Eurasia needs a Sino-German axis

The shooting down of Malaysian airline flight MH17 and the loss of all 298 people on board have cast a dark shadow on the Ukraine conflict raging for months between pro-Russian and pro-Western forces. The tragedy has made the international position of Russian President Vladimir Putin more difficult. He can't just back down now after months of support for the pro-Russian forces in Ukraine and nationalistic propaganda at home.

It has also strengthened the need for Germany and China to better coordinate their Russian policy. Both countries are wary of an aggressive Russia, but even warier of isolating or fragmenting the country.

Sino-German coordination on Russia, whether already a reality or still only a theory, could be more far more important than Putin's Ukrainian torments. In fact, in Ukraine there is much more afoot than a simple internal conflict. There is the reawakening, with vengeance, of Eurasian politics, which had been almost forgotten for decades.

This is something that is pushing the United States to deeply reconsider its strategy in this continent and to consider Eurasia as a whole and not as an odd combination of smaller "independent" regions.

After all, America won the Cold War because it foresaw the unity of Eurasia some 40 years ago.

Without thinking of Mackinder, the inventor of modern geopolitics, or even recalling the more modern Zbigniew Brzezinski with his "Great Chessboard", it is clear that the geographic continuum of the Eurasian continent is the strategic heart of the world - the scale that ultimately will weigh the power of politics.

American president Richard Nixon understood this when in 1971 he changed the course of the Cold War and turned the US defeat in Vietnam into a festering sore for the Soviet Union. Eurasia must be considered as whole, it can't be broken up artificially, who does it is bound to lose the continent and the world.

At the end of the 1970s, president Jimmy Carter continued Nixon's work by pitting China against the Soviet Union on many levels: He first pushed China into a short border war against Vietnam, then firmly Soviet; using the Chinese territory for arming and fomenting the war of Afghan mujahideen. He then triggered Chinese technological modernization and trade as a kind of economic base for a semi-American ally in Asia that was to be always against Moscow.

These elements transformed the geopolitics of Asia, which until the early 1970s seemed destined to be dominated by a growing red tide, with both ideological and geopolitical implications. Nixon's intuition on the role of Eurasia changed the course of the Cold War and won it.

This picture changed between 1989 and 1992. During those few years, America reaped unprecedented political results that transformed the whole situation. The Soviet empire was dismantled; Eastern Europe (including the Baltic States, a former part of the Soviet Union) came in a few weeks to completely embrace NATO; and other parts of the empire such as the Central Asian republics, Mongolia, and Ukraine became neutral territories and buffer states to limit a heavily reduced but still very large Russia.

The collapse of the USSR left the Middle East only in the hands of the United States, which acted to break the ambitions of a former ally, Iraq, and emphasized a role, however limited, of an antagonist of the US - Iran - which, although officially a sworn enemy, times and again was drawn to some sort of collaboration with America about restive Iraq. This was the first Gulf War, which left an unstable situation.

The problem was that after this generalized victory on every front of the Cold War, America had to move quickly to consolidate its advances in key areas such as Eastern Europe.

The US then neglected the Middle East, where the weakened Iraqi Saddam Hussein survived. Meanwhile it also forgot about Afghanistan, where the anti-communist mujahideen turned into anti-capitalists.

This changed Central Asia into a black hole of terrorism. In fact, it is easy with hindsight to accuse America in the 1990s of neglecting Central Asia, and perhaps it is also right, but one has to think instead about the world America faced at the time and what it started.

The US had to consider the immense ruins of the Soviet empire and kick-started the process of globalization, which led to unprecedented economic growth in the history of the planet.

That led directly to the rise of what became the main protagonist of globalization, China. Under president Bill Clinton, the United States in the 1990s had an ambiguous and imprecise foreign policy on China. After the 1989 crackdown in Tiananmen Square, many common Chinese had come to think of Americans as the true defenders of their interests, against a Chinese government keen on cracking down on its people.

However, the Clinton administration forfeited the past ideological commitment and it caused the collapse of the ideal bond with common Chinese people by raising the national issue of intellectual property rights.

With a strong stand on the issue of infringement of intellectual property rights, America hit out at small and medium-sized Chinese companies, often founded by individuals who admired Americans.

This transformed the sentiment of the common people in China and started to create an objective distance between America and China not due to ideology or ideals but because Chinese "pirating" companies were defended by their own government and attacked by a foreign government with which they sympathized.

The game was no longer geopolitical with China, because the ideological bias (against communist China), which had been neglected for 20 years (from Nixon to Tiananmen), returned with vengeance at a time, in 1990s when the situation of human rights - though still bad - was improving compared to the previous decades. Meanwhile, China had been admitted to the organizations of world trade - the General Agreement on Tariffs and Trade and then the World Trade Organization (WTO).

The overall message coming from America left Beijing and the Chinese generally perplexed. The whole trade issue spat (intellectual property rights and WTO) made Chinese feel that trade and economic interests (national interests) were paramount over ideal convergence.

America opposed the national interests of others, even when they expressed similar ideological perspectives. This surprise might look naive watching from the Atlantic, but one has to consider that the modern Western world was (and still largely is) totally different from the Chinese political tradition.

And yet in again another turn although the US had raised serious ideological objections to China unlike with the Soviet Union it also said China must continue to do business with America because international business and economic growth would solve everything. This turned up to be only partly true.

Washington actually had a complex reasons for taking such an ambiguous attitude with China. The latter was deemed to be a huge strategic threat especially at a time when, in 1990s Europe was moving towards economic and political integration, creating a trading block and a currency (the euro) that could challenge North America and the dollar.

Moreover, perhaps the emergence and success of globalization first and then the arrival of the challenge of Islamic terrorism made America forget the territorial contiguity of Eurasia. Just a few months before September 11, 2001 attacks on April 1 there was the EP-3 episode, when a US surveillance plane forcibly landed on the island of Hainan in China.

Previously, there was the stop America put to South Korea's "sunshine policy" towards North Korea, a diplomacy advocated by Beijing, and before that there was the American bombing of the Chinese Embassy in Belgrade in 1999.

At the turn of the millennium, when the EU was launching its currency - which for the first time in decades could challenge the supremacy of the dollar - there had been a crescendo of tension around China.

Yet despite these growing tensions with America, China did not turn to embrace Russia. The two countries, while sharing the longest border in the world, and a certain commonality of views on North Korea and the then Yugoslavia, were separated beyond words.

In 1994, then Russian president Boris Yeltsin, had indeed signed an important trade agreement for the sale of energy to China, but this agreement (subsequently re-signed several times over the years) was never carried out. Moscow's fear of an advance of Chinese economic interests in Russian Siberia was huge.

An immense, semi-inhabited territory that Russia ripped from Turkish-Mongolian populations in the course of about three centuries and a series of wars against the Manchus, who then fell to China, semi-deserted Siberia gives the Russians a sense of insecurity on the actual possession of this space, because too much space and too few people live there, against the far more numerous Chinese, who live in much lesser space.

Yet it is precisely the conquest of this space, a process started by the father of present-day Russia, Tsar Peter the Great, that has so far given Russians a sense of the great mother Russia.

Siberian chills
Without Siberia, Russia is somehow no longer Russia. And the exploitation of Siberia in favor of China opens the door to the commercial penetration and an increased Chinese population in Siberia. In that case, Russia would seem in danger of losing control of Siberia.

In the face of this threat, the various threats, costs, and humiliations imposed by Washington to Russia also lowered the risk of an embrace between Moscow and Beijing on energy in Siberia. This effectively froze the exploitation of Siberia, and nearly 20 years of conflict and deep instability in the Middle East have kept oil prices high and therefore the extraction of Russian oil (at about US$80 a barrel much more expensive than the Middle East) competitive.

To try to mute the China threat in Siberia, Moscow has attempted to involve Japan in the exploitation of gas in that area. But as Russian fears of invasion outweighed the economic calculations, in the case of Japan old chagrin about Russian history prevailed over the future of economic advantages (importation and exploitation of rich deposits).

Tokyo demanded (and allegedly even now demands) the return of the Kurile Islands without the Russian population that lives there. This is because Tokyo feels it was defeated by America but not Russia, which attacked Japan only in the last days of the war.

This is for Tokyo the pre-requisite of deep economic talks with Moscow on Siberia or anything. So for 20 years, Siberia remained there, without the exploitation of resources or a Chinese invasion.

In a way the US was right: new trade issues (intellectual property rights, WTO tiffs), and old and new local geopolitical issues (the Middle East simmering and open tensions; the border issues around China and its neighbors; the hard diffidence between Russia and its Asian neighbors, China and Japan) had covered the importance of considering Eurasia as a whole. Yet the pulls of Eurasia had not disappeared.

In fact, all this was altered dramatically with the anti-Russian uprising and now low intensity war in Ukraine and with the US discovery of shale gas. The arrival on the market of US shale gas potentially makes America independent of imports from the Middle East, gives the US the opportunity to become a net exporter, and in this way allows American shale gas to set the price of oil worldwide. Greater or lesser production by the US, which may decide to sell its gas at a loss, could derail Russia, dependent on the international high price of oil.

The American support for the "anti-Russian" factions in Ukraine further advances the goal of having anti-Russian countries along Russia's border, which pushed Moscow to a second armed intervention outside its borders in recent years, with the occupation and separation of Crimea from Ukraine. The first was the short but effective war against Georgia in 2008. Even after the war in Georgia, Russia and China were not thawing relations.

Yet, after Russia carved out a piece of Ukraine, for the first time the US floated the idea of sanctions against Russian oil and selling American shale gas to Europe. In other words, the view from Russia is that the US is not only trying to conquer the buffer state of Ukraine, and approaching Moscow by nearly a thousand miles (the depth of Ukraine territory), but Ukraine also gives control of the flow of Russian gas to Europe, as most of it flows through Ukraine.

Therefore the Russian gas flow can be broken or stolen with impunity (as it was apparently done by Ukraine) because if Moscow rebels nobody buys any Russian gas, because anyway the US has so much gas that the Washington can sell it to Europe, and this could also help American unsteady economic recovery.

In other words, with this combination of elements, the situation in Ukraine in 2014 was also radically different from the one of Georgia in 2008. In Georgia, America was trying to tighten the Russian southern flank, and the American operation "Allied to Georgia" was also linked to energy, since the Nabucco pipeline would pass through the Caucasus, and America wants the Nabucco since it would bring gas from Central Asia to Europe in competition with the Russian pipeline and bypassing Russia.

The Georgia-Nabucco operation, however, was not an alternative to Russian gas and did not put it out of business; it introduced only competition in the market - proving annoying but not fatal. In the case of Ukraine, that country has a hand in almost all of the distribution of Russian gas.

The first reaction to the Ukraine "provocation" of Russian President Vladimir Putin was almost visceral, to use force: let's intimidate Europeans and Americans. But this reaction has made things worse because the Europeans, who were lukewarm on Ukraine, have sided more with Washington. In addition, without even thinking about sanctions on Ukraine, foreign investment stopped flowing to Russia and Russian money began to flee from Moscow, triggering a dangerous weakening of the already fragile Russian economy. At that point, what remained to be done to Russia, with its back to the wall?

The series of actions proved to Moscow that in America some really want to dismember Russia, as was the case with the Soviet empire, dismantled piece by piece, starting with Eastern Europe. At that point, Putin may have no choice and might as well sell Siberia to the Chinese now, while it still owns it. Then even if Chinese had torn Siberia from Russia they would do it in exchange of a lot of money and not in exchange of the insults and humiliations inflicted by the Americans almost salivating at the prospects of Russian further fragmentation.

In addition, if the Russia-China deal will be done wisely, maybe Siberia will not be Sinicized, and maybe the Russians will be able to find new paths to hold on to Siberia. Besides, Chinese after all, for many reasons, may be not too keen on "conquering" Siberia.
In fact, today the question of the Ukraine/ Sino-Russian oil agreement is not the decisive element of a Moscow-Beijing alliance, as the Korean War was in 1951. Then again, before the Chinese intervention in Korea, America was ambiguous on Mao's China, and Mao was ambiguous with Moscow and Washington. It was the Chinese intervention in Korea, where Stalin forced the hand of Mao (Stalin feared that Mao was too "pro-American" and would order a split with the Soviets as did Tito in Yugoslavia), that decidedly pitted Washington against Beijing.

Today the issue of Ukraine/Sino-Russian oil agreement, although now very real, unlike the many fictitious agreements of the past, is not as dramatic as the Chinese intervention in the Korean war. Even the mere prospect of the Russian-Chinese agreement gives more lucidity to everybody and cooled many emotions.

It has given clarity to Russia, and pushes both parties toward a more reasonable position. This is so true that even the downing of airplane of the Malaysian airlines by pro-Russian forces has not triggered talks of US armed intervention in Ukraine, talks which were quite common in the West before the oil agreement. In addition, even China does not want to rush into a hug with the Russians.

Bear fears dragon
If the Russians fear the Chinese invasion of Siberia, the Chinese fear Russian possible attacks on China. The history of China is that for two thousand years, since the time of the Han dynasty, deadly attacks on their country came from the north, from Turkish-Mongolian peoples such as the Xiongnu (probably ancestors of Attila's Huns) and in the last 300 years that the threat became clearly called Russia. Against Russia, China fought a bitter border war at the beginning of the 1970s.

Mao gave Mongolia, formally independent but in fact a Russian satellite, to Russia; about a third of the territory claimed by Republican China in 1911 was ceded to Moscow after 1949 and in 1951 China was in danger of becoming a total Soviet satellite. Today, China has agreed to buy energy from Russia for a simple reason: it has no influence in the Middle East while it is in flames and highly unstable.

Moreover, the extraction of shale gas by the US will affect prices worldwide, so for a net importer of energy, like China, in means that its production, exports, and investments could be put out of business without notice, while its coal is too polluting and it is poisoning already is half the country. Against all this, the agreement with Russia is an insurance policy, the only available option now.

These are serious concerns in both Moscow and Beijing, and the current agreement does not mean Moscow nor Beijing will want to cut ties with Washington.

The future is open. Russia wants to return to America and China, but will Washington be able to put together the pieces of this broken vessel? The question should be revised on the basis of the requests coming from China and Russia separately.

In 2009, China was going to sign a green-energy pact with Obama. The pact fell because of the "mismanagement" of the environment conference in Copenhagen. In that moment of weakness in the US (the financial crisis had just hit the US in 2008), the G2 (US-China pact) that both seemed to be willing to work for, went under a tram of controversy.

It began with the issue of the Chinese censorship on Google, which ended up being expelled from China, then came the disputes in the South China Sea and with Japan over the Senkaku and lastly the Americans launched the policy of "Pivot to Asia", which made life difficult for China and gave new breath to America in Asia, while New York came out of the crisis. Today Beijing dreams of a new G2, which the current leadership called Great Power Relations, a G2 with a different name. But things have evolved.

The pivot to Asia in the meantime is not working, even if it creates a headache for Beijing and is likely to create also confusion in the medium term in the whole region, where many countries are trying to sell themselves at higher prices both to China and to the United States (America has the technology and strength, but China has the money and the market).

Spiral of tension
This creates a spiral of chaos and rising costs for both Beijing and Washington. In this spiral, if the US remains involved with the continent, it is likely to be drawn deeper and deeper and then drown; if it withdraws from the competition, the continent (about 60% of world population) is likely to crystallize around the centripetal force of China and thus expel US from Eurasia and marginalize it in the world.

On the other hand, China would like to expand in Central Asia, but does not dare to do so, only by negotiating terms with Russia. Beijing fears Russian traps in the region and that Chinese advances in Central Asia could raise the already high sensitivity of the Central Asian countries. Therefore Beijing would like some Western (European and American) support, also because the purpose of its adventure in Central Asia is to get closer to Europe with the construction of a Eurasian railway.

On the other hand, Russia dreams of Europe and the Mediterranean and knows that this dream is the one that can best protect its huge but weak Asian tail. That is, the more Moscow is strong in its relationship with Europe, the stronger Moscow's position when dealing with Beijing without needing to consume whole of Siberia.

This dual desire creates a space for America to negotiate separately with both Russia and China, threatening the other to squeeze the other in the most affectionate embrace. This could lead either parties where Washington wants, provided that there are reasonable choices and considerate for everyone.

In this game, America must also be able to play the European card, which separately interests both Moscow and Beijing. If Washington succeeds, it would turn a mess of the Ukraine situation, into a great opportunity to strengthen the American position and would give a powerful push to the so far ineffective policy of rebalancing to Asia. This would give Washington a huge political centrality, something desired by all the players in the game, who while wary of the US trust Washington more than any other country. Will America seize this opportunity?

This is not a game of strength but a game of strategy and diplomacy, the one that won the Cold War. That was put in the drawer soon after the end of it in favor of more direct instruments of political intervention such as limited wars, support for revolutions, and messianic visions - on the right or left - of democracy and the free market.

Now it would be the triumph of old politics, brought on by Mackinder and the now octogenarians - Brzezinski, Kissinger, the old Cold Warriors - who in the end have done so much good in the world, by winning a world war without resorting to guns and missiles and large slaughters.

Meanwhile, contact between Russia and Asia is already creating tectonic upheavals in Eurasian politics. First, the historical similarities: Peter the Great was the man who started the modernization of Russia and pushed the Russians to look to Europe - even physically, by commissioning Italian artists to build its capital, St Petersburg.

But he was also the man who began the expansion of Russia into Asia at a time when the Siberian regional power, the Manchus, were expanding toward rich China. Then the Manchu were almost willing to leave the control of poor Siberia to minor allies such as the Zungar Mongols, who in the following centuries supported the Russians rather than their Manchu "cousins". This new focus of Putin on Siberia, while Russia continues to look to Europe, echoes the actions of Peter the Great, which can only comfort St Petersburg-born Putin.

Along with this, however, there is also a new element of modern connectivity throughout Eurasia. In July, German Chancellor Angela Merkel's visit to Beijing took on a new dimension thanks to the Asian shakeup caused by events in the Ukraine. At that point, the commercial-economic relationship of China and Germany was already extremely strong, perhaps the ideal partnership for both, but without a political element.

Converging interests
Today, the Russian-Ukraine crisis has instead created a different space for convergence. Moscow has an objective interest in trying to play China against Europe, and vice versa, over energy supplies, or at least hedging risks on either sides of its east-west border. Berlin and Beijing now have an interest in close coordination on a range of agendas for Eurasian energy in order not to be played by Moscow.

This convergence of geopolitical interests will grow on the basis of very strong commercial interests and trends that point to land transportation lines including a superfast train journey from Beijing to Berlin. This could create a new dynamic across the Eurasian continent and might even put Russia in a vice (something that is not in the interest of any of the current players), but mostly creates economic and political relations within Eurasia that will drive all other countries to gravitate around the Berlin-Beijing league.

That is to say, in the case of a strong Sino-German economic and political relationship, countries such as South Korea or France (or many others) might find it objectively convenient (in terms of infrastructure, relationships, and the like) to align with Berlin-Beijing rather than seek alternative ties, which might be objectively more complicated and expensive.

This will work for the sake of convenience, although many weaker countries, such as Poland or Kazakhstan may have an interest in trying to carve out their own spaces beyond the league. For this shift to work, it will require great caution and the absence of force on the part of the poles, to avoid causing the league to in some way distort.

This new reality could in fact lead to the expulsion of America from Eurasia. Today, none of the political players in Eurasia wishes for such a development for many reasons. Most trust America more than any other actor in this game. This gives plenty of opportunity to the US to insert itself in this game. America could react to this within a range of options between: (1) trying to sabotage this new league, by kindling revolutions and difficulties right and left, or (2) by favoring it and thus inserting itself deeper in this space.

In reality, however, these alternatives are only theoretical. The experience of Ukraine, where somehow the Americans have pushed and encouraged the anti-Russian revolution in part to subvert the growing Berlin-Moscow convergence, teaches that attempts to oppose strong historical cycles, like the present, can create even worse consequences.

For America, the current perspective on a Berlin-Beijing league passing through Moscow (and in many ways it also involves India, historical an ally of Russia) is that it is worse than a Berlin-Moscow league. That is, an opposition front to this league may perhaps strengthen the ties and end up really expelling America from Eurasia and poisoning all relations in the meantime.

An alternative to this is for America to favor this league as a catalyst and great arbiter in a new game. Washington could do this because in theory Beijing, Moscow, and Berlin at the end of the day trust and love America more than they trust the other two sides of the new Eurasian triangle.

America, by the way, is already in the region thanks to its relationship with Uzbekistan (the most populous and culturally strong of the former Soviet republics in Central Asia) and of course its presence in Afghanistan, already a place convergence and divergence between Pakistan (historically tied to China) and India (historically tied to Russia).

In other words, to promote sense peace and stability in the continent would bring more geopolitical points to America in Eurasia than conceding to the easy temptation to try and sabotage the new Eurasian reshaping. Of course none of this is now easy, but this is often the result of choices that at times might have been too easy.

Furthermore, there are very economical consequences of this Eurasian political turn on the tails of the globalization process launched by the US in the early 1990s. In past week China has spearheaded a BRIC (Brazil, Russia, India, China) bank, which is objectively a new structure in a world financially dominated so far by the International Monetary Fund and the World Bank. These two institutions were founded with the Bretton Woods agreement that set up the post World War II economic order based on the centrality of the US dollar. The rise of BRIC economies would not possible without the greater freedom of commerce and investment launched by the US promoted globalization.

The new BRIC bank is far from challenging the IMF or the World Bank and has to prove its mettle in case of a financial crisis. Yet certainly in the Asian financial crisis of the late 1990s a few countries hit by it floated the idea of an Asian Monetary Fund, an idea sternly rejected by America in favor of an IMF intervention. Now, in case of a new policy of development or to stem a future risk, the BRIC countries and possibly their friends have an instrument out of the US orbit to conduct a policy possibly different from Washington's intentions.

To this one can add a calculation on the future of the Chinese currency, the yuan. At present, the yuan is not fully convertible and it is linked with a "crawling peg" to the US dollar. When the yuan will be fully convertible, in a period of five to 10 years depending on the evolution of the internal financial reforms in China, the global role of the dollar could be weakened. This could also correspond to enhanced Chinese political ties with Germany (center of the euro area), something that could further sideline the dollar. That is: a political Eurasia league could fuel and be fueled by a growing role of the euro and of the yuan on the two poles of Eurasia.

All of this is already undermining Bretton Woods, which at 70 years old this year is past the age of retirement for most people. To this the US again can react in different fashions (I owe this analysis to a conversation with Claudio Landi):

  By trying to disrupt the BRIC bank and the emergence of the international role of the yuan and of the euro (this may be very dangerous as it could trigger a world economic meltdown engulfing the US);

  By trying to establish a strong dollar-euro parity pact that would then dominate global finances for decades (this may also be risky: Germany would dominate, also politically, the euro area and because of the efficiency of its industry, it could push in a corner the US industry and put Washington in awe, and thus realizing the "Deutschland ueber Alles" dreaded by all, Germans included;

  By favoring the Eurasian league, playing both ends of the league, Germany and China, and inserting itself in the Eurasian tie and strengthening ties with Germany and China (the risk here is to be grounded and chewed up by either countries or by the relationship);

There are also intermediate versions of these three options, which anyway coincide with the geopolitical options of riding or opposing the Eurasian league. Immodestly, in my view, the less risky choice for America would be to try to ride the present trends and not opposing them.

This for a simple hydraulic principle: water pressure, like history, can't be stopped, but it can be channeled. If one tries to stop rising waters, one ends up with a destructive flood, if one channels, it one has bumper harvests. Surging egalitarian demands were channeled in America, Europe and the world in social democratic responses, which eventually dried up and killed Communism. Conversely, Communism won when it was fought by its alter-ego and opposite, fascism.

(A slightly different version of this essay will be published in the forthcoming the Italian journal of geopolitics, Limes, which will be entirely dedicated to the question of Eurasia and the new US role in it.)

Francesco Sisci is a Senior Researcher associated with the Center for European Studies at the People's University in Beijing.