Armenia has long pursued a four-pronged foreign policy of managing its over-dependence on Russia – the nation’s primary trade and security partner – while deepening ties with the European Union, sustaining links to the United States and developing trade with neighbouring Iran.

More recently there has been an added strategic priority that consists of an uncharacteristically subtle and stealthy pursuit of engagement with China. This “eastward embrace” may seem surprising, given the disparity in size and remote connections between Armenia and China, but the strategy is very much in line with the interests of both nations.

For landlocked Armenia, survival has traditionally meant a delicate balancing act between the West, backed by its sizeable diaspora, and Russia, which offered important security, economic and energy ties in return for accepting a place well within Moscow’s orbit.

China recognises that Armenia is too small and remote to be of any great significance on its own, but is a stable and promising element of a much larger landscape; the country’s position at the intersection of the Caucasus and the broader Middle East offers a pivotal bridgehead.

Armenia has appeared on the Chinese agenda of expanding trade and infrastructure and is now part of a bigger picture of enhancing Beijing’s influence and prestige. The latter is especially important in terms of the longer term rivalry with Russia within Eurasia.
On the geopolitical front, Armenia has been careful in cultivating China, as was seen in a five-page joint declaration concluded in March 2015 at the close of an official visit to China by then President Serzh Sarkisian.

Reached after talks with President Xi and Premier Li Keqiang, the declaration included a clear statement of Armenia’s position regarding Taiwan, stressing that Armenia opposed the island’s independence and pledged to avoid any “official contact” with Taiwan. Armenia also agreed to support “all Chinese government efforts to unite the country”.

Belt & Road Creates a New Bridgehead

From an Armenian perspective, drawing closer to China offers opportunities in the future and more practical and immediate benefits. In particular, it means the country can position itself early in the scramble to be included in China’s Belt Road Initiative.

Drawing Chinese capital investment in infrastructure is already paying dividends, as evident in Armenia’s “North-South” roadway, a project launched by the Asia Development Bank that is designed to provide “inter-connectivity” by extending and modernising the national highway network to Georgia in the north and Iran in the south. There has also been serious progress in bilateral trade, with a 33% increase to over $604 million in 2017. At the same time, China has provided at least $50 million in economic assistance since 2012.

Much of that trade centres on rising exports to China of wine and other alcoholic beverages, as well as canned food produce and chocolates. The Armenian government is also working to develop its information technology sector through expanded cooperation with China. Armenian imports from China have been largely limited to electronic goods and cheap textiles, and are not expected to greatly change in the short-to-medium-term as the country focuses on exports.

The more practical immediate benefits of the relationship are derived from Armenia’s need to enhance its security, and China has become a willing partner. Initially, the focus was on military education, under an agreement reached with the People’s Liberation Army in 2012. But it has been broadened to “military cooperation”, reportedly including training.

Closer Defence Ties, but Russia is Watching

Such links have involved increasing financial support from China, in a region long dominated by the United States and Russia. Beijing gave about five million yuan (US$740,000) in annual military aid to Yerevan in 2013-2016, but the sum rose to 10 million yuan ($1.5 million) in 2017.

There has also been a series of arms deals stretching back to the late 1990s that included shipments of WM-80 rockets systems and AR1A multiple-launch rocket systems; the latter has a firing of more than 100 kilometres. The most recent deal, in 2013, also involved a multiple-launch rocket system, this time with a range of about 128 kilometres.

For Armenia, Chinese military cooperation is driven by two factors. First, in a broader sense, it stems from the need to lessen Armenia’s dependence on Russia by spreading its options. And second, it is a response to growing Russian military ties with its rival Azerbaijan.

The Azerbaijan factor is especially sensitive for Armenia, which bemoans the rather meagre benefits from its allegiance to Russia: these include being the only host of a Russian base and being the only member of the Russian-led Collective Security Treaty Organisation in the region.

Dissatisfaction has grown over Russia’s deepening military ties with Azerbaijan as Moscow has become Baku’s primary arms supplier. Some 65% of Azerbaijani weapon imports came from Russia in 2013-2017, according to the Stockholm International Peace Research Institute.

It is Moscow, rather than Yerevan, Beijing, or even Washington, that may be the main obstacle to Armenia’s strategic embrace of China and pursuit of deepening military ties, if it comes to resent being upstaged by this new rival. It seems unlikely that China would seek to challenge for dominance, given its limited interests in the South Caucasus compared with Russia, Turkey and Iran, but Moscow is watching Beijing closely.

Yet this engagement with China may still work for Armenia, as ties to Beijing are still more acceptable and less threatening to Russia than any progress in Armenian relations with NATO or the United States. For the Armenian Government, the over-dependence on its chief security partner Russia necessitates a course correction.