Europe’s 11th Russian Sanctions Package Could Be Coming Soon
At the recent summit with Chinese President Xi Jinping, Russian President Vladimir Putin announced he was ready to establish a joint Chinese-Russian working group to develop the Northern Sea Route (NSR). However, the offer has not led to a new Chinese contract to purchase more Russian gas as the Kremlin leader clearly had expected. Rather, it has sparked concerns within the Russian Federation that China is now in a position to elbow Russia aside not only along the NSR but across the Arctic more generally. Indeed, one Russian observer on the "Captain Arctic" Telegram channel warns that Putin's misguided move has given Xi "the keys" to the Arctic and pushed Russia into a minefield, where an area that Moscow had always viewed as exclusively its own will now be subject to negotiations with a foreign power. According to this observer, while the conflict with the West over Ukraine will eventually end, Russia's differences with China will continue and Moscow will come to regret the advantages it has handed Beijing (T.me/caparctic, March 21).
For much of the past decade, China has been working hard to assume a major role in the Arctic, both economically and geo-strategically (see EDM, October 3, 2017; July 12, 2018; June 12, 2019; May 6, 2021). It has been building icebreakers and ice-capable ships (see EDM, July 23, 2020) and has been promoting Chinese development of infrastructure in those northern portions of Russia where an increasingly hard-pressed Moscow could not afford to do so (see EDM, March 9). But Putin's readiness to involve China in the joint development of the NSR, especially given that he has not received anything in return, represents a major turning point, one that highlights Russia's growing weakness in the Arctic and China's growing strength.
Putin clearly believes that, by giving Beijing this opening, Russia will receive the short-term help it needs and may even convince China to agree to purchase more Russian natural gas, something critical for Gazprom given its loss of markets in the West. Some Russian experts agree (Sco-khv.org, September 22, 2017). Yet, others say that the Russian president is being overconfident. They argue that the Chinese, being hard bargainers, believe that Moscow, faced with the problems of diminished gas sales in the West, will eventually be forced to sell its gas to China at even more of a discount-and Beijing knows this. Moreover, they point out that given the fact that Putin has mixed this issue in with the development of the NSR, it represents a far more serious and, from Russia's point of view, negative development. Beijing is not concerned only with the NSR, Chinese officials say. It merely wants a voice in the Arctic more generally and even in the development of the portions of Russia adjoining China, areas that Moscow has long assumed to be its own by right (Nakanune.ru, March 24).
Vasily Koltashov, an expert at Moscow's Plekhanov University of Economics, is one of these skeptics. He says that all will be well if Russia can control China's participation in Arctic affairs. In such a case, Beijing would make investments that Russia needs without challenging Moscow's position. However, there is a very real risk that, if Moscow's own position deteriorates further or if the Kremlin fails to manage the situation well, China will exploit the circumstances and Russia will be "transformed into the periphery of China," an outcome Putin clearly does not want but may be unable to prevent (Nakanune.ru, March 24). In that event, Russia will lose more than dominance over the NSR: It will also lose its place in the Arctic. And other Russian analysts, including Igor Yushkov of Moscow's Financial University, say that what happened at the summit shows that China is thinking in far bigger terms than Russia, focusing on the Arctic as a whole rather than just the NSR.
Russia's turn toward Asia and especially China in the Arctic may be more ramified than even the discussions of the Putin-Xi exchanges suggest. In recent decades, Russia had focused its efforts on the Arctic Council, the chairmanship of which it has had for the past two years. But because the other members have boycotted the organization to protest Russia's invasion of Ukraine, the Arctic Council has not played the role either Russia or its Western members had expected. The Western Arctic powers have continued bilateral and multilateral consultations among themselves on Arctic issues, but Russia has adopted a different strategy. In recent months, it has sought to create an alternative to the Arctic Council, one involving China and other Asian countries to make it less of a target for Western boycotts.
Moscow has taken the lead in establishing the Russian-Asian Consortium of Arctic Researchers, known by its Russian acronym RAKAI, which brings together scholars from Russia and China in the first instance but also from North and South Korea, India, Vietnam, Singapore and Hong Kong (Ysia.ru, November 25, 2022). Not accidentally, this group played a key role at a meeting in Yakutsk of Arctic researchers that took place during the same week as the Putin-Xi meeting. This is yet another indication of Russia's turn to the East as far as the Arctic is concerned and Beijing's exploitation of Moscow's move, especially when it comes to programs and policies affecting the region (Nezavisimaya gazeta, March 23).
At present, it may be excessive to suggest that Putin has presented Xi with "the keys to the Arctic" as the "Captain Arctic" Telegram channel suggests. Nevertheless, the fact that some Russians think he has calls attention to just how great a shift may now be happening in the Arctic. Moreover, these judgments about what Putin has done will have consequences even if these fears prove overblown, sparking opposition in the form of foot dragging or, worse, to the Kremlin leader's move. And this could have the potential of leading some who fear the rise of China relative to Russia to go public and exploit long-standing Russian fears that Beijing is planning to absorb parts of the Russian Federation. If either of those things happens, they may highlight Putin's offer to Xi on a joint working group to develop the NSR among the most consequential developments to come out of their meeting.
By the Jamestown Foundation
Founded in 1984, The Jamestown Foundation is an independent, non-partisan research institution dedicated to providing timely information concerning critical political and strategic developments in China,… More
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I thought that sooner or later Russia & China would come to blows over the northern territories. After all, that grand mineral wealth, including much of Russia's oil, is far closer to China's population centers that it is to Russia's. But all the dragon has to do is gently put its coils around that wealth - with the bear's blessings! I never thought that I would live to see the day when Russia is only west of the Urals and north of the Caucasus.
Russia is the biggest receiver of Chinese investments under the Belt and Road Initiatives (BRI). China has invested billions of dollars in Russia’s Novatek LNG development and production in the Russian Arctic and is already receiving a big chunk of Novatel’s exports via the Northern Sea Route (NSR).
President Putin has also spent hundreds of billions of dollars developing the Arctic which is considered a gold mine for Russia. It has 13% of the earth’s oil resources and also a quarter of the untapped gas reserves estimated at 125 billion barrels (bb) of oil and 80-100 trillion cubic metres (tcm) of gas respectively enough for 1-2 centuries. If these reserves were added to current Russian proven reserves of oil and gas, the figures mushroom to 233 bb and 117-137 tcm of gas. Moreover, Russia has been building new cities, airports and even floating mini-nuclear plants for electricity generation and has also been building nuclear icebreakers and ice-capable tankers and ships to ship oil, gas and coal vis the NSR to China.
By announcing during his discussions in Moscow with his strategic partner Chinese President Xi Jinping that he is ready to establish a joint Chinese-Russian working group to develop the NSR, President Putin was cementing the strategic alliance with China and inviting more Chinese investments. He wasn’t giving Xi “the keys” to the Arctic as was claimed.
Moreover, if President Putin let it be known that he won't hesitate to resort to nuclear weapons if Russia and its sovereignty are threatened, does anybody in his full faculties believe that he may cede any rights to China in the Russian Arctic?
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert