THE RISE OF THE CELESTIAL EMPIRE

Mid-November was very tense and important for international politics. First at the APEC forum in China and then at the G20 summit in Australia, world leaders discussed vital problems - from the economy and environmental issues to the conflicts in Ukraine and the Middle East.

Important geopolitical trends were identified while agreements, memoranda and contracts were signed and also during different negotiations and meetings, many of which were held eye-to-eye. One of those trends is the confirmation of the special significance of the Asia-Pacific (AP). It is this part of the world where chief human, industrial and technological resources are concentrated or are being concentrated, it is this region that is expected to give a push towards the revival and acceleration of the global economy, and it is Asia that is predicted to give birth to a new financial architecture that would be able to challenge the order established after the Second World War.

Forefront of change

Beijing hosted the 25th summit of Asia-Pacific Economic Cooperation (APEC), which includes 21 countries from the Baltic Sea to Southeast Asia. The Chinese hosts were lavish in bilateral contracts signed and entertainment provided for the guests. No doubt, China is at the forefront of all change in Asia, and this country is now so strong and confident that it clearly demonstrates to the United States that it is only on equal terms that it intends to communicate with the world's superpower. It seems that there is no other option for the White House, which has been weakened by a large foreign debt and failures in the Middle East and which is headed by a president whom everyone, without hiding it, is calling a "lame duck" as early as two years before his term in office ends. China controls a good portion of the US economy. It possesses US securities to the tune of a trillion dollars. Washington is, therefore, trying to make the best of a bad bargain and is doing everything to demonstrate that their relations with China are key to the future of the world and define the face of the planet. This is exactly what Secretary of State John Kerry said recently, The National Interest recalls. Barack Obama elaborated on this idea when he said at a joint news conference with Xi Jinping that it was necessary to develop a new format of relations between these countries, and that this would benefit the entire international community.

Washington and Beijing concluded two agreements to prevent military misunderstandings between the two countries, agreed to cooperate in the fight against terrorism, and are going to abolish tariffs on a range of IT products. However, experts believe, important issues in the field of cyber security and monetary policy remain unresolved. It is noteworthy that the United States has also publicly denied its involvement in orchestrating the protests in Hong Kong, while Xi Jinping stressed once again that the developments in Hong Kong were an internal affair of the country.

During the joint news conference, emphasis was not placed on China's maritime and territorial disputes or human rights issues. Later on, speaking at The University of Queensland, Obama said that Washington was willing to fulfil its commitments as an ally in the Asia-Pacific region and would not indifferently watch small nations or peoples being bullied in this part of the world. "American leadership in the Asia Pacific will always be a fundamental focus of my foreign policy," the US president said.

However, the centre of attention was not US but Chinese leadership in the Asia-Pacific region. Chinese leadership is being promoted, to a great extent, by "Cold War 2.0" that has broken out between Russia and the West. Beijing is receiving considerable benefits from this confrontation, to such an extent that sometimes it seems that Russia and the United States specially agreed to strengthen China from all points of view. China is currently at the height of its success - regional countries have once again rejected protectionist measures and even promised to restrain themselves within limits permitted by the WTO. Beijing has received additional volumes of fuel for its booming economy on a "silver platter". The "road map" of an Asia Pacific-wide free trade zone, proposed by Xi Jinping, was also approved. This is all the more important as Japan and the United States are insisting on their own similar schemes (the Regional Comprehensive Economic Partnership, and the Trans-Pacific Partnership), without including China. The thing is that the USA has its own vision of trade order in Asia, and there can be no doubt that work to cement an anti-Chinese alliance is under way. While for the United States China is just simply a powerful, and dangerous in that it is powerful, but still an equal partner, for Asian countries such as Vietnam, Cambodia, Laos, and Thailand it is a dangerous neighbour giant, and for Japan and South Korea it is the main geopolitical and economic rival. So, China's initiative will, certainly, meet with a lot of obstacles on its way, and not just political ones as it is very difficult to bring countries with different levels of economy, which interact with each other more in a bilateral format, to a common denominator. However, all initiatives, nevertheless, clearly show that China is not going to give up the lead in integration processes.

One of the most interesting contracts concluded by China is a memorandum on supply of Russian gas along the so-called "western route" (from fields in the Yamal Peninsula through Altay) to China's north-western provinces starting from 2018. Beijing, which also actively buys gas from Central Asia, seeks to reduce the share of coal in overall energy consumption. Certainly, there is also the option of liquefied gas, but Beijing does not seem to be particularly enthusiastic about being dependent on maritime supplies as LNG is very expensive. This is where the wishes of China and Russia, which seeks to break out of isolation and also to counteract US supplies of liquefied gas to Asia, coincide. Albeit it is Moscow that is having to go for price concessions on gas, and experts believe that they will be even bigger than within the framework of the May deal on the Power of Siberia. However, Moscow still looks happy - Russian exports will cover up to 20 per cent of China's demand for gas, and gas supplies to China will surpass European supplies. Russia also counts on cooperation between the Eurasian Economic Union and Asian countries and hopes that an increase in trade with Asia-Pacific countries and Asian investment will help its Far East develop. Putin spoke about plans to increase trade with the Asia-Pacific region from 25 to 40 per cent in Russia's overall trade. Incidentally, unlike other integration schemes, the Asia-Pacific free trade zone affects Russia as well.

Economic forecasts for Russia are now very poor - the sanctions are reaching their goal and the rouble has been demonstrating record after record all the time lately, and the outflow of money is high, as well as the inflation rate. Falling oil prices are having an even stronger impact on the state of Russia's economy. Low oil prices have once again exposed the weak sides of its economy, which is experiencing a shortage of money and human resources.

In political terms, everything hinges on the situation in Syria, Iran and Ukraine. A new war is very likely to break out in southeastern Ukraine. The West believes that fresh active hostilities are now beneficial for Russia in terms of diverting attention from domestic problems. In addition, Western experts believe, the Kremlin needs a land corridor to Crimea.

In Russia, some experts think that war is beneficial for the West as it will help hide the fact that Ukraine on the whole can no longer be saved, because, as Vladimir Putin said in an interview to German TV channel ARD, it is primarily Kiev that the sanctions against Russia are actively drawing into an abyss. Incidentally, the head of the Kremlin gave his assurances in the interview to ARD that "Moscow will not allow the Ukrainian authorities to destroy its political opponents". Asked by Canadian Prime Minister Stephen Harper (during their ceremonial handshake at the G20) about when Russian troops would leave (another version says "will get out of") Ukraine, Putin said it was impossible for them to leave Ukraine because they were not there.

On the sidelines of the G20 summit

Ukraine was the central theme at the G20 summit in Australia, although it was originally conceived as an economic forum. Nevertheless, all media relished the lukewarm reception that the hosts and many of their allies gave to the Russian president. Each second of the meeting between Putin and Australian Prime Minister Tony Abbott was reported because Abbott had promised to "shirtfront" Putin and ask him about the collapse of the Malaysian Boeing, which crashed in eastern Ukraine on 17 July. There were 27 Australian nationals among the 298 people killed. However, instead of fighting, Abbott and Putin peacefully posed for pictures, cuddling two koalas. Literally at the same time Russian's Channel One published a satellite image that supposedly captured the moment when a Su-27 fighter launched a missile targeting the Boeing, to which Western officials effectively did not react. Later, however, it emerged that the photo had been doctored and did not depict the actual state of affairs on that ill-fated day. But it is clear that the sides do have real images. After all, we are in the 21st century and there is no doubt that the conflict zone in Ukraine is under constant surveillance from outer space.

Another remarkable aspect of the summit in Australia was the early departure of Putin, who declined to have breakfast with his counterparts, held a final news conference and went back home. Nobody believed that the head of the Kremlin wanted to get some sleep before starting a new working week. People had their own theories about that - starting from the theory of escape, because he "could not bear pressure regarding Ukraine" to the theory that "he did what he needed to do and did not find it necessary to talk anymore". Indeed, it remained an annoying thing that Putin and Obama did not have a conversation - the several words they uttered "on the go" do not count. And in contrast to that, the remaining leaders at the summit talked to each other on the Ukraine topic immediately after Putin left, and the United States set the tone there.

"We're leading the international community in the fight against Ebola in West Africa, the Islamic State in the Middle East and in opposing Russia's aggression against Ukraine - which is a threat to the world," Obama believes.

While the United States continues spraying its power on all continents, China attracts the centre of global influence to itself. China is not concerned about Ukraine as much as other countries are. Xi Jinping, who is not taking any sides in a wise oriental manner and is avoiding confrontation, carries out economic transactions and seeks to expand trade in yuans. At Beijing's initiative, the Asian Infrastructure Investment Bank (AIIB) was founded, which will have about 50bn dollars at its disposal. Beijing also provides big money towards the creation of a "New Silk Road" that will connect Asian countries with Europe via Eurasia. There was a separate meeting of BRICS (Brazil, Russia, India, China, South Africa) heads of state on the sidelines of the G20 summit. This organization is currently busy forming the Development Bank and Contingent Reserve Fund - they will have up to 200bn dollars at their disposal, and they will make it to the top 10 largest development banks and international financial security networks. Incidentally, the leaders of the BRICS countries said that the sanctions against Russia were illegal and violated the UN charter and hampered economic recovery.

It appears that under the pressure of Western sanctions Russia is looking for ways of salvation in China, China sticks to a plan and takes advantage of favourable circumstances, and the United States acts as the situation dictates. However, Washington and Western countries at large are perhaps deliberately pushing Beijing towards Russia's borders. Everyone knows the worst-case scenario - first, China will use Russian energy resources and then begin a slow territorial expansion. The best-case scenario is that Russia will be able to develop the Siberia and Far East regions.

For China and the United States the worst-case scenario means sliding into confrontation and the best-case scenario is partnership relations. Beijing believes that Asian problems should be tackled by regional countries, and the superpowers should not take any sides in territorial disputes. But is the United States ready for this?