-insider.com/fondul-proprietatea-nuclearelectrica-investment (date of access: 05.10.2019).].

In the case of Bulgaria and Romania, the reasons for the relative failure should also be sought in the EUs membership of the two countries. As an EU Member State Bulgaria has an access to the EU Structural Funds which provide partial grants and this makes Chinese loans less attractive. [Zhelev, 2018. P. 12]

However, despite some failures, it should be emphasized that Chinas presence in the Balkan economies has been expanding since 2009, and especially since the launch of the BRI in 2013. Everything the Chinese have accomplished has been done in just 510 years.




1.Western Powers vs Chinfluence


The rapid spread of Chinese influence in the Balkans has caused both EU and US reactions. European Commissioner for Enlargement Johannes Hahn warned of the role of China in the Western Balkans and the possibility that Beijing will transform the regions countries into Trojan horses that will one day be members of the EU[8 - Ryan Heath, Andrew Gray. Beware Chinese Trojan horses in the Balkans, EU warns // Politico, 27.07.2018. URL: https://www.politico.eu/article/johannes-hahn-beware-chinese-trojan-horses-in-the-balkans-eu-warns-enlargement-politico-podcast/ (date of access: 02.02.2019).].

The German Foreign Minister Sigmar Gabriel appealed to EU members to pursue a common foreign policy vis-?-vis China to counter Beijings tactics: If we do not succeed, for example, in developing a single strategy towards China, then China will succeed and dividing Europe, he said. China is increasingly anticipated by the EU as a threat. [Prorokovic, 2017. P. 9]. For US analysts, the Chinese approach is clear, and therefore very problematic: Interestingly, a comparison could be made with the United States between the two world wars and Chinas promotion of the MSRI (Maritime Silk Road Initiative, as a part of BRI, remark by D. P.). [Blanchard, Flint, 2017. P. 235].

To a certain extent, it is unbelievable that Chinese influence is growing despite the fact that most Balkan countries are in the EU and/or NATO. The analysis of Slovenian IFIMES offers a simple explanation of this phenomenon: European leaders have often confirmed their support to the Western Balkans and its Euro Atlantic road, expressing at the same time concerns about the impact of individual states in the region, particularly Russia, China and Turkey. The EU with its enlargement stalemate practically pushes the Western Balkans counters to Russian hug, to blame in the end those countries for their close relations and cooperation with Russia. However, some EU states always set new requirements and membership criteria for the Western Balkans. Some experts have been pointing out that 15 EU member countries would not be able to fully meet the membership criteria now, which are required from the Western Balkans countries.[9 - Western Balkans 2019: Does the EU push the Western Balkans countries to the Russian hug? // The International Institute for Middle East and Balkan Studies, Ljubljana, October 16.2019. URL: https://www.ifimes.org/en/9706 (date of access: 20.02.2020).]

In addition, the hypocrisy or double standards of both  the EU institutions and key European countries are often visible. Germany, for example, strongly insisted on the implementation of the Third Energy Package, which essentially meant stopping the construction of the South Stream gas pipeline across the territories of Bulgaria, Serbia and Hungary[10 - Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC (Text with EEA relevance), Official Journal of the European Union, 14.08.2009, L211, pp. 5592. URL: https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:211:0055:0093:EN:PDF (date of access: 02.02.2019).]. But at the same time, it continued to build the North Stream and the EU did not even try to prevent it. [Prorokovic, 2018. P. 702].

Similar is the case with NATO, which is a key instrument in securing the US position in the Balkans. The US aggressive policy is based on the securitization of the Russian issue as well as the new attitude of the Donald Trump administration towards acute crises in the Middle East. In this context, the Balkan NATO members are forced to following the US, establishing a restrictive policy towards Russia and supporting Washingtons initiatives in the Middle East, which is not usually in their national interest. [Prorokovic, 2018a. P. 8687].




2.Conclusion: Perspectives and Challenges


In contrast to the Western powers, which show a deficit of optimistic initiatives or constantly make political demands, the Chinese approach is different. China presents itself as an ambitious and constructive partner. And more importantly for Balkan Stabilitocracies, it does not require any political concessions[11 - About Balkan Stabilitocracies more in: Florian Bieber, The Rise (and Fall) of Balkan Stabilitocracies, Horizons, Issue No. 10, Winter 2018, Center for International Relations and Sustainable Development, Belgrade, URL: https://www.cirsd.org/en/horizons/horizons-winter-2018-issue-no-10/the-rise-and-fall-of-balkan-stabilitocracies (date of access: 15.01.2020).]. This is probably the reason for Chinas great success. China is firmly committed to realizing the geo-economic goals of the BRI and is taking a number of initiatives in the Balkans. To some extent, it is even noticeable that the number and intensity of Chinas economic and political initiatives in the Balkans since 2013 are utterly disproportionate to the size of the markets and the foreign trade importance of these countries to China. [Prorokovic?, 2016. P. 5455]. Therefore, it can be concluded that China is projecting the pace and scope of its presence in the region. China has become a serious challenger to the US and EU in the Balkans. Therefore, China is an actor who will become more involved in regional political and security issues in the future.

However, the Wests advantage in the Balkans is characterized by its deep institutional presence (EU and/or NATO membership) and widespread economic ties (which are completely disproportionate, so that the export of the Balkan countries is predominantly EU oriented). Given that the EU and NATO have recognized China as a geopolitical challenger and Chinfluence as a threat, it is undoubted that they will use institutional mechanisms and economic leverage to attempt to limit or squeeze China out of the Balkans.

From the perspective of the ten-year development of relations between China and the Balkan countries, this format has a perspective. At the same time, looking at the long-term interests of the EU and NATO, there are many challenges ahead.




References


Bastian J. The potential for growth through Chinese infrastructure investments in Central and South-Eastern Europe along the ?Balkan Silk Road?. Athens // London: Report prepared by Dr Jens Bastian for the European Bank for Reconstruction and Development (with funding from the Central European Initiative), July 2017. P. 62. (in English)

Blanchard Jean-Marc F. and Colin F. The Geopolitics of Chinas Maritime Silk RoadInitiative // Geopolitics, 2017. 22 (2), 2017. . 223245. (in English)

Dimitrijevi?c D. and Huang Ping (Eds.). Initiatives of the New Silk Road  Achievements and Challenges. Belgrade: Institute of International Politics and Economics, 2017. P. 529. (in English)

Ghiasy R. and Fei Su, Saalman L. The 21 st Century Maritime Silk Road: Security implications and ways forward for the European Union. Stockholm: Stockholm International Peace Research Institute  Friedrich Ebert Stiftung, 2018. P. 63. (in English)

Holzner M. and Schwarzhappel M. Infrastructure Investment in the Western Balkans, Luxembourg: European Investment Bank  Wiener Institut fu?r Internationale Wirtschaftsvergleiche, 2018. P. 38. (in English)

Pencea S. Romania-China Trade and Investment Relations Against the Backdrop of ?One Belt, One Road? Strategy // Romanian Economic and Business Review, 2017. Vol. 12, number 2. . 1728. (in English)

Popescu L. and Br?nza A. Romania-China Relations. Political and Economic Challenges in the BRI Era // Romanian Journal of European Affairs, 2018. 18 (2). . 2039. (in English)

Prorokovic D. China  CEE relations need new strategies // China Daily, November 27. 2017. . 9. (in English)

Prorokovi?c D. Geoekonomski aspekti kineske koncepcije OBOR i pozicija Srbije, Crne Gore i BiH // Nacionalni interes, 2016. XII (26), 2/2016. . 3558. (in Serbian)

Prorokovi?c D. Od Soluna do Sofije: zas?to je slabio uticaj EU na Zapadnom Balkanu? In: Dragan Simic?, Dejan Milenkovic?, Dragan Z?ivojinovic? (Eds.). Evropa za mene. Beograd: Fakultet politic?kih nauka  Univerzitet u Beogradu, 2018. . 693702. (in Serbian)

Prorokovi?c D. Pogled na Srbiju iz okvira evroatlantizma kao geopolitic?kog koncepta: zas?to srpski interesi nisu podudarni sa americ?kim ciljevima? // Politika nacionalne bezbednosti, 2018a. IX (14), 1/2018. P. 7388. (in Serbian)

Ramasamy B. and Yeung M., Utoktham C., Duval Y. Trade and trade facilitation along the Belt and Road Initiative corridors // Working Paper Series, No. 172, Asia  Pacific Research and Training Network on Trade  UN Economic and Social Commission for Asia and the Pacific, Bangkok, 2017. . 922. (in English)

Stanzel A. China?s Investment in Influence: the future of 16 + 1 cooperation // China Analysis, Brussels: European Council on Foreign relations. 2016. P. 16. (in English)

Zhelev P. Bulgarian  Chinese economic relations in the context of 16+1 Cooperation // China  CEE Institute, 2018. Working paper No. 28. . 1214. (in English)




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Galaktika735@mail.ru

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SINO-GERMAN COOPERATION UNDER THE FRAMEWORK OF THE ONE BELT, ONE ROAD INITIATIVE


GALIMZYANOVA ALBINA KARIMOVNA


Lecturer, Department of Oriental Languages, Diplomatic Academy of the Russian Ministry of Foreign Affairs


Galaktika735@mail.ru

Sino-German cooperation under the framework of the One Belt, One Road initiative can strengthen the global nature of bilateral relations, set in motion the process of bilateral trade and investments, cooperation in third country markets, as well as strengthen cooperation in the financial sector. This will benefit not only Chinese companies, European goods, services and the financial sector will also be able to develop new markets.

The implementation of the One Belt, One Road initiative will allow China and Germany to cooperate in order to promote the stability and prosperity of countries alongside the Silk Road Route, such as the countries of Central Asia. The initiative is able to unite the cultures and peoples of the Silk Road countries.

In addition, unstable regions such as the Middle East and Africa also adjoin the Silk Road. Taking into account that Europe, and Germany in particular, is suffering from an influxes of migrants and refugees from Syria, China and Germany are interested in achieving stability and development in the region.

Currently, there are direct freight trains between the following German and Chinese cities, such as ChongqingDuisburg, ZhengzhouHamburg, Shenyang Leipzig, BeijingNuremberg. The ChinaEurope Express runs from Shilong railway station, Guangdong province to Duisburg. Germany also supports and takes an active part in the construction of the Asian infrastructure investment Bank.

Keywords: China, Germany, international relations, foreign policy, One Belt, One Road initiative.



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Nicola Casarini. When all roads lead to Beijing: Assessing Chinas New Silk Road and its implications for Europe // The International Spectator. Italian Journal of International Affairs. 2016, 51 (4). P. 114.

 . ?   ?   ?   [???:?????????????????????? ? ???????2016??1???5161??]      ,     .  , No 1, 2016. . 5161.

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 ,  . ?  ?   -  [?????????:???????????? ? ???????????2016??3???124??]   ,     . ? .  3, 2016. . 124.




References


Nicola Casarini. When all roads lead to Beijing: Assessing Chinas New Silk Road and its implications for Europe // The International Spectator. Italian Journal of International Affairs. 2016, 51 (4). P. 114. (in English)

Cui Hongwei. Yidai yilu zhanlu?e yu rong ke touzi jihua duijie qianjing fenxi [????? ???? ?????????????????? ? ??????2016??1??? 5161 ??] Analysis of the prospects for the integration of the One Belt, One Road initiative and Junckers investment plan. German Studies, 2016, No. 1. P. 5161. (In Chin.)

Zheng Chunrong. Deguo zai zhongou guanxi zhong de juese[???? ????????????????????? 2015??3???1-14??] The role of Germany in Sino-European relations. European Studies, 2015, No. 3, P. 114. (In Chin.)

Kelin Fulinte, Zhang Xiaotong. Yidai yilu yu diyuan zhengzhi lilun chuangxin [??????????? ???? ?????????? ???????2016??3???1-24??] The One Belt, One Road initiative and innovative geopolitical theories. Diplomatic Review, 2016, No. 3. P. 124. (In Chin.)




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nomitavandana87@gmail.com

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CHINAS ONE BELT ONE ROAD INITIATIVE AND ITS IMPACT ON MIDDLE EAST


NOMITA TOPPO


Research Scholar, Centre for Russian and Central Asian Studies, School for International Studies, Jawaharlal Nehru University, New Delhi, India


nomitavandana87@gmail.com

In recent years China has significantly expanded its economic footprint in the Middle East. Chinas One Belt, One Road (OBOR) initiative, aims to economically connect more than 60 countries throughout Middle East, Africa, Europe, South America and southern regions of Asia. The OBOR or BRI (Belt and Road Initiative) by China intends to revive the ancient Silk Road along with a Maritime Silk Road. The Middle East plays a vital role in the implementation of OBOR as it is a source of energy, providing more than half of Chinas crude oil imports. Besides, it is also a pivotal point for market access in Europe and Africa, where the EU is Chinas largest export market. China has invested heavily in the sectors including port development, oil and refinery development, and infrastructure development in the Middle East region. China has also accelerated negotiations for the establishment of a free trade area between China and the Gulf Cooperation Council (GCC). This article is an attempt to explore the nature of Chinas growing presence in the Middle East, and its implications in the region. For China, Middle East is a trading hub as around 70 per cent of the trade import in China comes from Middle East. China is also promoting cultural exchange programmes and people-to-people interactions. Thus, this paper attempts to analyse Chinas presence in the Middle East and its efforts towards regional integration, as the One Belt One Road initiative has initiated development in the regions like Middle East and Africa and is trying to bind the world in one thread.

Keywords: China, Middle East, One Belt One Road, infrastructure development, regional integration.




Introduction


One Belt One Road initiative comprises of two notions introduced by the President of China Xi Jinping in 2013 to endorse economic engagement and investment along two major routes. The first route, the New Silk Road Economic Belt, is reported to run westward overland through Central Asia to Europe. The second route, the 21st Century Maritime Silk Road, is expected to make a loop around south and westward by sea towards Europe, with proposed stopovers in South-east Asia, South Asia and Africa.

In recent years, Chinese companies are leaving their home-based market and going to foreign markets and establish itself. President Xi is putting efforts to strengthen Chinas global position. He has declared several high-profile multilateral initiatives envisioned to advance Chinas international existence and promote closer ties with other countries. One belt, one road not only represents a renewed, stronger and better coordinated push to expand Chinas influence overseas, but it is also coupled with a domestic investment drive, in which nearly every Chinese province has a stake[21 - China-led BRI and its Impact on India with Specific Reference to CPEC. URL: https://www.nepjol.info/index.php/joia/article/view/22592 (date of access: 28.11.2019).].




Research methodology


The broad mandate of this research is to examine and analyze the presence of China through the OBOR initiative in the Middle East. Examining the implications of OBOR in the Middle east and its effort in regional integration constitutes one of the prime tasks of this research. The proposed study is based on qualitative analysis. The data is obtained majorly from primary and secondary sources. Primary source include official record, government documents, data reports, official policy statements and also speeches and interviews on popular media. Documents of international and regional organisations like MENA and SCO will be used in this study. These will establish imperial basis of this research. The study will also make use of secondary sources such as books, newspapers, journals, articles published in academic journals and internet sources. These will extensively be used for the analysis of all the available primary and secondary sources will apply throughout the study.




Chinas Obor Initiative


OBOR is a vision launched by President Xi that seeks to integrate China with the Eurasian landmass through an immense network of transport corridors, energy pipelines and telecom infrastructures. The geographic span of OBOR is fairly large, covering around 65 countries, 4.4 billion people and 30 per cent of global GDP[22 - China Belt and Road Initiative Measuring the impact of improving transportation connectivity on trade in the region. URL: https://www.rand.org/content/dam/rand/pubs/ research_reports/RR2600/RR2625/RAND_RR2625.pdf (date of access: 02.12.2019).]. Although the initiative is called One Belt, One Road, which has created an impression that it is just one corridor, rather the two main routes actually have a series of sub-branches and various economic corridors like for instance, the China-Pakistan Economic Corridor (CPEC), or the China-Central Asia-West Asia Economic Corridor (CCWAEC). Therefore in 2015 China tried to change the name to Belt and Road Initiatives (BRI). However, still it is popularly known as OBOR.

OBOR is Chinas long-term development strategy. However, in the short term, it is a means to offset higher domestic production cost and excess capacity, reduce transport cost, create new markets for Chinese goods and services, and internationalize the Chinese currency RMB. Whereas, in the long term, China requires to ensure it has timely, efficient, and secure access to markets and resources as in the present it is the worlds largest trading nation. Chinas presence in the Middle East is of great importance as it links the three continents of Asia, Africa and Europe.




Main Results


The main finding of the study is summed by under the following subheadings: OBOR and Impact on the Middle East; what do countries get in return?

As President Xi Jinping has increased Chinas effort to take a more active role internationally, the Middle East has become one of the major regions for staging the OBOR initiative. In July 2018 in a gathering of 21 Arab nations in Beijing, President Xi assured substantial loans and financial aid to support economic development in the region. During the meet the Chinese government also lucratively elevated their relationship to a strategic partnership[23 - How China Is Winning Over the Middle East. URL: https://thediplomat.com/2018/07/how-china-is-winning-over-the-middle-east/ (date of access: 02.12.2019).].

Effectively, China has planned to launch a mini Marshall Plan for the Middle East and North African region. The main objective of the China-Arab State Cooperation Forum (formed in 2004) is the economic development of the region. China sees economic development as a key to resolve various security and humanitarian problems in the region.

China and the Middle East have mutual interests and their economic relationship is now expanding beyond oil. Chinese companies are pursuing major infrastructure projects in the Middle East region as part of Belt and Road initiative. The Chinese organizations created to support the Belt and Road Initiative is readily providing financing for much-needed infrastructure. Like for instance in Egypt, the Chinese have declared to invest around $50 billion to help the development of the new administrative capital.

The demand of renewable energy, fintech, artificial intelligence, and electric cars are increasing in the Middle East; sectors where China is playing a leading role. Major portion of Chinas financing will go toward supporting projects and sectors where China is a global leader, which is being welcomed by the Middle Eastern countries.

Apart from loans and financial aid for economic development, it was also announced at the Arab Summit for the creation of financial consortium. Wherein Arab and Chinese banks will establish a fund of around $3 billion to support economic reconstruction and industrial revival. The main objective of this group will be to promote cooperation in the fields of oil and gas, nuclear, and clean energy.

Considerably, President Xi has called upon the Arab countries to commence with negotiations for a free trade agreement between China and the Arab countries. Such negotiation is part of President Xis larger strategy of exerting its economic influence to negotiate free trade agreements with major regions around the globe.




What do countries get in return?


In lieu of cooperating in OBOR projects countries receive preferential financing including grants, interest-free and concessional loans, and other forms of government funding. They also receive a full development package to strengthen their economy. For instance, UAE, which is Chinas second largest trading partner in the region that handles 60 per cent of Chinas reexports to Europe and Africa with an estimated value of $70 billion each year. China has signed a $300 million deal to develop a manufacturing operation in the free trade zone of Khalifa Port, on the heels of Chinas COSCO shipping winning rights ($738 million) to develop and operate a new container terminal for 35 years. While most shipping companies own/ operate terminals and ports on foreign terrain as shipping-centric operations, China differs in that they open new ports and invest in adjoining free trade/ special economic zone and other development initiatives as well so that host countries get the entire development package[24 - Next Up on Chinas Maritime Silk Road: Abu Dhabi. URL: https://www.forbes.com/sites/wadeshepard/2017/08/02/next-up-abu-dhabi-chinas-maritime-silk-road-breaks-into-the-middle-east/#6022124b9bbe (date of access: 5.12.2019).].

China is an old ally of Iran and has vested interests, along with Russia, in Irans oil and gas industry. China is financing the upgrading of the Tehran-Mashhad railway along with Chinas Exim Bank lending US$1.5 billion for the lines electrification. The track of 2,300 km line will eventually link Urumqi, the capital of Chinas western Xinjiang Province, to the Iranian capital Tehran, connecting Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan along the way[25 - Chinas Belt & Road Initiative In The Middle East. URL: https://www.silkroadbriefing.com/news/2019/06/21/chinas-belt-road-initiative-middle-east/ (date of access: 5.12.2019).].

The proposed railway project is supposed to run from Tehran and join Irans east-west network leading west to Turkey and Eastern Europe. It is also expected to open a way to Europe by a developing rail route from the southern Iranian ports to Azerbaijan and Europe. Further linking with the Irans North-South Transport Corridor, this runs from Chabahar Port north to Azerbaijan. Towards the east, this links up with the also Chinese funded, low key Lapis Lazuli Corridor.

The rail project will extend from Tehran into Turkey and across the borders with the European Union. Additionally, Turkey is also being linked with rail freight lines running north through China and across Kazakhstan, to Baku in Azerbaijan. The Baku-Tbilisi-Kars Railway provides a direct link to Europe from China, via Turkey as it connects through a cross-Turkey. A high-speed rail service is being constructed by China, connecting Kars with Edirne, near Turkeys border with Bulgaria and Greece. Bilateral trade between Turkey and China was recorded at US$26.3 billion in 2017. Turkeys export to China was around US$3 billion while its imports from China exceeded US$23 billion.

China has extensively invested in Syria for developmental purpose. According to Ellis, this is an opportunistic and geopolitical play; opportunistic as Chinese contractors are looking at reconstruction projects to rebuild the country after its devastating civil war, and geo-political as China recognizes that Syria can provide an alternative route to Europe than the Suez Canal[26 - Chinas Belt & Road Initiative In The Middle East. URL: https://www.silkroadbriefing.com/news/2019/06/21/chinas-belt-road-initiative-middle-east/ (date of access: 5.12.2019).]. This region is being developed by the Chinese with a Special Economic Zone which is being built in Tripoli Port, and plans to rebuild the Tripoli-Homs Railway. The zone provides Chinese and other regional businesses with low tax options for consolidating and adding value to component parts sourced elsewhere to then be exported to Syria. As per the estimate of the United Nations, it will coast around US$250 billion to rebuild the region. As Syria is oil rich region, China can initiate with the infrastructure building and in return secure energy supplies. Meanwhile, develop a secondary route to the Mediterranean and southern Europe.

China is a big investor in Israel and has plenty of opportunity in the market, in the fields including real estate, transportation, energy, telecommunications, and other infrastructure requirements. Its ports and trade routes to the Middle East make it a major gateway to Europe for the Middle East, which is beneficial for China. Projects in Saudi Arabia, and the other Arabian states include gas pipelines, to meet Chinese demand and also a better consistent energy network across the region.

In 2018 President Xi visited Saudi Arabia, Egypt, and Iran[27 - Chinese president back home after visits to Saudi Arabia, Egypt, Iran. URL: http:// en.people.cn/n3/2016/0124/c90883-9008539.html (date of access: 10.12.2019).], and released its first Arab Policy Paper to signal its intention of increased engagement in the Mideast. The paper outlined the 1+2+3 cooperation framework[28 - China in the Post-Hegemonic Middle East: A Wary Dragon? URL: https://www.e-ir.info/2018/11/22/china-in-the-post-hegemonic-middle-east-a-wary-dragon/ (date of access: 9.12.2019).]. China is also trying to balance ties with Riyadh and Tehran, in March Beijing signed $65 billion worth of deals with Riyadh and aims to coordinate OBOR projects with Saudi Vision 2030, while in June China backed Irans admission to the China-led Shanghai Cooperation Organization (SCO) and recently extended a $10 billion credit line for infrastructure projects. Iran is an important node of the OBOR by virtue of its geography linking Central Asia with South and West Asia, while Saudi Arabia is a leader of the Gulf Cooperation Council (GCC) and also a key oil supplier[29 - The Belt and Road and Chinas Long-term Visions in the Middle East. URL: http:// www.ispsw.com/wp-content/uploads/2017/10/512_Lin.pdf (date of access: 10.12.2019).]. With a planned Tripoli Special Economic Zone adjacent to the port, Tripoli could be a useful hub for Syria and enable China via the OBOR to play a constructive role in post-conflict reconstruction and stabilization efforts.




Conclusion


Hence, the study concludes that the ongoing regional security problems including terrorism, economic woes, and a need for immediate infrastructure, investment and trade, the OBOR initiative offers a quick economic aid. As China is becoming a more significant geopolitical actor in the Middle East, gradually the regional countries will become more dependent on Beijing for their trade and investment relations. Chinas increasing economic soft power will in turn ease their dependency on the West and broaden their foreign policy options that may not always align with the United States and European Union interests. This would also reduce Western control over the region, additionally it increases regional countries freedom of action to diversify and engage with more economic partners. It would be beneficial if great powers including the Unites States, European Union, China, India, Russia and others also try to cooperate to jointly promote Middle East stability, security and prosperity.




References


Aneja A. China reaches out to West Asia, The Hindu, 23 March 2017. (in English)

Awasthi S. China-led BRI and its Impact on India with Specific Reference to CPEC // Journal of International Affairs, 2018, Vol 2 No 1. P. 97110. (in English)

Ehteshami A. and Horesh N. Chinas Presence in the Middle East: The Implications of the One Belt, One Road Initiative, 2019, Routledge. (in English)

Frans-Paul van der Putten et al eds. The Geopolitical Relevance of Piraeus and Chinas New Silk Road for Southeast Europe and Turkey, Clingendael Report, 2016. P. 27. (in English)

Johny S. Chinas long game in West Asia // The Hindu, 29 January 2016. (in English)

Lin C., The Belt and Road and Chinas Long-term Visions in the Middle East, ISPSW Strategy Series: Focus on Defense and International Security, 2017. Vol. 512. P. 110. (in English)

Macaes B. Belt and Road: A Chinese World Order. Penguin Viking, 2019. 288 . (in English)

Olimat M. China and the Middle East from Silk Road to Arab Spring, Routledge, 2015. 240 . (in English)

Sevilla H. Chinas New Silk Route Initiative: Political and Economic Implications for the Middle East and Southeast Asia, 2017, Asian Journal of Middle Eastern and Islamic Studies Volume 11, Issue 1. P. 83106. (in English)

Shichor Y. Gains and Losses: Historical Lessons of Chinas Middle East Policy for Its OBOR Initiative, Asian Journal of Middle Eastern and Islamic Studies, 2018, Vol. 12 Issue 2. P. 127141. (in English)




          




  


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THE IMPORTANCE OF THE CHINESE PROJECT ONE BELT  ONE ROAD FOR THE RUSSIAN ECONOMY


DAVYDENKO ELIZAVETA VASILEVNA


Associate Professor, The department of international entrepreneurship St. Petersburg State university of aerospace instrumentation


davvas@mail.ru

The Chinese large  scale project One belt  one road announced in 2013, is of significant interest to Russia. Taking into account the sanctions imposed by Western countries and the further strengthening of trade, economic and political relations with the countries of the Asia-Pacific region, Russia and China are strengthening cooperation within the framework of this initiative. Particularly relevant and acute due to the divergence of goals and interests of the Chinese and Russian sides is a question of interface of the project One belt  one road and the Eurasian Economic Union. As the six years experience of the One belt  one road initiative shows, the implementation of the One belt  one road project does not go smoothly and causes numerous criticism of China in imposing interests and conditions of bondage to other countries, the corruption component of the project and its opacity. Thus, the attitude to the project is ambiguous, and in these conditions, it is important to build relations between Russia and China in an optimal way for mutually beneficial cooperation. The aim of the study is to analyze the impact of the Chinese project One belt  one road on the Russian economy. The subject of the study is the Chinese project One belt  one road. The author comes to the conclusion that at present the Russian participation in the project One belt has mainly potential advantages and possibilities and real results for the Russian economy are very insignificant.

Keywords: China, economy, Eurasian Economic Union, One belt  one road, Russia.




Introduction


The importance of studying the impact of the Chinese project One belt  one road on the Russian economy is beyond doubt. The Chinese project is an open initiative and any country can join it. The project has a huge multiplier effect and is very attractive not only for China, but also for other countries. One of the active participants of the concept of One belt  one road is Russia. Nowadays Russia and China are strengthening economic and political cooperation within the framework of this initiative. This article will analyze the impact of the Chinese mega project One belt  one road on the Russian economy, highlight its advantages and disadvantages.




Methodology


In the course of the study the author identifying the advantages and disadvantages of the influence of the Chinese project One belt  one road on the Russian economy, used a comparative method, analysis and synthesis. The research is based on the materials of Russian and foreign experts and scientists.




Main results


The Chinese project One belt  one road, combining the Silk Road Economic belt and the Maritime silk road of the XXI century, was first proposed by the President of China  Xi Jinping in 2013. This project is a key element of the general Chinese policy and is aimed at the strengthening Chinas position in the international arena, solving Chinas domestic economic problems and strengthening regional integration.

This project will lead to significant transformations in the Eurasian space, in particular in the transport and logistics sectors. The project involves the development of cooperation between the countries in five key areas: infrastructure cooperation, political coordination, the growth of mutual trade, strengthening of spiritual unity and free movement of capital[30 - China in the world and regional politics. The history and modernity. Issue XXII / ed. Safronov E. I. Moscow: Institute of Far Eastern studies, 2017. 400 p. URL: https:// publications.hse.ru/mirror/pubs/share/direct/211288436 (date of access: 18.12.2019).].

According to the project, it is expected that there will be three main routes of the Economic belt: North  from China through Central Asia and Russia to the Europe, Central  from China through the Central and West Asia to the Persian Gulf and the Mediterranean Sea, South  from China to the Southeast and South Asia to the Indian Ocean. Within these areas it is planned to create international corridors: China-Mongolia-Russia, China-Central Asia-West Asia, China-Indochina, China-Pakistan, Bangladesh-India-Myanmar-China.

The Chinese project is an open initiative and any country can join it. In 2019 China has already signed 173 agreements according to the participation in the project with 125 countries and 29 international organizations. It is interesting that over 60 countries joined the project only in 2018. The project has been so deeply integrated into Chinas foreign policy that it was mentioned in the Charter of the Communist party of China in 2017[31 - Manukov S. One belt and one road, the clarification path and the extension zone // EurAsia Daily, 03.05.2019. URL: https://eadaily.com/ru/news/2019/05/03/odin-poyas-odin- put-utochnenie-puti-i-rasshirenie-poyasa (date of access: 14.12.2019).].

The scale of the project One belt  one road is enormous from the different points of view. For persuasiveness we can give some statistics. Morgan Stanley estimates that by 2027 the project will cost approximately $1.3 trillion. The Chinese banks and financial institutions, mostly state-owned, have invested more than $90 billion in this project. The reason is this project is widely supported by the Chinese government. Chinas partners have invested more than $ 40 billion in the Chinese economy. The volume of trade between China and One belt  one road participants, which exceeded $6 trillion, is impressive. The trade with project partners increases by an average of 4% per year. Over the six years of the projects existence it accounted for 27.4% of the Chinese trade in whole[32 - Ibid.]. So, the project has a huge multiplier effect and is very attractive, not only for China, but also for other countries.

One of the active participants of the concept of One belt  one road is Russia, supporting it from the very beginning of the project. It is necessary to mention that at present the economic relations between China and Russia are developing very dynamically and positively. The impulse for strengthening cooperation between our countries can be considered the introduction by Western countries sanctions in 2014 against Russia and a turn of Russian foreign economic and political strategy towards the Asia-Pacific region, in particular China.

For optimal cooperation between Russia and China it is important to combine the mutual interests of both countries. The interests of the Russian Federation are related to the deepening of strategic partnership with China, in particular within the framework of the Eurasian economic Union [Efremenko, 2018. P. 48]. China relies on further rapprochement with Russia to ensure stability in the North and a strong strategic rear, investment, trade and economic energy cooperation.

On the 8th May 2015 as part of the institutionalization of cooperation Russia and China signed a Declaration on the interconnection of the Eurasian economic Union and the Silk Road Economic belt. The Declaration identified key directions of contact: investments in industrial cooperation, a development of a common logistics system, a harmonization of foreign trade legislation, a strengthening of the role of joint financial institutions and expansion of foreign exchange cooperation in the field of foreign trade. In 2016 the Memorandum according to the coordination of joint efforts to promote economic and investment cooperation in various international platforms was signed.

In May 2018 another agreement on cooperation in the economic sphere between the Eurasian economic Union and China on trade policy, technical regulation, phytosanitary control was signed. The harmonization of norms and removal of restrictions will certainly give impulse to the development of cooperation. On the 17th October 2018 during the meeting in Beijing it was proposed to accelerate the pairing of projects within the framework of the One belt initiative[33 - China urged to speed up the pairing of the EAEU with the project One belt  one road, 17.10.2018. URL: https://www.vestifinance.ru/articles/108722 accessed 13.12.2019.] [Efremenko D. 2018]. This idea was also discussed at the fifth Eastern economic forum in 2019[34 - Eastern economic forum 2019. URL: https://roscongress.org/events/vostochnyy-ekonomicheskiy-forum-2019/ (date of access: 15.12.2019).]. Thus due to the active political support and stimulation of joint projects there is a significant institutionalization of cooperation between the Eurasian economic Union, the Silk Road Economic belt, the Russian Federation and China [The strategy of The Economic belt of the silk road and the role of the Shanghai cooperation organization, 2016. P. 16].

The interaction between the Eurasian economic Union and the One belt  one road initiative is primarily considered from the point of view of the development of logistics infrastructure and the creation of transport corridors. The Eurasian economic Union has proposed 38 projects for joint financing with China, including 11 Russian projects[35 - Transit with a Chinese accent. 21.12.2017. URL: https://www.vedomosti.ru/newspaper/articles/2017/12/21/746034-tranzit-kitaiskim (date of access: 15.12.2019).]. Thanks to the support of China the construction and development of transport routes connecting Western China and Western Europe and the Northern Sea route are planned.

The implementation of these projects is perfect for China because it will reduce the speed of delivery of goods to the European market (which is especially important because a daily trade volume of China  EU is 1.5 billion euro) and to Russia, as it will help to develop national production and export potential. As to the Russia the transit potential of the TRANS-Siberian railway is not fully used and a participation in the Chinese project will strengthen its role. The most important infrastructure project of fundamental importance for economic partnership between Russia and China is a construction of a railway bridge over the Amur River. The financial operator of this project is the Russian-Chinese investment Fund, formed By the Russian direct investment Fund and China Investment Corporation.

According to the opinion of some experts, the increase in the supply of goods, including transit through the Russian Federation by the help of land transport on the route China-Europe is real, if infrastructure capabilities and increase capacity will be increased. The experts also note two problems. The first one is an imbalance of under loading of trains when they return. The other problem is investment. The participants of the new Silk Road, who take part in the project as transit points, are still afraid to invest in the project, so the main financial burden falls on China. The Chinas participation in the Russian projects can be regarded as a political investment. Despite the loud statements of politicians of the two countries the real results of cooperation between China and Russia in the framework of the project are very modest.

Among project consequences for Russia we can note the following. The participation in the project One belt  one road can lead to the integration of the Russian transport system into the transport and logistics network of the Eurasian region, which will open up opportunities for transit and provision of related logistics services and access to the markets of the region[36 - ?????????: ???? ?????????????? = The Chinese Ambassador to Russia Li Hui: The one belt  one road Initiative opens a new path for the joint development of China and Russia.  : URL: https:// baijiahao.baidu.com/s?id=1610935269955576597&wfr=spider&for=pc (date of access: 18.12.2019).].

Of particular importance within the framework of the project is an interaction of our countries in the field of modernization of poorly developed regions of Siberia and the Far East, which need modern infrastructure and investment. As a concern, we can note a decrease of interest in the TRANS-Siberian and Far Eastern directions. The fact is that the route through Kazakhstan is beneficial for China both in terms of tariff rates and time. At present 10 of the 14 routes ChinaRussia are passing through Kazakhstan[37 - Where will the Silk Road lead Russia 27.04.2019. URL: https://newtvnews.ru/economics/2019/04/27/pan-ili-propal-kuda-zavedet-rossiju-shelkovyj-put/ (date of access: 16.12.2019).].

The second advantage is a strengthening of industrial cooperation between the countries, the possibility of forming production clusters. The third plus of the Russian participation in the project One belt  one road is a possibility of pairing the Eurasian economic Union and the One belt  one road and turning it into a new center of economic and political development at the global level. However, it is worth noting that China is mainly focused on the development of the bilateral relations with each member of the Union individually.

Lately China is accused of opacity and often enslaving terms of agreements, unfair choice of contractors, failure to meet deadlines, untimely provision of promised loans, construction of white elephants, and damage to the environment. Thus, according to China Global Energy Finance database in 2018 the share of coal projects in the project One belt  one road was 42%[38 - Where will the Silk Road lead Russia 27.04.2019. URL: https://newtvnews.ru/economics/2019/04/27/pan-ili-propal-kuda-zavedet-rossiju-shelkovyj-put/ (date of access: 16.12.2019).].

Beijing is also accused of pumping the developing economies involved in the project with loans and debts. The West has even coined a new term  debt trap diplomacy. In 2019 at the international cooperation forum One belt  one road in Beijing the Chinese President promised to become more open to Western investors. China assures the countries that the project has only an economic orientation; however, it is clear for everybody that by increasing economic power the country will gain geopolitical influence[39 - International experts positively assessed the results of the forum One belt and one road in Beijing 08.05.2019. URL: https://news.rambler.ru/other/42154117-mezhdunarodnye-eksperty-polozhitelno-otsenili-itogi-foruma-odin-poyas-odin-put-v-pekine/ (date of access: 14.12.2019).].




The resume


In summary it can be noted that a feature of the Russian and Chinese cooperation in whole and within the framework of the project One belt  one road can be called a high level of institutionalization. The economic process is mainly from the top supporting a high political activity of two countries. The Chinese investors act very carefully, and they prefer to conclude agreements rather than invest.

As practice shows a specificity of the Chinese approach is a long-term investigation of the market     and long negotiation processes that may end up with zero results. So during the reducing of its investments and withdrawing money from the Russian economy in 2018 and 2019 China refused to finance the pipeline The force of Siberia, invest in the construction of the Russias largest gas processing plant in the Amur region and considered the high-speed railway the Eurasia which was supposed to connect Beijing, Moscow and Berlin unprofitable. Chinese investment companies are often connected with the government financing therefore their investment decisions in many respects are not always motivated only by financial indicators. In our opinion at present the Russian participation in the project One belt  one road has mainly potential advantages and possibilities and real results for the Russian economy are very insignificant.




References


China in the world and regional politics. The history and modernity. Issue XXII /ed. Safronov E. Moscow: Institute of Far Eastern studies, 2017. 400 p. URL: https://publications.hse.ru/mirror/pubs/share/direct/211288436 (date of access: 18.12.2019). (in Russian)

China urged to speed up the pairing of the EAEU with the project One belt  one road 17.10.2018. URL: https://www.vestifinance.ru/articles/108722 (date of access: 13.12.2019). (in Russian)

Eastern economic forum 2019. URL: https://roscongress.org/events/vostochnyy-ekonomicheskiy-forum-2019/ (date of access:15.12.2019). (in Russian)

Efremenko D. The conjugation of the Chinese initiative The Economic belt of the silk road and the integration project Eurasian economic Union in the context of transformations of the modern world // History and modernity. Issue XXIII: annual edition / ed. by Safronov E. Moscow: IDV RAS, 2018. 392 p. (in Russian)

International experts positively assessed the results of the forum One belt and one road in Beijing 08.05.2019. URL: https://news.rambler.ru/other/42154117-mezhdunarodnye-eksperty-polozhitelno-otsenili-itogi-foruma-odin-poyas-odin-put-v-pekine/ (date of access: 14.12.2019). (in Russian)

Manukov S. One belt and one road, the clarification path and the extension zone // EurAsia Daily 03.05.2019. URL: https://eadaily.com/ru/news/2019/05/03/odin-poyas-odin-put-utochnenie-puti-i-rasshirenie-poyasa (date of access: 14.12.2019). (in Russian)

The strategy of The Economic belt of the silk road and the role of the Shanghai cooperation organization. The materials of the round table / ed. by Matveev V. Moscow: Institute of Far Eastern studies RAS, 2016. 172 p. (in Russian)

Transit with a Chinese accent. 21.12.2017. URL: https://www.vedomosti.ru/newspaper/articles/2017/12/21/746034-tranzit-kitaiskim (date of access: 15.12.2019). (in Russian)

Where will the Silk Road lead Russia 27.04.2019. URL: https://newtvnews.ru/ economics/2019/04/27/pan-ili-propal-kuda-zavedet-rossiju-shelkovyj-put/ (date of access: 16.12.2019). (in Russian)

?????????: ???? ?????????????? = The Chinese Ambassador to Russia Li Hui: The one belt  one road Initiative opens a new path for the joint development of China and Russia. URL: https:// baijiahao.baidu.com/s?id=1610935269955576597&wfr=spider&for=pc (date of access: 18.12.2019). (in Chinese)




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ASEAN IN THE BRAVE DIGITAL WORLD


EVGENY KANAEV


Professor, NRU HSE, ekanaev@hse.ru


LASRO SIMBOLON


PhD Student, NRU HSE, Official, Indonesian Foreign Ministry, lasrosimbolon@yahoo.com


PAVEL SHATERNIKOV


Teaching assistant, NRU HSE, psshaternikov@edu.hse.ru

As scholars review ASEANs performance, as well as predict likely trends of its future development, the associations response to the challenges presented by the Fourth Industrial Revolution becomes crucial. Assessing ASEANs pre-digital achievements as the foundation of its response to the emerging digital challenges, the authors specify the associations current and prospective readiness to effectively cope with them. As distinguished from numerous writings on the aftereffects of the Fourth Industrial Revolution for ASEAN, the central argument of the chapter is as follows. The key vulnerability of ASEANs policy is the overlap of the long-standing and present ASEANs shortcomings as the central reason behind its insufficient preparedness to face the digital challenges rather than the seriousness of these problems per se. The academic novelty of the research comes from distinguishing an appropriate remedy to decrease this vulnerability.

The actuality and the academic significance of the research stem from the authors identification and analysis of issues critical for ASEANs future evolution. Among these issues, the pivotal are prospects for the association to lose its digital sovereignty as a result of the intensifying Sino-American contradictions over the digital issues, the emergence of new imbalances between and within Southeast Asian states with negative implications for the ASEAN Economic Community. The aftereffects of the on-going digitalization of economic exchanges for ASEANs multilateral dialogue platforms and initiatives in the economic and political-security sphere. The authors findings on this set of issues, as well as their assessment, determine the academic originality of the paper.

Keywords: ASEAN, digitalization, security, Asia-Pacific multilateralism, Belt and Road Initiative, Indo-Pacific region, Russia.




Introduction


The new period of globalization marked by an exponential increase of information flows with the concomitant benefits and challenges presents the Association of Southeast Asian Nations (ASEAN) with serious policy dilemmas. By its very definition, the brave digital world can expand ASEANs possibilities to maintain the presently respectable rates of economic growth by exploring its new sources. But a deeper insight suggests that the same developments may well give the association strong reasons for concern rather than for optimism.

As the 2020 marks the year of realization of the ASEAN ICT Master-Plan and the middle point of ASEANs journey between the ASEAN Community to 2015 and to 2025, in which the digital competitiveness is given special significance, an interim assessment of what the brave digital world means for the association is a timely and relevant exercise.




Asean in the Pre-Digital Era: What Was and Was Not Achieved


Declaring that in the realization of ASEANs prospective plans to increase its digital competitiveness the previously developed foundation is an important prerequisite, the ups and downs of ASEANs digital journey will be assessed from this starting point.

Regarding ASEANs real achievements, the establishment of the ASEAN Community is of special significance. The importance of the ASEAN Economic Community (AEC) as part of the ASEAN Community project hardly stems from the advantages of the AEC itself as much work remains to be done even to make Southeast Asia a single market and a single production base as just one of the components of AEC to 2015, not to say about realizing the more ambitious goals of AEC to 2025. A more important factor is the weakness of other Asia-Pacific multilateral dialogue formats and initiatives, be it APEC, CPTPP or even the ASEAN-led prospective RCEP. As long as their prospects remain unclear, the AEC will remain the only de-facto existing multilateral initiative with relatively clear rules of cooperation.

No less significant ASEANs asset is its political-security brainchild with positive economic aftereffects. Having developed the cooperative security system in the Asia-Pacific region  exemplified by the ASEAN Regional Forum, the ASEAN Defence Ministers Meeting Plus Eight and the East Asia Summit, the Association has strengthened its credentials as a respectful Asia-Pacific actor. This allows the association to maintain a relatively peaceful international milieu in Southeast Asia contributing to its economic and investment competitiveness.

Lastly but perhaps most importantly, the history of ASEAN amply demonstrates how an international actor can benefit from the virtues of the evolutionary regional order by fostering international cooperation premised upon inclusivity and neutrality. The most important competitive advantage of ASEAN is its ability to bring to the Asia-Pacific region the inclusive and neutral mode of cooperation. The latter is an important strategic asset that is behind the present relative insulation of the Asia-Pacific region from the unfolding global entropy, which to a considerable extent has been made possible by the ASEAN-led institutions.

While the afore-discussed ASEANs advantages are indisputable, its points of its vulnerability are no less serious.

Arguably, the most potentially dangerous threat is ASEANs inability to create safety mechanisms against the negative aftereffects of globalization. The flows of capital are hampered by international sanctions, the free movement of people is accompanied by illegal migration, the information flows go hand-in-hand with the spread of fake news. In its turn, ASEAN lacks both institutional mechanisms for collective action and the capacities of its member states to manage these challenges.

With ASEANs pronounced intention to strengthen its influence on the global development, the global processes demonstrate the same characteristics the association has been trying to eliminate in the Asia-Pacific region since the ASEAN-led cooperative security system was established. In the global realm, long-term and mutually beneficial projects are regularly sacrificed for the sake of short-term minor political profit  suffice it to mention implications of the anti-Russian sanctions for Russias partners. From the ASEAN perspective, examples of the damage the anti-Russian sanctions inflict on the states of Southeast Asia are numerous[40 -          //  . URL: https://ria.ru/20181029/1531726956.html (date of access: 25.12.2019);            // . URL: https://www.rbc.ru/rbcfreenews/5b62d1a59a794740a8df2596 (date of access: 25.12.2019);          -35 -  // . URL: https://www.kommersant.ru/ doc/3797176 (date of access: 25.12.2019).]. On the whole, the ASEAN leaders disapprove of the present sanction-countersanction vicious circle exemplified mostly by China-US trade contradictions

The association is beset with the simultaneous rise of traditional and non-traditional security challenges in global politics. Their Asia-Pacific aftereffects are exemplified, among other developments, by systemic escalations of North Koreas nuclear and missile issue and the rise of ISIS threat in Southeast Asia. As long as the former is unresolved, for ASEAN the establishment of the Nuclear Weapons Free Zone in Southeast Asia remains a remote possibility. Regarding the latter, the ISIS is expanding its activity from the Middle East to other regions, among which Southeast Asia with its large Muslim population, deep-rooted separatist sentiments and indigenous groups linking separatism and terrorism, is a perfect destination. The Russian top military officials, including the Minister of Defense of the Russian Federation, assess the threat of terrorism in Southeast Asia as both real and growing[41 -     -    // . URL: https://regnum.ru/news/2753819.html (date of access: 20.12.2019).].

In this complicated context, the association aims to increase its influence upon the global development. The globalizing problems of the Southeast Asian territorial domain requires global solutions. At the same time, ASEANs attempts to explore the potential of intra-ASEAN cooperation, be it ASEAN Free Trade Area (AFTA), ASEAN Investment Area (AIA) and other multilateral initiatives, have reached the maturity level and demonstrated limited efficiency in developing cooperation with ASEANs extra-regional partners. Among the latter, Chinas example is worthy of note. After the establishment of the China-ASEAN Free Trade Area (CAFTA) the association encountered a growing trade deficit (strongly magnified by Chinas mega-strategy the Belt and Road Initiative). Responding to this trend, the association has to incentivize its other extra-regional partners to increase trade and investment exchanges.

Contrary to ASEANs expectations, however, the response of these partners has come in the form of a politicized project rather than a headlong rush to invest in Southeast Asia. The revitalization of the Indo-Pacific region with a clear anti-Chinese agenda may well marginalize the ASEAN-led venues of multilateral dialogue.

The challenges presented by the afore-discussed developments raise a logical question: to what extent has ASEAN developed the safety mechanisms of its policy which will assist the association in its journey to the brave digital world? Stating that the foundation is shaky at best, it is expedient to specify what this emerging reality means for the association.




Asean and the Digital Winds of Change


Outlining the influence of the presently evolving digitalization on ASEAN and its member states, the following points deserve distinguishing.

First, the global economy faces a kind of productivity paradox, as the exponential increase in technological development is not accompanied by the commensurate rise of productivity. Technologically advanced solutions, like gaming, interactive advertising, on-line shopping etc., focus on consumption and entertainment rather than production. For the ASEAN states, this scenario leads to a serious crisis of values as it undermines the East Asian work ethics as a pivotal prerequisite for new economic success stories.

Second, the Fourth Industrial Revolution incentivizes the association to seriously revise its formats and initiatives of economic regionalism. The present regulatory frameworks of multilateral trade, be it the General Agreement on Tariffs and Trade (GATT), the General Agreement on Trade in Services (GATS) or the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS Agreement) were developed before the present digitalization of international trade. Accordingly, these frameworks do not grasp the present essence of digital products and services. This incentivizes the association to perform a double-edged task  to digitally support its multilateral economic initiatives and to upgrade their regulatory formats, both under serious time constraints.

Lastly, an increasingly worrying trend resulting from the on-going digital exchanges is a decrease of internal manageability in the Southeast Asian states. Among the noticeable developments, the so-called eco-chambers are noteworthy. The grass-root citizens subscribe to the media resources, including those that cover politicized issues on religion, ethno-separatism etc., which correspond to their preferences and ignore alternative sources of information[42 - Tapsell R. 2018 Echo Chambers and a Sectarian Public Sphere in Southeast Asia. ASEAN Focus. URL: https://www.iseas.edu.sg/images/pdf/ASEANFocus%20Oct%202018.pdf (date of access: 27.12.2019).]. Apart from spreading fake news, this allows politicians to manipulate the public opinion during the election campaigns, as well as to mobilize, should the need arise, large masses of people to anti-government protests. Even more significant aftereffect for ASEAN member states is the rise of terrorist activity in the digital sphere. In the Internet, terrorists may carry out their illegal activities without the risk of imprisonment while crypto-currency and blockchain technologies can be used for financing acts of terrorism. Moreover, in the Internet the dissemination of extremist literature is easy as this can be done quickly and in great numbers.

A relatively new but critically important development is the politicization of the dialogue between ASEAN and its partners, mainly China and the United States, in the digital sphere. As Chinas and the US mega-strategies the Belt and Road Initiative and the Indo-Pacific region further evolve, their digital components come into conflict ASEANs interests.

Chinas Digital Silk Road as part of the BRI is premised upon Beijings intention to set the standards of digital cooperation from both hard and soft infrastructure perspective. As China strengthens its positions in the international industrial cooperation, it expands the reach of its ICT solutions. A representative example is the railway that will connect Laos and China includes the ICT-services accounting for 3.67 million dollars[43 - Four companies to provide ICT services for China-Laos railway // China Daily. URL: https://www.chinadaily.com.cn/business/2017-01/11/content_27922745.htm (date of access: 28.12.2019).]. Of equal, if not greater, importance is the supportive function of Chinas digital operating systems for the Chinese companies which expand its activity abroad and, by using the Alibaba Cloud and the data centers in other countries, have very few operating costs. This means that ASEANs industrial sector will be naturally slipping into Chinas rules of digital game.

The security implications of the Digital Silk Road for ASEAN are also likely to be far-reaching. As Southeast Asia integrates in Chinas digital space, the aftereffects will range from the PRCs possibilities to manipulate information during the elections (for instance, at the electronic voting and the vote-count procedures) to gathering security-related information. If this scenario even partially materializes, the degree of ASEANs vulnerability vis-?-vis China may well increase exponentially.

The US-ASEAN cooperation also includes the digital component. Of note is the US-ASEAN Cyber Dialogue. In the view of the US, ASEAN is a fast-growing market for digital services. The US-ASEAN Business Council estimates that there are 914 million active mobile connections in ASEAN, almost 1.5 times its population[44 - ASEANs Digital Economy is Projected to Exceed $240 Billion by 2025 // US-ASEAN Business Council. URL: https://www.usasean.org/why-asean/digital-economy (date of access: 28.12.2019).]. But the cyber-security remains underdeveloped, because of which in November 2019 the first session of the US-ASEAN cyber dialogue was convened[45 - Parameswaran P. Whats Behind the New US-ASEAN Cyber Dialogue? // The Diplomat.URL:https://thediplomat.com/2019/10/whats-behind-the-new-us-asean-cyber-dialogue/ (date of access: 29.12.2019).]. The Indo-Pacific Region as the response to the BRI also has the digital narrative. Of note is the US Free and Open Indo-Pacific Strategy is supplemented by the Digital Connectivity and Cyber-Security Partnership, launched in July 2018. Specifically, the initiative advocates the improvement of cybersecurity systems, since now the losses from their shortcomings cost the region $ 300 billion annually. Another problem is the weak development of cyber competencies. DCCP pledges to solve this problem but recognizes that in order to maintain the current growth rates, the region will have to invest $ 2.3 trillion by 2030 only in telecommunications[46 - Advancing digital connectivity in the Indo-Pacific region // USAID. URL: https://www.usaid.gov/sites/default/files/documents/1861/USAID_DCCP_Fact_ Sheet_080719f.pdf (date of access: 30.12.2019).]. Taking into account the politicization of the Indo-Pacific narrative, this means that the Sino-US contradictions are embracing the digital space.




Aseans Pains and Remedies


Considering all the developments outlined above, a timely question is what specific dangers ASEAN is exposed to, as well as what countermeasures it can adopt. Some observations are worthy of note.

Arguably, the association faces real prospects for losing its digital sovereignty (understood as ASEANs own digital infrastructure and strong digital competences, as well as the ASEAN member states ability to implement an independent policy in the internet in accordance with the international law), mostly as an aftereffect of the emerging Sino-US contradictions. In fact, the association is again being torn apart by China and the United States, this time along the digital lines, with prospects for digital bipolarity. While China and the US have repeatedly declared their intention to draw a line between their political contradictions and strengthen economic interdependence, including in Southeast Asia, does this priority extend to the digital sphere, and is the Sino-US technological interdependence possible? Or can it  by its definition  be nothing a weaponized interdependence at best?

Another potential threat for the association stems from prospects for new imbalances, both between and within (emphasis added  the authors) the Southeast Asian states. The Fourth Industrial Revolution entails large-scale social aftereffects, mainly a widening income gap, which will overlap with the deep-rooted social, ethnic and religious problems prevalent in Southeast Asia. If so, ASEAN will be unable to successfully develop regional integration as long as the processes of national integration are unfinished.

ASEANs vulnerability is reinforced by potentially negative implications for ASEAN-led multilateral dialogue platforms on political-security issues. As China continues to build its own security system in Eurasia portraying itself as the exclusive provider of economic benefits, the ASEAN-driven multilateral venues are likely to slip into irrelevance.

For ASEAN, a core premise in tackling these problems comes from its readiness to perform a double-edged task. The association should increase the manageability of challenges it encountered before the present digital problems appeared and at the same time strengthen its digital capacity-building. Both tasks make ASEAN upgrade its relations with extra-regional partners.

But these partners should simultaneously (emphasis added  the authors) meet multiple criteria. As the confrontation between the Asia-Pacific big powers is rising, this partner should be willing to preserve the ASEAN-favored neutrality and inclusivity in driving the regional multilateral dialogue. As digitalization is a global phenomenon, this partner should be an established global power capable of shaping the global digital agenda. As ASEAN needs digital competences, this partner should respond to these expectations. As the association is scared by the intentions of China and the US to obtain unilateral benefits at the expense of ASEAN, this partner should be free from such intentions.

Reiterating that these criteria should be met fully rather than partially, among ASEANs array of external partners there is only one appropriate. This is the Russian Federation, which recently enhanced its relations with ASEAN to the level of Strategic Partnership. To make this relationship really strategic, as its name suggests, ASEAN and Russia should develop future-oriented, long-term and resourceful directions of cooperation. Arguably, the digital sphere offers the parties the best presently available option.




Conclusion


The digital stage of globalization with its political, economic and informational aftereffects is the new normal of international affairs while digital infrastructure and competences are the new must-have for international actors. For ASEAN striving to increase its global influence, this is especially relevant as it will specify on what terms the association will integrate in the global economy, politics and security.

ASEANs response is complicated by numerous factors, as the association has only partially succeeded in making Southeast Asia an investor-attractive economic area. As the international milieu in which the association has to implement its policy becomes increasingly competitive, ASEAN has to act without the previously prepared assets. Actually, the ASEAN-led multilateral formats and initiatives, unable to digitally support ASEANs prospective plans, as well as to ensure ASEANs extra-regional partners in ASEANs indispensability, are likely to present the association with new challenges.

To effectively cope with them, the association will have to revise its present mode of relations with dialogue partners. Among them, the Russian Federation, an established global power with unique digital competences and a long-standing trusted friend of the association, has ample changes to loom all the larger in ASEANs present and future order of international priority.




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ASEAN IN VIETNAMS POLICY: BETWEEN TWO CHAIRMANSHIPS


VU T. TRANG


Institute for European Studies, Vietnam Academy of Social Sciences


vuthuytrang@yandex.ru


TERSKIKH MIKHAIL ANDREEVICH


Ph.D (political science), Institute of World Economy and International Relations, Russia


mikhail.terskikh@gmail.com


DINH M. TUAN


Institute for European Studies  Vietnam Academy of Social Sciences


tuaneu@gmail.com

The chapter examines the ASEAN direction in Vietnams foreign policy between its chairmanships in 2010 and 2020 respectively. The international changes that occurred during this period and influenced on ASEANs policy (the intensification of rivalry between the great powers, escalation of the South China Sea dispute, the growth of protectionism, restrictionism and nationalism, non-traditional security challenges including climate change, etc.), as well as its Vietnams dimension in forming ASEANs response, are thoroughly scrutinized. The SRVs priorities during its 2020 chairmanship  both declared and practical  are studied in detail.

The authors argue that owing to increased competition between the great powers with potentially disturbing implications for Southeast Asia, the on-going Vietnams chairmanship becomes a crucial point in ASEANs history. Grasping the challenges, the association has to deal with, as the present ASEAN chairman Vietnam offers its ASEAN partners, as well the external powers, an agenda of cooperation with a clear consolidating component.

The novelty of the study stems from a cutting-edge research of Vietnams likely policy directions as the present ASEAN chairman, which is based on an analytical interlink between the changes of the international milieu in Southeast Asia between 2010 and 2020, ASEANs remedial measures and their Vietnam perspective. In line with this analytical focus, a deep and nuanced assessment of the SRVs priorities and policy directions as the ASEANs 2020 chairmanship is made. Findings on this set of issues add the practical relevance of the study and make it academically unique.

Keywords: Vietnam, ASEAN, South East Asia, Asia Pacific, Indo-Pacific, South China Sea, security, cooperation.




Introduction


The effective chairmanship in the Association of Southeast Asian Nations (ASEAN) is considered by the leadership of the Socialist Republic of Vietnam (SRV) as one of the main foreign policy tasks for 2020. The midterm review of the ASEAN Community Vision 2025 and the 25th anniversary of Vietnams accession to the Association add urgency to this priority. The reputation aspect also matters  the election of Hanoi to the post of the nonpermanent member of the UN Security Council for 2020-2021 and the SRVs chairmanship in ASEAN are convincing indicators of an increased role of the state on the regional and the global arena. To examine the ASEAN direction of Vietnams policy between the previous (in 2010) and the on-going SRVs chairmanship in ASEAN becomes a timely and relevant exercise.

The chapter starts from a review of international context in Southeast Asia between 2010 and 2020. Then it turns to examining Vietnams contribution to ASEANs policy to cope with the emerging challenges. The priorities of Vietnams on-going ASEAN chairmanship are considered through the prism of these developments. The conclusion summarizes the main findings of the study.




A Decade of Changes


Between two Vietnams chairmanships, Southeast Asia has seen profound international changes. In 2010, the region and the world had barely recovered from the global financial crisis. ASEANs policy demonstrated that in a critical situation, the ten states prefer to act separately rather than collectively[47 - Kanaev E. A., Kurilko A. E. Yugo-Vostochnaya Aziya v usloviyah mirovogo finansovo-ekonomicheskogo krizisa (South East Asia in the context of the global financial and economic crisis  in Russ.) // Mirovaya ekonomika i mezhdunarodnye otnosheniya, 2010, No 2. . 3846.]. This, in turn, decreased ASEANs ambitions to solidify its status of the driving force of the Asia-Pacific. From the Vietnam perspective, a task to confirm the validity of the Associations ambitions, as well as to provide ASEAN with a new reputational value, was pressing. On the whole, that task was fulfilled. The main results of Vietnams chairmanship included the expansion of the East Asia Summit through the accession of Russia and the United States and the launch of the ADMM Plus format.

Vietnams 2010 chairmanship saw Washingtons involvement in the South China Sea issue, including the Sino-American polemics at the ASEAN Regional Forum[48 - Hillary Clinton Changes Americas China Policy // Forbes, July 28, 2010. URL: https://www.forbes.com/2010/07/28/china-beijing-asia-hillary-clinton-opinions-columnists-gordon-g-chang.html#16e70ceb50c7 (date of access: 24.03.2020).]. These moves were welcomed by Vietnam and a number of ASEAN states seeking the US support in opposing the PRC[49 - Vietnam, the US, and Japan in the South China Sea // The Diplomat, November 26, 2014. URL: https://thediplomat.com/2014/11/vietnam-the-us-and-japan-in-the-south-china-sea/ (date of access: 24.03.2020).].

Significant progress has been achieved in relations between ASEAN and its extra-regional partners. Specifically, the involvement of non-ASEAN countries in the regional affairs has radically changed  some of them actually started to set the tone for the evolution in Southeast Asia. China launched the Belt and Road Initiative, which aims to provide large-scale financial injections into ASEAN countries focusing on, but not limited to, the development of their infrastructure. Japan responded by the Partnership for Quality Infrastructure (hinting at the poor-quality Chinese), further politicizing economic cooperation. The US Republican Administration brought a second wind to the Quadrilateral Defense Cooperation (Quad) (USA, Japan, India, Australia) and introduced the Indo-Pacific narrative. Simultaneously, Washington created the Blue Dot Network, with the focus upon the infrastructure development. Lastly but importantly, extra-regional actors intensified their polities, from both substantial and institutional perspective, in the Mekong River basin.

As for the South China Sea, the assertiveness of Beijing in the maritime area did not weaken. The issue is perceived as one of the most important regional security challenges, while the international pressure on the PRC over it also increased radically.

In the economic sphere, a trend toward protectionism and a wider use of non-market regulatory methods has become widespread in the international politics. This could not but alert ASEAN, because the success of the export-oriented economies of its member states countries crucially depends on the free access to the external markets.

In general, the involvement of non-ASEAN countries in Southeast Asian affairs has increased while the launch of competing mega-projects has become a disturbing development for the Association. The initiatives of the great powers objectively began to outweigh ASEAN projects. The aftereffect is a decrease in the importance of ASEAN dialogue platforms, undermining ASEANs neutrality and central role in the Asia-Pacific multilateral cooperation. Lastly but importantly, understanding the complexity of intra-ASEAN processes, some non-regional players increasingly began to develop cooperation with individual ASEAN member states rather than with ASEAN as an international actor, which further intensified downward trends in the association.

At these complicated crossroads, ASEAN is forced to act very carefully. Though ASEAN was virtually unable to develop an effective approach that could consolidate the interests of great powers, it has not lost the role of a central negotiating platform in the region. In the context of the changes that have taken place over the past decade, this is an achievement in itself. And although the Association was unable to elaborate on instrumental links between its prospective plans and the Belt and Road Initiative, it was able to formulate its Indo-Pacific Vision[50 - ASEAN Outlook on the Indo-Pacific // Association of Southeast Asian Nations, June 23, 2019. URL: https://asean.org/asean-outlook-indo-pacific/ (date of access: 24.03.2020).], which is also notable success.

In the economic sphere, due to the different level of economic development of its member countries, ASEAN could not ensure completely free movement of goods, services and capital in Southeast Asia. At the same time, the establishment of the ASEAN Economic Community has spurred the launch of specific projects to strengthen infrastructure interconnectivity.

These factors suggest that the association has been relatively successful in coping with the decade-long challenges and associated risks which have been steadily rising. At this juncture, the role of chairmanship of a specific country, in terms of both its priorities and possibilities to translate them into reality, comes to the fore.




The Vietnam Perspective


Since 2010, Vietnam has been one of the most active ASEAN member countries in promoting the maintenance of ASEANs internal solidarity, regional resilience, common values, standards of conduct, as well as strengthening its central role in the Asia-Pacific multilateralism.

Beside the already discussed expansion of the EAS and the launch of ADMM Plus, Hanoi continued to engage non-regional partners in the dialogue in order to keep the Southeast Asian security challenges manageable. For example, Vietnam promoted ASEAN joint maritime drills with China in 2018 and with the United States in 2019. In the same strain, Hanoi is likely to make efforts to conduct similar drills with Russia in the year of its chairmanship[51 - Rossiya i ASEAN aktivno prorabatyvayut ideyu sovmestnyh uchenij VMS (Russia and ASEAN are actively working on the idea of joint naval exercises  in Russ.) // RIA Novosti, February 14, 2020. URL: https://ria.ru/20200214/1564687761.html (date of access: 21.03.2020).].

On the South China Sea issue, Vietnams policy aimed to achieve a consensus within ASEAN, as well as between ASEAN and its extra-regional partners. As a result, in May 2014, the foreign ministers of ASEAN issued a separate Statement on the South China Sea, for the first time since 1992[52 - ASEAN Foreign Ministers Statement on the Current Developments in the South China Sea // Association of Southeast Asian Nations, May 10, 2014. URL: https://www.asean.org/storage/images/documents/24thASEANSummit/ASEAN%20Foreign%20Ministers%20Statement%20on%20the%20current%20developments%20in%20the%20south%20china%20sea.pdf (date of access: 21.03.2020).].

The results of Vietnams involvement in the economic regionalism are dubious. In line with creating a network of free trade agreements with partners around the world, Hanoi, although it has markedly increased the volume of trade with nine partners in the Association, in percentage terms the ASEAN contribution to Vietnams foreign trade decreased from 18.1% to 11.3%, while the share of the East Asia Summit countries increased from 71.6% to 75% (See Table 1). But as practice demonstrates, for extra-regional states an FTA regime with Vietnam often becomes the first step for launching negotiations between non-regional partners with other ASEAN states and eventually for concluding an FTA with the Association.



Table 1. VIETNAMS TRADE WITH EAS STATES IN 2009 AND 2019[53 - The authors calculations based on the statistics provided by the General Department of Vietnam Customs, URL: https://www.customs.gov.vn/Lists/ThongKeHaiQuan/Default.aspx (date of access: 21.03.2020).]






Increased investment from both ASEAN and EAS members in Vietnams economy deserves mentioning. While in 2009 the USA ($9.8 billion), Cayman Islands ($2.2 billion) and Samoa ($1.7 billion) were leaders in terms of registered FDI, ten years later the list of major investors looked like this: the Republic of Korea ($7.9 billion), Hong Kong ($7.9 billion), Singapore ($4.5 billion), Japan ($4.1 billion), China ($ 4.1 billion)[54 - T?nh h?nh thu h?t d?u t? n??c ngo?i nam 2019 (Foreign Direct Investments in 2019  in Viet.) // FIA Vietnam, January 7, 2020, URL: https://dautunuocngoai.gov.vn/ tinbai/6318/Tinh-hinh-thu-hut-dau-tu-nuoc-ngoai-nam-2019 (date of access: 21.03.2020).].

In general, Vietnams contribution to ASEAN is more conspicuous in the political rather than in the economic sphere. Primarily, this is predetermined by objective constraints, mainly in the infrastructure development and the institutional spheres, the ASEAN connectivity narrative is encountering. Also, in the short-term perspective for Vietnam to promote economic cooperation with non-ASEAN partners is likely to be more profitable than within ASEAN. At the same time, the Association will remain the key SRVs foreign policy direction as it finds the strongest resonance with Vietnams long-term interests.




Assessing Srvs 2020 Priorities


This year, Vietnam intends to significantly increase ASEANs international stature. The attention is focused on ASEAN internal development issues with an emphasis on the strategic goal  the formation of the three-pillar integrated Community. As the leadership of the country has repeatedly emphasized, Hanoi will continue to build on the achievements of previous chairmanships and implement the tasks set in the ASEAN Community Vision 2025 [55 - Keynote speech by PM Nguyen Xuan Phuc at launching ceremony of VNs 2020 ASEAN Chairmanship // Online Newspaper of the Government, January 6, 2020. URL: http://news.chinhphu.vn/Home/Keynote-speech-by-PM-Nguyen-Xuan-Phuc-at-launching-ceremony-of-VNs-2020-ASEAN-Chairmanship/20201/38445.vgp (date of access: 21.03.2020).].

The slogan of the Chairmanship is Cohesive and responsive, which, along with even greater solidarity of ASEAN member countries, also implies an increase of resistance to the regional and global challenges, and the ability to capitalize on the emerging opportunities.

In this context, the Vietnamese Chairmanship identified the following priorities:

1. Increasing the Associations contribution to maintaining peace, security and stability in the region by strengthening intra-ASEAN solidarity and unity, mutual support, coordination of positions on regional and international issues.

2. Deepening interconnectivity and economic integration  both within the Association and with external partners. Enhancing the ability to adapt to the changes brought about by the Fourth Industrial Revolution.

3. Strengthening the ASEAN identity through the formation of common values, increasing the awareness of the population about ASEAN, promoting the image of the ASEAN Community.

4. Development of the Associations global ties in the interests of peace, stability and sustainable development. Increasing contribution to the formation of a new regional and global architecture, as well as rules of conduct.

5. Expanding the institutional capacities and effectiveness of ASEAN through appropriate reforms, improvement of existing and creation of new standards[56 - ASEAN Chairmanship 2020: For a cohesive and responsive ASEAN // Viet Nam News, January 13, 2020. URL: https://vietnamnews.vn/politics-laws/571038/asean-chairmanship-2020-for-a-cohesive-and-responsive-asean.html (date of access: 24.03.2020).].

Considering the present-day international milieu in Southeast Asia and beyond, Vietnam is not interested in increasing tensions in the South China Sea, which means it is unlikely to initiate any new anti-Chinese step (which, however, does not mean that Hanoi will not respond to possible provocations of Beijing). An ideal option for Hanoi is to maintain the balance achieved earlier, to avoid new contradictions, and to complete the second reading of the draft Code of Conduct. In a similar vein, the Vietnamese presidency will apparently adhere to a cautious approach to other regional issues, in particular the Rohingya problem in Myanmar.

In the context of the promotion of diverse Indo-Pacific strategies by non-regional countries, as well as the actual consolidation of Indo-Pacific terms in the regional political vocabulary, it is unlikely that the Vietnamese chairmanship will be free from these geographical neologisms. Consequently, Hanoi will probably continue to promote the ASEANs Indo-Pacific Outlook. This allows the association, on the one hand, not to go against the present-day political mainstream, and on the other, to defend its own agenda.

Importantly, from the multilateral perspective Hanoi has ample chances to repeat its ten-year old success story. This can be achieved both by inviting new non-regional partners into ASEAN-led discussions in various statuses, and by intensifying contacts with ASEANs existing dialogue partners.

Vietnam also plans to make the Regional Comprehensive Economic Partnership (RCEP) one of the main achievements of its chairmanship  with or without India. This was repeatedly stated by the leadership of the Ministry of Industry and Trade responsible for this project, emphasizing that it would do everything possible to sign the document in 2020[57 - RCEP  important milestone in Vietnams international economic integration process // Ministry of Industry and Trade, 08.11.2019. URL: https://moit.gov.vn/web/web-portal-ministry-of-industry-and-trade/tin-chi-tiet/-/chi-tiet/rcep-important-milestone-in-vietnam-s-international-economic-integration-process-16986-1311.html (date of access: 21.03.2020).].

Finally, Vietnam will increase ASEANs capacity to grasp the demands of the Fourth Industrial Revolution. Specifically, the emphasis will be placed on introducing the smart cities technologies and bridging the gaps between the digital development of ASEAN member states. Problems like the aftereffects of climate change, the salinization of soils in the Mekong Delta, plastic garbage, etc., will also be reflected.

In general, Hanoi will focus on decreasing the seriousness of challenges the Association is currently encountering. Among them, the most important are the remaining lack of ASEAN unity and prospects for rivalry in the regional and global international milieu. At the same time, Vietnam expects to receive serious reputation benefits, both through demonstrating its increased influence, and through finalizing ASEANs long-standing mega-projects, first and foremost, the RCEP.




Conclusion


Over the past decade, the regional and the global milieu have seen an increased competition between the great powers with troublesome aftereffects on Southeast Asia. This incentivizes the Association and Vietnam as its present chairman, to implement a smart and nuanced policy in order to balance interests of all the parties on the regional chessboard.

For Vietnam, ASEAN is and will possibly remain the key foreign policy direction as the association plays an indispensable role in promoting Vietnams interests from the substantial, institutional and reputational perspective. If so, Hanoi will make every effort to strengthen ASEAN solidarity and central role in the Asia-Pacific multilateralism.

So far, Vietnam has chaired ASEAN three times, and each chairmanship fell to the critical period for the history of the association. The 1998 chairmanship was amid ASEANs policy to cope with the aftereffects of the Asian financial and economic crisis, while the 2010 and 2020 chairmanships marked ASEANs attempts to keep the South China Sea issue and the outbreak of COVID-19 pandemics in a manageable state. Among other tasks, for the association it presupposed strengthening ASEANs internal unity and ASEANs positions in the Asia-Pacific multilateral dialogue platforms. The extent of Hanois ability to deal with these tasks during its present chairmanship will largely shape the future evolution of the association.




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VIETNAM BETWEEN THE USA AND CHINA

This article analyses the problems of choosing a way of political development and of geopolitical orientation of the countries of Southeast Asia in the context of the global transformation of international relations. Today the question of choice is relevant for the region and for the countries in particular.

Modern Vietnam has found itself in the field of conflict of interests of the United States and China. The reason is the geopolitical position, a sustained economic development, one of the strongest armies of Asia, a strong position among ASEAN countries and in the region. The struggle for influence in Vietnam can be crucial for the strategic equation in the region.

The United States is building up influence in several areas at once, including work with young people (primarily higher education programs), attempts to penetrate all spheres of public life, primarily political one. At the same time China maintains close ties between the communist parties of both countries, actively building up economic cooperation. Trade is very active especially in the border areas, implementing the initiative Two economic corridors  one belt, adopted in 2004. In such conditions, the article draws attention to the fact that the development of relations with Russia in all areas is very important, based on relations of mutual trust and partnership that have historically developed between the two countries.

Keywords: Vietnam, China, USA, Russia, Asia-Pacific integration projects, Indo-Pacific region, ASEAN.







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Ponka T. I., Belchenko A. S., Trusova A. A. Dvuhvektornyj podhod KNR k razresheniju territorialnyh sporov v Juzhno-Kitajskom more // Vestnik RUDN. Serija Mezhdunarodnye otnoshenija. 2017 Vol. 17. No. 3. S. 518529. (in Russ.)

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Contemporary Sino-Myanmar Relations: Dilemma of Letpadaung Taung Copper Mine Project




WAI YAN PHYO NAING


Ph.D. (Candidate), Doctoral School of History, Faculty of Humanities, National Research University  Higher School of Economics


ywai@hse.ru

Since Myanmar was opened to the world in 2011 local and international environmental activists tried to criticize the Chinese megaprojects in Myanmar. Letpadaung Taung Copper Mine Project is one of the huge Beijing investments in the Myanmar Military government era. The lack of corporate social and environmental responsibility on behalf of the Myanmar Wanbao Company created an intolerable situation for the residents. The only Letpadaung project became a center of international dispute and a dilemma of Sino-Myanmar relations similar to Chinese mega-projects in Myanmar. It happened because the late Myanmar Military government finalized all significant Chinese investments agreements before they transferred country power to the civilian administration in the mid of 2010.

This condition has led to a nation-wide movement after local intermediary administrators used Phosphorus bombs to destroy the activists camp near the project area in November 2012. President Thein Sein founded the Letpadaung Taung Investigation Commission and requested Myanmars democracy icon and opposition leader Aung Sann Su Kyi to lead the commission. However, Aung Sann Su Kyi did not receive a warm welcome from the local people and even faced aggressive sentiment on her field trip.

Beijing became concerned with its major construction projects in Myanmar since Myanmar-Sino relations rapidly degraded after the suspension of the Myitsone Dam in late 2011. This article investigates the factors of rising anti-Chinese persuasion in Myanmar and describes the problems connecting with the Letpadaung Taung Copper Mine Project.

Keyword: Letpadaung Taung Copper Mine, Chinese Investments, Wanbao, Sino-Myanmar relations.


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Introduction


In March 2011, Myanmar started its new chapter by shifting from authoritarian to democratic state. Myanmar people received opportunities to express their opinion on government projects, especially for joint investments with Chinese companies. After President Thein Sein suspended Myitsone Dam General Project by listening to his fellow citizens demand, another one, Letpadaung Copper Mine project emerged as the next step of the antiChinese investments in that time. On the other hand, there were invisible thorns in the two countries asymmetric economic relations such as Myitsone Dam project, Kyaut Phyu Deep Sea port project. Therefore, the dilemmas of the Sino-Myanmar relations became acquired tense and even confrontational character.

Looking from a global perspective, China is an influential neighboring country for Myanmar. Myanmar could not neglect Beijings role in the world and its policies on East Asia and the Southeast Asian region. Therefore, this article stands out from the existing body that advocated the literatures pushing of Myanmar to forge close ties with Western World and the US more than China.




Methodology


Previous studies have reported the locals opinions on Chinese megaprojects after Myanmar democracy transition is opened by Lauren Decicca[68 - Lauren Decicca. In the Shadow of Letpadaung: Stories from Myanmars Largest Copper Mine // National Resource Governance Institute, 2015.]. However, he did not pay attention to the daily life of locals after the projects commencement [Lauren Decicca, 2015]. Atsuko Mizumo focuses on details of Letpadaung Copper Mine Project connecting with Myanmars China policy[69 - Atsuko Mizumo. Economica Relations Between Myanmar and China // JICA Research Institute, 2016.]. Although he has researched Chinese Mine investments in Myanmar and their development, it is still necessary to do in-depth research on the Chinese interests in their project [Atsuko Mizumo, 2016].

These critical situations are concerning the Letpadaung project developed as the dilemmas of Sino-Myanmar relations until NLDs government came to power. This research examines different primary sources such as interviews, government documents, statistics, field studies in the project area.




Main results


Monywa is the largest city of the Sagaing Division and located at the east bank of the Chindwin river in the central part of Myanmar. There are four large copper mine projects, namely Letpadaung, Sabetaung, Sabetaung South and Kyisintaung in the western part of the town. In 1978, Myanmar started Sabetaung and Kyisintaung mines, which are located next to each other. Letpaduang Copper mine project is located to the southeast of these aforementioned two copper mines. According to the report from the Amnesty, Letpaduang can produce 75% of the copper out of these four projects [Amnesty, 2015. P. 12]. At that time, the Myanmar government managed all projects according to the Socialist economic policy [Maung ., 1964. P. 1189].

In 1996, Myanmar military government opened its economy to the outside world and invited foreign direct investments. Ivanhoe Myanmar Holdings Ltd, a Canadian owned company, had passed the government tests and entered into the joint investments with Minister of Energy (1) [Amnesty, 2015. P. 20]. The agreements were not only for the Letpadaung deposit, but also for all deposits in the Monywa project. However, the existing literatures do not mention these facts, mentioning only the Letpaduang mine. Ivanhoe gave up Monywa projects and sold its 50%[70 - Open for Business? Corporate Crime and Abuses at Myanmar Copper Mine //Amnesty International, P. 99.] share to the third party when the US and the West imposed harsh sanctions on Myanmar in 2007. However, the purchasers identity of the Ivanhoe shares was shrouded in secrecy from the media [Amnesty, 2015. P. 99].

In March 2010, The Union of Myanmar Economic Holdings Limited (UMEHL) nationalized 7,867 acres of land for the Letpadaung project. When Chinese Premier Wen Jiabao paid a state visit to Myanmar, the UMEHL and Ministry of Mines from Myanmar side and China North Industries Corporation (NORINCO) signed a US$ 1,1 billion joint investment for Letpadaung Copper Mine Project [Maung Myoe, 2015. P. 38]. Upon investigating the background of NORINCO, it became apparent that is Chinas military-owned company. The same applies to its counterpart UMEHL, that was also backed up by the Myanmar military[71 - Maung Aung MYOE. Myanmars China Policy since 2011: Determinants and Directions // Int. J. Journal of Current Southeast Asian Affairs, 2015. Vol. 34. No. 2. P. 2154.]. Only Maung Aung Myoe mentioned these facts [Maung Myoe, 2015. P. 39]. A. Clapp Priscilla reported that Wanbao is a Chinese state-owned company. No one knew when the agreement took place, and how did the parties reach a final agreement [Priscilla, 2015].

However, we should not neglect the fact that Wanbao company is a daughter of NORINCO. Before the NORINCO started managing the completed project, Wenbao Mining Ltd founded two subsidiaries such as Myanmar Wenbao Copper Mining Limited and Myanmar Yang Tse Copper Mining Limited [Myanmar Wanbao Company Limiteds webpage]. It could be confusing for researchers because Ivanhoe controlled the whole Monywe project under the same administration when they managed all mines before [Amnesty, 2015. P. 10]. For Letpaduang Mine, Myanmar Wanbao Copper Mining Ltd has managed the entire project, and Myanmar Yang Tse Copper Mining Ltd has handled the Sabetaung and Kyisintaung mines since 2010 [Amnesty, 2015. P. 10]. The only Letpadaung project became a center of international dispute and a dilemma of Sino-Myanmar relations similar to Chinese mega-projects in Myanmar. It happened because the late Myanmar Military government finalized all significant Chinese investments agreements before they transferred country power to the civilian administration in the mid of 2010 [Priscilla, 2015].




Growth of Anti-Protests on Letpadaung Project and investigation Commission Protests before the Commission


On 30 September 2011, the new governments President Thein Sein suspended the Myitsone Dam General Project. This project is one of the significant Beijing ventures in Myanmar, and two countries reached the final agreement before Myanmars first democratic government era and Maung Aung Myoe also highlighted similar idea in his work [Maung Myoe, 2015. P. 37]. Many Myanmar people believe that China is trying to take all of Myanmar natural resources for their development benefits[72 - Maung Aung MYOE. Myanmars China Policy since 2011: Determinants and Directions // Int. J. Journal of Current Southeast Asian Affairs, 2015, Vol. 34. No. 2. P. 38.]. This mindset has come from a lack of trust in Chinese goods and business practices.

At the same time, the tensions appear between Myanmar Wanbao and villagers because the regional government forced local people to relocate from their land at the beginning of 2011 [Decicca, 2015]. According to Amnestys survey, 30 villages and 6,785 acres of land are located in the project area [Amnesty, 2015. P. 13]. Anti-Chinese activists used the opportunities to influence Letpadaung villagers easily. In the mid of 2012, residents opened the demonstrations camp near the Myanmar Wanbao headquarter[73 - Letpadaung Investigation Commission Issues Final Report, Myanmar Law Updates //Charltons, April 2013. URL: https://www.charltonsmyanmar.com/letpadaung-investigation-commission-issues-final-report/ (date of access: 19.02.2020).]. Before the sunrise of the 29th of November 2012, the police disbanded the protest campsite by using tear-bombs and water cannons. Some investigators found that the cops even used white phosphorous [Charltons, 2013. P. 1].




Letpaduang investigation Commission


Therefore, President Thein Sein formed the Letpadaung Investigation Commission and requested Aung Sann Su Kyi to become its chairperson on 1 December 2012 [Charltons, 2013. P. 1]. The Presidents office appointed 16 members on the commission including military and police officers, academics and dignitaries. As a leader of the investigation commission, Aung San Su Kyi clearly understood the Chinese role in Myanmar Domestic policy and underlying Beijings interests[74 - Yun Sun. Can the NLD and China usher in a new era in relations? // The Myanmar Times, 2015.], and Yun Sun also indicated it in her work [Yun Sun, 2015].

The commission visited the Letpadaung Mine project area from 5th to 15th of December 2012. At the same time, commissioners also met with the injured demonstrators in the Monywa hospitals and Yangon General Hospital. According to the commissions report, there were 108 people and 99 monks injured in the incident[75 - Letpadaung Investigation Commission Issues Final Report, Myanmar Law Updates //Charltons, April 2013. URL: https://www.charltonsmyanmar.com/letpadaung-investigation-commission-issues-final-report/ (date of access: 19.02.2020).]. According to Charlton, the investigators observed that the commission met with the Police Chief of Staff and Police colonel accountable for the Sagaing Region [Charltons, 2013. P. 3], and discussed the details about the crackdown incidents of the 29th of November. Later, the Minister of Home Affairs removed several police officers from their current duties in Sagaing Region as stated in the local newspapers. When Aung San Su Kyi met with the villagers, they responded with emotional words. Su Kyi told the villagers, If we stop this project, it will not benefit the local community, or the country and they might think that our country cannot be trusted on the economy. at the Letpadaung [Charltons, 2013. P. 4]. She also argued that Myanmar needs Chinese investment. We have to get along with [China] whether we like it or not [Ramachandran, 2016].

The commission also visited the Moneywa mine project areas, not only Letpaduang but also Sabetaung and Kyaysintaung projects. In March 2013, the investigation commission delivered its final report to the President and publishing it in governmental newspapers [Mizumo, 2016. P. 113]. However, the commission agreed to continue the Letpadaung Copper Mine Project recommending 42 essential suggestions to the mines investors. Official Beijing being satisfied with the final report of the commission and sent the Chinese ambassador to pay visit to Aung San Su Kyis residence, expressing his congratulation on behalf of the Chinese government on the 24th of April 2013 [BBC]. Myanmar Wanbao also released its statement, promising that they will continue contributing to the sustainable development of our local community and of Myanmar as a whole [Charltons, 2013. P. 3].

In the new contract, Myanmar Wanbao, UMEHL, and the government specified new profit-sharing of the project by allocating 51% to the Myanmar government, 30% to Myanmar Wanbao, and 19% to the UMEHL. On the other hand, the investors have to use one million US$ for corporate social responsibility and two million US$ for the annual environmental preservation [Mizumo, 2016. P. 113]. Yun Sun noted that the investigation committee for the Letpdaung copper mine project, which she (Aung San Su Kyi) chaired, approved the continuation of the joint venture despite opposition from local residents and Myanmar society in general her position (or rather lack of it) has made her, at the minimum, an acceptable Myanmar politician for China. [Yun Sun, 2015].




Protests after the Commission


On 13 March 2013, Aung San Su Kyi visited local residents again, shortly after her commission published a final report. At the same time, the villagers did not stop their protests, rather intensifying them more provokingly. She faced emotional counter words from the villagers like during her first trip[76 - Letpadaung Investigation Commission Issues Final Report, Myanmar Law Updates // Charltons, April 2013. URL: https://www.charltonsmyanmar.com/letpadaung-investigation-commission-issues-final-report/ (date of access: 19.01.2020).], but this time they became more depraved and the government responded with tight security for her. The villagers also delivered their opinion that they did not want relocation and compensation, and they were not going to stop until the project shuts down totally [Charltons, 2015. P. 4].

In November 2013, police officers and villagers clashed again in the Myanmar Wanbaos headquarter, near the Letpadaung Project. The police used rubber bullets for antiriot shotguns, and nine police officers and five activists were wounded [Win Zaw Latt, 2013]. However, the villagers and activists still commented on environmental pollution and unfair salary for local workers, relocation and compensation processes for their land. Before the Letpadaung Investigation commission, Myanmar Wanbao reimbursed 550,000 MMKyats[77 - Myanmar Wanbao Company Limited. URL: http://www.myanmarwanbao.com.mm/mm.html (19.01.2020).] for an acre. Later, according to the commissions suggestion, Wanbao agreed to provide additional compensation for an acre between 700,000 and 1,25 million MMKyats [Maung Myoe, 2015. P. 38].

Back then, the author worked as a reporter, and visited the project on two times interviewing locals and activists. When he reached out to Myanmar Wanbao, they explained every detail of the Letpaduang project. The company sent journalists to meetings between villagers and company officers to examine how the company officials proposed CSR programs to local community. However, the author interviewed villagers and activists. The author asked, If you need urgent development for your community, and, even, you know that you can produce valuable bronze from Letpaduang Mountain, what will you do? The local activist answered that We will not produce any copper or bronze from the Letpadaung Mountain, even we do not have anything to eat. We do not need any development if we have to destroy the Letpadaung, and we are going to enjoy its beauty until we die. Therefore, we could clearly understand that the local residence feeling on the project.

When Myanmar Wanbao tried to start the project in December 2014, they faced vocal protests from the villagers again. Finally, the tension reached the highest point, after the police opened fire, and one villager, Daw Khin Win died on the spot. It received attention from international and local activists [Kivim?ki, 2016]. According to Amnestys research paper, there was preannounced lack of environmental concern and management in the mine. In May 2016, Myanmar Wanbao announced that they had started to producing copper from the Letpadaung Mine for the first time [Amnesty, 2016. P. 4].




Effects in Sino-Myanmar Relations


Every Myanmar government has believed that China is the paramount partner for domestic and foreign interests [Toh Han Shih, 2014]. Until the Myanmars democratization period, China was the leading investor in Myanmar. However, after a series of protests in Letpadaung Copper Mine Project took place, Beijing investments dropped rapidly [Yun Sun, 2012. P. 75]. In the first year of Thein Seins administration, 2011-2012, Chinese FDI in Myanmar reached US$ 4345.73[78 - Myanmar State Directorate of the Investment and Company Administration official Website. URL: https://www.dica.gov.mm/en/taxonomy/term/38 (date of access: 19.02.2020).] million, and it was the second-highest amount in two countries trade since 1988, according to the Myanmar State Directorate of the Investment and Company Administrations figures. However, in 2013-2014, FDI from China to Myanmar visibly dropped to the US$ 56.16 million, becoming the lowest since 1988 [DICAs annual report].

In March 2016, the NLD government came into power. They continue focusing on the Chinas role in the region and Logic of geopolitic when comstructing their foreign policy and Sudha Ramachandran has also illustrated symmetric idea in his work [Ramachandran, 2016]. However, the relations between the two countries have not improved as it was expected by both sides. The FDI from China never reached its highest pre 2011 point. On the other hand, the anti-Chinese sentiments are still festering in the Myanmar community.




Conclusion


Since 1988, Myanmar political activists had been trying to develop democracy in the country. However, they were suppressed by the Military government for over two decades, from 1988 to 2011. Therefore, majority of Myanmar people did not support the junta. They considered the government supporters and partner countries as traitors. Whenever the military government was under international pressure, China always stood by their side and supported with loans and investments [U Myo-Thit, 2017]. It has resulted in the development of the Sinophobia in Myanmar. The citizens did not trust Chinese investments because of their lack of duties for social responsibilities. Beijing understood for those sentiments and, therefore, tried to smooth every process for their investments in Myanmar with the Junta

However, the Chinese policies backfired when President Thein Seins government listened to their follow peoples voices. Consequently, the Beijing became concerned when the opposition was elected in the general election in 2015 [BBC, 2019]. In his trip, Wang Yi expressed hopes to his counterpart, Daw Aung San Su Kyi that Chinese interests in Myanmar will continue to be expected. The present situation of Sino-Myanmar relations, however, has many unresolved problems such the Chinese role in the Myanmar cease-fire, Myitsone Dam General Project and border issues.




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tshaumyan@gmail.com

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ARCTIC POLICY OF THE REPUBLIC OF INDIA


SHAUMYAN TATIANA LVOVNA


Head, Centre for Indian Studies, Institute of Oriental Studies Russian Academy of Sciences


tshaumyan@gmail.com

The article analyzes the geopolitical importance of the Arctic region, the main directions of Indias foreign policy in the Arctic, ongoing global processes such as global warming and the melting of the Arctic, discusses the importance of the Northern sea route from the point of view of using it for communication; the politics of Arctic and non-Arctic States to increase their cooperation in this area. The problem for India is the study of global climate change, precipitation, and ice conditions in Arctic glaciers to detect possible distant interdependence between the Arctic climate and the Indian monsoon. The melting of Arctic ice, global warming, raising global sea level by melting of glaciers can cause flooding in large areas of India with a population of over 100 million people. Monitoring the condition of the ice is one of the priorities of Indian scientists working in the Arctic region. The Russian-Indian cooperation to develop Arctic fields is determined by their desire to confirm the interest in India as an important ally on the world stage. India seeks to write for itself the flexibility with participation in the solution of problems of the Arctic, using membership in the Arctic Council. India intends to take an active part in initiatives related to Arctic issues. The Indian side confirmed its interest in equal participation in the development of existing and new projects in Siberia, the Russian Far East and the Arctic shelf through oil and gas company ONGC-OVL. India will continue to participate actively in the initiatives related to the Arctic issues using membership in the Arctic Council. Delhis partnership with Russia may contribute to the containment of China in its rivalry with India in the struggle for energy resources in the Arctic.

Keywords: Arctic, India, Russia, Northern Sea Route, the Arctic Council, Arctic and Non-Arctic States.



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