Research On Evolution Of Russia’s Geoeconomic Relations & Trade And Investment Effects

Russia straddles the Eurasian continent,and has very important geographical interests in the East("Asia-Pacific space"),West("Euro-Atlantic space")and South("Eurasian/post-Soviet space").Since Putin came to power in March 2000,the "South"(central Asia)has been the main focus for Russia’s foreign strategy.Russia"s geo-economic focus has however always been on the West,as its foreign economic and trade relations attest.The ongoing crisis in Ukraine raises the question of if Russia’s geoeconomic emphasis has shifted away from Europe.If this is the case,the question arises of what extent it has shifted to the Asia-Pacific.This and other questions will clearly be of great interest to researchers and practitioners who are interested in the evolution of Russia’s geo-economic relations.Previous studies of Russian geopolitical economy have mainly applied qualitative research methods to study geopolitical economic strategy and the application of foreign economic policy.In referring to geopolitical changes in Russia,this paper selects annual macroeconomic data from the period 1996-2020 and uses a mixture of qualitative and quantitative methods to assess Russia’s geo-economic relations and analyze the evolution of their spatio-temporal patterns.It selects the index system on the basis of geographical location advantage,resource endowment between countries,economic structure,labor efficiency and spatial factors.It constructs the internal mechanism of the evolution of Russia’s geo-economic relations,analyses the internal driving force of the evolution of Russia’s geo-economic relations,and uses the Extended Gravity Model to study the effect of geo-economic relations on Russia’s foreign trade and foreign direct investment(FDI).In doing so,it provides insights that will help China to guard against America’s geo-economic "trap" when constructing its foreign economic policy.The paper"s main conclusions follow:(1)Foreign economic and trade relations,and commodity trade in particular,are an important manifestation of the geo-economic relations between countries.After the Ukraine crisis,Russia’s foreign trade "east to turn" was obvious,and the proportion of Russian exports in Asia Pacific countries significantly increased,which could compensate for the loss of the European market.But Europe still dominated the supply of key technologies,and was an important source of foreign investment for Russia.To be more precise,the Ukraine crisis accelerated the shift of Russia’s geoeconomy at the political and strategic levels.This fundamental shift in Russia’s geoeconomy will not be reversible for a long time.(2)Geographical location,resource endowment,economic structure and other factors were used to select measurement indicators,and geo-economic relations between Russia and other countries were measured by using the weighted Euclidean Distance Method.The results show that Russia"s geoeconomic relations with ASEAN(Association of Southeast Asian Nations),APEC(Asia-Pacific Economic Cooperation),EEU(Eurasian Economic Union)countries were generally complementary,while geoeconomic relations with the EU(European Union)were generally competitive.Meanwhile,geoeconomic relations between Russia and Ukraine transformed from being strongly complementary to generally competitive;and the country"s geoeconomic relations with Germany,Italy and the Netherlands changed from strongly complementary to generally complementary.(3)The factors of the geo-economic relationship were calculated by using the Grey Correlation Degree Method,which showed the dominant factors of economic relations between Russia and different geo-regions were not the same.Fixed capital investment and energy cooperation were the main driving factors in geo-economic relations between Russia,APEC and the EU;and industrial structure,level of economic development and personnel flow were the main driving factors in the spatial geo-economic relationship between Russia,the EEU and the post-Soviet Union.Level of economic development and industrial structure were important driving factors in the Russia-ASEAN geo-economic relationship.(4)Geo-economic relations positively affected Russia’s foreign trade,but regional and temporal heterogeneity persisted.In the post-2009 period,the influence of Asia-oriented geo-economic relations on Russia’s foreign trade increased,but the influence of European-oriented geo-economic relations on Russia’s foreign trade still exceeded the influence of Asia.Russia’s foreign trade was positively correlated with trading countries"economic scale and legal environment.And trading country political stability has varying effects on Russia"s import and export trade,along with trading country power infrastructure.(5)Regression data related to Russia’s outward foreign direct investment(OFDI)in all host countries showed that host country geo-economic relations,economic scale,openness and network infrastructure were positively correlated with Russia’s FDI,which promoted Russian FDI in the host country.Host country technology level,logistics performance index and political stability sustained different types of geo-economic relations with Russia and had the opposite effect on Russian OFDI.