The current conflict between Georgia and Russia provides a stark expression of the enormous tensions between the major powers. Behind the eruption of fighting over the breakaway republics of South Ossetia and Abkhazia lies growing economic and strategic rivalry between the United States and Russia, in particular for control of the vast oil and gas resources and energy pipelines of Central Asia.

Since the liquidation of the Soviet Union in 1991, the US has persistently worked to exert its influence across the region once dominated by Moscow. Russia has reacted by seeking to establish its own alliances, particularly with China, to strengthen its position in Central Asia. Russia and China through the Shanghai Cooperation Organization (SCO) formed in 2001, have formed close ties with the Central Asia republics of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, in part, to counter US moves in the region.

Russia is also taking steps to boost the country’s military capabilities. While military spending in Russia is still a tiny fraction of the gargantuan US defence budget, Moscow has made efforts in recent years to arrest the decline of its armed forces, including replacing much of its Soviet-era military equipment.

The Russian government confirmed on July 27 that it planned to build up to six aircraft carrier battle groups and upgrade its nuclear submarine fleet. Navy spokesman Admiral Vladimir Vysotsky announced during Navy Day festivities in St Petersburg that construction would begin after 2012. “We call this a sea-borne aircraft carrier system which will be based on the Northern and Pacific fleets,” he said.

The aircraft carriers will form the basis for joint task groups that will include submarines, surface combat units, aircraft and unmanned aerial vehicles, as well as commando forces. Kremlin military planners estimate that the overhaul of the navy will be complete by 2050. New training facilities for navy pilots are also to be built, coming into use by 2010.

The development of new fleets in the Arctic and the Pacific mirrors Russian energy policy, which has plans for oil and gas pipelines and shipping lanes in these areas to transport the vast energy reserves of Siberia onto the world markets.

Russia is bitterly opposed to US steps to establish an anti-ballistic missile system close to its borders in Czech Republic and Poland. While Washington claims the proposed bases would target missile threats from “rogue states” such as Iran, Moscow has vociferously denounced the US scheme as intended to neutralise Russia’s nuclear capabilities.

In response, Moscow has re-established frequent flights of nuclear-armed long-range bombers over the Pacific and Arctic Oceans, which had been halted after the dissolution of the USSR in 1991. Russia has also hinted that it would target US anti-missile sites in Europe and possibly re-establish a refuelling base for its bombers in Cuba.

Russia has also increased oil and gas prices to Poland and the Czech Republic in order to pressure their governments to reject the US plans. In late July, the Russian oil pipeline monopoly Transneft cut supplies to the Czech Republic by 50 percent.

Russia and China

The Kremlin’s concern over encirclement by American military bases and pro-US allies is shared by the Chinese elite. Russia and China have also voiced hostility to Japanese involvement in the US missile shield programme.

Since the mid-1990s, Moscow and Beijing put aside many of their previous disputes in an effort to develop mechanisms to defend and advance their shared interests vis-à-vis the US. The two governments finalised a protocol on July 21 that formally demarcates their 4,300km international border—a major step to settle the longstanding tensions between the powers. The former USSR and China were involved in a series of military clashes in 1969 over a border dispute along the Amur River between the Russian Far East and northeastern China.

Russia has also recently strengthened its role as a supplier to China’s rapidly expanding nuclear power industry, with the two countries signing a $1.5 billion deal to build a fuel enrichment facility and supply uranium. This includes the construction of two Vodo-Vodyanoi Energetichesky reactors and a gas centrifuge plant in China and the provision of uranium-enrichment services.

Dmitry Medvedev’s first foreign trip after taking over as Russia’s president on May 7, was to Kazakhstan and then China. The new Russian president met his Chinese counterpart Hu Jintao in Beijing. (In 2003, the Chinese president’s first foreign visit took him to Moscow.)

In the official joint statement, the two leaders made a thinly veiled condemnation of Washington’s planned missile shield. “Both sides believe that creating a global missile defence system, including deploying such systems in certain regions of the world, or plans for such co-operation, do not help support strategic balance and stability, and harm international efforts to control arms and the non-proliferation process,” it read.

“Some don’t like such strategic cooperation between our countries, but we understand that this cooperation serves the interests of our people, and we will strengthen it, regardless of whether others like it or not,” Medvedev said. “Russian-Chinese relations are one of the most important factors of maintaining stability in modern conditions.”

Speaking at Tsinghua University the day after meeting Hu Jintao, Medvedev claimed that the alliance with China was not directed against any other nation. “It is aimed at maintaining a global balance,” he said. In a further barb aimed at Washington, Medvedev added that Russia and China support international law and a “decisive role” for the United Nations.

As well as discussing strategic defence plans, the trip was aimed at promoting the already booming levels of trade between Russia and China. Officials and businessmen from the two countries signed a package of agreements ranging from energy and aerospace to tourism and forestry. Bilateral trade volumes have surged from $10.7 billion in 2000 to $48.2 billion last year.

Following his attendance at the opening of the Olympic Games, Russian Prime Minister Vladimir Putin met with President Hu Jintao on August 9 to discuss proposals for further bilateral and multilateral cooperation. Hu said China and Russia would enhance their strategic cooperation to promote “global multi-polarization”, boost political cooperation and seek mutual benefits in economic development. Putin reaffirmed Russia’s policy of growing cooperation with China.

Despite closer relations, tensions remain. China is concerned about the rising price of Russian oil and gas exports, with disputes over costs stalling the construction of pipelines from Siberia to China. A multi-billion dollar contract signed in 2006 for Russian energy supplies has unravelled, with Russia’s state-owned oil company, Rosneft, threatening to end the deal unless China agrees on a price increase.

In a move that has angered Beijing, Moscow has announced alternative plans for a pipeline to Russia’s Pacific coast that will force China to compete with Japan and South Korea for Siberian energy. Currently, the Chinese plan to import 50 billion tons of Russian oil and gas between 2010 and 2015.

There is also mounting unease in Moscow over China’s growing influence in Central Asia. Medvedev’s visit to Kazakhstan in May was widely viewed as a message to both Beijing and Washington that Moscow sees the region, and its energy resources and pipelines, as firmly within its sphere of influence.

At this stage, however, any rivalry between Russia and China is being set to one side as both countries view the US push into Central Asia as a far greater threat to their economic and strategic interests. Russia will undoubtedly use the next heads of state meeting of the Shanghai Cooperation Organization (SCO) in Dushanbe, Tajikistan, on August 28 as a platform to marshal support from other member states to support its actions in South Ossetia and Abkhazia against Georgian forces.