THE GEOPOLITICAL POWER SHIFT IN EURASIA: A NEW WORLD ORDER?

PRESENTER: JACQUELINE CICCHINIMENTOR: NORMAN GRAHAM, PH.D. DEPT. JAMES MADISON AND CERES MICHIGAN STATE UNIVERSITY, EAST LANSING

OUTLINE Road-map and organization of talk.

• Purpose?• Who?• What?• Evidence • Data • Conclusion

PURPOSE?To understand China’s role in Eurasia and implications for the future global order in terms of economic and political power

RESEARCH QUESTION(S)

• 1) Is China’s increasing economic and institutional dominance a threat to Central Eurasia?

• 2) What role does Russia play in China’s rise? Is Russia’s power being weakened or strengthened?

BACKGROUND

• Soviet Russia• Russian Revolution, 1917

• Influence of communism around the world socialist bloc governments

• 1922: Union of Russia, Ukraine, Belarus, and the Transcaucasian Republics

• Structure & Politics • One party political system, largest state in the world (8.6 million

square miles) • Planned economy, strong railway and transport system• Strongest nation both politically and economically in Eurasia

BACKGROUND[…]

• Russia Today• Less control for Russia

• Collapse of USSR• Some soviet nations established established sovereignty • No longer economically dominant, China is major player

• Market force based• Abundant natural resources such as oil/gas • EU Sanctions have hurt Russia’s trading ability and financial

stability • Battered economy

• Increase in interest rates by 17%• Capitol outflows, falling oil prices, lack of access to foreign

markets and demographic problems

SHIFT IN POWER

CHINA• After Mao’s communist regime…

• Market-socialism, government no longer in control of all businesses; however, maintains strong central government

• Increased trade relationship with post-Soviet countries • Historically Russian dominated • Infrastructure development and investment • Sign of changing power in Central Eurasia

CHINA - RUSSIA

• “If the Russian side needs it, we will provide necessary assistance within our capacity” – Xi Jinping

• “The role of Ukraine, as a transit country, will be reduced to zero…Gazprom has de facto abandoned Ukraine as a transit party” – Gazprom CEO

THE SILK ROAD ‘ONE BELT ONE ROAD’

• Trade & Investment • “I believe that 2015 will provide the development of the ‘One

Belt One Road’ is an initiative primarily raised by China, it is fundamentally open and inclusive in nature” – China’s Minister of Commerce, Gao Hucheng

• What is China doing?• November 2014: Pledged $40 billion to set up a silk road

fund to improve connectivity across Asia by investing in infrastructure, resources and industrial and financial cooperation

• $54.7 billion to areas and regions in Central and South Asia• Energy, railway, and highway infrastructures

GAS AND PIPELINE DEALS

• Russian-Gas deal • 30 year agreement to start in 2018• Up to 68 bcm of Russian gas to be delivered to China annually• $350-400 per cubic meter• Possible Routes are Altai pipeline and power of Siberia pipeline

• “New Natural Gas Cooperation Alliance” • Altai Pipeline

• Gazprom to supply 30 billion cubic meters per year for 30 years from Western Siberia to Northwest China

• When?: Starting in 2019

OIL AND GAS GRAPH

GAS INVESTMENT GRAPH

MULTILATERAL AGREEMENTS• Asia Pacific Free Trade Deal• Shanghai Cooperation Organization • Asian Infrastructure Investment Bank

• Alternative to World Bank • Been approached by 27 prospective founding members with the

UK, France, Italy, Luxembourg, and Switzerland

• Start? By end of 2015

• “Austria has already had close economic and political ties with the Asian region and is always so far very positive about international projects” – Johannes Frischmann, a spokesman for Finance Minister Hans Joerg Schelling

SO WHAT?

CONCLUSION

• China’s rise with its continued streak of economic dominance should be viewed as a threat to Central Eurasia

• Why?• Regional alliances neighboring China should be wary of

measures taken to build international alliances

• Russia is losing power and credibility in the region and relying on China for economic support

• Now what?• Needs to reconsider the anti-West rhetoric, this could help

lift sanctions imposed by EU

REFERENCES • http://www.eurasiareview.com/15122014-russian-risks-rise-china-energy-deals-

analysis/• http://oilprice.com/Energy/Energy-General/Russia-and-Chinas-Growing-Energ

y-Relationship.html• http

://www.globalresearch.ca/russia-and-china-the-dawning-of-a-new-monetary-system/5423637

• http://rt.com/business/233051-russia-china-boost-partnership/ • http://www.iss.europa.eu/publications/detail/article/china-setting-the-agendas/ • http://www.isn.ethz.ch/Digital-Library/Publications/Detail/?lng=en&id=188638 • http://www.isn.ethz.ch/Digital-Library/Publications/Detail/?lng=en&v33=118574

&ots627=0c54e3b3-1e9c-be1e-2c24-a6a8c7060233&id=189360

• http://www.economist.com/news/europe/21639557-russian-economy-will-take-long-time-recover-it-badly-needs-structural-reforms-it

• http://rt.com/business/242533-russia-china-eastern-route/ • http://rt.com/business/243753-austria-china-infrastructure-bank/ • http://www.chinadaily.com.cn/business/2015-03/25/content_19908124.htm

ACKNOWLEDGMENTS • This project was made possible by

Michigan State University • Special thank you to my faculty advisor

Professor Graham for his dedication to research in Eurasian politics and guidance through the process of my own research

QUESTIONS?