Posts Tagged ‘Kazakhstan’

New piece for the Lowy Institute of Australia’s Interpreter blog, drawing on a batch of Eurasian travel from the end of the year.

Central Asian connectivity: Going beyond China

Central Asia is experiencing a connectivity boom, with China’s ‘Belt and Road Initiative’ the most dominant vision for the region. Yet this dominance has started to worry Central Asian powers, leading to the emergence of a new narrative – that of diversification. With China becoming the region’s most influential economic actor, steadily increasing its role in local security and politics, Central Asian powers are seeking to broaden their engagement and bring to life a long-advocated ‘multi-vector’ diplomatic approach.

I was fortunate enough to spend the end of last year travelling the Eurasian heartland, with stops in Ashgabat, Astana, Beijing and Islamabad. It was a variety of different trips, covering different projects, but one overriding message about China shone through at every stop: the expansion of Chinese investment into its immediate neighbourhood is having a game-changing impact on the ground. This is positive, but it is also worrying those on the ground and is changing the way that Beijing is thinking about its external investments.

Talk to any Central Asian foreign policy planner and you will almost invariably hear about a ‘multi-vector’ approach to foreign relations. Sitting at the centre of Halford Mackinder’s ‘World-Island’, Central Asians envisage themselves as commanding vast power from the heart of the Silk Road. Yet it’s not always clear the degree to which they actually control the options on the table before them, or whether these great powers move around them to their own tune. Nowhere is this balance highlighted more acutely than in regards to foreign investment. Ideally, Central Asian states would want a multitude of options on the table before them, but while their FDI figures are more diverse than is sometimes given credit for, it is clear that Chinese money is increasingly the principal source.

This is increasingly the story across Eurasia, where everyone is both clamouring for Chinese investment and finding themselves uncertain about relying too heavily on a single investor. In Beijing, officials at state policy banks and private companies worry about the countries they are investing in and the fact they do not know the environments, yet at the same time find themselves under great pressure to deliver on Xi Jinping’s vaunted ‘Belt and Road Initiative’ through commercially viable projects. This leads them to trying to puzzle out how to deliver these projects effectively and seek partners to share the burden.

For landlocked Central Asians, however, the story is a different one. Trapped by geography between a sanctioned Russia, a still-recovering Iran and the disputed Caspian, they are only able to find China as a substantial and long-term investor and partner. India has tried and thus far not delivered, and while they discuss with Pakistan, Europe, Korea and Japan, projects as big as China’s have been slow in arriving. In contrast, Beijing signs contracts and infrastructure appears.

But all are aware of the dangers of having a single customer. In Ashgabat, they link Turkmenistan’s most recent push on breaking ground with the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline and alternate energy partners to a sharp slowdown in Chinese interest in their gas, as China’s economy slowed down. In Astana, President Nursultan Nazarbayev links Kazakhstan’s Nurly Zhol (Shining Road) economic vision to the Chinese Silk Road Economic Belt, in that the local strategy is intended to build on the Chinese infrastructure, showing how they are making the Chinese investment work for them.

But they also discuss the many other partnerships they are developing. Kazakhstan is planning a consulate in Bandar Abbas, the Iranian port city that provides Central Asia a different route to international markets. This was reinforced in Astana, where senior officials spoke of ‘connectivity being the number one point for Kazakhstan’ and that the country ‘will look in any direction with no discrimination’. At the same time, according to the Kaznex Invest Chairman Borisbiy Zhangurazov, China is set to undertake around 50 investment projects in Kazakhstan worth more than $24 billion, an amount almost equal ($26 billion) to all US investment in the country in the past 10 years.

In Pakistan, people worry about the degree to which they are becoming dependent on Chinese loans. Figures published earlier this year indicate that in Q1 FY17, net loan and FDI inflows from China were $1.1 billion (of which $700 million was a loan). Total FDI inflow is down from $192 million a year ago to $91 million this year. Trends that worry people who on the ground express a high level of concern about the transparency of the projects being undertaken as part of China-Pakistan Economic Corridor and the excessive reliance on Chinese investment.

What is interesting about Pakistan, however, is that it is clear that China is finding itself mired in as many problems as others have previously experienced in the country. As a Dawn editorial flagged at the start of this year, ‘for China, the year 2016 was when the country began to discover the complexities of doing business in Pakistan’. Beijing’s answer is to encourage others to become involved to share the burden. Russia is seeking a role. The UK is interested (an idea my institute is currently working on). Other parts of the Belt and Road, such as Kazakhstan, are equally keen. During my recent visit to Astana, senior figures intimated they were contemplating even going so far as opening a consulate in the China-Pakistan Economic Corridor’s crown jewel, the port of Gwadar in Baluchistan.

Connectivity remains the keyword in Eurasian geopolitics. Talk of Silk Roads continue to dominate regional conversations. Yet diversification will be essential to realise the visions that are being advanced. It will only work if it is a collective project, something even Beijing appears to be beginning to consider as well.

Another piece for Longitude, the Italian’s Ministry of Foreign Affairs magazine. Part of a special edition on borders it looks at China’s western land relations, building on the work I have been doing on this subject as part of the China in Central Asia project. It is done in conjunction with Sarah Lain, my new co-editor on the site and RUSI colleague.

Related to Syria, I spoke to La Presse about Syrian Chechen leader Omar al Shishani and Newsweek about threats to aviation.

Creeping Encroachment, China’s Western Surge

While many are concerned with territorial disputes in Southeast Asia, the fact that China is quietly expanding its presence westward often goes unnoticed. Beijing has now become a huge player in Central Asia’s Great Game.

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A PDF of the article can be found here: Longitude China Central Asia Borders

A kick-off to the new year with Alex on China-Central Asia with an overview for Jamestown Foundations’ China Brief. This is part of our ongoing project looking at China in Central Asia about which we have a number of large publications coming this year.

China and Central Asia in 2013

Publication: China Brief Volume: 13 Issue: 2
January 18, 2013 05:10 PM Age: 1 days

China’s Gateway to Central Asia, Khorgos, picture from here

In the last two years, China has emerged as the most consequential outside actor in Central Asia. As we have described in other writings, China’s ascension to this role has been largely inadvertent [1]. It has more to do with the region’s contemporary circumstances and China’s overall economic momentum than a concerted effort emanating from the Zhongnanhai. The implications for United States and NATO policy are nevertheless profound. Not only have the geopolitics of Eurasia shifted in ways little understood in Washington and Brussels, but the socio-political and physical undergirding of the post-Soviet space from Aktobe to Kandahar is being transformed.

Official Chinese policy in Central Asia is quiet and cautious, focused on developing the region as an economic partner with its western province Xinjiang whilst also looking beyond at what China characterizes as the “Eurasian Land Bridge…connecting east Asia and west Europe” (Xinhua, September 4, 2012). Chinese state-owned enterprises (SOEs) are active throughout the region on major infrastructure projects, but it is not clear how much they are being directed as part of some grand strategy as opposed to focusing on obvious profitable opportunities. The Shanghai Cooperation Organization (SCO), the main multilateral vehicle for Chinese regional efforts and reassuring engagement is a powerfully symbolic, but institutionally empty actor. Many smaller Chinese actors—ranging from shuttle traders to small-time entrepreneurs to schoolteachers and students posted to Confucius Institutes throughout the region—are the gradual vanguard of possible long-term Chinese investment and influence.

China’s engagement in Afghanistan is growing as U.S. and Western involvement wanes. Whether Chinese companies and diplomats remain in the event of a surge in violence and country-wide destabilization is a question that will be answered post-2014. For the moment, however, Chinese SOEs Metallurgic Corporation of China (MCC) and Jiangxi Copper are invested heavily in one of the world’s biggest copper mines at Mes Aynak (just southeast of Kabul) while China’s energy giant China National Petroleum Corporation (CNPC) is pumping oil in Afghanistan’s northern Amu Darya Basin. Currently, the firm is trucking the oil across the border to refineries in Turkmenistan, although plans are in place to develop a refinery on the Afghan side of the border. Plans also are moving forward for the construction of another string of the Central Asia-China pipeline from Turkmenistan to Xinjiang to pass through northern Afghanistan (Xinhua, June 6, 2012). CNPC and its subsidiaries already have cut deals with local authorities to ensure security in their operating areas. Should Afghanistan once again be split between a Pashtun south and a Tajik and Uzbek north, Chinese companies may have the relationships to continue operations under the protection of a new Northern Alliance. It seems that plans for the natural gas pipeline include distribution to local communities in northern Afghanistan [2].

Next door, at the source of the gas in Turkmenistan, CNPC and the Chinese government have carved out for themselves an envious position as one of the most influential outside players in Ashgabat, at least when talking in energy terms. The Central Asia-China pipeline, one of the most impressive feats in energy infrastructure construction, was completed in 18 months and now is slated to bring 60 billion cubic meters (bcm) of natural gas per year to China in the coming decades (Platts, August 31, 2011). These immense volumes—four times that planned for the Trans-Anatolian pipeline from the Caspian to Southeastern Europe—may require up to three different routes for the project’s separate strings. This route planned to traverse northern Afghanistan will offer an alternative to the more costly route through Uzbekistan and Kazakhstan [3].

Turkmenistan’s main energy and foreign policy priority at the moment is the realization of the Turkmenistan–Afghanistan–Pakistan–India (TAPI) pipeline southeast across Afghanistan to markets in Pakistan and India. During the project’s recent international road show, CNPC and Sinopec reportedly expressed interest in the project, even if it was unclear in what capacity [4]. For the sake of diversity, Turkmenistan’s leadership would almost certainly prefer non-Chinese companies investing in TAPI. During the Petrotech conference in New Delhi in October 2012, the acting Minister of Oil and Gas Industry and Mineral Resources Kakageldy Abdullaev made overtures to Indian firms to come and invest in Turkmenistan (Business Standard, November 27, 2012).

Further downstream in Uzbekistan, the government started to pump its own gas down the pipeline traversing its territory in September. The move was part of a 2010 agreement signed between the two countries for Uzbekneftegas to send some 10 bcm per year to China (Platts, September 24, 2012). In historically energy-poor Tajikistan, CNPC partnered with Total to purchase a share each of Tethys find in Bokhtar, at the eastern end of the Amu Darya Basin (Bloomberg, December 21, 2012). In Kyrgyzstan, a Chinese firm also has agreed to build a refinery in the Chui Oblast whilst acting Kyrgyz Economy Minister Temir Sariyev reported “China is interested in the construction of Kazakhstan-Kyrgyzstan-China oil pipeline and a gas pipeline from Turkmenistan via the south of Kyrgyzstan” (Azer News, December 4, 2012; Central Asia Online, April 27, 2012).

Beijing and Chinese companies have long cultivated a close partnership with Kazakhstan as a regional power and source of valuable resources (“Sino-Kazakh Ties on a Roll,” China Brief, January 18). While Western companies suffer in their attempts to bring offshore projects online in Kazakhstan’s Caspian waters, China steadily has become the largest outside energy investor onshore. China’s sovereign wealth fund China Investment Corporation (CIC) is set to buy into Kazakhoil Aktobe, Kazakhturkmunai and Mangistau Investments—a deal which according to some estimates will give Chinese companies control over 40 percent of Kazakhstan’s oil production (TengriNews, January 8). The Kazakhstan-China oil pipeline—completed in a number of stages throughout the last decade—is slated to operate at its full capacity of 20 million tons per year (tpy) by 2014 (EnergyGlobal, November 9, 2012).

Nevertheless, this rosy picture has another side. According to analysts spoken to in Astana, the fields to which China has access are older ones that have been exploited for years. Furthermore, local Kazakhs with whom the authors spoke do not have particularly positive perspectives on their Chinese employers. At a grander scale, the slow progress with the Kazakh side of the free trade zone at Khorgos on the border between the two countries just northeast of Almaty is further evidence of these tensions. Analysts and officials asked either side of the border have vague responses about delays with the site. Currently, the Chinese side teams with new markets, corporate offices, hotels and customs buildings, but the Kazakhstani side still has some way to go in bringing its infrastructure on par with its neighbor [5]. Khorgos is the crossing point from China into Central Asia for three developments: a Central Asia-China pipeline from Turkmenistan; a new highway that is under construction linking Almaty, Astana, the Caspian shore and Russia; and a second train connection between China and Kazakhstan that opened last month (Xinhua, December 22, 2012). A key component of China’s so-called “New Eurasian Land Bridge,” the Khorgos passage is one of the main arteries in the chain connecting China’s eastern coast with Western Europe through Russia and the Black Sea-Caspian region.

These difficulties are even more evident in Kyrgyzstan where there have been a spate of clashes between locals and Chinese workers. In October, reports emerged from a gold mine managed by the Zijin Mining group in Taldy-Bulak that locals had threatened to burn down a company office after the company allegedly was killed a local horse (RIA Novosti, October 22, 2012). Then, in January, a fracas broke out between Chinese and local workers after Chinese workers allegedly caught a local stealing. In the ensuing clash some 100 people were involved and 18 Chinese workers were injured, two seriously (Xinhua, January 11). Whilst Kyrgyzstan is a notoriously difficult environment for foreign investors with many other nation’s countries also experiencing problems, China seemed to respond with particular attention this time around. In response to the first incident, the head of the Chinese Chamber of Commerce in Kyrgzystan, Li Deming, wrote an op-ed stating “Kyrgyzstan still a mine field for investors” (Global Times, October 28, 2012). In December, during an SCO Prime Ministers’ Meeting in Bishkek, Premier Wen Jiabao met with his counterpart and reinforced this message encouraging “Chinese enterprises to expand investment in Kyrgyzstan” (Xinhua, December 4, 2012).

A much larger, potentially strategic, threat to Chinese investments in Central Asia, however, lies in Russian President Vladimir Putin’s proposed Eurasian Union. Most recently announced in October 2011, when President Putin laid out his plan in an article in the Izvestia newspaper, the notion has its roots in the Customs Union that was first proposed in the 1990s by President Nazarbayev of Kazakhstan. While slow to accept the idea, President Putin now has embraced the idea wholeheartedly to create a regional organization that would coordinate “economic and currency policy” between the countries of the former Soviet Union (Reuters, October 3, 2011). Currently, the Union is made up of Kazakhstan, Belarus and Russia, but, in Central Asia, both Tajikistan and Kyrgyzstan have expressed an interest in joining. What is not entirely clear is whether this is something that is taking place as a result of Russian pressure or whether this is a choice. In his annual statement to the Duma in December 2012, President Putin spoke of tightening requirements for the citizens of the Commonwealth of Independent States (CIS) to enter Russia with passports rather than simply ID cards as is the case at the moment. He left open the caveat, however, that free access would continue to be allowed for citizens of countries members of the Union (RIA Novosti, December 12, 2012). The potential implication to remittance-reliant Kyrgyzstan or Tajikistan is clear, creating an instant obstacle for the masses of young men from those countries who work in Moscow to send money back home to their families.

The issue for China is what impact this will have on China’s trade relationship with these countries. In particular, Kyrgyzstan is one of the key routes for Chinese goods into the region and for onward re-export—Ambassador Wang Kaiwen, China’s man in Bishkek, places the figure at $5 billion per annum. In commenting, Ambassador Wang also placed Kyrgyzstan’s trade with China in a broader context. As he put it, “trade between China and Kyrgyzstan is $5 billion, and China’s foreign trade is $3 trillion…so this [joining the union] is not a big problem” (Knews.kg, November 30, 2012). The point is that this is a relatively limited problem for China, but the repercussions in Bishkek are uncertain and potentially more substantial.

In many ways, this uncertainty places China’s 2013 in Central Asia in its appropriate context. It is increasingly clear that China is the most consequential regional actor that is making all the right moves to consolidate its interests. The regional impact and the reactions of both the Central Asian states and Russia to this growing preponderance remain to be seen. For Beijing, the relationship is an important one if they are to effectively develop Xinjiang, but their growing perceived dominance is something that is met with ambivalence regionally where nations like China’s money, but worry about its dominance. The dragon has clearly risen in Central Asia, but how the region will decide to respond still remains unclear.

Notes:

  1. Raffaello Pantucci and Alexandros Petersen, “China’s Inadvertent Empire”, The National Interest, October 24, 2012,chinaincentralasia.com/2012/10/24/chinas-inadvertent-empire/
  2. Author interviews, November 2012
  3. Author interviews, October 2012
  4. Author interviews in Ashgabat, September 2012
  5. Author observations at Khorgos, April 2012; and interview January 2013

Back where this is accessible so catching up on old posting. This is a new piece based on recent travels in Kazakhstan, part of my ongoing project on China in Central Asia with Alex. On a related topic, was quoted in the UK’s Daily Telegraph about Zhou Yongkang’s visit to Afghanistan.

Chinatown, Kazakhstan?

September 20, 2012

By Raffaello Pantucci and Alexandros Petersen

Is there a Chinese restaurant in town?  The front desk clerk at our hotel answered that he knew of none in the city and could only direct us to a Japanese-Korean establishment, complete with waitresses in kimonos and chopsticks sanitized in Seoul.  While the food was good, it wasn’t what we were looking for.

Aktobe is our latest stop through the region tracking China’s influence in Central Asia.  We had heard this was the oil town where China National Petroleum Corporation runs the show and we wanted to try to get a sense of China’s role on the steppe.  Local Kazakhstani’s have nicknamed the city ‘Chinatown’ – a reflection of the size of the Chinese population. But, how could there be no Chinese restaurants in Chinatown?

The answer of course, is that there are some, though they maintain a low profile. One local Chinese worker mentioned his favorite. It’s ‘not high quality’ he said, as though our palates would only accept the most refined food. It was as we were wandering around to see Aktobe’s brand new, immaculate Russian Orthodox Church that we noticed a building with a big CNPC logo atop and the word ‘restaurant’ in Russian.  Right around the corner from our hotel, it was obviously something our concierge had never noticed. Inside a surprised waitress from Hubei pointed out the menu was only in Kazakh and Chinese. ‘没关系’ (‘never mind’) we responded with a smile to the empty dining hall.

Next door was further evidence of China: a Bank of China office. Walking in to ask whether a UnionPay card would work here, a Kazakhstani receptionist informed us in fluent Chinese that these cards could not be used here. When asked whether this was a bank only for companies, she shook her head – it was open for retail customers too, but had no capability to manage UnionPay transactions (UnionPay is the Chinese debit card system).  It was obviously a bank for local Chinese.

Chinese companies and foreign workers in Kazakhstan do not advertise their presence.  A vast country with long stretches of sparsely inhabited territory and a relatively small population, many Kazakhstani’s look warily at their overpopulated neighbor to the east.  In 2009 plans for a Chinese agricultural firm to lease parcels of land for soybean production were met with vehement nationalist protests.

Stories abound of low pay and bad working conditions at Chinese companies.  There is evidence that they import unskilled laborers from China to fill jobs that could go to locals; they even advertise for chefs that speak Chinese.  But back in Astana, Kazakhstan’s gleaming capital, energy analysts point out that nobody really knows what occurs on Chinese work sites.  Kazakhstan’s government is very strict about enforcing ‘local content’ quotas.  Local rumours may in fact be just that.

Nevertheless, in Aktobe it is quite clear that CNPC is the big player in town.  A new hotel and office complex houses a number of CNPC-AktobeMunaiGas subsidiaries, with a bustle of smart Chinese professionals coming in and out for meetings. Visitors from Beijing use the lobby bar to check emails, while colleagues take cigarette breaks in front of the building. Smaller offices can be found dotted around the city and a local sanatorium on the outskirts has apparently been turned into a rest home for the CNPC workers in from the field.

With no pagodas or chinoiserie to draw attention, relative to most American or European cities, the overt Chinese presence in Aktobe is minimal.  One has to go looking for it.  It therefore says something about the watchfulness of ordinary Kazakhstanis that Aktobe has earned its sobriquet.

A new big think piece for The National Interest that has already been re-posted on The Atlantic’s site under the title ‘The New Great Game: Development, Not Domination, in Central Asia.’ It is another piece to emerge as part of the project that I have been working on with Alex and which is primarily housed at my other site, http://www.chinaincentralasia.com. I am in the midst of a long period of travel for this project, so expect a lot more along these lines in the near future.

The Clash of Eurasian Grand Strategies

May 1, 2012

In Khorgos, on the China-Kazakhstan border, trucks laden with Chinese goods line up along the road, waiting for Chinese and then Kazakhastani customs officers to give them the go-ahead to continue their transcontinental journey across Eurasia. Many will be heading to the great markets of Central Asia, like Dordoi, Barakholka and Kara Suu, while others head all the way to Europe. Squeezing through a single lane, the trucks get stuck in lengthy backlogs as they wait in the shadow of the brand new multilane Chinese customs point that sits idle next door. This idleness is the product of conflicting strategies, emblematic of a lack of coordination that is taking place across Central Asia.

It is cliché to talk about Central Asia in great-game terms, with battling rival powers elbowing each other to assert their influence. Seeing the region as either as a buffer area to other powers or as a source of natural wealth and instability, the surrounding large powers have long treated Central Asia as little more than a chessboard on which to move pawns.

These days, however, the strategic approach taken by surrounding powers has shifted. Rather than talking about dominating the region, the discussion is focused on differing approaches to development, all of them tied to great powers’ particular interests. Lead amongst these are China, Russia and the United States—all of which have launched new initiatives intended to bring stability and security to the region.

Three Rival Strategies

The American strategic approach has been most clearly laid out by Secretary of State Clinton, who last year in Chennai, India told the audience of America’s desire to “work together to create a new Silk Road, . . . an international web and network of economic and transit connections.” While the United States is clearly eager for the entire region to be developed, later Clinton highlighted one of the U.S. key rationales for this approach: “An Afghanistan firmly embedded in the economic life of a thriving South and Central Asia would be better able to attract new sources of foreign investment, connect to markets abroad and provide people with credible alternatives to insurgency.” In other words, it is a strategy focused on tying Afghanistan economically into its neighborhood, which will help facilitate American withdrawal. An “action request” leaked soon after Clinton’s speech confirmed that this New Silk Road strategy was Clinton’s “number-one policy priority” for Central and South Asia.

For China, whose overriding priority is to develop Central Asia to help stimulate prosperity and stability in its restive Xinjiang province, the approach of tying the region together using trade and transport links is an old one. As early as 1994, then prime minister Li Peng declared in Central Asia that “it was important to open up a modern version of the Silk Road.” Years later, in a 2004 article in China Daily, the principle was expanded to include a “landbridge” between China and Europe, a network of train links that would make up a so-called Iron Silk Road and provide an alternative to lengthy and sometimes treacherous sea routes. Since then, China has moved this strategy forward, developing its own rail infrastructure at an astonishing rate, while also investing in regional train systems linking Central Asia together. While some projects such as those in Kazakhstan seem to have stalled, work is advancing on regional rail lines in Kyrgyzstan and Uzbekistan.

Russia, on the other hand, has taken an approach to the region that seeks to build on previous glory. Building on the already extant customs union that Belarus, Kazakhstan and Russia formed in 2009, in October last year President Putin proposed a Eurasian Union that would coordinate “economic and currency policy” while also being open to new members presumably drawn from the former Soviet space. As Putin put it, “membership in the Eurasian Union, apart from direct economic benefits, will enable its members to integrate into Europe faster and from a much stronger position.”

An admirable goal maybe, but one that directly clashes with China’s aims to try to integrate the broader region. In discussions last year in Kyrgyzstan, we were told by a former cabinet-level minister that should the Eurasian Union proceed, the markets in southern Kyrgyzstan at Kara-Suu would be “decimated.” And these tensions are already visible here at Khorgos, the ambitious “trans-national free trade center” that China and Kazakhstan opened last December between their two borders. The shining new Chinese customs post is unused, and a field of construction cranes await the go-ahead to continue their work developing the rest of the special economic zone.

And it is not only the Chinese and Russian strategies that are seemingly at odds with one another. As Chinese analysts in Urumqi were quick to highlight, the American and Chinese strategies also differ: America’s aim is to tie Afghanistan into its broader region, with paths largely going north-south across the region, while China’s is a grander east-west ambition enabling direct trade with Europe. China also is developing different infrastructure plans across Afghanistan, opening up an east-west path across the country to Gwadar, the Pakistani port it has been helping develop. While not necessarily contradictory, different end goals drive the respective projects.

The result is a series of strategies for tying together Central Asia—with each focusing on priorities dictated by the varying interests of Beijing, Washington and Moscow. China is promoting its development and trade; America wants to leave a more stable and prosperous Afghanistan; and Russia wants closer ties with the former Soviet space. These are fundamentally divergent approaches that contradict each other and leave the region torn between competing capitals.

Greater coordination and discussion is needed on what is essentially redevelopment of the Silk Road. The end state desired by all is a prosperous and stable region brought about by economic development—rather than the barrel of a gun. But until there is greater coordination, the result will be a confused latticework of competing strategies that leave everyone the poorer.

Raffaello Pantucci is a Visiting Scholar at the Shanghai Academy of Social Sciences (SASS) and Alexandros Petersen is the author of The World Island: Eurasian Geopolitics and the Fate of the West. Their joint research is available at http://www.chinaincentralasia.com.

Another piece to emerge from our recent travels, it is primarily in response to Joshua Foust’s post that reacted to our big piece for Jamestown on Kyrgyzstan. Many thanks to Joshua for agreeing to post it on Registan.net, a good site for information and comment about Central Asia. Thanks also to the lovely Sue Anne for the picture.

Guest Post: China is the power of the future in Central AsiaPost image for Guest Post: China is the power of the future in Central Asia

by JOSHUA FOUST on 11/22/2011 · 11 COMMENTS

I’ve bee pushing back against the idea, advocated most eloquently by Alexandros Petersen and Rafaello Pantucci, that China will take over the future of Central Asia. This is a response, an argument that China really is the future of Central Asia.

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By Raffaello Pantucci and Alexandros Petersen

China has always been a bashful power. Globally, the nation has taken on an ever more important role, but has been very careful to play its cards close to the chest. Rather than become involved in any overt power plays or geopolitical conflicts, it has chosen to quietly accumulate power and move with a view to a long-term trajectory. Typical of this trend is China’s role in Kyrgyzstan, where on our recent visit we observed a nation that while not visibly transformed into a province of China, was clearly somewhat alarmed by the growing influence that its neighbor to the east has on its economy.

This is not to say that China has somehow swept others out of the way to dominate the nation and the region completely. Clearly, Russia remains a dominant cultural force given its long history of occupation, and Russian is the natural lingua franca in Kyrgyzstan, grudgingly accepted even by more nationalist Kyrgyz in the south. However, our capacity to speak Mandarin helped us discover Kyrgyzstan’s burgeoning Chinese speaking community (government officials, businessmen, Chinese language students, Chinese exchange students and even Chinese traders) who helped shaped our understanding of the quiet but growing awareness of China amongst the Kyrgyz.

You have to know where to look.  Russian pop music still conquers the cultural landscape and American food like pizza and burgers is the cuisine of choice for the young and well-heeled in Bishkek.  But, China is increasingly influential where it counts.  Mandarin is the new popular second language: Beijing’s Confucius Institutes hold positions of primacy in some of the country’s universities.  China Aid signs are visible on public buses.  Chinese state-owned enterprises are re-paving key transport arteries across the country, investing in natural resource extraction and are building a refinery in Kara-Balta to break Kyrgyzstan’s energy dependence on Russia.

Perhaps most importantly, China dominates economically, in a way that Turkey, Central Asia’s alternative power of the 1990s never did. One former cabinet level minister called it “economic dependence”. The pending decision to join the Russian Customs Union and the subsequent negative impact this would have on Chinese imports into the country was going to “destroy” regional markets like Kara-Suu, he said. Putting this to a Mandarin-speaking foreign ministry official later in the day, he laughed and said, “what do you expect?” China is the nation’s giant and productive neighbor and it is consequently no surprise it is Kyrgyzstan’s leading trade partner. In 2010, 61% of Kyrgyzstan’s imports come from China, followed by Russia with 17.2%. Because Kyrgyzstan currently lies outside of the Customs Union, Kazakh traders, whose country is already a member, travel to Kyrgyzstan’s bazaars to procure Chinese goods, which are significantly cheaper than if directly imported from China into Kazakhstan.

And none of this is to take into account the foreign observers we met: each one spoke with alarm about rising Chinese power in Kyrgyzstan and the region. In Osh, we were treated to a lengthy exposition of China’s long-term plan to absorb Kyrgyzstan. One rumor we were told by a Kyrgyz professor in Bishkek ran that the Chinese firms that had built the roads in Kyrgyzstan had made them thick enough to be able to withstand the weight of a Chinese tank. Having no tank on hand to test this, we instead went to have a look at the Chinese Embassy in Bishkek. The many-storied compound towered over the temporary, low-rise buildings that make up the US Embassy.  Insiders told us that China’s was mostly empty, standing ready for the day when Beijing decided it needed to expand its representation in the country.

China is not comparable to Turkey that shares no borders with Central Asia and many years ago blew its opportunity when it attempted to sweep in as the “agbey” (big brother) to the Turkic people’s of Central Asia. Turkish influence does clearly remain, but China has no such ambitions and is instead focused on developing Kyrgyzstan and other neighboring countries with a view to creating prosperity and stability in its traditionally restive Xinjiang province. Our numerous discussions with officials and analysts in Beijing and Shanghai confirm this focus. That China sees its future role in Central Asia as key to its own domestic development is perhaps the most striking indicator that its influence is serious and long-term, even though it may seem overly cautious to outside observers. China realizes Kyrgyzstan is important to its long-term stability and is able to play a slow game to make sure that it works out in its favor. To disregard this approach as non-existent is shortsighted and risks missing out on understanding the potentially most important recent shift in Eurasian geopolitics.

Raffaello Pantucci is a Visiting Scholar at the Shanghai Academy of Social Sciences and Alexandros Petersen is the author of The World Island: Eurasian Geopolitics and the Fate of the West.

Image: An outpost of the China Road and Bridge Corporation (CRBC) responsible for repaving the Southern Transport Corridor highway in Kyrgyzstan from the city of Osh through Sary Tash to the Irkeshtan border with China. Photo by Sue Anne Tay.