Russia Losing Out to China in Eurasian Economic Community Member States, Academy of Sciences Says

Paul Goble

            Staunton, July 14 – According to a study by the Institute of Economics of the Russian Academy of Sciences, “almost all participants” in the Moscow-initiated Eurasian Economic Community “are rapidly reorienting their economic activity from Russia to China,” with Chinese trade with them growing even as Russian trade falls.

            The 60-page report, The Chinese Strategy of Mastering the Post-Soviet Space and the Fate of the Eurasian Union by Svetlana Glinkina, Madina Turayeva, and Artem Yakovlev (in Russian) (inecon.org/docs/Glinkina_Turaeva_Yakovlev_paper_2016.pdf) is summarized today in Nezavisimaya gazeta by economics reporter Anastasiya Bashkatova (ng.ru/economics/2017-07-14/1_7029_china.html).

            “All members of the Eurasian Economic Community, except Kazakhstan, have a significant negative balance of trade with China. In Kyrgyzstan, it formers over the last three years 93-95 percent of the total; in Armenia, about a third; and in Belarus, “almost half,” the report says.

            As a result, “in a number of post-Soviet countries, China hasn’t simply joined the top three major supplies of goods but already occupies there first place, having displaced Russia” from that ranking.  Moreover, it is increasingly the most important supplier of industrial equipment and loans and “is becoming the source of modernization” of these states.

            “The role of Russia in this regard in a number of states is shrinking,” the Institute of Economics experts says.  Moreover, they add, “the practice of exchange by China of its investments and credits for natural resources and a share of the market is continuing,” further reducing Russia’s role in those sectors as well.

            Moscow has tried, the economists say, to insist that cooperation between China and the Eurasian Economic community be on a bloc-to-bloc basis, “but China considers possible and even more effective cooperation with each of the members of the union on a bilateral basis.” That pattern seems certain to continue with China’s silk road undertakings as well.