Wednesday 24th of July 2024

Russia –Ukraine War and China’s BRI
Ajay Mohan
Region : China, Eastern Europe, Economy,
Issue : Security, Politics,
Ukraine war will be remembered as one of the biggest geopolitical events which changed the dynamics of world politics. This war changed the thinking of the world powers. This war prove that some nations provided new opportunities and some nations had bad experiences.
China’s ambitious biggest infra project Belt and Road Initiative (BRI) aims to stretch around the world. But some countries like India and America say that the project is an expansion of China. In the BRI project, 147 countries of the world and 40 percent of the global GDP have signed on to projects.
For China, the vast Russian land mass was one of the most reliable land routes for the BRI. China invests tens of billions of dollars in building a huge network of roads and railways line to send goods to the rich European markets. Russia, Ukraine, Poland, and Belarus is part of the BRI, BRI was later integrated into the new Eurasian land bridge or the New Eurasian Land Bridge (NELB), which is mainly a rail network.
The land connectivity dreams have been potentially killed by the Russia-Ukraine war and that is a severe headache for China. The BRI project there was also a sub-grouping called the 17+1 which is a BRI cooperation platform between China and 17 Central and Eastern European
The war in Ukraine has dampened prospects of reviving the BRI. China’s primary land route to European markets goes through the NELB these were a series of railroads through Central Asia and Russia to eventually reach the European continent. This route is so important for China, China did not have a backup plan for relying overly on Russia, and that lack of a plan is looking ominous. Experts have noted that the NELB route will be problematic after the war.
But the Ukraine war hurt the BRI project. Now Russia is involved in the war with Ukraine but it played a very important role in China’s grand project BRI. Its plans within the country in 2020 consisted of 122 projects many parts of the project involved transport and energy. Since the disintegration of the Soviet Union Russia’s relations with China have been very deep and complicated. The security issues that have been brought forth by this war have severely highlighted the inadequacies and the complications involved in using these routes.
Many logistics firms have already withdrawn from Russia even before this war began and even before sanctions forced them out European countries like Germany, Poland, and the Netherlands which once had ambitions of being key hubs for the BRI have now totally given up any form of economic ties with Russia instead of they are at the forefront of economic sanctions against Russia. So China needs to find an alternative route to do business in Europe.

Alternative Route of BRI
BRI’s alternative route goes via Iran which is facing Economic sanctions. Chinese firms can’t escape the impact of sanctions if they do business with Iran. The most important areas for the BRI are the key sub–regions called “China’s near abroad” these are Central Asia, South Asia, and South East Asia.
Two Big Complications
BRI projects in these three regions are often spoken of separately on their terms.
But Chinese see significant economic potential in trade and investment among these three regions South Asia, Central Asia, and South East Asia. But problem is that connectivity between South and Central Asia is increasingly becoming difficult such as South Asia’s biggest country India own relations with China are complicated because of a border dispute.
More importantly for all the support and money China has poured into Afghanistan, it is extremely wary of passing some of its major trade routes through a country controlled by the Taliban and other terrorist groups such as ETIM, Al-Qaida, and ISKP. Second, China’s major investment in Pakistan’s dream Gwadar port. Their Baluchistan residents have protested against Chinese projects in the area. China is very much upset about regularly targeting Chinese engineers and people. China’s projects in Pakistan are located in regions that are close to Iran, and Iran also facing severe facing western sanctions.
It does not help that Gwadar is a long way off from Uzbekistan and Kazakhstan which are the two economic spokes in Central Asia. So that Xi Jinping’s dream project seems to be stuck for political and economic reasons.
China must bypass both Russian and Belarusian support and maybe the entire Ukrainian geography itself. The BRI’s other corridors will inevitably gain more salience for China and Europe. Central Asia, West Asia corridor is likely to become more significant in Chinese thinking. BRI can bypass Russia and reach Europe by transiting via Central Asian nations.

Russia Fastened Western Sanctions
In the wake of the conflict NATO lead coalitions imposed sanctions on Russia it is reported that now Russia facing almost more than 5,000 targeted sanctions most in the world or any particular country. These sanctions indirectly threatened BRI. In this response, China paused many BRI projects in Russia. Such as the 500 million Sinopec gas plant, an integral piece in the BRI energy corridor from Russia to China. Maersk (transport giant) stopped new rail booking from Asia to Europe traveling through Russia; suspend transit on the BRI Eurasian land corridor. Insurance companies not providing insurance those Russian ships leaving Baltic and Pacific ports. European insurance companies have denied insurance to Russian ships without insurance ships can’t run.
Ukraine, Russia, and Belarus together currently account for around 20 percent of China’s overseas lending since 2000.
The Green Finance & Development Centre (an affiliate of Fudan University) said that China’s BRI project’s finance and investment fell in the first half of 2022. According to the report USD 28.4 billion, compared with USD 29.4 billion in the same period a year earlier. The first half figures were 40 percent lower compared with the same period in 2019. Due to global uncertainty in Sri Lanka, Russia, and Egypt, no new spending occurred in these countries.
Some countries backed or canceled their commitments including Pakistan, Malaysia Myanmar, Bangladesh, and Sierra Leone because of the high cost of projects and their impact on the national debt and the economy. No doubt, Ukraine’s strategic location at the crossroads of Europe and Asia makes it a potential gateway to Europe. That’s why China has to take very calculated move in this conflict. China’s move decides the future relations with Europe and America.
The views expressed above belong to the author(s)

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