James Kynge
A truncated railway bridge that stopped abruptly some way across the Amur river that separates Russia from China has stood for years as a challenge to the effusive rhetoric of an ever closer Sino-Russian relationship.
The Chinese portion of the 2.2km Amur bridge was completed in 2016, but the much shorter Russian section remained missing. However, this year Russia’s construction is under way, raising expectations that the first all year-round link across the 4,200km Sino-Russian frontier may be finished this year.
If completed, the bridge may yet take on a new metaphorical meaning. Russia has become one of the biggest recipients of Chinese investment under the Belt and Road Initiative, underlining the latter’s capacity to help forge stronger geopolitical links. According to the Center for Strategic and International Studies, a Washington-based think-tank, Russia has received $46bn in Chinese funding for BRI projects.
“We really value the BRI, especially in today’s divisive world, and because of the inclusivity it brings,” says Kirill Dmitriev, co-chief executive of the Russian China Investment Fund, a 2012 joint venture between the Russian and Chinese sovereign wealth funds, which includes the Amur bridge project in a lengthening portfolio of investments.
“We think that Russia can play a big role and be an important logistical bridge in a part of the world where the connectivity is lacking,” Mr Dmitriev said in an interview. “We are building or planning to build roads, bridges, railways and other forms of infrastructure.”
The RCIF — which was formed with an injection of $1bn each from the Russian Direct Investment Fund and the China Investment Corporation — has made about $6bn in investments to date in 25 projects and companies in Russia, China and elsewhere, Mr Dmitriev says.
Co-investors alongside the fund include sovereign wealth funds from the Middle East and Asia, Chinese commercial banks, including Citic, the financial conglomerate, and an unspecified Singaporean investor, Mr Dmitriev says. “I do not want to say their names, but the (co-investors) are not so much the European commercial banks,” he adds. The exclusion of western interests is typical of the developing Russia-China relationship.
This is quite a big project and could increase the trade between Russia and China
The ties that BRI is helping to cement are being forged in many senses in spite of western powers rather than with their co-operation.
This, in large part, is due to the west’s own stance. The US, EU and other countries imposed sanctions on Russia in 2014 after its military intervention in Ukraine, leaving Russia’s market open to non-western investors.
The demonstration of friendship between Russian and Chinese leaders Vladimir Putin and Xi Jinping has appeared at times to border on a bromance. Mr Putin has said that Mr Xi is the only foreign leader with whom he has celebrated his birthday — over a glass of vodka and a plate of sausage. Mr Xi, for his part, has called Mr Putin his “best, most intimate friend”.
Thus, projects such as the Amur bridge are regarded as indicators of whether such amity is filtering through to the grassroots. China fought a brief border war against the Soviet Union in 1969 not far from the Amur river, and mutual suspicion has punctuated the relationship since.
The bridge, which is designed to have the capacity to carry 21m tonnes of freight a year, is aimed at facilitating the export of Russia’s mineral wealth to China, cutting 700km from the current routes used, Russian officials said. A second bridge across a different section of the Amur is also planned. “This is quite a big project and could really increase the trade between Russia and China,” Mr Dmitriev said.
Bilateral trade reached $84bn in 2017 after growing by an average of 19 per cent a year over the past decade, putting a target of $100bn by 2020 within reach if current growth is sustained. Two key strategic areas now loom large for Mr Dmitriev. One is using the renminbi, China’s currency, to execute investment projects in the BRI, and the other is making the “Polar Silk Road” in the Arctic — which envisages boosting shipping through the increasingly ice-free Arctic seas — a reality.
The reason behind the desire to use the renminbi is simple. “Frankly, what the US is doing is making a lot of people think about how they can do things without using the US dollar completely,” Mr Dmitriev says.
Plans are now under way to execute a first investment project using a Rmb10bn ($1.5bn) fund created with the China Development Bank. Although the use of renminbi has been tightly regulated, the two sides will make an investment using the fund “very shortly”, Mr Dmitriev says.
So far, melting Arctic ice has freed up the route across northern Russia to China and Korea for the export of liquefied natural gas from ports such as Murmansk.
But Mr Dmitriev has bigger ambitions: “We are talking about billions and billions to be invested in making the Arctic silk road a reality and it is full steam ahead with this.”