Navigating the Great Powers: China's Entry in the South Caucasus

BAKU DIALOGUES BAKU DIALOGUES POLICY PERSPECTIVES ON THE SILK ROAD REGION Vol. 4 | No. 2 | Winter 2020-2021 The Second Karabakh War: Initial Thoughts & Reflections A Most Significant Geopolitical Development Matthew Bryza Reassessing U.S.-Azerbaijani Relations Robert F. Cekuta Special, Exceptional, and Privileged Ayça Ergun While You Were Sleeping Alper Coşkun Understanding Armenian Narratives Rovshan Ibrahimov & Murad Muradov Three Decades of Missed Opportunities Lala Jumayeva The Caspian Sea as Battleground James M. Dorsey Appraising the Present, Forecasting the Future Eurasia 2040 S. Enders Wimbush Right or Left Economic Recovery? Farid Shafiyev Universal Dead-end in a Global Wormhole Andrey Bystritskiy Between Russia & China: Perspectives on the Silk Road Region Grand Strategy Along the Silk Road Gregory Gleason Central Asia and the Belt and Road Initiative Djoomart Otorbaev Russia and China’s Digital Silk Road Jeff Schubert Navigating the Great Powers Rachael M. Rudolph Profile in Leadership Shev’s Way and the History of Europe Tedo Japaridze Baku Dialogues Interview A Higher Level of Openness and Engagement: Uzbekistan’s New Foreign Policy Abdulaziz Kamilov 3 Vol. 4 | No. 2 | Winter 2020-2021 BAKU DIALOGUES BAKU DIALOGUES Navigating the Great Powers China's Entry in the South Caucasus Rachael M. Rudolph To undertake a journey on a road never before traveled requires character and courage: character because the choice is not obvious; courage because the road will be lonely at first. And the statesman must then inspire his people to persist in the endeavor. – Henry Kissinger F policymakers and the global public today because of the shift in the international system from a quasi-unilateral order dominated by a single major power (the United States) to a multipolar order that is in the process of being reconstituted by major, rising and reemergent powers; the relative decline of America’s ability to project her power as a result of that shift; new types of geoeconomic and geopolitical competition among powers in key strategic regions and countries across the globe, including among traditional allies (e.g. between America or ages power has been the topic of countless articles, books, and newspaper columns. Analysts, practitioners, specialists, and theoreticians alike have thoroughly discussed its different types (hard, soft, smart); the nature of its distribution at the global and regional levels; and how large, medium, and small states behave (e.g. accommodate, balance, remain neutral) when there are both shifts in power and changes in international order. These age-old discussions are ever-present in the minds of Rachael M. Rudolph is an Assistant Professor of Social Science for a joint program between Bryant University and the Beijing Institute of Technology-Zhuhai based in Zhuhai, Guangdong, China. The views expressed and the position adopted are those of her own and do not per se reflect those of the organization or institutions with which she is affiliated. Vol. 4 | No. 2 | Winter 2020-2021 186 T he South Caucasus region, and European major powers) and as will be highlighted in the rivals (e.g. between America and first part of this essay, is no stranger western European powers and to the aforementioned compeRussia); and, U.S.-China competition and confrontation. Since tition and the Trump Administragaining (or regaining) indepention’s shift from a more cooperdence thirty years ago, each South ative engagement approach with Caucasus state has had to navigate Beijing toward one combining a geopolitical jungle comprised of competition, confrontation, and regional powers— cooperation on key Russia, Turkey and economic and poBoth statesmen and Iran, the United litical issues. Great States, and major power competition stateswomen are ponderwestern European with China will ing the past, looking at powers—all of continue under the present, and explorwhom have comthe Biden Ad- ing new courses of action peted for influence ministration, but for ways to wisely and and confronted there is likely to one another either be a greater em- safely navigate their state directly or indiphasis placed on and people toward an unrectly since the end multilateral en- defined, unknown future. of the Cold War. gagement and less on executive-level Armenia, Azerbaijan, and confrontation. Confrontation is Georgia have formed alliances with more likely to be led by U.S. conkey regional powers, established a gressional foreign policy entrepreweb of economic, political, and seneurs on foreign policy issues such curity relations with both regional as trade, technology, and investand major powers, and advanced ments in the time ahead. their own foreign policy agendas to promote growth, development, and Needless to say, the current pesecurity. When China entered this riod facing nation-states is filled jungle and showed individual attenwith uncertainty. Both statesmen tion to each state it was welcomed and stateswomen are pondering the with open arms. Not even the past, looking at the present, and major Western powers expressed exploring new courses of action for concern at the time. A review of ways to wisely and safely navigate transcripts and other news material their state and people toward an including speeches, congressional undefined, unknown future. 187 Vol. 4 | No. 2 | Winter 2020-2021 BAKU DIALOGUES BAKU DIALOGUES acquainted with such geostrategic games, experts on the South Caucasus are divided as to whether they will have a significant impact on the region and each country’s relations with China. hearings, interviews, and news articles published by government officials in States News Service and U.S. Federal News, which provide coverage to American news media outlets and are picked up by the Associated Press International, find that Sino-South Caucasus relations in general and China’s relations with the specific South Caucasus countries were not major concerns for Western policymakers. From the period of the announcement of the Belt and Road Initiative in 2013 to the present, the majority of the references to Sino-South Caucasus relations were made within the context of Russia’s role in the region. References to China’s relations with specific South Caucasus countries, on the other hand, simply mentioned them within a larger focus on issues of concern to lawmakers including democracy (or the lack thereof), the Nagorno-Karabakh conflict, energy developments, and economic security concerns. This essay explores Sino-South Caucasus relations, focusing more specifically on China’s trade relations, investments, and military relations (or the lack thereof) with Armenia, Azerbaijan and Georgia. In doing so, it draws on the larger debates to discuss potential ways forward for the region in this period of geopolitical uncertainty. Although the nature of relations between China and the region’s countries have grown, they are still insignificant to pose a challenge to either the aims and interests of regional or other major powers at this time. And, as Yu Hongjun wrote in the previous edition of Baku Dialogues, there is much potential for cooperation between China and the countries in the region, but they must be pursued in the spirit of perseverance given the many challenges facing the region and the global community. Despite the lack of specific concern expressed by Western policymakers, they have raised concerns about China’s growing global influence and the impact of that on both U.S. and Western interests. Some have even called for economic and political pressure to be applied towards smaller states to counter Beijing’s growing influence. Though the South Caucasus region is well Vol. 4 | No. 2 | Winter 2020-2021 The Geopolitical Jungle W ithin the geopolitical jungle of the South Caucasus, the geopolitical codes of the major and long-term stakeholders have been oriented toward the level(s) 188 As will become evident later in this essay, these experts are correct, but only to a degree. China’s relations are insignificant at the present time to either compete with or pose a challenge to the regional countries’ relations with either Russia, the United States, or the major EU countries. However, restrictions imposed by the EU on the re-export of goods and products sold in its market and the oversight of investment projects could potentially have an impact on and limit future Sino-South Caucasus economic relations. The actual impact will also depend to some degree on how EUChina relations evolve. in which they are engaged. Russia, Turkey, and Iran vie for influence not only in the South Caucasus but also in the Middle East—a region that has been the exclusive operational ground for America up until the last few years. Russia, an actor that strives to rekindle its great power status, competes with both America and the EU for influence in the European geography and other regions. The United States and the EU—two traditional allies in promoting and maintaining a Euro-Atlantic dominated international order—compete for economic and political influence in certain countries and regions despite their coordination to counter the perceived threats to instability within the Atlantic Alliance and the growing regional and global influence of Russia and China. R egional powers Russia, Turkey, and Iran have the greatest stake in the region’s political and economic development, given two factors: their geographical proximity to Armenia, Azerbaijan, and Georgia, and how instability in the region impacts on their national security. Russia is considered by scholars to be the most important regional actor, while Turkey is considered to be the second most important actor. Iran rounds off the list. China, a relatively new actor to the geopolitical game, is a competitor for the United States and a geo-economic competitor for Russia and the EU despite its stated desire not to be considered as such. Experts suggest Beijing’s growth in the South Caucasus will depend not only on Moscow’s but also the Euro-Atlantic bloc’s acceptance of its role. They also suggest the West has the potential to block or contain China’s growth, given the South Caucasus countries’ dependence on the European market. All the South Caucasus countries depend to some degree on Moscow for communications, transportation, supply-chain, and other networks that either pass through Russian 189 Vol. 4 | No. 2 | Winter 2020-2021 BAKU DIALOGUES BAKU DIALOGUES primacy and reterritory or are duce its economic under full Russian Baku has pursued a comand energy decontrol. As will be pletely independent forhighlighted below, eign policy, seeking to bal- pendencies. Azerbaijan is Turkey’s China’s economic traditional ally— relations neither ance both regional and and increasingly compete with nor other major power actors. so, as it turns out. challenge Russia’s Armenia and Georgia do However, Baku has economic relations not have the same luxury, pursued a comin the region. Some given the nature of their pletely indepenexperts suggest that dependencies. China has dent foreign policy, they, in fact, comseeking to balance plement them; thus neither given preference both regional and raising the concern to nor does it have a speother major power by some analysts cial relationship with any actors. Armenia and Western pol- specific country in the and Georgia do icymakers of a region, as do Russia and not have the same potential ChinaTurkey. luxury, given the Russia-Iran axis nature of their that could chaldependencies. China has neither lenge or replace American and given preference to nor does it have EU influence in the region. Such a special relationship with any spean axis, however, is unlikely given cific country in the region, as do the shift in the regional power dyRussia and Turkey. namics following the conclusion of the Second Karabakh War. oscow’s aims in the region include minimizing U.S. Beijing’s relations similarly comand NATO military encroachment pliment Turkey’s aims and interests and EU influence, maintaining in the South Caucasus. Armenia is military and security primacy, Moscow’s traditional ally, and the and minimizing instability by excountry that is most dependent on panding good neighborly relations Russia for its economic, political, for the purpose of reestablishing and security relationships. It has itself as a major global player. been a traditional Iranian ally as Some experts suggest the signing well. Georgia, on the other hand, of the armistice agreement between has turned to Turkey, NATO, the Armenia, Azerbaijan, and Russia U.S., and the EU to counterbalance that marked the end of the Second Moscow’s military and security M Vol. 4 | No. 2 | Winter 2020-2021 190 to the Iranian border and the fact that both actors have ties to competing non-state actors operating in the larger Central Asia and MENA regions. Karabakh War solidifies Moscow’s military and security primacy and effectively contains western relations to the economic realm. That may be. More interestingly, it opens the door to Moscow serving as meditator in any future tensions between Ankara and Tehran. However, Moscow is unlikely to allow any sort of tension between the two to develop in the short-tomedium term because of the impact it would have on the new balance of power Russia had a primary hand in establishing at the conclusion of the Second Karabakh War. Although relations between Russia, Turkey, and Iran affect stability, it is Turkey-Russia relations that have the most significant impact on the distribution of power in the region. The U.S., NATO, and the EU— coupled with their tensions with both Ankara and Moscow—factor into these dynamics as well. Turkey and Iran have long competed for soft power influence in both Azerbaijan and Georgia. Ankara’s aims in the region include promoting soft integration through economic, energy, and infrastructure projects; finding alternative energy sources and market opportunities; developing civil society, sociocultural, and commercial relations, including tourism promotion; and enhancing its security cooperation with Georgia and Azerbaijan (given the importance of their economic and energy cooperation and the need for stability in the region). A merican interests in the region have evolved. Initially, the United States was concerned with supporting and strengthening each South Caucasus country’s economic and political independence and territorial sovereignty. Then, in the mid-1990s, energy security became the driving force. The U.S. sought to deny any one country from having a monopoly on the transportation of Caspian natural resources, facilitate energy diversification for Europe, and reduce the region’s economic and energy Tehran seeks to bolster its economic, political, and cultural ties with each of the countries, and has long sought to maintain the status quo in the Nagorno-Karabakh conflict. Experts on IranSouth Caucasus relations say that the conclusion of the war reduces Tehran’s regional influence, while others suggest it opens the door to a different type of regional tension due to it bringing Ankara closer 191 Vol. 4 | No. 2 | Winter 2020-2021 BAKU DIALOGUES BAKU DIALOGUES the other hand, offers the region a stake in Beijing’s vision and room for the countries to create their own visions for economic growth and development. The aforementioned review in States News Service and U.S. Federal News finds that Western policymakers recognize this issue in the nature of U.S.South Caucasus relations and why BRI has been well-received. Experts and lobbyists have highlighted a need for the United States to provide countries with economic alternatives to those which are provided through Sino-South Caucasus economic relations. dependence on Russia. The U.S. shifted its main focus from containing Russia in the post-9/11 period in order to balance its global security objectives with other concerns by seeking support for the global war on terrorism and logistical assistance for operations in Afghanistan. Military and security cooperation with Armenia, Azerbaijan, and Georgia—and their participation in NATO’s Partnership for Peace program—increased during this period, commensurate with the aforementioned shift. American economic assistance and infrastructure investments also have been important components of U.S.-Caucasus relations. The Overseas Private Investment Corporation (OPIC) has invested around $1 billion in the South Caucasus. As will be highlighted in the following sections, China’s relations neither compete with nor challenge American economic relations in the region. The only area where some sort of competition exists is in consistency. All three South Caucasus countries have provided valuable support to NATO-led operations by contributing forces to NATO-led missions in Kosovo and Afghanistan and the U.S.-led coalition in Iraq. Terrorism, WMD proliferation, energy security, and protracted regional conflicts are the traditional security agenda items corresponding to each country’s security agenda, while border security, cyber security, and disaster preparedness and response are non-traditional security issues where cooperation with NATO is welcomed. The Atlantic Alliance’s engagement with the region is limited to these areas as well as to working with each country on defense sector reform, military A lack of American consistency in its foreign policy approach toward the region has been a longheld complaint among the South Caucasus countries. Experts highlight the fact that the U.S. has a welldeveloped strategy for Central Asia but is lacking one for the South Caucasus region. China’s BRI, on Vol. 4 | No. 2 | Winter 2020-2021 192 Economic and political development, energy security, and the protracted conflicts are the three key areas of concern for EU member states in the context of the South Caucasus. Georgia is the only country that has openly declared its intent to become an EU member (an unlikely prospect in any reasonable time horizon); both Armenia and Azerbaijan seek only a closer connection to, rather than membership in, the European Union. Experts suggest that the EU is likely to continue playing a minimal role, deferring instead to the U.S., NATO, and the engagement of the EU-3 (France, Germany, and Italy) in a non-EU capacity in promoting relations and advancing both European and transatlantic agendas. education, and training due to divisions within NATO itself and a lack of will among the South Caucasus countries for the Alliance to play a greater role in the region. None of them want to see increased Europe-Russia tensions, which would definitely result from a change in the present role NATO plays. Georgia is the only country with an expressed interest in, and a declared intention to, become a NATO member. Armenia and Azerbaijan have limited their engagement to participation without membership. This is viewed by each, for different reasons, as the best way to counterbalance Russian military and security primacy and transform regional security dynamics. Similarly, as will be highlighted later in the essay, limited military relations with China are seen as simply an attempt to diversify their military partners. EU-Russian relations shape the EU’s engagement (or the lack thereof) as well as member states’ divisions on the EU’s approach to EU-Russian relations. Sino-South Caucasus relations, as will become evident in the next section, are complimentary to both the EaP and ENP, and they neither compete with nor challenge the EU-3’s bilateral relations with countries in the region. Nonetheless, it should be kept in mind that there are European actors who have been working in concert with some U.S. policymakers to counter China’s growing global influence, and this could T he EU’s relations are conducted via its Eastern Partnership program (EaP) and European Neighborhood Policy (ENP). The EaP seeks to provide support in the countries’ transformation process and to bring them economically and politically closer to the EU, while the ENP seeks to promote prosperity, stability, and security in the countries and to the European geography as a whole. 193 Vol. 4 | No. 2 | Winter 2020-2021 BAKU DIALOGUES BAKU DIALOGUES are examined, these concerns just simply appear to be (at least at this time and within this context) nothing more than hyperbole. have a later impact on Sino-South Caucasus relations. C hina is a relatively new comer to the geopolitical jungle of China’s relations with each South the South Caucasus. Beijing has exCaucasus country have grown since pressly stated it has no geopolitical the introduction of the Belt and or geo-economic objectives despite Road Initiative in 2013. BRI aims to claims made by some Western polipromote connectivity, establish and cymakers. Some suggest Beijing instrengthen partnerships with countends to challenge U.S. primacy in tries along the various land and sea global politics; alter the rules-based routes, and facilitate sustainable transatlantic order that has defined development at the domestic, reand managed relations between gional, and global levels by building states since World War II; and use on and advancing its economic power existing economic, to influence counenergy, and transtries’ behavior in The South Caucasus port infrastructure domestic, regional, countries each view Chiand global politics na as a distant, alterna- initiatives. for the purpose A r m e n i a , of advancing its tive major power that has Azerbaijan, and own foreign policy no interest in interfering Georgia have each agenda. A few of in their domestic affairs welcomed BRI them even go so or using them to influence and increased ecofar as to posit that or alter regional or global nomic cooperation Beijing’s economic power dynamics; a potenwith Beijing, with and military or seboth Chinese statecurity relations in tial economic and politibacked and private certain regions and cal counterweight to both investments taking with specific coun- Russia and the West; and place in these countries are a national an actor that has demonsecurity challenge strated its willingness to tries. The South Caucasus countries and/or a potential invest in projects in otheach view China as future threat to rea distant, alternagional and global er countries and regions tive major power security. However, where the conditions are that has no interest when Sino-South not ideal in interfering in Caucasus relations Vol. 4 | No. 2 | Winter 2020-2021 194 their domestic affairs or using them to influence or alter regional or global power dynamics; a potential economic and political counterweight to both Russia and the West; and an actor that has demonstrated its willingness to invest in projects in other countries and regions where the conditions are not ideal (i.e. where there are higher levels of instability). Each country also seeks to diversify its economy and sources of foreign direct investment in order to reduce their economic dependency on some of the major actors, while both Armenia and Azerbaijan seek to diversify their military and security cooperation beyond their traditional partners. As will be highlighted toward the end of this section, regional military and security relations have not yet been a major focus for Beijing in its relations with Baku, Tbilisi, and Yerevan. primarily takes the form of trade and investment. Sino-South Caucasus Economic Relations There is, of course, variation across the countries in the goods traded. For example, in manufacturing goods, 60 percent is traded with Azerbaijan, 20 percent with Armenia, and 19 percent with Georgia. For industrial goods, 47 percent of the trade is with Azerbaijan, 22 percent with Armenia, and 31 percent with Georgia. In consumer goods, trade with Azerbaijan consists of 43 According to Yu Hongjun, China is Azerbaijan’s fourth largest trading partner, third largest export partner; and Georgia’s third largest trading partner. Although its trade with Armenia has stagnated over the past couple of years, China is still among the top five of Yerevan’s trade partners. An analysis of the 2018-2019 ImportExport data available from the Global Trade Database finds that China’s trade relations with the South Caucasus countries consists primarily of trade in manufacturing (62.95 percent), industrial (20.43 percent), consumer (17.58 percent), and agricultural goods (.04 percent). And of that trade, 55 percent is with Azerbaijan while the remainder is split almost equally between Armenia (22 percent) and Georgia (23 percent). I n his aforementioned Baku Dialogues essay, Yu Hongjun writes that there is much potential for economic and development cooperation between China and the South Caucasus countries and for them to combine existing cooperation into a wider framework. Their existing cooperation 195 Vol. 4 | No. 2 | Winter 2020-2021 BAKU DIALOGUES BAKU DIALOGUES L ike in trade, China’s investments in the South Caucasus have increased since 2013. An examination of available open source data on Chinese investments finds that they have specifically targeted projects in manufacturing and energy in Azerbaijan and Armenia; transportation infrastructure in Armenia and Georgia; finance and real estate in Georgia; and agriculture in Azerbaijan. These investments neither pose a real or perceived threat to Western interests in the region nor do they have the potential to alter regional power dynamics or policy behavior. Nonetheless, Chinese investments in energy and transportation infrastructure are two areas where Western policymakers have expressed concern in their public remarks with respect to China’s growing global influence. percent while the remainder is almost equally split between Georgia (29 percent) and Armenia (28 percent). Finally, in agricultural goods, 60 percent is traded with Georgia and 31 percent with Armenia. There was no reported agricultural trade with Azerbaijan. The Chinese leadership has consistently expressed its readiness to both expand the import of high-quality agricultural products from Armenia and help Azerbaijan with its agricultural renovations. Manufacturing goods comprise the majority of the region’s exports to China; and, of the total amount, 37.47 percent consists of natural resources and raw materials. The majority of these exports come from Azerbaijan (68 percent); they consist of mineral, fuels, distillation products, lac, gums and resins, inorganic chemicals, precious metals and isotopes, and copper. Ores slag and ash are also exported to China from Armenia and Georgia. These natural resources and raw materials are important for Beijing’s economic development and are much needed for its continued economic growth. Though the total amount of its imports from the region are relatively small in comparison to what it receives from Asia or Africa, they should be interpreted as part of Beijing’s strategy to diversify and strengthen its trade relations across BRI’s geography. Vol. 4 | No. 2 | Winter 2020-2021 Energy has been a major target for Chinese investment in the BRI countries, including in Armenia and Azerbaijan. A 2018 study conducted by Zhongsu Li, Kevin P. Gallagher, and Denise Mauzerall from the Global Development Policy Center in the United States found that countries falling within the scope of BRI’s geography comprise 48 percent of the Chinese energy investment portfolio covering various technologies including coal, gas, oil, hydro power, wind, solar, and biomass power. In 196 development by targeting business opportunities involved in the construction of bypass tunnels and railway goods, market and commercial facilities, and residential districts. These have included investments in the industrial zones, container cranes, and other heavy equipment needed for construction, management, and operations. In Azerbaijan, Chinese railroad workers contributed to the development and expansion of the Trans-Caspian International Transport route. As Taleh Ziyadov pointed out in the previous issue of Baku Dialogues, China also transferred the technology needed to enhance cargo capacity at the Port of Baku and to strengthen the country’s overall role in regional trade and logistics. In Armenia, Chinese investors enabled the construction of a portion of the North-South corridor connecting Gyumri to the Georgian border. All the countries seek FDI in transportation infrastructure. As the Azerbaijan government has highlighted, interconnectivity will boost development and economic cooperation in the region and enhance the global economy by creating more economic opportunities around the world. Armenia, Chinese investors have targeted thermal nuclear energy production capabilities and discussed the development of hydroelectric and solar capabilities. A focus for Chinese investment in Azerbaijan have been renewable energy including mobile energy stations for Nakhichevan, the dispatching of installation specialists, and the building of greenhouse complexes. Experts suggest the region’s energy imbalance poses future difficulties for ensuring the stability of energy transport. Transportation infrastructure is another area of interest for Chinese investors because of its impact on economic growth. According to Yu Qin of the National University of Singapore, infrastructure investments bring economic prosperity, affect the distribution of economic activities, reduce poverty, and promote economic integration in the targeted country. Chinese investment in the region’s transportation infrastructure has been limited even though Beijing has encouraged investors to play an active role in the construction of BRI transit corridors. Investors have instead concentrated on indirect opportunities surrounding each country’s planned and actual transport infrastructure projects. For example, in Georgia, they indirectly aided the country’s transportation infrastructure C hina’s economic relations with the South Caucasus countries pose no immediate challenge or threat to major powers or 197 Vol. 4 | No. 2 | Winter 2020-2021 BAKU DIALOGUES BAKU DIALOGUES with or challenge each of the major stakeholders’ interests. regional power dynamics, and it is unlikely that growth in them will result in a power realignment or accommodating behavior on their part. A lack of direct investment in Azerbaijan’s transport infrastructure projects is a case in point. DiFour reasons rise to the mind. rect investment by China or a moFirst, Sino-South Caucasus econopoly held by other non-Western nomic relations (at least at this entities could have triggered a time) are relatively insignificant fear that has been raised before by when taking into consideration Western policymakers, namely of the region’s economic relations the potential blocking of key transwith Russia, France, Germany, and port routes and the United States. critical infrastrucSecond, the nature ture (e.g. ports) in of China’s trade China’s economic relathe future, which, relations and in- tions with the South Cauin turn, could vestments comple- casus countries pose no hinder oil and food ment rather than immediate challenge or supplies to core compete with or areas in Eurasia challenge major threat to major powers or and Japan where powers. Third, re- regional power dynamthere is a heavy U.S. gional connectivity ics, and it is unlikely that military presence. through transport growth in them will result This fear, coupled i n f r a s t r u c t u r e , in a power realignment or with the perceived the nature of Eusecurity threat of ro-Atlantic and accommodating behavior on their part. a dominant power Euro-Asian trade in either Europe or linkages, and the Asia setting conditions for Amercomplex webs comprising the ican access to vital natural reSouth Caucasus countries’ bilatsources, have long provoked strong eral economic relations promote resistance to Eurasian connectivity economic and political developfrom some Western policymakers. ment and regional stability. Fourth, China has thus far recognized and Finally, the aforementioned exrespected the complex nature of the amination of material in States region’s power dynamics and ChiNews Service and U.S. Federal News nese investors have been selective indicates that although Sino-South in their investments so that they Caucasus economic relations are complement rather than compete Vol. 4 | No. 2 | Winter 2020-2021 198 and human assets to highlight its growing global security footprint. mentioned, they do not appear, at this time, to be a major concern among policymakers who are concerned about both the rise and economic and political influence of China across the globe. As was highlighted above, Western policymakers have raised concerns about Chinese investments in energy and transport infrastructure, but the nature of those investments in the South Caucasus do not seem to be an issue at this time. Recognition of this and reflection on its potential implications has led some Western policymakers to raise concern over whether its growing military and security roles in specific countries and regions across the globe will challenge and/or replace U.S. military and security primacy. Some have even questioned whether it could potentially challenge Russian military and security primacy in its own area of influence like the South Caucasus; and, if so, whether it would create a degree of regional instability that would necessitate U.S. or NATO intervention. Others experts, including those from the Rand Corporation, argue that because of Beijing’s own “renouncement of military aggression, lack of international allies, and limited power projection capabilities,” it presents neither a direct nor an indirect military and security challenge or threat at this time. As will be highlighted below, Beijing also poses no threat to major power stakeholders in the South Caucasus region. Military and Security Relations C hina has a growing stake in securing its overseas economic and energy interests and protecting its growing diaspora community, particularly given that the security environments where they are located are often plagued by a combination of traditional and non-traditional security threats. Experts highlight Beijing’s armament sales, military-technology and security agreements, and both its military presence in Africa and actions in the South China Sea as signs of its growing military footprint. They also underscore intelligence and satellite communications networks, dual-use ports and infrastructure projects, and the use of private or host-nation security forces to protect strategic commercial China’s military and security footprints in the South Caucasus is relatively light, with its relations being limited to Armenia and Azerbaijan. In Armenia, military relations consist primarily of high-level 199 Vol. 4 | No. 2 | Winter 2020-2021 BAKU DIALOGUES BAKU DIALOGUES Beijing as a potenmilitary-to-military tial alternative milpersonnel meet- Beijing has little to gain itary supplier and ings and limited by entering the geostraweapons sales and tegic security game, and security assistance provider. Beijing, non-lethal technohowever, remains logical assistance. doing so would only rereticent to exSome experts have inforce the fears and pand its militaryproposed the ex- concerns expressed by security cooperpansion of Sino- some policymakers and ation with either Armenian military- experts of a potential country because technological asChina-Russia-Iran axis of the nature of its sistance to include economic relations the creation of that could compete with with both couna joint military- and challenge Western tries, the military industrial center interests and influence in and security role for the production the South Caucasus. played by Russia, of military robots, Turkey, the United drones, and other States, and NATO in the region, military technology. However, and its own relations with these Beijing has not overtly expressed powers. an interest in such an expansion of their relations. Sino-Armenian hus, Sino-South Caucasus security relations consist of secumilitary and security rerity cooperation agreements on lations at this time present no anti-terrorism, cyber security, and military or security challenge to BRI security. In Azerbaijan, relaeither the United States (and by tions consist primarily of military extension NATO) or Russia. As armament sales. Baku has purwas highlighted in the previous chased Chinese-licensed tactical section, the nature of the security weapons from Turkey and a multiple environment in the region is alrocket-launch system that was jointly ready quite complex, given the nadesigned by China and Belarus. ture of relations between the major power stakeholders and each Like Yerevan, Baku has also excountry in the region. Beijing has pressed an interest in expanding little to gain by entering the geomilitary, military-technologstrategic security game, and doing ical, and military-educational so would only reinforce the fears cooperation with Beijing. Both and concerns expressed by some Armenia and Azerbaijan see T Vol. 4 | No. 2 | Winter 2020-2021 200 partners to meet their economic, development, and security needs. policymakers and experts of a potential China-Russia-Iran axis that could compete with and challenge Western interests and influence in the South Caucasus. And the latter itself, as will be recalled, runs contrary to the interests and aims of the region’s countries that do want limited military and security cooperation with the West. As has been highlighted in this essay, Armenia, Azerbaijan, and Georgia look to China—an emerging global power but not a rising power in the South Caucasus region per se—as an alternative source for their economic and development needs. Only Armenia and Azerbaijan have expressed a desire to explore and enhance their military and security relations with Beijing. The level and nature of Beijing’s economic, military, and security relations do not in any way pose a challenge to or threaten to alter the distribution of power in the South Caucasus region. As was highlighted in the first part of the essay, Russia and Turkey are major regional powers and have greater influence on the exercise of economic and military power in the region, and both the United States and the European Union play (lesser) roles in that dynamic. Also, for America and the EU, Russia rather than China remains the larger security concern for the transatlantic bloc, although Turkey appears to be running a close second in some circles (e.g. France). To that end, the limited SinoSouth Caucasus military and security relations should be seen within the larger context of BRI and as part of Beijing’s intention to offer incentives for participating countries and to simply diversify the nature of its relations with them rather than as an intent to compete with or challenge the established major power stakeholders in the region. Navigating the Way Forward T he relative decline of and the role played by America, the ongoing shift from a unipolar to a multipolar system, and the emerging (yet to be defined) new international order resulting from the rise of new and reemerging powers at the regional and global levels have each contributed to small and mid-size states making choices to search for alternative All this means that as long as Beijing’s relations continue to enhance the aims and interests of the region’s major stakeholders and the nature of their relations with the 201 Vol. 4 | No. 2 | Winter 2020-2021 BAKU DIALOGUES BAKU DIALOGUES between Russia and Turkey in North Africa, which has implications for the two competitors in the South Caucasus region, as Svante Cornell discussed in an essay that appeared in the previous edition of Baku Dialogues. South Caucasus countries, then it is unlikely there would be any external coalition formed in the shortterm for the purpose of targeting Sino-South Caucasus relations. A lso, the fact that Beijing is not a rising power in the region per se is an extremely important point to keep in mind, given that much of scholarship examining small and mid-size state behavior in periods of great and major power competition finds that it is the regional rather than the global distribution of power that matters more. This implies that there is unlikely to be any change in the behavior of Armenia, Azerbaijan, and Georgia toward their relations with China under present circumstances. Rather, each are more likely to remain inclined to keep enhancing their respective economic relations with Beijing, given the existing competition between the major Small and mid-size states are stakeholders in different regions. more conscious of the distribuEven if Beijing were to increase tion of power within their vicinity its economic relations with these (i.e. the South Caucasus) rather countries, research by experts finds than the larger region (i.e. Europe, that economic cabroadly underpabilities of a rising stood) or global power (should competition (i.e. Each South Caucasus Beijing reach that U.S.-China global country views its parlevel in the South competition). ticipation in BRI—as Caucasus in the Beijing has also future) are not demonstrated its well as its bilateral realone sufficient to reticence to get in- lations with China—as generate a change volved in regional an opportunity to bring in small and middisputes, as was greater development to size state behavior. demonstrated both themselves, prosperity to Rather, it is only a by the July four-day threat to their seflare-up in and their own people, and encurity that is likely around Nagorno- hance the strategic role of to induce such a Karabakh and the their region to the global change, whereby Second Karabakh economy. they turn to the War; and tensions Vol. 4 | No. 2 | Winter 2020-2021 202 leaders and policymakers of the South Caucasus have proven themselves to be adept in navigating great power competition at both the regional and global levels; so even if some aspects of their relations with China—such as those that have been raised as a concern by some Western policymakers—are targeted in the future, they are likely to navigate the conflictual currents with expertise and sophistication. Nonetheless, they should be cognizant of, and plan for, ways to overcome any points of tensions in the future. The shifting world order itself and the uncertainty that it brings will require both character and courage; for the future of the South Caucasus will be determined by how its statesmen and stateswomen weather the storms of global, regional, and domestic uncertainty. BD state or a coalition of states that can best provide for their security. Each country’s behavior will continue to be situationally determined. T he bottom line is that the economic, development, and security needs of Armenia, Azerbaijan, and Georgia will almost certainly continue to be defined and dictated by the nature of their relations with the region’s major stakeholders. Looking ahead, this will certainly include China. Each South Caucasus country views its participation in BRI—as well as its bilateral relations with China—as an opportunity to bring greater development to themselves, prosperity to their own people, and enhance the strategic role of their region to the global economy. The bakudialogues.ada.edu.az 203 Vol. 4 | No. 2 | Winter 2020-2021