The new brave world

In the Asian region one of the most massive changes which is occurring is the profound shift in economic and therefore military power between China and Russia. Once considered a great power in Asia as well as Europe, the outlook for Russia is far from clear. The two countries share a lengthy border and an uneasy history. The changing dynamic between the giants is barely understood in the west.

1st Jun 2010

In the Asian region one of the most massive changes which is occurring is the profound shift in economic and therefore military power between China and Russia. Once considered a great power in Asia as well as Europe, the outlook for Russia is far from clear. The two countries share a lengthy border and an uneasy history. The changing dynamic between the giants is barely understood in the west.

With the collapse of the USSR it was assumed by many analysts that Western democratic capitalism represents “the end of history”. The collapse was seen not as a historical accident caused by actions of the Soviet elite — mostly Mikhail Gorbachev, who slackened control of the state — but as the result of deep-seated rot in the system. The view was that the dysfunctionality of the Soviet economic system, with its heavy government involvement, doomed the Soviet economy, and Western capitalism was the pathway to a bright future. Totalitarian regimes were seen as a dying breed unable to compete with vibrant capitalist democracies, and the USA was the symbol of the prosperous West.

Today, twenty years after Francis Fukuyama's essay on “The End of History”, the global landscape looks totally different. The USA shows clear signs of deep-seated economic trouble. The generations-long loss of industrial jobs and huge trade deficits indicate a continuous decline in the overall competitiveness of American goods. The accumulation of debt and the increasing printing of dollars without visible backing in goods and services are other manifestations of problems. It is hard to see how this process could be reversed under present American socioeconomic arrangements. What is already called the "Great Recession” is not a hiatus, a springboard for a new rise, but perhaps a step to a “Great Stagnation” and possible steep decline.

Here the Chinese experience is telling. At the time Fukuyama's essay was published and Socialist regimes in Europe were beginning to crumble, China with its almost totalitarian arrangements seemed a prehistoric beast whose extinction was just delayed a bit, and its bloody pranks — such as killing hundreds if not thousands of unarmed civilians in Tiananmen Square — could be seen as the beginning of its death agony. Twenty years later the repressive controlling regime is alive and well, and a peculiar sort of post-modernist totalitarianism may have emerged. Chinese society has enormous economic vitality and could be an attractive model for many people. China's rise to pre-eminence in the twenty-first century would lead not just to new geopolitical arrangements but to domination by socioeconomic and political models absolutely different from those in the modern West, an aspect of China's rise that is often ignored by Western pundits.

The rise of China and other non-Western powers has led to notions of a post-American world. These notions have become something of a cliché and have been widely explored by pundits from Harvard professor Niall Fergusson to commentator Fred Zakaria. Other observers have pointed to the return of the centrality of Asia in the global order as a radical reinterpretation of human history, in which Western civilization could be just a footnote to the Asian mainstream.


But these pundits do not explore what political and socioeconomic systems would replace American capitalism. The implication, a kind of Orientalism, is that China would be pretty much the same as the USA, though perhaps with a different cultural hue.
Yet the socioeconomic and political aspects of China's system are quite clear and quite different from modern American arrangements. At the same time they are of course hardly uniquely Chinese. Totalitarian or semi-totalitarian regimes — that is, regimes with features of totalitarian monsters present and past — can be found in the layers of Western history. The rise of China demonstrates clearly that totalitarian/harsh authoritarian regimes are not just an unfortunate zigzag in humanity's march to capitalist democracy. China and its peculiar features would validate not just the survivability but even the competitiveness of twentieth-century totalitarian regimes that appeared unable to compete with Western capitalist democracies at the “end of history”.

One of course should not be overly simplistic here. China does have many similarities with the old Soviet Union, or to be precise, with the USSR that could have been if Iurii Andropov had not died. But China is not and will not be a carbon copy of the USSR. It will be an idiosyncratic system simply because history has never repeated itself word for word. The possible scenarios are manifold, and the exact configuration of events could be unexpected or even bizarre, at least from today's perspective. But several options can be imagined. China could achieve such economic preponderance that — barring major catastrophic events — it could exercise absolute geopolitical dominance, trapping most world powers in the web of economic dependence. Or it could co-exist with other powers such as a weakened USA, India and European Union. It could also undergo rapid catastrophic changes, caused by, for example, problems in the elite similar to those that doomed the USSR.

If such problems do not arise, China will definitely be one of the most powerful players of the twenty-first century. China will of course change. Other totalitarian states also developed and changed over their history. Yet the basic framework of the USSR socioeconomic and political system, for example, continued throughout the regime.

The same may be the case for the Chinese political and socioeconomic system. The system is based on often brutal exploitation of the populace and huge disparities between social groups and regions. It is also not immune from serious problems. But the system has provided the opportunity for making money and conducting scholarly research. Even more important, it has demonstrated remarkable economic performance for two generations. It not only catapulted China to the ranks of leading economic powers but led to rising living standards for hundreds of millions of Chinese. Even if we question the likelihood of China reaching absolute economic and geopolitical global domination, we must recognise that it has already become the second or third largest third world economy. This economic might has led to increasing influence over China’s neighbours. Some US allies have a sort of love/hate relationship for the Chinese, as they begin moving from the American to the Chinese economic and geopolitical orbit. For Russia, China’s gravitational pull could actually split the country.

Complicated relationship

The Russian relationship with China and the Chinese is complicated. Many Russians look at the Chinese with suspicion. Some Russian nationalists believe that waves of Chinese migrants will dominate the Russian Far East and lead it to split from Russia. But the danger might come from another source altogether — ethnic Russians in the Far East. China’s geographic proximity and increasing economic clout make it attractive to Far Eastern Russians. This attraction is facilitated by Moscow policies.
In the fall of 2009, Dmitry Medvedev and China’s leader Hu Jintao closed a deal making it possible for China to engage in direct extraction of natural resources in Siberia and the Far East. Economic connections between Far Eastern Russians and China will increase in the future, while their connections with Moscow will weaken. Indeed, for the twenty years since the collapse of the USSR, Moscow has not only failed to invest in the Far East but treats this part of Russia as a colony. In 2009 riot police were sent from European Russia when Far Easterners demonstrated against Moscow policy that prevented them from exporting used cars from Japan. Thus it is not accidental that more and more ethnic Russians look at China as potential overlord of the Russian Far East. This gravitational pull can be seen even by those ethnic Russians (the majority of the Far Easterners) who profess no particular love for China and the Chinese. This new mentality was revealed to me during conversation with one of my casual Russian acquaintances.

The Russian Far East and Russia's future

While waiting for a flight to Korea at Shanghai airport, I suddenly heard a voice in Russian. Near me on a bench was a young man talking on a cell phone, apparently discussing buying real estate in China. He eagerly engaged in conversation, and I asked what he thought about the future of the Far East. His views were quite bleak.

According to him, industry has collapsed and the people of the Far East are moving out en masse. This confirmed well-known information that a large percentage of Far Easterners have moved from the Far East and Siberia since the collapse of the USSR. One might add that the same process has been going on in European Russia. While traveling recently in Russia I met several people who had moved to the centre of European Russia from the north. They told me they that living conditions in the area they had left had become pretty much intolerable.

In the young man's views, Moscow's position is appalling. The central government does nothing to improve the life of ordinary people in the Far East and Siberia, but treats the area as a colony. In his view Russia is the raw material appendage to the world economy. In turn the Far East and Siberia are an appendage to Moscow, which exploits their resources — fish, timber and so on. Recent policy has been even more devastating. Moscow imposed a tax on imported cars, in particular those from Japan. Import and resale of these cars was the major source of income for quite a few people. The action not only destroyed the livelihoods of people in the Far East but was quite stupid, for it hardly improved the Russian auto industry and economy in general.

Moscow justified its policy by saying it wants to protect Russian producers from foreign competition. According to my interlocutor, this statement had no ground at all. There is not much economic development in the country in general, and native producers are almost nonexistent. Creating problems for importers of Japanese cars hardly helps Russian consumers. It deprives some people in the Far East from their livelihood, makes many people angry and leads to protests. He added that the protests are actually never-ending and confirmed my notion that Moscow was not able to use native militia/riot police to suppress them. Local law enforcement members were reluctant to beat up demonstrators because they themselves were sympathetic. Indeed, they drive the same Japanese cars.
I told him that there are those who believe the Far East will eventually become part of China. He seemed to discard the notion, and put forth several arguments why it would be absolutely impossible. The major reason was that Moscow would never allow the Far East to split, and the residents plainly do not have enough forces to fight for independence. The logic was as follows.

When the Putin/Medvedev regime created United Russia, party discipline bound local governors and the Kremlin elite in one political elite. The situation in the Far East, my interlocutor stated, is similar to that during the Soviet era. I mentioned my view that Yevgeny Nazdratenko, a former Far East governor, has criminal connections, and that I did not understand how people in Moscow could associate themselves with such an individual, especially in the same party. He responded that all those who rule the Far East are criminals, but it makes no difference in their relationship with Moscow. The Kremlin has incorporated everybody in power just to keep everything under its control.
Furthermore, protesters are comparatively few, not more than several thousand. Law enforcement is tough and might shoot those who tried to break up the Russian Federation. Moscow always seems to have enough military force to crush potential separatist uprisings. Still the potential danger exists and is related to potential economic troubles ahead. Moscow will not be able to deal with these economic forces in the long run.

Controversial assessment

My interlocutor's assessment of the Russian economy and the Far Eastern economy in particular is controversial. Russia does have serious economic problems. He acknowledged that it is not in such dire straits as in the late 1990s, when the ruble collapsed and oil was cheap. And even then Russia was able to survive. Today the price of oil is still high enough to shield Russia from economic collapse at least for a while. The danger is not in the depth of the crisis but in its duration. Russia has enough reserves to survive a short crisis. But if the crisis proceeded for a long time serious problems could emerge for the region in general and for him personally, and he and the people of the entire region might well think about radical change.
Apparently people of the Far East are already thinking about a possible change of geopolitical allegiance regardless of Moscow's power. Indeed Russia as a country, a unified nation bound by destiny, citizenship, or cultural/ethnic bonds, does not exist in this young man's mind. Regardless of all the explanations why the Russian Federation will survive and the Far East will continue to be part of Russia, everything boils down to force. He sees no economic, spiritual, cultural or other ties between Moscow and the Far East. There was even a word loaded with Russian nationalism and pride to be Russian and assertion that Russia is destined to rise to prominence.

When he dwelled on Moscow's inevitable triumph he sounded not like a Russian patriot who believed in his nation's ultimate triumph but like someone who lived in medieval Russia at the high point of the Mongol/Tatar yoke. Those Russians might publicly reject the notion that any sensible Russian would call for a direct uprising against Mongols. Yet the objection would not be love for Mongols or attachment to the Mongol empire, but fear of the Mongol military machine. If Mongol power declined he would eagerly hail the end of his people's dependence on the Horde. And for my interlocutor and implicitly considerable segments of Far East Russians, Moscow is indeed analogous to the Mongol Hordes. If Moscow became weak, the Eastern world would look for different geopolitical patrons. China implicitly emerges as a possible such patron, albeit he was inconsistent. His views of China were controversial and he did not elaborate how he saw a Far East transition to a sort of Chinese protectorate. And this personal inconsistency reflected the broader inconsistency of the Far Easterners, their hesitation in regard to a geopolitical patron if their ties with Moscow were to be cut for this or that reason.

On one hand my acquaintance clearly shows his anti-Chinese bias, and since the notion of political correctness does not exist in Russian minds he expressed his racist feelings openly and with some pride. He expressed his intention to live in or at least visit the USA. The major attraction was that it was the country of the white man; in other respects he did not see much attraction. The image of the USA and the West as a place of great wealth does not exist in his mind; he shares the increasingly popular Russian view that Western capitalism, its US variations in particular, is a road leading nowhere. His vision of the US economy was quite bleak, and surprisingly (at least from an American perspective), he saw little difference between the corrupt and dysfunctional Russian socioeconomic arrangements and those of the USA. The US government just prints money, and this will lead to big trouble for the USA and everybody else. Russia is firmly integrated in the West and has strong ties with the USA. So the collapse of the West would be the collapse of Russia as well. These bleak visions of the West and Russia made him increasingly fascinated with China, his problems with the Chinese notwithstanding.

While he seems to dislike China and the Chinese, my interlocutor at the same time acknowledged that he had engaged in active economic and personal relationships with both. He engaged in business in China and bought real estate there. He justified his interest by stating that the Chinese market could be compared not only with those in the Far East and Siberia but even with that in European Russia.

Because of his close business interests with China, he had actually lost interest and personal connections with the European part of the Federation. He implied he had not been in European Russia for a long time, and noted that it is much easier and cheaper to fly to China than to Moscow. Not knowing Chinese does not prevent him from traveling in the country, and he feels no discomfort or danger because of his linguistic handicaps or the fact that as a Caucasian he looks different from the others. Some of his travels, he admitted, were made with Russian friends who know the language. He added that he has met some Chinese people at close quarters and found they have a lot of similarities with Russians. For example, they could drink a lot and were in general friendly. Some, apparently those in the provinces, still regard Russians as “older brothers” and respect them. The desire if not to live at least to engage in business with China was reinforced by his skeptical view of the West, especially the USA, as an economic model.

For some residents of the Far East, pensioners in particular, the desire to be integrated with China goes farther, to a desire to live there. I asked him about pensioners (about whom I had read in the Russian press) who bought retirement apartments in North China. He responded that one should not overestimate their numbers, but acknowledged that the phenomenon exists. The reason is as follows. These people cannot live on the pensions they get from the Russian government, and real estate prices in Vladivostok and other cities of the Far East are exorbitant. So they sell their apartments in Vladivostok for enough money to buy luxurious apartments on the other side of the Amur River and to put the rest in the bank and live on the interest. He added that many Chinese also live in the Russian Far East and Siberia.

Brazen corruption

Economic vitality is the major reason China has become so attractive to Far Eastern Russians, but it is not the only one. Its political system is another. Westerners might be perplexed that Chinese totalitarianism could be attractive to Russians who had lived under a totalitarian regime so recently. But the reason is simple enough. The Yeltsin and even Putin eras have been marked by brazen corruption and social polarization, where a few amassed enormous fortunes at the expense of the majority. The image of democracy, at least in its Russian modifications, has also become tarnished. For quite a few, democracy is just a way for the corrupt bureaucracy and super-rich to maintain their power and wealth. China’s political model looks quite attractive to quite a few Russians, my interlocutor among them. In his view, the major positive aspect of China is the rule of law, enforced through execution of corrupt bureaucrats, thousands every year. In Russia corruption is destroying society. One cannot fight it because it goes to the very top and the elite would have to engage in self-purging to stop it.

Along with discarding China’s image as a country ruled by a brutal and arbitrary elite, he rejected its image as horrifically overpopulated and polluted. This image is absolutely wrong, created by Western enemies as part of a propaganda war. He stated that he spent some time traveling in the countryside and saw a lot of absolutely pristine land. Clearly, despite all reservations my interlocutor believed that at some point, for example, a major crisis in Russia, the Far East could well become part of China. When I asked whether China would absorb the Far East and Siberia in the future he said he believed this will be the case. Yet as soon as he found out that I am from the USA he stopped elaborating on the subject. It became clear that he was so open with me because he had assumed I was just a fellow Russian.


The rise of China as a major economic and geopolitical centre is much discussed in the press. Those who discuss the transition from a Western-centered world imply that little besides geographical and cultural make-up will change; Western democratic capitalism will simply be replaced by Asian democratic capitalism. But the transition to a China-centered global arrangement would mean totalitarian/harsh authoritarian regimes as a major if not the major form of political-social-economic arrangements. The situation might be compared with the end of the Cold War, but it could be quite different in one important aspect. By the late Cold War era the totalitarian systems in the USSR and East Europe had little attraction as a way of stimulating economic progress, even though some countries looked at the USSR as a model. The situation is quite is different with present-day China. If China continues its economic progress, its clout will increasingly attract the nations of the world. In some cases the Chinese model will change political and arrangements; in others it might split the countries. Russian residents of the Far East in certain situations prefer enlightened Chinese despotism to corrupt authoritarianism in Moscow. In any case China will qualitatively change geopolitical arrangements in the years to come.

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