Posts Tagged ‘China and the world’

More delayed catch up posting, this time a short piece for an excellent website called East Asia Forum, which is a platform for a very interesting discussion about Asian affairs drawing on a wide variety of authors and topics. Some very interesting stuff covered, well worth checking. Mine draws on a well-worn topic for me which is only going to build up further as time goes on.

China’s complicated relationship with Central Asia

2019-09-04T093820Z_1563111202_RC11D584FDF0_RTRMADP_3_KAZAKHSTAN-CHINA-PROTESTS-400x262

Author: Raffaello Pantucci, RUSI

The closure of a mine in Kyrgyzstan, protests on the streets in Kazakhstan. The grand guignol of menacing Chinese investment into Central Asia appears to be rearing its head in public discourse. Both fearful and grateful, the region is a paradox for China at the beginning of its Belt and Road. Hardly a week goes by without a senior Chinese visitor appearing somewhere in Central Asia, revealing a long-term influence game that Beijing is winning.

But the situation in Central Asia goes beyond foreign investment. People want to connect with China. In Ashgabat, queues of eager young Turkmen wait outside the Chinese Embassy seeking visas. For the young in Dushanbe, learning Mandarin is in vogue. In Uzbekistan, Chinese investment is the talk of the town, as the city celebrates the Chinese autumn festival and the China Expo showcases Uzbekistan as key to China’s Central Asia vision. And while Kazakhstan and Kyrgyzstan may have protests, Kazakh leader Kassym-Jomart Tokayev has just visited Beijing talking of strategic partnerships and Kyrgyzstan awarded Chinese President Xi Jinping their highest national award when he visited earlier in the year.

We have seen anti-Chinese protests in Kazakhstan and Kyrgyzstan before. Back in 2009 and 2016 there were large-scale protests focused on reports that the government was going to allow China to rent land for agricultural purposes. In 2011, fighting broke out between oil workers and the Kazakh state in Zhanaozen leading to a number of deaths — Chinese company CITIC was among the investors and received some blame for the bad pay which appeared to underpin the protests. Smaller scale brawls between Kazakh and Chinese workers are frequent. As seen currently in Kazakhstan, protests are usually linked to bad working conditions, clashes between workers or environmental damage. There is also usually a strong undertone of local politics.

Central Asians have watched as Chinese money, workers and influence have shaped the regional economic geography with the open support of local authorities. This is a lever that political opponents can sometimes use. Building on an elemental sort of racism towards Han Chinese that can often be found in the region, the protests can actually often be complaints aimed at local authorities. People are often protesting against their own government, with China becoming a target by proxy. This confluence was most clearly on display recently in Kazakhstan where protestors’ public anger was targeted at the Chinese, but the protests were clearly instigated by governmental political opponents.

In Kyrgyzstan, paranoia towards foreign mining investors has repeatedly led to locals scaring away foreign investment. The massive Kumtor mine in Kyrgyzstan has faced environmental issues and other problems for its Canadian owner. Chinese projects are smaller, but beset with similar problems. Stories of pollution, bad pay and local corruption blend with a general fear of Chinese investment which is sometimes stirred up by local potentates seeking to extract more money or score points against political rivals.

And there have been some dramatic failures by Chinese firms in the region. In January 2018, Bishkek lost powerfrom its main power station after refurbishment by Chinese firm TBEA failed at exactly the wrong moment. There are questions surrounding corrupt and pollutive practices of Chinese companies working in the region. Chinese firms tend to lower their standards in the region, ignoring requirements they usually adhere to back home.

What is less visible are the expressions of sympathy and concern about the plight of Uighurs in Xinjiang. US State Secretary Pompeo may have heard polite noises during his comments to Central Asian foreign ministers in New York but there is little public sympathy for their plight. Concerns tend to focus on co-ethnics and family members caught up in China’s camps system and fears that their governments might seek to purchase similar technology to use against them. When people do express fear about how events in Xinjiang might impact them, it is at a very personal level focussed on their own personal safety, rather than the broader cause of abuse of Muslims in China.

But very little of this matters to Beijing. Central Asian leaders remain eager for Chinese investment. The once closed Uzbekistan is the most obvious example of this, where the surge of Chinese investment is openly welcomed. Beijing is increasingly holding large portions of debt and becoming the main trading partner across the region.

China, in the meantime, is increasingly focusing on its security equities in Central Asia. Stories of Chinese private security emerging in the region sit alongside more overt displays of strength through the building of bases, the conduct of joint training exercises and the provision of equipment for Tajik forces along the Chinese border with Afghanistan. Already this year, there have been reports of joint training exercises with Tajik, Kyrgyz and Uzbekforces.

It would also be unfair to not point out the positive side of China’s presence in the region. In Badakhshan, Tajikistan locals may have conspiracy theories about China’s long-term intentions in the back of their minds, but they will admit that the Chinese-built roads have changed their communities for the better. Chinese companies and projects are often seen as more credible than locals — who often show up, make a lot of noise and fail to deliver. And while Confucius Institutes are regularly talked about in the public debate as centres focussed on brainwashing the young to be Xi acolytes, visit them on the ground and they are full of eager young Central Asians chasing the opportunities that China offers.

The story of China in Central Asia is a complicated and nuanced one of an emergent region which is being swallowed up by a neighbour who cares little about it, focussed instead on its geopolitical clash with Washington. Locals at an individual level do not care about these broader issues and are instead trying to navigate their way to prosperity among the economic boom they see in China. As the world watches the US–China confrontation play out on the international stage, few are paying attention to the heart of Eurasia where a sea change is happening. China’s natural borders mean it will always have a strategic interest in Central Asia, but helping the region develop other options should be the focus of western policymakers.

Raffaello Pantucci is Director of International Security Studies at the Royal United Services Institute for Defence and Security Studies (RUSI), London.

For much the same reasons as last time, been a bit delinquent in posting. Going to try to catch up a bit now, starting with a piece for my host institution RUSI looking at the China-Russia relationship. There is a possibility that some may see a whiff of contradiction in here, given the volume of writing I have done about how the China-Russia relationship is changing, but at the same time the point here is to say that it increasingly feels like in some places we are letting this get a bit too far. All of which reflects a weakened understanding of the topic. More on this as you can imagine to come, and as ever, comments, corrections and contradictions welcome.

The Over-Hyphenation of ‘China-Russia’

Raffaello Pantucci
Commentary, 3 October 2019
China, International Security Studies, Russia, Global Security Issues, Land Forces, Military Personnel, Technology

russia_china_1.jpg

A growing Western habit of linking China and Russia as joint adversaries in various contexts is missing the actual strengths of the relationship, and their varied interests in third locations.

Geopolitics have returned with a vengeance. Public discourse is increasingly conducted in adversarial terms, with ‘our side’ versus ‘their side’ dominating the strategic narrative. And while the ‘enemy of the day’ from a UK perspective is Iran, there is a growing discussion about China and Russia as though they are one and the same, a new ‘axis of evil’ working to stymie ‘our’ ability to operate in the world.

Reading between the lines of the narratives of most international confrontations, ‘they’ – for the most part the Russians and Chinese – inevitably appear to be supporting almost all of those who the UK (or ‘West’ more broadly) is against in the world: blocking votes at the UN; working together on military exercises; building up bases in the Arctic; and supporting Venezuela, Iran or the Syrian regime. This new entente appears to be behind many adversaries.

Yet there is a real danger of creating a Frankenstein’s monster in this interpretation of the Sino–Russian vector. There is no denying that the two have moved closer together in recent years – just watch the optics from Chinese Premier Li Keqiang’s visit to Moscow where he was feted as a great potential saviour of the Russian economy, or the latest security exercises involving Russian and Chinese forces, Tsentr 2019 – but the truth is that there are tensions between the two countries bubbling below the surface.

Start with Central Asia where there is a perennial tussle between the two over who is the dominant force. Russia has watched as China has become a major holder of regional debt, as its companies have moved in en masse to dominate local economies, and it is increasingly clear how China is moving into Russia’s traditional role of security provision. Chinese border guards are showing up along Tajikistan’s border with Afghanistan, doing training exercises and furnishing equipment. Security ministries across the region have growing numbers of officials who speak Mandarin or have experience in China. Russia’s power no longer looks as strong as it once was. It takes little effort to find voices in Moscow who worry about this erosion of Russia’s sphere of influence.

Or look at the growing Chinese technological penetration into Russia. Like much of the world, Russia is in the midst of a debate to determine who is going to build its 5G networks. But unlike the US, the UK or the rest of Europe, there is little evidence that Russians are going to resist China’s entry into this sector. Moscow’s spooks may worry about what this means for their dependencies on China but, as they will candidly say, what alternatives do they have? They point to who is sanctioning them at the moment. China may be scary, but the West is actually punishing Russia.

And, to look at a loftier normative level: China is fundamentally a status quo power, while Russia is the ultimate disruptor. Beijing quite liked the world structure as it was before US President Donald Trump took his sledgehammer to everything; the old world order fostered China’s stratospheric economic growth. It was a good path to which Beijing would like to return. By contrast, Russia has made itself increasingly relevant around the world through disruption, by creating chaos or by helping spur it along, as a prelude to Moscow inserting itself as an important player to help bring resolution.

These are fundamentally contradictory positions: Beijing likes the status quo, while Moscow derives relevance in chaos. And there are moments where these two perspectives have clashed. Beijing disapproved of Moscow’s redrawing of Ukraine’s borders (and Georgia’s beforehand). China has its own provinces with ethnic minorities seeking independence and recognition. It certainly does not like the precedents that Moscow set in recognising the South Ossetians and Abkhazians in Georgia or the breakaway parts of Ukraine. What if people were to start doing this to Tibet or Xinjiang?

Yet notwithstanding these tensions, the West is increasingly looking for a China–Russia axis around the world. The US has articulated this axis most clearly in the Pentagon’s National Defence Strategy, and similar concerns are echoed in Brussels and London. More glib commentary tries to separate them out – Russia is described as being a storm, while China is climate change. The argument here is that both are problematic, only that the former is an irritant, while the other is seismic. Yet increasingly such perspectives consider the two countries as parts of a linked problem.

Russia and China are not blind to this narrative and the broader global confrontations. For them it can be useful to show a strong alliance in the face of the growing Western bloc. At most major international conferences, senior figures stand up and champion their close relationship. They are undertaking ever more ambitious and important military exercises together. Beijing’s strategic bombers have participated in Russia alongside 1,600 troops as part of the massive Tsentr 2019 military exercise, the third or fourth such drill this year they have done together. They are talking about an ‘Ice Silk Road’ over the Arctic and have obviously developed a modus vivendi of sorts over what is going on in Central Asia. Li Keqiang’s latest visit has highlighted more investments into Russia (and Russian sales to China), at a time when Beijing’s economy continues to suffer under US trade tariff impositions.

Beijing and Moscow also share a worry about the ongoing pattern of popular uprising endangering regimes around the world. For Beijing this is most visible in Hong Kong, while Moscow has watched protestors rumbling on its streets for some time. For both of them, the fear is that this is part of the bigger wave of ‘colour revolutions’ that swept through Georgia, Ukraine and Kyrgyzstan in the 2000s, and more recently through the Middle East in the Arab uprising. Seeing these as Western-orchestrated plots to bring down governments the West found inconvenient, Moscow and Beijing worry that they might be next on the list.

There is no doubt that China and Russia increasingly see their futures as linked and are binding themselves closer together. But the West’s current habit of only seeing them this way is exacerbating this tendency and creating a unified adversary.

Adopting such an approach also means the UK is blind to the potential opportunities that exist on the ground in some contested areas of the world. Simply seeing a China–Russia axis means that observers miss their different equities in different places, and the fact that the local dynamics in each context and region vary. The UK must be careful not to will itself into a confrontation against an adversary that does not always exist.

BANNER IMAGE: Ceremony for exchanging the documents signed during the President of the People’s Republic of China Xi Jinping’s working visit to the Russian Federation, 2018. Courtesy of President of Russia/Creative Commons Attribution 4.0 International

The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.

And finally in this catch-up blast, a longer op-ed for the South China Morning Post looking at some of the recent machinations between China and Iran. Had a few comments back that this was an obvious point to make, but it feels like it needs to be all considered against the broader backdrop of China’s growing influence and power in its own backyard. More on this topic to come.

All of these posts aside, spoke to the Sunday Times about Chinese investment and influence in Ireland, spoke to CNBC about China-Russia (which was translated into Hungarian), The National about the far right in Germany, to Samaa TV about ISIS in Khorasan, to The National again about bounties being put on ISIS leaders heads, an old interview was used again in this fantastic Portuguese piece in Sabato by Nuno Tiago Pinto about important Portuguese foreign fighter Nero Saraiva who lived for a while in the UK, an earlier comment to the Telegraph about Hamza bin Laden’s death was picked up again, and another earlier piece in the Sunday Times was picked up by VoA.

Why Iran has got China wrong: Beijing will follow its own playbook in countering the US-led West

  • While regional players like Iran seek to bring China into the conversation as an ally, Beijing continues to rely on the rhetoric of non-interference
  • China is focused single-mindedly on its own interests and set to get stronger as a result

e6fbd108-dea1-11e9-94c8-f27aa1da2f45_image_hires_140148

The first-ever Chinese goods train to Iran arrives in Tehran on February 15, 2016, after a 14-day journey hailed as a revival of the Silk Raod under China’s Belt and Road Initiative. China is emerging as the central power in its immediate and expanding neighbourhood, while the West tears at itself and old alliances. Photo: EPA

Buried among last week’s news of confrontation with Iran was a story that China was on the cusp of investing US$400 billion into the country’s hydrocarbon industry. This was followed late in the week by the news that Iran was going to be joining China and Russia in new naval exercises, an announcement that came a week after the Iranian Armed Forces Chief of Staff, Major General Mohammad Baqeri, visited a naval base in Shanghai.

The clear suggestion was that Iran was showing it had a strong ally in Beijing. The axis of convenience against the West was bringing Tehran firmly into its bosom.

Yet, in the face of all of this noise from Iran, Beijing was largely silent. A foreign ministry spokesman denied any knowledge when confronted with a question about the investment during a regular press briefing. The Chinese commentariat seemed mostly focused on downplaying Iran’s role in the strike on the Abqaiq and Khurais facilities in Saudi Arabia, and President Xi Jinping had a phone call with King Salman.

Reported in similar terms by both the Saudi and Chinese state media (the Belt and Road was only mentioned in Xinhua’s read-out and the Saudi statement was far more aggressive), the phone call was a decorative effort highlighting the importance of the bilateral relationship and China’s desire for events not to escalate.

And, while Beijing seemed eager to not engage, Iranian sources appeared to deny the existence of the supersized investment. On Friday, an interview emerged with the head of money and capital markets at the Tehran Chamber of Commerce stating that he had not heard anything about it.

Furthermore, Iran’s oil minister Bijan Namdar Zanganeh denied the rumours, bluntly saying, “I have not heard such a thing.” In fact, the discussion in Tehran at the moment around China is about how long the Bank of Kunlun will be able to continue to be a lifeline of sorts for the country.

Owned mostly by the China National Petroleum Corporation, the bank is a Xinjiang institution that has long served as a conduit for financial relations between China and Iran. As the rest of the world severed its links to Tehran, Kunlun has kept a connection going. The bank has faced some pressure, falling into the US Treasury Department’s sights, leading the bank to try to downplay its relations for fear of damaging repercussions for parent institution CNPC.

The result has been a paring back of financial relations between the bank and Iran, with the maintenance of only a few lines of credit focused specifically on non-sanctioned goods.

Rather, the Iranian announcements have the ring of similarity to previous announcements to have emerged from Moscow, as its relations with the West went downhill.

Back in 2014, as the West’s condemnation of Russia’s redrawing of Ukraine’s borders reached fever pitch, President Vladimir Putin headed to Shanghai where he oversaw the signing alongside President Xi of a US$400 billion energy deal between China and Russia. The deal was one which had been announced and signed a few times before, but it landed in Shanghai at a convenient moment for the Russian leader.

Again, this was not a moment without some irritation for Beijing. While China never condemned Russia’s actions in Ukraine, it was not best pleased, keeping its comments sparse. China is not keen on major disruptions to international affairs, like the attack in Saudi Arabia, especially ones which might have repercussions for Beijing.

The precedent that Russia set in redrawing borders in Ukraine was not one that China wanted widely adopted –
fearing the loss of its own restive regions. And disruptions to international energy supplies result in higher prices, something China could do without.

The question, then, is whether China is hostage to disruptive powers like Iran and Russia, or whether Beijing is, in fact, gaining the upper hand.

To better understand this, it is important to note another event over the weekend that ties the three countries together – the Taliban negotiating team’s visit to Beijing after stops in Moscow and Tehran.

Organised after the dramatic failure of the American-led talks, the whistle-stop regional tour appears to be an effort by the Taliban to understand better where things now stand. With Afghan elections around the corner and the conflict showing little evidence of concluding, all three surrounding powers have begun to worry about how they will manage the long-term instability with which Afghanistan seems cursed.

From China’s perspective, however, this is all reflective of the fact that everyone appears to want to show that Beijing is on their side. In each of these situations, the regional players have all sought to bring China into the conversation and show that Beijing is backing them.

China is judicious in avoiding apportioning blame, and at best uses the opportunity to make digs at the United States. The net result is that China emerges as the central power in its immediate and expanding neighbourhood, while the West tears at itself and old alliances.

For Beijing, there is some danger in assuming this position. First, it reinforces the image of China as the central power in a new axis of convenience against the US-led West. And second, it places China in a position of potential responsibility between some of the world’s most intractable conflicts.

Yet, it is equally possible that Beijing has factored both of these realities in and is actually happy to bolster alliances against the US.

In terms of China’s unavoidable responsibilities, this is something that has been on the cards for some time, and yet Beijing has yet to really demonstrate a requirement to have to step in.

Instead, China continues to call on the rhetoric of non-interference to simply let things play themselves out, focused single-mindedly on its own interests. Rather than taking on the activist West at its own game, China appears to be crafting its own playbook.

And while Tehran may think that it is hustling Beijing into showing its hand in its favour, the reality is that it is China that is most likely to emerge strengthened from this geopolitical dance.

Raffaello Pantucci is director of international security studies at the Royal United Services Institute in London

Finally doing some catch up posting as have let things slip for a while. Been somewhat preoccupied with some real-world issues which am still working through. Likely going to see some workflow changes in the future, so watch this space!

But back to the matter at hand, back in early September this chapter emerged at last as part of an NBR publication. The paper was the product of an excellent workshop in Washington that Nadege, Brian, Ed and their colleagues had invited me to last year. The final report is a very interesting one featuring a selection of colleagues and experts writing about China’s growing security efforts along the Belt and Road.

I have reposted the executive summary here, but the whole paper is available to easily download from the NBR website. More on this topic more generally in the pipeline over the next period.

Essay from NBR Special Report no. 80

sr80_cover

The Dragon’s Cuddle
China’s Security Power Projection into Central Asia and Lessons for the Belt and Road Initiative
by Raffaello Pantucci
September 3, 2019

This essay examines how China’s growing security engagement with Central Asia provides a blueprint for how China might engage with countries through the Belt and Road Initiative (BRI) in a similar fashion.

Executive Summary

Main Argument

Xi Jinping’s decision to deliver one of the speeches announcing BRI in Kazakhstan was not incidental. It highlighted the centrality of Central Asia in Beijing’s thinking about the initiative. Consequently, it is useful to examine China’s behavior in Central Asia in some detail to understand better the longer-term consequences of Chinese influence and investment in regional countries under BRI. In the security space, Central Asia has been traditionally considered an area of Russian influence, but over time China has gradually increased its interests using five pillars for engagement: the Shanghai Cooperation Organisation (SCO), training and joint exercises, military aid, military sales, and private security companies (PSCs). Given the analysis of PSCs elsewhere in this report, this essay will focus on the first four pillars in order to better understand the long-term consequences of China’s security engagement in Central Asia and survey options for policymakers seeking to address China’s growing influence.

Policy Implications

  • Chinese security engagement in BRI countries should be understood in a broader context than military sales. Instead, a continuum of security activity should be considered, encompassing training and multilateral engagement as well as military sales. External powers seeking to understand or counter Chinese influence in this space need to engage in a range of security actions.
  • China is investing considerable resources into educating and developing the next generation of security leaders in Central Asia. The longer-term consequences of these efforts may take decades to play out but will likely require a more sophisticated level of engagement from outside powers.
  • The SCO is often considered an impotent institution that has failed to deliver any clear action. However, China and other members appreciate the consistent forum for engagement that the SCO provides, and the forum offers China opportunities to influence the normative space.

Raffaello Pantucci is the Director of International Security Studies at the Royal United Services Institute for Defence and Security Studies in London.

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.

Belatedly posting a piece for the Financial Times excellent Beyond BRICS blog which focuses on the reality of the Chinese relationship with Iran and Russia. More complicated than is often assumed. A topic that I would like to focus on more in the future, both in terms of the reality and complexity of China’s relations with Iran and Russia, as well as broader Eurasian geopolitics. On that particular note, please check back into the China in Central Asia website which  I am hoping to awaken soon.

Separately, spoke to the Guardian about the UK’s disengagement and desistance programme, to the BBC about the extreme right wing, to the LA Times about a Uighur fighting extradition from Turkey, to De Trouw about the role of mainstream political discourse in dragging the extreme right forwards, to AFP about ISIS (which was translated into Spanish), to the Independent about a plot that was uncovered to target Europe by some Sunday Times reporters, and finally a Press Association interview was used in the MetroDaily Star, and Al Banaba. Beyond this, my recent Observer piece was picked up and translated in digest into Spanish by El Mundo.

Russia and Iran cannot always count on China

In response to US sanctions, Beijing’s own interests come first

Presidents Vladimir Putin and Xi Jinping at a friendly ice hockey match between Russian and Chinese youth teams in Taijin last year © Getty

Beijing is seen by some as the financial backstop that countries can call on to bail them out when they fall foul of US displeasure and face sanctions. Yet a close examination of the cases of Russia and Iran instead shows that China is reactive to US sanctions policy, to the detriment of its supposed strategic allies.

This reflects the attractiveness of the US market, the reach of extraterritorial sanctions and the independence of some Chinese institutions from Beijing’s geopolitical interests.

It also highlights the existence of fissures between powers that are often painted as members of an anti-western alliance. They may talk with the rhetoric of allies, but their relationships are more complicated. Understanding how this will play out will be key for policymakers seeking to navigate today’s dangerous waters.

At a geostrategic level, China, Russia and Iran appear to be in lockstep. Yet notwithstanding their proximity, expressed in public shows of affection between their leaders (in particular between presidents Xi Jinping and Vladimir Putin), the reality is that there are deep tensions in Beijing’s bilateral relationships with Moscow and Tehran. Nowhere are these expressed more substantially than in the economic sphere, where Russia and Iran have consistently been disappointed by the willingness of Chinese entities and institutions to invest in their countries.

Most recently, China has been hesitant in its support of Russia’s de-dollarisation policy, through a cross-border system of bilateral settlements, for fear of angering the US. The two powers failed to conclude an agreement as planned by the end of last year, with one Russian source close to the talks telling Kommersant: “From Washington’s standpoint, China’s agreement with Russia would look like it was helping Moscow evade sanctions.”

This came after reports that Moscow was ready to bet heavily on China, diversifying its foreign reserves so that 15 per cent ($67bn) were held in renminbi, leaving the Russian central bank with a quarter of the world’s renminbi holdings. This was after it had sold about $100bn of its US dollar reserves while purchasing $44bn worth of renminbi in the second quarter of 2018.

The two countries already settle 14 per cent of bilateral payments in renminbi and 7 to 8 per cent in roubles, but were seeking to increase this, and to enshrine cross-border use of the Chinese Union Pay and Russian Mir credit card systems in each other’s countries.

A similar story can be seen in Tehran, where eagerness by authorities to use Beijing to circumvent a newly hardening US sanctions policy has been met with hesitation by Chinese institutions.

This was most publicly expressed in December, when it emerged that Kunlun Bank, which is majority owned by China National Petroleum Corp, was only going to clear Iranian payments, in full compliance with US sanctions policy, until the end of April, when China’s “significant reduction exemption” for the import of Iranian oil expires. Cutting this major lifeline for the Iranian economy was believed to be the product of CNPC’s concerns about the impact of its Iranian activities on its interests in the US.

Tehran has also seen a drop in imports from China, with an analysis by Bourse & Bazaar suggesting a 70 per cent drop from October to December last year after two months of tightened US sanctions. Like Moscow, Tehran has sought to increase the volume of transactions in local currencies but its central bank does not publish the composition of its foreign reserves, so it is not clear whether this has changed.

Frustration can also be seen in the supposed benefits that Russia and Iran have sought through investments under the Belt and Road Initiative, Beijing’s global infrastructure programme.

When Total, the French oil company, withdrew from Iran’s South Pars gasfield in response to President Donald Trump’s overturning of the agreement to lift sanctions on Iran, CNPC initially stepped forward. But it has not developed the field it at the pace Tehran had hoped, and reports this year suggested CNPC may have suspended its activities. The Financial Times has reported that Iran’s Revolutionary Guards are ready to take its place.

Similarly, Ali Akbar Salehi, head of Iran’s Atomic Energy Organization, expressed concern that Chinese developers were taking their time in redesigning the Arak heavy water reactor according to the terms laid out in the 2015 nuclear deal. He attributed this to fears of US sanctions.

While it is hard to draw a straight line between US sanctions and Chinese reticence, it is also clear that Moscow does not always find Beijing a useful infrastructure partner. In reported comments in December about the Moscow-Kazan High Speed Rail (HSR) train line, Anton Siluanov, deputy prime minister and finance minister, said he did not see the line’s economic benefits and questioned its viability. The project was proposed and signed in 2015 when China was on a global HSR push, and questions always hung over its practicability (and indeed of other HSR projects around the world). Its seeming jettisoning reflects the reality that not all Chinese infrastructure projects work out, even in countries that are supposedly strategic allies of Beijing.

There are a number of explanations for these trends. First; Chinese banks, companies and other institutions may sometimes act in ways that contradict Beijing’s view, driven by specific concerns of their own. The assumption that all of China works in lockstep to advance Beijing’s geopolitical world view does not always match up with facts on the ground. It may be hard to divine whether a Chinese institution is responding to sanctions pressure, fear of losing access to the US market or some central Beijing command, but their behaviour does not always match policy declarations.

Second, Chinese institutions drive hard bargains. In the context of Iran and Russia, China is the funder and their local counterparts the supplicants. This puts Chinese institutions in the driving seat — something they are aware of and will exploit. Commenting on Beijing’s reticence to sign a bilateral memorandum with Moscow, one source told Kommersant that in addition to concerns about the US, “China needs time to tweak the final document more to its benefit”.

Third, countries like Iran and Russia are fearful of becoming overly dependent on Beijing. They realise that opening too much to China risks flooding local markets and potentially curtailing their own development.

In Tehran, the government has gone further, with reports of authorities advising against buying Chinese goods because it amounted to “exporting jobs”.

It is clear that China’s alliance with Russia and Iran is more complicated than sometimes realised. It is also clear that US sanctions continue to have a deterrent effect on Chinese institutions.

Yet it is hard to project such complications into the future. While Beijing may have tensions with Moscow and Tehran, the three continue to be willing to support each other at a geopolitical level. If the aggression with which US economic sanctions are employed continues, alternative global economic structures will develop.

Their beginnings are already visible. Moscow is taking the firmest steps in this direction through its de-dollarisation policy. Tehran may find itself obliged to follow if it is unable to find a way out of its current impasse.

While it is clear that US sanctions may have an effect on their economies, it is not clear that they are generating the change in behaviour that Washington desires. In this context, Beijing will sense an opportunity.

This article has been modified since publication to correct the statement on Iran’s imports from China, previously stated as exports to China.

Raffaello Pantucci is director of International Security Studies at the Royal United Services Institute (Rusi)

More catch up posting for the South China Morning Post, this time looking again at China’s role in Afghanistan. I now realize a typo in here, specifically in when the attack that killed BLA leader Aslam Baloch took place. It was about a month after the attack on the Chinese consulate in Karachi, rather than the ten days I had put here. Also, the phrase ‘Visiting Beijing earlier last year, the outrageous narrative being advanced around Afghanistan was that America was making things worse and was largely the source of problems within the country’ – was not exactly as I meant to phrase it. The word outrageous was one that I meant to be expunged, but I was late to the editorial process.

Does Beijing grasp the portent of embracing Afghanistan and the Taliban?

Raffaello Pantucci says it is not clear that Beijing fully appreciates the role it is taking on by trying to broker peace in strife-torn Afghanistan

The 2018-19 period has been noteworthy in one way: it has seen a flurry of activity between China and Afghanistan.

During that time, China’s Foreign Minister Wang Yi and his colleague, Ambassador Deng Xijun, have racked up the air miles doing shuttle diplomacy between Kabul, Islamabad and hosting people in Beijing.

The result of all this manoeuvring was a successful trilateral meeting in Kabul between the foreign ministers of Afghanistan, Pakistan and China – a parley which appears to have helped accelerate the latest round of peace negotiations in Afghanistan’s seemingly endless conflict.

Yet amid the positive mood, it is still not clear what China’s expectations and plans are for Afghanistan. Nor is it clear that Beijing has fully appreciated the central role into which it is increasingly stepping.

The first question to ask is: What has spurred this new surge of Chinese diplomacy?

The answer is simple, and sits in the White House.

Visiting Beijing earlier last year, the outrageous narrative being advanced around Afghanistan was that America was making things worse and was largely the source of problems within the country.

This view needs to be considered in context, as it was the moment at which the broader US-China relationship was going down the drain.

Everything involving the Americans was bad. But as the days have gone by, this anger has turned into an awareness that the US might actually be on the cusp of making a dramatic withdrawal from Afghanistan.

As this realisation took hold in Beijing, the next stage, therefore, was to comprehend that China needed to step up to play a more forward role in resolving the situation.

While the US stands detached from the conflict, Beijing remains hostage to geography and is obliged to maintain some engagement with Afghanistan – a commitment whose salience is only increasing through China’s long-term investments in Afghanistan’s neighbours – Pakistan and Central Asia.

This state of affairs helps explain Beijing’s new activism, and Ambassador to Pakistan Yao Jing’s willingness to increasingly champion the Taliban as a political group.

Talking to Chinese interlocutors about their country’s engagement with the Taliban used to be a taboo subject; now it has apparently become a topic of conversation.

Beijing has clearly concluded that the road to resolution in Afghanistan includes bringing the Taliban to the table – something that was likely discussed between Wang and Mohammad Umer Daudzai, secretary general of the Afghan High Peace Council, on his visit to Beijing late last week (a trip that followed Daudzai’s visit to Pakistan to meet Taliban representatives).

Beijing is seemingly using its contacts to expedite the peace discussions – a move that even the Taliban’s leaders have championed. What is not clear, however, is what incentives are being offered and whether Beijing has considered the consequences of its latest actions.

At this stage, it is likely that Beijing’s immediate security concerns around Afghanistan have been largely mitigated – not resolved, but managed.

China has invested in security forces along Tajikistan’s border with Afghanistan; pumped money into similar structures in Gilgit Baltistan; provided training, funding and equipment to Afghan forces; and has hardened its own direct border with Afghanistan.

Sitting atop this activity, Beijing has created the Quadrilateral Coordination and Cooperation Mechanism, which brings together the chiefs of defence staff of Afghanistan, Pakistan, China and Tajikistan. There has even been talk this year of the four countries taking part in joint military training exercises together.

China’s is concerned about how Afghanistan’s instability might affect that country’s neighbours and Beijing’s larger investments in Pakistan and Central Asia. But even these issues seem to have some answer to them.

Just 10 days after the attack on the Chinese consulate in Karachi by a cell linked to the Baluchistan Liberation Army, the group’s leader (and admitted director of numerous attacks on Chinese targets), Aslam Baloch, was killed by a suicide bomber in Kandahar.

That ignominious end signalled that China had lethal friends in the region who were keen to show they could reach into the heart of China’s enemies and strike them.

It is still not clear what Beijing’s economic stake or interest is in Afghanistan.

Some of the routes of China’s “Belt and Road Initiative” – Xi Jinping’s massive infrastructure plan – that cross the Eurasian continent would benefit from transit through Afghanistan. Beijing’s mineral extraction firms view the country’s natural resources with interest.

While talks continue about moving forward with belt and road projects, actual activity seems to be quite low. Trade routes are opening slowly, but the spigot of economic investment has not quite opened up.

Beijing seems to have concluded that for the time being, the answer to Afghanistan is to try to get a political structure in place that involves everybody and then see how things play out.

It will continue to dangle the carrot of economic investment, while knowing that its direct security equities are covered. This strategy will position Beijing fairly securely to let the consequences of a Taliban inclusive government play out.

The danger here is what a Taliban inclusive government might mean.

First, it is not clear that this arrangement would be acceptable to all other regional players. And even if it were, it is not clear it would help bring stability to Afghanistan. Much of the progress that has been made there might be wiped out, and the country might slip back into even greater chaos and warlordism.

Beijing may feel it has this eventuality covered through its current relationships, security structures and economic incentives, but this assumption is risky. Civil conflicts are by their nature brutal and unpredictable, especially in a country so intertwined with its region, and with such a sad and rich history of conflict.

Beijing may assume that by brokering a negotiation, it buys itself immunity from these problems. But as the US withdraws from the region, regional powers will increasingly look to China to resolve their issues.

It is not clear that Beijing fully appreciates the consequences of this potential responsibility.

Raffaello Pantucci is director of international security studies at the Royal United Services Institute in London