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Putin’s Ephemeral Gains with the Eurasian Economic Union

Russia’s competition with China for dominance in Central Asia has long appeared to be doomed due to the asymmetrical relationship between Russian and Chinese economic power. The already strong Chinese economic position in the region has grown even stronger recently with Beijing’s announcement of large initiatives that are to pour billions of dollars of aid into the region, further tying it to China. Chinese President Xi Jinping announced earlier this month that China would commit $40 billion to a “Silk Road Fund” meant to finance infrastructure and development projects throughout Asia, with at least $16 billion of the fund dedicated to projects in Central Asia. In Tajikistan alone China has pledged to invest $6 billion over the next three years, according to the country’s deputy finance minister. China has already invested billions of dollars in the natural gas pipeline network connecting Central Asian producers to China, dramatically altering the relationship of these providers with Russia, which has traditionally been the recipient of most natural gas from Central Asia. Between China’s “March West” strategy, the investments that are part of the “Silk Road Fund”, and the newly-announced Chinese-led, Asian Infrastructure Development Bank, China’s economic might aimed at the region has increasingly sidelined Moscow in Central Asia and boxed Russia out of markets in which it has traditionally held dominant sway.