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Uganda and Tanzania Unveil Cross-Border Kikagati Hydropower Project

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Uganda and Tanzania Unveil Cross-Border Kikagati Hydropower Project

 

Uganda and Tanzania proudly unveiled the Kikagati Hydropower Project (Kikagati HPP), a groundbreaking initiative that marks the first cross-border hydropower project between the two nations. Situated on the Kagera River, this project, valued at $100 million, signifies a significant milestone in their collaborative efforts.

With a capacity of 14 MW, the Kikagati HPP has the remarkable ability to provide electricity to over 60,000 homes in both Uganda and Tanzania. The project, implemented by Kikagati Power Company Limited (KPCL), had its construction initiated in 2005. However, progress faced obstacles until 2017 when a bilateral agreement between the two countries propelled it forward to successful completion.

The inauguration ceremony, graced by President Samia Suluhu Hassan of Tanzania and her Ugandan counterpart, President Yoweri Museveni, emphasized the project’s profound impact on strengthening the historical and fraternal relationship between the two nations. President Hassan expressed her optimism about the project’s potential to enhance trade, investment, and cultural exchange between Uganda and Tanzania.

Kikagati Power

President Hassan further highlighted the transformative power of the Kikagati HPP in bridging the communication gap between urban and rural areas. Access to electricity would foster greater connectivity and social engagement among the people, thereby promoting inclusive development. She reiterated her government’s unwavering commitment to fostering strong brotherly friendship and cooperation with Uganda.

Echoing President Hassan’s sentiments, President Museveni reiterated his dedication to close collaboration with Tanzania across various spheres. He emphasized his government’s zero tolerance for bureaucratic hindrances that impede the speedy implementation of projects. President Museveni acknowledged the delays faced by the Kikagati HPP due to bureaucratic challenges, warning against the detrimental effects such delays can have on progress. He urged the political and bureaucratic classes in Africa to be more responsive to the people’s demands.

President Museveni extended his gratitude to the late President John Magufuli of Tanzania for his decisive actions in bringing the project to fruition. He commended President Hassan for continuing the visionary path set by her predecessor, further solidifying the strong bond between their nations.

Supported by Berkeley Energy, the Kikagati-Murongo project incorporates long-term technology with a guarantee of over 100 years. Luka Buljan, Managing Director of Berkeley Energy, emphasized the project’s significance in providing stable power to North West Tanzania and South West Uganda. Operated under a Build, Operate, and Transfer (BOT) framework, equal ownership between the governments of Tanzania and Uganda is anticipated after the expiration of the 20-year power purchase agreement.

The Kikagati HPP aligns with the vision of the East African Community (EAC) and the treaty for its establishment, focusing on cooperative exploitation of renewable energy resources to ensure

African Medicines Agency Set to Streamline Pharmaceutical Regulations Across the Continent

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African Medicines Agency Set to Streamline Pharmaceutical Regulations Across the Continent

 

Plans to establish the African Medicines Agency (AMA), responsible for overseeing regulatory processes for pharmaceutical products throughout Africa, are progressing, according to official sources. As of now, 35 out of the African Union’s 55 member states have ratified the AMA Treaty. The recent inclusion of countries like Kenya, Malawi, and Sao Tome bolsters local pharmaceutical production efforts, aligning with the call for a unified One Health approach to disease control in Africa.

Chimwemwe Chamdimba, head of health at the AU Development Agency-New Partnership for Africa’s Development (AUDA-NEPAD), disclosed that the agency’s bureau is already operational, and the governing board is taking shape. The AMA, as a specialized health agency of the AU, aims to harmonize medicine regulations across Africa. Member states are expected to finalize the formation of the governing board in the coming months, thereby replacing the need for manufacturers to seek approval from each fragmented regulatory authority of the 55 member states or the five regional economic communities.

The harmonization efforts of the AMA will not only address fragmentation but also facilitate collaboration among the five African regions. 

IMF Photo, James Oatway / Flickr cc

It will enable joint assessments and inspections by national regulators, fostering trust and cooperation within the regional economic communities. The AU is collaborating with partners like Amref Health Africa to train national regulators, and a continental regulatory reliance framework is being developed, with pilot implementation planned for the East Africa region.

The establishment of the AMA holds significant importance due to the challenges associated with accessing safe, affordable, effective, and quality medicines in Africa. Factors such as limited pharmaceutical industries, high costs of raw materials, inadequate investment in research and development, and reliance on foreign countries for medicines contribute to the complexities. Poor supply chains, insufficient government investment in the pharmaceutical sector, limited health workforce, and lack of infrastructure and technical expertise exacerbate the situation, leading to the circulation of counterfeit drugs causing numerous deaths each year.

Experts and academics in the health sector have widely welcomed the initiative, recognizing its potential to ensure access to safe and effective medicines for Africans. The inclusion of access to affordable and safe medicines as a fundamental human right in the UN-mandated Sustainable Development Goals further emphasizes its significance. The establishment of the AMA is seen as a crucial step towards achieving Universal Health Coverage and bridging the gap in healthcare access across the continent.

Michel Sidibé, the AU’s special envoy for AMA, applauded the agency’s formation, emphasizing its potential to encourage local development and manufacturing of medicines, reducing dependence on imports. Sidibé, a former minister of health and social affairs in Mali and former executive director of UNAIDS, highlighted how the COVID-19 pandemic exposed vulnerabilities and stressed the importance of regulatory harmonization in Africa.

Rwanda has been selected as the host country for the AMA headquarters. The agency’s establishment will complement the efforts of the Africa Centres for Disease Control and Prevention (Africa CDC), particularly in pandemic preparedness. It will enhance the continent’s readiness for future pandemics and support post-pandemic recovery. The AMA, as Africa’s second-largest health agency following Africa CDC, is expected to play a vital role in fostering the continent’s ambitions for drug and vaccine production.

International Collaborations Formed to Advance Fusion Project

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International Collaborations Formed to Advance Fusion Project

 

General Atomics (GA) of the USA and Tokamak Energy of the UK have joined forces to collaborate on high temperature superconducting (HTS) technology, targeting fusion energy and other industrial applications. The partnership aims to capitalize on GA’s expertise in manufacturing large-scale magnet systems and Tokamak Energy’s pioneering knowledge in HTS magnet technologies.

Magnetic fusion relies on tokamaks, which utilize powerful electromagnets to confine and shape superheated hydrogen gas, known as plasma. To achieve the necessary conditions for energy production through fusion, tokamaks must heat the plasma to temperatures exceeding 100 million degrees Celsius, surpassing the sun’s core temperature. This temperature threshold is crucial for making fusion a commercially viable energy source.

 We were making our way to the Rila Mountains, where we were visiting the Rila Monastery.

High temperature superconducting (HTS) technology

The collaboration between GA and Tokamak Energy focuses on advancing high-performance HTS magnets. These magnets generate strong magnetic fields by circulating large electrical currents through arrays of electromagnet coils surrounding the plasma. They are built using cutting-edge HTS tapes, which are multi-layered conductors coated with a superconducting material called ‘rare earth barium copper oxide’ (REBCO). By enhancing the power of HTS magnets, fusion power plants can use thinner magnetic coils while generating plasmas at higher densities.

Anantha Krishnan, Senior Vice President of GA, expressed enthusiasm about the collaboration, highlighting Tokamak Energy’s leadership in HTS magnet modeling, design, and prototyping, while emphasizing GA’s expertise in developing and fabricating large-scale superconducting magnets for fusion applications. Warrick Matthews, Managing Director of Tokamak Energy, acknowledged GA’s significant experience, knowledge, and manufacturing capabilities in producing large superconducting magnets. He also emphasized Tokamak Energy’s decade-long focus on HTS technologies for fusion and their potential applications in aviation, naval, space, and medical industries.

Tokamak Energy has set a roadmap to deploy commercial fusion power plants by the mid-2030s. To achieve this, they plan to complete the ST80-HTS device in 2026, which aims to demonstrate the full potential of high temperature superconducting magnets. The insights gained from ST80-HTS will inform the design of their fusion pilot plant, ST-E1, which aims to deliver electricity and produce up to 200 MW of net electrical power by the early 2030s.

In a separate collaboration, Germany’s Max Planck Institute for Plasma Physics has partnered with Proxima Fusion to further develop the stellarator concept for fusion power. Proxima Fusion, a Munich-based company founded by former IPP scientists, intends to design a nuclear fusion power plant based on IPP research.

Stellarators offer an alternative approach to tokamaks for magnetic confinement fusion. Unlike tokamaks, which have a uniform toroid shape, stellarators have a twisted figure-8 shape. Stellarators offer advantages such as continuous operation and improved plasma stability properties compared to pulsed tokamaks.

The Max Planck Institute operates both the ASDEX Upgrade tokamak and the Wendelstein 7-X stellarator. In February, the Wendelstein 7-X achieved a significant milestone by generating a high-energy plasma that lasted for eight minutes, with plans to extend plasma discharges to 30 minutes in the future. IPP aims to advance stellarators towards application maturity and sees great potential synergies in the collaboration with Proxima Fusion. IPP will contribute its expertise as the leading institute in stellarator physics, while Proxima Fusion will focus on technological advancements, fostering a fruitful public-private partnership.

Dangote Refinery: A Game Changer

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Dangote Refinery: A Game Changer

 

Amid fanfare and high expectations, Nigeria’s outgoing President, Muhammadu Buhari, commissioned the much-vaunted Dangote refinery alongside his counterparts from Ghana, Togo, Senegal, Niger, and Chad. The massive 650,000 barrels per day oil plant sits on 2,635 hectares of land in Dangote Industries Free Zone in Ibeju-Lekki, Lagos, and will employ over 100,000 persons.

The largest refinery in the world is set up to process crude oil grades from the continent of Africa, Asia and America, with a delivery of a surplus of close to 38 million litres of petrol, diesel, kerosene and aviation fuel for Nigeria’s daily. The refinery, owned by Nigerian business tycoon Aliko Dangote was inaugurated on the 22nd of May, 2023. It will transform crude oil into different uses of petroleum products such as diesel, gasoline, jet fuel and kerosene.

The largest refinery

Dangote Refinery: A Game Changer

At the commission ceremony, Dangote said the priority was to ramp up production to ensure the refinery could fully satisfy Nigerian demand and eliminate “the tragedy of import dependency.”

Opening Ceramony

According to Reuters, the government of outgoing President Muhammadu Buhari hopes that the refinery resolves Nigeria’s repeated fuel shortages, spending $23.3 billion last year on petroleum product imports and consuming around 33 million litres of petrol a day.

Export hub for petroleum products

The plant plans to export the surplus petrol, turning Africa’s biggest oil producer into an export hub for petroleum products. According to Dangote, Africa’s richest man, who funded the refinery’s construction, the refinery equally plans to export diesel.

The massive petrochemical complex cost $19 billion to build after years of delay – above initial estimates of between $12 billion and $14 billion – and has outstanding debt of around $2.75 billion, according to Nigeria’s central bank governor.

The complex also has a 435-megawatt power station, deep seaport and fertilizer unit, and it is expected to be operational by June.

According to analysts, the current opaque system has fostered corruption and limited the government’s ability to invest in critical areas like education and healthcare.

“A notable milestone” and “a game changer”

Buhari — who steps down on May 29 after eight years in office — described the project as “a notable milestone” and “a game changer for the downstream petroleum products market, not only in Nigeria but for the entire African continent.”

What’s Behind Uganda’s Export Sector Surge?

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What’s Behind Uganda’s Export Sector Surge?

 

Uganda’s Ministry of Finance, Planning and Economic Development has recently stated that the East-African nation exported goods worth $674.54 million in March 2023, a 93.0 percent increase over the $349.44 million shipped in February 2023.

“Coffee exports during the month amounted to $71.54 million, an 8.4 percent increase from $66.03 million in February 2023. This growth was mainly attributed to exporters who off-loaded coffee from their warehouses for sale to benefit from the rising international price of Robusta coffee,” an extract from the report reads.

The African Business Insider reported that in comparison to the same month the previous year, the ministry officials said merchandise exports grew by 85.4 percent from $363.74 million in March 2022 to $674.54 million in March 2023.

Uganda Export Freezone

Contributing factors This was primarily attributed to increased export earnings from mineral products, maize and tobacco during the month. Mineral products, mainly gold, increased significantly following the resumption of the gold trade in August 2022.

The East African Community (EAC) remained the top destination of Uganda’s exports in March 2023, accounting for 35.7 percent of total monthly exports. For Trade Balance with EAC in March 2023, Uganda traded at a surplus of $15.9 million with the regional bloc. “This was an 84.4% decline from the surplus of $102.4 million in the previous month.

The decline was largely due to imports from the Democratic Republic of Congo, Tanzania, and Kenya which increased considerably by $60.93 million, $60.1 million, and $14.19 million, respectively,” said Dr. Albert Musisi, commissioner macroeconomic department. However, trade deficits were recorded for Tanzania and Kenya, while surpluses were recorded for Congo, South Sudan, Rwanda, and Burundi.

A decreasing deficit

According to the data, Uganda’s merchandise trade deficit decreased from $297.66 million in February to $241.93 million in March 2023, a decrease of 18.7%. The merchandise trade deficit decreased from $292.94 million in March 2022 to $241.93 million in March 2023, a 17.4% decrease year over year.

DRC Eyes Uganda’s East African Crude Oil Pipeline

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DRC Eyes Uganda’s East African Crude Oil Pipeline

 

The Democratic Republic of Congo’s Hydrocarbons Ministry has revealed that talks are underway with neighbouring Uganda to use the latter’s $3.5 billion 1,445-kilometer pipeline dubbed as East African Crude Oil Pipeline (EACOP).  If all goes well, Uganda is expected to start pumping oil in 2025.

The pipeline will transport oil produced from Uganda’s Lake Albert oilfields to the port of Tanga in Tanzania, where the oil will then be sold to world markets.  The pipeline is buried, and once topsoil and vegetation have been re-instated, people and animals can cross freely along its length. 

Uganda acknowledged the crucial requirement of DRC to access the East African Crude Oil Pipeline (EACOP)

East Africa Crude Oil Pipeline (EACOP), Uganda and Tanzania route

in a recently published Twitter statement, Congo’s Ministry of Hydrocarbons said that its minister Didier Budimbu met his Ugandan counterpart Ruth Nankabirwa Ssentamu with discussions involving access to the pipeline.

EACOP Construction

“Uganda acknowledged the crucial requirement of DRC to access the East African Crude Oil Pipeline (EACOP) for the transport of crude oil to be produced from the oil exploration blocks located in the Albertine Graben in the Democratic Republic of Congo,” the statement read.

According to the statement, technical teams from both sides would consult and write reports to be given to the two ministers, who would subsequently brief the presidents of the two nations on signing a Memorandum of Understanding.

The talks were verified, and the EACOP was reported to have been created with Uganda’s neighbours, notably the DRC and South Sudan, in mind, according to a representative for the country’s energy ministry in Uganda. Uganda and Tanzania’s neighbours are also hopeful that they will be able to acquire money for a proposed pipeline for exporting petroleum.

Media reports have affirmed that the president of DRC, Félix Tshisekedi, is eyeing the East African Crude Oil Pipeline even though no crude oil has been discovered on the Congolese side of Lake Albert, but on the eastern side of the lake, in land-locked Uganda, commercial production of reserves estimated at over 6.5bn barrels may commence in 2025, after long delays since the initial discovery in 2006. On the western side of the lake, in a part of the DRC, progress has been slower and first oil is further off. However, exploration licences have recently become free for two blocks that may hold over 3bn barrels of oil, according to a 2012 seismic survey. If the oil proves to be recoverable the blocks could prove profitable for the licence holders and provide much-needed revenue for the DRC, reported African Business. 

What does border reopening mean for Kenya, Somalia?

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What does border reopening mean for Kenya, Somalia?

 

Following more than a decade of common border closure that began in 2011, Kenya and Somalia have jointly agreed to reopen their land border in 90 days. Last July, the two countries announced their intention to reopen the border, but this never materialized. 

Amid warming ties between the two nations, the decision was announced by Kenya’s Interior Cabinet Secretary Prof Kithure Kindiki and his Somalia counterpart Mohamed Ahmed Sheikh after high-level consultations in Nairobi on May 15, 2023. The meeting revolved around issues of bilateral cooperation in security, trade and the movement of people.

The first to open is Bula Hawa in Mandera in 30 days. Next is Liboi (Mandera) in 60 days and Ras Kamboni (Lamu) in 90 days, Kindiki said.

Kenya-Somalia to reopen 3 joint borders in 90 days after 12 years’ closure

Observers believe that the project, which will run over the next three years, has the potential to boost bilateral trade, regional security and counter extremism. Kenya closed its borders with Somalia in 2011 as part of Operations Linda Nchi to fight the influx of Al-Shabab fighters. 

Kenya – Somalia Border

On the security front, the two ministers revealed that the discussions centred around the need for shared cross-border intelligence and enhancement of law enforcement capacity to man the borders.

The initiative, worth over Ksh1.7 billion ($12 million), is funded by the United Kingdom, aiming to find a lasting solution to perennial insecurity and instability in the Horn of Africa due to the Al-Shabaab insurgency.

The agreement reflects improving relations between the two countries, with  Somalia severing diplomatic ties with neighbouring Kenya, accusing it of violating Somali sovereignty and meddling in its internal affairs before a general election. On the other hand, Kenya has accused Mogadishu of looking for a scapegoat for its domestic challenges. 

UK hands out 20 carbon storage licences

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UK hands out 20 carbon storage licences

 

Twelve companies have been awarded 20 concessions in Britain’s first-ever carbon storage licensing round, the North Sea Transition Authority announced on Thursday.

The 20 offshore licences encompass around 12,000 square kilometres, with many located near Aberdeen, Teesside, Liverpool and Lincolnshire.

When all new carbon storage projects are commissioned, they could store 30 million tonnes of carbon dioxide, representing 10% of the UK’s annual emissions.

Projects are expected to begin coming on line as early as 2029, but will first require operators to obtain leases and approvals.

“The UK’s offshore waters remain the crown jewel of our energy mix, providing energy security, emissions reduction and carbon storage,” said Stuart Payne

Stuart Payne, chief executive of the North Sea Transition Authority

The carbon storage licensing round opened in June 2022, with applications closing in September 2022.

The 13 areas originally up on offer were split to create 20.

Although bidders cannot officially be announced until they accept the awards, Reuters reported that Neptune Energy won three awards, Spirit Energy won one award and Perenco won one award.

Britain’s greenhouse gas emissions stood at around 417 million tonnes of carbon dioxide equivalent in 2022.

“This will require more and more integration and collaboration in a crowded space, and we are working closely with governments and agencies such as The Crown Estate and Crown Estate Scotland to ensure we maximise this amazing potential.”

Top 4 Largest Sovereign Wealth Funds in 2023

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Top 4 Largest Sovereign Wealth Funds in 2023

 

What are sovereign wealth funds, and which nations have the largest in the world?
 

Sovereign wealth funds (SWF) are often associated with well-to-do countries. But an SWF or lack thereof is not necessarily the sign of a wealthy nation. There are plenty of prosperous countries that do not have an SWF and a few not-so-prosperous ones that do.

SWFs serve a purpose in certain economic architecture, and are needed when governments have to deal with the welcome challenge of surplus income.

This may sound like a made-up problem, but handling surplus income is not as easy as it sounds.

Indeed, if handled badly, surplus income can turn into a curse rather than a blessing for a government.

First, let us think about how sovereign governments earn and spend money, and how on earth a government can end up with extra money which it has – seemingly- no use for…

March for our Lives 2020

The government of a sovereign state is not only a political machine, but also a massive economic entity. The federal government of the United States, for example, spent over USD6.25 trillion in the financial year 2022.

This money must come from somewhere. In the case of most Western-style economies, government revenue comes almost exclusively from taxes paid by the citizens and the private sector: income tax, corporate tax, and value-added tax, among others.

Countries with a large public sector and a multitude of state-owned businesses may also enjoy surplus government revenues.

France, for instance is the only country in the Eurozone with a sizable SWF (3rd largest in the world), which holds some USD1.67 trillion. This is due to the unique structure of the French economy which encompasses such huge and profitable state-owned enterprises as Bpifrance and Caisse des Dépôts et Consignations (CDC).

A good question here may be “so, what do SWFs actually do?”

Well, there is no better way to explain than by showing some examples.

Kuwait Investment Authority (KIA)

The Middle East is home to the most notable SWFs of our time. The Kuwait Investment Authority (KIA) was launched as the world’s first modern SWF in the 1950s to safeguard the Gulf nation’s surplus income from crude oil exports.

The fund currently manages just under USD740 billion worth of assets. Between 15-30% of Kuwait’s annual oil revenues are absorbed by the KIA each year. The fund operates following strict guidelines under the watch of a board of director’s headed by the serving minister of finance.

The KIA also manages the Kuwait Future Generations Fund (KFGF)—a fund which as the name suggests saves a part of the nation’s fortune for future generations.

Qatar Investment Authority (QIA)

This is yet another major SWF in the Gulf region. QIA has experienced rapid growth since its inception in 2005, acquiring USD450 billion worth of diversified assets across the world.

The QIA is also under strict control not only by its board members but also the Emir and the Prime Minister when it comes to major spending decisions.

QIA is famously keen on UK-based assets, although in recent years it has also focused on continental Europe. Acquiring the French Ligue 1 club Paris Saint-Germain was not only another European acquisition, but also an attempt at rebranding.

Public Investment Fund (PIF) of Saudi Arabia

Saudi Arabia’s SWF was launched by royal decree in the fateful year of 1971, when oil prices jumped several folds. The PIF is currently managing an asset portfolio of USD1 trillion.

The PIF’s mandate is to financially support the kingdoms strategic projects. The most recent examples of such enterprises are over 15 mega projects announced by Saudi Arabia since 2016, including NEOM, the Red Sea Project, The Line, and—most recently—the Mukaab.

The PIF also owns minority stakes in overseas companies such as the aircraft manufacturer, Boeing, the tech giant, Meta Platforms, and the financier Citigroup.

Emirates Investment Authority (EIA)

The EIA has been functioning as the UAE’s only federal SWF since 2007, though it works alongside each emirate’s local investment fund, such as the Abu Dhabi Investment Authority (ADIA).

The UAE’s wealth funds collectively oversee a portfolio of over USD1.35 trillion, which makes the UAE the Middle East’s leading economy in terms of sovereign wealth. The EIA’s activities are monitored by a board which is currently chaired by the Emirati royal and cabinet minister Mansour bin Zayed Al Nahyan.

The EIA has a diversified asset portfolio, including majority stakes in the Abu Dhabi telecom giant, Etisalat.

All that said, SWFs are not limited to the Middle East. France was mentioned earlier as one of the few Western nations with an SWF due to its large public sector economy. Norway is yet another example, although unlike France its USD1.4 trillion SWF is filled with petrodollars.

And, of course, we have China: the quintessential state-run economy with an SWF worth USD1.8 trillion.

China-Russia Relations

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China-Russia Relations

 

Beijing finds itself in a tricky diplomatic situation with the ongoing war in Ukraine, as it tries to avoid worsening relations with the West while remaining on friendly terms with Moscow.

They are large and influential countries, both used to be communist states, and neither country is on excellent terms with Western democracies.

So it would make sense if Russia and China were close allies. The reality of the matter is not that simple, however.

Russia and China are neither close allies nor enemies. Of course, they have long-established diplomatic and economic ties, but their closeness is a matter of practicality and can—at times—waver.

Beijing’s support of the Russian invasion of Ukraine has been tangible enough to cause dismay in certain quarters such as the US State Department, but it probably falls short of what Moscow was expecting.

From the Kremlin’s point of view, although Beijing has echoed some of the Kremlin’s justifications for war in Ukraine, China has not openly backed up Russia’s war, nor has it offered Moscow much in the way of financial and military support.

This is simply because China cannot afford to fall out with the West in the way that Russia did in February, 2022. China’s USD17.5 trillion economy has much to lose and little to gain from unequivocal support of the Kremlin’s policies.

Beijing and the West: Not the best of friends, but it depends…

Are West, China Different? Russia Says Beijing “Doesn’t Shoot Themselves”

Chinese industrial and technology manufacturers form the backbone of the red giant’s economy, and contracts with western companies are what make them tick.

If you happen to own an American or South Korean brand of smartphone, a look at the back of your device will tell you where it was put together. Not in the US or South Korea, surely.

Much else that you see around yourself originating from brands based across the world, too, were manufactured in the same place as your smartphone.

Beijing does not want to risk its lucrative—albeit a touch shaky—business relations with the US and its allies, particularly now that the red giant’s outstanding foreign debt exceeds USD2.7 trillion, according to Bloomberg.
Nevertheless, China does not want to risk its long-standing economic and political ties with Russia, either. 

Beijing and Moscow relations

Beijing and Moscow: Longtime comrades, but not unconditional

Much has changed since the Cold War, when Moscow was the de facto leader of the Eastern Bloc and the entire socialist world.

With its rapid transformation into an economic powerhouse over the last two decades, China has completely eclipsed Russia in almost every way, ranging from GDP to influence over developing economies.

“The China-led ‘16+1’ initiative in Central and Eastern Europe (CEE) is crafting a soft version of the old East European bloc, this time under Chinese rather than Russian tutelage,” observed Martin Hala in a 2018 scholarly article published in the Journal of Democracy.

China’s famous Belt and Road international investment initiative is of still higher importance in solidifying Beijing’s influence over some 70 developing nations, many of which used to be under Moscow’s sway during the Soviet era.

China is even working on economic projects on Russian soil. Chinese enterprises are active in many parts of Siberia, including around Lake Baikal, tapping into its huge freshwater reserves.

All this has caused some hard feelings among local Siberians, curbing China’s foreign direct investment in Russia since 2018.

Despite some misgivings, Moscow and Beijing still feel the need to keep their strategic alliance alive, at least for the sake of appearance, and possibly more.

Beijing, in particular, prefers to maintain its ties with Russia given the huge economic prospects, hence the political support and economic lifeline offered to Moscow after the annexation of Crimea.

Walking a fine line and an impossible choice

This time, however, things may get more intense given Russia’s large-scale and haphazard invasion of Ukraine.

Beijing is already walking a very fine line, doing its best to maintain its diplomatic and business ties with both the West and Russia, but the time may come for Beijing to make a difficult decision.

Beijing has something to gain from each of these two sets of relations, and neither is free of downsides.

It is extremely difficult, however, to predict which ties will survive if, over the coming months, China is pressed to choose one or the other.

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