Navigating the Great Powers

To undertake a journey on a road never before traveled requires character and courage: character because the choice is not obvious; courage because the road will be lonely at first. And the statesman must then inspire his people to persist in the endeavor.

– Henry Kissinger

For ages power has been the topic of countless articles, books, and newspaper col­umns. Analysts, practitioners, specialists, and theoreticians alike have thoroughly discussed its different types (hard, soft, smart); the nature of its distribution at the global and regional levels; and how large, me­dium, and small states behave (e.g. accommodate, balance, remain neutral) when there are both shifts in power and changes in interna­tional order.

These age‑old discussions are ever‑present in the minds of policymakers and the global public today because of the shift in the international system from a quasi‑unilateral order domi­nated by a single major power (the United States) to a multi­polar order that is in the process of being reconstituted by major, rising and reemergent powers; the relative decline of America’s ability to project her power as a result of that shift; new types of geo‑economic and geopolitical compe­tition among powers in key stra­tegic regions and countries across the globe, including among tradi­tional allies (e.g. between America and European major powers) and rivals (e.g. between America and western European powers and Russia); and, U.S.‑China compe­tition and the Trump Administra­tion’s shift from a more cooper­ative engagement approach with Beijing toward one combining competition, confrontation, and cooperation on key economic and po­litical issues. Great power competition with China will continue under the Biden Ad­ministration, but there is likely to be a greater emphasis placed on multilateral en­gagement and less on executive‑level confrontation. Confrontation is more likely to be led by U.S. congressional foreign policy entrepre­neurs on foreign policy issues such as trade, technology, and invest­ments in the time ahead.

Needless to say, the current pe­riod facing nation‑states is filled with uncertainty.

Both statesmen and stateswomen are ponder­ing the past, looking at the present, and explor­ing new courses of action for ways to wisely and safely navigate their state and people toward an un­defined, unknown future.

Both statesmen and stateswomen are pondering the past, looking at the present, and exploring new courses of action for ways to wisely and safely navigate their state and people toward an undefined, unknown future.

The South Caucasus region, as will be highlighted in the first part of this essay, is no stranger to the aforementioned compe­tition and confrontation. Since gaining (or regaining) indepen­dence thirty years ago, each South Caucasus state has had to navigate a geopolitical jungle comprised of regional powers— Russia, Turkey and Iran, the United States, and major western European powers—all of whom have com­peted for influence and confronted one another either directly or indi­rectly since the end of the Cold War.

Armenia, Azerbaijan, and Georgia have formed alliances with key regional powers, established a web of economic, political, and se­curity relations with both regional and major powers, and advanced their own foreign policy agendas to promote growth, development, and security. When China entered this jungle and showed individual atten­tion to each state it was welcomed with open arms. Not even the major Western powers expressed concern at the time. A review of transcripts and other news material including speeches, congressional hearings, interviews, and news arti­cles published by government offi­cials in States News Service and U.S. Federal News, which provide cov­erage to American news media out­lets and are picked up by the Asso­ciated Press International, find that Sino‑South Caucasus relations in general and China’s relations with the specific South Caucasus coun­tries were not major concerns for Western policymakers. From the period of the announcement of the Belt and Road Initiative in 2013 to the present, the majority of the references to Sino‑South Caucasus relations were made within the con­text of Russia’s role in the region. References to China’s relations with specific South Caucasus countries, on the other hand, simply men­tioned them within a larger focus on issues of concern to lawmakers including democracy (or the lack thereof), the Nagorno‑Karabakh conflict, energy developments, and economic security concerns.

Despite the lack of specific con­cern expressed by Western policy­makers, they have raised concerns about China’s growing global influ­ence and the impact of that on both U.S. and Western interests. Some have even called for economic and political pressure to be applied to­wards smaller states to counter Beijing’s growing influence. Though the South Caucasus region is well acquainted with such geostra­tegic games, experts on the South Caucasus are divided as to whether they will have a significant impact on the region and each country’s relations with China.

This essay explores Sino‑South Caucasus relations, focusing more specifically on China’s trade rela­tions, investments, and military relations (or the lack thereof) with Armenia, Azerbaijan and Georgia. In doing so, it draws on the larger debates to discuss potential ways forward for the region in this period of geopolitical uncertainty. Although the nature of relations between China and the region’s countries have grown, they are still insignificant to pose a challenge to either the aims and inter­ests of regional or other major powers at this time. And, as Yu Hongjun wrote in the previous edition of Baku Dialogues, there is much potential for cooperation between China and the countries in the region, but they must be pursued in the spirit of perseverance given the many challenges facing the region and the global community.

The Geopolitical Jungle

Within the geopolitical jungle of the South Caucasus, the geopolitical codes of the major and long‑term stakeholders have been oriented toward the level(s) in which they are engaged. Russia, Turkey, and Iran vie for influence not only in the South Caucasus but also in the Middle East—a region that has been the exclusive opera­tional ground for America up until the last few years. Russia, an actor that strives to rekindle its great power status, competes with both America and the EU for influence in the European geography and other regions. The United States and the EU—two traditional al­lies in promoting and maintaining a Euro‑Atlantic dominated inter­national order—compete for eco­nomic and political influence in certain countries and regions de­spite their coordination to counter the perceived threats to instability within the Atlantic Alliance and the growing regional and global influ­ence of Russia and China.

China, a relatively new actor to the geopolitical game, is a com­petitor for the United States and a geo‑economic competitor for Russia and the EU despite its stated desire not to be considered as such. Experts suggest Beijing’s growth in the South Caucasus will depend not only on Moscow’s but also the Euro‑Atlantic bloc’s acceptance of its role. They also suggest the West has the potential to block or contain China’s growth, given the South Caucasus countries’ dependence on the European market.

As will become evident later in this essay, these experts are correct, but only to a degree. China’s rela­tions are insignificant at the present time to either compete with or pose a challenge to the regional coun­tries’ relations with either Russia, the United States, or the major EU countries. However, restrictions imposed by the EU on the re‑ex­port of goods and products sold in its market and the oversight of in­vestment projects could potentially have an impact on and limit future Sino‑South Caucasus economic re­lations. The actual impact will also depend to some degree on how EU‑China relations evolve.

Regional powers Russia, Turkey, and Iran have the greatest stake in the region’s po­litical and economic develop­ment, given two factors: their geo­graphical proximity to Armenia, Azerbaijan, and Georgia, and how instability in the region impacts on their national security. Russia is considered by scholars to be the most important regional actor, while Turkey is considered to be the second most important actor. Iran rounds off the list.

All the South Caucasus countries depend to some degree on Moscow for communications, transportation, supply‑chain, and other networks that either pass through Russian territory or are under full Russian control. As will be highlighted below, China’s economic relations neither compete with nor challenge Russia’s economic relations in the region. Some experts suggest that they, in fact, com­plement them; thus raising the concern by some analysts and Western policymakers of a potential China‑ Russia‑Iran axis that could chal­lenge or replace American and EU influence in the region. Such an axis, however, is unlikely given the shift in the regional power dy­namics following the conclusion of the Second Karabakh War.

Beijing’s relations similarly com­pliment Turkey’s aims and interests in the South Caucasus. Armenia is Moscow’s traditional ally, and the country that is most dependent on Russia for its economic, political, and security relationships. It has been a traditional Iranian ally as well. Georgia, on the other hand, has turned to Turkey, NATO, the U.S., and the EU to counterbalance Moscow’s military and security primacy and re­duce its economic and energy de­pendencies. Azer­baijan is Turkey’s traditional ally— and increasingly so, as it turns out.

Baku has pursued a com­pletely independent for­eign policy, seeking to bal­ance both regional and other major power actors. Armenia and Georgia do not have the same luxury, given the nature of their dependencies. China has neither given preference to nor does it have a spe­cial relationship with any specific country in the region, as do Russia and Turkey.

However, Baku has pursued a com­pletely indepen­dent foreign policy, seeking to balance both regional and other major power actors. Armenia and Georgia do not have the same luxury, given the nature of their dependencies. China has neither given preference to nor does it have a special relationship with any spe­cific country in the region, as do Russia and Turkey.

Moscow’s aims in the region include minimizing U.S. and NATO military encroachment and EU influence, maintaining military and security primacy, and minimizing instability by ex­panding good neighborly relations for the purpose of reestablishing itself as a major global player. Some experts suggest the signing of the armistice agreement between Armenia, Azerbaijan, and Russia that marked the end of the Second Karabakh War solidifies Moscow’s military and security primacy and effectively contains western rela­tions to the economic realm. That may be. More interestingly, it opens the door to Moscow serving as meditator in any future tensions be­tween Ankara and Tehran.

Turkey and Iran have long com­peted for soft power influence in both Azerbaijan and Georgia. Ankara’s aims in the region include promoting soft integration through economic, energy, and infrastruc­ture projects; finding alternative energy sources and market oppor­tunities; developing civil society, sociocultural, and commercial relations, including tourism pro­motion; and enhancing its secu­rity cooperation with Georgia and Azerbaijan (given the importance of their economic and energy coop­eration and the need for stability in the region).

Tehran seeks to bolster its eco­nomic, political, and cultural ties with each of the countries, and has long sought to maintain the status quo in the Nagorno‑Kara­bakh conflict. Experts on Iran‑ South Caucasus relations say that the conclusion of the war reduces Tehran’s regional influence, while others suggest it opens the door to a different type of regional tension due to it bringing Ankara closer to the Iranian border and the fact that both actors have ties to com­peting non‑state actors operating in the larger Central Asia and MENA regions.

However, Moscow is unlikely to allow any sort of tension between the two to develop in the short‑to‑medium term because of the impact it would have on the new balance of power Russia had a primary hand in establishing at the conclusion of the Second Karabakh War. Al­though relations between Russia, Turkey, and Iran affect stability, it is Turkey‑Russia relations that have the most significant impact on the distribution of power in the region. The U.S., NATO, and the EU— coupled with their tensions with both Ankara and Moscow—factor into these dynamics as well.

American interests in the region have evolved. Initially, the United States was concerned with supporting and strengthening each South Caucasus country’s eco­nomic and political independence and territorial sovereignty. Then, in the mid‑1990s, energy security became the driving force. The U.S. sought to deny any one country from having a monopoly on the transportation of Caspian natural resources, facilitate energy diversification for Europe, and reduce the region’s economic and energy dependence on Russia. The U.S. shifted its main focus from con­taining Russia in the post‑9/11 pe­riod in order to balance its global security objectives with other con­cerns by seeking support for the global war on terrorism and lo­gistical assistance for operations in Afghanistan. Military and se­curity cooperation with Armenia, Azerbaijan, and Georgia—and their participation in NATO’s Partner­ship for Peace program—increased during this period, commensu­rate with the aforementioned shift. American economic assistance and infrastructure investments also have been important compo­nents of U.S.‑Caucasus relations. The Overseas Private Investment Corporation (OPIC) has invested around $1 billion in the South Cau­casus. As will be highlighted in the following sections, China’s relations neither compete with nor challenge American economic relations in the region. The only area where some sort of competition exists is in con­sistency.

A lack of American consistency in its foreign policy approach to­ward the region has been a long‑held complaint among the South Caucasus countries. Experts high­light the fact that the U.S. has a well‑developed strategy for Central Asia but is lacking one for the South Caucasus region. China’s BRI, on the other hand, offers the region a stake in Beijing’s vision and room for the countries to create their own visions for economic growth and development. The afore­mentioned review in States News Service and U.S. Federal News finds that Western policymakers recog­nize this issue in the nature of U.S.‑ South Caucasus relations and why BRI has been well‑received. Experts and lobbyists have highlighted a need for the United States to pro­vide countries with economic alter­natives to those which are provided through Sino‑South Caucasus eco­nomic relations.

All three South Caucasus coun­tries have provided valuable sup­port to NATO‑led operations by contributing forces to NATO‑led missions in Kosovo and Afghan­istan and the U.S.‑led coalition in Iraq. Terrorism, WMD prolifer­ation, energy security, and pro­tracted regional conflicts are the traditional security agenda items corresponding to each country’s security agenda, while border security, cyber security, and di­saster preparedness and response are non‑traditional security issues where cooperation with NATO is welcomed. The Atlantic Alli­ance’s engagement with the region is limited to these areas as well as to working with each country on defense sector reform, military education, and training due to divisions within NATO itself and a lack of will among the South Caucasus countries for the Alliance to play a greater role in the region.

None of them want to see in­creased Europe‑Russia tensions, which would definitely result from a change in the present role NATO plays. Georgia is the only country with an expressed interest in, and a declared intention to, become a NATO member. Armenia and Azerbaijan have limited their en­gagement to participation without membership. This is viewed by each, for different reasons, as the best way to counterbalance Rus­sian military and security primacy and transform regional security dy­namics. Similarly, as will be high­lighted later in the essay, limited military relations with China are seen as simply an attempt to diver­sify their military partners.

The EU’s relations are con­ducted via its Eastern Partnership program (EaP) and European Neighborhood Policy (ENP). The EaP seeks to provide support in the countries’ transfor­mation process and to bring them economically and politically closer to the EU, while the ENP seeks to promote prosperity, stability, and security in the countries and to the European geography as a whole.

Economic and political develop­ment, energy security, and the pro­tracted conflicts are the three key areas of concern for EU member states in the context of the South Caucasus. Georgia is the only country that has openly declared its intent to become an EU member (an unlikely prospect in any reason­able time horizon); both Armenia and Azerbaijan seek only a closer connection to, rather than mem­bership in, the European Union. Experts suggest that the EU is likely to continue playing a minimal role, deferring instead to the U.S., NATO, and the engagement of the EU‑3 (France, Germany, and Italy) in a non‑EU capacity in promoting relations and advancing both Euro­pean and transatlantic agendas.

EU‑Russian relations shape the EU’s engagement (or the lack thereof) as well as member states’ divisions on the EU’s approach to EU‑Russian relations. Sino‑South Caucasus relations, as will become evident in the next section, are complimentary to both the EaP and ENP, and they neither compete with nor challenge the EU‑3’s bilat­eral relations with countries in the region. Nonetheless, it should be kept in mind that there are Euro­pean actors who have been working in concert with some U.S. policy­makers to counter China’s growing global influence, and this could have a later impact on Sino‑South Caucasus relations.

China is a relatively new comer to the geopolitical jungle of the South Caucasus. Beijing has ex­pressly stated it has no geopolitical or geo‑economic objectives despite claims made by some Western poli­cymakers. Some suggest Beijing intends to challenge U.S. primacy in global politics; alter the rules‑based transatlantic order that has defined and managed relations between states since World War II; and use its economic power to influence coun­tries’ behavior in domestic, regional, and global politics for the purpose of advancing its own foreign policy agenda. A few of them even go so far as to posit that Beijing’s economic and military or se­curity relations in certain regions and with specific coun­tries are a national security challenge and/or a potential future threat to re­gional and global security. However, when Sino‑South Caucasus relations are examined, these concerns just simply appear to be (at least at this time and within this context) nothing more than hyperbole.

China’s relations with each South Caucasus country have grown since the introduction of the Belt and Road Initiative in 2013. BRI aims to promote connectivity, establish and strengthen partnerships with coun­tries along the various land and sea routes, and facilitate sustainable development at the domestic, re­gional, and global levels by building on and advancing existing economic, energy, and trans­port infrastructure initiatives.

Armenia, Azerbaijan, and Georgia have each welcomed BRI and increased eco­nomic cooperation with Beijing, with both Chinese state‑backed and private investments taking place in these coun­tries.

The South Caucasus countries each view Chi­na as a distant, alterna­tive major power that has no interest in interfering in their domestic affairs or using them to influence or alter regional or global power dynamics; a poten­tial economic and politi­cal counterweight to both Russia and the West; and an actor that has demon­strated its willingness to invest in projects in oth­er countries and regions where the conditions are not ideal

The South Caucasus countries each view China as a distant, alterna­tive major power that has no interest in interfering in their domestic affairs or using them to influence or alter regional or global power dynamics; a potential economic and political counter­weight to both Russia and the West; and an actor that has demonstrated its willingness to invest in projects in other countries and regions where the conditions are not ideal (i.e. where there are higher levels of instability). Each country also seeks to diversify its economy and sources of foreign direct investment in order to reduce their economic dependency on some of the major actors, while both Armenia and Azerbaijan seek to diversify their military and security cooperation beyond their traditional partners. As will be highlighted toward the end of this section, regional military and security relations have not yet been a major focus for Beijing in its relations with Baku, Tbilisi, and Yerevan.

Sino‑South Caucasus Economic Relations

In his aforementioned Baku Dialogues essay, Yu Hongjun writes that there is much poten­tial for economic and development cooperation between China and the South Caucasus countries and for them to combine existing cooperation into a wider frame­work. Their existing cooperation primarily takes the form of trade and investment.

According to Yu Hongjun, China is Azerbaijan’s fourth largest trading partner, third largest ex­port partner; and Georgia’s third largest trading partner. Although its trade with Armenia has stag­nated over the past couple of years, China is still among the top five of Yerevan’s trade partners. An anal­ysis of the 2018‑2019 Import‑ Export data available from the Global Trade Database finds that China’s trade relations with the South Caucasus countries consists primarily of trade in manufac­turing (62.95 percent), industrial (20.43 percent), consumer (17.58 percent), and agricultural goods (.04 percent). And of that trade, 55 percent is with Azerbaijan while the remainder is split almost equally between Armenia (22 percent) and Georgia (23 percent).

There is, of course, variation across the countries in the goods traded. For example, in manufac­turing goods, 60 percent is traded with Azerbaijan, 20 percent with Armenia, and 19 percent with Georgia. For industrial goods, 47 percent of the trade is with Azerbaijan, 22 percent with Armenia, and 31 percent with Georgia. In consumer goods, trade with Azerbaijan consists of 43 percent while the remainder is al­most equally split between Georgia (29 percent) and Armenia (28 per­cent). Finally, in agricultural goods, 60 percent is traded with Georgia and 31 percent with Armenia. There was no reported agricul­tural trade with Azerbaijan. The Chinese leadership has consistently expressed its readiness to both ex­pand the import of high‑quality ag­ricultural products from Armenia and help Azerbaijan with its agri­cultural renovations.

Manufacturing goods comprise the majority of the region’s exports to China; and, of the total amount, 37.47 percent consists of natural re­sources and raw materials. The ma­jority of these exports come from Azerbaijan (68 percent); they consist of mineral, fuels, distillation prod­ucts, lac, gums and resins, inorganic chemicals, precious metals and iso­topes, and copper. Ores slag and ash are also exported to China from Ar­menia and Georgia. These natural resources and raw materials are im­portant for Beijing’s economic devel­opment and are much needed for its continued economic growth. Though the total amount of its imports from the region are relatively small in com­parison to what it receives from Asia or Africa, they should be interpreted as part of Beijing’s strategy to diver­sify and strengthen its trade relations across BRI’s geography.

Like in trade, China’s invest­ments in the South Caucasus have increased since 2013. An exam­ination of available open source data on Chinese investments finds that they have specifically targeted proj­ects in manufacturing and energy in Azerbaijan and Armenia; trans­portation infrastructure in Armenia and Georgia; finance and real estate in Georgia; and agriculture in Azer­baijan. These investments neither pose a real or perceived threat to Western interests in the region nor do they have the potential to alter regional power dynamics or policy behavior. Nonetheless, Chinese in­vestments in energy and transpor­tation infrastructure are two areas where Western policymakers have expressed concern in their public remarks with respect to China’s growing global influence.

Energy has been a major target for Chinese investment in the BRI countries, including in Armenia and Azerbaijan. A 2018 study con­ducted by Zhongsu Li, Kevin P. Gallagher, and Denise Mauzerall from the Global Development Policy Center in the United States found that countries falling within the scope of BRI’s geography com­prise 48 percent of the Chinese energy investment portfolio cov­ering various technologies including coal, gas, oil, hydro power, wind, solar, and biomass power. In Armenia, Chinese investors have targeted thermal nuclear energy production capabilities and dis­cussed the development of hydro­electric and solar capabilities. A focus for Chinese investment in Azerbaijan have been renewable energy including mobile energy stations for Nakhichevan, the dis­patching of installation specialists, and the building of greenhouse complexes. Experts suggest the re­gion’s energy imbalance poses fu­ture difficulties for ensuring the sta­bility of energy transport.

Transportation infrastruc­ture is another area of interest for Chinese investors because of its impact on economic growth. Ac­cording to Yu Qin of the National University of Singapore, infrastruc­ture investments bring economic prosperity, affect the distribution of economic activities, reduce poverty, and promote economic integration in the targeted country. Chinese in­vestment in the region’s transporta­tion infrastructure has been limited even though Beijing has encouraged investors to play an active role in the construction of BRI transit cor­ridors. Investors have instead con­centrated on indirect opportunities surrounding each country’s planned and actual transport infrastructure projects. For example, in Georgia, they indirectly aided the country’s transportation infrastructure development by targeting business opportunities involved in the construction of bypass tunnels and railway goods, market and com­mercial facilities, and residential districts. These have included in­vestments in the industrial zones, container cranes, and other heavy equipment needed for construc­tion, management, and operations. In Azerbaijan, Chinese railroad workers contributed to the development and expansion of the Trans‑Caspian International Trans­port route. As Taleh Ziyadov pointed out in the previous issue of Baku Dialogues, China also transferred the technology needed to enhance cargo capacity at the Port of Baku and to strengthen the country’s overall role in regional trade and logistics. In Armenia, Chinese in­vestors enabled the construction of a portion of the North‑South corridor connecting Gyumri to the Georgian border. All the countries seek FDI in transportation infrastructure. As the Azerbaijan government has highlighted, interconnectivity will boost development and economic cooperation in the region and en­hance the global economy by cre­ating more economic opportunities around the world.

China’s economic rela­tions with the South Cau­casus countries pose no immediate challenge or threat to major powers or regional power dynam­ics, and it is unlikely that growth in them will result in a power realignment or accommodating behavior on their part.

China’s economic relations with the South Caucasus countries pose no immediate chal­lenge or threat to major powers or regional power dynamics, and it is unlikely that growth in them will result in a power realignment or ac­commodating behavior on their part.

Four reasons rise to the mind. First, Sino‑South Caucasus eco­nomic relations (at least at this time) are relatively insignificant when taking into consideration the region’s economic relations with Russia, France, Germany, and the United States. Second, the nature of China’s trade relations and in­vestments comple­ment rather than compete with or challenge major powers. Third, re­gional connectivity through transport infrastructure, the nature of Eu­ro‑Atlantic and Euro‑Asian trade linkages, and the complex webs comprising the South Caucasus countries’ bilat­eral economic relations promote economic and political develop­ment and regional stability. Fourth, China has thus far recognized and respected the complex nature of the region’s power dynamics and Chi­nese investors have been selective in their investments so that they complement rather than compete with or challenge each of the major stakeholders’ interests.

A lack of direct investment in Azerbaijan’s transport infrastruc­ture projects is a case in point. Di­rect investment by China or a mo­nopoly held by other non‑Western entities could have triggered a fear that has been raised before by Western policymakers, namely of the potential blocking of key trans­port routes and critical infrastruc­ture (e.g. ports) in the future, which, in turn, could hinder oil and food supplies to core areas in Eurasia and Japan where there is a heavy U.S. military presence. This fear, coupled with the perceived security threat of a dominant power in either Europe or Asia setting conditions for Amer­ican access to vital natural resources, have long provoked strong resistance to Eurasian connectivity from some Western policymakers.

Finally, the aforementioned ex­amination of material in States News Service and U.S. Federal News indicates that although Sino‑South Caucasus economic relations are mentioned, they do not appear, at this time, to be a major concern among policymakers who are con­cerned about both the rise and economic and political influence of China across the globe. As was highlighted above, Western policy­makers have raised concerns about Chinese investments in energy and transport infrastructure, but the nature of those investments in the South Caucasus do not seem to be an issue at this time.

Military and Security Relations

China has a growing stake in securing its overseas eco­nomic and energy interests and protecting its growing diaspora community, particularly given that the security environments where they are located are often plagued by a combination of traditional and non‑traditional security threats. Ex­perts highlight Beijing’s armament sales, military‑technology and security agreements, and both its mil­itary presence in Africa and actions in the South China Sea as signs of its growing military footprint. They also underscore intelligence and satellite communications networks, dual‑use ports and infrastructure projects, and the use of pri­vate or host‑nation security forces to protect strategic commercial and human assets to highlight its growing global security footprint.

Recognition of this and reflection on its potential implications has led some Western policymakers to raise concern over whether its growing military and security roles in spe­cific countries and regions across the globe will challenge and/or replace U.S. military and security pri­macy. Some have even questioned whether it could potentially chal­lenge Russian military and security primacy in its own area of influence like the South Caucasus; and, if so, whether it would create a degree of regional instability that would necessitate U.S. or NATO inter­vention. Others experts, including those from the Rand Corporation, argue that because of Beijing’s own “renouncement of military aggres­sion, lack of international allies, and limited power projection capabilities,” it presents neither a di­rect nor an indirect military and security challenge or threat at this time. As will be highlighted below, Beijing also poses no threat to major power stakeholders in the South Caucasus region.

China’s military and security footprints in the South Caucasus is relatively light, with its relations being limited to Armenia and Azer­baijan. In Armenia, military rela­tions consist primarily of high‑level military‑to‑military personnel meetings and limited weapons sales and non‑lethal techno­logical assistance. Some experts have proposed the ex­pansion of Sino‑Armenian military‑technological as­sistance to include the creation of a joint military‑industrial center for the production of military robots, drones, and other military technology. However, Beijing has not overtly expressed an interest in such an expansion of their relations. Sino‑Armenian security relations consist of secu­rity cooperation agreements on anti‑terrorism, cyber security, and BRI security. In Azerbaijan, rela­tions consist primarily of military armament sales. Baku has pur­chased Chinese‑licensed tactical weapons from Turkey and a multiple rocket‑launch system that was jointly designed by China and Belarus.

Like Yerevan, Baku has also ex­pressed an interest in expanding military, military‑technolog­ical, and military‑educational cooperation with Beijing. Both Armenia and Azerbaijan see Beijing as a poten­tial alternative military supplier and security assistance provider. Beijing, however, remains reticent to ex­pand its military‑security cooper­ation with either country because of the nature of its economic relations with both coun­tries, the military and security role played by Russia, Turkey, the United States, and NATO in the region, and its own relations with these powers.

Thus, Sino‑South Caucasus military and security re­lations at this time present no military or security challenge to either the United States (and by extension NATO) or Russia. As was highlighted in the previous section, the nature of the security environment in the region is al­ready quite complex, given the na­ture of relations between the major power stakeholders and each country in the region.

Beijing has little to gain by entering the geostra­tegic security game, and doing so would only re­inforce the fears and concerns expressed by some policymakers and experts of a potential China‑Russia‑Iran axis that could compete with and challenge Western interests and influence in the South Caucasus.

Beijing has little to gain by entering the geo­strategic security game, and doing so would only reinforce the fears and concerns expressed by some policymakers and experts of a po­tential China‑Russia‑Iran axis that could compete with and challenge Western interests and influence in the South Caucasus. And the latter itself, as will be recalled, runs con­trary to the interests and aims of the region’s countries that do want limited military and security coop­eration with the West.

To that end, the limited Sino‑ South Caucasus military and se­curity relations should be seen within the larger context of BRI and as part of Beijing’s intention to offer incentives for participating countries and to simply diversify the nature of its relations with them rather than as an intent to compete with or challenge the established major power stakeholders in the region.

Navigating the Way Forward

The relative decline of and the role played by America, the ongoing shift from a unipolar to a multipolar system, and the emerging (yet to be defined) new international order resulting from the rise of new and reemerging powers at the regional and global levels have each contributed to small and mid‑size states making choices to search for alternative partners to meet their economic, development, and security needs.

As has been highlighted in this essay, Armenia, Azerbaijan, and Georgia look to China—an emerging global power but not a rising power in the South Caucasus region per se—as an alternative source for their economic and de­velopment needs. Only Armenia and Azerbaijan have expressed a desire to explore and enhance their military and security relations with Beijing. The level and nature of Beijing’s economic, military, and security relations do not in any way pose a challenge to or threaten to alter the distribution of power in the South Caucasus region. As was highlighted in the first part of the essay, Russia and Turkey are major regional powers and have greater in­fluence on the exercise of economic and military power in the region, and both the United States and the European Union play (lesser) roles in that dynamic. Also, for America and the EU, Russia rather than China remains the larger security concern for the transatlantic bloc, although Turkey appears to be running a close second in some circles (e.g. France).

All this means that as long as Beijing’s relations continue to en­hance the aims and interests of the region’s major stakeholders and the nature of their relations with the South Caucasus countries, then it is unlikely there would be any external coalition formed in the short‑term for the purpose of targeting Sino‑South Caucasus relations.

Also, the fact that Beijing is not a rising power in the region per se is an extremely important point to keep in mind, given that much of scholarship examining small and mid‑size state behavior in periods of great and major power competition finds that it is the re­gional rather than the global distri­bution of power that matters more.

Small and mid‑size states are more conscious of the distribu­tion of power within their vicinity (i.e. the South Caucasus) rather than the larger region (i.e. Europe, broadly under­stood) or global competition (i.e. U.S.‑China global competition). Beijing has also demonstrated its reticence to get in­volved in regional disputes, as was demonstrated both by the July four‑day flare‑up in and around Nagorno‑Karabakh and the Second Karabakh War; and tensions between Russia and Turkey in North Africa, which has implica­tions for the two competitors in the South Caucasus region, as Svante Cornell discussed in an essay that appeared in the previous edition of Baku Dialogues.

This implies that there is unlikely to be any change in the behavior of Armenia, Azerbaijan, and Georgia toward their relations with China under present circumstances. Rather, each are more likely to re­main inclined to keep enhancing their respective economic relations with Beijing, given the existing competition between the major stakeholders in different regions. Even if Beijing were to increase its economic relations with these countries, research by experts finds that economic ca­pabilities of a rising power (should Beijing reach that level in the South Caucasus in the future) are not alone sufficient to generate a change in small and mid‑size state behavior. Rather, it is only a threat to their se­curity that is likely to induce such a change, whereby they turn to the state or a coalition of states that can best provide for their security. Each country’s behavior will continue to be situationally determined.

The bottom line is that the economic, development, and security needs of Armenia, Azerbaijan, and Georgia will almost certainly continue to be defined and dictated by the nature of their relations with the region’s major stakeholders. Looking ahead, this will certainly include China.

Each South Caucasus country views its par­ticipation in BRI—as well as its bilateral re­lations with China—as an opportunity to bring greater development to themselves, prosperity to their own people, and enhance the strategic role of their region to the global economy.

Each South Caucasus country views its participation in BRI—as well as its bilateral relations with China—as an opportunity to bring greater development to themselves, prosperity to their own people, and enhance the strategic role of their region to the global economy. The leaders and policymakers of the South Caucasus have proven them­selves to be adept in navigating great power competition at both the re­gional and global levels; so even if some aspects of their relations with China—such as those that have been raised as a concern by some Western policymakers—are targeted in the future, they are likely to nav­igate the conflictual currents with expertise and sophistication. None­theless, they should be cognizant of, and plan for, ways to overcome any points of tensions in the future. The shifting world order itself and the uncertainty that it brings will require both character and courage; for the future of the South Cau­casus will be determined by how its statesmen and stateswomen weather the storms of global, regional, and domestic uncertainty.