Russia and the West are continuing down a path towards increasingly dangerous confrontation without an exit in sight. Fighting in eastern Ukraine will intensify in coming weeks, and ever more onerous American and European sanctions, likely by next month, will weigh more heavily on Russia's economy. Even as tensions escalate, this is not (yet) a new Cold War. There are two main reasons why.
First, the United States and Europe will never care as much about Ukraine as Russia does. More importantly, Russia is not the Soviet Union. It lacks the USSR's ideological appeal, global military muscle, and network of foreign allies. Russia simply cannot project power on a global scale.
There is, however, one development that could make a new form of Cold War much more likely. In the still improbable event that China decides to align its interests much more closely with Russia's, the risk of great power confrontation would rise quickly and substantially. More on that in a moment.
Russia's conflict with the West over Ukraine will grow more dangerous. Tougher US and European sanctions won't change Russia's approach to Ukraine, because President Vladimir Putin is determined that this country will remain in Russia's orbit and eventually become the crucial addition to his "Eurasian Union", an economic alliance that now includes Kazakhstan and Belarus. Mr Putin would like to build this trade pact into a political and military union.
To accomplish this, he must block Ukraine's bid to join Europe. He can do this only by creating enough instability inside Ukraine and its economy to force a rewrite of Ukraine's Constitution that gives regional governments greater say in Ukraine's foreign and trade policy. Via Moscow's local allies in Donetsk and Luhansk provinces, that change would give Russia an effective veto over Kiev's European dream.
Adding fuel to the fire, Ukraine's President Petro Poroshenko faces intense pressure from backers in western and central Ukraine not to give an inch in Kiev's fight with pro-Russian separatists or their sponsor in Moscow. Government forces will continue their eastward advance. Mr Putin cannot allow Ukrainian forces to fully defeat the rebels, because Kiev's ability to reassert military dominance would push separatists across the border into Russia, adding to Moscow's costs while depriving the Kremlin of its last leverage inside Ukraine.
The winner in this conflict is China. As the escalation on the ground inside Ukraine deepens the divide between Russia and the West, Moscow will turn ever more conclusively towards Asia in general and Beijing in particular.
In May, Russia and China agreed on a historic US$400 billion (S$500 billion), 30-year gas deal that had been stalled for many years. Mr Putin got the diplomatic victory he wanted, demonstrating to Americans and Europeans that Russia has other commercial options. China got the price it wanted for access to long-term supplies of Russian energy, and it will continue to drive a hard bargain with Russia on every commercial deal they negotiate.
For the moment, China will try to limit any damage to its relations with the EU and America, its two lead trade partners. The needs of China's ambitious domestic economic reform process demand the international stability essential for continued growth.
Yet, China's improving relations with Russia will continue to deserve careful Western scrutiny. Beijing cares little about Ukraine, but its leaders do not want to see the Americans and Europeans push Russia into a corner. There is more than enough resentment of Western attitudes towards China to encourage Beijing to help the Russians when they're down.
More worrisome is a scenario in which China's reform programme, unprecedented in its scale and complexity, runs off the rails, stoking enough public unrest inside China that Beijing decides it must pick a fight with outsiders to rally people to their government.
The likeliest target of Chinese provocation is Japan, a crucial US ally with whom China shares a bitter history. China could also continue to push hard against its neighbours Vietnam and the Philippines in the South China Sea. Either action might draw a response from Washington that heightens US-Chinese tensions at exactly the wrong moment. In any of these cases, Beijing might well find strategic value in improved security ties with Moscow.
A formal Chinese-Russian alliance will remain unlikely for the foreseeable future. Neither country can afford to completely turn its back on Western economies and investors, historical mistrust between Moscow and Beijing will never be easily overcome, and the Central Asian governments and resources that lie between Russia and China are as likely to provoke competition as cooperation. China sees that Russia's energy-export-dependent economy is in decline, and though Moscow's aggressive approach to the West can help keep America off balance, it can also force Beijing to make public diplomatic choices it would prefer to avoid.
Yet, this can change as China itself changes, and conflicts like the ones in Ukraine and in the seas around China can sometimes take on lives of their own, creating partnerships of opportunity where they might otherwise never have developed. That is a risk worth watching in months and years to come.
This article was first published on August 13, 2014.
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