In Geopolitics Today: Thursday, January 9th
Serbia Fields Chinese Air Defence System, Slovakia Secures Russian Gas Through Hungary, and other stories.
China Builds New Rail Link to Uzbekistan
China, Kyrgyzstan, and Uzbekistan signed an investment agreement in December to build a 480-kilometre railway connecting Kashgar to Andijan. The project's most challenging section — a 320-kilometre stretch through Kyrgyzstan — is set to begin construction in July 2025 and take six years to complete. The new route promises to create direct rail connections between China and both Central Asian nations, bypassing the current requirement to transit through Kazakhstan.
Kazakhstan currently dominates East-West rail traffic through the Middle Corridor and plans to upgrade 11,265 kilometres of track while also building new routes. The new southern route through Kyrgyzstan could reduce Chinese freight costs and transit times to Europe, while specifically benefiting Chinese imports of Central Asian raw materials — including Kyrgyz coal. However, questions remain about the railway's profitability and ability to compete with Kazakhstan's established routes, despite Kyrgyz claims it will transform the country's economy.
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Serbia Fields Chinese Air Defence System
Serbian defence authorities announced that Chinese-made FK-3 air defence systems have entered service with the Serbian Air Force's 250th Air Defence Missile Brigade. The system, an export variant of China's HQ-22, can engage targets at speeds up to 1,000m/s and ranges up to 100 kilometres, including aircraft, helicopters, cruise missiles, and drones. The package includes command centres, missile launchers, and radar vehicles. This deployment represents China's first sale of medium-to-long-range air defence systems in Europe, following a 2020 agreement with manufacturer CASIC.
Serbia's strategic position is unique in Europe — bordered by five NATO members yet maintaining military neutrality and strong ties with both Russia and China. Its procurement choices reflect this balancing act: Chinese air defence systems and drones on one side, French Rafale fighters on the other. President Vucic has ruled out NATO membership and downplayed EU accession prospects for 2028, suggesting Serbia will continue to leverage its position between Eastern and Western powers. This policy gives Serbia autonomy in defence procurement, but also highlights growing Chinese military influence on NATO's doorstep.
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Nuclear Powers Race Against Missile Defences
A complex arms dynamic is unfolding as nuclear-armed states adapt their capabilities in response to missile defence developments. The US maintains 44 ground-based interceptors while spending $170 billion on missile defence over two decades, yet faces difficult tradeoffs. China's expansion to over 600 warheads in 2024, Russia's maintenance of 1,710 deployed warheads, and North Korea's growing arsenal all reflect strategic responses to perceived vulnerabilities.
The situation illustrates classic security dilemma patterns — defensive measures by one side prompt offensive counters by others, potentially decreasing overall stability. China is establishing 320 new missile silos and advancing hypersonic weapons, while Russia develops nuclear-powered cruise missiles and underwater systems. Rather than creating security, the interaction between missile defences and new offensive systems appears to be driving a multilateral arms competition. This raises questions about whether pursuing expanded missile defences ultimately enhances or reduces strategic stability among nuclear powers.
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US Export Rules Threaten Small Defence Firms
The US Bureau of Industry and Security (BIS) issued new export control guidance for banks on October 9, 2024, expanding their responsibility to monitor dual-use trade financing. Though labelled as voluntary, banks view these requirements as mandatory given past regulatory enforcement patterns. The rules particularly affect small defence contractors, who comprise 73% of the US defence base but often lack robust compliance resources. BIS jurisdiction covers any bank globally that handles US-origin items or technologies, making this a de facto international regulation.
Banks will likely respond by cutting off services to smaller defence firms whose compliance costs exceed revenues — a practice known as “de-risking” — while maintaining relationships with large prime contractors. This creates a paradox: regulations meant to protect sensitive technology may instead handicap the small innovators driving military technological advancement. The rules' global reach also risks pushing international tech firms and banks away from US-linked transactions, potentially fragmenting defence supply chains.
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Three Powers Now Split Control of Levant
Three non-Arab powers now dominate the Levant: Turkey, Iran, and Israel. This shift follows the decline of Arab nationalism after Egypt's 1978 Camp David Accords and accelerated with US withdrawal from the region after the Iraq War. Each power holds specific territory: Israel controls the West Bank, Gaza, and parts of Syria and Lebanon; Turkey administers northern Syria through local councils; and Iran maintains influence through Hezbollah in Lebanon and Shia allies in Iraq.
The region faces two major security challenges. Both Turkey and Israel confront independence movements — the Kurds and Palestinians respectively — while restricting them to limited autonomy. Meanwhile, Syria's ethnic divisions (Druze, Alawite, Sunni) attract varying degrees of support from these powers, with Israel backing Druze interests, Iran supporting Alawites, and Turkey aligning with Sunnis. The traditional Arab state system that once dominated regional politics has given way to a more complex web of alliances and proxy relationships.
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Slovakia Secures Russian Gas Through Hungary
Prime Minister Robert Fico announced that Slovakia has secured Russian gas supplies following his December meeting with Vladimir Putin in Moscow. The agreement comes after Ukraine declined to renew its gas transit contract which expired at the end of 2024, a decision that Slovakia claims costs it €500 million in lost transit fees and €1 billion in higher gas prices. While Slovakia continues receiving Russian gas through Hungary via the TurkStream pipeline system, the specific supply route remains sensitive — Moscow has explicitly declined to confirm details.
Despite broader EU efforts to reduce Russian energy dependence, Slovakia's geographic position and existing infrastructure constraints left it with limited options for securing affordable gas supplies. The re-routing of gas flows through TurkStream via Turkey, Bulgaria, Serbia, and Hungary demonstrates how energy trade adapts to political constraints. This reconfiguration of regional gas flows suggests that while political relationships may shift, the physical and economic realities of Europe's energy infrastructure continue to shape policy decisions.