Russia in Global Affairs

The year 2018 was marked by escalation in trade tensions among the world’s largest economies, mostly via bilateral trade restrictions.

Even if China’s high-tech offensive could be contained through a strategy of decoupling, it would not necessarily benefit most Americans. To the extent that corporations are rerouting supply chains out of China, the jobs and manufacturing are not returning to the United States but relocating elsewhere in Asia.

Chinese geoeconomics is making a great leap forward to adjust to rapid technological developments and a changing international distribution of power. The world is entering a new industrial revolution that further decouples the relationship between capital and labour, which incentivises Beijing to abandon its reliance on low-wage competitiveness and instead take the lead in developing high-tech strategic industries with its digital Silk Road.

The reasons for Russia’s turn to the East obviously lie in geopolitics?it was unable to establish a fruitful interaction with the West. China also failed to develop equal relations with Western countries. That is why many Russia’s decisions about the Far East were taken without proper calculations regarding the chances for economic development and investment attractiveness.

The Far East development strategy should focus on building an area of innovative resource-based economy. The production of innovative resource-intensive goods and services with a focus on the growing Asian markets running low on natural resources could be an attractive niche for the Russian Far East to take and succeed in.

Globalization American-style has reached its natural limits, and now China and Asia as a whole are becoming the main beneficiaries of world development. The current growth of neomercantilism, protectionism and regionalization in the world resembles the situation of the decade before World War I.

Facing its ‘most dynamic and formidable competitor in modern history’, Washington increasingly does away with hopeful thinking and seeks new approaches towards Asia. It raised the concept of the Indo-Pacific region. But what strategy is behind this buzzword? And what does it mean for Asia?

Faced with threats ranging from climate change to hugely disruptive technological advances, the world is clearly at a crossroads. More than ever a stable, inclusive and global governance is needed.

This article is an abridged and revised version of the paper written for the Valdai International Discussion Club. The original copy is available at: http://valdaiclub.com/a/valdai-papers/valdai-paper-82-the-belt-and-road-initiative/…