Is Russia really steering towards Asia?

dragons

 

2015/07/09 • Politics

Article by: Robin Molnar

Having lost the trust of its European partners, Russia announced – through its Prime Minister Dmitri Medvedev  – that it’s steering towards Asia and away from Europe.

Not only this does not make economic sense, but it’s also a sign of juvenile administrative capabilities, to say the least.

First and foremost, the GDP per capita in Asia is 2,941 USD. In Europe, it is 25,434 USD. This, obviously, bears the question: – Where is Russia steering to? This, also, bears the questions: – Why steer towards Asia? Why not trade with both, Europe and Asia? Why settle for less?

Either way, Europe or non-Russian Asia will win. Europe will win by manufacturing in Eastern Europe parts of the plethora of products currently originating from Russia. Asia will win by sheer increase in trade and resource consumption and conversion into goods, albeit their economies may suffer in the long term due to the fact that Russia has a more competitive economy than many Asian countries. Plus, some countries may find it uneasy negotiating with Russia, given the Ukrainian example. Again, mistrust is bad for business.

So, will Russia win, by steering towards Asia? It’s doubtful, as – due to GDP issues – the price of gas, energy and raw materials is lower in Asia than in Europe and Russia is confined in a very narrow price range with lots of competition.

Long story short, Russia is now learning that Europe has real alternatives to Russian gas, whereas Russia has no real alternative to European money.

 

  • Dalton

    Seriously, who cares? China would never trust Putin and would be one country that wouldn’t allow him to kill its people and take its land without a nuke vaporizing Moscow.

  • Dirk Smith

    Great news for Europe! After all, third-world russia is Asiatic; not European. Asia is a genetically better fit for the mongols. Also, russia is China’s bitch.

  • Michel Cloarec

    Is it not Asia steering towards Russia ? Many chinese people, will need more space. China is dropping its one child family scheme. Siberian is perfect , plenty gas and oil, big landscape unhabitated !

  • Michel Cloarec

    China’s rapid expansion into Central Asia has changed the balance of influence among outside players there. The Middle Kingdom’s return to the neighboring region, after more than 1,000 years, has been vigorous, sweeping aside most of the recent external players in Central Asia, and to some extent Beijing has even supplanted the recent traditional power in the region, Russia.

    • Dagwood Bumstead

      Precisely. Money talks. And Gazprom not paying forTurkmenistan’s gas will hardly help to increase or maintain Moscow’s influence, will it? Threatening Kazakhstan with invasion “to protect the Russian minority” won’t help either.

      • Michel Cloarec

        The news from Reuters are not very positive today, it has been going on since in mid-june ! But what exactly ? China is in turmoil with economy !

        • http://www.robintel.ro robintel

          It’s China’s 1929 Great Depression.

          Same mistakes as 1920s USA, same result.

          I am sorry for the poor people of China and their great suffering to come.

          • Dagwood Bumstead

            If it IS China’s 1929 Great Depression, then Dwarfstan will be dragged down with it. However, it’s far too early to tell. And the Chinese leaders are pragmatical people when it comes to the economy so I think they will limit the damage.
            What people tend to forget is that the amount of money in circulation remains the same, only it has been redistributed form the buyers of stocks to the sellers.

          • http://www.robintel.ro robintel
  • Michel Cloarec

    Russia is doomed ! Learn mandarin it will help !

  • Dagwood Bumstead

    “Russia a more competitive economy”????? Competitive in what???? It only produces oil, gas and weapons, but nothing else of significance. Who buys a Lada? Not even the Russians do, unless they can’t afford anything else. And tanks, MiGs and Sukhois are hardly products every household buys, are they?
    The products Russia does manufacture for the EU will soon be made in the Ukraine instead.

    • http://www.robintel.ro robintel

      Russia is more competitive than, say, Uzbekistan and other Central Asian countries.

      It is, still, not as competitive as European or North-American economies,

  • Michel Cloarec

    Something is wrong in China ! Are they afraid of the Brics meeting or what ?

    More than 25 percent has been knocked off the value of Chinese shares since mid-June, and for some global investors the fear that China’s market turmoil will destabilise the financial system is now a bigger risk than the crisis in Greece.

    • Dagwood Bumstead

      Chinese share prices have gone up considerably in recent months, so what we are seeing may well be nothing more than a correction. “What goes up must come down.”