THREAD How will #COVID19 affect China’s strategy in Eurasia, and Sino-Russian ties? The pandemic could tighten Beijing’s grip on the former USSR even further, leading to the creation of a China-led regional order in Eurasia: #PaxSinica. Here’s how: 1/ 
2/ Despite the huge amount of mistrust between Moscow and Beijing that COVID-19 has helped to expose, the virus is likely to strengthen China-Russia ties, as I argue in my recent piece for @ForeignPolicy foreignpolicy.com/2020/04/23/cor…
3/ Russia was one of the first countries to close its border with China. This move reflected Moscow’s suspicion of its neighbor. I’ve witnessed this in meetings with senior Russian officials who questioned Beijing’s data, complained about a lack of transparency etc.
4/ The Russian government was also reacting to the deep-seated Sinophobia present in Russian society, which is low-level at normal times, as @levada_ru polls show, but… levada.ru/2018/10/16/otn…
5/ … can be swiftly triggered by the formula “China + sensitive issue,” such as land, water, forestry and public health. See this example on Chinese investment around Lake Baikal by @NeilMacFarquhar:
nytimes.com/2019/05/02/wor…
nytimes.com/2019/05/02/wor…
6/ The virus-related harassment of Chinese people in Russia was sometime encouraged by the actions of local authorities, including @MosSobyanin. This led to spats with ambassador Zhang Hanhui. More details by @world_reporter via @business
bloomberg.com/news/articles/…
bloomberg.com/news/articles/…
7/ The mistrust is mutual, and on full display in the way China is reacting to the influx of new cases brought by Chinese nationals from Russia. See this story by @paulmozur & @stevenleemyers in @nytimes
nytimes.com/2020/04/23/wor…
nytimes.com/2020/04/23/wor…
8/ Hostility toward Russians/毛子 is widespread among Chinese netizens, and is on full display this time around. Russia has not been publicly criticized by official media, but @globaltimesnews ran an angry editorial on Moscow’s failure to fight COVID19 globaltimes.cn/content/118550…
9/ Yet despite the deep mistrust of China on display, Russia’s dependence on Beijing is likely to grow. For regimes in Central Asia, the situation is similar. The economy is the primary driver here
10/ Facing a severe recession coupled with a slump in oil prices, Russia and its commodities-producing neighbors need a market that can provide a cash lifeline for their shrinking state budgets
11/ The hope in Moscow is that Beijing will roll out measures to support China’s tumbling economy through state-driven investments in infrastructure, an opportunity my @CarnegieEndow colleague @michaelxpettis has written about in @FT recently ft.com/content/907740…
12/ For Russia, global oil markets look grim, not just because of collapsing prices, but because of painful cuts Moscow needs to make in order to meet its obligations under the OPEC+ deal. Good story on that by @olyatanas & @d_khrennikova via @business bloomberg.com/news/articles/…
13/ Russia will have to make a choice and prioritize markets. The recession in Europe and the obligations of @RosneftEN to Chinese creditors ($15bln for the ESPO pipeline in 2009 + $60bln in 2013) guarantee that an increasing share of Russian oil will flow to China
14/ It’s notable that China did not buy less oil from Russia in Q1, despite a 20% reduction in demand for oil. It was Gulf suppliers who took the hit
15/ As a result, China’s trade with Russia was up 3.4% in Q1, with imports up 17.3%. Stable demand for Russian metals was a contributing factor. At the same time, China’s trade with the rest of the world plunged by 8.4%
customs.gov.cn/customs/302249…
customs.gov.cn/customs/302249…
16/ In Jan-Feb, China’s share in Russian trade jumped to 18.7% from 16.4% in 2019. In 2013, before the war in Ukraine and US/EU sanctions, China’s share was just 10%
17/ A similar trend can be seen in China’s trade with oil & gas producers in Central Asia. Trade with Kazakhstan was up 6.6% in Q1 year on year, and Chinese imports from Kazakhstan were up 22.6%
18/ If this trend continues, China is set to fortify its position as Russia’s main export destination, which will give Beijing leverage. As Russia slips deeper into recession, this leverage can be used and converted into ownership of assets: tactics we’ve seen elsewhere
19/ Another avenue for increased Chinese influence will be telecommunications. The growing importance of telework will prompt the Kremlin to upgrade digital infrastructure, including the rollout of 5G
20/ This interview by the CEO of state-owned Rostelecom to @ru_rbc provides good insights into the government’s thinking on the need to double down on 5G rbc.ru/interview/tech…
21/ Chinese companies like @Huawei were frontrunners in the race to be the dominant supplier of 5G hardware on the Russian market before COVID-19, due to national security considerations. See this previous thread:
23/ Finally, COVID-19 has whetted appetite among insecure leaders across Eurasia to emulate Beijing’s model of surveillance, and China is set to become the primary provider of hardware, as well as a role model
24/ In Russia, local governments in Moscow and Tatarstan were early adopters of the technology: both sent officials to study China’s experience in Big Brother systems. Both regions rely on @HikvisionHQ for hardware tass.ru/obschestvo/656…
25/ Since Moscow and Tatarstan’s surveillance-focused approach to imposing the social distancing regime has been deemed a success by the Kremlin, other regions are likely to follow suit
26/ In Central Asia, @Huawei and other Chinese companies have been successfully pushing similar projects over the last decade: thediplomat.com/2019/08/smart-…
27/ As the pandemic unfolds, Beijing is set to boost its role across Eurasia as the major driver of economic growth, the provider of critical technologies, and the enabler of establishing new forms of political control for regimes that are feeling a whole lot wobblier
28/ The virus is accelerating existing trends in China’s policy toward Eurasia, but also creating new realities by making the decision-making process in Russia and other countries even more focused on the regime’s survival, rather long-term national interests
29/ Ironically, COVID-19 may bring China one step closer to the establishment of a #PaxSinica:s a Beijing-centered regional order that covers large swathes of the Eurasian landmass
30/ This leaves the West with some tough policy choices to be made. Before #COVID-19, @EmmanuelMacron suggested in an interview with @zannymb & @EWRCarr for @TheEconomist that Putin doesn’t want to be China’s vassal…
31/ … and that Europe should provide Russia with alternatives to its current path to becoming China’s junior partner economist.com/europe/2019/11…
32/ Given the rapid changes brought about by COVID-19, if the West is to prevent #PaxSinica from happening, it needs to be alert to new developments and able to present policy options for Eurasian states gravitating into Beijing’s orbit
33/ Whether the West can pull its act together to do this remains questionable, given the mounting problems at home and the evaporation of strategic thinking in the US under @realDonaldTrump as commander-in-chief 🤷♂️🤦♂️
