A Collection of Geopolitical Essays

Velina Tchakarova

Contents

Title Page

A Collection of Geopolitical Essays

1 GLOBAL SYSTEM OUTLOOK 2020

2 THE DRAGONBEAR: AN AXIS OF CONVENIENCE OR A NEW MODE OF SHAPING THE GLOBAL SYSTEM?

3 COVID-19 AND THE INDO-PACIFIC DECADE

4 INDIA AND CHINA: GEOPOLITICS IN THE INDO-PACIFIC DECADE — PART I

5 INDIA AND CHINA: GEOPOLITICS IN THE INDO-PACIFIC DECADE — PART II

6 COLD WAR 2.0: IS IT INEVITABLE?

7 WILL CHINA GET EMBROILED IN THE GRAVEYARD OF EMPIRES?

8 A SPLIT BETWEEN THE ANGLOSPHERE AND THE EU VS. THE DRAGONBEAR AMID BIFURCATION OF THE GLOBAL SYSTE

9 AUSTRIA AND THE AUKUS: FROM THE “ISLAND OF THE BLESSED” TOWARDS THE “ISLAND OF THE INDIFFERENT”

10 A POTENTIALLY INDISPENSABLE REGIONAL PARTNER

11 WHAT THE KAZAKHSTAN CRISIS TELLS US ABOUT INTERNATIONAL RELATIONS

12 WHAT TO EXPECT FROM THE SUMMIT BETWEEN XI JINPING AND VLADIMIR PUTIN?

About The Author

A Collection of Geopolitical Essays

2020-2022

Velina Tchakarova

Director of the Austrian Institute for European and Security Policy (AIES)

March 2022

Copyright © 2022 Velina Tchakarova

All rights reserved.

ISBN: 9798435395617

1 GLOBAL SYSTEM OUTLOOK 2020

Global System

Global affairs have become exceedingly complex, as globalization has created intertwined networks that merged into a Global System in recent decades without attracting much attention. The Global System interacts dynamically with its environment (nature and space) and can be seen as a set of interdependent components, which also function as systems of economic, political, natural, or social nature. Given that the subsystems of the Global System — e.g., global finance, global monetary, global economy, global trade, global energy, and their structures (international and regional institutions and organizations as well as various state actors’ formations) along the global supply chains — are currently undergoing comprehensive transformations, or even crises, one cannot but expect major shifts and unforeseen higher-order effects on the Global System.

Most importantly, the Global System encompasses these globalized networks of finance, economy, trade, and energy that facilitate the vital and free flows of goods, capital, services, data, people, and many more. They currently operate within the framework of a significantly changing global order and an increasing global power competition. One already witnessed the immense stress that was put on the Global System following the trade dispute between the USA and China, as well as the various negative effects caused by the systemic decoupling of ‘Chimerica’ - a term used to describe the unprecedented entanglements between the American and Chinese economies since the 1970s. The only other systemic shock of a similar scale so far took place during the Great Financial Crisis (GFC), resulting from the Lehman Brothers collapse and the followed contagion within the interconnected global financial and economic networks.

Banks. Big Banks. Central Banks.

Since then, the so-called Big Banks, named Too Big To Fail (TBTF), have turned into one of the major systemic risks to the Global System following the GFC. Thus, they are referred to as banks of ‘systemic importance’, because each of them could unleash another major systemic crisis through wide-spread contagion within the same networks in case of a default.

Imagine the financial system witnessed another GFC like it did in 2008! What would the governments or international organizations do this time? And what could be the epicentre of the next systemic crisis?

Gradually, the Central Banks of developed economies have become banks of ‘systemic importance’, due to their unprecedented monetary stimulation policies towards the global economy after 2008. Since then, they have practically been pumping more than $14 trillion into the global economy through their quantitative easing programs, in order to stimulate it with monetary tools and instruments. After a short break, the Federal Reserve (Fed) balance sheet was once again moved up to $4.18 trillion, the highest level in 16 months, and yet the Fed Chair Jerome Powell claimed that this move was in no sense Quantitative Easing (QE).

Currently, the Central Banks’ policy based on QE programs and bonds purchases constitutes the main systemic issue, as they continue sticking to measures that have not yet been tested throughout the entire monetary history. In fact, the giant experiment called “Central Banks’ monetary stimulation” was built based on trust in a decision, of which the implications have neither been proven efficient nor positive yet.

Covid-2019

More importantly, the way how TBTF and Central Banks currently present a systemic risk to the Global System, is how we should consider the systemic risks stemming from global pandemics such as the Corona Virus (Covid-19). Could the global outreach of Covid-19 lead to the next major shock to the Global System?

Obviously, the expected disruption of global supply chains due to the outbreak of Covid-19 is to be seen as the canary in the Global System mine. Moreover, the global virus outreach exemplifies the issue of systemic risks emerging from the interconnectedness of the Global System once again. The recent announcements, that most of the international flights to and from China were cancelled at least until the end of April, are indicative of upcoming stress on all economies and unforeseen pain on whole industry sectors. The markets, however, have not anticipated the long-term disruptions of global supply chains, nor did they price the real stress on the globalized networks as well as on the global flows of goods, people, and services yet. In this context, we shall consider that China by now constitutes 17% of the global output, while its share was only 4% during the outbreak of SARS in 2003. Thus, the Covid-2019 pandemic will further aggravate the ongoing economic slowdown and trade stagnation and might result in a yet unprecedented major shock to the Global System.

Other Shocks to the Global System

There are several other large-scale systemic processes and developments that require our attention, as they could produce further unexpected major shocks to the Global System. As of now, the world’s debt is more than three times the size of the global economy and there is an ongoing global liquidity crisis that puts a significant pressure on national economies, as they need to protect their national currencies and introduce hedging measures against possible defaults. Moreover, the global wealth centralization, the financialization of the global economy, the recently introduced QE 2.0, the growing gap between the income groups in societies, the increasing global corporate control through overwhelming centralization of the biggest companies in any significant sector such as Big Tech, Big Oil, Big Banks or Big Agriculture, together with the comprehensive environmental degradation of all relevant eco systems, are indicative of the growing interconnectedness and mutually enforcing negative effects within the Global System.

In addition, last year has witnessed extensive and often violent protests all over the world, and their outbreak was first and foremost rooted in socio-economic causes. Public protests took place in countries such as Lebanon, Chile, Spain, France, Iraq, Sudan, Russia, Uganda, Peru, Hong Kong, Zimbabwe, Venezuela, and many more due to predominantly corrupt and outdated political leadership that had introduced austerity or inadequate structural measures following the GFC. Furthermore, the current cycle of global economic slowdown and trade stagnation leads to surging consumer prices, a hidden inflation (e.g., shrinkflation) and eventually increased taxation by governments.

Significant signals would be if the Fed and other Central Banks were no longer capable of mitigating systemic risks in the global financial and monetary networks, or once the systemic decoupling between the USA and China would further advance. The systemic rivalry between the USA and China is shaping the global power competition, leading to the reshuffling of many regional actors’ constellations such as the Dragonbear (China and Russia), the Quad (quadrilateral security dialogue between the USA, Japan, Australia and India), Russia-Turkey rapprochement in several regions, the two Libyan geopolitical blocs, anymore. The prominent approach “convergences with many and congruence with none “, implies a process of strategic balancing rather than picking sides by the relevant state actors amid the newly emerging bipolar episode in global affairs. However, it is inevitable that there will come a point when all regional players and ‘free riders’ will have to pick a side amid the deepening systemic rivalry between the USA and China. Interestingly, the Helsinki summit between the US President Donald Trump and his Russian counterpart Vladimir Putin marked the beginning of a new period in international relations, what appears to be a 'bilateralization' of global affairs. Against this background, a growing systemic bipolarity between the USA and the Dragonbear (China and Russia) would have strong implications for the global order and further accelerate the global power competition, particularly over strengthening one’s own leverage amid the Fourth Industrial Revolution.

The Global System is clearly not anti-fragile; thus, the next financial crash or economic crisis would spread the contagion throughout the intertwined networks to a similar or even greater scale than during the GFC. Moreover, the sum of all systemic risks is now being reinforced by the Covid-2019 epidemic crisis, which might unleash yet unintended consequences of a higher order due to the disruption of the global supply chains and the devastating effects on the socio-economic networks, which no country or international company has properly prepared for. And yet, the most destructive influence on the current Global System will likely come from the global finance and monetary systems. This time, however, a systemic crisis might surpass any expectations in terms of its potential impact and unexpected consequences, as the next ‘bubble’ could appear everywhere. Hiding somewhere behind the stock and bond markets, but mostly emerging from the unprecedented monetary stimulation policy of Central Banks in the advanced economies.

February 19, 2020

The essay first appeared as a publication by the platform Antifragilista

2 THE DRAGONBEAR: AN AXIS OF CONVENIENCE OR A NEW MODE OF SHAPING THE GLOBAL SYSTEM?

Introduction

Over the last decade, a rapprochement between China and Russia has been occasionally discussed as regards a possible strategic alliance between them or the lack of such. I coined the term of “the Dragonbear” in 2015, to mark an emerging new mode of their bilateral relations aimed at shaping the global order in the 21st century. However, the interpretations of the context of increasing connectivity between the two countries range from very sceptic to very positive, hence it is too early to point to an outcome in this regard. Yet, there are two plausible directions of recent developments – either an interim axis of convenience destined to fail at some point, or an unprecedented new mode of shaping the global system through a wide spectrum of systemic coordination.

The Dragonbear - An unprecedented mode of shaping the global system

Given that Russia and China are natural rivals, what would they aim to collectively achieve in global affairs? It is noteworthy that the two countries share an overlapping understanding that the global order is in transformation, of which the results are unpredictable, and its consequential implications might have dangerous repercussions for their political systems and their stance in international relations. Hence, they share a common goal of counterbalancing arising centrifugal forces and negative effects resulting from the Global System transformation in the fields of economy, finance, and trade. Furthermore, they seek to bundle diplomatic clout, increase military, and defense ties, and shape strategic alliances with third countries that are opposed to the US-led global order. Obviously, the main common denominator of the Dragonbear is the geostrategic goal of disrupting the influence of the USA by all available means. Furthermore, they aim to establish and consolidate a Eurasian land connectivity as a response to the American maritime dominance in the Indo-Pacific realm, and thus build partial independence from maritime chains of supply in case of future blockades.

China and Russia are historically seen as natural rivals; however, they deliberately avoid addressing issues that contain certain historical animosities or might unleash serious tensions in their bilateral relations for now. Their relationship began moving towards comprehensive coordination in various fields, following the isolation of Russia from the West (Georgia war 2008, Ukraine war 2014) and because of the emerging systemic rivalry between the USA and China. The relationship is evolving into a highest-ranking coordination between President Vladimir Putin and his inner circle on the one side, and President Xi Jinping and his inner circle on the other side, which is to ensure the top-down consolidation of the Dragonbear. So far, it seems that the Dragonbear’s success is achieving a complementarity through the coordination of objectives and actions at the highest political level, based on the principle of ‘Not always with each other, but never against each other’.

In this context, it is expected that Russian-Chinese ties are to reach a peak in the history of their bilateral relationship, by further deepening the systemic coordination of their activities and measures in the various key fields. So long as the Dragonbear shares the common interest of disrupting the US-led global order by all available means, this unprecedented mode will continue despite emerging bottom-up tensions in the areas of intersecting national interests.

In a nutshell, following main arguments point to the Dragonbear as an unprecedented mode of shaping global affairs in the 21st century:

•Territorial issues

China and Russia have settled their longstanding territorial disputes and have demarcated their common border. Thus, no serious territorial claims or border disputes are expected to damage their bilateral relations. Although both countries are involved in territorial conflicts with third countries, they do not seek to interfere or mutually influence their positions or approaches regarding existing territorial issues (for instance, Russia’s role in the frozen conflicts in its ‘near abroad’ and China’s role in the South China Sea are not necessarily colliding).

•Energy

Russia is competing with Saudi Arabia to become the top oil supplier for the Chinese market, which has the largest share of the current global oil demand. Moscow also aims to expand its gas supplying role to diversify its energy portfolio, which is currently dependent on European demand. Several ambitious gas projects worth billions of US dollars have been in the making and might influence Russia’s future orientation in favor of Asian energy markets if they turn out to be profitable next to its dominant role as a gas supplier to Europe.

•International Organizations

The Dragonbear connection is particularly strong in shaping newly emerging organizations and institutions with an enhanced Chinese participation. It is worth noting that Beijing seeks to increase its influence in prominent international formats and simultaneously tries to create alternatives to the US-led international organizations, particularly in cases where China can find a fruitful soil to promote its interests in third countries and institutions. Such regional institutions are for instance BRICS (Brazil, Russia India, China, South Asia), SCO (Shanghai Cooperation Organization) or AIIB (Asian Investment and Infrastructure Bank), just to name a few. Furthermore, Russia expects from China to bundle the coordination and future cooperation between the Belt and Road Initiative (BRI) and the Eurasian Economic Union (EAEU). Both countries have already signed an agreement that lays out the integration of the EAEU and BRI, even if it is more about political rhetoric rather than concrete measures.

•Transport

For China, the significant rise of its share in global economic output outcome is linked to newly emerged ambitions and long-term plans. In this context, Russia occupies a central place in China’s efforts to consolidate the Central Asian landmass in terms of alternative transport routes, infrastructure, and connectivity. The maritime Silk Roads are of equally great importance. The Arctic will be one of the places where Russia will seek to promote the transport links with China through the North Sea Route (NSR), which would significantly shorten the distance between Russia’s Murmansk and Japan, China, and Canada. The NSR is equally important for Russia as a potential trade route connecting Europe with China. The same routes to Rotterdam would mark a significant shortening of the distance too.

•Financial and monetary matters

Russia and China aim to enhance the robustness of their currencies against the dollar’s dominance through further currency swaps and other bilateral and multilateral steps. For instance, Russia seeks to reduce the use of the US dollar and the euro in the trade between the countries within the Eurasian Economic Union. China, on its part, introduced the first pilot two currency program in one of its major cities. Both countries also signed a currency swap agreement worth almost 24 billion US dollars several years ago, when China stepped in to prevent the Russian currency from collapsing. Further measures towards promoting the national currencies are to be found at the level of operation of the BRICS bank, as well as in the bilateral trade between Moscow and Beijing.

•Defense and military

China has meanwhile the second largest defense spending in the world, and thus pursues a strong interest in deepening the defense cooperation with Russia, due to Moscow’s possible transfer of advanced technologies and sophisticated weapons. Russia seems to be the ideal partner in that matter for the future. It is worth noting that the military cooperation serves as a basis for the strategic bilateral ties between the two countries and thus requires high levels of trust building. Joint military exercises have become a substantial part of the bilateral defense cooperation, with the aim of facilitating better interoperability between their armed forces. So far, Russia and China have conducted joint naval drills in the Mediterranean Sea and the Sea of Japan. Their mutual defense cooperation was expanded within the SCO, whose role as an emerging regional organization has been growing after India and Pakistan (Iran has observer status) joined it.

•Economy

Other major fields, such as productivity, infrastructure, agriculture, aeronautical and space technologies, as well as the economic development in the Far East, are already on the bilateral agenda too. Both countries pursue similar industrial priorities, such as the progress in key areas of nuclear energy, space exploration, new information technologies, environmental protection, energy saving, production of high technology medicines and medical equipment, and some other.

An interim axis of convenience destined to fail

There is, however, an opposite understanding of the relations between China and Russia in the current global context. Their bilateral partnership is perceived as a temporary marriage of convenience based on an asymmetric relationship, in which China is predominantly the agenda-maker, while Russia is mostly the agenda-taker. Thus, this interim axis of convenience is destined to fail sooner rather than later. It is worth noting that there are economic, financial and trade setbacks affecting the relationship, and bottom-up pressure along conflicting interests in particular fields of policy and regional areas, that bear a potential to interrupt the process of consolidating the Dragonbear.

Currently, there are plenty of arguments in favor of the assertion that the Dragonbear is an interim axis of convenience destined to fail. Potential friction between Russia and China lies in the geographic prioritization and the overlapping geopolitical interests in third countries. Russia is a regional power possessing nuclear weapons with global reach and with vertical expansion of geopolitical and geo-economic interests from the Arctic and the Baltics through the Eurasian landmass and its neighborhood in Eastern Europe to the Caspian, Black and Mediterranean Seas, as well as to the Balkans and the MENA region. However, there is a well-established Russian fear of Chinese penetration, particularly in Central Asia and the Far East, as well as other traditional spheres of influence such as the Balkans, Eastern Europe, and the rest of the former Soviet reach. Furthermore, Africa and to some extent Latin America may become a playground of conflictual tactics at some point (e.g., Venezuela, Sudan etc.). Moreover, their interests in the energy sector do not overlap, since Russia is one of the major oil suppliers while China tops the list of the countries with greatest oil imports, which is why it seeks to diversify its energy demand portfolio. A sort of new energy interdependence as the one between Russia and Europe would be rather in the interest of Russia, which is increasingly supplying China with oil and natural gas through various pipelines to curb its dependence on gas supplies to Europe. China’s total crude oil imports during January and February rose 5.2% from the previous year – the oil imports from Saudi Arabia, however, rose significantly more than from Russia in this period.

Furthermore, the current dynamics can be described as indicative of an asymmetric relationship. Whereas China provides the liquidity through swap lines and diverse instruments, Russia provides its natural resources, as well as the necessary know-how in various key fields, in which China has to catch up with the USA amid an emerging systemic rivalry. In addition, a new mode of connectivity is being explored and expanded in the Arctic, Central Asia and beyond, to balance the US-dominated global supply chains. The current Chinese grand projects constitute a horizontal expansion from China to Europe and Africa through a network of various transport and infrastructure tools (pipelines, trade roads, loan programs etc.), and are meanwhile institutionally backed by a set of China-led organizations such as the Asian Infrastructure Investment Bank, the Eurasian Investment Bank, the Shanghai Cooperation Organization, etc. So far, there has been an agreement between China and Russia to merge the BRI and EAEU in Central Asia, in order to prevent third actors from entering the region or expanding their clout there, as well as to accommodate Sino-Russian relations in the region. However, the symbiotic relationship between BRI and EAEU has remained predominantly rhetorical, and with a symbolic significance for bilateral relations not reflecting the realities on the ground.

Specifically, there are increasingly bottom-up tensions on the ground. For instance, Kazakhstan already fears an overwhelming Chinese presence based on loans, investments, and business activities, whereas the political elite is still influenced by ties to Russia. Moreover, China and Russia still struggle to find a workable mode of how to diversify their economic and trade portfolio, by identifying potential areas and directly arranging deals at the top level. However, neither the trade volume nor the economic ties have been extensively expanded despite all efforts so far (the trend is, however, positive). Russia still needs a powerful ally due to its isolation in the West, whereas China seeks a dependable junior partner to increase its international clout. Insofar, this relationship will deepen but not necessarily evolve into a strategic alliance, depending on how successful or unsuccessful China’s rise as global power will be. A strong element of posturing should be considered, as it is in both countries’ interest to create an impression of a stable and resistant alliance against the West, particularly to restrain Western actions against them. Currently, there are negotiations on a defense cooperation deal between Moscow and Beijing, however, there are no clear signals towards a defensive alliance between these two powers. It seems that the rapprochement has a tactical rather than a strategic nature, following the maxim “Keep your friends close and your enemies closer”. A status quo relationship would remain acceptable and be further developed, so long as China’s rise is not a direct threat to Russia’s strategic interests of self-determination and security along its peripheries.

Moscow would not tolerate an emergence of Pax Sinica in continental Eurasia and the neighboring areas that have been Russian strongholds for centuries.

From Beijing’s perspective, the worst-case scenario would be a situation in which Russia starts adapting to the rise of China by balancing through a potential ad hoc partnership with the USA, just like China did in the 1970s during the Cold War. Obviously, Moscow would not tolerate an emergence of Pax Sinica in continental Eurasia and the neighboring areas that have been Russian strongholds for centuries. In this context, the relationship between China and Russia is an interim geopolitical axis destined to fail. The Covid-19 crisis in the context of the Dragonbear It is noteworthy that certain tensions emerged between Russia and China, following the Covid-19 virus outbreak in January. Moscow closed the Russian side of the border to China on January 30th by introducing severe fees and consequences for breaking the quarantine. Another potential consequence from the Covid-19 crisis is the global disruption of supply chains, which will stress economies and affect food security. While Russia is relatively secure in its agricultural production and can provide for the food demand of its population, China will certainly depend on imports of food, especially agricultural products.

Russia even began leasing agricultural land to China. Moscow views the Covid-19 crisis as a chance to consolidate its influence and solidify it along existent cracks and conflict lines within the Western alliances. Such example was the information campaign linked to the aid and the medical personnel sent to Italy and other parts of Europe due to the Covid-19 outbreak. During the virus outbreak, Moscow, like Beijing, has relied on soft-power capabilities by dispatching aid to hard-hit countries, while broadcasting propaganda campaigns on state and social media. Furthermore, the expansion of authoritarian governments’ policies and measures due to the Covid-19 virus outbreak will find a fruitful soil in the Dragonbear, even if these policies do not necessarily take place in a coordinated manner between China and Russia.

Conclusion

Whether an interim axis of convenience or an unprecedented mode of systemic coordination, the Dragonbear is here to stay and will further shape global affairs. Certain adjustments will need to take place in the way how the West approaches both China and Russia in the future, particularly following the restart of the economies after the Covid-19 lockdown in the first half of this year. In this context, there is a risk of deepening fragmentation and emerging conflict lines in the countries of the Transatlantic community, due to diverging visions and approaches of how to engage China and Russia. To conclude, the Transatlantic alliance should be aiming at preventing China and Russia from flexing their muscles in a coordinated manner in regions and areas of strategic importance to the West. It remains questionable how Europe will adjust to the realities of a great power competition between the USA and China, with Russia already positioning itself in between.

May 14, 2020

The essay first appeared as a publication by the Institute for Development and International Relations (IRMO) in cooperation with HSSt

3 COVID-19 AND THE INDO-PACIFIC DECADE

Great powers rise and fall, shaping each transitional period of global power shift and its geographic concentration. Currently, the world is witnessing a profound transformation in the geopolitical arena of international affairs. For the past years, the pundits have been propagating the emergence of an Asian multipolar century, with a shift from the Atlantic to the Pacific realm. However, following the COVID-19 virus outbreak, this year marks the obvious manifestation of an Indo-Pacific decade, with the US, China, and potentially India being the main protagonists in an emerging competition. This time, it is the unfolding of regional centres of power, which create the delusive impression of multipolarity, while in fact a new systemic bipolarity between the US and China comes to light. In the post-COVID-19 global context, the virus has become a catalyst of multiple systemic changes, inducing ad hoc constellations of regional actors—shaped by their geopolitical and geoeconomic interests—in a changing global order with eroding multilateral structures.

The upcoming decade is witnessing an intensification of the global systemic rivalry between the US and China, and, as a consequence, major regional tensions in all parts of the globe. With India being on its path to becoming the third largest-economic power by 2025 and as a natural long-term rival of China, the Indo-Pacific region is slowly but surely becoming the main arena for global power competition in the 21st century. The ‘bilateralization’ of international relations, coupled with traditional South Asian security dilemma triangles between China, India, and Pakistan, as well as the imminent global supply chains reconfiguration due to COVID-19, provide a fertile soil for a profound tectonic shift in global affairs. Against this background, there are three layers of vicissitude responsible for the emergence of the Indo-Pacific decade.

Systemic rivalry between the Eagle and the Dragon

With the possible emergence of two systemic centres of power—namely, the US and China—the global order may transform from a unipolar to a bipolar world. Following the collapse of the Soviet Union, the US unilaterally shaped the global order and wielded enough power to control, structure and secure supply chains and sea lines of communication. However, given China’s rapid economic and trade growth, there are projections about its rise on the global stage as a second systemic pole. China has also launched a comprehensive geostrategy through its Belt and Road Initiative (BRI), which aims to connect all continents, and may unleash a significant change in the structural flux of international relations.

It must be emphasized, however, that both countries were already involved in a competition encompassing various domains from trade and economy to finances and agriculture to the technology sector prior to the COVID-19 virus outbreak. The prominent speech of Vice President Mike Pence and this year’s speech by President Donald Trump on China, as well as the US Administration’s new approach to Beijing, are considered in this context. Despite the achievement of a preliminary bilateral “Phase One” trade agreement, a full-scale deterioration of their relationship seems more realistic in a post-COVID-19 context.

In this regard, the US is increasingly turning to the Indo-Pacific realm and would likely invest more in partnerships and allies’ formations linked to this region. Gurpreet Khurana describes this geopolitical space as stretching from the Indian and western Pacific Ocean to the littorals of West Africa and East Asia. It must be mentioned that President Obama proclaimed the US pivot to East Asia in 2012 to advance the rebalance to Asia and the Pacific. However, it comes without surprise that the US Department of Defence has just recently laid out the Indo-Pacific region as main priority theatre and the US Pentagon Chief announced the readiness to reallocate forces precisely to this area.

Make every country great again

The global system also reveals an emerging network of regional actors with limited power projection capabilities, which seek to navigate the systemic rivalry between Washington and Beijing. In the famous words of Lord Palmerston, there are neither eternal allies, nor perpetual enemies, only eternal and perpetual interests. This seems to be the leading geopolitical maxim of the upcoming decade, facing multiple ad hoc actors’ constellations and reconfigurations—determined by the goal of maximizing their own gains. Among the main protagonists are countries such as Russia, India, Japan, Canada, the key European states such as Great Britain, France, Germany and Italy, Australia, and a few other relevant regional powers. Following COVID-19, they have one thing in common—to play a balancing act between the US and China without getting caught by the difficult choice of taking sides.

Against this background, the conflictual relationship between China and India will further complicate the existent security triangles in the Indo-Pacific region. A rapprochement between China and Pakistan, and in a broader context between China and Russia (the Dragonbear), are key examples of the fluid regional formations due to ongoing systemic changes. Logically, the US regards India as a reliable partner to create a counterweight to China’s overwhelming presence in South and Southeast Asia. Current developments, such as the emergence of QUAD, CPTPP negotiations, and other Anglosphere constellations, are increasingly seen as US-led counterbalancing efforts against China’s own geoeconomic projects such as BRI, China Pakistan Economic Corridor, and Regional Comprehensive Economic Partnership. Furthermore, new defence cooperation formats were also agreed on, such as the deal between Australia and India covering cooperation between their militaries and facilitating technology exchange. Obviously, the political elites in New Delhi are increasingly in favour of closer relations with Washington, but also continue to rely on friendly relations with Moscow amid the intensifying tensions with Beijing.

It is expected that a major geopolitical shift in the region will take place, caused by Washington’s efforts to establish a comprehensive strategic relationship with New Delhi, due to China’s rise in the Indo-Pacific region and beyond. Furthermore, China will continue extending its terrestrial connectivity to Europe through Central Asia, in order to bypass the US maritime dominance in the Indo-Pacific space. To conclude, it seems that there are two likely mid-term systemic scenarios linked to the region: either the US (and India) against China and Russia (the Dragonbear) or the US in a rapprochement with Indian (and Russia) against China. In the case of further conflict escalation, the US would use each opportunity to support New Delhi against Beijing, while Russia would rather seek to remain officially neutral in the tensions between China and India while supporting both sides in a different manner.

Geoeconomic reconfiguration of supply chains due to COVID-19

Repositioning the global supply chains away from China is already becoming a reality following the COVID-19 virus outbreak, and the Indo-Pacific region is about to become a forefront of this geoeconomic reconfiguration, due to the withdrawal of American and international capital from Beijing. Major geoeconomic opportunities and challenges will appear following the diversification of the global supply chains. A global disruption of supply chain, coupled with the imperilled rules-based global order caused by eroding international structures, as well as newly emerging organisations and institutions, will certainly not bypass the Indo-Pacific region. On the contrary, the reconfiguration will be initiated by the US to bring manufacturing and supply chains back home or to branch out to American allies and partners from the Anglosphere of influence such as UK, Australia, Japan, and increasingly India. Moving production from traditional hubs to new ones will take time and will require trust building, but will also create new geoeconomic advantages, particularly for New Delhi. Regional centres of trade power, such as Japan and the EU, already began considering a shift of manufacturing operations out of China. Over the long term, there is a likely scenario of two parallel supply chains networks, one set up by the US, the other with access to China.

Sectors such as space technologies, artificial intelligence, defence, and cyber tools can expect strategic investments to promote the growth of new, regional power centres. This is important since any significant breakthrough in these areas will bestow global competitiveness and geoeconomic advantages. Further, the unprecedented interconnectedness of all socio-economic systems has obfuscated the distinction between economic and trade indicators, on one hand, and defence and security considerations on the other. This explains why the competition between the US and China does not solely represent a trade war, but a broader rivalry extending to the global networks of finance, trade, economy, diplomacy, energy, defence and so forth. So once again, the Indo-Pacific region will become a major battlefield for any progress regarding the Fourth Industrial Revolution in the upcoming decade.

July 2020

This essay appeared first in the Oberserver Research Foundation (ORF)

4 INDIA AND CHINA: GEOPOLITICS IN THE INDO-PACIFIC DECADE — PART I

Complexity of current global affairs and the Indo-Pacific Decade

Following the COVID-19 virus outbreak, the new year marks the beginning of the Indo-Pacific decade, in which China and India are destined to become “indispensable powers”, as their rise will shape the emerging global order in one way or another. It is the Asian continent that is anticipated to surpass North America and Europe in terms of demographics and economic power, with the two giants being at the center of this global power shift. The rapid unfolding of regional centers of power creates a delusive impression of multipolarity, while in fact a new systemic bipolarity between the USA and China has been in the making for quite some time now. With India being on its path to becoming the third-largest economic power by 2025, the Indo-Pacific region is slowly but surely becoming the main arena for global power competition in the 21st century. Gurpreet Khurana describes this geopolitical space as stretching from the Indian and western Pacific Ocean to the littorals of West Africa and East Asia.  The traditional South Asian security dilemma triangle between China, Pakistan, and India as well as the imminent reconfiguration of the global supply chains due to COVID-19 crisis, provide a fertile soil for a profound tectonic shift in their relations.

No other corner of the world faces the presence of three nuclear powers in the immediate vicinity, marked by unresolved security dilemmas and zero-sum game mentality. The pioneer of realpolitik, August Ludwig von Rochau, outlined a concept of state power reflecting on the historical political theory of nineteenth-century European affairs. He developed a new way of understanding (geo)politics and the distribution of power, based on which the British historian A. Taylor defined realpolitik as “the true motor of international relations with moralism serving at best as a pious smokescreen for a battle for power”, or as he also described it in one of his books “for the struggle of mastery in Europe”.  Two hundred years fast forward, the relations between China and India are reflective of Taylor’s maxim to a great extent, given that realpolitik is the true motor of global affairs serving at best as a pious smokescreen for the struggle for mastery in the world. Against this background, geopolitics and geoeconomics are the two main pillars of realpolitik, as the former presupposes the use of political tools and instruments based on geographic conditions, while the latter relies on the economic mechanisms and instruments for the same reasons. The rationale behind geoeconomics implies that states stick to the logic of trade by applying a wide range of economic tools to attain geopolitical objectives and, more importantly, weaken their rivals and competitors.

How will the global power shifts impact the relationship between China and India based on the geopolitical realities in the Indo-Pacific region? Are Beijing and New Delhi going to rise peacefully in the emerging bipolarity rooted in the systemic competition between Washington and Beijing? This piece explores the geopolitical approaches of the two Asian rivals and identifies the main points of contention based on realpolitik thinking. Moreover, the paper in part II will present two future scenarios based on strategic foresight and evaluates the potential trends considering their bilateral relationship in the Indo-Pacific region and beyond.

China and the return of realpolitik

Since their foundation, China and India have been increasingly engaged “in a monumental battle for geopolitical supremacy”, based on still unresolved issues and disputes such as the McMahon Line as well as the competition for strategic access to the Indian Ocean. In the global context, however, China is faced with the unique chance of becoming the first Asian global power in the modern history of international relations. Beijing’s global rise will primarily be determined by the outcome of the Fourth Industrial Revolution of cyber-physical systems as well as the willingness and capabilities of China to establish its own global networks of finance, trade, energy, economics, and diplomacy in global affairs. In this regard, China seems to currently be in a unique position, as it pursues to become the first “heartland” and “rimland” power at once.

British geographer Halford Mackinder developed his theory on the struggle for power between sea-based and land-based powers at the beginning of the 20th Century. His approach claims that the geographic position of a country does influence the state interests, goals, and decisions. While geography is a main factor, he also acknowledged the role of technology and technological breakthroughs as a determinant of state power. The main theoretical premise implies that the state power that controls the World Island (large parts of Europe, Africa, and Asia) would also control the world in terms of demography, technological superiority, economic productivity etc. Thus, the world map is split into “heartland” and “rimland” (a term later introduced by Nicholas Spykman) territories. While the “heartland” realm is mostly sea-locked with a vast land connectivity as well as flat and open terrains (e.g., Russia and Central Asia), the “rimland” is characterized by a sea access and naval power capabilities (e.g., Western Europe, East Asia, India etc.). Nicholas Spykman developed further the theory based on Mackinder’s “heartland concept” by claiming that a state power with control over the “rimland” would have better access to natural recourses, trade routes, and a larger population, which would enable global power projection.

Mackinder also claimed that China could become a major player in global affairs one day because of its geographic location stretching from “heartland” to “rimland terrains”. Derived from Mackinder’s theoretical premises, China seeks to establish a terrestrial connectivity through Eurasia with the industrial heart of Europe – Germany, France, and Great Britain. Moreover, Central and Eastern Europe is the key to winning “the heartland”, whereas the control over the “heartland” in Eurasia would enable global power projection. From the prism of Mackinder’s theory, one could assess the launch of China’s One Belt One Road in 2013, which later became the Belt and Road Initiative (BRI).  BRI entails meanwhile two terrestrial connectivity routes to Central and Eastern Europe – one through Russia, and another one through Central Asia and Turkey. In addition, Beijing introduced various political and economic platforms for engagement and cooperation with the countries from this region, with the 17+1 initiative being the most famous among them. Based on Spykman’s theoretical premises, China is also building up its military presence in the South China Sea and the Indo-Pacific realm, while it has developed the “string of pearls” approach in the Indian Ocean Region (IOR) to create a network of friendly ports and trade posts in India’s direct neighbors as part of the maritime connectivity within the BRI. Andrew Michta describes Beijing’s endgame as a “global inversion” of the interconnected trade flows, “which currently favor maritime routes, a setup that relies on U.S. naval power as enforcement. If China can develop a cross-Eurasian supply chain and protect it, it won’t need to match America in the maritime domain.”  This paper argues, however, that China pursues simultaneously the formation of alternative routes via maritime and terrestrial connectivity, an approach combining Mackinder’s Heartland and Spykman’s Rimland theory.

Two decisive asymmetries arise from China’s geopolitical perceptions of the relationship with New Delhi. First, Beijing sees itself as a rising global power facing a systemic competition with the USA in all relevant socio-economic fields and key industrial sectors, while India is considered as a significant regional power in possession of nuclear weapons, but with limited power projection. Second, Beijing has managed to develop a long-term oriented geoeconomic relationship with the New Delhi’s direct rival – Pakistan. The realpolitik calculus behind their economic and trade ties coupled with an immense financial funding for Islamabad is part of China’s maritime connectivity strategy aimed at establishing an access to the Indian Ocean. However, this new reality of the China-Pakistan alliance created a significant geopolitical imbalance in the Indo-Pacific region, detrimental to India’s geopolitical interests.

There has been a profound shift in the mutual perceptions about the foreign and security policy of the two Asian rivals following the second mandate of Prime Minister Narendra Modi in 2019, which was described by Chinese scholars as embarking on a ‘riskier’ foreign policy approach.  One of the major topics in Chinese academic literature is India’s shift towards the USA following the COVID-19 crisis outbreak. China endorses India’s objective of taking a leadership role in shaping the global affairs towards ‘reformed multilateralism’, however, it also becomes detrimental to Chinese geopolitical interests due to India’s rapprochement with the USA in the Indo-Pacific region and an enhanced security and defence cooperation with Japan and Australia within the QUAD. Furthermore, Chinese experts carefully follow India’s growing economic self-reliance strategy and approach towards a reconfiguration of the global supply chains away from China as part of the systemic decoupling processes between Washington and Beijing.

China’s view on the Sino-Indian relationship has experienced a further shift following the bilateral skirmishes in the Ladakh region in 2020. These events primarily shattered any expectations on both sides for stability and predictability in the bilateral relationship. Since India has voluntarily pulled out of the negotiations on a deal with China’s Regional Comprehensive Economic Partnership (RCEP), Beijing’s expectations for the Indian economy to become steadily integrated into the industrial and supply chain networks in Asia with China at the centre have become too unrealistic.  The common understanding currently is that it may take long for the Sino-Indian relationship to normalize following the Ladakh episode in the summer last year.  Furthermore, China considers the bilateral relationship with India as an asymmetrical non-zero-sum relationship, whereas India sees itself involved in a zero-sum relationship between two equally powerful countries in South Asia. India’s perception of China is that Beijing takes the central position in the direct neighbourhood and increasingly in the IOR, while China perceives New Delhi as the major geopolitical factor with considerable naval capabilities in the Indo-Pacific region.

India’s geopolitical approach towards China

For India, the possible outcome of the systemic rivalry between Washington and Beijing will be decisive for its path towards becoming an established regional power in the Indo-Pacific region. If China emerges as the winner of the Fourth Industrial Revolution and manages to establish itself as a second global centre of power, this systemic process will have a negative impact on India’s geopolitical interests and goals. Thus, it is in the immense interest of New Delhi to build strong ties with as many regional actors as possible in Asia. Beyond that, India seeks to strengthen the security and defence ties with various allies close to the USA, particularly in the maritime domain together with the QUAD. The quadrilateral cooperation between India, USA, Japan, and Australia is aimed at boosting security and defence ties between the four Indo-Pacific countries while counterbalancing China’s rise in this region.

It remains so far open whether the Indian government will pursue a policy of non-alignment amid the systemic rivalry between Washington and Beijing. Rather than that, it seems likely that India would not be given the option to remain neutral this time. In this geopolitical context, the deepening of relations with the USA towards a comprehensive strategic alliance seems to be only a matter of time. A decisive factor for this calculus is China’s behaviour towards its big neighbour. Beijing is currently faced with the option that the Chinese leadership either adopts a more assertive approach towards India resulting in further tensions along the line of actual control (LAC) and the IOR or it succeeds in mitigating the antagonistic relationship with New Delhi via diplomatic channels and geoeconomic incentives in order to prevent a 2nd major conflict arena while dealing with the USA in other parts of the world.

The two asymmetries pointed out in the previous chapter are enshrined in India’s geopolitical approach towards China. New Delhi anticipates a geostrategy of encirclement through the so called “string of pearls” approach by Beijing. While Beijing treats New Delhi as a second order rival due to its predominant focus on the systemic competition with USA, India considers China as the most existential threat to its geopolitical and geoeconomic interests in the Indo-Pacific region. Furthermore, India sees itself confronted with two nuclear powers which are direct neighbours and close economic partners.

New Delhi follows a two-fold approach with both a terrestrial and maritime component in its geoeconomic strategy, with a particular focus on the contested Himalayan borders with China and Pakistan. The country seeks also to expand the maritime component due to its geostrategic positioning in the IOR. This means a strategy aimed at creating a counterbalance to the growing Chinese presence in the IOR and the direct neighbourhood by expanding the network of regional and bilateral partnerships, alliances, and various security and defence constellations, “while playing as well, carefully but with dedication, the card of the Indo-Pacific.”  As a “middle power” positioned between Washington and Beijing with ambitious regional power projection capabilities, its main goal is to establish partially a strategic autonomy in the relations with other key players such as the USA, Russia, Japan, Australia etc., while carefully navigating through the complex relationship with China and Pakistan. Ultimately, India’s approach aims to partially replace China by cutting domestic dependencies and simultaneously attracting foreign investors which pursue a similar goal of diversifying supply chains, production processes, and trade ties away from Beijing.

China and India have also become more active in various international and regional organisations, with Beijing being in the lead once again. Even though New Delhi has actively participated in China-led organisational formats such as e.g., BRICS, AIIB and SCO, it refrained from a participation in trade blocs such as RCEP due to geoeconomic considerations. RCEP represents meanwhile the world's largest trading bloc with ASEAN countries with the participation of Australia, Japan, South Korea, and New Zealand et al., while excluding major economic powers such as the USA, the EU, and India.  India pulled out of the treaty due to fears of unequal competition with China in addition to its boycott of Chinese products, services, and technology solutions (apps, software etc.). Considering the enhanced multilateral platforms, the regional and international organisations will become another playground for India and China to seek relative advantages. The United Nations Security Council would likely become one of the arenas for diplomatic clashes in the next two years since New Delhi is a non-permanent member until 2023.

February 2021

This essay appeared first in the Special Edition of The Defence Horizon Journal and later in 9Dashline

5 INDIA AND CHINA: GEOPOLITICS IN THE INDO-PACIFIC DECADE — PART II

Territorial skirmishes along the Actual Line of Control

The political, economic, and diplomatic relations between China and India have grown significantly in recent decades, guided by the principle of cooperation and trust building.

Beijing’s surging geopolitical clout and geo-economic footprint, however, coupled with the focal points of unresolved border issues, brought about a shift in the relationship between the two Asian powers in most recent times. The two nuclear-armed nations with the largest militaries and populations in Asia are slowly but surely turning into regional rivals despite their shared aspirations for multipolarity and cooperation on international issues of mutual interest. The geopolitical tensions between them have particularly intensified since 2017. There have been armed clashes on the Sino-Indian border in the Himalayas. This was not only the worst standoff in the last decade, but it ultimately resulted in a shift in the bilateral relationship from a cooperative towards a more confrontational modality. The disputed region on the Doklam plateau is claimed by both China and Bhutan and is of strategic importance to India, due to its proximity to the Indian border.

Most recently, the Asian giants got involved in the Galwan skirmishes along the Line of Actual Control, causing an unprecedented loss of life on both sides34. It eventually led to the deployment of troops on both sides of the border, with China allegedly mobilizing 50,000 troops. Jagannath Panda names the “rising tempers on both sides alongside more robust nationalism in each country that frames the other as an antagonistic power” as the main reasons for the most recent tensions.

Neither the clashes with China along the disputed Himalayan border nor the Chinese presence on the Tibetan plateau are expected to diminish or to be resolved diplomatically. The incidents between the Indian and Chinese troops throughout the last year, which unfolded in the Ladakh highland, are expected to repeatedly occur in the upcoming years. Furthermore, India will have to develop its transport infrastructure near the common border as well as transform its military to enhance its capabilities towards a containment of Chinese activities near Indian territories. Finally, the two armies will remain engaged in a standoff in “Pangong Tso, Galwan Valley, Demchok and Daulat Beg Oldie in Eastern Ladakh”, which might easily lead to another brinkmanship in the future.

Complex Security Triangle Between China, India and Pakistan

While China sees the USA as its most significant competitor, so does India feel about China. In addition, India is more cautious since Beijing has established close ties with Pakistan, while China increasingly distrusts New Delhi because of its mutually warming relations with the USA. In this context, Pakistan is clearly the apple of discord between them, whereas the Kashmir region has been the focal point of conflict since the foundation of India. Kashmir has an overwhelming Muslim majority, however, it remains largely part of India, while Pakistan has occupied its Western part. The frozen conflict between the two hostile neighbours is periodically shaped by the emergence of tensions, regular skirmishes, and sudden brinkmanship along their common border. Despite the possession of nuclear weapons, both countries have been involved in direct military clashes throughout the decades. What adds most aggravation to the already complicated geopolitical situation from an Indian point of view is the steady geoeconomic rapprochement between China and Pakistan. Beijing has gained an access to the Indian Ocean through the Comprehensive Economic Corridor (CPEC), which entails railways and a trans-Himalayan highway in Pakistan and a port in Gwadar – to the disadvantage of Indian geopolitical and geoeconomic interests. In this regard, India seeks to act as the most significant naval power in the IOR, as the Chinese presence is becoming menacing to India’s goals. For that reason, both Asian powers seek to strengthen their positions in South Asia through various cooperation formats and economic ties. Pakistan, Nepal, Sri Lanka, and the Maldives are already witnessing a strong Chinese presence in their domestic affairs. And yet, New Delhi aims to offer an alternative to the Chinese connectivity projects by attracting foreign investment and engaging the neighbouring countries diplomatically and economically. Thus, South Asia will witness a growing competition between China and India over the “hearts and minds” in each of these countries, whereas even diplomatic efforts towards a normalization of the relations between New Delhi and Islamabad would not be unrealistic in the future.

Geoeconomic Competition Between India and China

The two Asian goliaths are already vying for limited resources at a time when the COVID-19 crisis has been exacerbating each socio-economic aspect of their domestic affairs and disrupting global supply chains. A large proportion of the world's goods as well as energy transports pass through the Indo-Pacific region, entailing some of the most significant maritime routes and global choke points for food and oil supply. Around 40% of the world's oil shipments and one-third of the annual global trade in goods pass through the Indian and Pacific Ocean, including critical transport hubs such as the Strait of Hormuz, the connection to the Persian Gulf, and the Strait of Malacca, the main artery between the two oceans. An immense proportion of the world's raw material supplies also pass through the Indian Ocean on their way from Africa to the South China Sea and beyond. In view of the increasing interconnections in the Indo-Pacific region, a rise of tensions can be expected due to an enhanced competition over natural recourses, the hindered access to free navigation along the oil and food choke points as well as the disrupted access to water.

Furthermore, Beijing’s controversial region Xinjiang occupies a strategic position in China’s main terrestrial connectivity projects within the BRI – the primary route goes through Russia (Dragonbear), the middle route through Central Asia, with deviations through Iran and Turkey, and the Black Sea, and a third one through Pakistan (CPEC) connecting to the port Gwadar in the Indian Ocean. Xinjiang, known for its forced labour camps and broad discrimination of human rights against the Muslim Uighurs, is of great importance as China asserts claims over parts of India’s Arunachal Pradesh, while India claims the region Aksai Chin connecting Tibet with Xinjiang in Northwest China. The two nations have even fought a war over this territory in 1962. From a geopolitical point of view, the rapprochement with Pakistan offers a solution to several key issues in terms of the long-term Chinese interests – a transport and trade route from China to the Indian Ocean and Gwadar port as a maritime component of the BRI. Moreover, an ambitious and cost-intensive project such as CPEC requires safety and protection, which China already provides with the help of private security companies. Finally, Gwadar is part of a comprehensive network of ports in key locations, which enables power projection in the Indian Ocean Region and beyond.

Future geopolitical scenarios

From a geopolitical point of view, the new great game will be predominantly situated in the South China Sea and the Indian Ocean due to rising competition between the two Asian giants, in addition to the systemic rivalry between China and the USA. The rapprochement between China and Pakistan, as well as the systemic coordination between China and Russia (the Dragonbear) in a much broader geopolitical context, are key examples of fluid regional formations. Russia remains a major actor with a significant geopolitical potential for both China and India. Moscow’s approach during the border tensions in 2020 clearly showed that it prefers to play the role of a mediator, aimed at mitigating possible escalations instead of taking sides. In fact, Russia has a strong geoeconomic interest in supplying arms to both countries and would reluctantly renounce this opportunity in the future. However, the phenomenon of a systemic coordination between China and Russia in various key fields is perceptibly becoming a factor in India’s foreign and security calculus. As a rising regional power, India could use the trilateral format with the Dragonbear to coordinate important conflictual positions and invest in trust building regarding security and defence issues in the Indo-Pacific region.

Logically, the US regards India as a significant and reliable partner in creating a counterweight to China’s overwhelming presence in South and Southeast Asia. Following the COVID-19 crisis outbreak and the deteriorating relations between members of the West and China (e.g. Canada, Australia, and member states of the European Union), the re-emergence of the QUAD and other constellations that include core members of the Anglosphere such as CPTPP, are increasingly seen as part of a broader US-led counterbalancing effort against China’s rise, including geoeconomic projects such as the BRI, the China Pakistan Economic Corridor and the Regional Comprehensive Economic Partnership. Obviously, the political elites in New Delhi are increasingly in favour of closer relations with Washington, but also continue to rely on friendly relations with Moscow amid the intensifying tensions with Beijing. It remains to be seen whether Biden’s Administration will skillfully play a balancing act between China and India in the near future. It is expected that a major geopolitical shift in the region will take place due to Washington’s efforts to establish a comprehensive strategic relationship with New Delhi. Furthermore, China will continue extending its terrestrial connectivity to Europe through Central Asia, to bypass the US maritime dominance in the Indo-Pacific space.

There are two plausible scenarios linked to the Indo-Pacific region in the short term: either the USA and India will unite to coordinate actions and measures against the growing influence of China in tandem with Russia (the Dragonbear) or the USA and China will engage in a process of approximation under Biden’s Administration, which seems increasingly unlikely, whereas India will need to carefully navigate between the two systems of power without aligning itself in a strategic manner. In the case of further escalations in South Asia, the USA would support New Delhi, while Russia would rather seek to remain officially unaligned. India’s geopolitical choices are either joining the US-led bloc of predominantly Anglosphere allies and close partners such as Japan and Australia against China, or, once again, building partnerships of non-aligned middle powers that can navigate through the complex relationship between Washington and Beijing without taking sides.

Geographically speaking, China is an Asian-Pacific country, while India is turning into an Indo-Pacific one. However, the focal point of intersection between China’s terrestrial and maritime connectivity projects is situated in the Indo-Pacific region, where Beijing will further seek to enhance its presence and geoeconomic leverage. It is beyond any doubt that China has adopted a geopolitical approach of simultaneously becoming a “heartland” (Central and Eastern Europe, Eurasia, the Dragonbear) and “rimland” power (the Indo-Pacific, South China Sea and Southeast Asia). Such approach will trigger further tensions with India in the upcoming Indo-Pacific decade. New Delhi will have to make tough geopolitical choices and engage in multi-fora alliances. Unless China builds its navy big enough for power projection into the Indian Ocean, India will keep its leverage as a major naval power. However, China is gaining more importance in the geoeconomic arena by the day. Thus, there is a risk that India will cede ground to Beijing on trade, investment, and infrastructure issues. In addition, China may be viewed as being an emerging winner from the current COVID-19 crisis, while it will take more time for India to recover. This will give China an additional geoeconomic leverage, particularly while engaging countries linked to the Indo-Pacific region.

To conclude, the outcome of the geopolitical rivalry between China and India is not clear yet. The geopolitical approach of both countries is reflective of a constructive pragmatism when necessary and a comprehensive competition whenever possible. Given that China and India will be the two major powers of the Indo-Pacific region, their relationship will increasingly be shaped by economic competition, geostrategic rivalry, and a certain readiness for confrontation in their quest for shaping this common geopolitical space.

March 2021

This essay appeared first in the Special Edition of The Defence Horizon Journal and later in 9Dashline

6 COLD WAR 2.0: IS IT INEVITABLE?

“Look back over the past,

with its changing empires that rose and fell,

and you can foresee the future too.”

Marcus Aurelius

Introduction

The Global System has never been so interconnected, as was globally demonstrated by the Covid-19 virus outbreak. However, global affairs are at an inflection point. One of the unexpected manifestations following the pandemic was a bifurcation of the global order unseen since the Cold War. It begs the question: is the world witnessing the revelation of a new bipolar era of global competition?

Global powers rise and fall. The pendulum swings back and forth, and a fragile equilibrium is achieved through the constant struggle for power and influence that keeps global affairs afloat. The rationale behind it lies in maximising the gains, forming powerful alliances and partnerships, and building enough capabilities to project power beyond the national realm. Any competitor strong enough to question the dominance of a global power would seize the opportunity to fill the gaps wherever they may present themselves. In the presence of a hegemon, there is always a process of polarisation that leads to the creation of a second system pole consisting of a single competitor or a group of rivals that seek to undermine global power supremacy. To bring things into perspective: a global reserve currency is not possible nowadays without the global power projection capabilities that enable the USA to control the interconnected flows of goods, capital, services, data, etc., and to protect the trade and transport routes from disruptions that might result in major supply shocks.

Global affairs are constantly influenced by competition and cooperation. In this regard, the Global System has been entering a new transitional period with the formation of two centres of power – the USA and China. The former has been predominantly shaping the international relations following the collapse of the Soviet Union due to global power projection via transnational networks established over decades of world dominance. Given the impressive economic growth trajectories of the latter, even despite the Covid-19 pandemic, there are certain expectations about its further rise on the global arena. However, it remains unknown yet, whether Beijing will be capable of transforming its growing geoeconomic clout and geopolitical influence into global power projection. Under any circumstances, the Global System is already facing profound implications with long-lasting effects for the international affairs. This essay deals with the question of whether Cold War 2.0 is inevitable amid the comprehensive competition between the USA and China.

From Chimerica to Systemic Decoupling

According to Biden’s administration, China “is the only competitor potentially capable of combining its economic, diplomatic, military, and technological power to mount a sustained challenge to a stable and open international system. Furthermore, Secretary of State Antony Blinken portrayed China as “America's most powerful adversary and competitor” as well as “America's biggest geopolitical test of the 21st century".  Biden’s counterpart, Xi Jinping, similarly identified the USA as “the biggest source of chaos in the present-day world” as well as “the biggest threat to our country’s development and security.”  Moreover, the Chinese Communist Party “revealed late last year that the ☐Five Year☐ plan would span not just military but also economic, financial, and technological security.”

A systemic rivalry means a competition over the access to and control over the socio-economic web of American global dominance. The integration of China into the US-led systems during the Cold War and afterwards is what many coined as Chimerica –globalization created an unexpected phenomenon of highly interconnected networks between Washington and Beijing. However, the unintended effect was China’s rise on the global arena challenging America’s dominance in various domains. Against this background, a new Cold War scenario implies the emergence of what has been coined as a systemic decoupling – “the formation of two separate systems with their analogue networks along transport, infrastructure and connectivity routes.” 

British geographer Halford Mackinder once claimed that China could become again a major player in global affairs based on its geographic location stretching from “heartland” to “rimland terrains” of the world. Derived from Mackinder’s vision, China will seek to establish a terrestrial connectivity through Eurasia with the industrial heart of Europe – Germany, France, Italy, and Great Britain. Moreover, Central and Eastern Europe is the key to winning “the heartland”, whereas the control over it in Eurasia would enable China’s global power projection. From the prism of Mackinder, one could also assess the Belt and Road Initiative (BRI).  The BRI entails two terrestrial connectivity routes to Central and Eastern Europe – one through Russia, and another one through Central Asia and Turkey. In addition, Beijing introduced various political and economic platforms for engagement and cooperation, with the 17+1 initiative being the most famous among them. Based on Spykman’s premises, China is also building up its military presence in the ‘rimland terrains’ of South China Sea and the Indo-Pacific realm, while it has developed a “string of pearls” approach in the Indian Ocean Region to create a network of friendly ports and trade posts in India’s direct neighbours as part of the maritime connectivity within the BRI. 

Andrew Michta describes Beijing’s endgame as a “global inversion” of the interconnected trade flows, “which currently favour maritime routes, a setup that relies on U.S. naval power as enforcement. If China can develop a cross-Eurasian supply chain and protect it, it won’t need to match America in the maritime domain.”  China is already pursuing simultaneously the formation of alternative routes via maritime and terrestrial connectivity, an approach combining Mackinder’s “heartland” and Spykman’s “rimland” strategy. Thus, China is seizing the unique chance of becoming the first Asian global power in the modern history of international relations. However, Beijing’s global rise will primarily be determined by the outcome of the Fourth Industrial Revolution of cyber-physical systems as well as its capability to establish its own global networks of finance, trade, energy, economics, and diplomacy.

Contrary to the bipolar global order established during the Cold War competition between Washington and Moscow, the systemic rivalry between the USA and China is evolving simultaneously at sea and on land. State actors seek to “weaponize interdependence” by leveraging global networks for strategic advantages.  There are four domains which will be key for the outcome of the mutual competition: political economy, technology, international rules and ideology, and, finally, partnerships and alliances.

Political economy

According to the pioneer of Realpolitik, August Ludwig von Rochau, the distribution of power lies at the heart of international relations. Realpolitik, with its two main pillars of geopolitics and geoeconomics, has become once again the true motor of global affairs. It is the main driver behind the systemic decoupling between the USA and China following the shifting global power dynamics from Atlantic to the Indo-Pacific. The competition between the two systemic rivals was already taking a shape when US President Obama decided to launch the American pivot to Asia and engage with like-minded partners to build institutional alliances, trade blocs and coalitions to counterbalance China’s increasing geoeconomic clout. Moreover, President Trump continued building up the pressure on Beijing on all fronts, mostly by applying a protectionist approach through bilateral agreements and coalitions.

China’s approach following the Covid-19 pandemic is focused on “sustaining economic growth and prosperity, developing its domestic markets, boosting innovation and technology, improving its military capabilities and maintaining domestic stability.”  Beijing strives to implement domestic reforms and improve its economic development while preparing to gradually decouple from the US-dominated networks by simultaneously building up transport, trade, and energy connectivity with the rest of the world. It is misleading to conclude that Washington is unilaterally pursuing the decoupling from Chimerica. Beijing is no less keen to break up its dependence on American monetary, financial, economic, trade, diplomatic and technological networks. Its approach is clearly aimed at achieving greater self-sufficiency by establishing alternative systems and substituting critical connectedness that is “forcing China and the United States towards a zero-sum understanding” of the world’s complexity.” 

Who will ride the wave of the Fourth Industrial Revolution?

Globalization takes place based on a geoeconomic and geopolitical expansion model introduced by the state actor capable of establishing global dominance. This was the case with Great Britain in the nineteenth century as well as with America following the collapse of the Soviet Union in the twentieth century. These global powers accomplished a dominant position in the world by riding the wave of the previous Industrial Revolutions. The winner of the current technological competition remains to be seen. However, the vanquisher will impose its predominance on both competitors and allies. The rivalry over a pre-eminence during the Fourth Industrial Revolution necessitates an attempt at self-sufficiency in critical technologies and global supply chains. Logically, there cannot be two winners in the contest over technological supremacy. Against this background, “Xi has publicly proclaimed the imminence of China’s industrial superiority and strived to achieve it via the largest industrial espionage offensive in history.”  As Edward Luttwak points out, “there is the relentless accumulation of Chinese military strength, funded by a still growing economy, whose more visible elements include a growing fleet whose combat value matters less than the symbolism of such a direct challenge to American power in the Pacific.”

Reconfiguring the global supply chains away from China is already becoming a reality following the COVID-19 pandemic due to the withdrawal of American and international capital from Beijing. A global disruption of supply chains, coupled with the imperiled rules-based global order caused by eroding international structures, as well as newly emerging organisations and institutions, will certainly not bypass any region in the world. On the contrary, the reconfiguration will be initiated mainly by the USA to bring manufacturing and supply chains back home or to branch out to American allies and partners. Moving production from traditional hubs to new ones will take time and requires trust building, but will also create new geoeconomic advantages, particularly for India, which is projected to become the third world economic power in the next decade. Regional centres of trade power, such as Japan and the EU, already began considering a shift of manufacturing operations out of China. Over the long term, there is a likely scenario of two parallel supply chains networks, one set up by the USA, the other facilitated by China.

Sectors such as space technologies, artificial intelligence, defence, and the cyber domain will witness strategic investments to promote the growth of new, regional power centres. This is important since any significant breakthrough in these areas will bestow global competitiveness and geoeconomic advantages. Further, the unprecedented interconnectedness of all socio-economic systems has obfuscated the distinction between economic and trade indicators, on one hand, and defence and security considerations on the other. This explains why the competition between the USA and China does not solely represent a trade war, but a broader rivalry extending to the global networks of finance, trade, economy, diplomacy, energy, defence and so forth.

The battle over international norms and exceptional ideologies

The Cold War encompassed a competition over the systemic hierarchy of international values, norms, and rules. Once the Soviet Union was dismantled, the USA could define this agenda by promoting the liberal ideas of a democratic political order coupled with a market economy and human rights and freedoms. Obviously, the outcome of the competition between Washington and Beijing will be also decisive for the future of the global order in terms of the prevalent international norms, standards, rules, and values.  Furthermore, the systemic coordination between China and Russia (the Dragonbear) already indicates "a willingness to challenge the international order and the US position in it."

While an ideological competition has not become overt yet, once again the liberal international order under American guidance is facing a new threat due to the growing influence of a governance model and an authoritarian ideology spread by the Chinese Communist party.  Following Beijing’s geoeconomic ascent in the world, authoritarian regimes and ideas became firmly established as a stronghold in Southeast Asia: “Strongmen in power in Myanmar, Thailand and Cambodia, single parties in Laos and Vietnam, and democracy eroding in the Philippines, Malaysia, Indonesia.”  The battle of narratives further escalated following the introduction of competing Covid-19 vaccines, which revealed a new challenge to the West as China sought to improve its global public image by taking geopolitical advantages. Clearly, its soft power clout during the pandemic added another layer to the rivalry between the two competitors (e.g. the “wolf” diplomacy in Australia, Canada, and Sweden).  Beijing has also become known for its human rights abuses, “including a crackdown on pro-democracy activists in Hong Kong and against Uighurs in Xinjiang.”  There are already speculations that Beijing might seek to penetrate the political spectrum and socio-economic fabric of Taiwan, in order to establish control over its processes and structures in the long run.

At present, the United Nations (UN) and other international organisations are already affected by the global power competition. The demise of the role of the UN Security Council (UNSC) is linked to the declining international role of Washington, particularly during Trump’s mandate. Moreover, two simultaneously occurring processes are at the core of the phenomenon, linked to the decreasing efficiency and partial dysfunctionality of the UNSC – a surging disunity withing the Transatlantic Community with the consequence that the USA often faces difficulties in convincing its own allies, partners and like-minded countries to vote in favour of American draft resolutions (e.g. Iran), on the one hand, and the rising assertiveness by China and Russia as diplomatic powers due to their growing influence within the multilateral institutions (e.g. Syria), on the other.

Multilateralism is at risk of becoming a buzzword reflecting an institutional reminiscence from the Cold War, as the Security Council was often turned into a playground for diplomatic battles between the two major groups of countries. This dynamic could resurface, considering the growing polarization centred around the Transatlantic Community, on the one hand, and China and Russia (the Dragonbear), on the other. Obviously, China together with Russia operate within the existent global order with the clear goal to disrupt it, disfunction its multilateral structures, and create better conditions for the own concept of multilateralism, which is strictly opposed to the Western values, norms, and rules. One can safely assume that the coordinated efforts by the Dragonbear within the UNSC and other international organisations will further increase, as both actors will seek to boost their international image as norm-setters in a rapidly changing rules-based global order.

What does a systemic bipolar era mean for alliances?

The unfolding of regional centres of power creates the delusive impression of multipolarity, while in fact a new systemic bipolarity between the USA and China encompassing all relevant networks is occurring. An important structural layer of the Global System consists of the middle-sized powers oscillating between Washington and Beijing in order to maximise their own gains while avoiding taking sides so long as possible. Once again, Realpolitik comes into the foreground. In the famous words of Lord Palmerston, there are neither eternal allies, nor perpetual enemies, only eternal and perpetual interests.  This seems to be the leading geopolitical maxim of the upcoming Indo-Pacific decade, facing multiple ad hoc actors’ constellations and reconfigurations. Among the main protagonists are countries such as Russia, India, Japan, Canada, the key European states such as Great Britain, France, Germany and Italy, Australia, Turkey, and a few other relevant regional powers. Following the COVID-19 pandemic, they have one thing in common – to play a balancing act between the USA and China while delaying the difficult choice of choosing sides.

Main hotspots and potential triggers for escalation are in the South and East China Sea, the Indian ocean, the Mediterranean, Caspian, Black Sea as well as the Middle East and North Africa. Tensions are also expected along the global choke points for energy and food as well as the Chinese Silk Roads. Beijing has been in the lead in various organisational formats such as e.g., BRICS, the Asian Investment and Infrastructure Bank, the Shanghai Cooperation Organisation, and trade blocs such as the Regional Comprehensive Economic Partnership, the world's largest trading format with ASEAN countries, including Australia, Japan, South Korea and New Zealand, while excluding major economic powers such as the USA, the EU, and India.  Obviously, the growing gap between Washington and Beijing leads not only to a bipolarization of the global order but is also increasingly putting pressure on the regional powers caught in the middle.

Concluding remarks

China has become the main external factor in American domestic politics, while America can only exert a limited influence on domestic affairs in China. International cooperation has become a function of the global competition and systemic rivalry between Washington and Beijing. Their competition, however, does not necessarily have to turn into an overt and direct confrontation. The Secretary of State Antony Blinken stressed that the “relationship with China will be competitive when it should be, collaborative when it can be, and adversarial when it must be.”

The layers of vicissitude in the comprehensive competition consist of the oscillation of middle powers between the USA and China as well as the technological, geoeconomic and institutional decoupling. Not only has China already become a second system pole of global power, but it has also begun challenging the existent international structures and networks in the global order. While the USA will seek to preserve the institutional heritage, technological leverage and geoeconomic clout in cooperation with the transatlantic allies and regional partners, China will clearly aim to establish and promote alternative structures and systems to counterbalance and challenge the American dominance inherited from the Cold War. It is obvious that the outcome of these contradicting strategies cannot result in a win-win situation. Eventually, their systemic competition will fragment the interdependent and globalized world by unleashing centrifugal forces of bipolarity, affecting the whole spectrum of interactions in global affairs. Until the bifurcation of the Global System reaches a tipping point, we can still pretend that we live in multipolarity.

A pessimistic scenario would imply a more radical and consistent mutual decoupling while an optimistic scenario reveals a more peaceful systemic coexistence as Beijing would focus on partnerships and commitments to strengthen its domestic development until it builds a counterbalance to the overwhelming American influence.  In both scenarios, the message is clear: every state actor – big or small – will have to choose sides between two very different global systems with their set of norms, rules, and ideologies.   America has been so far the biggest source of China’s wealth. And yet, Washington might also become the biggest source of China’s demise. Make no mistake – the USA will not shy away to advance the latter under aggravating circumstances of global power competition.

April 2021

This essay appeared first in Raisina Special Files 2021 

7 WILL CHINA GET EMBROILED IN THE GRAVEYARD OF EMPIRES?

Afghanistan is a complex geopolitical playground and remains one of the world's fiercest battlegrounds. After the recent withdrawal of US and NATO troops from Afghanistan, the Taliban immediately began claiming territory in various parts of the country. They now control more than 85 per cent of the country. The Afghan government may be overthrown in the next few months due to the poor preparation of the country’s security forces. Against this backdrop, the question arises whether China may be the next great power to get embroiled in the ‘graveyard of empires’.

Great powers have always tried and failed to turn Afghanistan into a hotbed for their geopolitical ambitions. America is the latest superpower to suffer a catastrophic defeat in the country after two decades of unsuccessful occupation and nation-building. Washington's poor performance in delivering major energy, infrastructure, and connectivity projects has been one of its biggest failures over the past twenty years. Meanwhile, Beijing is carefully preparing to fill the void left by the US.

China’s position in Afghanistan

China is pursuing three main objectives in Afghanistan: avoiding a further expansion of the conflict and all-out civil war, promoting intra-Afghan negotiations, and preventing the rise of terrorist forces and activities. In this respect, China is relying on intensified relations with Russia (the Dragonbear), Iran, and Pakistan.

Afghanistan is geostrategically located in a hotspot linking the Middle East, Central and South Asia, and Europe. China views the country as a major geopolitical puzzle piece between Pakistan and Iran, both of which have already deepened their ties with Beijing under the Belt and Road (BRI) and China-Pakistan Economic Corridors (CPEC) initiatives. In this context, some specific strategic projects in Taxkorgan, Wakhan and Gwadar are of immense importance. The construction of Taxkorgan Airport on the Pamir Plateau in the northwestern Uighur Autonomous Region of Xinjiang is a significant long-term investment, as Taxkorgan is "China's only county-level city bordering three countries - Tajikistan, Pakistan and Afghanistan". China and Afghanistan share an 80-km border with the Wakhjir Pass, which is the only potentially navigable pass. However, there is no road connection to the pass on the Afghan side. A potential investment would be to create a direct link to Afghanistan through Wakhan and Little Pamir as part of the Belt and Road Initiative, thus revitalizing the Silk Road in Afghanistan through the Wakhan Corridor.

A road project connecting Bozai Gonbad with the the Wakhjir Pass is currently in the implementation phase and is being financed by the Afghan government without any Chinese involvement. Whoever is in charge in Afghanistan will soon have to decide whether to reconnect the country with China by building a 50 km highway, a project estimated to be worth at least 5 million dollars. The realization of the transit corridor contains potential risks and challenges for China. Beijing considers the Wakhan a potential infiltration route for residents in Afghanistan, who vow to conduct terror activities in Xinjiang. Chinese interest in a direct connection to Afghanistan may grow with the changing situation on the ground as Beijing is seeking to gain a foothold in Afghanistan through the BRI with USD 62 billion in investments following the US withdrawal from the war-torn country.

The CPEC consists mainly of projects involving highways, railroads and energy pipelines between Pakistan and China; the port of Gwadar is a key strategic asset, which enables Beijing's power projection into the Indian Ocean. Beijing could include Afghanistan in CPEC to provide economic incentives through a direct land connection with Pakistan. Concrete projects can be developed under the “Digital Silk Road, the Sino-Afghanistan Special Railway Transportation Project, the Five Nations Railway Project, and a Kabul–Urumqi air corridor”. Currently, China is Afghanistan’s second-largest trading partner (USD 1.19 billion), but it can significantly increase its trade volume through its direct land connection with Pakistan. Talks on the construction of a main road between Afghanistan and the north-western Pakistani city of Peshawar indicate this may be the first major project within CPEC in the near future.

China is already working on building the relationships with all relevant actors in Afghanistan and, if necessary, accommodate the Taliban to discourage their support for Muslim Uighurs in China's Xinjiang province. Currently, Beijing expects instability to spill over into the country's immediate neighbourhood due to the rapidly deteriorating situation in Afghanistan. Based on its concept of the ‘three evil forces’ of extremism, terrorism, and separatism, China is committed to cracking down on any activity that threatens to turn Xinjiang into a hotbed of Islamic extremism and terrorism, including the Islamic Movement of East Turkestan. Beijing is likely offering economic incentives to the Taliban to guarantee their support for its BRI in Pakistan and Afghanistan. The Islamic State's growing presence in the north of Afghanistan is another concern. China will seek Russia's help to prevent IS from destabilizing Central Asia, a common geopolitical goal shared by both the Russian-led Collective Security Treaty Organisation (CSTO) and the Chinese-led Shanghai Cooperation Organisation (SCO).

Finally, Chinese economic investments in Afghanistan will potentially grow as Beijing seeks to get access to “its unexploited reserves of copper, coal, iron, gas, cobalt, mercury, gold, lithium and thorium”. According to a geological study, Afghanistan has reserves of rare earths and minerals estimated at up to USD 3 trillion. The war-torn country may have 60 million tons of copper, 2.2 billion tons of iron ore, 1.4 million tons of rare earths (lanthanum, cerium; and neodymium), and deposits of aluminum, gold, silver, zinc, mercury and lithium. Thus, it is logical that China is more than interested in expanding its trade ties with this part of the world. However, Beijing will certainly seek to secure and protect investments and major infrastructure projects in the future. Military presence in coordination with regional partners such as Russia, Iran, and Pakistan, or regional organisations such as CSTO and SCO, may accompany the expansion of China’s BRI and CPEC towards Afghanistan. The role of private security companies in this corner of the world will clearly increase too.

The geopolitical stakes in Afghanistan

All relevant actors – Moscow, Beijing, Washington, and, to a lesser degree, Brussels – are interested in integrating South and Central Asia into various connectivity, transportation, and trade corridors. Meanwhile, they are already competing for influence and presence in Afghanistan's Central Asian neighbours.

For Russia, the relationship with Afghanistan's direct Central Asian neighbours is a logical continuation of the integration process within the Eurasian Economic Union, and for China within its BRI and CPEC. Moscow wants to promote a geoeconomic space between the southern ports of Iran and India, and the northern cities of Russia and the EU. However, while Russia views the emergence of US presence and bases in its ‘underbelly’ as undesirable, Washington will seek to gain a foothold in the Central Asian region after its incomplete withdrawal from Afghanistan. In this context, the Dragonbear's geopolitical goal is to keep the US out of Central Asia and prevent Washington from using the region as a springboard to contain Russia, China, and Iran. Therefore, coordinated actions and measures between Beijing and Moscow regarding Afghanistan and Central Asia are quite likely in the future, perhaps within the framework of the CSTO and the SCO or bilaterally.

The US has announced that more than 4,000 troops will be withdrawn from Afghanistan while up to 650 will remain in the country. Thus, Washington will not completely pull out from the war-torn country. After the withdrawal, the US asked Central Asian countries to take in refugees from Afghanistan – mostly Afghans who cooperated with the US and NATO over the past twenty years. Russia, however, is wary of the potential risks and threats associated with using military bases and hosting thousands of Afghan refugees as well as any efforts to revitalize American presence in Central Asia. There are even allegations that Moscow has instead offered Washington the temporary use of Russian military bases in Tajikistan and Kyrgyzstan.

South Asia will witness growing competition between China and India over the ‘hearts and minds’ of the direct neighbours, including Afghanistan. Pakistan is preparing for the security vacuum in Afghanistan, as Islamabad expects the gap to be filled by China with Russia's help. Given the poor relations of all regional actors with the Taliban, Pakistan seeks to capitalize on its good ties with them as a mediator. Since Islamabad holds sway over the Taliban, it considers its role as one of the main channels for future talks between them and Beijing. But Islamabad is also concerned about the risks of a new civil war in Afghanistan or the country’s takeover by the Taliban, which is why it will cooperate with other states such as Turkey or even the US to stabilize Afghanistan. The growing Chinese economic presence and ‘debt-trap diplomacy’ towards Pakistan will make Islamabad aware of the need to diversify its relations in the region. There might be even diplomatic efforts towards normalising trade relations between New Delhi and Islamabad in the future.

The close relationship between China and Pakistan, as well as coordination between China and Russia (the Dragonbear), are key examples of fluid regional formations that can help China manage Afghanistan and will have a major impact on India. Given that China and India will be the two major powers of the Indo-Pacific region, their relationship will increasingly be shaped by competition and confrontation in their quest for shaping this common geopolitical space. Current China-Russia and China-Pakistan close ties have created a significant geopolitical imbalance in the Indo-Pacific, which is detrimental to India’s interests. India is already facing growing tensions with China along the Line of Actual Control (LAC) and is building a geoeconomic counterweight to the Silk Road through a terrestrial corridor across Iran and Central Asia to Russia and Europe (the International North-South Transport Corridor). The Indian-backed Chabahar port is located on the Gulf of Oman in southern Iran and connects India to Afghanistan and other Central Asian countries, bypassing Pakistan. New Delhi remains the largest reconstruction donor of Afghanistan and seeks to coordinate with other like-minded partners through bilateral and multilateral channels regarding the volatile situation in the country.

Logically, the US regards India as a reliable partner to create a counterweight to China’s overwhelming presence in South and Southeast Asia. Current developments, such as the emergence of the Quad and other Anglosphere constellations are increasingly seen as US-led counterbalancing efforts against China’s geoeconomic projects such as the BRI, CPEC, and the Regional Comprehensive Economic Partnership. China's competing regional integration projects threaten to increasingly isolate the West from this part of the world, which will experience immense growth in global GDP and population in the coming decades.

The West has its own calculations regarding the worsening situation in Afghanistan. With the Quad's increased focus on the Indo-Pacific, none of the four members – the US, India, Japan, and Australia – can afford to have "a blind spot in Afghanistan that encompasses both geopolitical and terrorist threats”. Meanwhile, Washington launched another Quad formation with Afghanistan, Uzbekistan, and Pakistan to enhance regional connectivity. These US-led quadrilateral formations not only aim to contain the growing Chinese presence, but also engage in Afghanistan and Central Asia on a range of geopolitical and geoeconomic issues, from counterterrorism and humanitarian assistance to infrastructure projects and reconstruction investment. The European Union fears another large wave of refugees due to the growing security vacuum and is therefore eager to promote economic stability and trade relations with and between Central and South Asia too (e.g., regional connectivity).

Finally, Turkey is supporting the regime in Kabul for now, as it is on a collision course with the Taliban. Ankara's ambitions to guard the airport in Kabul are linked to geopolitical calculations, as the airport is important for keeping US military presence in the country and creating opportunities for cooperation with the US and NATO allies in the future. For Ankara, “securing a role in Afghanistan in the post-US era will be an opportunity not only to be a step ahead of its regional rivals, such as Iran, but also to guarantee a sustainable influence in the region”. If Kabul’s government can’t hold off the Taliban in the next few months, Turkish troops may face a precarious situation, where Turkey’s ties with Pakistan and China can prove to be very useful.

Turkey increasingly sees itself as part of China's terrestrial connectivity to Europe through the Black Sea area, while its support for Azerbaijan in the recent war against Armenia in Nagorno-Karabakh has opened up a new geopolitical space for Ankara in the South Caucasus and the Caspian Sea. Ankara has expanded its geopolitical and geoeconomic clout and enhanced its military presence in the immediate neighbourhood from the Middle East to North Africa. Increasing its military presence in Afghanistan can play a dual role for Turkey's geopolitical interests: Ankara will boost its geostrategic importance to NATO and especially to the US amid strained bilateral relations, but it will also keep the door open for a possible rapprochement with China, Russia, and Iran on the future of Afghanistan if the situation on the ground deteriorates dramatically in the coming months.

What next

Although Beijing is critical of the US’ withdrawal from Afghanistan, it is pursuing its own calculus on securing Afghan territory against possible terrorist encroachment and preventing the civil war-like situation in Afghanistan from spilling over into China's Xinjiang province or neighbouring Central Asian countries. China will have to decide whether to manage Afghanistan through its current proxy Pakistan or by directly confronting the Taliban. In this regard, Beijing is unlikely to make the same mistakes as the US and the Soviet Union. Rather than removing or expelling the Taliban, Beijing is more likely to accommodate them to leverage the country's resources and enable the necessary networks within BRI and the China-Pakistan-Afghanistan economic corridor. Connecting Iran and Afghanistan through Chinese energy, infrastructure, and trade routes will open vast geoeconomic spaces for Beijing. Ultimately, Russia occupies a central place in China’s efforts to stabilize the Central Asian landmass and incorporate Afghanistan in its plans for alternative transport routes, infrastructure and connectivity in the future.

Afghanistan is likely to become the next geopolitical quagmire after Syria. It will be interesting to follow how China will navigate this playground, as Beijing is likely to be the next great power to try and fill the void. Perhaps that is exactly why the US is pulling out now – the move could possibly become an American trap if China enters the Afghan quagmire and fails, as the Soviet Union did between 1979 and 1989. This was indeed a major failure that put the final nail in the Cold War superpower's coffin. Washington seems to have a plan to cause trouble for the newly emerging great power China. Obviously, Afghanistan will be an important geopolitical test for Beijing, but will it succeed where others have so far failed?

July 2021

The essay appeared first in 9Dashline

8 A SPLIT BETWEEN THE ANGLOSPHERE AND THE EU VS. THE DRAGONBEAR AMID BIFURCATION OF THE GLOBAL SYSTEM

Not surprisingly, Australia, the United Kingdom and the United States have decided to deepen diplomatic, security and defence cooperation in the Indo-Pacific region, including through cooperation with partners, i.e., likely Japan and India in the near future.

The announcement to support mutual security and defence interests and promote more intensive information and technology sharing, building on the long-standing bilateral relationship, must be seen in the context of an intensifying systemic rivalry between the US and China and the emerging bifurcation of the global system.

Together with QUAD and other Anglosphere formations, the partners will seek to promote deeper integration of security and defence-related relationships in the areas of science, technology, industrial bases, supply chains and security and defence capabilities. This is about hard power projection in the midst of an emerging second system pole in the region — China. But the trend towards new geopolitical and geo-economic constellations in the Anglosphere has been emerging for some time now. The QUAD, CPTPP and now AUKUS are increasingly seen as US-led counterbalance efforts against China’s own geo-economic and geo-political projects like BRI, SCO, China-Pakistan Economic Corridor and the Regional Comprehensive Economic Partnership in the Indo-Pacific region. Perhaps Japan and India may join the AUKUS turning it into the hottest JA(U)KUSI in global affairs right now.

By contrast, the EU seeks to be a geopolitical player, however Brussels announced on the same day its new major geoeconomic project “Global Gateway” as a counterinitiative vs. China’s BRI without coordinating this step with its biggest partner, the US. Simultaneously, the US announced the major security pact with the UK and Australia without coordinating it with Brussels, Paris or Berlin. The move by AUKUS was immediately perceived as a “stab in the back” by the main European ally in the Indo-Pacific region — France. It is believed to be one of the lowest points in US-French relations in the last two decades, which could also have implications for the future transatlantic approach to China.

Clearly, AUKUS mirrors the major geopolitical shifts towards the Indo-Pacific, which means bad news for the EU in general, but also for France as the main Indo-Pacific member of the EU in particular. Despite the latest positive developments linked to the launch of the EU Indo-Pacific Strategy and the strategic documents of France, Germany, and the Netherlands regarding their bilateral approach to the region, it is obvious that the EU must first become a security actor in the Indo-Pacific in order to be taken seriously by its partners in the Anglosphere. Once again, the EU might overlook the geopolitical realities on the ground, namely that the global power competition is moving eastwards.

The West is clearly fragmented on this issue: the US and its European partners are not on the same page geopolitically. The trend points to a growing split between the Anglosphere and the EU when it comes to dealing with the “Dragonbear” (China and Russia) amid an emerging bifurcation of the global system. The fact that the US is willing to spend more political capital and invest in security and defence ties with the UK and Australia before reaching out to EU powers is quite revealing.

Hard conclusions need to be drawn in Brussels, Berlin and Paris as to whether they are not increasingly isolating themselves from their most important transatlantic partner due to their approach to the Indo-Pacific region and China in particular.

Against this background, we are witnessing a major geopolitical shift in this region amid the global power competition between the US and China, and the EU strategy of oscillating between Washington and Beijing will not be successful in the long run if EU powers like France, Germany and the Netherlands seek to have a seat in these fluid geopolitical formations. The EU and the member states must prevent a possible situation in which Europe becomes the geopolitical backyard of global affairs.

September 2021

This essay appeared first on Medium

9 AUSTRIA AND THE AUKUS: FROM THE “ISLAND OF THE BLESSED” TOWARDS THE “ISLAND OF THE INDIFFERENT”

Introduction

The Austrian Federal government is embroiled in the next biggest corruption scandal after the Ibiza affair, which caused the previous coalition to resign in 2017. Therefore, Austria, which is often described as the “island of the blessed”, will have even less time to deal with world events. As an observer of global affairs from neutral Austria, a country that is not perceived as a geopolitical actor by either partners or rivals, as it hardly extends its sphere of influence beyond its immediate neighbourhood in Central and Eastern Europe and the Western Balkans, one will find little to no interest in the latest developments in international relations. It is, therefore, not surprising that neither the EU’s strategy for the Indo-Pacific region nor the announcement of a security and defence pact between the USA, Great Britain and Australia (AUKUS) have led to domestic political debates in Austria. The country is one of the few EU states that is not a member of NATO due to its neutral status, and its military power projection is limited due to defence spending of less than 1%, while as a landlocked country it has no naval capabilities.

AUKUS and Europe’s Reaction

The diplomatic confrontation between the three Anglo-Saxon powers and France following the announcement of AUKUS has triggered a public outcry in the EU and the European capitals. Following the cancellation of the submarine deal between Australia and France, all EU members have expressed their support for France in the dispute. The foreign ministers of the EU members, including Austria, declared "their clear solidarity with France" at a meeting on the side-lines of the UN General Assembly in New York.  In addition, the EU institutions also backed France’s position. The EU’s top diplomat Josep Borrell stressed that AUKUS was not just a "bilateral issue" but concerned the EU as a whole.  EU Commission President Ursula von der Leyen called the treatment of France "unacceptable".  And EU Council President Charles Michel accused the US of a "clear lack of transparency and loyalty" in its handling of the situation.  Moreover, Charles Michel described the surprise announcement of the AUKUS deal coupled with the abrupt US withdrawal from Afghanistan earlier this summer as possible triggers for Europeans to “act together and learn the lessons together” on the basis of “European strategic autonomy”. 

The political circles in France and Brussels stressed the need for Europe to build a defense alliance that is not dependent on the US. In addition, Germany rejected the politics of "fait accompli" by the US and urged for deeper cooperation between the EU and US in the Indo-Pacific region, a position that Austria is likely to endorse. The German Foreign Minister described the AUKUS as a “sobering” moment for transatlantic relations and pointed to the need for an independent European position on this and other pressing geopolitical issues in the context of ongoing debates on “European sovereignty” and “Strategic Autonomy” of the EU in global affairs.  The heads of state and government of the EU member states discussed the topic of greater European independence on the international stage at the latest summit in Slovenia. The debate was particularly important in light of the geopolitical developments in Afghanistan and the Indo-Pacific region, as well as in view of future relations with China.  However, there is still no consensus between the EU members and institutions on this issue and recent developments have only deepened the gap between the different positions on the future role of the EU in global affairs. In particular, French and Central and Eastern European views are quite detrimental. Currently, the US military is to countries in Central and Eastern Europe what it is to Australia in the Indo-Pacific region – the most significant security guarantee against external threats. Therefore, France needs to recognize these geopolitical realities and do something about them before pushing for a European strategic autonomy agenda away from the US. Austria, for its part, sees the Visegrád countries not only as the most strategic direc t neighborhood, but also as the most important trade partners, and therefore it carefully navigates between these opposing positions by avoiding taking sides. Moreover, Austria along with Germany, the Netherlands, Denmark and a few more members rejected the idea of postponing the Trade and Technology Council between the EU and US.

Austria – from the “island of the blessed” towards the “island of the indifferent”

The developments related to AUKUS have also affected Austria to some extent. The French MEP and Vice-President of the largest party group in the European Parliament (EPP Group), Arnaud Danjean, publicly expressed negative views on the meeting between Federal Chancellor Sebastian Kurz, who belongs to the same European family of parties, and Australian Prime Minister Scott Morrison on the margins of the UN General Assembly in New York.  Arnaud Danjean described this act by the Austrian chancellor as "lacking solidarity" in view of the crisis between France as an EU member and Australia.

At the same time, as an export-oriented country, Austria is highly dependent on trade deals. The Federal Chancellor signed a strategic partnership agreement with the Australian Prime Minster in New York, which focuses on expanding the areas of trade, investment, science, education, energy, digital, anti-terrorism and more.  In 2020, Australia was the fourth largest goods export market for Austria in Asia after China, Japan and South Korea.  The Alpine republic has worked closely with Australia since the beginning of the pandemic to share “best practices” in dealing with the COVID-19 crisis. Obviously, Austria also wants to stick to its trade agreement with Canberra, while the EU Commission announced a halt to the free trade talks with Australia for at least a month. 

Moreover, Austria aims to ensure that the EU plays a strong and visible role in the world and acts as a driving force of rules-based multilateralism. The constantly deteriorating security situation in and around Europe means that the “ring of crises” is approaching Austria.  Therefore, the country wants to reinforce a comprehensive approach to security and sees its role in helping the EU to emerge as a stronger and more unified foreign and security policy actor in the world.

The announcement of AUKUS was perceived as a "stab in the back" by the main European ally in the Indo-Pacific region – France. It quickly became one of the lowest points in US-French relations in the last two decades, which will also have implications for the future transatlantic approach to China as well as for the EU’s negotiations on a free trade deal with Australia. The latter is detrimental to Austria’s interests, as its export-oriented economy depends on the EU Commission to regulate trade relations with important competitors and partners in the global geoeconomic context. Furthermore, Austria’s and France’s positions on Islamic terrorism overlap following the terror attacks in both countries, as well as on future migration flows to Europe after the US withdrawal from Afghanistan.  With regard to the European integration of the Western Balkans, however, they hold diametrically opposed views. Austrian foreign and security policy has always attached particular importance to the Western Balkans due to the traditionally strong cultural, economic and political ties. Compared to other European countries, Austria is one of the largest troop contributors in European missions abroad. Austria’s role in stabilising the neighbourhood (especially in the Western Balkans) and securing peace continues to be significant within the EU. In addition, as an exporting country, Austria supports the EU's free trade agreements, which is why France's role in the EU's decision to postpone talks on a trade agreement with Australia may not be well perceived in Vienna in the long term.

What next in the Indo-Pacific region?

In the rapidly changing global environment, the EU wants to be a geopolitical player, and yet Brussels announced its new major geoeconomic project "Global Gateway" to compete with China's BRI without coordinating with its biggest partner, the US. Similarly, the US announced the security pact together with the UK and Australia without coordinating with Brussels, Paris, or Berlin. AUKUS should be seen as a major tectonic geopolitical shift in the Indo-Pacific region that puts the EU in a corner and has a direct negative impact on France as the main EU member in the region. Despite the positive developments linked to the launch of the EU’s Strategy on the Indo-Pacific region and the strategic documents of France, Germany and the Netherlands, the gap between the EU and the AUKUS will be growing in the region, unless the US invites France to participate in QUAD during the upcoming bilateral meeting between the two presidents.

Together with QUAD and other Anglosphere formations, AUKUS partners will seek to promote deeper integration of security and defence-related ties in the areas of science, technology, industrial bases, supply chains, as well as capabilities. This involves hard power projection and engagement with a rising second system pole in the region – China. However, the trend towards new geopolitical and geoeconomic constellations in the Anglosphere has been emerging for some time. QUAD, and now AUKUS, are increasingly seen as US-led counterbalance efforts against China's own geoeconomic and geopolitical projects such as the Belt and Road Initiative, the China-Pakistan Economic Corridor, and the Regional Comprehensive Economic Partnership. 

The announcement of AUKUS to support mutual security and defense interests, building on the long-standing bilateral relationships between the three countries, must be seen in the context of the intensifying US-China systemic rivalry and the emerging bifurcation of the global system. Looking at the AUKUS, the US and the EU members are not on the same page geopolitically. The shift points to a growing split between the Anglosphere members and the EU when it comes to dealing with the Dragonbear (China and Russia). The fact that the US is willing to spend more political capital and invest in security and defense ties with the UK and Australia before reaching out to EU powers is quite telling. In this context, Austria, as a neutral country, mirrors the EU’s stance of trying to act as a giant neutral bloc by avoiding taking sides in the systemic competition between Washington and Beijing. However, the EU’s approach of oscillating between Washington and Beijing will not work in the long run if EU powers like France, Germany and the Netherlands want to participate in geopolitical formations such as AUKUS and the QUAD in the Indo-Pacific region. Hard conclusions need to be drawn in Brussels, Berlin and Paris as to whether they are not increasingly isolating themselves from their most significant transatlantic partners in their approach to this region and to China in particular.

Against this background, Austria, like all other medium-sized and small EU members, will increasingly feel the pressure to recalibrate its priorities and interests based on the EU’s approach to the Indo-Pacific region and to China in particular. Austria has not yet initiated a public debate on these pressing issues. Moreover, the official websites of the main federal ministries still define the region as the "Asia-Pacific", which shows how little willingness there is to adapt to conceptual changes and pressing geopolitical realities.  A similar process to adjust Austria's official position on China in the light of the EU's threefold approach (negotiating partner, economic competitor, and strategic rival) will be launched soon.

The EU and its members, including Austria, should prepare for a scenario in which diplomatic, security and defence ties between Australia, the UK and the US in the Indo-Pacific region are deepened and complemented by cooperation with partners such as Japan and India. AUKUS could soon become JAKUSI (Japan, A(U)KUS, India), which would limit Europe's options in this part of the world and slowly but surely turn it into a geopolitical backyard of global affairs. As long as the EU does not become a security player in the Indo-Pacific region, there will only be moderate opportunities for cooperation with the countries of the Anglosphere in the future.

October 2021

This essay first appeared for the Institute for Security and Development Policy

10 A POTENTIALLY INDISPENSABLE REGIONAL PARTNER

Russia sees the global focus shifting to Eurasia (Central Asia, South Caucasus, Eastern Europe), South Asia (India, Pakistan, Afghanistan) and the Indo-Pacific region. Moscow vehemently opposes the emergence of geopolitical blocs in the Indo-Pacific and has now created a two-front scenario against the US by coordinating its position on Ukraine with Beijing's position on Taiwan. Russia's engagement in the Indo-Pacific could take place through a few possible geopolitical corridors.

Currently, Moscow is expanding its military presence in Africa and is seeking to build military bases in several African countries, including Madagascar, Mozambique, and Sudan. This is one way in which Russia could acquire direct access to the Indian Ocean and, in the long run, project its power in the Indo-Pacific. Moreover, despite the deepening of relations between Moscow and Beijing, India remains a strategic and traditionally reliable partner of Russia. Indeed, Moscow has managed to build the best relationship with China (the Dragonbear), and at the same time consolidate its long-standing strategic partnership with India.

Diplomatically, Russia supports China's stand on the Indo-Pacific, openly opposing geopolitical blocs such as the US-UK-Australia Security and Defence Pact (AUKUS) and QUAD (US, India, Australia, and Japan). Moscow is also open to India's proposition for a more active Russian role in the Indo-Pacific. New Delhi and Moscow share a geoeconomic interest in creating an alternative to China's terrestrial BRI connectivity in South and Central Asia, which is why they are promoting the International North-South Transport Corridor (INSTC) as a multimodal transit route connecting India with Europe, Central Asia, and Russia.

Even if Russia does not play a key role in the competition between the major powers of the Indo-Pacific right now, the country could become an indispensable partner in the future geopolitical constellations in this most significant geographical area. Russia remains an important player with significant geopolitical potential for both China and India. Moscow's actions during the 2020 border tensions between China and India have clearly shown that it prefers the role of a mediator, seeking to defuse possible escalations rather than taking sides. In sum, Russia has a strong interest in supplying arms to both countries and will only renounce this opportunity with great reluctance if tensions arise between the two Asian giants in the Indo-Pacific in the future.

January 2022

This essay appeared first in 9DASHLINE

11 WHAT THE KAZAKHSTAN CRISIS TELLS US ABOUT INTERNATIONAL RELATIONS

The geopolitical crisis in Kazakhstan was overcome despite the ongoing internal dynamics related to the transition of power and social discontent resulting from the rise in energy prices. None of the main external actors was interested in a protracted crisis in Kazakhstan, which contributed to the rapid de-escalation. Russia has already announced the withdrawal of its troops after Kazakhstan was successfully stabilized through the deployment of the Collective Security Treaty Organization (CSTO) operation. China was preparing for the Olympic Games in early February, so Beijing was pleased with Russia’s swift engagement to de-escalate the situation on the ground. In fact, China and Russia regularly coordinate their positions within the Shanghai Cooperation Organisation (SCO) when it comes to dealing with potential terrorist activities or destabilizing events with dangerous repercussions in Central Asia. As a result, the China-led SCO sided with Russia and the CSTO, and statements by Chinese officials were consistent with Russia’s official position on the crisis. Another regional player with major interests in Central Asia is Turkey. However, Ankara was under great domestic pressure due to the ongoing currency crisis at home and has therefore been unwilling to commit economic or military resources to resolve the crisis. Turkey has major political influence in Central Asia but must first cautiously await the outcome of the transition of power in Kazakhstan. The US and the European Union have not been involved in the crisis management, mostly because they were focusing on the preparations for the US-Russia bilateral talks in Geneva, the NATO-Russia talks in Brussels, and the OSCE talks in Vienna due to Russia’s military escalation along Ukraine’s border. After the withdrawal from Afghanistan, America no longer has a military footprint in Central Asia. The EU is in fact an irrelevant geopolitical actor in Central Asia, although it has major geoeconomic interests in Kazakhstan (oil and uranium supplies).

Following Russia’s military involvement in Kazakhstan, Moscow has strengthened its negotiating position vis-à-vis the US in the run-up to the bilateral talks in Geneva, the NATO-Russia talks in Brussels, and the OSCE talks in Vienna which did not produce any valuable outcome. In reality, Russia’s preparations for a military operation are steadily advancing. By keeping Kazakh President Tokayev in power, Russia also gained immense leverage over Kazakhstan due to the country’s significant share of raw materials, its access to the Belt and Road, and its membership in the two main regional organizations, the CSTO and the SCO. Russia’s military performance in rapidly and efficiently stabilizing the situation on the ground helps Moscow improve its regional position vis-à-vis the US and China amid the bifurcation of the global system and further military escalation in Eastern Europe. Russian President Putin will raise the price of Russia’s future engagements at the request of authoritarian regimes that want to stay in power. After Russia’s support for Syrian President Assad and Belarusian President Lukashenko, Kazakh President Tokayev is now the next leader to safeguard Russian interests on the ground and beyond. Certainly, China can benefit from Russia’s power projection in the near abroad and in Eurasia by offering economic and financial incentives once the situation is stable enough. Moscow is emerging as a valuable security provider crucial to China’s geo-economic interests in the region. Thus, Russia could play an indispensable role by becoming a global mercenary power for China’s interests amid the systemic rivalry between Washington and Beijing. Merging the activities and operations of the CSTO and the SCO could not only keep external actors out of Eurasia but also guarantee the survival of the Russian and Chinese presidents in the event of major social riots in the future. The Dragonbear may have just discovered a successful formula of task sharing (Russia is the security provider, China is the financial provider) that can become a pattern in other parts of the world.

January 2022

This essay appeared first at the Central European Institute of Asian Studies

12 WHAT TO EXPECT FROM THE SUMMIT BETWEEN XI JINPING AND VLADIMIR PUTIN?

Since it has become clear that the US will not intervene militarily in a possible war between Russia and Ukraine, China and Russia anticipate a likely American retreat from the old continent in the long run in order to focus more on the Indo-Pacific region and East Asia. In this context, China views NATO as an institutional remnant of the Cold War and is vehemently opposed to geopolitical and military blocs such as the US-led QUAD or AUKUS in the Indo-Pacific region, a view shared and diplomatically supported by Russia. The military escalation of the crisis in eastern Ukraine has shown that China and Russia have created a two-front scenario for the US on the diplomatic stage of global affairs. The two-front scenario, with Russia openly supporting China’s position on Taiwan and China openly supporting Russia’s position on Ukraine, creates a new level of diplomatic confrontation between the Dragonbear and the US. What China defines as “Russia’s strategic space” with regard to Ukraine, Russia correspondingly defines as “China’s strategic space” with regard to Taiwan and the South China Sea.

The Dragonbear has proven to be a unique modus vivendi for coordinating Moscow’s and Beijing’s positions on key international issues of strategic importance to their national interests. The Dragonbear is, however, neither an alliance nor an entente. China and Russia have tactically joined forces to manage the uncertain transitional phase of the bifurcation of the global system (growing systemic rivalry between China and the US as well as geopolitical competition between the US and Russia) without the strategic need to formally enter into an alliance. Russia’s impossible demands on the US and NATO regarding the future of the security architecture in Europe show that Moscow is preparing for “the long game”, i.e., the systemic rivalry between Washington and Beijing, and Russia’s future positioning in it. Russian President Putin is keen to enhance Russia’s role as an indispensable partner for China in this competition. The Russian president is also testing the American response to the Russian escalation, knowing that there will be no US military involvement in Ukraine due to the upcoming mid-term elections in November, and no NATO military involvement as Ukraine is not a member. This view is shared by China. Moreover, Russia is keeping the West busy until 20 February, which means an overt support for Beijing ahead of the Olympics, given the West’s diplomatic boycotts.

China is turning into a cornerstone of Russia’s foreign policy, and Beijing is siding with Moscow on the Ukraine issue, although it has business interests with Ukraine and the other countries in Eastern Europe. Russia needs a powerful ally because of its isolation by the West, while China needs a reliable international partner with regional power projection to bolster its global influence and global geopolitical clout. The extent to which this relationship will deepen depends on China’s continued geopolitical rise in global politics. It is in the interest of both countries to give the impression to the outside world of a stable and resilient alliance against the West. However, there are currently no clear signals of a defense alliance between the two powers. The rapprochement appears to be more tactical than strategic. Even maintaining the current status quo would probably be acceptable to both states as long as the rise of China does not pose a direct threat to Russia’s strategic interests in its own geopolitical sphere of influence. I do not anticipate a Russian military attack before February 20 because the Olympics are very important for Xi Jinping to demonstrate his soft power to the world and to improve China’s image after the Covid-19 virus outbreak. After February 20, a military attack is more likely, but only on a limited scale and with a limited timeframe for operations. In this regard, Russia will rely on China’s diplomatic backing in international organizations and regional forums, as well as strong economic and financial support, similar to the assistance provided by China after Russia was isolated by the West in 2014. However, Russia does not expect China to provide military support, so no Chinese strategic interests are threatened in the event of a military attack by Russia. By showing military strength, Vladimir Putin makes Russia an indispensable player, without which neither of the two rivals — the United States and China — could win the future system competition against each other in the long run.

The Russian president’s visit to China during the Olympics not only has strong symbolic significance to send a message of unity and firm ties between the two heads of state, but also serves to increase global diplomatic weight and improve China’s international image in the face of increasing boycotts by Western countries. On the diplomatic front, bilateral relations have continued to evolve. Russian President Putin stressed that relations with China have reached an unprecedented level of bilateral coordination. Nevertheless, China-Russia relations are not officially described as an alliance, but as something “better than all alliances.” Especially in international organizations, the increased systemic coordination is hard to be ignored. The voting behavior of both states in the United Nations Security Council shows an increasingly positive trend when it comes to coordinating their positions on current international affairs.

Logically, there will be plenty of issues of common interest to discuss during Putin’s visit to Beijing. The modus vivendi of systemic coordination of policies and actions primarily concerns energy, agribusiness, trade, security and defense policy, international and regional organizations, health, as well as the corridors for land and sea connectivity from China through Russia and Central Asia to Europe within the Belt and Road Initiative. The main common denominator is not only the goal of opposing U.S. positions on leading international issues, but also the creation of meaningful Eurasian connectivity in response to U.S. maritime dominance in the Indo-Pacific region, thereby ensuring security of supply in the event of future blockades of sea lanes. Moscow and Beijing also share a common goal of reducing the influence of third actors, particularly the United States and Europe, in Eurasia. As the leaders of all Central Asian countries will attend the opening ceremony of the Olympic Games, I expect multilateral talks between China, Russia, and the five countries on positions of strategic interest (the situation after the crisis in Kazakhstan, cooperation within the framework of the Shanghai Cooperation Organization (SCO), connectivity and anti-terrorist operations and measures, stabilization of Afghanistan). The talks are expected to focus not only on Central Asia, following Russia’s recent military engagement in Kazakhstan with the Collective Security Treaty Organization (CSTO), but also on Afghanistan and the ties with South Asia (Pakistan), where Russia is entering the energy sector with negotiations on a new gas pipeline, while China has established an economic corridor. Meanwhile, with Russian support, Beijing is carefully preparing to fill the geopolitical and geoeconomic void left by the United States in Afghanistan. Other topics of discussions include multilateral projects such as the preparation for the BRICS Summit which will be held in China this year, coordination of positions and actions within the SCO and the CSTO, coordination of positions on the JCPOA negotiations with Iran in Vienna, progress in creating synergies between the Eurasian Economic Union and the BRI, and assistance on issues related to their core interests in the Indo-Pacific region, the European security architecture, and other upcoming issues of common interest within the UN Security Council.

Regarding bilateral issues, the two presidents will discuss how to deepen economic and trade ties as the bilateral trade reached a record high of more than $100 billion for the first time in 2021. There will also be talks on technological and scientific cooperation, as well as defense cooperation and future arms transfer deals. China is interested in defense cooperation as Russia could transfer advanced technologies and sophisticated weapons systems. Growing military cooperation is also the basis for strategic bilateral relations. Joint military exercises and the first joint air patrols are already taking place to ensure better interoperability between their armed forces.

Following the Olympics, the future of the European continent remains open when it comes to the destiny of its security architecture. However, the Dragonbear as a modus vivendi of systemic coordination between China and Russia in various strategic domains is here to stay and will further shape the bifurcation of the global system. For Europe, the worst nightmare is yet to come. And it’s not called the Dragonbear! No, it’s called American retreat from the old continent to deal predominantly with China (but likely with the Dragonbear too) in the Indo-Pacific (particularly East Asia) in the long run.

February 2022

This essay appeared first in Intelligence Quarterly.

About The Author

Velina Tchakarova

Velina Tchakarova is Director of the Austrian Institute for European and Security Policy (AIES) and Peer Board Member of the Defence Horizon Journal. She is a lecturer at the Real World Risk Institute led by the best-selling author Nassim Taleb and a Member of the Strategic and Security Policy Advisory Board of the Science Commission at the Austrian Federal Ministry of Defence. Velina Tchakarova holds a M.A. from Heidelberg University, Germany, and BA from the University for World and National Economy, Bulgaria.
She is currently writing a book on the Dragonbear and finishing her PhD dissertation on the Role of External Actors in Azerbaijan, Belarus and Ukraine at the University of Vienna