Posts Tagged ‘kyrgyzstan’

Slightly delayed posting of my latest piece, this time with my sometime co-author and friend Li Lifan looking again at China-Russia and Central Asia. This was part of a series that Ben edited at Open Democracy Russia which seems to have attracted some attention. As usual, a lot more on this topic coming soon as part of mine and Alex’s project on China in Central Asia.

Decision time for Central Asia: Russia or China?

LI LIFAN and RAFFAELLO PANTUCCI 24 January 2013

Vladimir Putin’s attempts to draw the countries of central Asia into his fledgling Eurasian Union creates a dilemma for some of them: if they take up his offer, they might lose their valuable trading links with China. Li Lifan and Raffaello Pantucci discuss their options.

If one turns enough of a blind eye, it is easy to be optimistic about Central Asia. Wily diplomats from Kyrgyzstan and Tajikistan are masterfully playing off the great powers. Kazakhstan and Turkmenistan are turning into hubs in their own right – and nobody can tell plucky Uzbekistan what to do. This is nobody’s backyard, and attempts by neo-imperialists in Moscow, Washington and Beijing to play games in the region are only strengthening the hands of the Central Asian states themselves. This is a comforting picture – which is why Western policymakers love it – but it looks increasingly false as President Putin tightens the screws.

Why a Eurasian Union matters

Russia’s desire to strengthen its sphere of influence in Central Asia seems to be intensifying. The first sign came in October 2011 when Russia’s ‘national leader’ published his vision for a Eurasian Union in the Gazprom-Media owned daily Izvestia. Here Putin stated that the Customs Union with Belarus and Kazakhstan that would come into force on 1st January 2012 was just the beginning – and that it would expand ‘by involving Kyrgyzstan and Tajikistan. Then, we plan to go beyond that, and set ourselves the ambitious goal of a higher level of integration – a Eurasian Union.’

The Russian president is said to dream of his third term being his ‘geopolitical presidency,’ where he will make up for the lost ground and lack of achievement in foreign affairs that he views as his main failing. The transformation of the fledgling Customs Union into the Eurasian Union of his dreams is the centrepiece of this strategy. Whilst Kazakhstan seems to have already decided that it wants to be a part of the Union (and its president, Nursultan Nazarbayev is credited for first raising the idea of a Customs Union back in 1995), for the Central Asian states of Kyrgyzstan and Tajikistan this is a potential turning point, forcing a decision on which partner they want to prioritize: China or Russia?

The way Central Asian states will turn — to Russia’s Eurasian Union or to China — is the test for influence in the region. Photo: (cc) Wikimedia/IvaNdimitry

Deciding whether to follow Putin into the Eurasian Union will be a decisive choice for both states in the year ahead, as it will force them to choose which they want to risk: the GDP they get from trade with China or the GDP generated from remittances from their nationals working in Russia. Putin has thrown down the gauntlet – they will now have to make up their minds whether their economic future is going to be closer to Moscow or Beijing. Their dichotomy is not quite as black and white as this, but this is nevertheless a power test. The choices they make will decide whether Russia or China has a stronger say in Central Asia.

Kyrgyzstan’s dilemma

There is a simple reason why Putin’s union matters so much to Kyrgyzstan and Tajikistan: trade with China. Unlike energy rich Kazakhstan, already in the Customs Union, Bishkek and Dushanbe’s economies are dependent on business with Beijing. Kyrgyzstan’s ‘shuttle trade’ business with China, where small traders cross borders as ‘tourists’ with their goods in suitcases in order to avoid Customs duties, accounts for roughly a third of its GDP.

On the other hand there is fear in Bishkek that if they do not deepen integration with Moscow then the millions of migrant workers it exports to Russia – whose remittances are also equivalent to a third of GDP – will be forced to carry international passports, or suffer far reduced quotas. The nightmare is that they will eventually end up barred from Moscow’s labour market by a full visa regime – something nationalist elements in Russia, including charismatic opposition leader Alexey Navalny, have been calling for.

These fears are well grounded: in December 2012 Putin warned that within three years he wanted to end the post-Soviet practice of migrants from the CIS being able to come to Russia on their internal passports, effectively ID cards – but Customs Union members will be exempted from the new requirement for international passports. Polls conducted by the independent Levada Centreshow over 60% of Russians supporting tighter immigration controls.

Visa-free admission to Russia and access to the Russian labour market may be soon be a thing of the past for Kyrgyz migrants. Photo: (cc) Shutterstock/FotograFFF

That free access to Russia can no longer be taken for granted is not lost on Kyrgyzstan. But at the same time the Kyrgyz elite fears that joining a Eurasian Union would mean effectively losing control over its border tariffs and regulations, and would destroy the rich network of new trade routes that are tying them into China, bringing them cheap goods and enabling a substantial re-export economy. These trade routes are economic lifelines for this fragile state – and for this network the Customs Union has all the potential to be a total disaster. As a former Kyrgyz cabinet minister put it to one of us in Bishkek last year, it would ‘decimate’ the country’s key markets in the south at Kara Suu and Osh. In his words, ‘almost every’ small business in Kyrgyzstan is reliant on trade with China and any new tariffs or rules would entirely change the local economy.

China: vulnerability and official indifference

Chinese officials insist that the expansion of the Customs Union matters little to them. Ambassador to Bishkek Wang Kaiwen put it succinctly to reporters in late November when he said: ‘Kyrgyzstan’s entry into this Customs Union will not affect trade relations with China.’ Kyrgyz-Chinese trade, he pointed out, oscillated somewhere between $5-$10 billion per annum, a figure that was ‘a small problem’ dwarfed by China’s overall foreign trade of $3 trillion. The question of whether ‘to join or not…should be your decision.’

This blunt response hides a complex reality. It is true that in the grand scheme of things, China’s trade with Kyrgyzstan is a drop in the ocean. The problem for China is that it is a drop that comes from one of the most troubled parts of one of its most restive provinces. China is not investing massively in its trade infrastructure with Central Asian countries for reasons of charity – but to stabilize its own restive Xinjiang Uygur province by turning it into a trade hub for this region.

The Eurasian Union would have a potentially damaging effect on the substantial investment China has made on both sides of its border. The erection of a Russia controlled tariff barrier between China and Kyrgyzstan is likely to have a chilling effect on trade coming out of Kashgar, at a time when the Chinese government has invested a great deal into trying to develop the southern city. Capital of a part of Xinjiang that has faced heightened ethnic tensions for decades, the government has spent a lot of money re-developing the old city and establishing a Special Economic Zone with the aim of turning it into a hub for Central Asian trade.

According to recent figures China invested some $91.91 billion into infrastructure in its ‘western provinces’ – an area that covers Tibet, Guizhou and Xinjiang. This is a focused strategy and Xinjiang sits in the middle of it. All of this will be threatened if suddenly traders no longer find it profitable to send their goods along the roads winding into the CIS from Kashgar. At the same time these traders’ choice of markets is surprisingly limited: without a route through Kyrgyzstan or Tajikistan they would have to travel through the Khunjerab Pass to Pakistan. The problem there is the roads on the Pakistani side remain woefully under-built. Their only other possible border crossing would be with Afghanistan, which remains firmly closed at time of writing.

Seen from China, these are unanswered questions. When one of us asked a group of academics in Urumqi, the capital of Xinjiang, what they thought of the Customs Union’s impact to China, they shrugged and in vague terms said they were ‘waiting to see’ if the Customs Union would actually come to pass across the whole region. In Shanghai and Beijing, everyone has stories of friends who have conducted surveys in the region that highlight its unpopularity. But this is largely behind closed doors. The official line is that espoused by Ambassador Wang, that ‘Kyrgyzstan’s entry into Customs Union will not affect trade relations with China.’ Nothing to see here, keep moving on…

A losing game for small states?

This used to be the sort of situation where Central Asians were in their element, masters of the game of playing one partner off against another. Kyrgyzstan in particular has cannily used access to its Manas airbase to extract large chunks of money from both America and Russia. This time it seems as though Moscow is playing a much harder game, forcing Bishkek into a decision that could ruin one aspect of its economy or another. How this plays out may end up determining the shape of the Kyrgyz economy. For all the talk about China in Central Asia, Putin is still able to compete with Beijing – and the choices made in Bishkek and Dushanbe will make it clearer whether Moscow is still the world power it dreams of being.

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

A new piece for 东方早报 (Oriental Morning Post) the Chinese paper I occasionally write for, this time focused on difficulties that corporate China has encountered recently in Central Asia. As usual, the Chinese is on top, with what I submitted in English below.

潘睿凡   发表于2012-11-14 05:13
上月,吉尔吉斯斯坦传来新闻说,由中国人投资的金矿因与当地民众发生纠纷,不得不撤走工作人员,施工被中止。

  上月,吉尔吉斯斯坦传来新闻说,由中国人投资的金矿因与当地民众发生纠纷,不得不撤走工作人员,施工被中止。这不是中国公司第一次在吉尔吉斯斯坦遇到类似麻烦,也不是中国公司第一次在中亚遇到类似事件。

今年9月在乌鲁木齐召开的第二届中国-亚欧博览会上,温家宝总理强调了新疆作为中国与亚欧之间桥梁作用的重要性。博览会上,面对来自阿富汗、哈萨克斯坦、吉尔吉斯斯坦、塔吉克斯坦等国的高层领导,他特别指出:“新疆的改革开放和发展振兴,不仅惠及新疆各族人民,也将给亚欧国家带来更多的发展机遇。”发展新疆与这些国家都有着重要关系。

新疆并不是主要的海上通道或者现代贸易路线,显而易见,发展该地区的重要性在于发展与其接壤国家的通道。打开这些通道能进一步帮助增强中国与欧洲的联系,新开通的道路能直接将中国货品运入欧洲市场。

政府对此持非常积极的鼓励态度。利用进出口银行的贷款和国有企业部署,政府在新疆和中亚已经建造了公路,铁路也在建设中。中国政府还进一步鼓励国有企业在这些区域利用其丰富的天然资源进行投资。这些由国有企业打下的基础已经促使了新疆公司的发展,贸易商也在那里积极寻找向他们开放的新市场。我在去中亚地区旅游的时候发现了中国的贸易商、货物和工人,他们都为新疆的经济扩展起到了重要作用。

但是如今,这种增长正在日益遇到挑战。最近在吉尔吉斯斯坦的这类问题并不是首次发生,中国公司在这一区域也碰到过其他麻烦。这部分是因为中亚本身是比较困难的工作环境,也部分是因为当地的观念。在同哈萨克斯坦、吉尔吉斯斯坦和塔吉克斯坦人聊天的时候,我总是会被一些当地人对个别中国公司持有的负面影响和看法震惊。他们会告诉我各种所谓中国工人抢走工作和吃光附近所有动物的传闻。更严重的是,他们还告诉我,“个别中国企业不按劳或是按时付酬,为当地居民提供很差的工作,对工作人员也非常糟糕。”不管真实与否,他们所持有的印象是:“在中亚的中国公司只是把那里的原材料和商品带回中国,带进当地市场的则是质量有问题的产品。”

这种负面印象导致的正是吉尔吉斯斯坦目前所发生的事。必须承认,当地居民告诉我绝大多数外国公司在那里都有相近的问题。但差别在于,这些国家的公司并不直接帮助本国某一区域的发展。在中亚的中国公司与欧洲公司的本质差别是:对于欧洲公司来说,这仅仅是另一个遥远的市场所在;但对于中国公司来说,却是如果要发展新疆就必须得发展的家门隔壁的市场。

这也是为什么中国的决策者应该看重这个故事的理由。应该开始着手改变中国在中亚的形象,否则开发新疆和其接壤地带的战略都会受到影响。

如今所需要的是更为清晰的中国与中亚接触战略方式。除了依靠上海合作组织峰会和从新疆扩散的缓慢的经济政策,中国不妨做出更多努力来促使这些国家的经济发展。

这并不是一条简单的道路,但是,除非对于中亚采取某些实质性的政策,否则新疆区域发展战略就可能受到影响,这也会成为将来对发展整个国家大战略以及帮助中国走出经济滞胀产生负面影响的因素。

  潘睿凡  英国伦敦国际激进主义  研究中心副研究员   (李鸣燕 译)

Corporate China’s Challenges and Opportunities in Central Asia

Last month news came out of Kyrgyzstan that a local dispute at a Chinese owned gold mine had escalated to the point that staff had to be evacuated and operations shut down. This is not the first time that Chinese companies have had trouble in Kyrgyzstan. It is not in fact the first time that Chinese companies have had trouble in Central Asia more generally. Doubtless this is a problem that is considered far down the list of priorities for the new leadership in Zhongnanhai, but it has the potential to have a direct impact on China domestically. Unless Chinese companies get Central Asia right, it is going to be very difficult for the May 2010 work plan to develop Xinjiang to be effectively implemented.

In September this year at the second international China Eurasian Expo in Urumqi, Premier Wen Jiabao highlighted the important link that Xinjiang is between China and Eurasia. In particular he highlighted how ‘Xinjiang’s reform, opening-up and development will not only benefit people of all ethnic groups in Xinjiang, but also bring more development opportunities to Eurasian countries.’ Saying this at the Expo before senior leaders from Afghanistan, Kazakhstan, Kyrgyzstan and Tajikistan highlighted the importance of these relationships in developing Xinjiang.

Far from major sealanes and modern trading routes, it has always been obvious that the solution to developing Xinjiang lies in developing its links with the countries it borders. Opening up these links is something that will further help strengthen China’s connections with Europe, opening up roadways to directly link Chinese producers with European markets.

And the government has actively encouraged this. Using money from Export-Import Bank loans and deploying state owned firms it has built roads and is building rail infrastructure both in Xinjiang and Central Asia. It has further encouraged state owned companies to invest in the area, taking advantage of the rich natural resources that can be found. And the groundwork laid by state owned firms has been built on by Xinjiang companies and traders seeking new markets that have now been opened up to them. In my travels across the region, I found Chinese traders, goods and workers – many of them with strong connections back to Xinjiang, highlighting how they were helping expand Xinjiang’s economy.

But now this growth is increasingly encountering difficulties. The recent trouble in Kyrgyzstan is not the first of its kind, and in the past Chinese companies have had other problems regionally. Partially this is because Central Asia is a difficult environment to work in, but there is also a problem of local perceptions. In talking to locals in Kazakhstan, Kyrgyzstan and Tajikistan I was endlessly surprised by the negative reactions and beliefs they would have towards Chinese companies. People would tell me stories about how Chinese workers were stealing jobs, women and eating all the animals in sight. More seriously, they would tell me how Chinese firms underpay or pay late, offer bad jobs to locals and treat staff badly. Whether true or not, the general perception is that Chinese firms are in Central Asia to simply take raw materials and commodities back to China, while they flood the markets with low quality products.

The picture that results is a negative one that leads to difficulties like those currently being experienced in Kyrgyzstan. Admittedly, I was told by locals that most foreign firms encounter similar issues in Kyrgyzstan, but the difference is that these other companies are not playing a role in directly helping a part of their home nations develop. This is the key difference for Chinese firms in Central Asia versus European ones: for the European ones it is merely another distant market, for Chinese ones, it is a market next door that is important to develop if the policy to develop Xinjiang is to be achieved.

This is also why this story is something that is important for policymakers in Beijing. Unless something is done to improve China’s image in Central Asia, then the overall strategy of developing Xinjiang’s links with its border regions will be undermined.

What is needed is a clearer strategic approach to China’s engagement with Central Asia. China cannot solely rely on Shanghai Cooperation Organization (SCO) Summits and a slow economic policy that spreads out from Xinjiang. This approach is already causing some friction on the ground and this will only get worse. If China wants to establish a cooperative economic relationship with its Central Asian neighbours, then some efforts need to be made into establishing how to help these economies develop and not simply focus on extracting national benefit from them.

This is not an easy path to take, and Beijing’s new policymakers have an already crowded plate. But unless some effort is taken to forge an actual policy towards Central Asia, China will find its regional development strategy with Xinjiang falling down too. And this would be something that would have a hugely negative effect on any grander strategy to develop the country and help it move beyond the growing economic stagnation.

A longer article in the latest The National Interest journal, this one alongside Alex as part of our ongoing China in Central Asia project. Whilst the whole article is available on their site, they have asked that I only post the first few paragraphs here for the time being with the rest up later here. The article is the first that captures comprehensively the ‘inadvertent empire’ thesis that is going to be a big focus of this project.

China’s Inadvertent Empire

From the 

A Chinese road crew works in Tajikistan.

PRESIDENT OBAMA’S late 2011 announcement of his administration’s pivot to Asia marked a sea change in America’s geopolitical posture away from Europe and the Middle East to Asia and the Pacific Rim. Reflecting the growing strategic repercussions of China’s rise, the move presages a new era of great-power politics as the United States and China compete in Pacific waters. But is the United States looking in the right place?

A number of American strategists, Robert D. Kaplan among them, have written that a potential U.S.-Chinese cold war will be less onerous than the struggle with the Soviet Union because it will require only a naval element instead of permanent land forces stationed in allied countries to rein in a continental menace. This may be true with regard to the South China Sea, for example, or the Malacca Strait. But it misses the significance of the vast landmass of Central Asia, where China is consolidating its position into what appears to be an inadvertent empire. As General Liu Yazhou of China’s People’s Liberation Army once put it, Central Asia is “the thickest piece of cake given to the modern Chinese by the heavens.”

For most of its unified history, China has been an economically focused land power. In geopolitical terms today, China’s rise is manifest particularly on land in Eurasia, far from the might of the U.S. Pacific Fleet and Washington’s rimland allies—and far also from the influence of other Asian powers such as India. Thus, Western policy makers should be dusting off the old works of Sir Halford Mackinder, who argued that Central Asia is the most pivotal geographic zone on the planet, rather than those of Alfred Thayer Mahan, the great U.S. strategist of sea power. Greater attention needs to be paid to China’s growing presence in Central Asia if the United States is to understand properly China’s geopolitical and strategic rise.

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Another post for the site I manage as part of my China and Central Asia work, this time looking at my experiences visiting the Irkeshtam Pass between China and Kyrgyzstan. A fascinating trip, with some of the pictures courtesy of the lovely Sue Anne Tay.

The Irkeshtam Border Pass Between China and Kyrgyzstan

By Raffaello Pantucci

The red arrow and circle indicate the Irkeshtam border pass. Picture from here.

In what can only be described as a cosmic coincidence or evidence of some deeper significant trend that I can only guess at, on either sides of the Irkeshtam Pass between China and Kyrgyzstan we found Japanese backpackers. The surprising part was that our visits to each side of the border took place some five months apart from each other. Ardent Japanese travellers aside, there were few other obvious similarities on the two sides of the border. In fact, what differences there were seemed to be weighted in favour of the Kyrgyz side, where the road was in better shape than its Chinese counterpart.

Leaving one morning from Osh with a driver a local Chinese teacher had helped us source, our trip to Irkeshtam on the Kyrgyz side was a relatively painless one. The road was for the most part tarmacked and aside from a bumpy part in the mountains, in good condition. Funded in part by the Asian Development Bank, the Islamic Development Bank and the Chinese government, the China Bridge and Road Corporation (CBRC) had built most of the road (often as subcontractor to the international projects) – a Chinese state owned enterprise whose management office we came across as we zoomed along on the Kyrgyz side. Wandering into the compound we found a few Chinese engineers who said that the project was due to finish in spring 2012. They worked from April to October of each year when weather conditions were bearable. An hour or so down the road, we came across their colleagues, Chinese men huddled in in heavy green military coats directing large trucks of granite as they worked to asphalt the road.

As with many borders in the region, there is a gap between the actual border and where they check passports before you get to the line of demarcation. On the Kyrgyz side, a small camouflage painted mobile home sat by the side of the road with a simple metal barrier across the road itself. The young Kyrgyz guard manning the barrier waved vigorously at us as we tried to take pictures, though he seemed a lot less threatening once we noticed that his AK-47 did not have ammunition clip.

The border itself was a dusty parking lot with giant shipping trucks with Customs (海关) emblazoned on the sides edging around each other. A lone donkey wandered through the chaos as various truckers and other loafers used facilities, shopped at the mini-mud buildings selling food, cigarettes and other provisions or had meals at the rudimentary restaurants. One Uighur-Chinese driver (who had in fact helped ferry hapless Japanese backpacker Takeshi through the pass) told us eagerly that he was on his way to Uzbekistan with a truckload of ‘stuff’ – when asked to specify he said various electronica and low-end Chinese products. He was more interested to hear about Shanghai and the business prospects there.

In contrast, the Chinese side of the border was visibly policed with more solid structures at the actual border post – a big white tiled building and men in warm uniforms guiding the truck traffic. Present in early spring (we did the trip to Kyrgyz side in October, the Chinese side in April), there was still snow on the ground and written into it in the mountain above the post was the phrase 中国民爱 (roughly translated as China loves its people). Unlike the dusty Kyrgyz side, the Chinese side was a small village of concrete buildings with a police station, Sinopec office, restaurants, hotels and grocery stores. On the road before the encampment was an odd building with a giant football on top of it. Behind it was a walled area with cameras on top that our driver informed us was some sort of military installation.

While the border itself was relatively developed, there was a dramatic contrast in the state of the roads up to it on the Chinese side. Whilst likely done by the same company as that on the Kyrgyz side, the road on the Chinese side was a potholed mess and for a substantial period we were drudging through dirt and knee-deep snow. Our driver steadily became more exasperated, chain-smoking his way through two packs of cigarettes as we battled on and his carefully cleaned car turned into a mud coloured mess with a broken bumper. Ploughing through a blizzard we saw large trucks abandoned by the side of the road, battered by the treacherous road conditions. We had been warned the ride would be difficult, though given the excellent state of the Karakoram Highway and most infrastructure in China, we figured this could not be that bad. We were wrong: it was a bumpy ride from almost the moment we left Kashgar.

The reason for this rather surprising inversion in road quality is that the road to the border on the Chinese side is in the process of being re-built, due to be finished by 2013. Something visible along the way as we saw teams digging holes and moving large pieces of concrete around to support the road. A city is being built along the way at a previously minute village called Ulugqat that currently serves as an entertainment spot for the customs officers and workers on the road and at the border – but is mostly a muddy mess with giant construction going on everywhere. The customs post before the border ‘dead-zone’ on the Chinese side was a more substantial creation, with a small soldiers’ cabin across the road from a much larger official customs building with Chinese flags and logos all over it. In contrast to their Kyrgyz counterparts, these soldiers had ammunition clips in their guns as well as new uniforms that contrasted our increasingly bedraggled appearance.

Unlike its northern counterpart the Torugut Pass, Irshketam is open most of the year. One of the key crossing points for China into Central Asia, it provides a route for Chinese products to get to Kyrgyz markets as well as travel up into Russia, across into Uzbekistan and beyond both to Europe and Iran. Much of the material brought across the border ends up in Kyrgyzstan’s crowded Osh or Kara-Suu bazaars, an arrangement in danger of being destroyed if the Kyrgyz elect to join Putin’s Eurasian Union and a subsequent tariff barrier is erected between the Kyrgyz and Chinese economies. When we put this to officials in Kyrgyzstan they told us it was potentially devastating. Chinese we asked seemed less concerned. Partially because the market loss would be negligible in terms of China’s overall trade volumes, but also since they believe that the entire Eurasian Union project is unlikely to amount to much. As a Chinese academic put it to us, the Eurasian Union will clash with Kyrgyzstan’s WTO membership and the expectation is that the Kyrgyz would rather be part of the global economy than be a pawn in Russia’s expansionist agenda. This outlook was supported by evidence on the ground where China is clearly making investments in turning this road into a major artery for its Central Asian trade.

Another ribbon in the latticework that is the New Eurasian Landbridge.

 

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

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

China and the Arab Spring

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

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

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

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

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

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

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

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

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

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

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

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

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

2012年中国面临的中东挑战

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

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

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

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

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

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

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

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

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

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

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

(张娟 译)

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

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

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.

***

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.

Another piece on China-Kyrgyzstan, this time for a new outlet within Jamestown Foundation, their China Brief. Lots of on-the-ground detail from my recent trip, with even more to come in the following weeks and months.

China’s Slow Surge in Kyrgyzstan: A View from the Ground

Publication: China Brief Volume: 11 Issue: 21November 11, 2011 02:54 PM Age: 4 hrs
By: Raffaello Pantucci, Alexandros Petersen

Chinese Ambassador Wang Kaiwen with the Kyrgyz Premier

Kyrgyzstan’s recent peaceful presidential elections did not feature China as a campaign issue. For the most part, they focused on domestic issues and where foreign policy seeped in, it was mostly in the positive light that most Kyrgyz see Russia and separately its regional customs union, or perennial whipping boy the U.S. “transit hub” at Manas airport, outside Bishkek. Subsequent to the elections, the winner Mr. Atambaev declared: “In 2014 the United States will have to withdraw its military base from the ‘Manas’ international airport” (www.regnum.ru, November 1). China was not mentioned at all, even though a series of conversations and interviews up and down the country in the weeks prior to the election revealed a strange sense of unease about Kyrgyzstan’s growing dependence on China.

The paradoxical and unfocused nature of this concern was best exemplified in a pair of interviews conducted in Bishkek with a former cabinet-level minister and a young Kyrgyz e-businessman. The former official spoke in concerned terms of Kyrgyzstan’s “economic dependence” on China and the fact that “all small- to medium-sized enterprises (SMEs) in the country had to deal with China” [1]. The businessman on the other hand saw China as a giant opportunity: one has to “just look at a map” to see how important the country is going to be for Kyrgyzstan [2]. While exact figures are hard to come by, a visit to a number of Kyrgyzstan’s large bazaars in Bishkek, Osh and Jalal-Abad all show high volumes of Chinese goods and, in some, long-term Chinese traders from as far away as Fujian province. While income from the U.S. airbase is important (according to the Congressional Research Service, accounting for some $501.5 million or 5 percent of GDP in 2010) and remittances from Kyrgyz in Russia or Kazakhstan remain a key provider of income in the country; it seems increasingly clear that China is bringing Kyrgyzstan into its economic sphere of influence [3]. The question that seems to bother some Kyrgyz is what the potential implications are in the longer term.

China has taken a three-fold approach to Kyrgyzstan, accompanied by an informal fourth pillar and the overarching umbrella of the Shanghai Cooperation Organization (SCO). In the first instance, it has focused on economics and facilitating trade between the two countries, including infrastructure development. Roads linking Kyrgyzstan to China are being redeveloped by Chinese state-owned enterprises like the China Road & Bridge Company (CRBC), that won the tender in 2007 to complete a project partially-funded by China to develop the road from Osh to the Irkeshtam Pass with China [4]. Due to be completed next year, a drive along it in September confirmed this schedule was being kept with the road almost completed. In other instances, the Chinese government has offered development in exchange for local mining concessions (www.24.kg, August 26). A practice emulated at a more local level by smaller Chinese mining firms south of Jalal-Abad (Reuters, September 21). The question of a China-Kyrgyzstan-Uzbekistan train line continues to go unresolved, with skeptical observers interviewed in Bishkek pointing out that similar Chinese projects elsewhere overcame their difficulties rapidly, while officials tell the press that difficulties are focused on the question of how to rationalize the different gauges that would need to be deployed (AKI Press, October 12).

In parallel to this infrastructure development and trade encouragement, China has started to make a soft-power push in the region. This has come in the form of establishing a pair of Confucius Institutes in Bishkek with subsidiary branches in Osh and Jalal-Abad. Part of the international network of Confucius Institutes, they are focused on teaching Chinese language to young Kyrgyz, using Kyrgyz-Chinese text books and leveraging faculty and administrators brought in on two-year cycles from partners Xinjiang University and Xinjiang Normal University. Based on a recent count by a teacher at a university in Bishkek, the authors were told the Confucius Institutes and teaching stations had somewhere in the region of 4,000 students in total at every level across the country—a number that pales in comparison to the number of young Kyrgyz able to speak Russian or English. This large and growing figure probably reflects the opportunities that young Kyrgyz see in China or with Chinese firms in Kyrgyzstan. While the Confucian Institutes focus on language learning to prepare students to use Chinese in a business setting, teachers appear eager to stimulate their students’ interest in other aspects of China’s culture and history giving informal classes in tai chi, paper cutting and Chinese dressmaking.

There are other aspects to China’s cultural influence in the region. In early 2009, the Kyrgyz government accepted a Chinese offer of 20,000 television receivers for individual homes in the Batken Oblast in southern Kyrgyzstan. Given the mountains and distance between Bishkek and certain isolated southern areas, locals were using antiquated receivers for their televisions and consequently getting news from Uzbekistan that painted the Bishkek leadership in a bad light. According to a senior foreign ministry official spoken to in Bishkek, part of the exchange that the Chinese government extracted for the receivers was to allow CCTV Russian to be broadcast directly into the country [5]. In addition to this, however, locals in Osh report they are able to receive Xinjiang Television on their receivers without cable packages and are often surprised to find Kyrgyz language broadcasts included in the daily programming [6]. At a more practical level, the Chinese government has donated Yaxing buses and tractors for Kyrgyz farmers to use (Xinhua, July 30) [7]. In June 2011, the Chinese Ambassador announced a donation of some $14.3 million to Kyrgyzstan to fix roads, power stations, and to support the construction of the railroad in the country (AKI Press, June 20).

The third pillar of Chinese interests in the country is far more opaque: China’s security interests in Kyrgyzstan. Primarily focused on security threats directly linked with Uighur terrorist networks in China, the Chinese government has focused these relations at a very secretive and direct level and little is known publicly about how China has conducted its relations in this field. Stories and rumors abound of China seeking extradition of specific Uighurs (IRIN News, January 29, 2004). In one case recounted to the authors by a Kyrgyz official focused on religious affairs, at the Chinese government request, police in Bishkek aggressively suppressed a protest by Falun Gong supporters outside the Chinese Embassy. It was unclear if this was before or after the Kyrgyz court decision to revoke Falun Gong’s registration in the country (Associated Press, February 26, 2005).

A fourth informal pillar also exists to Chinese-Kyrgyz relations: the growing community of cross-border traders and the smaller local Chinese SMEs that are focused on developing interests in Kyrgyzstan. From a Chinese perspective, this community is one that needs to be assisted occasionally, such as when the Chinese government arranged buses and airplanes to evacuate Chinese citizens caught up during the riots in southern Kyrgyzstan last year (Xinhua, June 17, 2010). Chinese academics spoken to in Shanghai have expressed some concern about the number of Hizb ut Tahrir members amongst this community of traders, but this does not seem a live concern on the ground where there is little evidence of extreme religiosity amongst the Chinese traders found in Osh, Jalal-Abad or Kara-Suu bazaars. Chinese SMEs are focused in the mining industry and also have invested in a cement factory in Kyzyl-Kyia. In some cases, these firms have encountered local problems with accusations of poisoning and environmental despoliation, or with local groups expressing anger at outsiders coming in and taking what they see as their natural wealth. According to numerous local officials and foreign observers, however, this anger is not directed specifically at Chinese firms, but is a more general rage against all outside investors in the extractive industries [8].

Overlaying China’s bilateral relationship is its regional multilateral framework, the Shanghai Cooperation Organization (SCO). For Kyrgyzstan, the SCO is primarily an international opportunity. Though almost universally regarded by ordinary Kyrgyz and foreign ministry officials alike as an exclusively Chinese vehicle, it is cautiously welcomed as a balance against Russia’s Collective Security Treaty Organization (CSTO) and the Moscow-led regional Customs Union that is actively courting Bishkek [9]. That said, Kyrgyz spoken to are quick to note that the SCO very loudly did nothing when political violence and ethnic strife rocked their country in 2010 (Xinhua, June 21, 2010). Its supposedly bringing together of China, Russia and the Central Asian states (except for Turkmenistan) to jointly combat the “three evils” of separatism, terrorism and extremism rings hollow when residents of Osh look at their half-empty, burnt out market. In interviews, Kyrgyz inside and outside the government wondered why China does not assert itself more politically through the SCO, though few would welcome such an eventuality [10].

Perhaps most important for a small state like Kyrgyzstan is the regular opportunity the SCO provides for dialogue on a range of issues with neighboring Central Asian states, especially Uzbekistan [11]. With a closed border and the ever-present fear of perceived bullying from Tashkent, the SCO’s regular head-of-state, ministerial and expert-level meetings provide a venue in which to reduce tensions. Having been beaten by Pakistan for the rotating seat on the UN Security Council, Bishkek will welcome the international attention it receives as the SCO chair and the host of its summit in 2013 (24.kg, June 16).

The real test for the SCO will come once Western forces begin to withdraw in earnest from Afghanistan and the region. The year 2014 is bandied about in Kyrgyz political discourse as the moment that Kyrgyzstan will be abandoned to the great powers of the region or the restitution of Kyrgyz sovereignty once the United States leaves the Manas airbase (Associated Press, November 1). It is an open question what role the SCO could play in a post-Afghan withdrawal environment with officials, academics and foreign observers met in Beijing and Bishkek concluding the SCO was not going to do much [12]. Aside from Russia’s historical baggage with Afghanistan and a general lack of capacity from the Central Asian SCO members, a key reason behind this lack of action is a Chinese unwillingness to become too visibly involved in either local political disputes or larger geopolitical games.

For Kyrgyzstan, this contributes to a sense of uncertainty, bordering on foreboding, about China’s presence in the country and the region. With China on the other hand, it is not clear what the nation wants or has the capability to do in Afghanistan, though its larger regional strategy is clearer. In the medium and longer-term the priority for China in Central Asia remains ensuring stability and development—something that is going to require more effort with Kyrgyzstan specifically given the nation’s poverty and lack of natural resources. Typical of Beijing’s cautious approach to international relations globally, China probably will continue to increase its presence and influence slowly. This will help develop the region abutting China’s restive western province Xinjiang (both in economic terms locally, but also as a transit route for Chinese goods to elsewhere) and hopefully, from a Chinese perspective, increase prosperity there too. This ultimately is the key to understanding Chinese involvement in Central Asia where the priority remains developing the region with a view to helping development in Xinjiang.

For Kyrgyzstan in particular, the main threat and difficulty to China comes in the form of the nation becoming a failed state that provides a shelter for separatist and terrorist networks seeking to launch attacks within China. Currently, it seems China has established strong connections and is willing to provide funding to prevent such groups from developing much capacity in Kyrgyzstan. In terms of becoming involved in fixing ethnic tensions within Kyrgyzstan, China however has expressed little interest in becoming involved, focusing instead on providing aid and reconstruction support when it is useful or requested. Typical of China’s approach to international relations elsewhere, this is all conducted in a quiet manner, something that will likely do little to improve local confidence in Chinese aims. Kyrgyzstan will continue to seek to assert its independence in policymaking by balancing the great powers off each other, but China’s slow surge has an ever-larger impact on the policy agenda even if it is not part of the public discourse.

Notes:

[1] Authors’ interview with former cabinet level minister, Bishkek, October 19, 2011
[2] Authors’ interview, Bishkek, October 19, 2011
[3] Jim Nicols, “Kyrgyzstan: Recent Developments and U.S. Interests,” Congressional Research Service, May 11, 2011
[4] Sebastien Peyrouse, “Economic Aspects of the China-Central Asia Rapprochement,” Central Asia-Caucasus Institute, Silk Road Paper, September 2007
[5] Authors’ interview, Bishkek, October 20, 2011
[6] Authors’ interview, Osh, October 25, 2011
[7] Yangzhou Yaxing Motor Coach Company Press Release, September 3, 2009, http://www.yaxingkeche.com.cn/en/News.aspx?id=9e5e7e19-76cc-47e5-8e8b-7d16ab378210
[8] Authors’ interviews, Bishkek and Osh, October 2011
[9] Authors’ interview, Bishkek, October 17, 2011
[10] Authors’ interviews, Bishkek, October 2011
[11] Authors’ interviews with foreign political observers, Bishkek and Osh, October 2011
[12] Authors’ interviews, Bishkek and Beijing, October 2011

Another article on the theme of Central Asia after my trip there. This one is for the Washington Times, a DC newspaper I used to write for relatively regularly (on Tony Blair’s election victory; Angela Merkel’s; and Gordon Brown’s takeover). Also, my most recent journal article on terrorism was used in another newspaper story, this time for Der Spiegel for those who can read German.

PANTUCCI & PETERSEN: Uncertain times for Afghan neighbors

Wednesday, November 9, 2011

OSH, KYRGYZSTAN.

There is a sense in Kyrgyzstan that the United States is on its way out. It is a worrying prospect when one considers that almost a fifth of its gross domestic product comes from the U.S. “transit hub” for Afghanistan at Manas Airport, outside the capital, Bishkek. Against this backdrop, Secretary of State Hillary Rodham Clinton made a visit to neighboring Tajikistan and Uzbekistan last month to highlight how America has a strategy for the region, post-Afghanistan. Such a strategy is essential to lay out now if the United States does not want to leave a regional vacuum that allows a poor region to fall further into disaffection and economic uncertainty.

Talking with Kyrgyzs and others in Bishkek and Osh, the country’s second-largest city, reveals a strong sense that America’s interests in the region do not extend much further than the 2014 withdrawal date from Afghanistan. As a result, while the United States remains an important actor in the region, it placed third in terms of how “good” people saw relations with it among global powers, behind China and Russia, in a recent poll conducted by the International Republican Institute (IRI). For Kyrgyzs, Russia is seen as the most popular outside power; residual linguistic and cultural links and a tendency for young men to seek their fortunes in Russia mean that the public is largely accepting of Moscow’s might in the region. Political leaders recognize this. They regularly make pilgrimages to Moscow before and after any election and use their links with Russia as badges of distinction.

But as it was put to us in Bishkek, Russia is an “immature” power that seems to want to simply assert its authority regionally to compensate for a lost empire. This is something that Kyrgyzs notice. They also note with concern their now almost complete economic dependency on China. Officials and analysts in Bishkek darkly allude to Beijing’s potential leverage, though none can point to many examples of it being exerted. In contrast, the United States is seen as a fickle power whose interests rotate around operations in Afghanistan and will fade rapidly once the 2014 deadline passes.

The stage is thus set for a post-withdrawal situation in which the United States leaves a poor region to fall back into instability. Russia will continue to play an important role, but it is China that will fall into the role of being the balancer. It is not a role that China seeks, but one that it will assume by default given the absence of American leadership and the continued Russian tendency to attempt to re-enact previous glories. China is already setting itself up to play this role. Recognizing the importance of having some sort of a cultural footprint, it has established Confucius institutes in four out of five Central Asian states. Its embassy in Bishkek towers over its American counterpart, sitting mostly empty as it leaves room for further expansion of its diplomatic presence.

Semi-official analysts with whom we spoke in Beijing highlighted the importance of stability and development in Central Asia in guaranteeing stability in China’s restive Xinjiang province. This is perhaps the most important signal of China’s future role in the region: If influence in Central Asia is key for Beijing’s domestic concerns, it is likely to grow.

From her visits in the region, Mrs. Clinton’s post-Afghanistan Central Asia strategy seems to be made up of three pillars: direct investment, such as a new General Motors Co. plant in Uzbekistan, regional economic integration, through a new “silk road” of transportation links to South Asia through Afghanistan, and lectures for the region’s autocrats to respect human rights. This vision is a welcome indicator of an American path, but it is one to which Washington will have to demonstrate commitment, particularly because, compared with China, the U.S. is rather thin on the ground. Unless that happens, America’s withdrawal from Afghanistan in 2014 could hand China the unwanted role of alternative to Russia in the region.

Raffaello Pantucci is a visiting scholar at the Shanghai Academy of Social Sciences, and Alexandros Petersen is author of “The World Island: Eurasian Geopolitics and the Fate of the West” (Praeger, 2011).

A new article on Kyrgyzstan based on my recent trip out there that was part of the bigger project I have mentioned in previous posts. I actually used to write for The National Interest more regularly (here is a previous piece on Europe), but it has been a while.

 

The National Interest

In the midst of a relatively calm election season, we have been travelling to Kyrgyzstan’s cities, villages and border posts to track the rise of China in Central Asia. The atmosphere around this election is less tense than in previous years, when governments have been ousted by street revolutions and transfers of power have yielded ethnic violence. But Kyrgyzstan’s new government will not alone decide the country’s fate.

Kyrgyzstan is a place between powers, and not just geographically. This is reflected in Jalal-Abad University, located in the country’s third-largest city, where respective wings of the central administrative buildings are run by the U.S. embassy-sponsored American Center and a Chinese government-funded Confucius Center subsidiary. In between sit Kyrgyz administrators.

The American Center provides the students with language courses, access to the Internet (only twenty-five minutes at a time) and a selection of educational movies to help with English (including Pulp Fiction, which struck us as maybe not the best English to be learning). In the Chinese wing, a pair of dedicated teachers provides various language courses for about 60 students. The best students get to go on paid trips to China. A bright display at the back of one of the classrooms shows groups of them in Xian, Shanghai and Urumqi.

Behind all this lies the reality that the lingua franca in Kyrgyzstan is Russian. The Chinese teacher used it to translate phrases. The English teacher in the American Center was Russian. Stuck between mountain ranges and great powers, Kyrgyzstan is a nation defined and dominated by what surrounds it.

This is most obvious in the economics, where the nation is now almost completely dependent on the reexport of cheap Chinese goods. A further 20 percent of GDP is generated in fees from the American “transit center” outside the capital Bishkek, with much of the rest coming from remittances from Kyrgyz men working menial jobs in Russia. Apart from charming handicrafts (and these are increasingly being replaced by Chinese-made look-alikes), the country itself produces very little.

This dependency worries the leadership. Some have proven adept at playing the great powers off each other, but others, like the former cabinet-level minister we met, are deeply concerned about where this leaves their nation. As one foreign observer based in the south of the country put it, “the country has not been allowed to develop by itself.”

But the Kyrgyzstan traveler can easily see why it has continued to be dominated by those around it. A picturesque land of nomads, it was forced through a period of industrialization by the Soviets that left them the inherited infrastructure they still depend on today. But it is falling apart, and foreign-aid agencies are only really interested in helping alleviate poverty. Into this steps China, a neighboring power eager to see the country stable and prosperous to provide knock-on stability in its underdeveloped Xinjiang province. It builds new roads, offers refining facilities to reduce dependence on foreign energy imports and is planning a railway project to connect the country to the broader region. It dispatches groups of teachers from Xinjiang universities to help teach Mandarin to young Kyrgyz and has even distributed free television receivers to homes across the south of the country.

This serves China’s interests. But it also offers opportunities for Kyrgyz who can “look at a map,” as one young Bishkek businessman put it. Being in the middle means you can serve as a transit point. This businessman coordinates shipments from Dubai and Guangzhou, bringing electronics to Bishkek for reexport to the Russian market. Like impatient businessmen everywhere, he played with his phone throughout our conversation, saying “next question” as he tired of subjects. But his success demonstrates what is possible when you are stuck in between. With an advanced degree and a smattering of Chinese and fluent English and Russian, he would have been the perfect candidate to administrate the Jalal-Abad University; instead, he focuses on profit. Once he contributed articles to English-language publications, but that policy stuff is not for him anymore, he said.

For good or ill, the future of a small Central Asian state such as Kyrgyzstan will be shaped not by government policy makers. Their power will never match the military; they will never have the economic and cultural clout of global powers with stakes in the region. But Kyrgyzstan’s businessmen, large and small, can turn what seems like dependence into opportunity. This is a lesson for many small countries stuck in between, geographically or otherwise. You may have to play the hand you’re dealt, but you can play it with clever resolve.

Raffaello Pantucci is a visiting scholar at the Shanghai Academy of Social Sciences. Alexandros Petersen is the author of The World Island: Eurasian Geopolitics and the Fate of the West (Praeger, 2011). They are conducting research for a book on China’s role in Central Asia and have a website at www.chinaincentralasia.com [4].

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