Russia is competing for the Global East with the US and China

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Moscow is pursuing expansion in the Indo-Pacific region by building relationships with states and taking advantage of their competition with each other. A soft approach coupled with economic tools gives Russia financial gain and the prospect of building influence in the region.

Russia’s struggle for the region

In the realities of the modern world, the Indo-Pacific region, including the so-called Global East, is gaining key importance in world politics and economy, displacing the so-called North Atlantic region dominated by the US and the EU. The population of the 25 countries of the Global East, which includes the traditional regions of East, Southeast and South Asia, is 4.23 billion, i.e. 51.83% of the world’s population, and its growth continues. GDP (PPP) is $59.25 trillion or 34.85% of world GDP (PPP). This makes the demographic and economic potential of the region unique, which accounts for its geopolitical importance in the present and future.

The Global East is the main area of confrontation between the US and China in the new Cold War. But the region also attracts other forces that, although sympathetic to one of the camps, use the confrontation to their own advantage. Among the main “fishermen in troubled waters” is Moscow.

The struggle between the US and China creates unique opportunities for Russia for political and economic expansion. And also to protect its interests in the confrontation with the West, which is the main Russian interests.

Partnership with China: Benefits and Challenges

The key state in the region is China, for which Russia is a basic ally in confronting the United States and the Global West. Russia’s importance is reduced to nuclear and military deterrence of the US, NATO and the AUKUS Asia-Pacific bloc, where the countries implement a “mutual cover” model, with Russia restraining Western capabilities in Europe and China covering Russia in the Far East. In addition, both states pursue a coordinated policy of expansion in Asia, Africa and Latin America. Finally, in the economic sphere, Russia provides China with safe exports of energy and other resources against the constant threat of blockade by the United States and its allies. And China provides Russia with direct and parallel exports of technology and goods in the face of sanctions. Beijing could also become a key investor, replacing the US and European countries.

But despite the critical role of Russia in the global conflict for Beijing, China pursues a pragmatic policy toward Moscow, which Moscow perceives painfully. The first reason for this behavior is China’s traditional economic philosophy of extracting the greatest financial benefit from relations, with the political component playing a secondary role. In this approach, the instruments of influence are reduced to economic “binding” of the partner state. The second reason is the specifics of the economic confrontation between China and the United States, which are on the path of gradual disintegration. Beijing minimizes economic losses from this process, where excessive support for Russia may lead to the growth of “secondary sanctions” and give additional advantages to Washington. The third reason is China’s strategy to diversify its foreign trade supplies, which aims to prevent excessive import dependence for economic security.

For example, China’s share in Russian imports has grown from 27% to 45% since the start of the Special military operation, and in exports only from 18% to 28%. China has been consistently limiting the supply of Russian hydrocarbons, the reorientation of which to the Asian region is of key importance for Moscow. Russian oil shipments to China in 2023 compared to 2022 are up 24% and LNG by 23%, but Russia’s share is less than 12%, and it is behind Saudi Arabia with 19%. In addition, China is diversifying its transportation risks by betting on the China-Central Asia-West Asia trade corridor as an alternative to supplying its products to Europe via Siberia and the Northern Sea Route (NSR), which is perceived strictly as an insurance route.

In the perspective of 10-15 years, Russia has a real chance to increase its exports to China and increase technological transfer from Beijing if it continues the tactics of consistent partnership and “patience” in its new status of a “little brother”. De-risking motives will intensify in mutual relations between China and Western countries, with the EU and the US minimizing export-import relations with Beijing, forcing it to seek alternative sources of supply.

At the same time, the threat of blocking oil and gas supplies through the Strait of Hormuz due to instability in the Middle East will grow. The United States is also threatening to block supplies through the Strait of Malacca in order to put pressure on China. Under such conditions, Russia can provide transit in a completely safe mode, having prospects to increase its share in China’s energy imports to 20-25% and become a key exporter. Overland transportation via Russia and The Northern Sea Route (NSR) will also increase, which will be associated with China’s growing investment in Russian logistics and related technological projects. Against the backdrop of China’s growing food security trend, which is actively exporting products from the US and the EU, it may also turn to Moscow for safe imports of agricultural products. This will create good prospects for Russia’s agricultural sector.

In the technological sphere, Russia also has attractive opportunities for China. First of all, this concerns Rosatom’s participation in a joint Russian-Chinese project to build a thermonuclear reactor to create a thermal power plant system on the territory of both countries. Secondly, these are the joint projects of UAC and the Chinese company COMAC for the creation of modern passenger airplanes, which will become relevant again in the conditions of the growing technological blockade of China by the West. Against this background, the joint expansion of Russia and China in the Third World, where China takes over basic production and investment functions, and Russia can take over coordination of militaristic structures, political support, as well as energy and transportation issues, has prospects for growth.

Friendship with India to contain the PRC

The second key country in the region is India. New Delhi is both China’s rival for regional and international leadership and a partner of the US and EU in containing Beijing. India has a pragmatic policy towards Russia with the opposite sign compared to China. And that is why India is the best example of Moscow’s tactics in non-Arab Asia – demonstrative friendship with countries that may soon constitute Beijing’s “containment axis”. This approach diversifies Russia’s political-economic assets, and encourages China to be more “affectionate” with Vladimir Putin.

*Photo by* *Alexandr Demyanchuk / Sputnik/ AFP*

India is ramping up its oil imports from Russia, which have increased 14-fold from 2% to 19% in the fiscal year 2022-2023, and there are prospects for growth in the next 10-15 years to 25-30%. Especially if the oil and gas transit project through Central Asia and Afghanistan can be realized. Similar opportunities exist for the growth of Russian oil and gas exports to Pakistan. India, which is formally friendly to the US, has an advantage in providing parallel exports for Russia compared to China. For instance, India’s exports to Russia grew by over 35% in the fiscal year 2023-2024. The growth was driven by increased shipments of engineering products including machinery, aircraft spare parts and electronics.

There are prospects for a further increase in export-import turnover in the coming years. In addition, India, like Pakistan, can become a source of sending migrant workers to Russia, similar to the Arab “kafala” system, where workers will not exacerbate the ethnic tensions that worry Moscow. In the political sphere, Russia can play the role of an effective mediator in resolving international conflicts between India and China, as well as India and Pakistan, having partnership relations with all parties, which is useful for Russia and sometimes for its Asian partners.

There are opportunities for Russia to strengthen its political and economic positions in the Global East and in other countries that constitute the “second echelon” compared to China and India. Thus, Russia’s key partner is the Democratic People’s Republic of Korea (DPRK). This country is part of Russia’s deterrence system in the Far East, which blocks the potential for military aggression by South Korea and Japan, and also supplies Russia with some advanced military products. In return, Russia provides stable exports to the country of energy, agricultural products, metals and other resources that stabilize the DPRK’s economy. In the future, Russia can attract North Korean workers under a system similar to the “kafala” system we wrote about above to implement infrastructure projects on its territory, as well as invest in the DPRK economy and its cheap and relatively skilled labor force to establish joint ventures on the territory of the DPRK itself, if a system of Russian financial “soft expansion” that is safe for the local authorities and satisfactory to both sides is achieved. Less comfortable conditions exist for investment in Mongolia, but Russia may soon realize the project of the Power of Siberia-2 gas pipeline to China, which will pass through the territory of this country. This basic project, as well as the country’s geographical location between Russia and China, in the next 10 years may allow Western and South Korean investors to be pushed out of there, and Russia will be able to gain access to the extraction of important mineral resources such as iron ore, tungsten, molybdenum, tin, gold, copper, uranium and so on.

Vietnam and Indonesia: benefits for Russia

Russia also has ample opportunities to expand its economic and political prospects in the “neutral countries” of the region. For example, Vietnam remains a significant importer of Russian arms, and its traditional historical relations allow it to maintain its friendship despite Hanoi’s partnership with China and Japan, South Korea, and the United States, which are hostile to Russia. In addition, Russia can be an arbitrator between Vietnam and China, including on the issue of conflicts in the South China Sea. Vietnam can also be an alternative route for technological exports to Russia, having an advantage over China, as it has the status of a country that occupies an “indefinite” position in the conflict between China and the United States and receives bonuses from both sides.

Indonesia, which claims the status of a regional leader in Southeast Asia on the basis of its huge demographic and economic potential, occupies a similar position. The main follower of this policy is the country’s new president, Prabowo Subianto, who, unlike his predecessor Joko Widodo, who was relatively cautious in foreign policy, will pursue a course of greater national sovereignty. He will increase engagement with Russia, who’s rhetoric of a new just world order is appealing to him. Despite the sanctions risks, he is going to locate representative offices of Russian companies in the new capital. In the practical economic sphere, Russia can become Indonesia’s partner in modernizing its mining industry. Back in 2014, the Indonesian authorities banned the export of nickel ore from the country in order to encourage Western companies to build modern mining and processing plants in the country, so that nickel exports from the country would have more added value. Similar measures are expected to be applied to copper, silver, tin, iron ore and bauxite. This threatens an embargo by Western countries on mining equipment exports, which Russia can help overcome.

How are Bangladesh and Myanmar useful?

Less extensive point opportunities exist in a number of other countries. For example, Russia can create good investment opportunities in Bangladesh, where the Rooppur NPP being built by Rosatom will be a growth point. In addition, Bangladesh is one of the possible sources of labor force for the implementation of the kafala system project in Russia. It is also possible to expand arms exports to Myanmar, which is a strategic partner of China, which seeks to create a logistics hub there to protect China from possible “blocking” of the Strait of Malacca. In Myanmar, Russia could take over the operation of ports and other transportation projects, as well as support the government in fighting separatists who are at war with the official authorities in the north of the country. China is now reluctant to formally engage in a conflict on the territory of its ally, and Russia could profitably take these risks. After all, the instrumental use of Russia in its interests for China on the world stage is already habitual for Beijing. Also, Russia can pursue a policy of information pressure on the public of such countries hostile to itself and China as Japan, South Korea or the Philippines, conducting propaganda of peace and non-interference. Having good experience in conducting such humanitarian and political operations, Russia can be more effective here than the PRC, which is of great concern to the Japanese, South Koreans or Filipinos.

The Global East is a territory consisting of many strong and competing states that have great political and leadership ambitions. Most of these countries are playing “their own game” and are in no hurry to fully align themselves with either the United States or China in a new “Cold War”. For Russia, this creates favorable prospects as a “third party” or even an “arbiter” that can pursue a balanced policy, gaining the trust of even entities that are relatively hostile to each other. With a systematic policy of “soft penetration”, it is possible to materialize this trust into political and economic influence, even with a relatively weak position at the start.