China and central asia | Raffaello Pantucci

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China and Central Asia – UK Policy Options

Posted: May 24, 2023 in UK Parliament
Tags: Central Asia, China, China and central asia, China-Central Asia, Kazakhstan, kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan

Submitted testimony for a UK Parliament Foreign Affairs Committee hearing on policy towards Central Asia. Chose to focus on China, and draws on impressions from a lot of recent regional travel in particular.

China and Central Asia – UK Policy Options

Raffaello Pantucci is a Senior Fellow at the S. Rajaratnam School of International Studies (RSIS) in Singapore and a Senior Associate Fellow at the Royal United Services Institute (RUSI) in London. He is the co-author of Sinostan: China’s Inadvertent Empire (Oxford University Press, April 2022) which draws on over a decade’s research and travel around Eurasia including repeated visits to all five of the Central Asian countries, Xinjiang, wider China, Afghanistan, Russia, Iran and Pakistan.

A good starting point for contemporary China’s relations with Central Asia is 1994 when then-Premier Li Peng visited the region stopping at all of the capitals except for Dushanbe which was at the time suffering from a brutal civil war. During the visit, he highlighted two key themes – building new ‘silk roads’ to encourage trade and connectivity, while on the other hand worrying about separatist and terrorist groups that China saw as gathering in the region to threaten Beijing.

In 2001, China joined hands with all of the Central Asian countries except Turkmenistan to create the Shanghai Cooperation Organization (SCO). Building on the success of the Shanghai Five grouping – which sought to delineate and stabilize the new border regions that China had inherited following the collapse of the Soviet Union (with Russia, Kazakhstan, Kyrgyzstan and Tajikistan) – the SCO expanded to bring in Uzbekistan. Whilst Chinese leaders spoke repeatedly about their hopes for the Organization to develop a cultural, political and economic identity, the first moves and structures to come to life focused on countering terrorism. A long-standing theme of common concern and interest amongst all members (the late 1990s were a period of some violence in the region), it is worth noting that the SCO was born three short months before the September 11, 2001 terror attacks which emanated from across the border in Afghanistan.

Track forwards 20 years and in 2013, President Xi Jinping used Nazarbayev University in Kazakhstan as the place where he announced the ‘Silk Road Economic Belt’, the first of a pair of speeches which acted as the kick-off of the Belt and Road Initiative (BRI). While focused on economic development and prosperity, the BRI has at its conceptual core the idea that development will lead to stability, a salve to the problems of separatism, terrorism and extremism.

These two themes – worrying about extremism/terrorism and development leading to stability are key to understanding China’s interests in Central Asia. Bordering Xinjiang, one of China’s most sensitive regions, much of Beijing’s thinking towards Central Asia is shaped by events in Xinjiang or more clearly directed by authorities (or companies) in the region. China has undertaken numerous ‘develop the west’ domestic strategies over the past decades which have sought to increase development and stability in China’s western regions (Xinjiang). The most recent came in the wake of the 2009 riots in Xinjiang which led to at least 200 deaths in clashes between Uyghur and Han, and led to a huge internal economic boost to Xinjiang. This economic push has of course been paired with a constant and tightening security grip (which has in fact undermined some of the economic goals, something local officials and companies complain about). But all of this will only succeed if there is a stable and prosperous neighbourhood for Xinjiang to share a border with. The reality is that the region is as land-locked as any of the Central Asian powers that it borders.

This helps explain the connectivity narrative around the BRI that was born in the region. In trying to seek to open Xinjiang up to become a gateway for Eurasia, China needed to build roads, rail, pipelines and more. This would not only open up routes into and beyond the region, but also help tap the region’s rich natural resources which would help satisfy China’s inexhaustible domestic demand. It would also help alleviate Beijing’s concerns about the ‘Malacca Dilemma’ whereby a considerable part of China’s imported oil flows through the potentially precarious (and US-influenced) Malacca Straits.

But to simply see China’s interests in Central Asia through natural resources misses the bigger picture, where Chinese firms and interests can be found across Central Asian societies. Chinese firms are working in numerous sectors and are seen across the region as the biggest potential (or actual) investors. China is increasingly the region’s largest trading partner, as well as a critical route to international markets. It is worth reflecting the transformation that this is for the region, where during Li Peng’s visit, the vision was for hydrocarbons to flow from Central Asia (Turkmen fields) across China to Japan, the then-booming Asian economy. At the time, markets in western China were often filled with goods coming from the former Soviet space rather than the other way around. In 30 years, this flow has entirely reversed and more.

It is also useful to remember that the private sector is an important driver of Chinese interests in the region. Whilst there is a habit in western capitals to see China as a monolith, this is not the case and in particular in the economic sector where public and private players exist. Chinese Central Asian economic engagement is often as influenced by the state-owned sector as it is the private sector. For example, TikTok is a dominant market player, as are local Alibaba fronts targeting the local e-commerce markets. Huawei, ZTE, Oppo and Xiaomi are important players in the telco sector, and Chinese electric cars can increasingly be seen on the roads in Central Asian capitals. The point is that while state driven enterprise is important, there is a large private sector that also plays a role – which includes everything from internationally recognized brands like those listed, to smaller scale Chinese entrepreneurs seeking opportunity.

Domestic security concerns also remain important to Beijing, and in recent times the perception is that these problems are worsening in the wider region. Whilst China has not reported any violence within Xinjiang that they would associate with terrorism since February 2017, they have continued to advance policies towards Uyghur and other minorities in Xinjiang in advance of what they term ‘counter-extremism’. These concerns exist across the border in Central Asia as well, where China regularly lobbies and works with local authorities to pursue groups or individuals of concern. In Afghanistan a cadre of Uyghur militants operating under the name the Turkestan Islamic Party (TIP) continue to operate, while the Islamic State group’s affiliate in Afghanistan (Islamic State of Khorasan Province, ISKP) has recently started to articulate a strong anti-Chinese sentiment highlighting in particular the plight of Uyghurs within Xinjiang. Further down in Pakistan, an even wider range of groups has started to articulate anger towards China (though more often than not, related to domestic issues rather than Xinjiang). Suffice to say, China sees a region to its west which is replete with potential risks and threats which they can tie to domestic terrorism concerns.

Beijing has also sought to advance a ‘soft power’ push into the region. This has been driven by Confucius and other educational Institutes, scholarships at multiple levels, advancing Chinese messaging through local media, lobbying local elites and driving home narratives of economic opportunity amongst the local populations. Driven both by Beijing and companies working in the region, the push is in part a recognition of the deep levels of Sinophobia that exist. These are often based on little more than racial prejudices, but they have a practical effect on the ability of Chinese firms to operate in the region. In Kazakhstan, major land deals had to be conducted discretely after large-scale public protest led to the government having to reconsider its plans. In Kyrgyzstan, a large logistics centre was abandoned when local protests escalated to the point that the company decided it was not worth the trouble. And there are many other examples.

This has created a strange tension in the region, where the discussion is often of China as the coming power and major investor, yet on the ground not many Chinese can be found. In part this is a choice – they recognize the Sinophobia they can face and simply stay discrete, or in some cases, companies simply tell their people to stay in compounds out of the public eye. But it is also sometimes driven by local authorities who find themselves under pressure to keep a reign on Chinese presence and pass laws seeking to ensure high percentages of ‘local content’ in any project implemented in Central Asia by Chinese firms.

It is worth pausing a moment to drill down a bit into China’s individual relations with each country, as while China engages with the region as a grouping – through a C5+ format that has become a vogue around the region – it also has clearly distinct policies towards each country. These very brief summaries serve to highlight a few key points.

Kazakhstan – was always seen as the backbone of China’s relations with the region, something that helps explain the fact it was the first country President Xi visited post-COVID. The foundation of the relationship is energy, but China has deep interests in other mineral resources in the country (uranium and copper to name two), while also worked on numerous infrastructure projects. The region was home to large Uyghur diaspora and dissident groups in the 1990s, though these were largely dealt with through bilateral security engagement. Beijing had always seen the country as amongst the most dependable in the region, though this was somewhat shattered by the trouble in the country in January 2022.

Kyrgyzstan – has largely been seen as a conduit for products elsewhere. Chinese firms have worked considerably on the country’s infrastructure, often through linked loans from national policy banks. The country has also been site of numerous terrorist attacks on Chinese nationals, including the murder of diplomats, officials, businessmen and in May 2016 a car bombing at the Embassy in Bishkek. There are deep tensions towards China in the country, though recently Beijing appears to have finally found a way through building a long-delayed train route through the country which would link China to Uzbekistan more directly (and then potentially onwards towards Caspian routes).

Tajikistan – came later as an economic partner with China given its relatively limited opportunities and small population. Chinese companies have been present and built some infrastructure, but more recently the push has been on the security side with China seeking to bolster Tajik capability at its border with Afghanistan. The country is less wealthy and has a smaller population than its neighbours and any infrastructure in the country is complicated by its exceptionally rugged geography.

Turkmenistan – China has in essence one interest in Turkmenistan and that is its gas. An early investor in the country, Chinese oil majors were willing to essentially do whatever the Turkmen wanted to secure access to the gas. This worked well, but has now set up a situation that is slightly awkward for Ashgabat whereby they are almost entirely dependent on one customer. They have sought consequently to diversify in all other directions, but find them challenging to achieve. Outside this, China does play a role in the Turkmen economy more widely, but the country’s wealth means it is able to pick and choose what it wants making it challenging for Chinese firms.

Uzbekistan – until the passing of first President Karimov, Uzbekistan was as closed to China as it was to everyone else. The subsequent opening up has been reflected in a surge of Chinese interest and activity, though this has not entirely overtaken Russian and Turkish investment. As the region’s most densely populated country, and traditional heart of the region, Uzbekistan is an interesting opportunity for Chinese traders, investors and businessmen which was on a rapid growth trajectory before the pandemic.

To turn instead to a few key issues that are worth considering when looking at the region and China against the wider backdrop of UK interests.

Afghanistan – the Wakhan Corridor that provides China’s direct link to Afghanistan is bordered on the north by Tajikistan and on the south by Pakistan. Consequently, Afghanistan is worth considering in China’s calculations. So far, Beijing has not filled the vacuum as was widely speculated following the Taliban takeover of Kabul. Rather China has trodden carefully, while its entrepreneurial cadre has leapt at the potential opportunities. Beijing engages Central Asia on Afghanistan, through involvement in various groupings including the SCO, regional Special Representative formats, as well as being willing to at least rhetorically support Central Asian narratives towards the region. In Tajikistan, China has developed one of its few overseas security bases – run by the People’s Armed Police (PAP) in Shaimak, along the country’s border with Afghanistan. The intention of this is to help China keep its own eyes on the potential problems that might overspill from Tajikistan. But overall, China has actually stayed relatively back from stepping into the mire in Afghanistan, preferring to instead try to keep a security buffer and engage with Central Asia (and anyone else interested) in trying to ensure the current situation does not de-stabilize further. What is important for the UK to note is that while China is a player in Afghanistan, it is still a relatively timid one, something Central Asians see as well.

Russia – there is a long-standing misreading of a regional division of labour around Central Asia between China and Russia. The myth says that China does the economics while Russia does security. Quite aside from the illogical nature of this calculation, the reality is that both are engaged in both sectors (and more). This does in some cases lead to competition, but for the most part, they seem happy to operate in parallel. During President Xi’s recent visit to Moscow, this comity was emphasized when they stated that they planned to coordinate their activities in Central Asia to a greater degree going forwards. The canard of seeking fissures between the two in Central Asia misses the wider problem that this growing proximity presents to Central Asia which finds itself operating in an increasingly limited geopolitical space. Central Asian strategists love to talk about their countries ‘multi-vector’ foreign policy which is able to balance people off each other, and play them against each other for their gain. But this strategic approach becomes highly challenging when your two biggest neighbours and partners are increasingly in lock-step with each other (even though recently, the balance of economics in the region has swung slightly back in Russia’s favour). The region will never be able to entirely reject China and Russia, but it is eager to develop options. What is important for the UK to note is that looking at the region as the place where China and Russia disagree is a waste of time which misses the real impact that Beijing and Moscow’s growing strategic alignment has on the region.

Uyghurs – unfortunately, the plight of Uyghurs in Xinjiang is not something that animates much policy discussion in Central Asia. While pockets of public support can be found, and at a government level behind closed doors people will often sympathise, the reality is that there is little interest or appetite to confront China on this issue. There have been some practical steps taken by the Kazakh authorities to get better treatment for ethnic Kazakhs caught up in the camps system, as well as work on individual cases, but this has not extended to wider condemnation. For many in the region, the Uyghurs living in China are simply citizens living under a different regime, and having to bear the consequences of that. This is important as lobbying at an official level for the region to condemn China on the issue is unlikely to generate any positive response, and is instead likely to simply close doors. This does not necessarily entirely preclude discrete support in some way, but it would be a challenging goal to achieve. At the same time, it is worth considering the ramifications of the Xinjiang and Uyghur related sanctions that have been passed in the US and Europe which may have a direct impact on Central Asian businesses (or UK investments in the region).

UK options

There is a great deal that the UK could do in Central Asia. As a country with high ‘soft power’ status across the region, strong business links, as well as one of only a few to have diplomatic representation in all five, the UK could gain a good return on investment were the region to garner more focused and consistent high-level diplomatic attention.

When thinking about China in this context, however, three areas are worth considering for UK policymakers:

First – engage with the reality of China as a player in Central Asia. This even means engaging with Chinese projects when they are being advanced. This does not necessarily mean working directly with the Chinese firms (though this might also be an option), but to instead work with locals to ensure that they are maximizing their benefits and seeing what ancillary projects could be done which would support local development.

Second – help foster a greater Central Asian collective narrative and policy development. One positive development of recent times has been a growing shift towards greater discussion in Central Asia of working together. While there are still deep issues and tensions between the five countries, there is also a clear effort being made to work together. This is in part a recognition of their difficult geographical realities of being between the Scylla and Charybdis of China and Russia (and Iran/Afghanistan), but also as this is now more possible given the passing of the first generation of leaders whose personal animosities sometimes kept relations between countries on ice. The UK should seek to find ways of supporting the fostering of a greater Central Asian policy identity as a way of empowering the region to manage its own affairs and through that become a critical western ally.

Third – the war in Russia has complicated routes north (though also increased regional economic dependence on Russia), while routes across Afghanistan remain limited and China is only just opening up again post-COVID. There has been a recent revival in attention towards trans-Caspian routes. While energy pipelines may be difficult to realize, expanding goods capability through strengthening of ports, rail and road links, and more creates a new route for Central Asia to Europe. Clearly this is also a route that China will be interested in, and is in fact already exploring supporting in various ways (the Kyrgyz railway for example). The route, however, would likely benefit Central Asia as much as China.

Finally, there is a need more widely for London to consider the Eurasian heartland to a greater degree in its strategic thinking. The recent Integrated Review (IR) Refresh made limited mention of Central Asia, and did not particularly consider in much detail the wide physical geographical space between the Euro-Atlantic and the Indo-Pacific at which Central Asia sits at the heart. When thinking in geostrategic terms it seems strange to omit such a large part of the globe, especially as it is one where the two key strategic adversaries repeatedly mentioned in the IR have increased their presence and attention. Numerous threats (from geopolitical adversaries to terrorist threats) intersect in this region, and Central Asia stands out as a region which could play an important supportive role in managing these issues. To generate true strategic advantage, the UK should focus a greater degree of attention onto Central Asia.

China in Central Asia: The First Strand of the Silk Road Economic Belt

Posted: July 13, 2019 in Asian Affairs
Tags: BRI, Central Asia, China, China and central asia, China and the world, SREB

Have a bit of catch up posting to do, and have quite a few longer pieces that are in production at the moment. Some big personal news on the horizon too, feel free to get in touch if you want to hear more (or do some digging online). My personal hope is that the upside is more time to write. A perennial complaint, lets see how it pans out.

But onto the present. First of all a longer article in Asian Affairs journal as part of series they published after this conference in London during which you can see me present the ideas laid out in the piece. Some other excellent pieces by smart colleagues in the special edition of the journal which would highly recommend. The piece might be behind a firewall for you, and feel free to get in touch if you are having issues. In the meantime, am posting the abstract below and you might be able to find the piece here.

China in Central Asia: The First Strand of the Silk Road Economic Belt

Publication Cover

In starting his announcement of the Belt and Road Initiative in Astana, Kazakhstan, President Xi Jinping was very consciously making the point that the broader vision of BRI was something that drew out of an approach that had been long developing between China and Central Asia. Focused on trying to improve prosperity at home through development and prosperity in adjacent regions, China’s relationship with Central Asia was one which provided a model that Xi saw as a positive way to articulate China’s foreign policy more broadly. Consequently, however, China’s relationship with Central Asia provides a useful window into understanding China’s broader Belt and Road Initiative. In the article, the author lays out a short history of China’s relations with Central Asia, illustrates their current status, before offering seven broader lessons and issues to be found which can provide a useful prism through which to consider the longer-term impact of the Belt and Road Initiative around the world.

China: Understanding Beijing’s Belt and Road Initiative

Posted: May 15, 2017 in Royal United Services Institute
Tags: Belt and Road Initiative, BRF, BRI, China, China and central asia, China and the world, OBOR

Back on my China in Eurasia theme, this time a piece timed to land at my institutional home RUSI to coincide with the big Belt and Road Forum taking place in Beijing. Lots more on this topic to come, and if you want more have a look at the China in Central Asia site.

Separately, spoke to the Times about returning foreign fighters to the UK from Syria, to Politico about Brexit and counter-terrorism, and the Mail on Sunday about Khalid Ali, the arrested Westminster terror plotter.

China: Understanding Beijing’s Belt and Road Initiative

A great deal of rhetoric is expended over China’s gigantic investment initiatives. Still, many of the economic projects are real, and Western governments will be well advised to understand their purpose.

The Middle Kingdom is asserting its centrality in global affairs by hosting the Silk Road summit this weekend. Aimed at showcasing President Xi Jinping’s ‘Belt and Road’ vision, the conference will bring together leaders, officials and experts from around the world.

Apart from the signing of some large deals and some affirmations about China’s eagerness towards free trade, the summit’s real importance is in the message it sends about China’s place in the world.

First announced in 2013 in a set of speeches in Astana and Jakarta, the One Belt, One Road (now renamed the Belt and Road Initiative) is at its root about putting a new name on a series of initiatives that built on existing Chinese investment and trade relationships.

The decision to first focus the initiative on Central Asia was a reflection of the fact that the region served as a conduit for China’s decades-long approach to investment around the world.

With a model of building infrastructure using Chinese firms deployed to deliver on loans provided by the country’s financial institutions to open up trade and markets, Beijing’s investments in Central Asia since the end of the Cold War provide a model for the globalised Belt and Road Initiative.

For countries along the routes, there is the difficulty of understanding and connecting with the Chinese investments in a manner that is useful to them, so that they are not simply roads passing through their territories.

For outside powers, such as the UK, there is the challenge of comprehending where they sit in the broader vision, as well as how they can connect with these projects along the routes.

To understand these issues better, there are three key aspects to remember. First, the concept is not a monolith. Each of the strands of the Belt and Road are different; at different stages of development, advanced to differing degrees and of variable importance.

In some cases, China is building on a long history of investment, while in others China is starting from a very low base of investment. It is important to distinguish between the rhetoric and the reality in each case.

Second, it is important to remember that this is not a giant aid project; China is making commercial investments in many cases. In some, the loans have been offered at reasonable rates and the implementing partner is contractually obliged to be Chinese. Looking at the Asian Infrastructure Investment Bank projects, they are in fact put out to open tender.

It is only in very few cases that the investment being offered acts as pure aid. China is still developing its aid profile, and this is key in understanding what China is doing under the Belt and Road.

The ultimate aim is to develop a series of trade and economic corridors using Chinese companies (thereby helping them go out into the world) to help China develop domestically. This is fundamentally a selfish vision aimed at advancing Chinese interests.

Third, it is important to think of the vision with a longer horizon that we are used to considering. At the moment, there is little economic logic to placing goods on trains from China to go to Europe: the route is far more expensive than going by sea and the highest value goods that need to get across land quicker need to travel by air.

Consequently, the much-vaunted trains which are travelling across the Eurasian landmass bringing goods between Europe and China are for the most part going full one way and empty back.

Furthermore, they are being subsidised by Beijing or the regional governments from where they depart. They do not currently make economic sense.

But it is possible that this is looking at them on too short a timeline. Seen from Beijing, the idea is to lay these tracks and develop these routes so that once China’s western regions become more developed and productive, they can take advantage of these routes.

Over time, what seems a short-term loss may turn into a longer-term artery of international trade. The point is that it is possible that the horizon with which the Belt and Road is currently considered is too limited.

In fact, it is something with a much longer timeline and is fundamentally, seen from Beijing, about re-establishing China as the centre of a global network of trade and economic routes that will help re-wire international trade.

These three elements are essential to bear in mind when outside powers are seeking to connect with the vision. It is important to understand each corridor in detail, to focus on the commercial opportunities that the corridors will create and to think with a longer horizon that most governments usually consider.

Once this learning has been absorbed and considered, it will be easier to understand how to connect with China’s vision – something that is as relevant to countries such as the UK at one end of the route as those that are along the routes.

For the Chinese investments are happening, notwithstanding the hyperbole that will be on display this weekend; money is being spent, and ground is being broken.

Banner image: The first goods train service from China to the UK arrives at DB Cargo’s rail freight terminal in Barking, East London. Courtesy of PA Images

Building support for the Belt and Road

Posted: March 15, 2016 in Whose World Order?
Tags: Belt and Road, China, China and central asia, China foreign policy, China-EU, EU, Silk Road Economic Belt

And final catch up post, this time for a think tank I worked for a while ago, the European Council on Foreign Relations (ECFR), with whom I am still doing some things. This is a post for their site which focused on some of the issues of the ‘Belt and Road’ strategy and what they need to do to get greater European cooperation on it. This is a topic that is very rich and has lots of work in the pipeline around it.

This aside, to catch up on some media conversations, spoke to The Times, Reuters and La Liberation about the leak of ISIS documents, to Newsweek about al Shabaab targeting aviation and training Boko Haram fighters, to Buzzfeed about Brexit and national security questions, to The Independent about Prevent issues in the UK, to the Press Agency about the attacks in Ivory Coast, to the Associated Press about the latest round of talks in Afghanistan the Chinese are helping with, and a presentation I did recently in Washington on China-Russia in Central Asia got a write up in the Diplomat.

Building Support for the Belt and Road

Xi Jinping has laid out what is going to be the defining foreign policy vision of his leadership in the form of the Belt and Road. An all-encompassing initiative, it is something that repeated Chinese leaders have said they want to engage with foreign partners on, in particular with European capitals given the vision is one that starts in China and ends in Europe. Yet, there is still a lack of clarity around exactly what this initiative actually looks like and how it is that foreigners can engage with China on this project. Beijing needs to lay out more clearly what it needs and wants from the world to implement this vision.

Seen from the outside, the Belt and Road initiative is one that appears to in essence be about building economic and trade corridors emanating out from China. Through the development of transport links – be they rail, road, ports or airports – and the construction and rehabilitation of pipelines, markets, economic zones and more, China aims to open Eurasia while reconnecting China to Europe across the wide landmass they share. The potential impact is a game-changing effect on a wide swathe of Eurasia, something that has not gone unnoticed in Europe where policymakers spend lots of time thinking about how to develop their continent. Yet, connecting on the initiative has so far proven difficult. If China genuinely wants greater cooperation on this strategy, then a number of key things need to happen.

First, Beijing needs to clarify where the routes of the Belt and Road will actually go. At the moment, all of the maps that have been produced are ones that are done by enterprising journalists interpreting official statements. The National Development and Reform Commission (NDRC), the body responsible for the vision, has so far not expressed a view or produced a map. This is problematic as it means people are unable to know exactly which Beijing’s priorities are and what specific routes Europe should focus on developing to support and work with China’s plan. For example, generally it is clear that the Silk Road Economic Belt will pass through Central Asia, but which specific road or rail projects is China going to focus on first?

Second, China needs to understand that if they want to maximise external support on the vision, then Chinese led funding initiatives need to be open to foreign contractors. European investment structures like the EBRD or EIB (as well as international ones like the ADB) are very keen to work with China on this vision, but need to ensure that the subsequent project contracts to emerge from investments are put out to open tender. This ensures that the best possible contractors will undertake the projects and ensures that the vision gets carried through in the most effective way possible. This is something that extends beyond simple financing terms and contract procedures: it needs to be made clearer that there is a role for others in Chinese led projects. The key point here is that China needs to be open to working with others in very practical terms to try to advance this vision.

Third, China needs to find ways to discuss sensitive security questions with outsiders. Through the Belt and Road, China is going to increasingly find itself becoming one of the most consequential players on the ground in large parts of Eurasia. With such power will increasingly come a greater regional role, including on sensitive security questions where Beijing will find itself having to try to broker negotiations and agreements between sides in open conflict with each other. This is already happening in Afghanistan, and as time goes on Beijing will find itself ever more involved in such discussions across the continent. Europeans have some experience and understanding of some of these questions and would be willing to share their intelligence and experience with China if Beijing showed an equal level of openness in discussions. Genuine cooperation and deeper understanding come from a full and frank exchange.

There are clearly a great deal more detailed issues that need to be discussed, but these three overarching points need to be addressed before greater detail can be gone in to. China needs to understand that many in Europe are keen to cooperate on this vision, but they need some greater clarity to able to find practical ideas for what cooperation can look like in practice. By offering a more detailed outline of what this initiative physically looks like and what projects Beijing is prioritising, opening up to the idea of making joint investments, and being willing to participate in more frank and open security discussions, Beijing will find receptive doors across Europe. All of which will be essential to ensure President Xi’s vision turns into a long-standing foreign policy legacy reconnecting the Eurasian landmass along the old Silk Roads.

Raffaello Pantucci is Director of International Security Studies at the Royal United Services Institute (RUSI)

Looking West: China and Central Asia

Posted: April 6, 2015 in US Congress
Tags: Central Asia, China, China and central asia, China and the world, China-Afghanistan, China-Kazakhstan, China-Kyrgyzstan, Chinese foreign policy, New Silk Road, Silk Road Economic Belt

Been quiet for a while as am getting very caught up with administrative things which are driving me a bit crazy. Have some more writing which I will publish over this week, mostly around my China looking west work, and more pieces hopefully in the pipeline, but the big push over the next few weeks is going to be my UK Jihad book. Am hoping for more reviews around that. So far, have had the Evening Standard and a very nice write-up based off the book in The Times. More hopefully en route.

This aside, have spoken in the past month to the South China Morning Post about extremists on campus in Guangzhou University and China in Central Asia, to the BBC about new government measures to handle extremist preachers, to the Daily Mail about ISIS, Voice of America about China, to the Associated Press about the attacks in Tunis, Bloomberg about China’s counter-terrorism policy going out and China getting Uighurs sent back to China, El Mundo about al Muhajiroun, and to the Times about ISIS using deaf mutes in its videos. There are also likely others, but cannot find links.

The main body of this post, however, is my submitted written testimony to the US-China Economic and Security Commission (USCC) where I had the honour to testify last month on China in Central Asia. The hearing was an excellent opportunity to hear a lot of the top experts on Central Asia in the same place at the same time. Please note that the footnotes seem not to have survived posting here, please follow this link for the full PDF.

March 18, 2015

Raffaello Pantucci

Director, International Security Studies

Royal United Services Institute for Defence and Security Studies (RUSI)

Testimony before the US-China Economic and Security Review Commission

Looking West: China and Central Asia

Background

In September 2013 during a visit to Astana President Xi Jinping spoke of establishing a ‘Silk Road Economic Belt’ (SREB) that would ‘open the strategic regional thoroughfare from the Pacific Ocean to the Baltic Sea, and gradually move toward the set-up of a network of transportation that connects Eastern, Western and Southern Asia.’ Made during the President’s inaugural visit to Central Asia, the speech was both an articulation of a policy in a region that had been underway for around a decade, as well as the first declaration of a foreign policy vision that has increasingly shaped China’s own projection of its approach to foreign affairs. Founded in Central Asia, the SREB and the development of trade and infrastructure corridors emanating from China that it has come to symbolize, is slowly becoming Beijing’s dominant and most vocalised foreign policy strategy and is possibly set to be the defining public narrative for Chinese foreign policy under Xi Jinping.

Xinjiang

To understand the SREB in its proper context, it is important to first understand Xinjiang. Xinjiang occupies approximately a sixth of China’s landmass, with around 1.5% of its population (at around 22.09 million according to the 2011 census). It is home to large oil and gas reserves (about a fifth of the national total of oil), and has about 40% of the nation’s coal reserves that are close to the surface and of good quality (coal remains one of China’s main sources of electricity generation). It also has a major agrarian industry, with 70% of China’s tomatoes grown in the province, making the region one of the world’s major sources of ketchup and tomato paste. Xinjiang is a region that is beset with tensions focused around ethnic rivalries. Home to Uighurs, a Turkic speaking people’s whose language, culture and ethnicity is closer to Uzbek or Turkish, the region has faced community tensions between Uighurs and Han Chinese for decades. Uighurs were once a majority in the region. PRC census data from 1953 indicates that at the time the province was 75% Uighur and 6% Han, a figure that today stands instead at around 40+% each according to the 2011 census. There is resentment against the growing presence of Han Chinese, with the Uighur population feeling that their identity and culture is slowly being eroded down as Beijing profits from the region’s natural wealth.

Since the People’s Liberation Army (PLA) conquered Xinjiang in 1949, the region has faced tensions with angry Uighurs occasionally rising up against the state or inter-communal violence erupting between the growing Han population and the increasingly minority Uighur one. This has expressed itself in terrorist violence at home and abroad. Groups of Uighurs have travelled abroad into Central Asia or Afghanistan, where they have connected with extremist groups and created training camps to prepare to return to China and fight.

Most recent attention, however, was focused on July 2009 when rioting in the region’s capital led to an estimated 200 deaths as mobs of Uighurs rampaged through the city attacking, and killing, Han Chinese. The next day, counter-marches took place with angry Han taking to the streets to protest both against the Uighur-led atrocities, but also the failure of the government to protect them. The local government’s failure to quell the violence was so dramatic that President Hu Jintao had to embarrassingly leave the G8 Summit in L’Aquila to return home to manage the crisis. The result of this was a change in leadership in the region, with of the removal of a number of local figures from their positions (for example, Li Zhi, Communist Party Secretary in Urumqi, and Xinjiang Public Security Bureau head Liu Yaohua) and most dramatically, a year later, the removal of long-time regional party boss Wang Lequan.

At the same time as changing the regional leadership, on May 17-19, 2010, Beijing hosted a major conference on the region. The Xinjiang Work Conference was hosted in Beijing by the CCP’s central committee and the State Council, involving then President Hu Jintao and then-Premier Wen Jiabao, as well as both of their successors Li Keqiang and Xi Jinping. This was a rare but significant work conference about a specific region (a number have been done for Tibet), and it led to a number of new policy approaches to the region by Beijing. Focusing on ‘leapfrog development’ the main thrust of the conference was economic development as the key to solving the region’s problems. Amongst the raft of economic measures was the developed of a twinning policy between more affluent provinces in China and prefectures in Xinjiang. For example, Shanghai took on responsibility for parts of Kashgar – something that translated in practice to the transfer of Shanghai officials to work in the region for a year, the delegation of a portion of Shanghai’s GDP as financial support for the region, and delegation visits from Shanghai to the region to advise on developing institutions and structures that had added to Shanghai’s prosperity. State and provincial companies are actively encouraged to invest in the Xinjiang, while different provinces would attempt to teach the parts of Xinjiang that they are responsible for some of the things that helped their success. For example, Shenzhen helped Kashgar develop a Special Economic Zone. Another innovation was the transformation of the then relatively moribund Urumqi regional trade fair into a Eurasian Expo, aimed at bringing in traders, businessmen and officials from across the Eurasian landmass to Urumqi – a city described by an Urumqi official to the author as the ‘closest big Chinese city to Europe.’ Economic investors from Europe and elsewhere were actively encouraged with preferential benefits and gentle persuasion. For example, a Turkish-Chinese business park was developed just outside Urumqi to bring Turkish investment into the region. German carmaker VW was encouraged alongside its Chinese joint venture partner SAIC to build a sedan factory in the region. Central Asian businessmen and traders were actively targeted for the Eurasian Expo, and another Special Economic Zone was established at the border crossing with Kazakhstan at Khorgos. And finally, funding was allocated to develop infrastructure, roads, rail and airports across the region to enable Xinjiang to become ‘a gateway for mutually beneficial cooperation between China and other Eurasian countries’, as put by Premier Wen Jiaobao during the Second Eurasian Expo in Urumqi in September 2012.

China’s policy towards Xinjiang was not, of course, solely one of economic investment. Alongside this surge of inward investment (something that had been underway for some time through various ‘develop the west’ initiatives) was a growth in security spending in the region. Emphasis was placed on trying to strengthen the security forces in the region and stamp out the periodic bouts of violence that continue to plague the region. China’s approach was in essence a binary one of heavy economic investment and heavy security clampdown. The balance between these two seemed to be shifted back in favor of ‘stability’ (or security) in the wake of a second Xinjiang Work Conference under Xi Jinping’s leadership in January 2014. However, the State Council also emphasised the importance of economic investment when it announced in June 2014 that the Xinjiang government was to spend approximately $130 billion to develop the region’s infrastructure.

But for both the security and economic surges to work, there was clearly a need to develop stronger links to the region around Xinjiang, and it is here that Central Asia starts to play a prominent and key role. Abutting Xinjiang, Central Asia is China’s westernmost periphery. Scattered around the region are pockets of Uighur populations – with major communities found in ethnically proximate Uzbekistan, Kyrgyzstan and Kazakhstan. In Kazakhstan in particular, Uighurs play a substantial role in the nation, with current Prime Minister Karim Massimov an ethnic Uighur. In Pakistan, relatively large Uighur communities live along Pakistan’s side of the Karakoram Highway. Within these communities and countries, China sees concern and Beijing and Urumqi security chiefs have developed strong links with their local counterparts (at a bilateral level, but also through the Shanghai Cooperation Organization) to ensure that, should any dissident Uighurs flee across the border, they will be rapidly repatriated.

More visible than this strong security bond, however, is the huge level of economic activity and investment that is slowly spilling across the border into Central Asia from China. Something that has always happened naturally given the borders, traditionally nomadic people’s and the nature of trading across Central Asia, it has increasingly taken on a life of its own as Chinese investment has poured in to refurbish and revitalize the trade routes across the region. The logic to this growth is simple: Xinjiang is as landlocked as the Central Asian countries it abuts. If Beijing is going to ensure that the region prospers, then it will need to be better connected to the world. Given the relative land proximity to Europe, it therefore makes more sense to develop the region’s physical links into Central Asia, not necessarily for Central Asian prosperity in itself, but rather to ultimately help transport Chinese goods to Eurasian and European markets (and vice versa). Hence the need for infrastructure that helps re-connect and re-wire the Eurasian landmass from China to Europe. Ultimately, if Xinjiang is going to benefit from the push for economic investment within China, it is going to have to have somewhere to trade with and through. Logically, conduit for this has to be Central Asia.

China’s Economic Surge into Central Asia

It is in many ways the economics of China’s push into Central Asia that is the most significant external aspect of this ultimately domestic policy response. The narrative of Chinese investment into the region used to be one of mineral extraction and exploitation. A late entrant into Central Asian energy through investments in Kazakhstan, CNPC purchased aging Soviet oil fields in Aktobe, western Kazakhstan and rapidly built an oil pipeline back to China. Built with great speed and efficiency, the pipeline became the symbol of China’s relations with the region. Most perceived China as viewing Central Asia simply as a large source of fuel and minerals that it could exploit to feed the seemingly insatiable energy needs its economic development required. This view was further affirmed through CNPC’s major investments into Turkmenistan, where the country has been one of the few to successfully operate and buy Turkmen gas. CNPC has become one of the largest supporters of the Turkmen national budget, through gas purchases and the development of almost four different pipelines to transport gas back to China.

This superficial view of China’s growth in the region misses the reality on the ground whereby China is slowly becoming a dominant player in a vast array of different economic areas. From Kyrgyzstan, where the import and re-export of Chinese goods plays a huge role in the national economy, to Tajikistan that is increasingly becoming one of China’s biggest debtor partners. To better understand the breadth and depth of China’s economic influence in the region, it is useful to look at the extent to and manner in which China operates in the energy industry, one of the dominant industries in which China participates in Central Asia.

As has been mentioned, China is the major player in Turkmenistan, where it is the sole country that is able to get substantial access to Turkmen hydrocarbons. Russian volumes have shrunk and Iran has had difficulty paying in cash (offering barter instead), making China the preferred player in Ashgabat. This is a similar story in Kazakhstan, where China has not only constructed one of the quickest-built pipelines ever in the country, but it has also bought 8.33% of the supergiant oil field Kashagan, purchasing American firm ConocoPhilips’ stake. Buying into a project run by a multi-national consortium is a new endeavor for a Chinese company in Kazakhstan. It is also a major purchaser of Kazakh uranium. In 2014 Kazakhstan’s state-run nuclear energy agency Kazatomprom said that 55% of Kazakh uranium production was exported to China. In Uzbekistan, China has signed contracts to extract some gas and build a pipeline across the country from Turkmenistan. It has also aided in developing electricity re-metering , as well as helped the country to develop its solar panel production capability, and refurbish solar furnace factories.

Tajikistan, until relatively recently considered a very energy poor country, made discoveries of large potential gas reserves in the Bokhtar region. Chinese company CNPC partnered with Canadian Tethys and French Total to undertake further exploration. Downtown Dushanbe, once famous for its blackouts, now has a large Chinese-built thermal power plant that provides electricity to the city through the cold winter months. A major producer of hydroelectric power, Chinese firms have explored the possibility of both exporting Tajik hydroelectric power, but also building some of the infrastructure to support it. And finally, Kyrgyzstan, remaining energy poor has nonetheless benefited from Chinese attention in the energy field. While Russian firm Gazprom remains a major player in the nations energy mix, CNPC has offered to build refineries in the country, as well as helping connect the country upgrade and build power transmission lines. China is a player across Central Asia’s energy fields, not solely in extractives.

The funding for these projects comes in a number of different ways. In some cases, like a coal-fired plant in Dushanbe, the project was one that is offered by a Chinese firm in exchange for preferential treatment on another project. In other cases, it is funded through Chinese policy bank loans that are offered at preferential rates and stipulate that the implementing party must be Chinese. One example of this structure is the decision to build a camera monitoring system in Dushanbe to help monitor traffic in the city. Money was offered through an ExIm Bank loan, and the implementer was Chinese telecoms giant Huawei. This approach is not actually novel to the region, with both Korean and Japanese banks offering similar structures in regional contexts, but the scale and size of Chinese loans and rapid implementation is significant.

Increasingly one can see China assisting in the rewiring of roads, railways, pipelines and electricity grids across the region so that all lead back to China, or at least in some way benefit China’s access. All of this helps connect up what is happening in Central Asia with the all-important domestic strategy in Xinjiang. Consequently, the economic push into Central Asia by China comes from a blend of economic forces as a result of the economic investment into Xinjiang, as well as the ongoing outward push by Chinese firms and money.

Enunciating a strategy

While this is how things have been playing out on the ground for many years, prior to Xi Jinping’s SREB announcement, China’s investment strategy for Xinjiang and Central Asia was not something that had been directed or enunciated in any clear or coherent way from Beijing. The closest thing to a regional strategy document can be found in the Xinjiang Work Plan and its acknowledgement of the importance of developing markets and routes into Central Asia to improve Xinjiang’s prosperity. In 2011, Chinese academic and Dean of Beijing’s international school Wang Jisi offered some sort of academic theory to the logic of this push in his influential writing about China’s March Westward. But there was no clear policy expression or formulation offered until Xi Jinping visited Central Asia in 2013 and laid out his SREB vision, in essence symbolizing Xi Jinping’s desire to take ownership over a reality that had been going on for some time and stamping his brand and leadership on an overarching policy concept around it.

And since the announcement of this belt, and the later addition of the Maritime Silk Road in a speech in Indonesia in October 2013, amalgamated into the phrasing ‘one belt, one road’ there has been a further surge in development and investment to make this vision a reality. At home, the Silk Road has now become a project with huge implications across the west of the country. Maps have been issued showing the city of Xi’an as the starting point, while $79.8 billion has been announced into investment into Gansu. A further domestic fund of some $16.3 billion has been announced for supporting Silk Road projects at home. Mostly infrastructure investment projects, there have also been more specific investments emanating from provinces in Western China to Central Asian countries – like $800 million invested by Henan into Tajikistan. On the ground such investment efforts can be found in Tashkent in the form of trade fairs bringing Xinjiang traders to the region, as well as in markets across the region that are filled with low-end traders and larger property or market owners who have spent a decade or more in Central Asia building up empires of market stalls, local factories and real estate portfolios.

Externally, this surge of infrastructure investment is also clearly visible in the form of a growing constellation of investment banks being directed out of Beijing, as well as the expansion of the concept of the SREB. From an initial vision that seemed focused on Xinjiang development through Central Asia, it has now become something that spans the Eurasian landmass (more than 60 countries now see themselves in its route), but has also developed offshoots in the Maritime Silk Road, the Bangladesh-China-India-Myanmar (BCIM) Corridor, and the China-Pakistan Economic Corridor (CPEC). Each of these is less developed compared with the SREB, but at the same time all reflect logical trade corridors that China would like to open up. China has already started to explore how to develop the necessary infrastructure in each case.

One of the main reasons why this push seems more credible than previous efforts is the volume of funding that China is pushing towards the projects and the array of development bank vehicles they are creating to help make it a reality. The Asian Infrastructure Investment Bank (AIIB), the BRICS Bank, and the earlier discussed but never realized Shanghai Cooperation Organization (SCO) Development Bank, are all expressions of this. Whilst the AIIB and BRICS Bank are not singularly focused on Central Asia, the model of development they are focused on is one that reflects China’s experiences in Central Asia, using the lever of economic infrastructure investment to help foster trade corridors and routes that ultimately connect China to its markets. The focus on infrastructure reflects not only the reality of a region that has infrastructure huge demand for investment in this area, but also a Chinese policy outlook that is shaped by the concept of regional connectivity and development of a prosperous neighbourhood. This underlying concept is something that has been present in Xi Jinping’s foreign policy outlook from the beginning of his presidency. This is highlighted when in October 2013 he held a rare foreign policy work conference focused on ‘peripheral diplomacy’, meaning China’s relations with its proximate neighbours.

Regional repercussions

The biggest question in this Chinese push, however, is how the region is going to react to it. Looking to Central Asia in particular, China has played a very careful and sensitive game. This is most clearly exemplified in the SCO, that was first developed as the Shanghai Five, a cooperative grouping focused on delineating China’s borders with the former Soviet Union in the wake of the latter’s collapse. In 2001, Uzbekistan joined China, Russia, Kazakhstan, Kyrgyzstan and Tajikistan, and the SCO was formed with a Regional Anti-Terrorism Structure (RATS) founded in Tashkent. From there, the organization has continued to operate, using counter-terrorism as its main rallying flag, but with little evidence of it developing too much more beyond this. Chinese thinkers and officials have tried to push the SCO in a more economic and development direction, but this has largely been met with skepticism and hesitation by regional powers, in particular Russia, who has hesitated to let the SCO develop too much more beyond its current mandate. At the same time, China’s hesitation to get involved in hard security questions regionally means that the Central Asian members of the organization continue to prioritize the security relationship with Russia over China (though there is some evidence that this is starting to change).

With Russia, the question of underlying tensions has remained a major issue, though whenever Chinese officials and experts talk of Russia in a Central Asian context, they go to great lengths to highlight the fact that they would do nothing that would contradict their Russian counterparts interests in Central Asia. For their part, Russian experts recognize that China is the coming force in Central Asia, but seem willing to accept it and highlight that most regional leaders see Moscow as their key international partner who is also able to play a much more decisive security role than Beijing. There have been some deals recently where Russian firms have lost contracts in favor of Chinese companies – for example, the redevelopment of the Manas Airbase in Kyrgyzstan in the wake of American withdrawal, is something that has been passed on to Chinese firms rather than Russian Rosneft who was initially believed to be taking the contract. But at a larger strategic level, both powers seem to have reached a modus vivendi in Central Asia that does not necessarily reflect the strategic balance in outsiders eyes, but that functions for them on the ground.

The other key regional question hanging over the region is Afghanistan (and Pakistan). For Central Asia, it is Afghanistan that is seen as the great potential destabilizer, and there is the concern that the massive investments into the SREB that have been done into Central Asia may be negatively impacted should Afghanistan become once again an exporter of instability. This is a concern that Chinese officials will express, though most often when talking about Afghanistan they will express concern that Uighur extremists might once again use the territory as a training ground to export violence back to China. China has increasingly been playing a role in Afghanistan, in particular in trying to offer itself as a broker between the Taliban and authorities in Kabul, as well as mineral extraction, economic investment, and some regional collaboration. But at the same time, it is unclear that Afghanistan necessarily features as part of the SREB, except in some of its northern regions that offer themselves as routes to Iranian and other Middle Eastern markets, in one of the routes offered in Chinese publications of where the SREB actually flows.

The biggest regional problem that China faces with its SREB in Central Asia, however, is the question of Sinophobia. Something that is palpable on the ground at times in the resentments that people feel towards Chinese businessmen and traders, there is a noticeable sensitivity when discussions come up about Chinese redrawing boundaries in certain parts of Central Asia. In Tajikistan, online discussions about land deals between Chinese state owned agri-businesses and Tajik authorities were blocked to reflect the perception on the ground that these deals were the government selling the nation to China. In Kazakhstan a similar deal was announced by President Nazarbayev in 2009, but the public outcry against it led to him walking back on the initial deal. Relatively small countries by population, the Central Asians fear overwhelming by China, a sentiment that can also be found in Russia’s border regions with China. This is not only about numbers of people, but also in the fact that all of the Central Asians want to become manufacturing hubs themselves, something that is going to be very difficult when they sit next to the world’s manufacturer.

China is not unaware of this Sinophobia, and has attempted through various means to undertake a soft power push in the region. For example, there is a growth number of Confucius Institutes in the region. They have also funded specific research projects in countries like Kazakhstan by local experts and opinion formers to help both shape the individuals views, but also to understand better the nature of the sinophobia so they can react to it. Travel to Aktobe, a city where CNPC plays a major economic role, and it is almost impossible to find a visible Chinese presence in the city. Chinese workers stay outside the city in a compound in an old sanatorium.

US Relations and impact

From a Chinese and Central Asian perspective, the US’s role is complicated. In the first instance, it is important to understand a bit more of the theory behind the policy. When Professor Wang Jisi drafted his influential work on the need for China to March Westward, his thinking was not only based in trying to get China to focus on its immediate periphery and develop its west, but also to try to get Chinese officials to refocus from their almost obsessive attention to China’s relations with the United States and maritime powers. This underlying logic highlights how to some degree China sees its push into Eurasia as something that it is doing without the United States. At the same time, China has shown itself to being increasingly willing to cooperate with the United States in Central Asia, with a willingness to undertake joint programs in Afghanistan, as well as explore discussions with American officials about what cooperation could be undertaken collaboratively in Central Asia.

At the same time, regionally, the United States is seen as something of an erratic actor. With the drawdown from Afghanistan, and the oscillating American attention to Central Asian powers, there is a regional perception that the United States is a fairweather friend or only focuses on the region when national interests are threatened (like in the wake of September 11, 2001). Furthermore, the United States is seen as not offering the same opportunities as China – while there was an interest in the New Silk Road highlighted by then-Secretary of State Hilary Clinton in a speech in Chennai in 2011, little has come from that beyond an expression of interest by the United States in creating a north-west corridor through Afghanistan. Projects like the Turkmenistan-Afghanistan-Pakistan-India pipeline or CASA 1000 are slowly moving forwards, but without the financial push or heft of China behind them, progress is much slower than China’s efforts.

Central Asia: The View from China

Posted: February 22, 2015 in EUISS
Tags: Central Asia, China, China and central asia, China in Central Asia, Chinese foreign policy, xinjiang

Further catching up on delinquent old posting, here is a piece I wrote for the EU’s foreign and security policy think tank EUISS. Part of a series they did on Central Asia, and bigger work they have been doing recently in support of the Latvian Presidency of the EU which has been focused on this topic. Big thanks to Eva for helping me connect with this project.

Central Asia: The View from China

China’s rise in Central Asia is not a new phenomenon. For the past decade, Beijing has gradually moved to become the most significant and consequential actor on the ground in a region that was previously considered Russia’s backyard. In September last year, President Xi Jinping announced the creation of a ‘Silk Road Economic Belt’ running through the region. Although this declaration is the closest thing seen so far in terms of an articulation of a Chinese strategy for Central Asia, it nevertheless offered more questions than answers.

To understand China’s approach to Central Asia, a wider lens needs to be applied to explore both the detail of what is going on and how this fits into a broader foreign policy strategy that is slowly becoming clearer under Xi Jinping’s stewardship.

The Long March westward

It is in the first instance important to look at the geographical link that exists between China and Central Asia. This flows principally through Xinjiang, China’s westernmost province which is home to a disgruntled Uighur population, some of whom are currently locked in a painful struggle with the Chinese state. An ethnic minority in China (though almost 10 million strong, with a substantial diaspora in Uzbekistan, Kyrgyzstan, Kazakhstan and Turkey), the Uighurs are closer in terms of culture and language to Central Asian peoples like the Uzbeks. Stemming from Xinjiang (a region that covers a sixth of China’s landmass but contains roughly 1-2% of its population), Uighurs have long complained that their identity is slowly being eroded by Beijing-sponsored Han Chinese immigrants. This alienation has resulted in protests, as well as violence directed against the authorities, the resident Han population, and local Uighurs seen to be collaborating with the central government. The most recent bout of serious civil unrest can be traced back to 2009, when roughly 200 people were killed during riots in Urumqi, Xinjiang’s capital. In the wake of this event, Beijing’s attention was drawn towards the troubled region, and a subsequent work plan laid out in May 2010 signaled a new push towards fostering development in the province.

This focus was not in fact completely new. Chinese officials had long worried about Xinjiang and the underdeveloped nature of China’s western frontiers. While coastal provinces like Shanghai and Guangzhou were booming, some regions in the centre and west were left behind economically. In addition, China’s foreign policy was almost exclusively focused on maritime disputes and the country’s relationship with the US. The reality is that if Xinjiang is to be developed, China needs a more prosperous region in its vicinity to trade with – and through. Far from the coast, Xinjiang’s southern markets are closer to Europe or the Indian subcontinent than they are to China’s mighty eastern seaports. The result is an approach towards Xinjiang that is focused on economic development and improving its links through Pakistan and the countries of Central Asia.

A Chinese pivot?

The outcome of this approach is the development of the Silk Road Economic Belt, a corridor that (eventually) will connect Xinjiang to Europe. A project that is being implemented by Chinese companies with funding provided by the country’s policy banks, it seeks to help (re)connect Central Asia to China. The region is consequently being transformed from one which is wired to Moscow to one which is increasingly wired to Urumqi – and Beijing. Unlike the US plan to forge a ‘New Silk Road’, China has devoted substantial financial resources to its Silk Road Economic Belt – some $40 billion has been allocated for external aspects, and $17 billion for projects within China. Beyond this, new international financial institutions created and funded by China – such as the BRICS Bank or the Asian Infrastructure Investment Bank – all point to a Chinese desire to help and fund the development of its immediate neighbourhood.

There are clearly selfish motivations for China’s investments – from Turkmenbashi to Khorgos, Chinese traders are often the most dynamic players on the ground. But while the overall project is designed to help improve China’s undeveloped regions, there are also clear ancillary benefits for Central Asia.

A grander vision

China is, however, not solely an economic giant: it has demonstrated a growing willingness to engage in security matters in Kyrgyzstan and Tajikistan (perceived by Beijing to be the most unstable of the Central Asian states) through bilateral military support and training. Beijing might not want to take full responsibility for the region’s security, but with every visit by a Chinese leader resulting in greater economic connectivity between these countries and one of China’s most sensitive provinces, it is becoming increasingly difficult for its government to simply ignore its place as a regional stakeholder.

That said, Beijing remains uncertain of how exactly to exert its power. And it is here that the EU might step in and play a role in influencing China’s posture. For example, Chinese officials and businessmen often fall into the same corruption traps as their European counterparts active in Central Asia. The European Bank for Reconstruction and Development (EBRD) and other European entities, however, effectively operate in the region, and their lessons learned are ones that Chinese enterprises could benefit from. China has likewise little experience in resolving border disputes, while European bodies like the OSCE or projects like the EU’s Border Management Programme for Central Asia (BOMCA) have an extensive history of being deployed in the region. If China’s wish to build a trade corridor through Central Asia is to become a reality, Beijing’s policymakers will have to establish ways to deal with the region’s complicated dynamics. Europe can help China with this aim, while also helping to promote greater regional stability. For example, joint training and capability building missions, cooperative security strategies, and efforts to counter drug trafficking and criminality in the region would advance both Chinese and European interests.

At a more strategic level, there is an opportunity in the Silk Road Economic Belt for Europe to develop its relations with China. It is not only part of Beijing’s vision for Central Asia, but has formed the contours of China’s foreign policy towards a raft of regional partners: economic corridors similar to the Belt are now are sprouting from every direction to and from China (including the China-Pakistan Economic Corridor, the Bangladesh-China-India-Myanmar Corridor, and the Maritime Silk Road). This increases the importance of the Silk Road Economic Belt and offers a chance for Europe to play a role in a project that is both key for the Chinese leadership personally and important to a strategically significant region which Europe has expressed a keen interest in. The Belt already effectively exists. It has (under different auspices) been a reality for almost a decade or more. China’s leadership has decided this is a cornerstone project which ultimately should stretch all the way to Europe. If Europe were to reach back and thereby improve its relationship with China, there would be significant benefits for all actors involved.

Raffaello Pantucci is the Director of International Security Studies at RUSI.

A Xinjiang Trade Fair in Tashkent

Posted: May 19, 2012 in China in Central Asia
Tags: Central Asia, China, China and central asia, China trade with Central Asia, Uzbekistan, xinjiang

This is going to become a more regular outlet for my writing. As part of my ongoing work on China in Central Asia, I am going to be producing more content directly for the site that I help co-edit, China in Central Asia with Alex and Sue Anne. Thanks in particular to dear Sue Anne for working on this one with me. This first piece is based on an experience a week or so ago in Tashkent at a curious Expo that we came across there.

A Xinjiang Trade Fair in Tashkent

May 17, 2012

By Raffaello and Sue Anne Tay

Last week, we have been visiting Tashkent, Uzbekistan as part of our ongoing research on Chinese interests in Central Asia.

Fortunately, on the flight here from Beijing, one of us had the good fortune to be seated amidst a boisterous group of 40 Xinjiang businessmen part of a provincial business delegation attending a trade fair in Tashkent. They had been forced to fly through Beijing from Urumqi – a geographically illogical route – due to the fact that there are no direct flights between Tashkent and Urumqi.

At their invitation, we visited the trade fair earlier this week. Held in an old exhibition hall in the outskirts of Tashkent it was a no-frills affair with basic booths lined up four by four. In its fourth year, the Xinjiang Trade Expo was sponsored by the Uzbek Chamber of Commerce, the Xinjiang government, and the bingtuan (the former People’s Liberation Army (PLA)-managed state owned enterprise (SOE) responsible for much of Xinjiang’s industries).

On the Chinese side, the participants were a mix of Xinjiang companies specializing in locally produced goods like Xinjiang snacks of dabanji (the famous big plate chicken), mushrooms, culinary sauces, an array of Uighur style clothing (and some fancily called ‘Turky style’ clothing) and more generic industries like uniforms/garment manufacturing and electronic equipment.

Other key participants were Xinjiang subsidiaries of holdings companies based in Guangzhou as part of the central government’s push for increased domestic investment in China’s less-developed hinterlands. One manager highlighted that they had started this work in the province at the Guangdong provincial government’s request. They were offering potential Uzbek customers property investment opportunities in Kashgar in southern Xinjiang, Chinese electrical gadgets like smartphones and Ipad-knockoffs tailored to the Uighur market (appropriately labeled with an Android character donning a Uighur hat), lightning equipment, police and factory uniforms. Many of the samples on display were manufactured in southern China and shipped to and assembled in Xinjiang.

With the pomp of the opening ceremony behind them, the reception at the Xinjiang Trade Fair when we went was lackluster to say the least. A thin traffic of Uzbek passers-by browsed with fleeting curiosity at what they considered well made but expensive Chinese products.

“The Uzbek market is too small and low-income compared to the vast opportunities we have in Xinjiang,” a uniforms manufacturer salesman named Tan Chao complained. Two locally dressed older Uzbek women stopped by to finger the bright Gortex jackets and browse a catalogue. A listless conversation in stilted Russian began with no conclusive business made.

Like Tan Chao, many of the Xinjiang businessmen were bored by the lack of opportunities offered in the trade fair. When we spoke to a pair of salesmen from an agricultural machinery manufacturer subsidiary of AVIC (the Chinese military aviation SOE), they acknowledged their presence seemed almost futile. Neither spoke Russian nor were there any serious potential clients for the cotton-picking machines they were peddling (Uzbekistan is one of the global top five cotton-producers). They responded to inquirers by waving a sheet with the prices of their equipment carelessly scribbled. Amusingly, curious onlookers seemed more interested in purchasing the model on display rather than the actual machinery.

A manager of a Xinjiang-based electricity infrastructure developer (with affiliation to Siemens) named Liu Zhao was one of the more enthusiastic and serious participants. His company had specially shipped in a landscape model of an electricity grid made up of parts manufactured by their company. Liu spoke fluent Russian thanks to 2 years of study in Almaty, Kazakhstan and extensive experience travelling to the region for work.

Several businessmen we spoke to, including Liu, acknowledged the difficulties of doing business in Uzbekistan. The government welcomed investment but not competition with local industries. Hence, the options for Chinese businesses in Uzbekistan are in the form of trade of specialized Chinese goods to the Uzbek market, attracting Uzbek investment to China and vice versa.

The limited convertibility of the Uzbek currency – 1800 Uzbek som to 1 USD (at the official rate, we were told the unofficial rate was as high as 2800 som to the USD) – was another obstacle. It is prohibited to take earned foreign currency out of the country, meaning you cannot leave with more forex than you arrived. Thus, foreign companies are either compelled to reinvest domestically any Uzbek som profits or absorb foreign exchange losses made via the official foreign exchange centre.

Hence, the dilemma facing Duan Weiming, a Chinese producer of Western suits who had just made a modest sale of several tens of thousands in Uzbek som. He jokingly showed off his cash bundles to his friends. What is he going to do with all the cash he made? We inquired.

“Why, spend it all on dinner, drinks and karaoke!” he boomed smilingly in response. Maybe to go enjoy his new fortune, the group packed up early at four o’clock. With another day at the Xinjiang Trade Fair, the Chinese businessmen were determined to make the best of what remained a slow affair.

Middle East Challenges Facing China in 2012

Posted: January 10, 2012 in Oriental Morning Post
Tags: arab spring, Central Asia, China, China and central asia, China and the middle east, China and the world, Chinese foreign policy, Confucius Institutes, kyrgyzstan, lone wolves, terrorism, xinjiang

A new article for 东房早报 (the Oriental Morning Post) the Chinese newspaper I sometimes contribute to about what China faces with regards the Middle East and the fall-out from the so-called Arab Spring of last year. I have also been doing a few media appearances, including being quoted in an article for Voice of America about recent troubles in Xinjiang and Chinese cultural influence in Kyrgyzstan for Eurasianet. Also, my recent piece for HSToday about Lone Wolves has been reproduced in a few places, including this digested version of it for a specialist site.

The article can be found here, and below is the English I submitted and under that is the text in Chinese for those able to read it and compare the differences.

China and the Arab Spring

This has been the year of great drama in the Arab world. Old certainties were pushed aside as Hosni Mubarak was reduced from Pharaoh to an old man being wheeled into a courtroom on a bed and the defiant Muammar Gadaffi was stripped and shot while hiding in a sewer. A new world order is being shaped, but what remains unclear is what exactly China’s role in this order will be.

At a conference in May this year, a Chinese friend angrily berated the government for being so slow to respond to events in Libya. While he was impressed by the rapidity with which they had been able to evacuate the 35,000 or so Chinese workers in the country, he was distinctly unimpressed by how long it had taken the government to reach out and make contact with the rebels.

And even once China did make contact with rebels, stories were also to emerge that China was maintaining contact with the old Gadhafi regime. In one widely reported case that was subsequently admitted by the government, documents obtained by the press showed that Chinese arms manufacturers were holding discussions with the Gadhafi regime as late as July 16, 2011 to provide supplies for the Colonel’s forces. This taking place a month after Beijing had hosted NTC leader Mahmoud Jibril to discuss China’s interests in Libya.

On the one hand, being friendly with both sides is something that is a strategically safe bet. By keeping everyone happy, you are able to theoretically focus on your interests and not become involved in local rivalries. But on the other hand, this can leave you in a situation where you are seen to be supporting an unpopular regime. Something highlighted when a friend from Beirut reported in response to a question about how China was perceived by the “Arab street” during this time, that China was not seen in a very positive light. Protesters taking up against regimes like Mubarak’s or Gadhafi’s were noticing that the regime had received weapons and equipment from China. They also did not appreciate the sense that it was a result of Chinese foot-dragging that the United Nations did not become involved sooner.

All of which illustrates quite tidily the problem that China faces when looking at how to react to the Arab Spring. The long-standing non-interference principle dictates that China cannot take an active role in getting involved in other nation’s internal problems. But this is a stand that will protect it from becoming entangled in situations like Iraq, but at the same time, it means that when an unhappy populace rises up against its leadership, it is equally likely that China will find itself backing the wrong side in the local public mind.

The problem for China with the non-interference principle is that sometimes in not choosing, China has made a decision or can be interpreted as making a choice. So when China chooses to avoid supporting sanctions through an abstention, it is in fact tacitly agreeing with the sanctions and therefore supporting the side that would want the sanctions. But it is doing this in a grudging fashion that suggests that in fact it disagrees with the idea of imposing the sanctions. Currently this is most visible in Iran and Syria where the Chinese government’s ongoing refusal to support strengthened sanctions against either country is something that is blocking the west from advancing sanctions themselves. The problem for China is that while at the moment this can seem a safe bet given the fact that it is not only China that is blocking sanctions, in the longer run it could leave China in an awkward situation should the regime be replaced.

Let us look for example at Syria, the off-shoot of the Arab Spring that is most likely to dominate news cycles in the next year. After a refusal to support UN resolutions condemning Bashar al-Assad’s regime, China ended the year by supporting a Russian proposal that in equal measure apportioned blame for the current trouble on the rebels and government. Earlier shifts only came after the Arab League had moved to condemn the regime in Damascus – theoretically reflecting a broader regional condemnation and therefore a regional consensus that China could agree with and therefore be seen as part of the mainstream.

This is a careful approach that is designed to give the appearance of not supporting oppression while at the same time not advocating regime change. Instead, the desire is to project a vision of China that is supportive of whomever is in charge, irrespective of their political leanings. The logic is that once the dust settles, China can sweep in with its deep pockets and focus on its interests and avoid having to choose sides. And certainly for some in Libya this is the case: as Abdul Rahman Busin, a spokesman for the NTC put it, “we all need to remember that China is a superpower. We all rely on products that come from China. We would have hoped they would have been on our side….but if it is the interests of the Libyan people to deal with China, then we will deal with China. It is very expensive and time consuming trying to settle old scores.”

But what does this say of China as a global power? Part of the reason why European forces engaged in Libya was a recognition that they had until then been supporting an oppressive regime and that it was a stain on Europe’s character. Once Gadhafi started to talk about going from house to house wiping out dissidents, it became clear that Europe was on the wrong side and leaders moved swiftly to get UN authorization to protect Misrata and Benghazi. While the decision to impose a no-fly zone was one that was contentious within Europe – Germany chose to abstain from the resolution – the end result was that the no-fly zone was voted for and imposed. This led to subsequent events and Gadhafi’s toppling.

China’s decision to sit, with Germany and others, in the abstention box, was ultimately neither here nor there. By refusing to take a position, China ultimately did take a position since it did nothing to try to stop the no-fly zone from being imposed. As a result, China ended up supporting what took place in Libya without accruing any of the international credibility that accompanied the vote. Instead, China was seen as being uncertain whether it really was a good idea to save the floundering rebellion and unaware of the consequences of its decision-making in the UNSC.

The question that China needs to confront in this coming year is what kind of an international player it is going to be. In this past year, it has shown that it is an international player – operations off Somalia show a capacity to conduct operations within an international framework (something already shown in the many peacekeeping operations China participates in), voting on sanctions against Libya shows it can choose sides when it wants to, the 10^th year anniversary of the Shanghai Cooperation Organization (SCO) show that it can create a regional security framework, and its work in Sudan helped ensure that the partion of the country was a largely peaceful event. The world knows that China has deep pockets and impressive capabilities to develop infrastructure, but the question is what sort of a leadership role is China going to take in the new world order.

Nowhere will this test become clearer in this coming year than in Iran and Syria – two countries long at odds with the western world and ruled by regimes of dubious legitimacy. This year it seems possible that we will finally reach a climax on both. For Iran, the signals that it is nearing capability to build nuclear devices are becoming ever clearer, while for Syria it seems likely that the Assad regime will eventually succumb to pressure and either crack-down more heavily and violently in a way that the international community cannot deny or simply collapse. And these late echoes of this past year’s Arab Spring will have a direct impact on China’s interests, something that China would do well to try to get ahead of rather than subsequently follow.

Up until now, China has been able to sit back and watch world events happen while it hedges by making friends with both sides. This is something that has been made possible by the willingness of western powers to step in and take leadership roles to make situations develop in positive directions. But in the coming year, austerity and domestic elections will become the priority concerns, meaning that China might find that its previous cover is blown. 2012 marks a new leadership direction in Beijing – let us hope that this leadership includes a more proactive stance in international affairs. The world is crying out for greater Chinese leadership; let the next generation of leaders be those to take China onto the world stage.

2012年中国面临的中东挑战

过去的一年是阿拉伯世界经历大变局的一年：穆巴拉克从“法老”变成了躺在床上被推进法庭的老头；从来不可一世的卡扎菲躲进了下水道，并在毙命前被羞辱……过去的一套法则被颠覆，新的世界秩序正被重塑，但中国在这一秩序中究竟将扮演怎样的角色还远不清楚。

比如，尽管中国政府从利比亚撤离35000多人的速度和能力令世人印象深刻，不过，中国政府向利比亚反对派伸出橄榄枝的步伐却没那么快。

一方面，“两头不得罪”在战略上是安全的。从理论上讲，让所有人都高兴，可以让人能够专注于自身利益，而不必卷入地区冲突之中。但另一方面，这种做法可能置人于一种不利的境地。

以上这些都非常清楚地展现了中国在思考如何应对“阿拉伯之春”的问题时所面临的困扰。长期秉持的“不干涉原则”限定了中国不可能积极地介入其他国家的内部问题。

“不干涉原则”给中国带来的问题还在于，“不选择”有时候也表明中国已经做出了决定，或可能被认为是做出了选择。所以，当中国选择通过弃权来避免支持对某国进行制裁时，表示它心照不宣地对制裁采取了赞成的立场，由此事实上也就支持了想要推行制裁的一方。而以不情愿的方式采取行动，则暗示其不赞成采取制裁。眼下，这一点最显著地体现在伊朗和叙利亚事件上，中国政府拒绝支持对任何一国实施进一步的制裁，这阻碍了西方推进制裁的脚步。

让我们以叙利亚为例。在新的一年里，这一场“阿拉伯之春”的独幕戏最有可能占据新闻头条。中国拒绝支持谴责大马士革阿萨德政权的相关决议，并在2011年年底前对俄罗斯的提议——将叙利亚出现乱局的责任分摊到反对派和政府身上，各打五十大板——表达了支持。这是一种谨慎的处理方式，表明中国一方面不支持压迫人民的做法，与此同时，也不主张政权更替。当然，对于利比亚的某些人而言，这的确如此，如同利比亚全国过渡委员会发言人Abdul-Rahman Busin所言：“我们都需要记住，中国是一个超级大国。我们都依赖来自中国的产品。我们希望他们能够站在我们一边……但如果与中国打交道符合利比亚人民的利益，我们将和中国打交道。力图解决过去的矛盾既耗费资本，又浪费时间。”

过去的一年，中国已经展现了国际大国的形象：索马里海域的巡航行动显示了中国具有在国际框架下执行（军事）任务的能力（这在中国参与的多项维和行动中同样得以展示）；在利比亚制裁决议上投赞成票表明必要时中国能够“选边站”；上合组织成立十周年展示了中国具有创建地区安全框架的能力；在苏丹开展的外交工作确保了该国的分而治之得以和平进行……全世界都知道了中国拥有巨大的财富和惊人的基建能力，但问题是新世界秩序之下，中国将扮演怎样的领导角色。

新的一年里，没有什么比伊朗和叙利亚事件更能明晰地考验中国在国际角色扮演上的选择。这一年里，两起事件似乎都可能达到顶点。就伊朗而言，越发逼近制造核武器能力的信号已然清晰；而在叙利亚，阿萨德政权可能将最终迫于压力，或发起更大程度和更为暴力的镇压行动，或轰然倒台。刚刚过去的2011年“阿拉伯之春”的回响对中国外交将产生直接的影响，中国会竭力提前采取行动，而不是在事后再跟着形势走。

直至目前，通过与两边交朋友，中国得以能够“袖手旁观”且静观世界风云变幻。但这种局面得以可能的前提是西方强国愿意介入和发挥领导作用以推动局势向积极方向发展的情况之下。

在新的一年里，经济拮据和国内选举将成为各主要强国的首要关切，这意味着，中国可能发现这些之前的掩护已经不复存在。

2012年对于中国而言，将开启新的篇章，全世界迫切需要中国发挥更大的领导作用，期待中国在国际事务中采取更加积极的立场。

（张娟译）

“全世界都知道了中国拥有巨大的财富和惊人的基建能力，但问题是新世界秩序之下，中国将扮演怎样的领导角色。

2012年对于中国而言，将开启新的篇章，全世界迫切需要中国发挥更大的领导作用，期待中国在国际事务中采取更加积极的立场。”

Raffaello Pantucci

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