Russia, China and the Baltic connectivity

Abstract

Both Russia and, more recently, China play an important role in the development of connectivity in the Baltic states. It goes without saying that the importance of the Baltic states for Russia is traditionally much higher than for China, due to historical, geographical, and economic reasons. Russia often considers the Baltic states as its natural zone of interest, which traditionally is referred to as "near abroad" (rus. Ближнее зарубежье) – a term which also includes Commonwealth of Independent States (CIS) countries. In recent decades the Baltic states have achieved considerable progress in lowering their economic and energy dependence on Russia. Even so, Moscow tries to sustain its influence in the region, and demonstrate that it is the dominant actor, including through regular military power projection. China's economic presence in the region has been growing. For Beijing the Baltic states are less important due to geographical distance, lack of natural resources, small markets, and the limited size of the high-tech sector. At the same time, the Baltic states matter for China as it seeks to broaden its economic presence in Europe. For example, the Baltic region could serve as an additional transportation link to the Western European markets. Furthermore, China is interested in selling its high-tech products in the Baltic states (including 5G). Similar to Russia, China sees this region in the framework of global political expansion and power struggle with the United States. 252 253 Russia, China and the Baltic connectivity The aim of this chapter is to examine in detail Russian and Chinese activities in the field of connectivity in the Baltic states, including in the traditional transportation, energy and communication sectors, but also the high-tech and financial-technological sectors. The chapter analyses numerous cases and examples of both countries' presence in these sectors, and explores similarities and differences in their interests, approaches and tools. As a result of Russian and Chinese investments and activities, the Baltic countries face the serious challenge of how to balance possible economic opportunities with considerable risks to national security. The chapter therefore also analyses the security risks involved.