Posts Tagged ‘New Silk Road’

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

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

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

March 18, 2015

Raffaello Pantucci

Director, International Security Studies

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

Testimony before the US-China Economic and Security Review Commission

Looking West: China and Central Asia

 

Background

 

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

 

Xinjiang

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

China’s Economic Surge into Central Asia

 

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

 

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

 

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

 

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

 

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

 

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

 

Enunciating a strategy

 

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

 

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

 

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

 

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

 

Regional repercussions

 

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

 

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

 

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

 

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

 

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

 

US Relations and impact

 

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

 

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

 

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A new piece for China Outlook, an excellent online magazine that I have actually written for before, but failed to post here for some reason. For my previous piece for them, please see here, it looked at foreign investment into Xinjiang and the difficulties the Chinese government was encountering in persuading people to come. This one instead draws and expands considerably on a presentation I did in Beijing. It draws on my time honoured theme of China’s push into Central Asia, and of course, much of my work on this topic can also be found on the site I co-run, China in Central Asia. Special thanks to editor Nick at China Outlook for his work on this and for allowing me to repost here and on my other site.

Related, I spoke to the Associated Press about Xinjiang and how the Chinese government tries to control the narrative, and unrelated, to NBC about the new video featuring European fighters to emerge from ISIS in Syria.

China’s inexorable drive into Central Asia

August 5, 2014

by Raffaello Pantucci

Central-Asia-270x167

Picture from China Outlook

In a speech last September at Nazarbayev University in Astana, Kazakhstan, China’s President Xi Jinping coined a new strategic vision for his country’s relations with Central Asia, calling for the creation of a Silk Road Economic Belt. Coming at the culmination of a sweep through Central Asia during which he signed deals worth $56bn and touched down in four out of five capitals, the declaration may be something that has now received a new moniker from President Xi, but the economic and geopolitical reality that it characterizes is one that has been underway for some time.

President Xi’s declaration of the Silk Road Economic Belt needs to be understood within a wider context, particularly in his October 2013 speech at a work conference on diplomacy in which he set out his first formal statement on foreign policy. There he highlighted the priority he wanted his administration to place on border diplomacy: “We must strive to make our neighbours more friendly in politics, economically more closely tied to us, and we must have deeper security cooperation and closer people-to-people ties.”

The emphasis has continued and China has placed great store by the events it is hosting which focus on regional coordination and connectivity: the Conference on Interaction and Confidence Building Measures in Asia (CICA) was elevated from being an unheard-of conference to a spectacle of international importance; whilst the Heart of Asia process (focused on re-connecting Afghanistan to its region) is being hosted in Tianjin later in August to equal fanfare. On the international stage, China has prioritized creating a new development bank to reflect both its increasing rejection of the old global financial structures, but also to increase its ability to influence growth and development in the world.

The clearest expression of the Xi administration’s newly attentive border diplomacy, however, can be found in the focus on economic corridors. The declaration of the Silk Road Economic Belt has been matched by an enhanced focus on three other major economic corridors emanating from China: the Maritime Silk Road, the China-Pakistan Economic Corridor, and the Bangladesh, China, India, Myanmar (BCIM) Corridor.

Talk to Chinese officials or experts and they will talk of these corridors as strings of the same instrument, highlighting the focus on economics, connectivity and the stability that flows from prosperity as the end goal of this ‘corridor’ diplomacy. Officials talk of the ‘One Belt, One Road’ strategy that focuses in particular on the Maritime Silk Road and the Silk Road Economic Belt as the two core elements.

For President Xi’s administration, the aim is to recreate China as the heart and hub of regional politics and economics, to develop China’s poorer border regions and to provide prosperity and opportunity for Chinese firms that are increasingly being pushed to go out into the world. In diplomatic terms, it is the beginnings of a realization in Beijing that it can no longer sit by and let international affairs happen in its neighborhood without taking any role. But as with all Chinese initiatives, it starts by focusing on confidence-building measures, discussion and economics.

China’s rise in Central Asia at the expense of Russian influence and power is not new, but has been underway for almost a decade. President Xi’s visit to Astana came off the back of a number of regional visits by his predecessor President Hu where China had signed a number of huge deals and demonstrated that it was the coming power in Central Asia. As Russian influence has stagnated and infrastructure rotted, Chinese firms have moved in to secure energy fields and mining concessions, as well as rebuilding Central Asia’s physical infrastructure.

Travel along the routes from Kashgar or Urumqi in Xinjiang into Central Asia and you will find roads and rail links that have been refurbished or newly built by Chinese firms. Pipelines from Kazakhstan’s oil fields in Atyrau or Turkmenistan’s super-giant Galkynysh gas field have been built in record time to bring the fuel back to China. Mining concessions across Kyrgyzstan and Tajikistan have been snapped up by Chinese firms, while Chinese companies burrow roads and rail links through mountains in Tajikistan and Uzbekistan.

Visit downtown Dushanbe in Tajikistan, and you will now find a city that has had its main roads refurbished in time for a national anniversary by Chinese firms, a Presidential home and library built by Chinese companies, a CCTV traffic system paid for by a China Development Bank loan and built by Huawei, fields of cranes manned by Chinese workers erecting new buildings around the city, and all of this powered by a giant thermal electricity plant built by PowerChina that ensures that Dushanbe’s power shortages during winter are a thing of the past.

China’s relationship with Central Asia can no longer be caricatured as being built on extracting mineral wealth to feed insatiable Chinese factories. Chinese companies build infrastructure and are increasingly becoming regional energy suppliers, as well as supplying Chinese goods into Central Asian markets. From Kyrgyzstan’s southern entrepots of Kara-Suu and Osh to the Caspian Sea at Turkmenbashi in Turkmenistan, Chinese goods fill the markets.

Talk to young students at the Confucius Institutes in Bishkek, Kyrgyzstan and elsewhere and they will often speak of learning Mandarin at their parents’ demand to help them cut better deals in Chinese markets in Urumqi or Guangzhou. Language training at a more formal level extends to officialdom in Kyrgyzstan, with scholarships offered to bureaucrats in the Presidential administration, ministry of foreign affairs and ministry of the interior. Beijing, Shanghai and Urumqi universities are full of Central Asian officials’ children who are learning Mandarin. When Turkmen President Gurbanguly Berdimuhamedov visited Beijing in November 2011 he was greeted by around 1,000 Turkmen students on scholarships at Chinese higher education establishments.

These scholarships are part of the Chinese soft power push into the region, one that is matched with strong political relations that are advanced at a bilateral basis as well as through the Shanghai Cooperation Organization (SCO). And as this multifaceted push develops, its economic force and gravity becomes a draw for random Chinese traders and adventurers seeking prosperity.

One couple in Bishkek reported initially arriving as officials working for a state owned firm and as a travel agent: 15 years later, they owned stalls in Kyrgyzstan’s markets, a Chinese restaurant in Bishkek, as well as a biscuit factory outside the city. In downtown Dushanbe, a generous Chinese businessman who had been in the country for about seven years proudly showed off the factory into which he had designed purpose-built flats for Chinese workers coming into the country. His main industry was a fireworks factory and on his wall he displayed a calendar with pictures of himself with senior leaders and events at which he had supplied the fireworks.

The drive behind all this activity is both directed and haphazard. The latter is mostly the product of industrious Chinese following the economic gravity in the region. At a more directed level, however, the effort is part of a longstanding effort by the Chinese government to increase development and prosperity in the under-developed western regions. Xinjiang, China’s westernmost province that accounts for a sixth of the nation’s land mass, has an under-developed infrastructure with an angry Uighur minority who are increasingly expressing their anger through attacks against state institutions.

The Chinese government’s solution to this is a heavy-handed security response matched with focused economic investment. But for landlocked Xinjiang to be able to prosper it will require trade links through Central Asia to Russian and ultimately European markets, or through Afghanistan or Pakistan to Arab and Iranian markets or to the Indian Ocean.

The push in this direction has been in existence for some time. It was late 2011 when Peking University’s dean of international studies, Wang Jisi, first floated his ‘March Westward’ concept. And it is one that President Xi Jinping appears to have harnessed as one of the cores of his foreign policy direction as he looks out at the world.

Building on the success of this drive into Central Asia and its economic and trade push, with politics and security coming as secondary consequences, the model is now being replicated elsewhere, with the four corridors fundamentally echoing the New Silk Road that had been underway for some time.

For anyone trying to understand China’s foreign policy under Xi Jinping, it is in Central Asia that the first glimmers of understanding can be found. The larger focus on border diplomacy and its short and medium-term impacts and consequences can all be found in Central Asia where China is rapidly becoming the most influential player on the ground.

The region is being re-wired so that all roads go to China, and the economics are slowly becoming increasingly dependent on China. The longer-term implications of this shift have yet to be completely understood, but they will likely strike a path that we will slowly see China following along its other economic corridors.

Another op-ed in the Chinese press, this time in 中文 for the Oriental Morning Post (东方早报). Looks at the question of Chinese-European cooperation on Central Asia. More detail on this topic coming soon. As usual, Chinese on top, English submission below.

中欧在中亚的合作前景

吉尔吉斯斯坦首都比什凯克最近有点忙。就在短短几周里,欧盟与中亚部长级会议和上海合作组织总理会议先后在此召开。虽然两者并无联系,但两大高层会议在吉尔吉斯斯坦召开不但显示了中亚的重要性,也体现了这一区域作为中欧之间桥梁的潜在作用。

目前中国在中亚是一支崛起力量。与日俱增的投资、对于天然资源的兴趣和区域制度的发展都在让这一区域重新转向中国。最近上合组织总理会议上,温家宝总理鼓励中亚各国充分利用中国提供的100亿美元贷款来建设这一地区的基础设施,即充分体现了这点。中国希望这一区域的经济能够腾飞,而更为重要的是能同时带动新疆的发展。

欧盟的部长级会议并没有这样远大的目标,而是再次强调了发展中亚对于欧盟的重要性。除土库曼斯坦首都阿什哈巴德之外,欧盟外长凯瑟琳·阿什顿访问了其他各国首都,并且利用这次部长会议机会强调“可能进一步发展我们之间的能源、贸易和经济关系”。欧洲在中亚的投资目前非常有限,这主要是因为缺乏机会,投资环境也非常不佳。但是毫无疑问,欧盟具有发展双方联系的意图和希望。

2007年,欧盟公布了中亚战略,内容范围非常雄心勃勃,意图为整个欧洲在中亚打造一份新计划。这一战略以欧盟的“欧洲伙伴政策”为表述,旨在增强欧盟对中亚的重心。在德国担任欧盟轮值主席国期间,作为历史上长期对中亚充满兴趣的国家,一手推动了这一战略。欧洲非常希望这能发展出一条更为实在的路径,通向这些长期来被他们忽略的中亚国家。

然而事与愿违,距这份战略公布至今已有五年时间,但并未见到任何实质性的发展。欧盟在中亚投入了大量资源,这非常显而易见,如果你驾车在中亚地区,会看到学校和开发项目工地上挂着欧盟的旗帜。除此之外,欧盟也通过一项叫做“中亚边界管理”的合作来帮助中亚各国进行边界控制,为落后的边境管理提供现代化训练和管理办法。但是,欧洲在此留下的足迹依然停留在非常表面的层次,绝大多数中亚国家并不会把欧盟当作这一区域的主要角色。如纳布科天然气输气管工程这样的大规模能源项目依然在无穷无尽的讨论谈判之中。

相比之下,中国在中亚的力量迅速崛起。过去一年里每个中亚国家我至少都去了一次以上,而在每个国家的官员、民众和分析家都告诉我中国是那里的新力量。有趣的是,虽然他们看到的是中国为这一区域带来的变化,但他们都宣称更想成为欧洲国家。欧盟模式许诺的稳定繁荣和国家发展是他们都希望能逐步达成的前景,而且他们强调自己愿意同欧洲做生意。照此看来,欧盟在中亚赢得了软权力。

但是,欧盟和中国在中亚取得的成就也突出了中欧间通过中亚进行结盟的潜在可能。中国对这一区域产生兴趣的本质是发展新疆战略。今年早些时候在乌鲁木齐举办的中国亚欧博览会上,温家宝总理说计划要把新疆发展成“亚欧的门户”。其想法是建立通过中亚、最终到达欧洲的联系。这将为新疆带来经济繁荣和发展,产生如当年“丝绸之路”那样将欧洲和亚洲相连的效应。

这对于各种有关方都是个非常具有吸引力的计划。这不仅仅将帮助达成中国区域发展的目标,还能为中亚带去繁荣,以及增强中国和欧洲之间直接贸易联系,这一切都将对经济发展产生重要作用。

当然,需要克服的障碍也不少。尽管中亚人民经常强调中国是这一区域的崛起大国,但他们也经常告诉我中国控制带来所谓的危险。吉尔吉斯斯坦和哈萨克斯坦的人们说中国公司给工人待遇过低,不够公平,塔吉克斯坦人则一直对中国男人娶走了他们的女人表示不满。显然,中国在中亚的软实力建设还有待提高。但是,中国公司可以向欧洲同仁学习一件事情:雇佣当地工人,为他们提供好的工作条件,改善他们的社会,这些都是中国在中非投资时能够用来改善自己形象的方法。同欧洲公司进行接触也许可以帮助中国投资者学习一下他们使用的战略。

这一切都将是个长期游戏。欧洲对中亚重燃兴趣,但这需要有更具体的行动跟进。但是如果中国愿意表达同欧洲作为伙伴在中亚共同发展的兴趣,那么这一定会引来欧洲更大的关注。虽然讨论“新丝绸之路”未免有些过时,但通过中亚铺开中欧之间的道路将会最终带来两方战略合作的果实。

(李鸣燕 译)

Europe in Central Asia

Bishkek, Kyrgyzstan has had a busy few weeks. In the space of a few weeks it has hosted a EU-Central Asia Ministerial meeting and then the Shanghai Cooperation Organization (SCO) Prime Minister’s Summit. Whilst unconnected, the two high level meetings in Kyrgyzstan show Central Asia’s importance, but also the potential for the region to act as a link between China and Europe.

Currently, China is the rising power in Central Asia. Its growing investment, appetite for natural resources and development of regional institutions are reorienting the region towards China. The recent SCO Prime Ministerial Summit in Bishkek highlighted all of this as Premier Wen Jiabao encouraged Central Asian powers to take advantage of the $10 billion loan that China was extending through the SCO to encourage regional infrastructure investment. The hope for China is that the region would develop economically, and more importantly, that it would develop in a way that would help encourage development in Xinjiang.

Europe’s Ministerial meeting was far less ambitious, but highlighted once again the importance that the EU attaches to developing Central Asia. Visiting all of the regional capitals except Ashgabat, Turkmenistan, European foreign minister Catherine Ashton used the opportunity of the Ministerial meeting in Bishkek to emphasize the ‘potential to further develop our energy, trade and economic relations.’ European investment in Central Asia is currently quite limited, trapped between a lack of opportunities and a very challenging investment climate. But clearly the hope and intention is there to try to develop this connection.

Back in 2007, the EU launched a strategy for Central Asia. The paper was ambitious in its scope, and aimed to lay out a new plan for Europe to engage with Central Asia. Phrased as being an expansion of the EU’s ‘European Neighbourhood Policy’ the strategy aimed to increase and target’s the EU’s focus towards Central Asia. Nurtured and launched under a German Presidency of the EU – a member state that has always had a keen historical interest in the region – there was a great hope that it might finally help develop a more practical approach towards a set of states the EU had long overlooked.

Unfortunately, in the five years since the strategy was launched, very little has tangibly been achieved. The EU has spent considerable resources in Central Asia – something that is visible on the ground as you drive around with European Union flags on schools and development projects around the region. It has also helped try to develop border controls across the region through a special Border’s Management Program that has tried to bring modern training and methods to Central Asia’s underdeveloped border guards. But its regional footprint is still very light, with most Central Asian countries not considering the EU one of the region’s major players. Large-scale energy projects like the Nabucco pipeline have yet to get going and are trapped in endless discussion rounds.

In contrast, they increasingly see China as a major player. Over the past year, I have been to all of the Central Asian countries at least once. And in each one, officials, citizens and analysts all told me that China was the rising power in the region. What is interesting is that while they all see the growing consequence of China in the region, they all aspire to be like European states. The model offered by the EU of stable prosperity and a developed state is something that they would all like to achieve eventually and they were eager to emphasize that they would like to do business with Europe. The EU, it seems, is winning the soft power conversation on the ground in Central Asia.

But these parallel achievements by the EU and China in the region highlight the potential for a great alliance between the EU and China through Central Asia. China’s interest in the region is in essence an extension of its strategy to develop Xinjiang. The underlying plan laid out during the China Eurasia Expo is to develop Xinjiang into becoming a ‘gateway for Eurasia’ as Premier Wen Jiabao put it in Urumqi earlier this year. The idea is to develop links through Central Asia and ultimately through to Europe. This would bring prosperity and economic development to a part of the country that has thus far suffered from underinvestment and under-development. It would also finally have the effect of rebuilding the Silk Road that used to bring Europe and Asia together.

This is a plan that has great appeal to all involved. It would not only help China’s goals for regional development, but also help bring prosperity to Central Asia, and finally, help improve direct trade links between China and Europe. All of which would have the net effect of improving prosperity.

Of course, there are a number of obstacles to overcome. While people in Central Asia were often eager to highlight that China was the rising power regionally, they were equally eager to tell me stories of the dangers of Chinese domination. People in Kyrgyzstan and Kazakhstan told stories of Chinese companies paying badly and treating workers unfairly, while Tajiks would repeatedly talk of Chinese men marrying their women. China has a great deal of soft power work to do in the region. But here is something that Chinese firms regionally could learn from their European counterparts. Hiring local staff, offering them good working conditions and establishing ways to help improve the societies in which they are working are methods that the Chinese investors in Central Asia might be able to help improve their image. Making contact with European companies regionally might be a way to try to learn some strategies they have deployed.

All of this is a very long-term game. Europe’s renewed interest in Central Asia needs to be followed up with more concerted action. But an expression of interest from China that Europe is a partner with which China would like to work with in helping regional development in Central Asia is something that could help spur greater European attention on the region. While it is cliché to talk about the New Silk Road, repaving the link between China and Europe through Central Asia could help finally bring the EU-China strategic partnership to fruition.

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.