There have been noticeable attempts in recent International Relations scholarship to introduce the concept of ‘hedging’ as an alternative to ‘balancing’ and ‘bandwagoning’. This article argues that to be useful in the analysis of great power politics hedging should not be understood as an alternative to balancing or bandwagoning, but as a phenomenon of a different order. In contrast to balancing or bandwagoning, which describe great powers’ behaviour in response to system-level forces, hedging denotes interstate political matters unfolding at the unit and regional levels. The analysis of China–Russia relations supports this understanding. Both great powers are strategically on the same page with respect to resisting unipolarity and other global political issues, but their strategies often diverge with respect to purely bilateral relations, or policies in their salient geographic environments. This two-level nature of China–Russia relations—balancing the Unipole while hedging towards one another—suggests that their global strategic behaviour and regional bilateral interactions are subject to different causal forces that push in different directions. The former is a reaction to system-level pressure, whereas the latter is a result of multiple unit-level factors. Therefore, in the analysis of great power relations, hedging occupies a specific rung on the ladder of levels of analysis.
Introduction: Hedging Research Programme and China–Russia Relations
The term ‘hedging’ has been introduced as an alternative to the well-known ‘balancing’ and ‘bandwagoning’ in the recent International Relations (IR) literature to describe the post-Cold War behavioural patterns of smaller Southeast Asian states,1 great powers such as China, Russia, the United States, and India,2 and major European powers.3 One of the main attributes of ‘hedging’ is that it consists in counteracting policies. It represents an ‘engage-and-resist strategy’4 that is simultaneously a mix of ‘balancing/containment and engagement’;5 of ‘cooperation and competition’;6 of ‘risk contingency’, which may take shape of indirect balancing; and ‘return maximization’, which may turn into limited bandwagoning.7 Hedging, therefore, implies inherently contradictory or opposing actions.
The hedging research programme remains underdeveloped, largely due to difficulties in isolating the standing empirical content of ‘hedging’, and the consequently confusing overlaps between it and other related terms describing various patterns of state behaviour. Hedging has been presented as possessing attributes, for example, of ‘indirect’ or soft balancing’,8 ‘limited bandwagoning’,9 ‘realist-style balancing’,10 ‘low-intensity balancing’, or simply ‘balancing’.11 Conceptualization of hedging, therefore, follows the logic of adding adjectives to the existing international relations terms to grasp certain characteristics that distinguish hedging from balancing or bandwagoning. This blurs meaningful boundaries between hedging and other types of state behaviour, making hedging a classic example of conceptual stretching.12 Currently, hedging can at best be considered an ‘umbrella concept’13 of multiple dimensions, open to multiple understandings and interpretations. This is particularly the case with respect to the analysis of great power relations, which are multipronged and multilayered. Such conceptual ambiguity and overlaps with other terms make defining and theoretically justifying the type of independent variables one must focus on to explain hedging behaviour problematic.
So far, conceptualization has been carried out by placing hedging somewhere between or on the same level as balancing and bandwagoning. According to Goh, hedging is a set of strategies that ‘cultivate a middle position that forestalls or avoids having to choose one side at the obvious expense of another’, and ‘refers to any behaviour that sits in between balancing and bandwagoning’.14 According to Kuik, hedging is conceived as a ‘multiple-component strategy between the two ends of the balancing–bandwagoning spectrum’.15 Tessman and Wolfe conceptualize strategic hedging as an approach that allows the addressing of a wider range of strategies wider than hard balancing, but which at the same time has a strong connection to the structure of the international system.16 Hedging, according to them, is of lower intensity than balancing, because it ‘stops short of formal military coalitions aimed at the system leader (external balancing) or extensive military build-ups (internal balancing)’. Balancing, in other words, is an ‘upper limit’ for hedging, whereas its lower limit is simply a behaviour that is ‘strategic’, that is to say, involves a priority issue area for a hedger, and coordinated at the highest level of government.17 Tessman later presented hedging as an alternative to balancing, bandwagoning, and buck-passing, and further tried to conceptualize it as driven by system-level forces.18 Given the general lack of consensus in the IR field on definitions, adding hedging as a nuanced modification of either balancing or bandwagoning creates empirical problems as regards both its identification and explanation.
This article attempts to enhance the understanding of ‘hedging’ in great power politics by relating it to the issue of levels of analysis in IR theory. The purpose is to identify the right type of causal forces that most affect hedging. Instead of placing hedging somewhere between balancing and bandwagoning or attaching it to either end of the balancing-bandwagoning continuum, this research argues that hedging is most useful if removed from the system level and tied more closely to regional (interactional) or unit-level independent variables.
To illustrate this assumption empirically, this article explores the case of the China–Russia strategic partnership, with special emphasis on Russia’s policies towards China.19 The literature on China–Russia relations is impressive for its striking diversity of assessments, which range from some form of alliance or alignment to competition or even rivalry. The article demonstrates that the elements of behaviour described in the literature as ‘hedging’ occur mostly at the regional or country-to-country interactional level, and that they are subject to domestic circumstances or situations in the two countries’ salient geopolitical environments. In contrast, China and Russia’s recent attitudes and policies towards major global political issues, including the post-Cold War American unipolar domination, largely coincide, resembling what structural realists have called ‘balancing’, and which are better explained by the structural pressure of the unipolar system.
The two-level nature of China–Russia relations—consensus on global issues and teaming up to balance against the system leader on the one hand, and elements of hedging towards one another at the regional level of interaction on the other—suggests that the key difference between balancing and hedging is that the former is a system-level phenomenon related to macro transformations of polarity whereas the latter is a unit-level policy better explained by independent variables other than systemic pressure. In other words, the two levels of China–Russia relations are best explained by referring to causal forces residing at different levels of analysis. This observation agrees with the structural realist statement that ‘international politics’, understood as a change of patterns of polarity, and explained by the distribution of power within the system, is not the ‘foreign policy’ undertaken by states on a daily basis and affected by multiple non-systemic state-level causes.20
The article is organized as follows. The Section ‘Levels of Analysis in IR and Hedging’ redefines hedging by locating it along the levels of analysis, showing that it is logically a better fit with the unit level than the system level of analysis. The Sections ‘Systemic Balancers: Unipolarity and China–Russia Strategic Alignment’ and ‘Regional Hedgers: Unit-Level Forces and China–Russia Interaction’ constitute empirical proof of this assumption. The Section ‘Systemic Balancers: Unipolarity and China–Russia Strategic Alignment’ provides evidence of systemic balancing by both China and Russia against the system leader, showing that although there is no formal alliance at the global level, China and Russia form a team of closely cooperating partners that, when necessary, are ready to support, directly or indirectly, one another’s standing vis-à-vis the United States. There is, therefore, no mutual hedging in the Chinese or Russian grand strategies. The Section ‘Regional Hedgers: Unit-Level Forces and China–Russia Interaction’ descends to the regional level of China–Russia interaction and shows that this is the level at which hedging exists. The section focuses on three cases of regional bilateral politics: the policies of China and Russia in the South China Sea dispute, particularly Russia’s arms exports to Vietnam; China–Russia interaction in Central Asia, which Russia considers a sphere of traditional interests; and the strategies of the two countries in the Arctic. The discussion shows that although the cooperation dimension is strengthening there are elements of hedging that are better explained by non-systemic factors. The last Section ‘Regional Hedgers: Unit-Level Forces and China–Russia Interaction’ concludes by further clarifying hedging as a regional-and-unit-level phenomenon and suggests directions for future research.
Levels of Analysis in IR and Hedging
There have been attempts in discussion of great power relations to tie hedging to system-level independent variables. Tessman and Wolfe tried in their analysis of hedging to build upon the foundations of traditional balance of power theory and develop an approach that ‘maintains a structural emphasis while accounting for the lower intensity, non-military strategies that second-tier states will favour under conditions of unipolarity’.21 They therefore attempted to explain the hedging strategy of second-tier great powers (dependent variable) by the structural pressure of the international system, i.e. by polarity, as Kenneth Waltz explained the emergence of balancing and restoration of the balance of power.22 In other words, they attempted to present their ‘theory of hedging’ as a ‘theory of international politics’ rather than as a ‘theory of foreign policy’. However, ‘hedging’ was in fact conceptualized as a policy or state behaviour applicable to an issue area of major national security concern, e.g. stable delivery of oil or gas, rather than an international outcome such as balance of power.
The rationale behind pushing the analysis of hedging to the system level is not clear. Why make hedging, which stands for state behaviour in certain areas and consists of contradictory or opposing actions, a system-level theory? There are already many concepts working at the system level, and increasing their number is not particularly helpful for rigorous theorizing. At the same time, there is a lack of concepts describing regional foreign policy phenomena—patterns of foreign policy better explained by variables other than the structure of the international system. Moreover, to push hedging to the system level means trying to explain versatile and kaleidoscopic day-to-day policies of states through remote systemic variables that do not conform to the original logic of structural realism. Considering hedging within the context of the levels of analysis may help clarify the issue.
Kenneth Waltz, in his classic work Man, the State and War, created ‘three images’—of man, the state, and the international system—which became a typology for various explanations of the causes of war with respect to units of analysis.23 Each unit of analysis that Waltz presents reflects the key independent variable used in theorizing specific causal relationships. Thus, according to the first image, human nature or individual behaviour is the cause of war among states. If the second image is accepted, the improper internal constitution of a state is the cause. The third image states that the anarchy of the international system is the cause of war among states.24 Explanatory variables, therefore, can be located at the level of ‘international system’, ‘states’, or ‘individuals’, or viewed as a combination of all three.
Walt's three-level ladder is not the only one in IR studies,' or 'Walt's three-level ladder is not the only levels-of-analysis ladder in IR studies.25 Singer, for example, discerned only two categories (nation-states and the international system) and excluded the individual.26 Wolfers also proposed two levels of understanding international relations, but his comprise states and individuals, similar to Waltz’s first and second images, and leave out the international system.27 Banks argues that international relations should be understood from two points of reference—the individual person and the whole global system28—which resembles Waltz’s images one and three. Rosenau agrees with the three-level framework, suggesting three parameters of world politics, one of which operates at the micro level of individuals, one at the macro level of collectivities, and one that is a mix of the two.29 Hollis and Smith suggest four levels, those of the international system, nation state, bureaucracy, and individual.30 Goldstein suggests that, in addition to the levels of individual, state, and international system, there is also a ‘world level of analysis’ that is distinct from the international level. He argues that the international level consists of the interactions of separable units (sovereign nation-states), whereas the world level consists of a single holistic system whose parts are mutually constituted rather than separable.31
More recently, Mouritzen and Wivel also highlighted a distinction between system-level and ‘interstate level’, so creating a three-fold framework of system, interstate, and intrastate (unit) levels. The system level coincides with Waltz’s third image (system); the intrastate or unit level intends to open the state black-box, and combines Waltz’s image one (individual) and image two (state and its domestic politics). The ‘interstate level’ of analysis, in turn, refers to immediate geopolitical interests in a state’s salient environment; ‘each state faces a specific and stable salient environment rather than the international system as a whole’.32 Therefore, with respect to explaining states’ behaviour at a particular time and place, Mouritzen and Wivel believe that the crucial factors are more likely to reside in this salient environment than in the attributes or developments of the international system as a whole.
What is particularly important about the levels of analysis is not that they vary in different works but that each level has its strengths and weaknesses in explaining different types or levels of great powers’ policies. As Singer states, ‘the responsible scholar must be prepared to evaluate the relative utility – conceptual and methodological – of the various alternatives open to him and to appraise the manifold implications of the level of analysis finally selected’.33 Given that the external behaviour of great powers is multilayered, it is quite possible that system-level variables best explain great powers’ grand strategies towards fundamental world politics issues, such as polarity, hegemony, the role of international institutions, or general views concerning their own role in the international system, and what such a system should look like. ‘Interstate’ or ‘intrastate’ levels, in turn, best explain states’ day-to-day policies, agreements and disagreements, minor contradictions and cooperation, or diversification of trade partners in the states’ salient geopolitical environment.
Indeed, according to Waltz, structural realism best explains international outcomes and general modes of great power behaviour (balancing/bandwagoning), although not states’ policies in a particular place and at a particular time. In his Theory of International Politics, Waltz moved away from the three-level framework and focused exclusively on the third image (international system), considering that the other two are insufficient for explaining great power politics.34 At the same time, however, he introduced some important qualifications to his structural theory. Namely, he emphasized that structural realism postulates only that balances disrupted will one day be restored, and does not claim to predict when and how. ‘Of necessity, realist theory is better at saying what will happen than in saying when it will happen … because international political theory deals with the pressures of structure on states and not with how states will respond to the pressures [emphasis added]. The latter is a task for theories about how national governments respond to pressures on them and take advantage of opportunities that may be present.’35 In other words, structural realism is a theory of systemic patterns of international politics which does not explain the plethora of day-to-day agreements and disagreements between states over certain issues. The key parameters of structural realism—relative power and security—alone cannot explain the varied motives and acts of states, particularly powerful ones with ample international opportunity.36 Thus, system-level approaches do not claim to explain particular interactions between states.
Which of the abovementioned levels best explains ‘hedging’? This article argues that system-level variables best explain balancing, whereas hedging, which consists of simultaneous engagement and containment, is best explained by variables on a level lower than the systemic level and relate more to regional (interstate according to Mouritzen and Wivel, or international according to Goldstein) and intrastate or domestic politics.37 There are two reasons—one theoretical and one empirical—for this statement.
The theoretical reason is that, given the existing definitions of hedging, which highlight its internally opposing ‘engage-and-resist’ nature, the role of remote systemic factors in explaining hedging is at best indirect. As mentioned above, the root definition of hedging combines engagement with indirect balancing; cooperation with competition; engagement with soft balancing; balancing and bandwagoning; and other, but similar, pairs of opposing dimensions. Medeiros, for example, argued that hedging involves the pursuit of policies that ‘on the one hand, stress engagement and integration mechanisms, and on the other hand, emphasize realist-style balancing in the form of external security cooperation … and national military modernization programmes’.38 Nadkarni, analysing interactions and partnerships of second-tier great powers such as China, Russia, and India, talks about ‘neither classic balancing nor bandwagoning’ but instead of ‘engage-and-resist’ hedging strategies as routine policies responsive to domestic and regional environments.39 For example, as Russia or India develops closer ties with China, their mutual partnership ‘serves as a hedge for each in the event of a downturn in their respective ties with China’.40 This symbiosis of containment and common pursuit of mutual interests, which is the ‘how’ of government behaviour, is what makes presenting hedging purely as a result of systemic pressure problematic, because this would mean explaining, by the same variable, both balancing and bandwagoning by the same state, towards the same state, and at the same time.
The result is a situation wherein both evidence of a phenomenon (balancing in all shades) and its counter-evidence (bandwagoning in all shades) are explained by one causal force. In this situation, rigorous explanation of hedging and the crystallization of key causal variables become impossible, because there is always some evidence that will prove the role of the system. The apparently good fit can always be found, and any point of view can be asserted through a rational actor’s reconstruction of the presumed motives of the state’s behaviour. The assumption that a system-level cause pushes a great power occupying a structural position in the contradicting directions of balancing and bandwagoning makes system-level explanations useless. For example, if the unipolar configuration of the modern world with the US as the system leader holds, China and Russia cannot, at least in theory, be pushed by such a system towards both aligning with one another against the unipole and at the same time containing one another. If a systemic cause does both at the same time, establishing causality becomes impossible and all systemic theories become unfalsifiable, because any evidence will fit well with the theory.
As noted by Mouritzen and Wivel, structural realists diverge on whether second-tier powers should be expected to either bandwagon with the system leader or balance against it.41 Thus, according to Waltz, second-tier states are prone to worry about their safety in the unbalanced international system, and to start taking actions to balance against the unipole.42 Others argue that states are prone to bandwagon with the system leader.43 Given that realism is a parsimonious theory insensitive to national intrastate or geopolitical conditions, one would expect a uniform behaviour that is either balancing or bandwagoning. The double-sided nature of hedging and the simultaneous presence of two opposing sides within it make it incompatible with either version of realism. Cooperation, engagement, or some form of bandwagoning between two or more second-tier great powers in a joint attempt to resist the system leader would contradict the second version of realism. Conversely, mutual containment, resistance, or balancing between such powers, would contradict the Waltzian version. Therefore, to explain hedging through system-level variables is problematic.
Figure 1 summarizes the above discussion and locates hedging on the levels of analysis ladder (the bottom horizontal axis) and among major IR theories (the top horizontal axis), and identifies the primary independent variables (the left vertical axis).44 The figure suggests that most explanatory power for hedging resides at the state and interstate levels of analysis, with reference to regional geopolitical and domestic variables.
The empirical reason for such an approach to hedging comes from observation of the relations between two great powers other than the system leader—China and Russia. There have been disagreements concerning the nature of post-Cold War China–Russia relations. Some called China–Russia rapprochements a Rapallo-style anti-West pact45 or a deliberate attempt to reduce America’s influence. Others had deep doubts about the future of the China–Russia strategic partnership46 or declared its ‘sunset’.47 Still others seem to fall in between in carefully calling China–Russia relations a ‘limited defensive strategic partnership’.48 These theoretically non-specified and conflicting depictions reveal the disagreements concerning the nature of post-Cold War China–Russia relations—as if certain forces are simultaneously pushing this relationship in opposite directions.
This article argues that these works disagree with one another because they talk about phenomena occurring at different levels of China–Russia interactions. The analysis below reveals that China–Russia relations form a two-level pattern: a strategic consensus on the global scene coexists with a more complex pattern of interaction involving both common interests and clashes of interests at the regional level.49 The discrepancy between China and Russia’s global strategies on the one hand and their regional interactions on the other suggests that the latter are affected by forces other than the pressure of polarity.
Systemic Balancers: Unipolarity and China–Russia Strategic Alignment
According to structural realism, the world should balance against American hegemony. Waltz argues that hegemons that possess predominant positions in the global distribution of power inevitably cause other states to worry about their safety in the unbalanced international system. Such other states, therefore, either concentrate efforts on increasing their capabilities (internal balancing) or on trying to realign with other second-tier states (external balancing). This happens regardless of whether or not the hegemon manages to control and restrain itself, or seeks to maintain its pre-eminence by employing strategies based more on benevolence than coercion.50 More recently, it has been argued that the temporary lack of hard balancing against the US does not mean that balancing coalitions will never form, as it can certainly be imagined that the United States may behave in a way that threatens the interests of other great powers and eventually provoke a balancing coalition.51
Current China–Russia–American relations fit neatly into this logic. In the post-Cold War world, and particularly over the past 5–10 years, the United States’s policies have not only caused both China and Russia to start balancing internally by increasing military spending, but also induced the China–Russia comprehensive strategic partnership.
When confronting Russia, the US led the eastward expansion of The North Atlantic Treaty Organization (NATO) and imposed on the country multiple restrictions and sanctions. When it became clear that the eastward expansion of NATO and the EU would not cease unless drastic measures were undertaken, Russia reacted forcefully through individual acts of hard balancing, such as the Russian–Georgian War of 2008 and intervention in Ukraine in 2014. China, in turn, faces American policies of encirclement in the form of the ‘American pivot to Asia’. The latter is a strategy of containing China in the Pacific using Japan, Taiwan, South Korea, and the Philippines, and which the Chinese view as a direct threat to China’s national security. China was also faced with US-led isolation when the country was not included in the Trans-Pacific Partnership (TPP) agenda. Moreover, recent events in the South China Sea demonstrate increased levels of confrontation with the United States.
In this context, President Putin has repeatedly stressed that Russia’s economic future lies with China, which is on track to surpass the United States as the leading global economic power. As Ruslan Pukhov, head of the Centre for the Analysis of Strategies and Technologies in Moscow stated, ‘We have powerful enemies but we don’t have powerful friends, that’s why we need the support of such a giant as China’.52 China, in turn, reciprocates Russia’s attempts to build closer political economic and military links, and turns to Russia for broader cooperation. The two countries are moving rapidly from limited economic links to a comprehensive strategic and economic partnership that can be expected to change not only the profile of China–Russia bilateral relations but also the power architecture of the entire Eurasian continent and the world as a whole.
China–Russia relations now represent a pattern of bilateral relations wherein the two countries emphasize issues that bring them together and at the same time avoid potentially contentious areas. As Portyakov noted, this model of interaction has allowed Moscow and Beijing to move, within two and a half decades, from ‘good-neighbourliness’ to ‘constructive cooperation’, and further to a ‘comprehensive strategic partnership’. This has generated a self-sufficient China–Russia strategic partnership mechanism and strengthened its sustainable immunity against all sorts of perturbations.53 A number of factors have implied the anti-unipolar nature of this partnership. Among them are common attitudes and reactions to unipolarity, such as to the American National Missile Defence (NMD) programme; responses to recent major crises in the Middle East and the post-soviet space; and joint initiations within existing, or creation of new, international institutions as an alternative to US-led institutions.
China and Russia never embraced unipolarity and have signed multiple joint declarations emphasizing the necessity for cooperation in promoting the multipolarity principle.54 Against the backdrop of the war in the Balkans, the US withdrawal from the Anti-Ballistic Missile Treaty (ABM) treaty, the growing American military presence in Central Asia, the US invasion of Iraq, and its plans to deploy a missile defence system in Eastern Europe, anti-unipolarity sentiments in both China and Russia have increased. In 2001, the two countries signed the ‘Treaty of Good Neighbourliness and Friendly Cooperation between the People’s Republic of China and the Russian Federation’ which became the foundation of a bilateral strategic partnership, and carries strong features of an alliance treaty.55 On May 23, 2008, Russia and China issued the ‘Joint Statement of the People’s Republic of China and the Russian Federation on Major International Issues’, which expresses explicit support for such multilateral formats as Russia–India–China and, in particular, BRICS (Brazil, Russia, India, China, and South Africa), that run counter to the US-led unipolar world.56
In his speech on October 24, 2014 at the Valdai international discussion club in the city of Sochi, President Putin reconfirmed Russia’s conviction that a unipolar world is not sustainable, saying, ‘A unilateral diktat [of the U.S. and its allies] and imposing one’s own models produces the opposite results. Instead of settling conflicts, it leads to their escalation; instead of sovereign and stable states, we see the growing spread of chaos; and instead of democracy, there is support for a very dubious public ranging from open neo-fascists to Islamic radicals.’57 Two years earlier, Xi Jinping selected Russia as destination of his first foreign trip after officially taking office. In a speech he delivered at the Moscow State Institute of International Relations about the importance of the China–Russia strategic partnership he stated, ‘Strong China-Russia relations not only answer to our interests but also serve as an important, reliable guarantee of an international strategic balance and peace’.58 Xi also became the first foreign leader to visit the Russian military command centre in Moscow.
Another issue regarding Russia and China’s shared concerns, which can be traced back to the 1990s, is that of the American NMD programme. Although Russia’s position was less consistent in the early 2000s upon Putin’s assumption of power, resistance against American NMD has nonetheless been an area of sustained China–Russia cooperation. During Putin’s state visit to Beijing on July 17–18, 2000, the two sides signed The Beijing Declaration and The Joint Statement on The Anti-Ballistic Missile Treaty, according to which China and Russia share deep concern about the US’s plan to build NMD, which is prohibited by the ABM treaty, and believe that the ‘true goal of such a policy is to seek unilateral military and security dominance that will pose the gravest, adverse consequences to the security of Russia, China, other states, to the global stability, and the United States itself’.59 The two countries also urged Washington to adhere to the ABM Treaty, warning that not doing so ‘would trigger a new arms race and lead to an about-face in the positive trends that appeared in world politics after the end of the Cold War’.60
They also agreed that an analysis of current international realities reveals that the use of the alleged ‘missile threat’ to the US by ‘some countries’ as justification for the new NMD is ‘totally unjustified’.61 On May 23, 2008, then Russian President Dmitry Medvedev and his Chinese counterpart Hu Jintao reinstated the shared view on international issues in general and American NMD in particular by signing a Joint Russia–China Declaration on Major International Issues. It stated that, ‘the creation of global missile defence systems and their deployment in some regions of the world … does not help to maintain strategic balance and stability and hampers international efforts in arms control and nuclear nonproliferation’.62 China and Russia, therefore, have persistently considered American missile strategy as running counter to their common strategic interests, and put forward common positions on the issue.
Trade between China and Russia almost doubled over the past six years.63 On May 21, 2014, the two countries signed a $US 400 billion gas megadeal that includes large-scale infrastructure projects tying China and Russia together for the foreseeable future, and which increases Russia’s geopolitical leverage vis-à-vis the West.64 On top of that are multiple trade contracts and projects in the financial sector aimed at reducing the impact of the dollar as the major international currency.65
China and Russia are also strengthening mutual military ties. On July 5–12, 2013, warships from the Russian Pacific Fleet and the China’s PLA Navy North Sea Fleet participated in ‘Joint Sea 2013’ exercises in Peter the Great Bay, the largest naval drill the PRC navy has ever undertaken with a foreign navy.66 In May 2015, the Russian and Chinese navies conducted their first joint naval exercises in the heart of NATO—the Mediterranean.67 This entailed China and Russia setting up a joint command centre in Russia’s Black Sea port of Novorossiysk, which Chinese vessels entered before heading out with Russian ships to the Mediterranean.68 Such a military visit to Novorossiysk was also the first in the history of China–Russia relations, and symbolically linked to Xi Jinping’s attendance of the Victory Parade in Moscow on May 9, 2015. This extended visit turned the event into a China–Russia joint celebration of the defeat of Nazism, featuring Chinese soldiers marching in Red Square, despite many western leaders having turned down Russia’s invitation to join in due to disagreements over the Ukraine Crisis. Given the context of deteriorating relations between Russia and the West, China’s joining Russia on 9 May and the extended military cooperation between the two countries undoubtedly sent a strong message to the rest of the world.
The two countries also became a coalition in the UN Security Council, having jointly vetoed four US-backed resolutions on Syria—on October 4, 2011; February 4, 2012; July 19, 2012; and May 22, 201469—that thwarted the joint efforts of the U S, France, the UK, Germany, and Portugal to topple the Assad regime. The US and its allies lambasted the vetoes and accused Moscow and Beijing of buying time for President Assad.70 Susan Rice, US ambassador to the UN, stated that the United States was ‘outraged’ and ‘disgusted’.71 Hillary Clinton intimated that Russia and China would ‘pay the price’ for supporting Assad.72 According to UN envoys, efforts by the US and its allies to impose sanctions on Syria were meeting ‘fierce resistance’ from Russia and China.73 Moscow and Beijing, in turn, argued that the resolutions the West suggested contained measures against Assad but not against his armed opponents. Russian Foreign Minister Sergei Lavrov, for example, said, ‘Unless you do it both ways, you are taking sides in a civil war.’74 Beyond the UN Security Council, in the period 2006–2012 (China had to leave the UN Human Rights Council after its first six years, in compliance with the Council’s rule applicable to each member state in this regard), throughout a total 120 voting occasions, China was never on the same side as the US. There was, however, a 99% rate of agreement between China and Russia—another example of a Russia–China axis within the UN.75
China also never took an anti-Russian stance over Russia’s behaviour during both the Russian-Georgian war of 2008 and the Ukraine Crisis of 2014. Russia, in turn, never criticized China’s assertiveness in the South China Sea and elsewhere. In fact, when Russia faced isolation and sanctions from the US and its allies due to the Ukraine Crisis, China not only opted not to support the West’s anti-Russia campaign and avoided joining anti-Russian sanctions, but rather, in contrast, responded with a willingness to expand economic and strategic cooperation with Russia. In addition to the abovementioned gas megadeal, the two countries strengthened cooperation in other spheres and formats, so frustrating the efforts of the US and its allies to isolate Russia and intimidate China in the South China Sea.
The two countries reached agreements on the joint design and production of a wide-body non-military aircraft, signed during Premier Li Keqiang’s visit to Moscow, and joint construction of a large military helicopter, signed by Xi Jinping and Putin in May 2015, when Xi attended the 9 May Victory Parade. In 2014, the central banks of Russia and China reached agreement on a foreign-exchange swap worth RMB150 billion. Chinese investments in the territory of the Russian Federation grew substantially, and the two countries agreed to build a high-speed railroad from Moscow to Kazan.
Russian Foreign Minister Sergei Lavrov noted in his speech of November 22, 2014, on the development of Russia’s comprehensive partnership with China, ‘Important bilateral decisions have been taken, paving the way to an energy alliance between Russia and China. However, there is more to it. We can now even talk about the emerging technological alliance between the two countries. Russia’s tandem with Beijing is a crucial factor for ensuring international stability and at least some balance in international affairs, as well as ensuring the rule of international law.’76 Some on the Chinese side expressed hopes that accelerated development of economic ties between China and Russia would help the two countries consolidate their strategic partnership, thus helping them ‘to protect their vital interests and support the global balance of power’.77
Russia and China also enhanced cooperation within multilateral formats such as the Shanghai Cooperation Organization (SCO) and BRICS. On July 15, 2014, the two countries established an agenda for the BRICS Development Bank (New Development Bank) and a reserve currency pool, called the Contingent Reserve Arrangement (CRA), equal to $US100 billion. Headquartered in Shanghai, the Bank represents an eloquent attempt to break the dominance of the US dollar in global trade, as well as dollar-backed institutions such as the International Monetary Fund (IMF) and the World Bank, both of which are US-led institutions within which BRICS countries have little influence. The China–Russia relationship has thus become a major driver in fleshing out new international ‘non-Western’ structures.
Particularly important is Xi Jinping’s personal support for President Vladimir Putin, which he consistently provided in the course of their six meetings in 2014—in Sochi, Shanghai, at the SCO summits in Dushanbe, the BRICS in Fortaleza, the G20 in Brisbane, and APEC in Beijing.78 Moreover, by sitting beside Putin in Red Square during the Victory Parade, Xi Jinping made clear to the world that China emphatically does not bow to Western pressure on Russia but rather, amid the complex geopolitical milieu, sides with Russia.
To summarize, at the global level, the China–Russia comprehensive strategic partnership stands strong and immune to crises in Russian–Western relations. In fact, disagreements with the West, particularly the United States, facilitate elevation of the China–Russia strategic partnership to new levels. Both countries consistently emphasize their willingness to consolidate mutual strategic confidence, deepen the mutual benefits of bilateral cooperation, and strengthen coordination and interaction in global affairs. These steps reveal a pattern of systemic balancing against the Unipole, albeit one short of a formal military alliance.79 Although some of China and Russia’s specific interests may diverge, their strategic tandem is becoming a key factor of current world politics.
Regional Hedgers: Unit-Level Forces and China–Russia Interaction
At the same time, however, the interstate (regional) level teems with difficulties, agreements and disagreements, all of which fit the concept of hedging. Both China and Russia have attempted to enter into some type of strategic partnerships with minor regional states, compete for resources in their salient environments, or engage in the military modernization of smaller states with which they have different—even conflicting types of relations. There has been a stealthy geopolitical competition of moderate intensity wherein both China and Russia have attempted to expand the scope of their respective regional influence.
This competition, however, does not undermine China–Russia alignment at the global level. It results from domestic or regional circumstances and utilizes the abundant international opportunities open to powerful states such as China and Russia. Having structural positions within the international system, both enjoy a considerable degree of freedom as regards foreign policymaking at the regional level. This explains why the logic of their bilateral regional interactions is at odds with their behaviour in response to the overall systemic pressure. Three cases that stand out as hedging are Russia’s policies towards Vietnam, China–Russia discordances in Central Asia, and the behaviour of the two countries in the Arctic.80
In all three cases, China and Russia are hedging against what are in their respective views undesirable regional outcomes, and for which they employ a specific combination of policies that constitute a hedge. At first sight, Russia has longstanding interests in each instance that might have no bearing on Chinese behaviour. However, the recent rapid rise of China and expansion of its strategic and economic interests into the explored regions result in a situation wherein China–Russia regional competition increases and both countries must hedge against mutually posed potential economic and security risks.
The South China Sea Dispute and Russia’s Arms Exports to Vietnam
The South China Sea territories have been a cause of territorial disputes for centuries, and involved multiple players. The most serious troubles in recent tensions over maritime territory, however, are those that have flared up between China and Vietnam. China claims a large area, defined by the ‘nine-dash line’ which stretches hundreds of miles south and east of China’s Hainan province. The Chinese authorities state that China’s right to the disputed area goes back centuries to when the Paracel and Spratly island chains were considered integral parts of the Chinese nation. Vietnam, in turn, angrily disputes China’s claims, arguing that it has had de facto rule over both the Paracels and the Spratlys since the 17 century. Over the past five years, the China–Vietnam confrontation has increased dramatically and often reached a near-conflict level.
In this context, Russia–Vietnam energy and military ties grew considerably and, as some noted, disgruntled Beijing, adding a layer of complexity to the regional security web.81 In 2012, Russia’s state energy giant Gazprom signed a deal with Vietnam on developing two gas projects in the Vietnamese continental shelf in the South China Sea. Despite Beijing’s requests that it leave the area, Gazprom took a 49% stake in the offshore blocks that hold an estimated 1.9 trillion cubic feet of natural gas and more than 25 million tons of gas condensate.82 At the same time, Russia stepped up military–political cooperation with Vietnam and considerably increased its arms sales to the country. The Vietnamese Defence Minister hence called Russia, ‘Vietnam’s leading strategic partner in the sphere of military-technical cooperation.’83
To protect Russia–Vietnam energy projects in the South China Sea, Russia expressed in 2012 an interest in regaining a naval base in Cam Ranh Bay, and has been helping Vietnam build a submarine base and repair dockyards there. November 2014 saw the signing of an agreement that considerably simplified the Russian Navy’s use of this naval facility. Moreover, Hanoi has become one of the major customers for Russian advanced weapons, primarily submarines and planes. Deals include selling to Vietnam six advanced Varshavyanka-class submarines,84 which can conduct anti-submarine, anti-ship, and general reconnaissance patrols in the relatively shallow waters of the South China Sea, and 12 new Sukhoi Su-30MK2 multirole fighter aircraft that can target ships as well as aerial and ground targets, two Gepart-3 frigates, and two K-300P Bastion-P coastal defence missile systems. These and many other purchases from Russia undoubtedly enhance Vietnam’s defence capabilities and, as some argue, ‘will almost certainly be deployed to protect Vietnamese interests in the South China Sea’.85 Moreover, the two countries concluded a military cooperation pact in 2013 that would formalize Russia–Vietnam defence cooperation and stimulate confidence building through opinion and information exchanges. Beijing has been unhappy with these developments, calling them ‘unrighteous’, because Russia–Vietnam energy, military, and political cooperation gives Vietnam confidence sufficient to extend energy exploration into contested areas, and even to start territorial reclamations in the South China Sea.86
Russia, therefore, has been steadily upgrading its military, economic, and political support for Vietnam—hedging behaviour that cannot be explained by system-level variables, and which seems to contradict the logic of a China–Russia strategic partnership. This behaviour is of a different order because it is regional and aimed at securing Russia’s economic and geopolitical goals in Asia, where China now intends to be a major player. Russia’s growing ties with Vietnam, meanwhile, are part of Moscow’s ‘turn to the East’, the main goals of which are to diversify Russia’s Asia policies and accelerate development of Russia’s Far East and Siberia, so helping Russia to become an important Asian power. This is a typical policy of hedging aimed at offsetting potential economic, security, or political risks by pursuing multiple policy options. By selling weapons to Vietnam and India as well as China, Russia tries to diversify its military export portfolio to offset potential costs should its relations with any one of its partners deteriorate. A similar logic applies to Russia–Vietnam energy cooperation, which promises significant benefits for Russia’s gas industry and helps Russia diversify its energy politics. However, each of these strategies has a minor, if any, effect on the power configuration within the international system. Regionally, Russia and China conduct independent foreign policies and often compete to secure their respective economic and geopolitical interests. Treating regional competition as a phenomenon of a different level helps understand why competition and cooperation coexist without challenging the partnership nature of bilateral relations.
The Arctic and China–Russia Interactions
Another area in which hedging between China and Russia can be observed is the Arctic and, more specifically, the territories surrounding the Northern Sea Route (NSR). Similar to the previous case, China–Russia hedging in the Arctic region is not an outcome of structural pressures of the international system, but rather the result of different economic interests and geopolitical considerations.
Climate change and the melting of ice in the Arctic have resulted in the appearance of alternative sea routes that are shorter and presumably safer than the traditional sea lanes. Thus, the NSR, which lies across Russia’s Far East and Siberia coastal waters, has become a focus of attention of both the surrounding Arctic states, such as the United States, Canada, Sweden, Norway, and Russia, and of non-Arctic states, such as China, India, Japan, South Korea, and Singapore.87 Although exploitation of the NSR remains limited due to harsh climate conditions, the potential gains of the route are nevertheless attractive. According to certain calculations, a voyage by cargo vessel from Shanghai to Hamburg could be approximately 6,400 kilometers shorter than through the common shipping lanes such as the Malacca Straits and Suez Canal.88 Therefore, the NSR’s potential economic value as regards reducing both the time taken and fuel costs of vessels traveling from Asia to Europe are considerable.
With respect to China–Russia relations, the NSR and its value as a shortcut to European markets open up both opportunities and challenges. Beijing sees the NSR as potentially essential for the development of China’s Eurasian trade, particularly as an alternative ‘road’ linking Europe and East Asia. Beijing has demonstrated its commitment to participating in Arctic affairs in general and in the economic opening of the NSR in particular, and been persistent in its attempts to secure observer status on the Arctic Council. In August–September 2013, the Chinese cargo vessel Yong Sheng, currently owned by China’s largest shipping firm COSCO, carried containers through the NSR from China’s domestic port of Dalian to Rotterdam. Compared with the Suez route, that through the Arctic saved approximately two weeks of transit time.89 This demonstrated the potential economic viability of this route and reconfirmed China’s interests in the region. Chinese analysts also stated that by 2020, 5–15% of China’s trade with Europe, amounting to approximately US$600 billion, could be done through the Arctic.90
Xi Jinping’s announcement of the ‘Silk Road’ initiative implies China’s focus on exports as a primary engine of economic growth. Such emphasis on external trade makes the potentially cheap and short NSR vital to Chinese trade interests. China’s interest in opening a new transportation route grows even stronger as it develops its shipbuilding industry to become one of the leading cargo vessel producers. Proactive use of Arctic routes, therefore, opens new markets for China-made ships. As a non-Arctic State that cannot claim territories bordering the Arctic, China is interested in ‘internationalization’ of the region and its resources. This, however, runs counter to Russia’s stakes in the Arctic, and generates diplomatic competition with China.
As an Arctic state, Russia approaches the issue from a different perspective and expresses concerns about the potential effects of involving China in Arctic politics. Russia has a long Arctic history that goes back to the first half of the 20th century when, in 1932, the maritime space between the islands of Novaya Zemlya and the Bering Strait was legally defined as Soviet, and later became Russian sovereign waters. Other than a short interruption in the difficult 1990s, Russia has always been active in the region, a significant part of which constitutes Russian sovereign waters. For Russia, therefore, Arctic politics is a matter of maritime sovereignty rather than trade interests. Russia is most interested in maintaining the status quo in the region, and most concerned about the specific benefits it might reap as an Arctic state located along the transit route.
Driven by these considerations, the Russian government has substantially increased its military presence in the Arctic and announced its large-scale ‘return to the Arctic’. New routine naval patrols in the waters of Northern Siberia have been introduced, and the military bases in the Novosibirskiye Ostrova (the New Siberian Islands) in Eastern Siberia, on Ostrov Vrangelya (Wrangel Island), and Mys Shmidta (Cape Shmidt) either reopened or announced their imminent reopening, so to regain a greater strategic presence in the region. Unlike China, which is interested in cheaper trade routes, Russia is interested in the economic benefits it can extract through greater numbers of Asian vessels coming through the NSR. For example, having the world’s largest fleet of icebreakers, including the world’s largest nuclear-powered icebreaker—the ‘50 Let Pobedy’ (50 Years of Victory), Russia requires that all foreign vessels going through the Arctic waters near Siberia be escorted by a Russian icebreaker–for a considerable fee amounting to hundreds of thousands of US dollars.91
Because Moscow considers the Arctic as a regional or even domestic policy issue, there are worries in Russia, as well as in other Arctic states, that China could use the Arctic Council to change the region’s political status quo.92 This is why, despite the overall strengthening of China–Russia strategic relations, the Russian government was not particularly welcoming when China tried to obtain observer status on the Arctic Council. It was believed in Moscow that China’s participation could increase internationalization of the region and so adversely affect Moscow’s regional interests. Even after Beijing successfully obtained observer status on the Council, Russian Prime Minister Dmitry Medvedev told a Norwegian media outlet, ‘There is trust in China but you and we, that is, the Arctic states, lay down the rules here.’93
To summarize, China–Russia relations in the Arctic are a typical case of hedging wherein competition and cooperation coexist. The economic interests of Arctic and non-Arctic States diverge. The former are interested in the status quo and potential benefits of an increased volume of transit, whereas the latter are more concerned with internationalization and costs of transportation. Similar to the case of the South China Sea, China–Russia hedging in this instance is not a result of power configuration within the international system, but rather of different economic and geopolitical interests.
China and Russia in Central Asia
Since the collapse of the Soviet Union, Central Asian states have sought diversification of their external trade and incoming investments. Under this context, China became a key player in the region. With its economic power and an investment capability far surpassing Russia’s, China was able to drag the Central Asian states into its orbit of economic influence. China’s investment activity in Central Asia grew dramatically in two waves after the financial crises of 1998 and 2008, when China de facto became the major creditor and investor in the region, and had particular interest in the energy reserves of the Central Asia states and multiple ferrous and non-ferrous metallurgy plants built in Soviet times. Thus, Kazakhstan has become China’s main Central Asian trade partner, attracting more than 80% of China’s investments in the region, and the trade volume between the two countries increased 40-fold from 1998 to 2008.94 Additionally, Chinese companies far surpassed their Russian counterparts as regards oil extraction in Central Asia. Most Central Asian states hence became financially dependent on China, particularly after the 2008 financial crisis. For example, the total volume of China’s investments in Tajikistan reached $US 700 million in 2010 and have since continued to grow, whereas Russia’s companies curtailed their economic activities in Turkmenistan, Tajikistan, and Kirgizstan.
The main sphere of China–Russia competition in the region is the energy sector. A striking example is investment in Turkmenistan’s gas industry. Chinese investors built and in 2010 put into operation a gas pipeline from Turkmenistan to China via Uzbekistan and Kazakhstan. The capacity of the new pipeline is approximately 40 billion cubic meters per year, equal to the amount of gas originally delivered to Russia. Chinese direct investment in Turkmenistan also contributed to building the country’s largest regional gas distribution system, including gas storage and compressor stations. There are, according to the China National Petroleum Corporation (CNPC), three gas pipelines from Turkmenistan to China (also known as the Central Asia–China gas pipeline), and a fourth is planned. The existing three lines have a capacity of 65 billion cubic meters per year (bcm/year), and inauguration of the fourth line is projected to add 15bcm/year by 2020. However, deliveries in 2015 were just 28bcm.95 The Chinese also conducted overhauls and modernization of Turkmen oil wells. China is interested in obtaining full access to the region’s energy reserves.
Russia, in contrast, considers Central Asia as a sphere embodying its priority geopolitical interests. Russia attempts to solidify its influence in the region and maintain control over the regional energy sector, which runs counter to Chinese interests. As a hedge against growing Chinese influence, Russia has launched its own Eurasian integration projects, such as the Eurasian Economic Union (EEU),96 which has become the largest common market across former Soviet states.
The EEU project fleshed out a number of practical steps aimed at tightly consolidating post-Soviet space and increasing Moscow’s influence in the region’s affairs. On January 1, 2010, the Customs Union of Russia, Kazakhstan, and Belarus came into existence.97 A year later, in October 2011, President Putin suggested moving farther along with the Eurasian integration project by modelling it on the European Union’s integration. On January 1, 2012, the Single Economic Space, with the Eurasian Economic Commission as a regulatory agency, began functioning.98 On 29 May of the same year, the leaders of Russia, Belarus, and Kazakhstan progressed towards the final stage of integration by signing the treaty forming the EEU, which came into effect on January 1, 2015.
An important feature of the new EEU is that it implies unification of economic policies among member states, elaboration of common market strategies, coordination of policies in the energy sector, industry, agriculture, and transport, and, as in the case of the EU, implementation of common policies towards non-member states. It is important to note that Russia has been tough in terms of pushing Central Asian states under the EEU framework. Thus, businesses in both Kyrgyzstan and Tajikistan faced higher tariffs when trading with Kazakhstan and Russia when the Customs Union first came into force and exerted pressure on their political leaders to join. As a result, Kyrgyzstan officially joined the union on May 14, 2015, and Tajikistan is also on track to join. On January 2, 2015, Armenia also became an official member of the EEU.
These Russian policies are examples of hedging in a region that Russia considers its sphere of traditional interests. The ‘fight for Central Asia’ on the part of Russia is the result of economic interdependence, a still-strong common identity rooted in the Soviet past, and cultural, social, and political links between Russia and the Central Asian states. Moreover, closer links with the region are perceived as a necessary geopolitical condition for Russia to regain its great power status.
However, contrary to sceptical views that interpret China–Russia relations in Central Asia as inevitably confrontational, recent developments demonstrate that the cooperation component of the bilateral relations prevails. Russia’s recent joining of the Asian Infrastructure Investment Bank (AIIB) and China–Russia cooperation within the SCO demonstrate that the two countries take strategic partnership and cooperation with one another seriously. On May 8, 2015, Russian President Putin and Chinese leader Xi Jinping signed the Joint Statement on Cooperation and Connection Between the Silk Road and Eurasian Economic Union, which will considerably reduce potential confrontations of interests. According to President Putin, ‘The integration of the Eurasian Economic Union and Silk Road projects means reaching a new level of partnership, and actually implies a common economic space on the continent.’99
This article attempted to provide an alternative perspective on hedging which envisages it as a pattern of great powers’ policies that are not a direct result of systemic pressure. An attempt was made to go beyond simply establishing whether or not hedging between great powers other than the Unipole happens, and identifying its best explanatory variables. To differentiate hedging from other terms, the article specified the level and unit of analysis, arguing the benefits of delinking hedging from the system level. This represents an alternative approach to the conceptualization of hedging. Rather than trying to add more adjectives to already existing terms, this article has tried to conceptualize hedging in theoretical rather than simply conceptual terms, interpreting it as a phenomenon of a non-systemic but regional order. Such an approach, this article argues, helps reduce the level of confusion about hedging, increase analytical clarity, and avoid multiplying overlapping terms describing states’ various behaviours.
The case of the China–Russia strategic partnership was used to substantiate the argument. The interaction between these two great powers represents a two-level pattern wherein anti-unipolar systemic balancing coexists with regional hedging in the salient geographic environments. This was also the case during the China–Soviet alliance, in which anti-US unity of strategic interests—a systemic factor—coexisted with regional disagreements—a unit level factor. A direction for further research could be that of testing the two-level assumption, with hedging as a unit-level phenomenon, against other great powers’ bi- or multilateral relations. The suggested framework may help comprehend the confusing complexity of great power relations. If hedging is different from system-level trends, as this article argues, the regional disagreements, referred to by analysts as undermining interstate relations and used as evidence of the unreliability of such relations,100 may not in fact prevent the strengthening of alignments and their development into full-fledged military alliances—processes that are subject to causal forces of different levels. In future research, the framework developed in this article could be applied to and tested against the reality of China–India, Russia–India, and other great power relations.