To be, or not to be the Russian Tsar, part 2

(Analysis of the results of Xi Jinping’s visit to Moscow)

In the previous part of this series, I wrote about the meeting of Josef Resin, First Vice-Mayor, Head of Construction Complex in the Government of Moscow, with the General Managers of the four biggest Chinese construction Corporations. That meeting took place in Moscow, in 2004, and during that meeting, it turned out that the number of builders employed in each of the Chinese state corporations was several times bigger than the population of Moscow, and the total number of employees in these four Corporations was equal at least to half of population of the whole of Russia ( )

That was twenty years ago, before China’s main economic breakthrough.


                                        Remains and Remnants of the Soviet Union

There was one aspect in that story that no one talked about at that meeting, but that all the Russians present thought about, and that was the fact that in the former Soviet construction companies, that survived the collapse of the USSR and whose names continued to be highly respected, there were only dozens of people working, among them only few were builders…

Shortly before the meeting between Resin and the management of Chinese Corporations, I had conversation with Andrey Shernin, project manager of Glavmosstroy Corporation at the State Kremlin Palace. In Soviet times, “Glavmosstroy” was one of the biggest state enterprises in construction.

In 2004, my company JSC «Moskonversprom» and Glavmosstroy occupied several premises for offices under the auditorium for 6,000 seats in the State Kremlin Palace. Actually, all rooms were occupied by “Moskonversprom” except one that was occupied by Glavmosstroy.

At that time, in 2004, our company signed two contracts with the State Kremlin Palace. The first one was for renovation of the engineering systems in the Palace, and the second one was for designing of reconstruction and renovation of the Palace, technical supervision and building control over the work carried out by other contractors, including Glavmosstroy.

Photo: The State Kremlin Palace (in Soviet times, the Kremlin Palace of Congresses)

No matter how many times I went into rather spacious room, occupied by Glavmosstroy, there were always two elderly women sitting in it, silently working on computers. Shernin, project manager, occupied large table in the center of the room. It was always quiet in the office, the builders used to enter it modestly and quietly from time to time to pick up documents from women or give them papers, and silently leave the room.

Shernin visited the construction site early in the morning to accompany our construction manager, architect and building control manager, and to take notes. During the day he appeared at the construction site only when the authorities from the Presidential Administration used to come to check the progress of work.

Shernin was twenty years older than me, short but thick and red-faced, as Russian builders usually are. In the space between the drawers and the surface of his table, he always had clean glasses and in the bottom drawer a bottle of vodka or cognac and snacks. Witnesses said that he could outdrink any big man.

I used to visit his room very rarely and only of necessity. Once, he delayed documentation, and I entered his room. Shernin sat angry and unhappy. I rarely saw him like this.

— Valery, you are lucky man, — he said, answering my questions about documentation and reasons for his bad mood. — You have real construction company and people, who work, and I have no one here except these two women!

— What are you talking about? — I asked in surprise. — You have Glavmosstoy behind your back. My Company is only four years old, I have two hundred people working in it, the rest are subcontractors, and Glavmosstroy, as I heard from your President, have thirty-five thousand builders.

— What!? There is almost no one! Compared to your Moskonversprom, we are an empty box. Several men and a dozen of women. We have only directors, secretaries, and accountants. You go around here, command and demand from all, and I sit and make documentation, even quotation, myself, and my women collect bills and reports from subcontractors. That is all!

— How do you manage to run big projects? — I wondered.

— That is how!… We had big projects in the past. Now, we managed to get into the Kremlin with the help of Resin and are trying to pretend and survive. We are the cardboard box… You have modern construction company, and we only have glorious past, name and connections… We are collectors and distributors of funds, channels for money…

It turned out that the former Soviet “Main Directorate for Housing and Civil Construction in Moscow (Glavmosstroy)”, one of the largest construction enterprises in the Soviet Union that built the Kremlin Palace of Congresses, now the State Kremlin Palace, where I met with Shernin, as well as the Lenin Stadium and other Olympics-1980 projects in Moscow, the main hotels, theaters and administration buildings in the Soviet capital, in 2004, had become “cardboard money box”.

In the early 1980s, Glavmosstroy employed 130,000 builders, operated more than 10,000 large construction ­machines and annually built over 2,000 projects using the most modern computer construction management system. In 2004, there were only few dozen “managers” and “accountants” working…

By the end of 2004, Glavmosstroy’s contract for rather small part of renovation works in the State Kremlin Palace was completed, but not paid in full. Next year, the Corporation was sold to Basic Element, former Siberian Aluminum, the financial group based in the British tax heaven Jersey and headquartered in Moscow, owned by Oleg Deripaska.

After buying Glavmosstry, the new owner found out that he had bought the name with great past and billions of debts. He managed to avoid paying most of the debts and in few years, raised Glavmosstroy to the level of “4000 employees” (according to its press-release) and tried to sell it, but due to the crisis in 2008, it went into bankruptcy. Then there was crisis of 2015…

The story of Glavmosstroy reflected the past thirty years of Russia, since collapse of the USSR. In 1991, Russia’s GDP was 520 billion US dollars. In 2004, when I worked with Glavmosstroy at the State Kremlin Palace, Russia’s GDP for the first time in the post-Soviet period, in 13 years, exceeded the level of 1991. In the past twenty years, the Russian economy has developed more successfully than in 1990s and early 2000s, and by 2022, its GDP has more than tripled and reached $2,5 trillion dollars.

Since 1991, China developed at a rate that did not fall below 6% per year, and this happened only once, in 2018, during the covid. Its annual rate throughout that period was around 10% and, in some years, reached 14%. During the collapse of the USSR, in 1991, China’s GDP was about 400 billion US dollars, that is, more than 25% lower than Russian GDP, and by 2004, China’s GDP had increased by 5 times and amounted to 2 trillion US dollars, close to the level of modern Russia. In 2023, China’s GDP will exceed 20 trillion, tenfold over the past 20 years and will exceed Russia’s GDP by almost 8 times.

In terms of purchasing power, Russia’s GDP is estimated at $4.7 trillion, Chinese GDP in terms of purchasing power exceeded the US GDP by almost 30% and this year will reach $30 trillion dollars.

Today, China is country with cities, for example, Chongqing, with territory that exceeds the territory of London by 50 times, or equal to Scotland, or Austria, or 30 cities like Moscow. In terms of population, Chongqing is five times the population of London and four times the population of Moscow…

China and India, as well as some countries of Southeast Asia, became locomotives of the world economy, and the fact that Russia has friendly relations with most of these countries, primarily with China and India, not only opens up opportunities , but also sets before the Kremlin, and Putin personally, the tasks that if failed to accomplish, can plunge Russia into another period of internal unrest. During the last visit of Xi Jinping to Moscow, the Kremlin began to understand this…

Enormous prospects are opening up for Russia, and these prospects are being opened up not only by China and India, but also by other countries in Latin America, Southeast Asia and the countries of the Islamic world, and behind them, Africa is making breakthrough.

However, China, personally Xi Jinping, became the actor who, in the era of transition to new technological and world orders, set the level of demands for Russia, personally to Putin, including level of effective government and economic development, and that was done precisely during Xi Jinping’s visit to Moscow in March 2023.

However, that was not the subjective opinion or desire of the Chinese leader, but was the result of objective historical process, the development of relationships and interactions between Russia and China over the past millennium, that made Xi’s offer not possible for Putin to reject.  

At this moment, we are to look back in history…


                                            “From where is and come the Russian Land”

The creation of the first Russian state, in the IX century, was due to and caused by several processes, but one of them was decisive, and it was based on the need to ensure reliable functioning of the trade route, called in old Russian chronicles «from the Varangians to the Greeks».  

Traditionally, in Russia, the path «from the Varangians to the Greeks» is shown as path from Byzantium to Scandinavia, from the Black Sea along the Dnieper River and further along the rivers north to the Baltic Sea. However, in the chronicle «The Tale of Bygone Years» written by the Russian monk Nestor in Kiev, in XII century, the first that told about creation of Rus, the first Russian state, the “route from the Varangians to the Greeks» was described as important segment of the greatest system of trade routes used for exchange of goods by countries, peoples, tribes in the territories of Central Asia, Persia, Assyria, India and China in the East, and Byzantium and Europe in the West.

In the photo: The path «from the Varangians to the Greeks» on the European part of Russian territory

Goods went both to the West and to the North, along the Danube, along the Dniester and Dnieper Rivers, along the tributaries connecting them, and along the Don and Volga, from the Black and Caspian Seas to the Baltic Sea and back around Europe. Moreover, the routes in Eastern Europe were actively used not only in the warm season, but also in winter, especially in the northern and central now Russian territories, where it was more convenient and faster, to transport goods along frozen rivers than in summer.

In the X century, it became difficult to use trade routes from Asia to Europe through the Middle East, North Africa, South Europe. By that time, Islam had spread throughout the Mediterranean, including the territory of modern Spain, and the conflict between Islamic states and Christian Byzantium, created difficulties in trade between Asia with Western Europe and North Africa. The role of transport routes across the East European Plain for the supply of goods from Persia, India, China, Transcaucasia and Central Asia to Europe has increased dramatically.

In the X century, the territory that is now called the Russian Plain, was populated by tens of the Slavic and Finno-Ugric tribes, none of them called Russians, and agriculture was their main activity. In most of the regions, it was low profitable and required lot of hard work. Thin fertile layer of soil and long winter period did not allow to produce high surplus value. For rural communities, — that comprised more than 98% of the population, — hunting, fishing, and gathering in the forests surrounding community villages played important role.

However, trade was the most profitable, and not only in summer, but especially in winter, when the harvest was collected, agricultural work stopped for several months, rivers were covered with ice that made it possible to quickly move around and to transport goods over long distances. That is why at that time Novgorod that became the first capital of Russia, was the largest and richest city on the territory of the Slavic tribes, although the lands around it were unsuitable for intensive agriculture.

When the significance of the trade route from East and South Asia across the Russian Plain to Europe, dramatically increased, the Germanic and Scandinavian tribes, primarily the Vikings, invaded the East European Plain, trying to get important trade routes under their control, destroying and robbing the Slavic tribes. The Slavic tribes united in that war and pushed the Vikings out of their territory.

However, they failed to effectively use the trade routes and the opportunities that opened up. To control the trade routes, they had to provide peace and stability. That required tranquility, balance, equal relations between the tribes, but tribal leaders, who were called in old Russian chronicles “knyaz” (single) and “knyazya” (plural), traditionally translated in English as “princes”, could not accept the power of neighbors. One tribe could not submit and recognize themselves as inferior to another. Instead of peace between the different Slavic and Finno-Ugric tribes, struggle began for influence and power that turned into continuous civil strife.

There was another problem. Scattered over vast territory of millions of square miles, the tribes lived mainly in small towns and village communities, separated and surrounded by vast forests. Both cities and village communities were usually located along the banks of the rivers that were used as transport routes, including in winter on the ice of the rivers. Tens of thousands of the village communities consisted of three to five families, and such communities could not provide themselves with protection from external invasions of hostile tribes and big robber groups.

Due to the low fertility of the land, it was difficult for tribes to maintain big professional army. There were almost no professional armies in the Slavic tribes. In peacetime, adult men worked for and within their communities and joined militia to participate in armed conflicts only under threat of attack and invasion from outside.

To protect trade routes over vast territory, to punish robbers and aggressive neighbors for attacking and to deprive them of ability to carry out new attacks, the professional army was needed that could create belt of armed outposts, move quickly and conduct raids on the territory of enemies, punishing and destroying those who invaded, in order to ensure peaceful life for huge number of small peasant communities, for towns and market places located along the riverbanks.

There was only one way out, and that was to call on an outside force that had to be strong enough to protect the territory from external enemies, to ensure the efficient and safe use of the transport and trading system over the vast territory, to maintain peace and balance between the tribes allowing foreign merchants and local population to trade.

This force had to be weak enough to accept the conditions of the tribes and not be able to impose its own conditions of government, to deprive local tribes, their leaders, tens of thousands of communities of their centuries-old traditions, rights and forms of communal ownership and use of lands and resources in territories of their residence. Terms of government were to be beneficial to both the tribes and the new rulers.

The squad, the army headed by three brothers, Truvor, Sineus and Rurik, was precisely such outside force that was not able to conquer the Slavic tribes but was able to operate as professional army and supreme judge.

Agreement has been reached. The squad led by three brothers received the right to collect tribute from the tribes, from each community for performing functions as protector and peacemaker, and the tribes kept the right to live according to their traditions, beliefs, preserving communal territories and rights to use their resources.

After the death of his brothers, Rurik became the sole ruler, the Grand Knyaz, the Grand Duke, of the new state — Rus. Novgorod became the capital of Rus, but later, under the rule of Oleg, the capital of Rus was moved to Kyiv located in the center of the trade and transport system,the most convenient place to be used as main military base and for the Grand Duke to rule.

Photo: Calling the Varangians. Miniature from the Radziwill Chronicle, 15th century


                                        Russian doll as principle of creation of Rus

In the creation of Rus, we can see the application of “matryoshka”, the Russian doll, principle that I wrote about in part 1 of this series, noting that Russia and China used that Russian doll principle to create new zone within the existing system of international relations.

In XXI century, Russia and China intend to fight for the new world order, using the Russian doll principle in existing international organizations, primarily the UN and the G20. For that purpose, OPEC +, EAEU, SCO and BRICS became tools, like little dolls, for pursuing joint Russian Chinese policy and reforming the UN, operating from within of the UN and G20, not opposing or confronting them, but trying to reform, to change and adapt them to the new order

It was on that principle of the Russian doll that the first Russian state, Rus, was created.

At that time, none of the Slavic or Finno-Ugric tribes were called Russians. The Rurik family, his clan and squad were called Rus. They became the rulers over population that continued for several centuries to consider themselves as separate tribes: polyane, drevlyane, krivichi, slovene … However, over time, all the people, all the tribes that were ruled by the descendants of Rurik, began to be called Rus, Russians, because the main principle of the functioning of the social system on the Russian Plain was not national, but territorial-communal.


Russia and the Russian people arose not according to ethnic or national, but according to territorial-communal principle to ensure the efficient and safe use of the important part of the Eurasian trade and transport system on the territory of the East European Plain.

It is hard to overestimate the role in creation of Russia played by trade and exchange of goods produced inEurope, Middle East, Persia, Assyria, South Asia and China, as well as the role of merchants who carried out the flow of these goods from town to town, from market to market, to the Slavic lands, and then by rivers to Europe and back to the South and the East of Asia.

From the very beginning of existence, Russia, its rulers and the tribes that lived on this vast territory, became caretakers and guardians of this section of the trade and transport system that transformed the tribes over the centuries into the Russians.

(To be continued)

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