Connecting the BRI with Eurasian Economic Union is strategic choice of China, Russia
Li Ziguo

Editor's note: Li Ziguo is the acting director of the department for European-Central Asian Studies at the China Institute of International Studies. The article reflects the author's opinions, and not necessarily the views of CGTN.

There are many regional integration and cooperation mechanisms and initiatives in Eurasia, of which the most influential is undoubtedly the Belt and Road Initiative (BRI) proposed by China. Nearly 160 countries and international organizations have signed partnership agreements with China. As far as post-Soviet space is concerned, the highest level of integration is represented by the Russian-led Eurasian Economic Union (EAEU). Now, Russian President Vladimir Putin is in China attending the second Belt and Road Forum for International Cooperation held in Beijing, how do the two initiatives get along? This is an important issue that China and Russia need to consider.

Historical inevitability of connecting BRI, EAEU

Judging from the nature of the two initiatives, there is no contradiction in principle between the BRI and the EAEU. The Eurasian Economic Union is a highly integrated organization with complete mechanisms for decision-making, implementation and resolution of differences. And the BRI is a pan-regional cooperation initiative, a cooperation platform without an entry bar and with strong inclusiveness. There is no fundamental conflict between the two, which serves as the basis for their connection.

 Russia's President Vladimir Putin arrives at Beijing airport ahead of the Belt and Road Forum in the Chinese capital on April 25, 2019. /VCG Photo.

 Russia's President Vladimir Putin arrives at Beijing airport ahead of the Belt and Road Forum in the Chinese capital on April 25, 2019. /VCG Photo.

Judging from the internal and external environment, the connection of the two initiatives is the result of strategic thinking by China and Russia. It is inevitable rather than just a tactical compromise made by the two countries to create an atmosphere for strategic partnership.

First of all, changes in the external environment require closer cooperation between China and Russia. The most prominent change is that the U.S. uses “fair and free trade” as the pretext to build a small circle that excludes China and Russia through bilateral negotiations and to reconstruct a new trade order dominated by the U.S. and other developed countries. 

From the perspective of geopolitics, the U.S. strategy of containing China and Russia will not change. China and Russia do not want to spoil their relations with the United States. However, the two countries also know very well that it is much easier to fall foul of the United States than get along well with it.

Secondly, the Eurasian Economic Union desires to strengthen cooperation with the outside world. From a technical point of view, the economies of the member countries of the union are homogeneous and the transfer of production is limited. For example, Russia, Belarus and Kazakhstan are all energy and chemical producers and exporters. There is a demand for raw materials trading, but there is also competition rather than complementarity in terms of finished products. As the largest economy in the EAEU, Russia has neither the capital to invest abroad nor the extra production capacity to be transferred abroad. 

Therefore, countries in the union place their hopes for economic development on the outside world. In February 2016, President Nazarbayev proposed to designate 2016 as “the year to deepen the economic relations of the Union with third countries and key trade blocs,” which reflects the union's desire to strengthen economic and trade ties with the outside world. Among the potential partners, all countries regard China, which has abundant foreign exchange reserves and is eager to “go global,” as the ideal pick.

The Second Belt and Road Forum for International Cooperation (BRF) is being held in Beijing from April 25 to 27. /CGTN Photo.

The Second Belt and Road Forum for International Cooperation (BRF) is being held in Beijing from April 25 to 27. /CGTN Photo.

Impact of connecting China, EAEU  

It is precisely because of the strategic need for connection that the process has been very smooth. It takes only three years for such a connection to be fully realized from the time the idea was put forward.

On May 8, 2015, China and Russia signed the Joint Statement on Cooperation on the Construction of Joint Eurasian Economic Union and the Silk Road Projects. China supports the Russia-led Eurasian Economic Union while Russia formally and explicitly supports China's Silk Road Economic Belt Initiative. 

If the above statement is only a preliminary plan for the general direction of cooperation and is more of a political gesture, then one year later, in June 2016, a joint statement of the Eurasian Economic Commission (EEC) and the Ministry of Commerce of the People's Republic of China (PRC) on the principal conclusion of negotiations on the agreement on trade and economic cooperation was signed, which indicates that both sides hope to speed up the process of integration and cooperation in the context of the reconstruction of the international political and economic order and will carry out substantive measures rather than just talk the talk.

In October 2016, the two sides held the first round of negotiations. In October 2017, the two sides concluded negotiations. On May 17, 2018, the Agreement on Trade and Economic Cooperation between the EAEU and China was signed, covering 13 chapters, including customs cooperation and trade facilitation, intellectual property rights, departmental cooperation, e-commerce and government procurement. It marked that the economic and trade cooperation between China and the EAEU countries entered a new stage driven by projects. In December 2018, the economic and trade cooperation agreement entered into force.

 Russia's President Vladimir Putin arrives at Beijing airport ahead of the Belt and Road Forum in the Chinese capital on April 25, 2019. /VCG Photo.

 Russia's President Vladimir Putin arrives at Beijing airport ahead of the Belt and Road Forum in the Chinese capital on April 25, 2019. /VCG Photo.

At the heart of the connection between the BRI and EAEU is the mutual coordination of China's and Russia's economic interests in Eurasia and the search for the greatest common denominator for the interests of all parties after taking into account the demands of member states. The connection will bring tangible benefits to the BRI and EAEU countries. 

For China, the political significance is that it dispels the worries of the entire Eurasian region so that countries don't have to worry about the need to “choose between China and Russia.” The economic significance is that it provides institutional arrangements for customs facilitation and e-commerce, which is conducive to the exchange of goods and personnel. 

For EAEU member states, the connection can better attract Chinese investment and accelerate the implementation of joint projects. More importantly, it can help EAEU countries access China's huge market, especially in agricultural produce.

Connection is a process without an endpoint. It is necessary to find an optimal point in the continuous running-in process so as to minimize the institutional cost for cooperation between China and EAEU member states, accelerate the landing of projects and ultimately benefit the people of all countries.

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