China’s Belt and Road Initiative heralds a new era with mega infrastructure projects dotting the landscape
by Pepe Escobar (cross-posted with the Asia Times by special agreement with the author)
If you are looking for the latest breakthroughs in trans-Eurasian geoeconomics, you should keep an eye on the East – the Russian Far East. One interesting project is the new state-of-the-art $1.5 billion Bystrinsky plant. Located about 400 kilometers from the Chinese border by rail and tucked inside the Trans-Baikal region of Siberian, it is now finally open for business.
This mining and processing complex, which contains up to 343 million tonnes of ore reserves, is a joint venture between Russian and Chinese companies. Norilsk Nickel, Russia’s leading mining group and one of the world’s largest producers of nickel and palladium, has teamed up with CIS Natural Resources Fund, established by President Vladimir Putin, and China’s Highland Fund.
But then, this is just the latest example of Russian and Chinese cooperation geared around the New Silk Roads or the Belt and Road Initiative (BRI). Beijing is the world’s largest importer of copper and iron ore, and virtually the entire output from Bystrinsky will go to the world’s second largest economy.
Naturally, to cope with production, a massive new road and rail network has been rolled out, as well as substantial infrastructure, in the heart of this wilderness. Yet there is another major BRI initiative about 1,000km east of Bystrinsky. Work started on the Amur River Bridge, or Heilongjiang as the Chinese call it, in 2016 and the road and rail links should be finished in 2019.
The project is being developed by Heilongjiang Bridge Company, a Russia-China joint venture, along a crucial stretch of the Russian-Chinese border. It will also be part of a huge trade corridor, which will transport iron ore to China from the Kimkan mine, owned by Hong Kong’s IRC Ltd, in Russia.
The Amur River Bridge, linking Heihe, in Heilongjiang province, with Blagoveshchesnk in the Russian Far East, is a natural part of the New Silk Roads program. It is well connected to one of BRI six major corridors – the China-Mongolia-Russia Economic Corridor, or CMREC, via the Trans-Siberian Railway all the way to Vladivostok.
CMREC’s additional importance is that it will connect BRI with the Russia-led Eurasia Economic Union, or EAEU, as well as the Mongolian Steppe Road program. CMREC has two key links. One involves China’s Beijing-Tianjin-Hebei to Hohhot before winding on to Mongolia and Russia. The other is from China’s Dalian, Shenyang, Changchun, Harbin and Manzhouli to Chita in Russia, where the Bystrinsky plant is located.
Numerous aspects of the Russian-Chinese intranet were extensively discussed at the Third Eastern Economic Forum in Vladivostok in September. CMREC involves closer cooperation, especially in energy, mineral resources, high-tech manufacturing, agriculture and forestry. Chinese Vice-Premier Wang Yang had already announced even closer economic cooperation with Russia, including a $10 billion China-Russia Investment Cooperation Fund in yuan for BRI and EAAU projects.
Monetary integration
Part of this will include Russian-Chinese investment funds, known as Dakaitaowa, or “to open a matryoshka doll”. Monetary integration and energy cooperation are all part of an ambitious Russian-Chinese package. This will allow trade to be settled in yuan, instead of US dollars, in Moscow via the Industrial and Commercial Bank of China. Products promoted under the http://www.madeinrussia.com “Made in Russia” brand are bound to get a boost.
According to the China General Administration of Customs, Russia continues to be the country’s leading crude oil supplier, exporting more than one million barrels per day, ahead of Saudi Arabia and Angola. Exports of Russian oil to China have more than doubled during the past six years.
Last month, the Russian parliament approved the draft of a conservative 2018-2020 Russian federal budget at $279 billion. This included increased spending in the social sector, a higher minimum wage, and increased salaries for teachers and healthcare workers.
Manufacturing in Russia has actually grown in absolute terms during the past decade along with a slight rise in GDP. Contrary to Western perceptions, energy revenue in Russia amounts to only around 30 percent of the federal budget. In absolute terms, it actually fell from 2014 to 2016, while non-oil and gas income has increased steadily since 2009.
Those were the days when Saudi Arabia and the Gulf petro-monarchies were dumping excess capacity on the oil market in a price war that was bound to ruin Russia’s finances. The draft budget assumes the price of oil will stay around at least $40.80 a barrel during the next few years. In fact, it may actually rise from its current $61.03 for the OPEC basket. Of course, that would boost Russia’s reserves.
Natural resources
As for exports, oil accounts for around 26 percent of Russia’s GDP. Oil and gas as a percentage of total exports fell during the past two years from 70 percent to 47 percent, but they are still the country’s top export money earners. When you add other commodities, such as iron, steel, aluminum and copper, revenue from natural resources come to more than 75 percent of Russia’s total exports.
But the key problem ahead for the country is the debt of provincial governments, and not defense, which is much lower than during Gorbachev’s reign in the late 1980s. Still, the integration of BRI and EAEU now offers excellent opportunities for Russia.
To put this into context, we have to go back to the 1689 Treaty of Nerchisk at a time when Manchus, an ethnic minority in China and the people from whom Manchuria derives its name, were deeply concerned about Cossack incursions into their lands.
Nerchisk was the first Chinese treaty with a European power, and it safeguarded borders and regulated relations between the two neighbors for nearly two centuries. For the first time, Russians could trade directly with the Middle Kingdom and negotiate as equals. No Russian or Manchu was spoken, but Latin, via two Jesuit interpreters. They were well positioned in the Qing court by supplying the Kangxi emperor with weapons, as well as advanced courses in geometry and astronomy.
Century of humiliation
Now, compare this with the “unequal treaties” of the 19th century with England, France, the United States and Germany, known as the “century of humiliation” in China. It is true that Russia gobbled up Chinese lands back then, as well as securing the Amur basin and the eastern side of the Sikhote-Alin mountains, which denied the country access to the Sea of Japan.
At the time, the Qing dynasty was helpless. Everything was later formalized by, well, treaties. China lost what was known as Outer Manchuria and Eastern Tartary. Today this whole region is known as Primorsky Krai, Russia’s Maritime Province. Then in 2006, President Putin solemnly announced the resolution of all border disputes with China along the Amur. Beijing de facto agreed.
Now, with the integration of BRI and the EAEU, Russia has a great chance of fulfilling part of its Pacific Destiny, first envisaged when the Trans-Siberian rail link was finished in 1905. Today, that vision is alive with gold and timber in the mountains north of the Amur, fish in the Sea of Okhotsk and the Bering Sea, and gas reserves from Sakhalin island all part of a modern export chain.
Amazing Projects that will help the little people , while the West talks about Hate ,Destruction, and wars
Bye, bye Babylon; there are new kids on the street!
The convergence of needs, wants and desires is in the hands of two visionaries who also are accomplished in geopolitical reality. Presidents Putin and Xi have embraced the Yin and Yang of historic Russian and Chinese problems and found solutions. Both nations benefit, and the synthesis presents to the Empire’s hegemonic schemes an impenetrable bloc.
The core reason for the North Korean crisis is the great potential of developing the entirety of the Korean Peninsula. Russia and China, along with South Korea’s President Moon, have ready plans for development. This would release the pent up energy of the North with the spirit of enterprise of the South, and would take within the Eurasia world a key engine of technology the West depends on. The Empire wants to control it all. Thus, a conflict of enormous danger that worries all rational people.
Putin has been working for three years to draw Pyongyang into the real world, away from its justifiable paranoid hermitage. Kim has rejected these generous and friendly actions. He also insults President Xi and the Chinese habitually. But the imperative for both giant neighbors is to quiet the North and calm the Peninsula. This is not negotiable.
Yesterday, Trump called Putin. Topic: North Korea.
Goal: denuclearization.
This is important. Putin is the signal caller because the US and China are sidelined by Kim. No one in Washington wants to admit this, but Trump knows and showed it yesterday.
The Russians, day before yesterday, sent a four-man delegation from the MOD to talk to counterparts and political officials of the Kim regime. This is crucial. For stability on the Peninsula, rock hard military defense of the North has to be assured by Russia. Kim would never trust any other broker or partner.
For the Chinese in the Northeast and for Russians in the Far East, a solution must be found to get the Hegemon out of the Korean Peninsula.
As development begins to roar to life, as Pepe has articulated, North Korea has to be “solved”, peaceably. Putin has stated that war is not acceptable. China has drawn a red line against the Hegemon’s actions, as well as warned the regime it would not be saved if Pyongyang initiated war.
Putin settled the border issue with China years ago. Putin has welcomed co-development with China (and also has invited in Japan). Putin has been working to “tame” North Korea’s bellicosity along with demonstrating Russia’s military right at the edge of its Asia-Pacific borders as warning to the Hegemon and its vassal allies.
Now, hopefully, Trump has made a move to work in some sort of concert with Russia to normalize the North Koreans.
Three very brilliant world leaders in their unique circumstances are trying to solve the dilemma of nukes and ICBMs in the hands of rigid gangster-ideologue-nationalist. It’s like a James Bond plot.
What makes the impossible more probable is that economics outweighs ideology.
Empire cannot afford to lose South Korea and Japan econ-engines in order to neutralize the North Korean menace. Even the containment of China and Russia is not more important than a stable American supply chain for its technological base of domination.
Trump seems to understand this. He bellows. But he acts rationally with Putin and Xi.
Economics may trump war, yet.
What ?
“Putin ….draws Pyongyang into the REAL WORLD away from PARANOID HERMITAGE ? Kim has rejected these generous and friendly actions ? HE (?) also insults President Xi and the Chinese habitually ? ”
“North Korean MENACE (?) ”
“Trump has made a move to NORMALIZE the North Koreans ” ?
Where did you get that nonsense ?
You call Trump ” a very brilliant world leaders” ? after his announcement of Jerusalem an Israeli capital ?
READ, the 100 y. old history of the conflict .
1) A Murderous History of Korea — http://www.globalresearch.ca/a-murderous-history-of-korea/5590526?utm_campaign=magnet&utm_source=article_page&utm_medium=related_articles
2) U.S. is Guilty of Genocide in N.Korea and M.East, that’s the reason N.Korea is building nukes — https://www.globalresearch.ca/americas-renegade-warfare-is-the-u-s-guilty-of-genocide/5618885
As the English geographer Halford Mackinder stated in the late 19th century and Brzezinski confirmed in the 20th, Eurasia is the key economic region of the word. Two world wars were fought in order to prevent a Russian-German economic union and to destroy both Russia and Germany. Well, Russia survived and is prospering, creating with China the Eurasian Economic Union. As one analyst has stated, in the 19th century there was a saying which went like this:”Go West young man”. In the 21st century the new saying will be:”Go East young man”. Times are changing. Unfortunately, not all prepared to accept this change, as witnessed by the ongoing crisis points in the world.
B.F.
Just a minor correction: The Eurasian Economic Union is not including China. It is aligned with China’s BRI in a greater Eurasian Development. But China is not a member per se of the EAEU. Where all the Eurasian nations are joined is within the SCO. And that organization is also forming an economic agenda as well as its anti-terror, anti-trafficking issues.
https://en.wikipedia.org/wiki/Eurasian_Economic_Union
Thank you. However, this point is minor, since all analysts take it for granted that China is de facto a member of the Eurasian Economic Union, which is still in the making.
As you wish, sir.
No B.F. they (the analysts) do not take it for granted. That’s because the central Asian republics that are part of this union do not want China to be part of this economic union because it will give China tariff free access and disproportionate influence over the internal rules. Along with the vulnerable central Asian republics, Russian producers (manufacturers, food processors, etc.) are not in favor: both entities are opposed as long as China can wipe out domestic industries due to their currency manipulation, but more importantly, their economies of scale.
Thank you. Different analysts, ofcourse, have different opinions. China is not de facto a member of the Eurasian Economic Union, but this Union cannot function if China is ignored. China may not become a full member, but the Union will have economic contacts with China, which is why analysts always include China as being part of it, one way or another. Let time decide the matter.
It is so great to have israel huge around the jews’ neck. Decent humanity has a hostage, particularly against america. All nukes pointed to israel please.
The zionist occupation has nothing to do with Judaism and everything to do with US imperial pretensions.
@Larchmonter445
you wrote:
Well, you are optimist, on the one hand declare Russia/China as biggest threath to US and after ask for help with NK. Where is the logic of understanding?
As long as there are US military bases in SK, there is no chance to solve the situation. Only cataclysm to situation can be major economic disaster in the US. Therefore it can result in closing all [or most] foreign bases outside the US. Till this time it is only Kabuki theatre.
Tanto
He is not as much optimistic as bad informed .
Regarding trump’s phone call to Putin on Thursday, here is a partial transcript.
Trump: “…hey you guys saved Obama’s bacon back in Syria when he was locked in to stage a major attack over those chem weapons. Do you think you could do a repeat and save my ass regarding North Korea? I’d be eternally grateful and be willing to return the favor…”
Putin: “Hmmmm…”
Promises from habitual treaty breaking Anglo elites aren’t worth even wiping ones ass with.
So I think that conversation would probably end one of Putin’s famous sardonic laughing episodes, sort of like this one:
https://m.youtube.com/watch?v=8ux3oiWELIQ
“Then in 2006, President Putin solemnly announced the resolution of all border disputes with China along the Amur. Beijing de facto agreed.”
A journalist said a few years ago this was only a temporary agreement with an expiry date sometime in the 2020`s – is this true??
The Chinese like Mexicans are neither blind nor stupid. They recognize the reality. It is better to trade goods than to trade bullets. Furthermore, Eastern Russia and the border areas with China were never inhabited by Han Chinese. It was inhabited sparsely by Manchus and Siberians. Russian and Chinese also share minorities such as Tatars and Mongols. China needs Russian processed raw materials than the nationalist small dreams of marginal amounts of land guarded by 20,000 nuclear missiles.
With the opening up of vast new areas for industrial exploitation, are there also provisions for environmental protection in the brave new world being developed?
Not being snarky; just curious.
Why do Russians and Chinese for a Silk Road build standard railways of 1.42/1.52m width, and the standard trains for these rails? Why shouldn’t they choose a width of – say – 5m, and trains 40x heavier? Don’t they have a space, don’t they have a need for great transports? Such a train would carry 40.000 tons, and reach the speeds of 400km/h. It could carry oil, raw materials, containers, and the people, of course.
Russia builds trains which can automatically change the distance of wagon wheels ,in case of need.
The scale suggested is vastly different.
The interface between the Continental and the Iberian gauges is achievable over a very short distance.
Pay attention.
A gauge of 5m with trains carrying 40,000 t is the death of sea transport but isn’t going to happen before…
Place your bets…
Yes, the death of a sea power – that is what I think about !!
Pepe wrote:
It is true that Russia gobbled up Chinese lands back then, as well as securing the Amur basin and the eastern side of the Sikhote-Alin mountains, which denied the country access to the Sea of Japan.
Ahh! Thank God for Russia! One can only imagine how much more insufferably arrogant the Qing and the inheritors would have been and would be today if they controlled those territories. It is thanks to Russia holding on to these resource rich areas that we have the kind of cooperation being outlined in the article.
Also, whatever Siberian, or Altaic tribes and cultures in those areas would have been destroyed by assimilation. The same would have been the fate of the wildlife and flora. In that sense those lands were no more Chinese than they were Russian, they belonged to native tribes that lived there. Luckily for them, they ended up under Russian rule that was orders of magnitude more humane than what they would have experienced under China (Qing cruelty was legendary, as were the nationalists and as was Mao, by the time an enlightened Deng Xiao Ping showed up, it would have too late for the flora, fauna and natives).
I must say that China is showing signs of maturity in it’s dealings with other nations. Under President Xi, there appears to be a noticeable civility, sophistication and respect for others that was lacking in the time of the rather crude and vulgar Jiang Zemin (a China exceptionalist not much different from an American exceptionalist).
Pepe Escobar’s previous article and this one seem to fluctuate from extremes: either pessimistic (previous article) or overly optimistic (this article). I think the Chinese perspective towards this relationship is more sanguine. Below is a link to a panel discussion on CGTN (English Language Chinese news channel) regarding the RIC (Russia India China) organization and relationship as well as touching on BRI/OBOR and the INSTC. It has Mark Svoboda representing the Russian view, Dr. Rong Ying representing the Chinese view.
In the discussion, Svoboda tries, like Escobar, to go over the top and describe the Russia China relationship as a Strategic Alliance. It was refreshing to see the Chinese expert, Dr Rong Ying (a powerful member of the CCP) unequivocally shoot down this statement by stating that China does not see the relationship -at all- as an alliance, but merely as a partnership.
You can watch this video yourself, it’s surprisingly objective given that CGTN hosts try to spin topics to comply with their government’s official line. In this particular show the host pretty much did not interfere with statements of any of the panelists.
Here is the link to get a more realistic background and perspective than Pepe Escobar’s:
https://m.youtube.com/watch?v=wgaHNHDx_O4
Mark Svoboda’s statement characterizing the Russia-China relationship as a Strategic alliance, is at 19:08, and Dr. Rong Ying’s rapid and unambiguous rebuttal refuting this view is at 19:44. I would recommend people watch the RIC segment which is 20 minutes long, it is related to the topics Escobar has covered in this article and the previous one.
Since Chinese officials openly refute this view of a strategic alliance, it’s kind of hard to understand why non Chinese continue to hang on to it. This is even more strange when President Putin too has repeatedly rejected the idea of Russia being bound by an alliance with China (or anyone else).