Turning East: How Russia’s ambitions in Asia are confronted by reality

In early September, Vladivostok hosted the tenth annual Eastern Economic Forum that has become an indicator of the progress of Russia’s policy towards the Asia-Pacific region. Official statements from Moscow presented the event as a sign of successful engagement with regional partners, particularly China, and highlighted ongoing efforts to develop the Russian Far East as an economic and logistical hub.

However, in practice, the so-called ‘pivot to the East’ faces significant institutional and infrastructure-related constraints, with the result that instead of the diversified cooperation which Russia initially envisioned, it has led to deepening dependence on China – a trend that raises questions about the long-term strategic sustainability of Moscow’s eastern agenda.

The Eastern pivot as a strategic priority

Russia’s ‘pivot to the East’ was first declared a national priority for the 21st century in 2013. The Kremlin was forced to place greater emphasis on it after the annexation of Crimea, and especially in the aftermath of the full-scale invasion of Ukraine in 2022, which triggered intensified sanctions and growing isolation from the West. Initially conceived as a counterbalance to its partnership with Europe, Russia’s eastern strategy has gradually evolved into the central axis of its commercial and diplomatic reorientation, aimed at reducing the country’s exposure to Western pressure.

Today, the goal of the ‘pivot to the East’ goes beyond securing access to new markets. It is an attempt to establish a stable economic and political foothold in the Asia-Pacific region, as well as to gain entry to capital markets and modern technologies. In terms of economic policy, this means expanding exports to China, India, and Southeast Asian countries, as well as attracting investment – predominantly from China – into Siberia and the Russian Far East. On the political front, Russia is seeking to shape regional governance frameworks through participation in alliances such as the Asia-Pacific Economic Cooperation, the Shanghai Cooperation Organisation, and BRICS.

The Eastern Economic Forum as a barometer of weakness

In practice, Russia has struggled to establish a position in the Asia-Pacific region. The 2025 Eastern Economic Forum starkly illustrated the limited progress of Moscow’s eastern strategy. Despite the personal involvement of President Putin, the presence of senior foreign officials was minimal. Key regional players such as Japan, South Korea, Thailand, Indonesia, and Singapore were not represented in Vladivostok at all.

Although the forum’s organisers announced the signing of 358 agreements worth 6 trillion roubles in total, not a single major long-term international contract was concluded.

China formally remains Russia’s strategic partner in the region. Yet the nature of this relationship only highlights the structural limitations of the pivot to the East. Russia continues to export raw materials in exchange for limited technological cooperation, without expanding its economic influence in the Asia-Pacific region.

The trade relationship is defined by deepening asymmetry: Russia supplies oil, gas, coal, and timber, while China exports high value-added manufactured goods. In 2024, China accounted for 33.8 per cent of Russia’s total trade turnover (trade between the two countries was worth USD 244.81 billion), with energy resources making up the bulk of Russian exports. However, Chinese investment in the Russian economy remains modest.

Power of Siberia 2: Symbolism over substance

The memorandum on the construction of the Power of Siberia 2 pipeline signed by Gazprom and China’s CNPC following President Putin’s visit to Beijing appears largely symbolic. While the announcement received considerable attention in Russian and Western media, it was barely mentioned in Chinese official outlets, raising doubts about the extent of any substantive agreement.

Even if some project parameters have been discussed, key issues, notably the pricing formula and financing model, remain unresolved. President Putin has acknowledged that China will pay less for Russian gas than European buyers, but no final deal has been reached. In any scenario, the commercial viability of the pipeline is questionable, and the prospect of it becoming operational before 2030 appears remote.

Nevertheless, the Kremlin has portrayed the memorandum as a diplomatic success. The aim is two-fold: to sustain expectations of an expanding Russian presence in China’s energy market, and to bolster Gazprom’s financial position amid steep losses in Europe. For Beijing, however, the potential increase in pipeline gas imports from Russia serves primarily as a foreign policy tool. By showcasing the option of reducing reliance on US LNG, China gains an additional lever in tariff and trade negotiations with Washington.

This dynamic reflects the broader nature of Sino-Russian relations. Russia functions as a resource supplier but does not occupy a central place in China’s strategic priorities. As a result, the Russian economy remains heavily dependent on Chinese demand. Any shifts in Beijing’s purchasing volumes or pricing policy could have significant implications for Russia’s export revenues.

The Russian Far East: Ambitions and constraints

The Russian Far East remains a central pillar of the Kremlin’s strategy towards the Asia-Pacific. It is intended to serve as a platform for engagement with regional partners and as a growth driver for the national economy. However, the development of this vast and sparsely populated region continues to face significant structural limitations, casting doubt on the feasibility of transforming it into a true engine of growth.

Despite the creation of special economic zones such as the Territories of Accelerated Development (TOR) and the Free Port of Vladivostok, which offer tax incentives and simplified procedures for investors, and despite major infrastructure projects including the modernisation of the Baikal-Amur Mainline and the Trans-Siberian Railway, the construction of bridges and ports, and the development of the Northern Sea Route, the overall effectiveness of efforts to modernise the infrastructure of the Russian Far East remains limited. Progress has been hindered by western sanctions, a shortage of skilled labour, and excessive dependence on Chinese partners. As a result, the anticipated economic returns for both the region and the federal budget have so far been minimal.

The Far East continues to be heavily subsidised. Most infrastructure and economic initiatives rely on federal funding: over 73 billion roubles have been allocated in 2025 alone. While resource exports partially offset some of these costs, the region remains economically fragile and closely tied to Chinese demand. One high-profile example, launched during the 2025 Eastern Economic Forum, is the Pacific Railway project, intended to transport up to 50 million tonnes of coal annually from the Elga deposit, primarily for export to China. In 2024, Russia exported over 95 million tonnes of coal to China. However, the potential for further growth appears limited since Beijing has been actively reducing coal imports in favour of domestic production and broader decarbonisation policies. Against this backdrop, an expansion of Russia’s share in the Chinese coal market seems unlikely.

Demographics pose another major challenge. Since 1990, the Russian Far East has lost around a quarter of its population, largely due to outward migration. Government programmes such as the ‘Far Eastern Hectare’ (offering free land), subsidised mortgages at 2 per cent, and university development schemes under the ‘Priority 2030’ initiative have helped slow the decline and even led to modest population gains in specific cities, such as Vladivostok, partly thanks to incoming students. Yet their overall impact remains limited. Although more than 150,000 people have received land through the ‘Far Eastern Hectare’ programme, many plots remain unused, even in relatively attractive areas, due to inadequate infrastructure, the harsh climate, and bureaucratic hurdles.

The Russian Far East also continues to exhibit some of the country’s worst social indicators, with particularly high mortality rates linked to alcohol, drug use, and suicide, especially in Chukotka, Buryatia, Zabaykalsky Krai, and Magadan Region. Other structural challenges include congested ports and transport corridors, a shortage of skilled workers, delays in major infrastructure projects, and the failure of private investors to meet their commitments.

For the Kremlin, the development of the Far East represents a geo-strategic rather than commercial investment. In the context of protracted confrontation with the West, the region is acquiring increased strategic significance. Without substantial state support, it risks further population decline, leaving Russia increasingly vulnerable and unable to exercise influence outside the Baltic and Mediterranean regions.

Yet the region’s natural and geographical constraints – a harsh climate and remoteness from Moscow and Russia’s core economic centres – are inherently difficult to overcome. Any large-scale development effort would require resources that Russia currently lacks. Military spending continues to absorb a substantial share of the budget, while the Ministry of Finance maintains a rigid fiscal policy that rules out increasing the budget deficit, despite its relatively modest level by international standards (1.9 per cent of GDP in the first eight months of 2025). In different political circumstances, the projects in the Far East might hold far greater potential.