Posts Tagged ‘China’

A final column for last year, this time a forward look at Central Asia in 2023 for Nikkei Asia Review, repeats the same format last year. The last one became somewhat obsolete quickly in large part because of the Russian invasion of Ukraine. It remains to be seen how this one will play out.

2023 outlook: Central Asia is not out of the woods yet

Spillover effects from Ukraine and Afghanistan, so far limited, still pose risk

Vladimir Putin met with other presidents at the Central Asia-Russia summit in Astana on Oct. 14: Central Asia will continue to find Moscow a complicated partner.   © Reuters

Raffaello Pantucci is a senior fellow at the S. Rajaratnam School of International Studies in Singapore and author of “Sinostan: China’s Inadvertent Empire.”

It has been a tumultuous year for Central Asia. It started with large-scale internal violence and is ending with talk of a formal alliance between the region’s two most powerful players, Uzbekistan and Kazakhstan.

Yet uncertainty remains on the horizon for the coming year, with the potential for violence to boil over, geopolitics to come crashing down around regional states or internal pressures to escalate once again.

The biggest question that still hangs in the balance is what will happen next in fellow former Soviet republic Ukraine. With little sign of an end to its conflict with Russia in sight, Central Asia will continue to find Moscow a complicated partner with which to engage over the coming year.

So far, gloomy economic predictions offered in the immediate wake of Russia’s invasion have not played out.

Higher energy prices have meant increased revenues for energy-rich Turkmenistan and Kazakhstan. Rather than falling as expected, remittances from Central Asian migrant workers in Russia have risen, thanks to a surge in demand for labor, according to the European Bank for Reconstruction and Development (EBRD).

Meanwhile, Russian and Belarusian companies seeking to get around Western sanctions have set up operations in the region, as have some Western companies exiting Russia.

These trends helped prompt the EBRD to raise its 2022 gross domestic product growth forecast for the region to 4.3% in September from just 1.1% in May. It also adjusted its 2023 outlook to 4.9% from 4.7%.

It remains to be seen whether these trends can hold.

Europe’s desire to get access to Central Asian energy was on clear display during European Council President Charles Michel’s visit to the region in October. But the same fundamental problems that have long held up trans-Caspian energy routes persist and are unlikely to be resolved in the near future.

Other world leaders are courting the region, too, with Chinese President Xi Jinping choosing Central Asia for his post-COVID return to the international stage, a stream of U.S. officials coming through and Russian President Vladimir Putin taking advantage of some of the few doors around still open to him.

Xi Jinping and Kazakh President Kassym-Jomart Tokayev in Astana on Sept. 14: The Chinese president chose Central Asia for his post-COVID return to the international stage. (Handout photo from press service of the president of Kazakhstan)   © Reuters

But despite the surge of attention and economic resilience so far, the Ukraine conflict could still carry major downsides for Central Asia.

The Russian economy could still implode, or the geopolitical balance that Central Asia has managed to strike could suddenly shift.

There has also been little international condemnation or fallout from the instability seen earlier this year in Kazakhstan and Uzbekistan, the continuing crackdown in Tajikistan’s Gorno-Badakhshan region or violent border clashes between Kyrgyzstan and Tajikistan. The general attitude taken by outside powers, including the usually accusatory Western ones, is to simply move past these issues, hoping the governments will be able to handle them.

But the raft of incidents this year exposed a dangerous risk. The large-scale violence in Kazakhstan and Uzbekistan was a shock to most observers. While things appear to have settled down, the unrest underscored that there are potential issues bubbling under the surface, even in the region’s traditionally more stable countries, which could lead to widespread problems.

What other surprises lie beneath the surface is of course unknown. Few, for example, would confidently speculate about what exactly is going on in Turkmenistan.

A more clear and present danger can be found across the border in Afghanistan, where the Taliban continue to exert a weak grip on power. The Islamist regime may face no direct and obvious challenger, but it is clearly unable to enforce its mandate very far.

This has particular repercussions for Central Asia, due to the continuing threat of Islamic State Khorasan as it broadcasts threats in regional languages and seeks recruits from its outposts in Afghanistan.

Led mostly by Uzbekistan, Central Asia has sought to answer Afghanistan’s problems with a push for connectivity with South Asia, but the cost of realizing this dream is prohibitively high for the countries involved to absorb themselves. International finance could help, but Taliban rule continues to pose a threat to project completion.

So far, much external engagement with the region has focused on security support for mitigating potential problems from Afghanistan, rather than large-scale transformative investment.

China remains an important partner, and the end of zero COVID might bring new economic exchanges, but it is unlikely that Beijing will be willing to expend much to realize Central-South Asian connectivity dreams.

Meanwhile, although Uzbekistan and Kazakhstan have started to make a show of strengthening their promising partnership, Putin’s proposal to join with the two Central Asian states in a “natural gas union” has not been flatly rejected.

There is a long history of grand Central Asian visions that have not managed to catch on, so it remains to be seen how these trends will play out.

The fallout from Ukraine has so far not been as bad as initially expected. And while Afghanistan remains a problem, the spillover has been limited so far.

Yet the downside risk in both cases for Central Asia remains high. The new year looks to be a challenging one.

More from late last year, this time trying to dig into the narrative that emerged of Kazakhstan in particular seeking to use China as a counter-weight to Moscow for the South China Morning Post.

Why Uzbekistan and Kazakhstan’s hopes of using China as a hedge against Russia could be doomed

  • Central Asia’s increasingly tense relations with Russia have made closer ties with China attractive, but achieving that is not without its problems.
  • Far from Beijing proving a hedge against Moscow, the opportunities on offer in Russia might simply increase the competition for China’s attention.
Chinese President Xi Jinping (left) walks alongside Uzbek President Shavkat Mirziyoyev at the Shanghai Cooperation Organization summit in Uzbekistan on September 16. Uzbekistan and Kazakhstan have welcomed China’s interest in Central Asia, but that interest has been complicated by the pandemic and geopolitical concerns. Photo: EPA-EFE

Uzbekistan has in many ways always been the heart of Central Asia. It might be dwarfed in hydrocarbon wealth and physical size by Kazakhstan, but its other attributes give it influence. Yet, China does not have the same sort of commanding position within the country as it has with Kazakhstan.

There are numerous reasons for this, from local hesitance to problems in China, but collectively they illustrate the trouble Central Asia faces as it seeks to use Beijing as a hedge against Moscow, with whom relations have grown increasingly testy.

The difference in how Uzbekistan and Kazakhstan see their relationships with the two capitals was most clearly seen in the past few weeks. They both abstained from a vote against Russia on Ukraine at the United Nations, while they voted against a UN resolution seeking a debate on Beijing’s actions in Xinjiang.

Both have been appalled by Russia’s invasion of Ukraine. While some individuals within the countries might hold some moral objections towards what China is doing in Xinjiang, they largely see this as a domestic issue within China.

There is no doubt some element of hard geopolitics has also played into their thinking. Both Kazakhstan and Uzbekistan have expressed reservations about Russia’s actions in Ukraine publicly before and are concerned about the clear evidence of Russian weakening.

They seek new partners to help stabilise their increasingly tormented neighbourhood. Their embrace of President Xi Jinping’s visit to the region in September underlines their eager eagerness for more Chinese investment. 

But at the same time, both are aware of the complications of increasing their dependence on China. This came into view during the Covid-19 pandemic.

Uzbek traders report that during the height of the pandemic, the costs of containers going through China to Uzbekistan rose by at least five times. While they have since gone down, they remain more expensive than they were pre-pandemic. The growth of traffic through the region to Russia helps keep them high alongside complications on the Chinese side.

At the same time, routes into China have only recently reopened, even though opening them was a focus of regular lobbying during the pandemic as landlocked Central Asians sought to get goods out and in.

The problems went beyond goods at borders. According to Uzbek data, the pandemic led to an abrupt drop in the number of new companies being created in Uzbekistan with Chinese investment. The numbers have started to rise again but are far below pre-pandemic levels.

China has retained its trade primacy in Uzbekistan, though the numbers are lower than before the pandemic and dipped substantially in 2020. All of this comes on top of Chinese companies in Uzbekistan being seen as behaving in ways that will keep local authorities happy but do not always actually deliver.

For example, media reports and experts on the ground suggest there has been a steady growth in recent years of Chinese companies opening factories in Uzbekistan. This is something the authorities welcome, eager to turn the country into a manufacturing hub. Yet at the same time, it is not clear how much these factories are actually manufacturing rather than serving as assembly plants. 

The reasons for this from a Chinese perspective are logical – it is often not clear the local market will be able to absorb the volume more active plants could produce. However, the consequences are a smaller level of local capacity building.

It also means it can often be quicker and cheaper to simply import the desired piece of machinery directly from China rather than purchase it from the local manufacturing plant. The factory is going to have to wait for the parts from China and then take time to assemble the product in Uzbekistan. Once you factor order book backlogs on top of this, it can become quite a long wait. These problems are not exclusive to Uzbekistan. Import-export firms across the region have noted the trade problems with China during the pandemic, and the unpredictability these have injected into an economic relationship both sides assumed would simply continue to boom. 

This reality lurks in the shadows of the push to warmly embrace Xi. Both Uzbek President Shavkat Mirziyoyev and Kazakh President Kassym-Jomart Tokayev made it clear they welcomed and sought a closer relationship with China. Kazakh officials behind the scenes were ecstatic about Xi’s comments about being willing to defend their national sovereignty, interpreting it as a protective clause should Moscow’s revanchist eye fall on their territory.

Yet the reality is that China is unlikely to play that role or do much to prioritise trade with the region. This reticence will emerge elsewhere as well, leading to frustration on the ground.

This might eventually turn in an even more complicated direction as Beijing leverages the surge of hydrocarbons and other opportunities that will present themselves as Moscow seeks new markets, against the same purchases and opportunities they see in Central Asia. Far from Beijing proving a hedge against Moscow, Russia might in the end simply increase the competition for China’s attention.

Raffaello Pantucci is a senior associate fellow at the Royal United Services Institute in London and a senior fellow at the  S. Rajaratnam School of International Studies in Singapore

Longer piece in The Diplomat last month taking a wide ranging look at China’s relationship with the Taliban. Since then there have been even more developments which hopefully should be covered in coming pieces. So keep coming back for more!

Inheriting the Storm: Beijing’s Difficult new Relationship with Kabul

Far from inheriting an opportunity, China finds itself encumbered with an ever-expanding roster of problems in Afghanistan, which it is showing little interest in trying to resolve or own. 

Taliban guards stand guard in Mes Aynak valley, some 40 kilometers (25 miles), southwest of Kabul, Afghanistan, Saturday 30 October, 2021. AP Photo, Ahmad Halabisaz

The Taliban takeover of Kabul in August 2021 left China with a dilemma. Not only did Beijing now share a border with a country ruled by a group considered a terrorist pariah by much of the world, but China was also the closest strategic ally of the Taliban’s principal supporter in the international arena, Pakistan. As the rest of the world withdrew from Afghanistan, Beijing suddenly found itself in an influential position by default, juggling a number of key relationships without having the shield of U.S. hard power to ultimately hide behind.

In many ways, the image of a sea receding from shore is a useful analogy. While the United States and its allies were present in Afghanistan bolstering the Republic government, a sea washed over Afghanistan that hid a number of issues. As the U.S. and its allies left, this tide retreated, exposing brutal realities on the ground. Among those was the fact that China has no real choice but to engage with Afghanistan given its geographical position and its security concerns on the ground.

Yet this reality has had a remarkably limited effect on China’s actual activity in Afghanistan and the wider region. In many ways, Beijing has sought to continue the relatively limited engagement efforts that were being undertaken prior to the takeover of Kabul by the Taliban. The oft quoted narrative of a Chinese surge was overplayed.

Prior to the collapse of the Republic, Beijing was a partner of the Afghan government, exploring economic opportunities as well as addressing key security concerns. They also explored working with other countries in Afghanistan (like the United States, India, or European powers), and followed through on some limited programming. China was a provider of vaccines and other COVID-19 management tools and had participated in the many different regional engagements that sought to help Afghanistan, including creating specific trilateral formats bringing together Afghan and Pakistani officials. Following the collapse of the Republic government, the level of activity at an official level has stayed similar, though changed to adapt to the new authorities in Kabul.

In security terms, China cooperated closely with the Republic on Uyghur militants Beijing saw gathering in Afghanistan. They are still trying to build this relationship with the Taliban.

The closing months of the Republic were confusing in this regard.The Republic’s National Directorate of Security (NDS) moved definitively against China by detaining a network of Chinese intelligence agents active in the capital in December 2020. Both Beijing and Kabul worked closely together to keep the story out of the public domain, with then-Vice President (and former NDS chief) Amrullah Saleh tasked to manage the relationship by President Ashraf Ghani.

By early 2021, the relationship had been built up again to the point that Saleh was attending events at the Chinese embassy and praising what China was doing in Xinjiang, while at the same time highlighting through social media the links between Uyghur militants and the Taliban (something the U.S. government had sought to break by delisting the East Turkestan Islamic Movement, ETIM, as a terrorist organization in November 2020).

But as the year went on, the relationship between Beijing and Kabul broke down, with the Afghan side refusing to turn over militant Uyghurs it had caught (as Kabul had done previously).Confirmation of this came in the news that when the Taliban swept through, releasing prisoners in Republic custody, a number of Uyghurs prisoners were among those released. Exactly what led to the rupture is unclear, with stories circulating about the proximity of the Republic government to India, unfulfilled information exchange requests, or something financial.

What exactly happened is still unclear. But as the Taliban swept across the country in 2021, China seemed to increasingly pull back from the Republic government and showed itself even more willing to engage with the Taliban. Beijing even hosted top Taliban figure Mullah Baradar and a delegation in Tianjin, where they met with Foreign Minister Wang Yi, in July 2021. Still, Beijing was careful to continue to maintain the appearance of good relations with the Republic. Shortly before the Taliban’s visit, Chinese leaderXi Jinping spoke by telephone with Afghan President Ghani, likely in part to smooth relations. But it was clear that by this point, relations between the Republic and China were in a difficult place.

By late summer of 2021, Beijing had read the runes and concluded that no matter what happened, the Taliban were going to take some degree of power in Kabul, and this mandated establishing closer links. That approach set a path that Beijing was able to take advantage of when the Republic government finally fell and the Taliban took over.

In the wake of the precipitous U.S. and NATO withdrawal, the public discourse around China in Afghanistan went into overdrive. The chaotic nature of the withdrawal fit with a wider narrative –fanned by Beijing (and Moscow, too) – of Western decline. China’s geographical proximity, engagement with the Taliban, as well as longstanding history of announced (if unfulfilled) investments inAfghanistan all fed a narrative of Beijing stepping in to fill a vacuum left by the United States. People saw the reports of vast untapped mineral wealth and assumed the insatiable Chinese industrial machine would be eager to consume it.

Yet in reality these narratives were vastly overblown. China had long been a frustrating partner economically for the Afghan Republic. Deals had been signed, but no progress had been made. Chinese contractors came and worked on infrastructure projects, but little of the money was actually Chinese; rather it was World Bank or other international financial institution projects with the Chinese simply serving as contractors. Trade was underwhelming, and Beijing seemed unwilling to really find ways of tyingAfghanistan into Xi’s connectivity vision, the Belt and Road Initiative. Once the pandemic broke out, China did step in and provide some medical aid, which was welcomed in the beleaguered country, but this was offset by the sudden closure of the Chinese market to Afghanistan.

On the security side, Beijing and the Republic had a fairly easy relationship. The Republic authorities were quite happy to arrest and turn over any Uyghur militants China sought, as they were for the most part fighting for, or allied with, the Taliban. At the same time, they were willing to accept the fact that China maintained a connection to the Taliban, though frustrations did seep through. Reports that the Chinese, at various points, had supplied arms to the Taliban naturally caused tensions, but the Republic government always saw a greater upside in trying to engage withChina economically than become distracted by this frustration, which was not perceived as a strategic issue.

The Republic continually sought to keep China onside. For example, the Republic did not follow the United States in denying the existence of and delisting ETIM, a closing act by the Trump administration to destabilize things with China. Instead, senior Republic officials continued to refer to the group by the name ETIM and highlighted the links between the Taliban and Uyghur militants. They also seemed willing to defend publicly China’s mass detentions and surveillance in Xinjiang, in stark contrast to the narrative Washington was pushing.

The most complicated part of the relationship was Beijing’s ties with Pakistan. Here, Kabul repeatedly hoped that China would use its influence in Islamabad to try and advance concerns they had. Yet, there was little evidence of this happening. While China did establish a trilateral foreign ministerial format between Kabul, Islamabad, and Beijing, as well as use its influence in Islamabad to bring the Taliban and Pakistanis to the table with Kabul at various moments, none of this was able to change the conflict on the ground. And notwithstanding cooperation on counterterrorism questions related to Uyghurs, there was a shadow of paranoia across China’s engagement with the Republic’s security apparatus, thanks to the latter’s deep relationship with the United States.

Afghans were often frustrated by the China-Pakistan EconomicCorridor (CPEC). They pointed out that while China talked about the Belt and Road in Afghanistan, very little was actually forthcoming, in contrast to the billions pumped into Pakistan. Trying to allay this, in 2019, China pushed the idea of encouraging greater cross-border trade between Pakistan and Afghanistan through the establishment of better facilities and refrigeration points for fruits to go back and forth across the border. This fit into a wider pattern of trying to link the CPEC to Afghanistan, an approach that usually found hostility in Islamabad alongside innumerable practical problems on the ground.

The arrival of the Taliban in Kabul changed the dynamic between Kabul and Islamabad (and Beijing), though not necessarily as much as might have been expected. Relations between the Taliban and Islamabad have proven to be as fractious as they were between the Republic and Islamabad. For China, having long cultivated a relationship with the Taliban, it was easy for Beijing to continue operating in Kabul after they took over. The Chinese embassy did not evacuate in the face of the takeover, though they warnedChinese nationals to find ways out of the country or stay in secure locations. Chinese businesspeople in the city reportedly fended for themselves, while the embassy at one point was reduced to calling on Western support to evacuate citizens as their own plans failed.

But once the hump of the takeover was done, China quickly slipped into a strong public support mode, concluding that the Republic was done and Beijing needed to rapidly establish a relationship with the new authorities. Foreign Minister Wang Yi was an active figure on the regional conference circuit, using every opportunity to push for sanctions relief for the new government while his officials regularly taunted Americans over the failure in Afghanistan.

They were also quick to rekindle the formats that Beijing had established between the Republic and Islamabad, as well as try to find ways of engaging with the Taliban through the many regional formats that have developed over the years around the country. The trilateral ministerial engagement was restarted, and Beijing has reportedly also brought together senior intelligence figures from Afghanistan and Pakistan to discuss problems.

On the economic front, they restarted the “pine nut air corridor” that had been established under the Republic. The corridor sought to quickly bring Afghan pine nuts to the Chinese market, and the government helped make sure they were immediately promoted and sold on high-profile online influencer channels. Aid came in to support the ongoing fight against COVID-19. During the winter of2021, the Xinjiang regional government gave just under $50 million in supplies and aid to the authorities in the neighboring Afghan provinces of Badakhshan, Takhar, Kunduz, and Baghlan.

By November 2022, Chinese Ambassador to Afghanistan Wang Yu highlighted how his country had given “300 million RMB in emergency aid to Afghanistan and continued to complete 1 billion RMB in bilateral aid.” He also confirmed that as of December 1, zero tariffs would be levied on 98 percent of products from Afghanistan being sold to China. Afghan carpets were on display at the China International Import Expo (CIIE) this year.

But big ticket deals have moved much slower, if at all. While China National Petroleum Corporation and Metallurgical Group Corp, the two firms responsible for the biggest projects in Afghanistan – an oil concession in the Amu Darya region in the north and the Mes Aynak copper mine in Logar – have re-engaged with the Taliban authorities, there is little evidence they are moving quickly forward. In an apparent demonstration of a total lack of awareness of the nature of the project (or the earlier signed contract), the Taliban authorities in early November announced that the Mes Aynak project would need more electricity. This highlighted a larger problem that Chinese operators find on the ground, which isa counterpart in the Taliban that lacks much expertise to manage large projects.

The economic problems resonate across the border in Pakistan, too. In an attempt to save money, Pakistan took advantage of the low cost of Afghan coal and the fact that Afghan coal miners lack export options and increased its purchases. But once the story got out that Pakistan was taking advantage of Afghanistan’s problems, the authorities in Kabul hiked up the price of coal. This, however, blew back on the Chinese power companies working in Pakistan, which had arrived as part of CPEC and had long purchased cheapAfghan coal. They complained to the Taliban and continue to lobby to get them to lower the prices once again. Chinese coal miner Chinalco has even started to engage with the Taliban to explore opportunities in the country to get a direct Chinese hand into the industry.

Looking beyond the economy, however, China’s biggest concern about the relationship between Pakistan and Afghanistan is the growing militant nexus that sees China as an important adversary. This has been seen most sharply in Pakistan, where there has been a notable expansion of groups targeting Chinese interests. From being mostly targeted by Baloch or Sindhi separatists, Chinese in Pakistan now find themselves under fire from networks linked to the Tehrik-e-Taliban Pakistan (TTP), as well as rumors of Uyghur militants within the country working with local partners.

The murder of the Karachi University Confucius Institute director by a female suicide bomber dispatched by the Majeed Brigade in April 2022 crossed a new Rubicon as it showed the Baloch groups were broadening out their range of targets from CPEC-specific projects to any Chinese in the country. A number of Chinese nationals evacuated Pakistan afterward.

It seems to be no coincidence that the surge in violence against Chinese nationals happened alongside the Taliban takeover (though it had already been building for some time). At a practical level, the takeover released a vast amount of weaponry left behind by the Afghan National Army and its Western allies, but it also strengthened a number of militant groups, like the TTP or Baloch organizations, that are increasingly targeting Chinese interests in Pakistan and often have bases in Afghanistan.

In Afghanistan, the Islamic State of Khorasan Province (ISKP) has put out far more anti-Chinese propaganda than any other organization. It dispatched a suicide bomber who claimed to be aUyghur against a Shia mosque in Kunduz in October last year. In claiming the attack, ISKP specifically referenced Beijing’s close relationship with the Taliban as a motivating factor.

All of this adds up to a deeply worrying threat picture for China. While previously Beijing could somewhat hide behind others (the United States), it is now seen as the big power in the region, and it is finding itself facing all of the problems that come with that label.

Additionally, China has not been able to establish the same sort of security relationship with the Taliban as it had with the Republic. While China has repeatedly demanded that the Taliban do something about Uyghur militants, thus far all the Taliban seem to have done is move them from one part of the country to another, from Badakhshan to provinces in Afghanistan’s interior. There have been reports that the Haqqani-linked parts of the Taliban government have worked to support Chinese aims, but there are no reports of people being captured and repatriated, as happened routinely under the Republic.

In a demonstration perhaps of how comfortable he was in Afghanistan, Abdul Haq, the leader of the Turkestan Islamic Party (TIP, the name the Uyghur militant group often referred to as ETIM gives itself) released a video of himself talking to a large crowd of followers and their children celebrating Eid 2022 in Afghanistan. As of now, it does not seem as though there is any appetite in the Taliban government to turn over their close allies.

And the reality is that Beijing is not entirely committed either. All of the big economic talk has not resulted in the investment theTaliban desperately want. Rather, there has been a surge of entrepreneurial Chinese businesspeople into Afghanistan, spotting opportunities posed by a nearby country where, broadly stated, violence suddenly diminished and where there were lots of potential mining and other opportunities. Such Chinese entrepreneurs as a group are a hardy bunch. Their risk threshold is much higher than others (witness the challenging parts of Africa where numerous Chinese firms have decided to go). None of what has been seen in Afghanistan seems to be state directed, but rather is pushed by individuals, small companies, and in some cases regional state-owned enterprises. Beijing itself is barely involved, except in allowing permission for individuals to travel and for the potential material to return home.

But even these entrepreneurs find themselves frustrated, with reports that some early investors have already decided it is impossible to do business in Afghanistan and packed up to go home, writing off their large early investments.

The Chinese embassy in Kabul has avoided these negative stories, and instead championed positive ones – like the multi-modal train and truck route that was opened up between Afghanistan and Zhejiang. Home to the massive international trading market at Yiwu, Zhejiang has long been a place where Afghan business people go. Opening up the route was entirely the product of smart Afghans and some folk in Zhejiang, rather than anything coordinated or concocted by Beijing.

This is the reality of the current relationship between China and Afghanistan. While Beijing continues to talk up its positive acts in the country, it has in fact done very little in practical terms. What Chinese activity is taking place on the ground is often driven by private enterprise, and there is a growing level of frustration in Kabul about the slow pace of bigger projects that could have a more substantial impact on the Afghan economy. On the Chinese side, there is frustration about the Taliban’s inability to deliver on outcomes and an awareness that Afghanistan’s problems are already starting to export themselves around the region.

Far from inheriting an opportunity, China finds itself encumbered with an ever expanding roster of problems in Afghanistan which it is showing little interest in trying to resolve. The Taliban remain a frustrating partner, while Pakistan continues to be a source of concern that struggles with security at home while cozying up toChina’s adversary the United States. Never comfortable in an outright leadership role, China finds itself walking a dangerous tightrope in a region where its actual leverage and capability to achieve goals is limited.

A new piece for the South China Morning Post this time exploring the fact that all of the prognostications of China, Russia and other adversary powers sweeping into Afghanistan have not come to pass. In fact, they all appear to have more complicated relations with the Taliban than the US does at this point. There is more to say on this topic, so look out for a refresh soon.

China won’t be filling the void left by the US in Afghanistan any time soon

  • Rather than being quick to gain an edge in Afghanistan following the US withdrawal, China, along with Russia and Iran, remains uneasy about security threats coming from the country
  • Meanwhile, the Taliban government is frustrated at the lack of economic support being provided by its neighbours

A Taliban fighter stands guard at Wazir Akbar Khan hilltop in Kabul on August 30, the one-year anniversary of the US withdrawal from Afghanistan. A year and a half on from its withdrawal, the US has managed to establish a regional foothold which enables it to at least deal with some of its security concerns. Photo: AFP

There was a lazy narrative that emerged in the wake of the Taliban takeover of Kabul that this would be a major victory for China. The operating assumption was that Beijing would swoop in and fill the geopolitical void left by the Western withdrawal.

Underpinning this was a general sense of Western decay which “adversary” powers – China, Russia, Iran – would be able to take advantage of. Yet as we have seen ahead of this month’s meetings known as the Moscow format talks, these powers are having as many, if not more, problems with the Taliban government as the West.

The Moscow format is a Russia-initiated group that was established in 2017 to bring together Afghanistan’s neighbours. It includes Russia, China, India, Iran, Pakistan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.

The last meeting of the group was held in October 2021 and included representatives from the Taliban, who walked away from the session feeling that there was a “positive atmosphere”. The format also agreed to treat the Taliban as the de facto authorities in Afghanistan (acknowledging without acknowledgement) and sought to put pressure on the United States to lift all sanctions against the regime.

It is consequently quite a turnaround for Russian coordinator Zamir Kabulov to announce that “the Taliban delegation will not take part [in the meeting], it is only for members of the Moscow format”. The format in his view was to focus on fostering closer cooperation among Afghanistan’s neighbours, while encouraging the Taliban to act on women’s rights and deal with terrorist threats.

Kabulov did not offer any explanation for not inviting the Taliban to the talks. It is not hard, however, to guess why.

The decision is likely linked to a growing frustration among Afghanistan’s neighbours at the Taliban’s seeming inability to deal with the security threats they are all worried about. The ISKP, an affiliate of the Islamic State militant group, has lashed out in its neighbourhood with little evidence of an effective Taliban response.

Iranian authorities have pinned the recent terrorist attack that killed 15 at a shrine in Shiraz on ISKP, while the group also claimed responsibility for the attack on the Russian embassy in Kabul in September that killed two Russian officials, among others. Rocket attacks on Central Asia that came from Afghanistan have also been claimed by the group.

China has so far been spared any direct assault, but the ISKP’s publications are full of anti-Chinese narratives. And Beijing continues to be frustrated by the Taliban’s failure to crack down on armed Uygur groups that are living in the country.

The irritation goes both ways. The Taliban have also found themselves frustrated by the level of commitment from some of Afghanistan’s neighbours. While Central Asian countries have sought a tight economic embrace to help stabilise the country, China has delivered very little.

Beijing has sent some aid, but much of the economic activity seen in Afghanistan has been driven by private enterprise. The large Chinese state-owned enterprises with interests in Afghanistan have held numerous meetings, but actual progress has been slow.

Russia has sent delegations of officials to Kabul and hosted Taliban interim Minister of Industry and Commerce Nooruddin Azizi. They have signed agreements about food, oil and aid, but investment has not been forthcoming.

This stands in contrast to the success of the United States in dealing with its direct security concerns – as exemplified by the drone strike that killed al-Qaeda leader Ayman al-Zawahiri. The US has also provided at least US$327 million in aid, and has opened direct lines of communication with the Taliban through meetings in Kabul and Doha attended by the CIA chief and his deputy, respectively.

The US has also leaned heavily into its security cooperation with Afghanistan’s Central Asian and South Asian neighbours. At the same time, Washington has not compromised on handing over money it had frozen in the wake of the Taliban takeover, instead creating a special fund in Switzerland which will manage the money to pay for key national requirements like electricity.

This has not been seen as positive by the Taliban, who remain furious at Washington for “usurping” their money. And yet, the approach has borne some fruit for the US. The release in September of US prisoner Mark Frerichs in exchange for a Taliban warlord and drug dealer in American detention reflects an ability to strike an agreement with the Taliban that pleases both sides. And it is likely other agreements have been reached behind the scenes too.

It is not impossible that both China and Russia have sought similar arrangements, but the public optics are noticeably different. Russia failing to invite the Taliban to the Moscow format follows growing irritation in Kabul around the lack of Chinese investment, and growing concern in Iran about terrorist attacks on its territory.

A year and a half on from the US withdrawal from Afghanistan, we have come full circle. The much vaunted vacuum has not been filled by regional “adversary” powers, while the United States has managed to establish a regional foothold which enables it to at least deal with some of its security concerns.

So much for the narratives of China filling the void.

Raffaello Pantucci is a senior associate fellow at the Royal United Services Institute (RUSI) in London and a senior fellow at the S. Rajaratnam School of International Studies (RSIS) in Singapore

As usual have been delinquent in posting here. First up in my latest wave of material, a longer piece that has been in the works for a while with the wonderful Niva from the OSCE Academy in Bishkek for my old institutional publication the RUSI Journal. It explores the idea that China might be finally realizing its economic dreams for the Shanghai Cooperation Organization (SCO) through the Digital Silk Road.

Paving the Digital Silk Road with the Shanghai Cooperation Organisation

Largely disregarded or derided in the West, the Shanghai Cooperation Organisation (SCO) has grown since its humble beginnings into an important vehicle for Chinese digital and technology penetration in Central Asia. Raffaello Pantucci and Niva Yau show how China has managed to realise some of the economic goals that Beijing has long envisaged for the organisation, even if it has often found itself stymied by other members. In much the same way as the region has been a testbed for Chinese foreign policy approaches, the SCO now appears to have become a key locus for implementation of the Digital Silk Road.

When the Shanghai Cooperation Organisation (SCO) was founded in 2001, it was widely seen as an organisation focused on countering terrorism. Transformed from the ‘Shanghai Five’ to the SCO in 2001, and followed rapidly by the establishment of the Regional Anti-Terrorism Structure (RATS) in Tashkent, the organisation seemed of its time, reflecting the Global War on Terror launched by the US in the wake of the 9/11 attacks. Yet, while counterterrorism may have been interpreted as the organisation’s initial guiding rationale, each of the members had their own reasons for joining.

While China was clearly interested in the counterterrorism goals linked to Xinjiang that the SCO helped Beijing to achieve in Central Asia, its vision for the organisation was always grander. China’s longer-term aim was to transform it into a body which would aid its own economic, social, security and political penetration across the Eurasian landmass. Through the SCO, China would normalise its role as the major player in Eurasia, something Beijing was most keen to undertake in the economic domain.

Early statements about the SCO and its predecessor, the Shanghai Five, show the importance of the organisation in Beijing’s mind as more than simply a security institution. Seen through China’s eyes, the trajectory of the Shanghai Five to the SCO was one that started with border delineation, but ended with much wider ambitions, including economic goals that extended to realising a new ‘Silk Road’.1 This built on a visit to the region by Premier Li Peng, who in 1994 laid out a vision of infrastructure and economic links tying China to its Central Asian neighbourhood.2 But China has always struggled to realise these goals outside rhetorical statements. Initially, resistance came in the form of neglect, with the others refusing to take the organisation as seriously as China did. Over time, this turned into a more active sense of concern as the other members grew fearful of Chinese dominance – something that became even more acute as the Chinese economy boomed to become the second largest on the planet.

Guests take part in a documents exchange ceremony during the Thematic Forum on the Digital Silk Road, Beijing, April 2019. Courtesy of Xinhua / Alamy

Economic relations are increasingly front and centre with Central Asia and China. The SCO continues to exist but has changed over time. Most recently, it has grown into the digital domain, through which China has managed to dramatically expand its reach. The Belt and Road Initiative (BRI) emerged from the same strand of Chinese policy thinking that created the SCO, and built on a history of Chinese engagement with Central Asia. Starting in Central Asia (where President Xi Jinping gave the speech which inaugurated the concept in 2013),3 the BRI has now grown into a global vision for Chinese foreign policy, which has also landed on the idea of developing a Digital Silk Road (DSR). While the many strands of the BRI continue to exist, it is the DSR which is increasingly seen as the focus of China’s global struggle.

The SCO has also been caught up in this, increasingly moving into the digital domain. As with many other global trends, the coronavirus pandemic has sped up this process. Chinese firms and institutions have increasingly developed their links, interests and influence in this space. It has also provided an interesting set of new conduits to advance China’s attempts to turn the SCO into an economic actor. Pre-pandemic, the SCO was already moving its discussions towards e-commerce and digital and tech engagement, bringing itself into one of the increasingly central spaces of modern societies. Through digital technology, the SCO is at long last appearing to live up to the economic ambitions that China has harboured for it. This article is an attempt to sketch out the evolution of the SCO’s economic role, and to show how China’s Central Asian economic dreams and goals for the SCO are being realised through the DSR.

A New Multilateral is Born

The abrupt collapse of the Soviet Union in 1991 surprised leaders in Beijing, who quickly realised the need for border delineation with several newly independent neighbours. Always a contested space due to its remote and sparsely populated nature, the 3,000-km-long border China shares with the Central Asian states was of particular priority to Beijing as it defined a region, Xinjiang, with which it has a long and difficult history. In 1996, the first significant border security treaty between China, Russia, Kazakhstan, Kyrgyzstan and Tajikistan was reached, a group later termed as the Shanghai Five.4 A year later, China’s concerns about potential separatism in Xinjiang were brought to life when large-scale protests broke out in Ghulja (or Yinning).5 Its proximity to the border with Kazakhstan and the ethnic and community links that spanned the Kazakh–Chinese border highlighted the risks of uncontrolled borders.

While the focus on security and borders was the principal pragmatic concern for China in the Shanghai Five process, Beijing’s long-term strategy in Central Asia was already focused on building a strong economic presence and links. Then Chinese Premier Li Peng had already promoted the idea of reviving the old Silk Road during his tour of Central Asia in April 1994, when he stopped at all the capitals except war-torn Dushanbe. Travelling with Premier Li were a number of Chinese entrepreneurs, who were being encouraged to invest and look at opportunities in the region. Among the most prominent were engineers and executives from the oil and gas sector, who initiated negotiations to develop a natural gas pipeline to bring Turkmen gas across China to Japan, something Premier Li was regularly talking to Japanese officials and executives about back in Beijing.6 The importance of this economic agenda with Central Asia was later highlighted by the announcement in 1999 of the Great Western Development Plan, which sought to develop China’s western regions and boost trade with neighbouring countries.7

In 2001, the Shanghai Five evolved into the SCO, and expanded to include Uzbekistan. Tashkent had remained an observer until that point, lacking the same border delineation logic with China that determined membership of the Shanghai Five. Uzbekistan was also among the most fiercely independent of the Central Asian states, eager to avoid joining any regional or international security institutions. However, a series of terrorist incidents in 1999 and 2000 – which included cross-border attacks by Islamic Movement of Uzbekistan (IMU) militants into Uzbekistan, as well as a series of bombings in downtown Tashkent8 – highlighted the regional nature of terrorist threats to Uzbekistan in particular. This helped to change leader Islam Karimov’s perspective, as well as shape the budding organisation. Initially, the newly minted SCO seemed principally focused on security affairs, with the most visible first practical step being the establishment of RATS in Tashkent in 2004 (after some initial discussion about housing it in Bishkek).9 Counterterrorism provided a useful banner for the region’s leaders to gather around.

However, from a Chinese perspective, economics was always important. Speaking at the SCO’s founding conference, then Chinese President Jiang Zemin spoke of economic and trade cooperation as an important area of activity for the newly born international organisation.10 In 2003, Premier Wen Jiabao again stressed the importance of economic and trade cooperation in the SCO region, and went even further, proposing an SCO free trade zone and various initiatives to rid the region of trade barriers.11 After identifying 127 investment projects to boost regional trade in September 2004, China also proposed financing mechanisms such as an SCO development fund and bank.12

Yet, while the security side of the SCO thrived,13 most of China’s economic initiatives failed to move forwards. Initially, Russia and Uzbekistan were wary of these Chinese projects, fearful of how they could alter regional economic and trade dynamics. Russia was worried about losing influence and markets that it had traditionally controlled, while Uzbekistan under Islam Karimov was a deeply inward-looking power, sceptical of Chinese and Russian initiatives. The other Central Asian powers engaged in the SCO were more welcoming of Chinese economic engagement – Kazakhstan embraced Chinese investment, while traditional aid recipient countries Kyrgyzstan and Tajikistan saw Beijing as simply another source of much-needed aid and investment.

For Russia, resisting China’s greater economic presence meant pushing towards an integrated Eurasian economic bloc that sustained the existing regional dynamic. Initially, Moscow was resistant to such ideas in the chaotic disintegration that came after the collapse of the Soviet Union. Fearful of the economic burden of carrying former Soviet states, Moscow was eager to separate itself from its former dominions in the mess that followed the collapse of the Soviet Union. This was met with pushback from the newly liberated Central Asian countries in particular. While the western-facing part of the Soviet Union was keen to break away, the eastern-facing part was less so. For example, Kazakhstan resisted these efforts, with former Soviet-era leader and then President Nursultan Nazarbayev proposing in 1994 the establishment of a Eurasian Union to continue the economic links across the former Soviet space and avoid the complete collapse of the intra-regional economies that existed.14

A year after Premier Li’s talk of reviving the Silk Road, the first agreements on establishing a unified customs union between Belarus, Kazakhstan, Kyrgyzstan, Tajikistan and Russia were reached.15 However, very little progress was made after this. It took almost two decades for these early treaties to materialise into more specific action, when Moscow saw the value of revitalising them to try to stymie China’s regional economic initiatives and restore some Russian primacy in the region. The result of this belated push has been that China’s regional economic initiatives must work with the Russia-led economic bloc, leading to the cooperation agreement between the Eurasian Economic Union (EAEU) and China in 2018.16 This was largely pushed through by Russia in direct talks between President Vladimir Putin and Xi, with no consultation from the other EAEU members.

All the Central Asian states were sceptical of China’s grand economic proposals to some degree. Kazakhstan, which over time became more confident in building its path to independence from Russia, sought to lead a Central Asian Union. China was seen as an opportunity in this regard, and Astana worked closely with Beijing to quickly finalise the Kazakhstan–China oil pipeline to secure an alternative source of income from the country’s rich energy reserves.17 However, at the same time, Kazakhstan opposed a completely open-door policy to Chinese investments. In 2003, when British Gas decided to sell its portion of the giant Kashagan oil field to CNOOC and Sinopec, KazMunaiGas (KMG), the Kazakh government’s representative in the consortium running the project, blocked the sale. It bought most of the share itself, and divided the rest among other consortium members.18 Kazakhstan has also refused repeated requests to grant Chinese nationals a visa-free regime,19 and has imposed strict employment quotas, joint venture requirements for projects and more – though some of these policies have been loosened over time.

Uzbekistan’s isolationist policy during the Karimov era stood directly against China’s regional economic initiatives, and created direct blocks on some of the proposed initiatives. For example, the Central Asia–China natural gas pipeline from Turkmenistan to China was first proposed in 1994, and it took Uzbekistan (a transit country on the route) until April 2007 to sign up.20 By the early 2010s, Uzbekistan’s perspective was gradually changing. It sought ways to take advantage of the Chinese economic boom, while still retaining tight reins of control. This resulted in some illicit or grey trade, while the government slowly allowed China into some market sectors.21

Kyrgyzstan and Tajikistan have always maintained a certain level of ambivalence, although they have tended more towards seeking to attract Chinese money. On the one hand, as poorer countries, they were grateful for any investment and economic attention, while on the other, they were wary of the unfettered flow of Chinese products, recognising the resultant impediments it would create to domestic economic development. Some Kyrgyz experts and officials favoured joining Russia’s economic bloc to help to better manage the flow of Chinese products, blaming it for the poorly developed Kyrgyz manufacturing industry as it encouraged unsustainable reliance on re-export revenue.22 A similar sentiment is evident in Tajikistan, where local traders and producers have been squeezed out by Chinese products and traders.23

This set of tensions prevented China’s grand regional economic initiatives from coming to life. The proposals of an SCO free trade area, an SCO development fund and bank have all largely stalled – although the development bank idea is periodically raised by the Kyrgyz and Tajik governments, as well as Beijing.24 Instead, China has been restricted to bilateral economic engagement, and the SCO economic initiatives that did take off were confined to promoting dialogue, with regular meetings between economics and trade ministers, banks and business associations through the SCO Interbank Association and SCO Business Council. What trade promoting measures the SCO was able to advance, such as the SCO ‘Agreement on Facilitation of International Road Transport’ that was signed in 2014 and entered into action in 2017, are widely unknown on the ground.25

This narrative has changed in recent years with the arrival of China’s BRI, which has increasingly subsumed and co-opted the SCO’s economic side. When talking about the transport agreement, then Secretary General Rashid Alimov stated that ‘the Agreement is the SCO’s practical contribution to the development and implementation of the Silk Road Economic Belt project’.26 This narrative, where anything economic within the context of the SCO is rephrased to include Silk Road terminology, is increasingly common and has been highlighted once again by the arrival of the DSR.

Approved in 2015 by Chinese President Xi to be part of the BRI, the DSR aims to facilitate information and commercial connectivity through optical cables, satellite passageways, hardware and software, all alongside a long-term interdependence through e-commerce, tech-enhanced security measures and more. Legislation and standards are being increasingly harmonised as the SCO slowly turns digital. Since starting the SCO e-commerce working group in 2004, China’s push for digitalisation in the region has grown in leaps and bounds. In 2009, a unified electronic signature system to ease cross-border trade was developed;27 in 2010, an SCO e-commerce online trading and investment platform was set up;28 and in November 2017, the proposal of an SCO e-commerce industry trade association was made by a delegation including several Chinese e-commerce leaders.29 A month later, for the first time, the development of a regional digital economy joined the list of important tasks identified by SCO heads of state in the joint communiqué released after the 2017 summit in Sochi, Russia.30 After three years of negotiations, cooperation in the digital economy was agreed at the 2019 summit in Bishkek, Kyrgyzstan. Moreover, in the online Moscow Summit of November 2020, the heads of state grouping issued a communiqué on harmonisation and cooperation across the digital domains for commerce,31 IT security32 and counter-radicalisation.33 E-commerce had gone from being a marginal activity to the basis of a core agreement at the organisation’s most senior summit.

Digitalisation: China Builds and Builds

The SCO developed alongside the world’s digital transformation. And, like many SCO activities, security came first. After pinning the 2005 Tulip Revolution in Kyrgyzstan on an alleged US disinformation campaign,34 the SCO issued a statement during its June 2006 summit in Beijing, highlighting the role of information technology in ‘affecting all aspects of national security, including politics, economy, national defense, social culture, as well as the entire international security and stability system’.35 Specific measures were laid out in an SCO Agreement on Cooperation to Guarantee International Information Security, which was signed into action by members in 2009.36 At the same time, the RATS Center in Tashkent had sought to pioneer work on questions around online radicalisation and data protection. Data from member states on terrorist groups and threats was gathered, translated and disseminated.37 Actions included the establishment of a working group targeting cyber security and online radicalisation, which would hold conferences and training sessions, and ultimately led to the first SCO cyber-terrorism exercise in Xiamen in 2015, of which more have occurred bi-annually since.38 All of this took place at a moment when Central Asia started to take cyber security questions more seriously, with both Kazakhstan and Uzbekistan drastically improving their Global Cybersecurity Index score, from 0.19 to 0.79 and 0.17 to 0.68 respectively between 2014 and 2018.39 Exactly what role the SCO played in this is unclear, but it certainly takes place in parallel.

As a landlocked region disconnected from the large international fibreoptic cables, broadband in much of Central Asia is extremely expensive. China has done a great deal to change this. Chinese tech companies are often the most affordable in the region – in part due to Chinese government subsidies to the companies back in China – and have rapidly gained a large presence in Central Asia. It should be noted they were early movers into the region, with Huawei and ZTE having been longstanding players in the region’s digital hardware. Huawei entered the region through Kazakhstan in 1998.40 In 2000, Turkmenistan used ZTE to establish its first dial-up service.41 In 2001, Kyrgyzstan was given $10-million worth of free ZTE equipment via an intergovernmental gift to install a telephone network for 10,000 subscribers in Bishkek.42 By 2002, ZTE was installing a wireless telephone system for Kazakhtelecom, while the Kazakh company chose to use Chinese cables to upgrade its Europe–China internet cabling systems.43 More awkwardly, both ZTE and Huawei signed contracts (likely as part of a wider agreement between the government and local authorities) with the Taliban government in Afghanistan in the late 1990s to establish a digital phone system in Kabul and Kandahar.44

From this early start, they have made dramatic inroads. In Turkmenistan, where there are fewer than 10 operational Chinese companies in total, Huawei has provided around 45% of the country’s telecommunications infrastructure.45 According to StatCounter, an online service that tracks internet usage, Chinese mobile phone providers have made considerable inroads into Central Asian markets. Samsung remains the dominant provider across the region, but Chinese manufacturer Xiaomi has grown to take an ever-increasing market share. In January 2020, the Chinese manufacturer overtook Samsung in Kyrgyzstan, and now controls around 45% of the local market (in comparison to 34% for Samsung, 10% for Apple and 6% for Huawei).46 In all the other markets, Samsung is dominant, with Xiaomi and Huawei together supplying between a quarter and a third of the rest of the market, while Apple and other providers tend to make up the rest.47 This metric is significant when one considers the Western push to reject all Chinese technology.

Looking to the internet and cyber storage infrastructure, companies such as Huawei and ZTE provide a growing proportion of today’s cloud and internet capacity in Central Asia. In 2014, Huawei entered into an agreement with the Karamay local government to create a cloud ‘model city’ to help establish a base for Xinjiang and Central Asian cloud services provided by the company.48 In 2021, ZTE handed a SDM (Subscriber Data Management) platform to Uzbekistan’s

Bee­line, a data centralisation tool that allows for generating analytics, data sharing with third parties, monetisation and many other cloud-based functions.49 Both firms have built large sections of the region’s new cyber infrastructure (3G, 4G and now 5G networks), including establishing factories regionally to build and sell home internet equipment.

Going beyond this, Russia and Central Asian states have in recent years welcomed China’s tech-driven approach to security by, for example, adopting ‘Smart City’ development models and projects with hundreds of cameras in their capitals.50 Some of these deploy Chinese facial and numberplate recognition technology, and all rely on Chinese software and hardware. Some projects, such as Dushanbe’s traffic system, are implemented using official Chinese loans disbursed through the SCO mechanism to purchase Chinese products.51 These local network systems are also offered in didactic institutions, with Huawei in particular offering them to schools and universities across the region.52 While tools such as these are increasingly ubiquitous in major cities around the world, the key question is where the data that is being collected is being stored and how it may be used for China’s national security purposes.

Beyond networks, China has also recognised the role of digitalisation in developing an advanced economy. China’s domestic digital economy is among the biggest in the world, with giant national firms that have increasingly moved outside China. Russia and Central Asian states have also found this increasingly attractive, and have come to favour e-commerce cooperation with China. Alibaba reached more than 20 million active buyers from SCO-participating states in 2017.53 AliExpress Russia, a joint venture between the Russian sovereign wealth fund (Russia Direct Investment Fund (RDIF)), Alibaba Group, MegaFon and Mail.Ru, was set up in October 2019 to smooth access to one another’s e-commerce markets and encourage cross-border cooperation.54 In 2019, Alibaba founder Jack Ma declared that his company planned to generate some 100 million jobs and support 10 million small companies over the next few years, with a particular focus on the SCO area.55 In 2021, a group of Chinese e-commerce experts and practitioners trained Uzbek governmental officials and businesspeople on managing the e-commerce space.56 A growing number of smaller Chinese and Central Asian traders have also gone online in the past few years. The drastically improved e-commerce infrastructure in Central Asia has resulted in a significant increase in the region’s Business-to-Consumer E-Commerce Index score between 2015 and 2019, jumping from 25 to 35 for Kyrgyzstan, 26 to 45 for Uzbekistan and 37 to 69 for Kazakhstan.57

Chinese and Central Asian companies have set up middleman websites to allow locals to purchase Chinese products more easily and cheaply online, while bilateral governmental efforts have been made to grant Central Asian products access to the Chinese market directly. This includes an official flagship store for Uzbekistan on Alibaba’s Taobao mall (also known as ‘Tmall’). With a large section of Uzbek confectionary, the store gained over 5,000 followers within a year of its opening in November 2019. According to Tmall data analysis, Russian sweets, Indian eyebrow powder, handmade dolls from Uzbekistan, dark chocolate from Kazakhstan and vodka from Kyrgyzstan are the favourite imported products for Chinese consumers.58 These products now travel on the DSR, while the traditional large in-person trading markets in Dordoi and Barakholka are slowly being replaced by online malls.

Following the inclusion of the digital economy in the SCO list of ‘important tasks’ in 2017, as well as the SCO digital economy cooperation agreement in 2019, Chinese e-commerce leaders have found themselves at meetings with senior SCO figures. Alibaba CEO Jack Ma met Vladimir Norov, SCO Secretary General, for the first time in August 2019.59 While the world was busy combating a pandemic in 2020, Norov had at least nine prominent public meetings with leaders of China’s tech world, including e-commerce giants such as Alibaba, Jingdong and Pinduoduo.60 The timing coincided with a visible SCO push into the e-commerce space. In August and November 2020, two SCO experimental policy zones were opened in China: a Cross-Border E-Commerce pilot zone in Lianyungang and the Qingdao Development Center. Exact details on both are not very clear, except that they are intended to be major boosters to commerce and trade using online technology. First announced during the SCO Summit in Qingdao in 2018, the Qingdao Development Center was opened with typical Chinese speed two years later.61 The companies Norov met with all played a constructive role in pushing the SCO’s e-commerce agenda forwards. For example, Jingdong has committed $1.5 billion to build a smart industrial park within the Qingdao Development Center using advanced cloud computing to showcase China’s first-class supply chain technologies for cross-border e-commerce.62 In 2021, Kyrgyz officials proposed to open an e-commerce experiential logistics zone at the Qingdao Development Center for the export of Kyrgyz agricultural products to China, South Korea, Japan and ASEAN.63 It is unclear what representation the other SCO member states might have at these institutions, although there was some suggestion that Kazakh companies were using the Lianyungang port already.64

Unlike many of their counterparts in traditional industries, these Chinese tech giants seem to more actively recognise the merits of engaging in soft power building abroad. This is something they have all done globally, but in particular in Central Asia and often through SCO structures. Huawei, ZTE and Weidong Cloud Education began donating information technology tools to classrooms in Central Asian high schools and universities across the region in the early 2010s. Huawei’s own overseas academy, with Huawei lecturers and its own curriculum, opened in Uzbekistan in 201665 and Kazakhstan in 2017.66 In just two years, the Kazakh branch had trained over 400 computer science students.67 Huawei’s flagship ‘Seeds for the Future’ programme, a study and work programme for foreign computer science talents to spend time in China, is one of the most attractive programmes offered to Central Asian youth. Including travel and training in China, it is seen as guaranteed to offer good employment opportunities for graduates. The programme opened in Tajikistan in 2016,68 Turkmenistan and Uzbekistan in 2017,69 and Kazakhstan in 2018.70 It is not clear whether it has been established in Kyrgyzstan, although the company has had a footprint and staff there since at least 2001.71

All these initiatives are fostering the next generation of Central Asian tech experts in Chinese standards and practices, and will inevitably strengthen China’s norm-making position in the digital industry within the region. There has already been something of a push towards Chinese standards and norms through various SCO working groups and engagement structures. Previously, there has been engagement in the cyber security domain on how countries could share best practice to stop the spread of extremist ideas online. There has also been some discussion about harmonisation in the digital commerce domain, including efforts to focus on making legislation compatible and learning from one another. The training programmes offered by Huawei and others provide a further point of engagement and influence. China is not only building, but also shaping, the future of the cyber and digital world in Central Asia (and further afield).

These companies have further continued this soft power push and increased their links and visibility alongside the SCO during the coronavirus pandemic. For example, Alibaba, Weidong Cloud Education and others continued to reach out to regional youth and political leaders using the digital space, and helped to organise a number of seminars and joint online events with the SCO. For example, Alibaba set up online COVID-19 treatment courses and engagements between Chinese doctors and their Central Asian and SCO counterparts.72 Moreover, Weidong’s contribution to helping children under lockdown to continue to receive teaching received a personal ‘thank you’ from SCO Secretary General Norov.73 This work came in parallel with a substantial push by China to provide online health support and services, with doctors regularly holding online forums and videoconferences to exchange ideas and experience.74 For example, in April 2020, a telemedicine system was set up in Uzbekistan between Jiangxi and Tashkent.75

They also offered more classical forms of support. Alibaba, for instance, has been implementing further measures to help bring Central Asian products to the Chinese market.76 In the backdrop of all this activity, there were dozens of medical donations from many of the leading Chinese tech companies to the region. Jack Ma’s personal foundation, for example, sent planeloads of aid publicly to all the countries except Turkmenistan.77

What Next?

Chinese tech companies have emerged as leaders in advancing China’s goal to have the SCO become a regional economic force. From basic hardware such as fibreoptic cables and telecoms towers, to everyday smartphones and critical storage infrastructure such as cloud systems, they have made significant inroads across Central Asia, building a DSR through the region. Chinese online sales and payment platforms have followed, meaning China is building and delivering the region’s digital economic future. Throughout this process, the SCO has played an increasingly important role in facilitating and strengthening this push, finally living up to the hopes first articulated for the group by Jiang Zemin. As digitalisation proceeds with Chinese tools, Beijing is becoming a crucial player across the region’s critical sectors including security, trade and education.

Digitalisation is recognised by all member states of the SCO as an important step to development. China’s eagerness to share and sell its tech-driven practices and insights has thus been welcomed by SCO member states. Kazakh President Kassym-Jomart Tokayev has made digitalisation one of his most urgent tasks since taking office in spring 2019,78 and he has focused on emulating the Chinese model. At a meeting on Kazakhstan’s future development, Tokayev praised China’s success. Pointing to a specific Chinese company, Hikvision, he said the company’s techniques ‘have gone far ahead, they deeply digitalized all major cities. You click on the screen, the data on the person comes out, including literally everything. When he graduated from university, where he goes in his free time, and so on … We need to go in this direction. This is a global trend. I set this task just before our capital’s leadership’.79

Digitalising economies is a top priority for SCO leaders. In January 2021, as part of a push for country-wide digitalisation, Uzbek President Shavkat Mirziyoyev set a deadline: ‘by the end of this year, every industry and regional leader must make a radical turn in the digital economy’. He offered a 30% salary boost for those regional officials who improved digitalisation in their spheres of work.80 It is highly likely that he intended them to use some of the Huawei technologies he had been introduced to during his visit to the company’s innovation centre and meeting with founder Ren Zhengfei in April 2019 on the fringes of the Belt and Road Summit.81

Digitalisation in Central Asia, as in many other developing regions, is centred on adopting existing technologies rather than developing indigenous ones. While domestic firms are preferable, these take time to develop and the marketplace is increasingly full of cheap, readily available options. Since the beginning, China has offered a cheap option that is easily accessible and often provided with loans. Having established a foothold, it will continue to be a dominant supplier of both hard and soft technology in the region. This means China will also end up exporting its norms and practices that govern the digital space. Given the growing digitalisation of entire economies and societies, China will also export norms in other areas such as security and trade. In these key sectors, Central Asian countries are set on a long-term path of reliance on Chinese technologies, with limited development of local capacity. In a worst-case scenario, this reliance – combined with a lack of local capacity – exposes Central Asian countries to deep potential national security problems, with little domestic capability to manage these things themselves. For example, a global attack on Chinese tech and tools could have catastrophic consequences regionally.

The dangers go in other directions as well. The dramatic and abrupt assault on Jack Ma brought his financial technology company Ant Financial’s huge initial public offering to a grinding halt and raised questions about the company’s future.82 This was a reminder of the Chinese Communist Party’s ultimate control over the country’s private sector, and a salutary notice to economies in which these companies are deeply enmeshed. Central Asia has already watched as other Chinese companies that had invested heavily in the region suddenly fell foul of authorities at home – the case of energy firm CEFC is instructive in this regard. After a sharp ascension around the world acting as a major player along the Belt and Road, the company was brought down dramatically in 2018 through anti-corruption investigations that have swept up CEO Ye Jianming.83 Kazakhstan lost a $680-million investment, while Russia’s Rosneft lost a $9-billion investor. The Czech Republic found itself suddenly losing an investor that had purchased ‘the country’s oldest football club, Slavia Praha; a brewery; a share of the Travel Service airline group; a publishing house; a neo-renaissance building; a stake in the investment bank J&T Finance Group; and a building in the Czech capital Prague’.84 These are stark reminders that over-reliance on Chinese firms can come with deep and unpredictable political risks and real economic repercussions.

Another curious risk was raised more recently with the expulsion from China of its cryptomining firms, which led to a large number choosing to relocate to Kazakhstan. While the Kazakh government initially seemed happy with this development, it has abruptly become a huge drain on the national electricity grid and is causing all manner of problems as a result, including forcing the country to renegotiate its electricity purchases from Russia. This unintended consequence of shifting Chinese domestic digital economies is another way in which the region is finding itself tied to China.85

A further danger is posed by the global clash between the West and China, which has increasingly focused on the digital and tech sector. As the US and its Western partners push sanctions on Chinese firms, this will complicate the latter’s viability and the operating spaces they are in. It will also start to complicate relations between the West and third countries, such as those in Central Asia, where Chinese technology companies are a major provider. This is a wicked problem for some of the countries in Central Asia – while they might prefer the Western alternatives, these are simply too expensive, and they are limited in other possible options. And, at this point, they already have the Chinese hardware installed, meaning a cost should they want to completely remove it. The Chinese vendor thus becomes the most attractive, despite the potential consequences that come with it.

Russia’s tech sector lags behind China’s innovative applications. Leading Russian tech companies are confined within the post-Soviet space. Rostec, Russia’s military technology conglomerate, while underfunded, has tried to enter commercial markets where there is high Chinese competition. In June 2021, Rostec secured a deal in Uzbekistan to provide basic urban planning technologies for the advanced stages of its smart city.86 However, Rostec is unlikely to be a serious rival for Chinese tech companies without Russian subsidies and loans. Ozon, which could be seen as Russia’s Amazon or Alibaba, had a market capitalisation of $2.4 billion at the time of writing (as compared to Amazon at $1.46 trillion and Alibaba at $249.64 billion)87 and is inefficient in comparison to its international competitors that compete with it at home. The recent invasion of Ukraine has served to isolate Russia and its firms from the world, making them even less competitive in some ways.

Russia’s homemade consumer electronics have failed to penetrate even the post-Soviet market. Russian mobile telephone providers Beeline and MegaFon may be able to continue to dominate regional telecoms provider services, but their hardware is usually not Russian-made. Russian smartphone manufacturers Yota and Sitronics are almost unheard of. Furthermore, Russia’s country-wide adoption of Huawei’s 5G networks and Chinese technology more broadly will only further weaken the Russian tech sector in the years to come. India offers another possible option, but technology providers there are still very heavily focused on their own domestic market and trying to consolidate in the wake of the government’s vociferous expulsion of Chinese technology.88

Russia and India offer another potential problem in geopolitical terms for Central Asia. Both are SCO members, but they have different relationships with China. India’s approach to China has long been two-sided, where on the one hand it is facing off near conflict, while on the other it is eager to engage. At the time of writing, confrontation over technology is at the forefront of the clash between the two countries, with India banning swathes of Chinese applications and seeking to curtail investment by Chinese companies such as Alibaba, Huawei and Xiaomi.89 Russia has a warmer relationship with China, but it is one with tensions below the surface. There are, for example, growing concerns in Moscow about the country’s increasing over-reliance on Chinese investment, economic growth and technology (notwithstanding the growing push together as a result of the invasion of Ukraine). This presents Central Asia with problems in terms of potential alternative partners, as well as the SCO’s pre-eminence in this Chinese push. The potential exists for these broader geopolitical tensions to undermine the relationships built through the SCO and to create future problems for those in Central Asia that have enthusiastically embraced the organisation and the Chinese technology that comes with it.

Conclusion

As soon as the Soviet Union collapsed, China activated an effort for economic, social, security and political penetration across the Eurasian landmass. These goals were products of domestic concerns and a desire to define relatively opaque borders, and were initially delivered through the first international security organisation that China helped to create. The SCO provided a vehicle through which Beijing could build its relations with its Eurasian neighbourhood, starting with a security framework, but with an underlying economic and broader intent. However, realising these broader goals has proved challenging. China’s position in the world has transformed since the early 1990s, when the country was just escaping the shadow of the Tiananmen Square massacre and its economy was opening up. At the time, the SCO region was largely uninterested. Now, China is the world’s second-largest economy and a crucial trading partner for all SCO member states. But it has struggled to translate its economic dreams within the SCO into reality.

This has now changed through the DSR. As early movers in the region and supercharged under the broader Belt and Road vision, China’s tech giants have built a strong presence in Central Asia and are now increasingly engaging with the SCO, helping it to realise China’s longer-term economic ambitions. This new approach has seemingly managed to overcome previous concerns about China-led economic initiatives, but is laying the foundations for deep Chinese influence long into the future. The SCO might finally be helping China to fulfil its economic ambitions and checkmate the activity of others in Central Asia. As with much of China’s foreign policy approach to Central Asia, what Beijing has advanced and tested in this area is likely to be exported elsewhere. Learning from how the SCO has gone digital will help to create a wider understanding of how the DSR may play out in other contexts as well.

Additional information

Notes on contributors

Raffaello Pantucci

Raffaello Pantucci is a Senior Fellow at the S Rajaratnam School of International Studies in Singapore, a Senior Associate Fellow at RUSI and author of Sinostan: China’s Inadvertent Empire (Oxford University Press, 2022, with Alexandros Petersen).

Niva Yau

Niva Yau is a Senior Researcher at the OSCE Academy in Bishkek and Fellow at the Eurasia Program of the Foreign Policy Research Institute in Philadelphia.

Notes

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25. Shanghai Cooperation Organisation (SCO), ‘SCO Promotes Transport Links’, July 2017, <http://eng.sectsco.org/news/20170706/306862.html>, accessed 14 August 2022; author interview with logistics experts in Osh, Kyrgyzstan, 2019.

26. SCO, ‘SCO Promotes Transport Links’.

27. SCO, ‘Shànghǎi hézuò zǔzhī mìshū zhǎng zài 2009 zhōngxī nányà qūyù jīngjì hézuò lùntán shàng de zhìcí’ [‘Speech by the Secretary-General of the Shanghai Cooperation Organisation at the 2009 Central and Southwest Asia Regional Economic Cooperation Forum’], 4 September 2009, <http://chn.sectsco.org/news/20090904/16988.html>, accessed 14 August 2022.

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32. SCO, ‘Zayavleniye soveta glav gosudarstv-chlenov Shankhayskoy organizatsii sotrudnichestva o sotrudnichestve v oblasti obespecheniya mezhdunarodnoy informatsionnoy bezopasnosti’ [‘Statement of the Council of Heads of State of the Shanghai Cooperation Organisation on Cooperation in the Field of International Information Security’], 10 November 2020, <https://sco-russia2020.ru/images/108/46/1084605.pdf>, accessed 14 August 2022.

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60. These are all recorded on the SCO website, <http://eng.sectsco.org/>, accessed 14 August 2022.

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69. Huawei, ‘Tǔkùmàn sītǎn’ [‘Turkmenistan’], <https://www.huawei.com/cn/sustainability/win-win-development/social-contribution/seeds-for-the-future/turkmenistan>, accessed 14 August 2022. Huawei, ‘Wūzībiékè sītǎn’ [‘Uzbekistan’], <https://www.huawei.com/cn/sustainability/win-win-development/social-contribution/seeds-for-the-future/uzbekistan>, accessed 14 August 2022.

70. People’s Daily, ‘Huá wéi zhōng yà chuàngxīn rì huódòng zài hāsàkè sītǎn jǔxíng’ [‘Huawei Central Asia Innovation Day Held in Kazakhstan’], 15 November 2017, <http://world.people.com.cn/n1/2017/1115/c1002-29648654.html>, accessed 14 August 2022.

71. As highlighted in note 41.

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73. SCO, ‘President of the Weidong Group Visits SCO Secretariat’, April 2020, <http://eng.sectsco.org/news/20200411/642503.html>, accessed 14 August 2022.

74. Raffaello Pantucci, ‘Beijing Binds: COVID-19 and the China-Central Asia Relationship’, Central Asia Program Paper No. 232, 19 June 2020, <https://www.centralasiaprogram.org/wp-content/uploads/2020/06/Beijing-Binds-COVID-19-and-the-China-Central-Asia-RelationshipCAP232.pdf>, accessed 14 August 2022.

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Another piece written around President Xi’s visit to Central Asia, this time for the Straits Times exploring the growing clout that China has within the region. Draws on ideas in the book of course, but also on the fact that travel is now possible once again so am able to get to the region a bit again.

China’s growing clout in Central Asia

A vacuum is developing as Russia’s war in Ukraine dismantles Moscow’s credibility and strength across the Eurasian heartland.

A broadcast of the meeting between Mr Xi Jinping and Mr Vladimir Putin on the sidelines of the Shanghai Cooperation Organisation summit in Uzbekistan. PHOTO: REUTERS

President Xi Jinping’s decision to pick Central Asia for his first foreign trip since the Covid-19 pandemic began reflects Beijing’s confidence that it is now the ascendant power in the Eurasian heartland. This was clearly evident from both Mr Xi’s tour of the region and the much-watched meeting between the Chinese leader and his Russian counterpart Vladimir Putin on the fringes of the Shanghai Cooperation Organisation (SCO) summit in Samarkand, Uzbekistan, last week.

The optics around Mr Xi’s visit underlined China’s rising star in the region. First, the grandiloquence was apparent in both Kazakhstan and Uzbekistan, the two countries he chose to visit.

The Kazakhs were clearly very pleased that theirs was the first country Mr Xi decided to visit. Kazakh President Kassym-Jomart Tokayev was at the airport to personally welcome the Chinese leader in fluent Mandarin and nothing was spared in the way of pomp and ceremony for the state visit, including the awarding of the Order of Altyn Kyran (Order of the Golden Eagle) to Mr Xi. The two leaders also toured a recently opened exhibit of archaeological artefacts that was displayed under the title “Kazakhstan-China: Dialogue of the Millennia”.

Not to be outdone, the authorities in Uzbekistan also put on a grandiose welcome for Mr Xi, with large groups of dancing people at the airport. President Shavkat Mirziyoyev could not match his Kazakh counterpart’s Mandarin skills, but he also awarded Mr Xi the country’s “highest friendship award”, the Order of Friendship.

The contrast could not have been more striking during Mr Mirziyoyev’s meeting with Mr Putin. Rather than the Uzbeks offering their visitor an award, it was the Russian leader who dished out a medal to his Uzbek counterpart. He awarded Mr Mirziyoyev the Order of Alexander Nevsky, which is given to foreign leaders “for major contributions to promoting friendly ties with Russia”.

The strains were also palpable during the bilateral meeting between the Chinese and Russian leaders, with Mr Putin openly acknowledging that China had expressed concerns and questions about the war in Ukraine. Mr Putin made similar comments during his separate bilateral meeting with Indian Prime Minister Narendra Modi, who was also in town for the SCO summit. Mr Putin’s comments separately to both leaders only served to emphasise the sense that neither China nor India was in fact very pleased with the Russian leader’s aggression in Ukraine.

But the differences should not be overplayed. In Beijing’s case, at least, the reality is that it has little desire to put Russia down or see Moscow lose in a conflict against the West. The net result of that would be to weaken Beijing’s support base in its larger geopolitical confrontation with the West, and would also provide more space for the West to focus more on China. The conflict in Ukraine provides a useful distraction at the moment.

China is certainly not happy with the global disruptions and costs generated by the conflict, but at the same time, it has little choice but to support Moscow as an important geopolitical partner in confronting the United States-led West.

Wider context

The wider context of the summit in the Uzbek capital was more interesting. Established in 2001 with Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Russia and China, the SCO has grown, in large part due to Chinese efforts, to become a multilateral organisation bringing together the leaders of around 40 per cent of the world’s population. It now includes India, Pakistan and Iran, with countries like Belarus and Turkey knocking at the door. An organisation often overlooked in the West (or in much strategic discourse), it is in fact emblematic of the growing influence that China has across a growing swathe of the central and eastern Eurasian heartland.

Mr Xi’s ambitious Belt and Road Initiative came from a desire to carve routes across this region, rewiring infrastructure and trading routes that used to lead to Moscow to instead be diverted to China. While the Kremlin was initially dismissive of China’s inroads into the region, Moscow now finds itself trying to co-opt or counteract Beijing by touting to the others what it can offer that China cannot.

Russia, though, is increasingly on the back foot among its neighbours, largely because of Ukraine. In the past couple of weeks, violence has erupted once again between Azerbaijan and Armenia over Nagorno-Karabakh in the Caucasus. A long-running border dispute between Kyrgyzstan and Tajikistan has also escalated again, leading to dozens of deaths as security forces on both sides shell and shoot at each other. This is occurring as trouble on the other side of Tajikistan, in the Badakhshan region, continues, and there has also been recent large-scale public unrest in Uzbekistan and Kazakhstan. Yet, Russia has been able to offer security support only in Kazakhstan, and even then in a limited way.

It is worth noting that China has not stepped into any of these issues. Beijing has little appetite to get stuck in such messy conflicts, recognising that it will struggle to try to resolve them, and will most likely only make enemies in the process. China would rather wait it out and let history take its course. But it will be increasingly difficult to adopt this passive stance as it becomes the biggest economic power across the region.

Few in the region will deny Russia’s importance, but many have become wary of Moscow in the aftermath of Mr Putin’s decision to invade Ukraine. There has been notable diplomatic pushback across Central Asia, and a growing sense of a need to develop other options, including building up ties with China.

A vacuum is developing – one which, logically, China can fill. Russia’s war in Ukraine is dismantling Moscow’s credibility and strength across the Eurasian heartland, and China is currently the most obvious beneficiary.

But Beijing has not chosen to do much with its growing clout.

Going forward, evading that responsibility might no longer be possible.

Raffaello Pantucci is a senior fellow at the S. Rajaratnam School of International Studies, Nanyang Technological University, and the author of Sinostan: China’s Inadvertent Empire (Oxford University Press, April 2022)

Almost up to date, now a piece for Foreign Policy about the importance of Central Asia in Chinese foreign policy in the wake of his tour to Kazakhstan and Uzbekistan.

Why Xi Jinping Chose Central Asia for His First Post-COVID-19 Trip

The region has long served as a testing ground for Beijing’s economic and foreign-policy ambitions and is becoming increasingly close to China.

China’s President Xi Jinping, Russian President Vladimir Putin, Uzbek President Shavkat Mirziyoyev and other participants attend the Shanghai Cooperation Organisation (SCO) leaders’ summit in Samarkand on September 16, 2022. (Photo by Sergei BOBYLYOV / SPUTNIK / AFP) (Photo by SERGEI BOBYLYOV/SPUTNIK/AFP via Getty Images)

Chinese President Xi Jinping’s decision to make Central Asia the site of his first foreign visit since the coronavirus pandemic began is an unsurprising one. The region is one where China can claim lots of foreign-policy successes and is full of countries that will not publicly criticize Beijing. As then-Lt. Gen. Liu Yazhou [1] put it in 2010, Central Asia ‘is a rich piece of cake given to today’s Chinese people by Heaven.’

Modern China’s relationship with Central Asia goes back to the end of the Soviet Union. Beijing inherited a number of things from the collapse of Moscow’s empire. One was a lesson on how not to dismantle a communist ruling governance structure; the other was a messy border adjacent to one of Beijing’s most sensitive regions. The second became the foundational issue for China’s relations with Central Asia.

For China, the end of the Soviet Union meant that it suddenly found itself bordering four new countries: Russia, Kazakhstan, Kyrgyzstan, and Tajikistan. (Turkmenistan and Uzbekistan also emerged, but they did not share borders with China.) The Soviet-Chinese frontier had always been remote and ill-defined, and with the emergence of these new states, there was a need to establish relations, define borders, and attempt to demilitarize what was a messy and ill-defined space. Chinese President Xi Jinping’s decision to make Central Asia the site of his first foreign visit since the coronavirus pandemic began is an unsurprising one. The region is one where China can claim lots of foreign-policy successes and is full of countries that will not publicly criticize Beijing. As then-Lt. Gen. Liu Yazhou[1] put it in 2010, Central Asia ‘is a rich piece of cake given to today’s Chinese people by Heaven.’

Modern China’s relationship with Central Asia goes back to the end of the Soviet Union. Beijing inherited a number of things from the collapse of Moscow’s empire. One was a lesson on how not to dismantle a communist ruling governance structure; the other was a messy border adjacent to one of Beijing’s most sensitive regions. The second became the foundational issue for China’s relations with Central Asia.

For China, the end of the Soviet Union meant that it suddenly found itself bordering four new countries: Russia, Kazakhstan, Kyrgyzstan, and Tajikistan. (Turkmenistan and Uzbekistan also emerged, but they did not share borders with China.) The Soviet-Chinese frontier had always been remote and ill-defined, and with the emergence of these new states, there was a need to establish relations, define borders, and attempt to demilitarize what was a messy and ill-defined space.

This led to the creation of the Shanghai Five grouping, bringing together the leaders of China, Kazakhstan, Kyrgyzstan, Tajikistan, and Russia to help define borders, establish what military presence would exist, what cross-border trade would look like, and how the relationships between China and these new states could develop.

But the entity grew far beyond its initial mandate, and it was so successful (at least from a Chinese perspective) that Uzbekistan was encouraged to join. With Tashkent’s ascension, the name changed and in 2001, it evolved into the Shanghai Cooperation Organization (SCO). Each member joined for their differing reasons. Beijing was always interested in the organization developing a strong economic aspect, something the others were more skeptical of. Ultimately, they all agreed to let it develop as a security grouping focused on terrorism, and it became the first international, security-focused, multilateral organization that China created.

This was a major step forward at a moment when China was still a relatively timid actor on the world stage. Here the country was trying to build something, when in many other contexts it appeared to be trying to still live by the maxim of ‘hide and bide your time.’ But within Central Asia, it was actually not surprising.

Since the collapse of the Soviet Union, China has sought to rekindle the idea of Silk Roads through Central Asia. At the time, the focus was to build pipelines and rail links from the region across China to the eastern seaboard to reach the booming Japanese market that was keen for Central Asian hydrocarbons. However, this rapidly shifted as China’s economy took off and needed more of these resources itself and people saw growing markets they wanted to connect with.

Beijing signed contracts in 1997 and was soon building pipelines in Kazakhstan to get its oil back to China (agreements were signed even earlier with Turkmenistan to access its rich gas supplies, but took much longer to actually implement). In the wake of his 1994 tour of the region, Chinese Premier Li Peng hosted meetings of Eurasian rail ministers to help develop links across the region and open up routes from China. This was a first for Chinese energy firms. Central Asia was a region where China was willing to try out new things.

As well as get access to the region’s rich resources, China’s ultimate goal in Central Asia was to help stabilize Xinjiang province. Beijing was worried about violence in the region, which had links across the border. Militant Islamists were a feature of the scenery in both the region and China—though the degree to which they were motivated by religion or their ethnic identity was difficult to determine. Large-scale violence took place in Central Asia as well as China throughout the late 1990s. China wanted cooperation and support from Central Asian governments to deal with this. As a result, strong and sensitive security links were developed.

But the longer-term answer to these problems, in Beijing’s analysis, was always going to be economic. A benefit of the collapse of the Soviet Union to Xinjiang in particular was a sudden opening up of what had been a landlocked region that had faced sealed borders. Chinese leaders at the time pushed the region to exploit these opportunities. As then-Chinese Foreign Minister Qian Qichen put it (as reported by Xinhua News Agency in March 1993), ‘the foreign minister urged all border regions [Xinjiang] to further improve their infrastructure and basic industries such as transport, energy and telecommunications to meet challenges they will face in years to come. Border trade must develop into mutual economic cooperation.’

This order was followed, and over the next few years, Xinjiang gradually increased its trading activity of goods with Central Asia. Products from across China would increasingly move through Xinjiang to Central Asia while raw materials and some agricultural products, in particular, would go into China. Much of this was via routes built by Chinese firms, often with Chinese bank loans supporting them.

This was something that was carried forward into Chinese President Xi Jinping’s time, when he decided in September 2013 to make Kazakhstan the site of his first speech laying out his big foreign-policy concept: the Belt and Road Initiative (BRI). In doing this, he was building off earlier visits by Li and later declarations by leaders like former Chinese President Jiang Zemin or former Chinese leader Wen Jiabao, who in 2012 declared Urumqi the ‘gateway to Eurasia.'[2]

Central Asia had always held an important place in Chinese thinking, and Xi decided to stamp his imprimatur on it and take it one step further by globalizing the entire concept. But the broader vision of the BRI was something that China had been talking about and doing in Central Asia since the late 1990s.

There was an additional hard security agenda at play as well. Although strong contacts and focus had helped manage the violent threat that China perceived from angry Uyghurs, there were still risks. In the wake of rioting in Xinjiang in 2009, violence seemed to escalate, coming to an embarrassing head in 2013 when an attack was perpetrated in Tiananmen Square and then a year later when Xi visited Xinjiang in 2014, only to be met by an attempted suicide bombing at Urumqi’s train station. In their wake, an already tight security vice clamped down further, and there was an increasing push by China to establish clearer visibility on security threats in the region.

This led to the creation of a People’s Armed Police (PAP) permanent presence being established in Tajikistan along the top of the Wakhan Corridor—the thin strip of Afghanistan which reaches out and touches China, separating Tajikistan from Pakistan. (It was initially developed as a border between the rival Russian and British empires). This was China’s first-known military base outside its borders; it has since more publicly established a naval base in Djibouti and is currently exploring opportunities in other places as well.

The exact dates of the establishment of the base are unclear. From my own research around the region, I started to hear rumors as early as 2012, though it was unclear whether this was just Chinese soldiers patrolling, people misinterpreting what they thought they had seen, or something else. What is clear is that as word of it started to spread in the mid-2010s, Russia started to become agitated. But its public anger was directed more toward Tajikistan than China—bristling at the fact that a Collective Security Treaty Organization partner would allow a foreign base on its territory without informing its partners.

The Tajikistan episode highlights a long-standing, simplistic analysis that is often thrown around regarding this region. There are always dark rumors that Beijing is trying to oust Moscow from the region and that heated competition behind the scenes could escalate. There is doubtless some displacement happening, but the truth is that for both of them, competition over this region is far less relevant than the important geostrategic support they provide each other in their collective confrontation with the United States. Russia has noted it is losing ground and seeking to strengthen its position in creative ways by demonstrating what it can offer, but it is unlikely to do this in a way that would be interpreted as running counter to Chinese interests.

The region is a propitious one for Xi to make his first foreign foray in over two years. He is visiting a region where China has consistently tested out new foreign-policy ideas, where the local governments will go to great lengths to ensure the visit goes smoothly, and where there is an appetite for economic cooperation on all sides.

From a domestic Chinese perspective, it means Xi has had an easy visit where he rubs shoulders with some of the world’s largest powers (like Russia and India), can showcase his foreign-policy vision (the Belt and Road Initiative), and celebrate China’s contribution to the world of international multilateral organizations (the Shanghai Cooperation Organization).

Although the SCO is widely derided in the West, it has only grown and expanded in remit during its 21-year existence, and it now encompasses almost 40 percent of the world’s population. It is an organization that has important Western allies (like India) as members, reflecting its appeal beyond the club for anti-western authoritarians that it is sometimes described as. For many of its members, the SCO is an expression of the ‘more just’ international order that senior Chinese diplomat Yang Jiechi[3] described to the Russian ambassador to Moscow. It is showing the world that there are options out there beyond the western-dominated order that was created in the wake of World War II.

Central Asia has always held an important place in Chinese strategic thinking. It is a space where China has consistently tested out new ideas and has a web of relations and interests that are tied to some of its most sensitive domestic national security concerns. It is now also giving Xi the final step of his victory lap ahead of his likely third-term coronation at the 20th National Party Congress.

[1]: https://www3.nd.edu/~pmoody/Text%20Pages%20-%20Peter%20Moody%20Webpage/AdvanceTowardWest.pdf

[2]: http://english.mofcom.gov.cn/article/newsrelease/significantnews/201209/20120908320465.shtml

[3]: https://www.theepochtimes.com/mkt_app/china-and-russia-vow-more-just-international-order-ahead-of-putin-xi-meeting-top-ccp-diplomat_4727591.html

Almost caught up on re-publishing my writing here after a long period of delay, this time a piece for Nikkei Asian Review on the Shanghai Cooperation Organization (SCO) Summit pointing to the optics of the session as one of the key attractions to some of the members.

China and Russia to showcase alternative world order at SCO Summit

Samarkand gathering demonstrates sanctioned states still have allies of substance

Xi Jinping is set to attend as he makes his first international trip since the beginning of the COVID pandemic.   © AP

Raffaello Pantucci is a senior fellow at the S. Rajaratnam School of International Studies in Singapore and author of “Sinostan: China’s Inadvertent Empire.” (Oxford University Press)

As the West advances a world order constructed around institutional structures developed after World War II, those leading the charge against the West are embracing their own institutions to demonstrate their options.

This week, the Shanghai Cooperation Organization will hold its annual heads of state summit in Samarkand, Uzbekistan, bringing together Russia, China, Iran and a host of other nations. The narrative these countries want to advance is that there is another order out there beyond the Western-imposed one, as thin as it often seems on closer inspection.

This year’s summit is attracting more interest than previously as Chinese President Xi Jinping is set to attend as he makes his first international trip since the beginning of the COVID pandemic. The fact that he has chosen Central Asia and an SCO heads of state summit to do this, even before confirmation of his third term as Communist Party leader at the party’s congress next month, is a reflection of the importance of the SCO to Beijing.

The exact agenda of the summit is still being set, but it is likely that Afghanistan, new members and connectivity will be key items.

Afghanistan has been a perennial issue on which the SCO has failed to deliver. With the full accession of Iran to the group next year, Afghanistan will be almost entirely engulfed geographically by full SCO members, save for uncompromisingly neutral Turkmenistan, but Iran has been joining SCO summits for a while and Turkmenistan will be there this year too.

Taliban fighters in Kabul celebrate the first anniversary of the withdrawal of U.S.-led troops on Aug. 31: Afghanistan has been a perennial issue on which the SCO has failed to deliver.   © AP

Notwithstanding the bloc’s clear interest in resolving Afghanistan’s long-standing issues, the organization has done nothing to help it, nor has it come together effectively to deal with the problems emanating from the country.

It is unlikely we will see much material progress this time either amid continuing uncertainty about the longer-term viability of the Taliban authorities, as well as concerns about their mixed attempts to rein in militant groups.

The answer from Uzbekistan’s perspective has been to seek ways of trying to engage with the new Taliban authorities. It has been keen for some time to push a narrative of greater connectivity across Eurasia.

Rather than simply piggyback on China’s Belt and Road Initiative vision, Tashkent has sought to instead cultivate a vision of connectivity between Central and South Asia, to both tap markets and seek escape from the region’s landlocked nature.

But these practical issues are side stories to the main narrative that will emerge from the Samarkand summit.

Attendees are expected to include the leaders of Turkey, Azerbaijan, Armenia, Mongolia, Iran and Belarus, which are each seeking to highlight their inclusion and links to the SCO. Rumors suggest Syrian President Bashar al-Assad may appear too.

In joining with the leaders of existing members Russia, Tajikistan, Kyrgyzstan, Kazakhstan, Uzbekistan, India, Pakistan and China, they will be part of a constellation of powers that for various reasons, and to different degrees, have tensions with the West.

For all of these powers, there is a pleasing visual utility to being present at a colloquium of such stature, representing at least a third of the world’s population and with no Westerners present. They can all show that notwithstanding the sanctions or sanctimony thrown at them by the West, they have allies of substance who welcome them with open arms.

There is no doubt that the SCO is nowhere near capable of competing with entities like the Group of Seven, NATO or the EU, but this is not the point. The organization is one that marches to its own beat, has only grown in its 20-plus years and continues to enlarge the volume of topics that it engages on.

It has helped normalize China’s role as a major player on the Eurasian continent while also providing an opportunity for Chinese diplomats, officials and business executives to engage regularly at multiple levels with their neighbors and a growing range of countries. Even supposed Western allies like India and Turkey see value in showing up for the meetings to soak in a non-Western-led order that they can appreciate being involved in.

There is no doubt that the members have little trust in one another, and the international order they are building is flawed. But at the same time, the interesting question is whether this matters to them.

The optics are good enough as the summitry gets positive play in other parts of the world. The event presents the impression, with some apparent foundation, that the democratic order advanced by the West is not the only achievable structure out there.

A short piece for the Financial Times looking forwards on how terrorism might evolve and melt into the wider greater great power conflict that currently consumes international affairs.

Terrorism fused with great power conflict may be the west’s next challenge

Some countries such as Iran persist in using armed proxies to advance their goals

Veteran al-Qaeda leader Ayman al-Zawahiri was killed by a drone strike on a safe house in Kabul

The writer is senior fellow at the S Rajaratnam School of International Studies

Terrorism is the past and the future is great power conflict. In a moment of nearly perfect public narrative, the death of al-Qaeda leader Ayman al-Zawahiri was almost entirely overshadowed by the visit of US House Speaker Nancy Pelosi to Taiwan. Yet the risk is that we miss how the two problems can become entangled and make each one worse.

As national security agencies turn their focus to states, they will inevitably deprioritise terrorist threats. Yet the shift is unlikely to be as tidy as this suggests. Even more worrying than the risk of paying less attention to terrorist groups is the potential for the two threats to interact with each other. In a worst-case scenario, great power conflict might make global terrorism worse.

The use by states of terrorist groups as proxies is not new. Iran has a long history in this regard. Hizbollah in Lebanon is the largest of numerous proxies that Iran has used to attack its adversaries. In recent years, Tehran has become more overt about using terrorist tactics directly itself.

In July 2018, an Iranian diplomat was arrested in Germany alongside a pair of Iranians in Belgium for planning to bomb a high-profile dissident rally in Paris. Rudy Giuliani, Donald Trump’s former lawyer, and several British MPs were due to attend the event. This month, the US Department of Justice charged a member of Iran’s elite Revolutionary Guards with directing agents in the US to murder John Bolton, Trump’s national security adviser.

Tehran may be the most blatant about it, but it is not the only power to use such groups or engage in such plots. Moscow’s hand can be seen behind some extreme-right terrorist networks in

Europe. India detects Chinese intelligence playing in the shadows of some of its domestic conflicts. India and Pakistan have honed the art of manipulating such groups against each other, and sufunderlying fered the blowback as a result. Furthermore, all these powers see supposedly all-powerful western intelligence agencies lurking behind various networks and plots that they perceive as threats.

The second risk comes from how the war on terrorism has been pursued around the world. As the west grows frustrated with longstanding counterterrorism campaigns in distant places, resources have been pulled back or withheld. Clearly, some capability is retained, but in certain places a vacuum has emerged and Russia has frequently filled it. Private security group Wagner has stepped in to bolster local authorities and launch offensives in the name of counter-terrorism. It is questionable how much this helps. It often appears as though these campaigns exacerbate the anger that creates the terrorist groups in the first place.

Mali is the most obvious example, with the situation escalating to the point that the country’s government is now accusing France – a previous leader in providing counter-terrorism support – of working with jihadis. At the same time, Wagner is celebrated in the streets of Bamako, the capital. But Wagner forces have also been deployed in the Central African Republic, Libya and Mozambique, all places suffering from terrorism that the west has failed to address or is not focusing on.

According to one view, it is a relief to have someone else deal with such problems. But the risk is that they are only making the situation worse, or that they may try to manipulate groups on the ground to their own ends, with little regard for any backlash that might strike the west. Or, this could be their intention.

The other side to this shift in attention is that taking pressure off terrorist groups may end up with no one focusing on them. We do not really know whether the reason we are now seeing a lowered terrorist threat is because the threat has gone down or because of the pressure that was on it.

The exact nature of how threat and response play off against each other is poorly understood. But just because we have stopped worrying about a problem does not mean it no longer exists. It is hard to say with confidence that any of the underlying issues that spawned the international terrorist threat have been resolved. Some analysts think they have grown worse.

Twenty years of conflict have changed the international terrorist threat that we face. But it has not gone away, and in a nightmarish twist it may start to fuse with the great power conflict we find ourselves locked into. The world has a habit of throwing multiple problems at us. In a growing world of threat, disinformation, proxies and opacity, terrorist groups offer a perfect tool. The west may one day rue the fact that it no longer has the relative clarity of the early years of the war on terror.

As the anniversary of the Taliban takeover of Kabul took place, did a bunch of work around what China has been doing and achieved during this first year. This first piece is for Nikkei, with a few more coming.

Afghanistan shows the limits of China’s Belt and Road

Despite its engagement with the Taliban, Beijing is unable to reach its goals

Chinese Foreign Minister Wang Yi, right, stands next to Mullah Abdul Ghani Baradar, acting deputy prime minister of the Afghan Taliban’s caretaker government, in Kabul on Mar. 24: There is little trust in China on the Taliban side.   © Xinhua/AP

Raffaello Pantucci is a senior fellow at the S. Rajaratnam School of International Studies in Singapore and author of “Sinostan: China’s Inadvertent Empire.” (Oxford University Press)

A decade ago, Peking University international studies professor Wang Jisi set the conceptual foundation for what would become the Belt and Road Initiative with an essay called “Marching Westwards.”

In it, Wang decried the excessive focus of Chinese foreign policy on Washington and the Asia-Pacific region, highlighting instead the opportunities and threats along China’s western land borders.

Billions of dollars of BRI plans and projects later, though, China remains as obsessed with Washington and the Asia-Pacific as ever. At the same time, the limits of its foreign policy capabilities are coming into stark relief in Afghanistan.

Among Afghanistan’s neighbors, none have engaged more visibly with the Taliban regime that took power a year ago than China.

Its Kabul embassy has led Beijing’s diplomatic push, which has helped get Taliban officials included in various regional forums. Chinese institutions have extended millions of dollars in aid while the Ministry of Foreign Affairs in Beijing has been a leading voice in calling for Washington to release $7 billion in frozen Afghan central bank funds. In general, Beijing rarely wastes an opportunity to condemn the abrupt withdrawal of U.S. forces last year and contrast it with China’s own contributions.

Yet all of this positive engagement has not advanced the goals Beijing actually wants to achieve.

Beijing hoped that the Taliban would form a broad-based government whose inclusiveness would support regime stability, but instead a single faction dominates the new administration.

The Taliban has failed to hand over Uyghur fighters as Beijing wanted or apparently even to curtail their activity within the country. Efforts to rein in militant groups seeking to undermine the Pakistani government, such as Tehreek-e-Taliban Pakistan, have been limited. Indeed, the TTP appears to have offered training to Balochi separatists and other militants who are targeting Chinese interests in Pakistan. On top of that, the Taliban has confounded expectations by actively courting New Delhi.

The one lever Beijing has to play in Afghanistan is economic investment, but so far, it is not clear that it quite knows how to use that to advance its goals. There has been a surge of Chinese businessmen and traders going into Afghanistan, but this is most likely simply the result of entrepreneurs sensing an opportunity amid the decline in violence since the Taliban ousted the previous U.S.-backed government.

Growth in direct trade has been limited so far, and China’s big state-owned enterprises are treading carefully. The complete lack of infrastructure or managerial capability on the Afghan side limits their ambition, alongside concerns about what they might be getting themselves into.

In fact, economic activity may prove to be a millstone for Beijing. China could end up finding that the perceived economic engagement that it could offer Afghanistan will be seen as a silver-bullet solution to the country’s problems, raising expectations of what China can offer the country beyond what is actually possible.

The Belt and Road Initiative was always an ill-fit for Afghanistan. Most BRI maps showed routes running westward from China going around the country.

What BRI activity in Afghanistan could look like now is even harder to imagine at a moment when the wider narrative around the program is turning to ensuring returns on investment and focusing on viable opportunities. The most obvious link would be to build connections between the China-Pakistan Economic Corridor and Afghanistan, but this would require better relations between Kabul and Islamabad.

It is also clear that there is little trust in China on the Taliban side. Some Taliban factions are resisting any moves to curtail Uyghur militants who have given the movement support. Some are concerned about Beijing’s closeness to Islamabad. Incoming Chinese traders are often seen in a suspicious light too.

There may be a lot of noise around the potential opportunities China offers, but this is likely increasingly matched by skepticism about how much might actually materialize.

All of this is quite a turnaround for Beijing. Prior to the Taliban takeover, China enjoyed a far more propitious environment and government in Kabul.

While it was clear that trust levels were low and declining in the months before the government’s fall, there was at least a counterparty Beijing could deal with which would target militants it did not like.

Afghanistan used to be a place where China could run joint projects with India, the U.S. and others. Now instead, Afghanistan is increasingly seen through the light of great power competition as merely another place where Washington and its proxies might undermine Chinese interests.

The poor hand China has to play was most vividly articulated recently by the U.S. drone strike that killed al-Qaida leader Ayman al-Zawahri. To some degree, China had previously been able to count on Washington acting as a backstop for problems in Afghanistan, with U.S. forces even launching airstrikes on the Taliban’s Uyghur allies as a common enemy.

The U.S. still has enemies in Afghanistan and, as was seen with the death of al-Zawahri, the capability to do something about them, even in Beijing’s backyard, while China lacks these same kinetic tools and capabilities to go after its adversaries.

A decade on from the birth of the BRI concept, Afghanistan highlights Beijing’s difficulty in using its development model as a foreign policy concept to be replicated around the world. It also illustrates the limits of Chinese power projection and its ability to generate change on the ground abroad.