The Russo-Chinese Challenge to Our Liberal Capitalism

In the last presidential election of Russia on March 2, First Deputy Prime Minister Dmitry Medvedev has been elected. It is widely believed that President Medvedev will be a puppet of Prime Minister Putin, and continue to pursue policy course set by the Putin administration. An ex-president of an oil company, will Medvedev take nationalist energy diplomacy? More importantly, a strategic partnership between a self-assertive Russia and an ambitious China will pose a critical challenge to our liberal capitalism. Success of their authoritarian capitalism can attract anti-Western dictators in developing nations, which will erode our liberal world order. Therefore, I would like to talk about Russian foreign policy under the next administration, and challenges to the global community by the Russo-Chinese partnership.

First, let me mention Medvedev’s bio data in “Russia Profile”. Having graduated from Leningrad University (currently, St. Petersburg University) with a law degree, he developed close personal contacts with Vladimir Putin, while heading Gazprom. Though Putin is expected to use strong influence on him, the predecessor is likely to advise Medvedev in softer tones, according to his profile in this journal.

With regard to implication of this election, Dmitri Trenin, Deputy Director at the Carnegie Endowment Moscow Center, has contributed an article to the Wall Street Journal (“The Meaning of Medvedev”; March 4, 2008). Trenin points out “Mr. Medvedev's task is twofold: to make decisive progress toward the rule of law, and to improve Russians' health, housing and education standards, even as the country moves past its commodities-driven economy and builds a foundation for economic innovation.” Despite successful economy, Russia will remain authoritarian and un-transparent for the time being. As a Russian, Trenin admits this. However, he insists that the Medvedev Russia will move toward constitutionalism.

Dmitri Trenin points out that Russia cannot survive in the global economy without freedom and accountability. Therefore, he says that liberalism is widely supported among businessmen, professionals, middle class, and progressive bureaucrats. Also, he points out that Russia has reached the limits of the current economic model. In his view, the trend toward political freedom is irreversible in Russia. At the same time, Trenin comments that political liberalization will not complete in Medvedev’s presidential term, and the next four year will be a crucial step for further reform to be continued in the future.

However, in foreign policy, Trenin argues that Russia will pursue geopolitical rivalry against the West. As witnessed in energy sanction to Ukraine, Russia feels uneasy with its lonely great power position. In conclusion, Dmitri Trenin says “Russia is gradually transforming itself into a Western-type society and economy, while politically standing very much apart from Europe. It is a country to watch closely. Dmitry Medvedev comes at an interesting time.”

Will Russia pose challenge to the West along with China? Both great powers have much in common. While pursuing free market economy, political elites in both countries are still reluctant for rapid reform at this stage. Moreover, they are becoming increasingly antagonistic to unipolar American world order and Western supremacy in global politics and economy.

Finally, let me review the discussion between Gideon Rachman, Chief Foreign Affairs Columnist of the Financial Times, and Robert Kagan, Senior Associate of the Carnegie Endowment for International Peace (“Illiberal Capitalism”; Financial Times; January 22, 2008). This article questions as the following. In Russia and China, capitalism has not led to Western-style democracy. The new Russo-Chinese model advocates a combination of economic development, state authority, and nationalism. The Russo-Chinese axis opposes Western pressure on rogue states. It is important to understand the implication of the rise of illiberal capitalism, and whether their model will replace the Western model.

Kagan and Rachman answered to questions from both sides of the Atlantic. Most of them are about the implication of the Russo-Chinese model to the West. Though autocrats in developing countries may be attracted to authoritarian capitalism model in Russia and China, Robert Kagan denies that both giants are exporting their models. They do not hold universal ideologies. However, Kagan points out that their influence growth in international organizations will encourage autocrats. Rachman mentions Chinese soft power to defy American or Western supremacy. China questions democracy promotion by America and Europe. However, Rachman point out the limit of Chinese soft power, because Asian neighbors take threat posed by China seriously.

Other questions are more or less the same. But one by a Chinese reader raises concern that criticism to Russia and China comes from Western-centrism. Both Kagan and Rachman reply that the West today respects multiculturalism. However, they agree that some non-Western nations are reluctant to accept Western enlightenment as a universal value. This is what I discussed in a previous post, “New Year Question: Antipathy to Western Civilization and Pax Americana”. I recommend the Financial Times article quoted in this post.

Although as Trenin says, progressive intellectuals in Russia and some of them in China may move both nations toward liberalism gradually, they remain authoritarian for some decades. The rise of nationalism will delay political liberalization. The Russo-Chinese defiance to the expansion of our liberal political economy will be one of the most important issues in this century.