China 2020: Russia and Pakistan

IMGXYZ3853IMGZYXChina’s relations with Russia and Pakistan have followed an unpredictable path, often mired in domestic and international tensions. In the second event of the “China-Russia Dialogues” seminar series and the fourteenth installment of the “China-South Asia Dialogues” seminar series, Michael Oppenheimer of New York University, Alexey Efimov of Russia’s RIA Novosti, Ouyang Xiangying of the Chinese Academy of Social Sciences, Du Bing of the Chinese Institutes of Contemporary International Relations, and Yang Xiaoping of the Chinese Academy of Social Sciences, discussed future scenarios for all three countries. Carnegie’s Lora Saalman moderated.

Future Scenarios

Oppenheimer explained that scenarios describe divergent paths that China, Russia, and Pakistan could take, but warned that these scenarios are not meant as predictors. He argued that there have been unanticipated events that can alter human history, such as the fall of the former Soviet Union, indicating the importance of critical thinking about countries’ futures and how best to respond.

China

• Reasons for Optimism: Although China faces a number of real obstacles, such as economic disparities and issues of transparency, Chinese leadership is working to mitigate these problems, Oppenheimer said. He added that China's "strong state model” is central to its survival, but the sustainability of this model depends upon a degree of flexibility in economic and political growth.
   
• Creating Scenarios: Oppenheimer described three scenarios for China:
  
  
  1. Adaptation: China continues on its current development path, implementing minor reforms to weather its current constraints.
      
  2. Hard Landing: China is not able to adapt to the changing internal and external environment, and issues such as China’s real estate bubble force the country into a hard economic landing.
      
  3. Economic and Political Reform: China implements economic and political reform, softening the impact of future shifts.


• Anticipating Response: One Chinese participant noted that the Chinese economy could face internal and external shocks that might challenge the scenario outcomes. These jolts could come from a number of issues, including tensions over intellectual property, the global economic crisis, the potentially destabilizing speed of China’s development, or current internal challenges such as pensions, healthcare, drug abuse, corruption, popular dissatisfaction, and soaring education costs, added another Chinese expert.

Russia

• Locked in Stagnation: Oppenheimer was cautious about Russia’s ability to evolve over the next ten years, describing Russia as locked into its current stagnation by a non-competitive economy, excessive concentration of wealth, over-dependence on oil and gas revenues, a blocked political system, and a highly personalized and authoritarian governance.
   
• Creating Scenarios: Oppenheimer described three scenarios for Russia:
  
  
  1. Functional Authoritarian System: Russia moves toward China’s strong state model, while at the same time diversifying its economy, reducing corruption, enabling selective political openings, giving local governments more independence, and creating bilateral deals with Russia's neighbors to spur domestic trade and investment.
      
  2. Liberalism and Modernization: Russia is forced to give greater control to the provinces, as the world discovers alternative energy sources and relies less on Russian exports, while local governments liberalize Russia from the periphery to the center.
      
  3. Degeneration: Russia’s system cannot reform itself and muddles its way downward, in a “slow-motion train wreck” as it slides into irrelevance.


• Anticipating Response: One Chinese expert took a more optimistic view of Russia’s future, asserting that Putin and the Russian leadership are aware of its three core problems: a backwards economy, declining population, and lackluster development of the Russian Far East. She added that different populations, salary expectations, and skill sets might prevent Russia from emulating China, but added that Russia’s level of system sustainability and personal happiness exceeds that of China, citing Russian efforts to extend lifespan and health care. A Russian participant critiqued the scenarios for evaluating Russia as a single entity. He stressed that Russia’s neighbors would take part in shaping its development through immigration flows and resource imports. One Chinese expert suggested that Russia’s entry into the World Trade Organization would propel its economy forward, while another advocated greater Chinese investment in the Russian Far East.

Pakistan

• A Failing Country: Oppenheimer expressed pessimism about the fate of Pakistan, characterizing it as a failing state facing increasing lawlessness, high levels of corruption, fundamentalism, terrorism, a dangerous neighborhood, and weakened by a lack of coordination between the state and the military. As the United States withdraws from Afghanistan, he argued its incentive to aid Pakistan will diminish, leaving Pakistan to solve its own problems.
   
• Creating Scenarios: Oppenheimer offered three scenarios for Pakistan:
  
  
  1. Government Reform: Pakistan continues to be the beneficiary of U.S. development assistance programs, creating avenues for it to export goods, support civil society, and bring foreign direct investment into Pakistan, thereby helping Pakistan to develop its internal infrastructure.
      
  2. Radicalization Beyond Status Quo: Pakistan becomes an increasingly radicalized Islamic state in both its civilian and military structures, in turn amenable to nuclear proliferation to other Islamist states.
      
  3. Societal Fragmentation: Pakistan’s center no longer holds and the different provinces and cities start to come apart, resulting in some areas descending into chaos.


• Anticipating Response: Chinese experts argued that the scenarios presented were too pessimistic. One responded that although Islam in Pakistan is strong, there remain a variety of strains of Islam, including softer ones that would mitigate radicalism. He added that Pakistani federalism has existed since the country’s origins and has been reinforced in the wake of the Arab Spring. Pakistan’s greatest challenge is its patronage system and weak political structure, he said. Despite this, Pakistan has factors compelling greater cohesion and stronger national identity, as reflected by its response to natural disasters and threats from India, he concluded. Another Chinese participant stated that suggestions of fundamentalism are inherently U.S.-oriented in tone and do not gain much traction in China. Instead, such factors as self-identity, localized economies, tribal states, economic development, and the military-government relationship are central, she noted. External actors can have a destabilizing or stabilizing influence, another Chinese expert added. He suggested that the U.S. military has worsened the domestic situation in Pakistan through actions like drone attacks and the assassination of Osama bin Laden, causing the Pakistani military to lose credibility. He stressed that this is dangerous, given the role of the Pakistani military in maintaining domestic stability and cohesion.