August 02, 2015

"Ultimately, the spread of China’s influence westward through Eurasia to CEE will likely serve to undermine the values of transparency and rule of law, to weaken the appeal of democratic ideals, and to strengthen more authoritarian and less transparent impulses in this post-Soviet space still trying in many ways to deal with the crippling legacy of communism."

Forbes For the past couple of years, while everyone has been watching Vladimir Putin’s moves in Eastern Europe, China has been making increasing economic inroads on Russia’s periphery. by Paul Coyer

'Its economic dominance of Moscow’s traditional backyard, Central Asia, is well known, but less well known is its growing presence in other areas of Russia’s periphery, such as the Caucasus and Central and Eastern Europe (CEE). Beijing is pledging tens of billions of dollars of investment and aid and signing major cooperation agreements with everyone from the Republic of Georgia to Romania to Belarus, and in the process is gaining political influence and beginning to reshape the geopolitics of the region. This influence will come at the expense both of Russia and of the West.

'The post-Soviet space has long been viewed as an intermediate zone between Russia and the West, and, given the renewed conflict between those protagonists, continues to be viewed as a field of great power interaction and conflict more than as a region important in its own right. The region’s “in between” status is particularly accentuated at present, and the interposition of a major external actor taking up a significant, independent role will undoubtedly add geopolitical complexity to the region, even if the interests of the powerful third party are purely economic. In the case of China, it is doubtful that its ambitions are limited to purely economic concerns, nor that China will be overly deferential to the interests of its erstwhile partner, Russia, when the interests of the two conflict.

'Chinese investment from the Caucasus to the CEE states has been warmly welcomed. Georgia and the countries of Central and Eastern Europe have heretofore been highly dependent on investment and political support from Western Europe and the United States. The inflow of capital and technology from the West has been critical since the end of the Cold War. The economic downturn of 2008 and 2009 illustrated the vulnerability of these economies to such a high level of dependence upon the West – as Western economies struggled, trade and investment dropped significantly. Since then, Western European budgets, which have been significantly constrained by austerity measures, have not allowed for more than a trickle of the massive amount of infrastructure and other investments needed by CEE states, whose economies generally lag far behind those of their Western European partners. Lastly, Russian economic stagnation has also proved a drag on CEE economies. This situation has left the door wide open to Beijing.'

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