Dialogue April-June, 2010, Volume 11 No. 4
China’s Rising Profile in Central Asia
Raghav Sharma*
Introduction
The formal demise of the Soviet empire in the winter of 1991 and with it the system of centralized political control by the Kremlin gave birth to five Central Asian Republics1 (CAR’s) that embraced sovereign statehood for the first time albeit a sense of nervousness. China was amongst one of the first countries to have granted diplomatic recognition to the five CARS’ on 27 December 1991, thus providing a window of opportunity for Beijing to rekindle old ties with the region that had been abruptly ruptured as a consequence of the Sino-Soviet schism.
Stakes in the region have soared with the opening up of avenues for the exploitation of oil and gas. These developments have shaped the contours of engagement for some of the major world capitals2 jockeying for influence in the hydrocarbon rich region. China’s fortunes in the region have witnessed a meteoric rise over the last two decades and it has forged extremely close ties with the CAR’s by weeding out political irritants in their relationships through: a settlement of long running border disputes, ensuing de-militarization of its borders, forging substantial economic links and developing meaningful regional cooperation through forums like the Shanghai Cooperation Organization (SCO)3. China’s geographical contiguity, ethnic linkages and growing economic linkages to Central Asia bring into play a host of other dynamics that underpin its deepening engagement with the CAR’s. This article attempts to identify the key interests that mould Beijing’s policies towards the CAR’s and the steps its taking to realize those interests, the potential challenges for realization of those interests and the implications of China’s rise to pre-eminence in the region for other players such as the US, Russia and India.
China’s Interests in Central Asia
With a gradual opening up of the CAR’s, a détente on China’s borders and the resultant deepening engagement on all key fronts have resulted in a phenomenal growth of China’s profile and accompanying interests in Central Asia. Beijing’s seminal interests in the region can be classified under the following three broad categories: security, energy and commercial interests.
Security Interests
Security and stability on the periphery through securing friendly and stable regimes is seen as being vital for ensuring growth and stability at home in the Chinese strategic calculus4. In light of the Central Asia’s geographical contiguity, ethnic and religious ties to China’s volatile Xinjiang province coupled with the creation of five new and unstable republics on its borders. Beijing nurtured serious anxieties with regard to the implications of these developments for its security. Thus, Beijing particularly keen to limit possibilities for any serious trouble brewing in Xinjiang and finding itself internationally isolated following its brutal suppression of the 1989 Tiananmen Square protests, moved swiftly to cultivate ties with the new Central Asian regimes. Beijing settled border disputes by inking border demarcation treaties with Kazakhstan in 1994 (with some areas being demarcated in 1999), Kyrgyzstan in 1996, and Tajikistan in 2002.5 The resolution of its long running border disputes with the CAR’s helped ease China’s security concerns, helped bridge the trust deficit and propelled its relationship with the CAR’s to a higher plane, thus paving the way for deeper engagement. Beijing has also prevailed upon the CAR’s to deny Uighurs any political or cultural space demonstrated for instance in the forced closure of associations for Uighur diaspora in Kyrgyzstan and Kazakhstan, particularly so in the case of the closure of the Institute of Uighur studies located in Kazakh capital of Almaty.6 This has been made possible by two factors: first refusal by CAR’s to fall in line would impose economic costs whose burden would be almost unbearable and second the despotic Central Asian regimes themselves feel increasingly threatened by radical politico-religious forces. To this end Beijing has also sought to cleverly harness the post 9/11 discourse on terrorism in its favour by latching its fight against the Uighur separatists in Xinjiang onto the bandwagon of Islamic terrorism.
Yet another emerging non-traditional security challenge for China is posed by the steady increase in the inflow of Afghan opiates, which have risen by 25% and find their way into China through the Tajikistan-Xinjiang border7. While 47 metric tons of precursor chemicals which are used for production of morphine and heroin were seized from Uzbekistan, Kyrgyzstan and Tajikistan in 2008,8 what is likely to be a particular cause of concern for Beijing would be that inflow of drug trafficking apart from undermining its already strained human security net in the region could also emerge as a lucrative source of funding for Uighur separatists.
Beijing has sought to use the SCO forum to address challenges of terrorism9 and drug trafficking by setting up a Regional Anti-Terrorism Structure in 2002 at Bishkek. While the 2006 summit of the SCO is significant for it resulted in the signing of the Shanghai Convention on fighting terrorism, separatism and religious extremism.10
Energy Interests
With China and CAR’s successfully weeding out some of the major irritants in their relationship early by the mid 1990’s, stage had been set for substantive and meaningful economic engagement which has been a powerful driver of China’s Central Asia policy. Central Asia’s oil reserves are pegged at 2.7% (13-15 billion barrels)11 and oil reserves estimated to be 4% (270-360 Trillion cubic feet)12 of the world’s total. Thus Central Asia offers China an opportunity to diversify its sources of oil and gas from its overt reliance on supplies from the volatile Middle East. Given China’s heavy dependence on energy imports to keep its economic engine in motion, the rich hydrocarbon resources in Central Asia have been the primary movers behind China’s deepening economic engagement with the region.
China has been rapidly acquiring stakes in the region’s oil and gas fields and it controls 24 per cent of Kazakhstan’s oil production13 and China National Petroleum has invested approximately US $10 billion in Kazakhstan alone since 199714. Beijing is working towards realization of its ambitious aim of connecting its oil and gas acquisitions to a vast network of pipelines being laid by it to quench its growing thirst for energy. The 2,238 km Sino-Kazakh pipeline which will connect the energy fields of the Caspian to the Dostyk-Alashankou border post and then feed into China’s domestic pipeline network is estimated to supply 20 billion tons of oil, about 5% of China’s crude oil imports.15 However, even more ambitious has been the Sino-Turkmen gas pipeline constructed at a cost of US $7 billion; it will supply 30 billion cubic meters (bcm) of gas to China. What is remarkable is Beijing’s success in drawing together Turkmenistan, Uzbekistan and Kazakhstan into a common pipeline network with the latter two supplying about a third of the gas requirements to China.16 Although Beijing was a late entrant in the Central Asian energy market not only has it successfully broken the monopoly of state owned Russian giant Gazprom but it also commands a distinctive edge vis-a-vis other potential competitors such as India17. The commissioning of these pipelines is also symbolic of China’s immense political will to secure its energy needs as also the power shift underway in Central Asia, away from traditional hegemon Russia towards China. The pipelines are envisaged by Beijing as reducing its overt dependence on shipment of oil by tankers through the Malaca Straits, which are under the control of the United States.
Apart from pipelines Beijing is also using its financial muscle to smoothen out potential competition to its energy ambitions in Central Asia. At the 2009 Yekaterinberg summit of the SCO, Beijing offered a loan of US $10 billion to the CAR’s on the pretext of helping the CAR’s reeling under the impact of a global economic recession, but in effect the loans are seen as a tool being used by Beijing to edge its way into the regions energy resource base and ease out competition.18 Russia will be the immediate and most severe casualty of the Chinese offensive in the energy sector in Central Asia.
In addition to hydrocarbons Beijing has also demonstrated interest in harnessing the hitherto untapped hydroelectric potential of Tajikistan by financing construction of hydroelectric projects in the country. This apart from being a cheap source of electricity to feed China’s growing energy needs could also potentially allow China to act as a transit country for energy to markets in India.
Commercial Interests
In addition to hydrocarbons Central Asia also offers the Chinese industry a vast array of mineral resources ranging from copper, iron, tungsten, gold, zinc to uranium to tap into. China has invested in an array of projects for extraction of industrial metals such as aluminum to precious metals like gold. However of particular significance is the strategic value attached by Beijing to the securing and diversifying its supply base of Uranium – vital to fuel its expansion of the nuclear energy sector. This is borne out by the agreement reached between Kazatomprom and Guangdong Nuclear Power Corporation (China Guangdong Nuclear Power Holding, CGNPC) in 2007. Under this agreement the two sides will forge “strategic cooperation in the field of nuclear fuel production…and Kazatoprom shall become the main supplier of Guangdong cooperation…means 50 per cent of the reactors to be built in China.”19
Second, the CAR’s offer a huge market for China’s burgeoning, export oriented economic growth and also hold out the potential for serving as its economic gateway into Russian and subsequently the European markets.20 China’s trade with Central Asia has grown in leaps and bounds, with the very first year following the collapse of the Soviet Union witnessing an astounding 130 per cent jump in trade21. Today, China with a trade turnover of US $17 billion compared to Russia’s US $21 billion has emerged as the Central Asia's second largest trading partner and is fast bridging the gap with Russia which has already fallen behind China in Kazakhstan- which dominates China’s trade relations with Central Asia.22 While Central Asia offers a lucrative land route for transit of oil and gas as well as for conducting trade with Eurasia to China, the latter offers to the landlocked CAR’s outlet to the sea. China has sought to effectively capitalize on this as early as 1995 by opening up its land ports for transit of trade goods to CAR’s.23
Trade between China and Central Asia is set to expand manifold with the operationalization of pipeline projects as well as with China’s massive investments in the offing to strengthen and expand the region’s road and rail network with which it hopes to penetrate both markets and sources of raw materials in the region. Proposed railroad projects worth over US $2 billion will link China to European markets via the CAR’s of Kyrgyzstan and Uzbekistan, bypassing Russia’s trans-Siberian rail network.24
Unlike the West, China has a distinctive edge in securing its interests due to its leadership’s appetite to take risks in a region whose political environment is not regarded as being conducive to large scale economic investments’. Second, China is perhaps the only country to have paid attention to the neglected banking sector in the region and has opened up branches of its banks in Central Asia and facilitated opening up of Kazakh banks in China25. Beijing’s attention to banking has played a major role in facilitating trade and investment in the region and allowed it to undertake execution of massive infrastructure development projects. Finally, Beijing has provided the Central Asian markets with cheap consumer goods that have successfully competed with and undercut Turkish, Iranian, Russian and expensive Western products.
Potential Challenges
Although, China’s rise to pre-eminence in the region is undisputable however there persist certain fundamental challenges which if not tended to could potentially sully China’s presently cozy relationship with the CAR’s. First, inspite of having cultivated good ties with all Central Asian capitals Beijing’s problems in Xinjiang are far from over. The religious revival that followed the Soviet demise, coupled with a re-establishment of ethnic and cultural linkages between Central Asia -which is home to an estimated 300,000 Uighurs (primarily concentrated in Kazakhstan, Kyrgyzstan and Tajikistan)26-with Xinjiang have all contributed to re-kindling ethno-nationalist aspirations of independence from Beijing. Furthermore, the radicalization ushered in by the Afghan jihad, the rise of movements such as Islamic Movement of Uzbekistan (IMU), Hizb-ut-Tahrir (HT) in the Ferghana valley and the Islamic Party of East Turkestan having trans-national linkages and aims coupled with widespread corruption and the repressive political and socio-economic policies followed by the elites of the CAR’s have all combined to make a lethal combination for fuelling unrest.27 Any instability emanating in the CAR’s will impinge upon security and stability of China, especially in the restive Xinjiang province.
Second, as part of its commercial transactions China’s sale of arms to the dictatorial regimes that dot the regions political landscape is likely to have serious repercussions in the long run. The arming of Central Asian regimes by Beijing, apart from upsetting Moscow and the US, will further contribute to domestic repression28, which in turn is seen as an important ingredient in fuelling violence in the region that often manifests itself in radical religious terms.
Third, the sheer pace and scale of China’s energy acquisitions in the region is likely to not only bring it in fiercer competition with Russia which has traditionally regarded the region as its sphere of influence but newer players such as India but it has sparked off fears of a reduction of the CAR’s energy independence at the cost of the Chinese.
Fourth, trade relations between China and CAR’s are massively unequal in character, with 85% of China’s exports to the region comprising of finished products while over 85% of Central Asian exports to China comprise of raw materials, oil and gas and metals.29 Beijing has also extended lines of credit to the CAR’s to buy Chinese products, thus seemingly reducing CAR’s to a state of economic dependency.30
Fifth, China’s plans to build and finance China-Central Asia railroad network connecting it to the Eurasian market are seen as directly undermining the Russian trans-Siberian network and are likely to create friction in its relations with Moscow.
Finally, the prolific rise of Beijing’s fortunes in Central Asia, the sheer scale of its economy, the nature of its economic relations with the CAR’s and it’s disproportionately large size have all contributed to an almost simultaneous increase in suspicions regarding its true intentions. China is accused of sponsoring an “unofficial policy of migration of its citizens to Central Asia as well as resource rich but sparsely populated Russian Siberia.”31The words of former Kazakh Ambassador to China Murat Auezov who opines “19th century China, 20th century China and 21st century China are three different China’s. But what unites them is a desire to expand their territories” 32 underscores the prevailing sentiment of a perceived fear regarding China’s expansionist tendencies.
Implications of China’s Rise
China’s expanding engagement with the CAR’s on all major fronts will undoubtedly engineer a major geo-political and geo-economic re-alignment in the region’s landscape. For the foreseeable near future there will continue to be a broad congruity of interests between the Zhongnanhai and the Kremlin, given their opposition to US military presence in the region as well as the threat of ideological contagion posed by the color revolutions. However, with China poised to eclipse Russia economically and with its emergence as a powerful alternative market for the Central Asia’s hydrocarbon resources, Moscow fears being reduced to the position of a junior partner in a region it traditionally regards as its ‘extended neighborhood.’ Furthermore China’s rise has rekindled old fears in some quarters in Russia of nefarious Chinese designs of encouraging migration of Chinese citizens not just to Central Asia but also to the resource rich and sparsely populated Russian Far East.33 The slow but steady rise of Chinese soft power in the region seen for instance in the proliferation of Chinese language and culture in the region will undermine Russia’s exclusive cultural dominance over the region. Sustaining the current comaraderie in Sino-Russo relations in Central Asia will prove to be an increasingly arduous task. Thus, finding common ground upon which to base their relations would be vital to sustaining their relationship and this would entail looking beyond an alliance to counter the US in the region.
The rise of China not only provides the CAR’s the possibility of freeing them from Russian tutelage but also provides them with a viable alternative to the US. China’s geographical proximity to the CAR’s, economic, security and political interests imply that China’s involvement with the region will sustain over a long period of time unlike the US whose interest in the region has waxed and waned over time. Moreover unlike the US, with whom dealings are conditional on issues of democracy and human rights, the Beijing regime has no qualms in doing business with their Central Asian counterparts. The eviction of the US from its base at Kashi-Khanbard, Uzbekistan in 2005 following the Anndijon uprising underscored the fragile nature of the alliance between the US and the CAR’s. The mounting influence of China in the region is likely to make it all the harder for the US to push its agenda of democracy and human rights while simultaneously aspiring for acquiring a more strategic foothold in the region.
India like China has had civilizational linkages with Central Asia and it has sought to forge cooperation with the CAR’s in a vast array of sectors ranging from trade, science, information technology and agriculture to name a few. However, with Beijing effectively casting its net far and wide into the region, a shrinking of Moscow’s stature in the region and with reduced leverages that Washington wields over the region, New Delhi will have to show some serious policy innovation with regard to Central Asia if it is to play the unfolding game of Chinese checkers in Central Asia on its own terms.
Conclusion
The die has been cast for an exponential growth and proliferation of China’s stature in the Central Asian Region, a development that will have profound implications for determining the future contours of the regions’ geo-political landscape and the engagement of outside players with it. Securing its periphery primarily through spurring economic growth and securing friendly regimes in the neighbourhood coupled with a desire to expand its sway over the region’s vast hydrocarbon reserves have been the primary driving forces behind Beijing’s Central Asia policy. Thus far Beijing has scripted its rise in the region with great degree of strategic planning and finesse, and its results are all too visible. Infact the rise of Chinese influence in Central Asia far from being a bland zero sum game also provides the CAR’s an opportunity to play off influence of Moscow, Washington and Beijing against each other, thus strengthening their bargaining position.
However there exist several potential pitfalls, which if not addressed, could scuttle the pace of Beijing mounting influence in Central Asia. Beijing’s tendency to treat the Uighur problem primarily as one of law and order which it seeks to address primarily through economic measures and seeking alignment with Central Asian regimes but without an accompanying internal political dialogue; its close identification with and support to unstable Central Asian regimes seen as a root cause for rise of religious radicalism; the nature of its economic engagement with the CAR’s, potential friction with Moscow – all of which if not dealt with a great deal of dexterity could potentially undermine China’s almost phoenix like rise in a region with which it has enjoyed historical linkages. Thus, how Beijing chooses to navigate the new Silk Road it is forging with the CAR’s will be instrumental in determining the harnessing of potential opportunities as well as response to challenges that emerge along the way.
Footnotes
1 Following the disintegration of the Soviet Union in December 1991, the region of Central Asia saw the emergence of five independent Republics of: Kazakhstan, Kyrgyzstan, Turkmenistan, Tajikistan and Uzbekistan.
2 Apart from Moscow and Beijing today Washington, Brussels, New Delhi, Ankara, Tehran and Tokyo are all trying to deepen their foothold in the region.
3 The organization was founded in 1996 as the Shanghai five and rechristened as the SCO in 2001 following the accession of Uzbekistan. China is the principal architect of the SCO, which has today emerged as one of the largest and most successful regional groupings by way of having made considerable progress in terms of economic engagement and political cooperation. Further details can be accessed at http://www.sectsco.org/EN
4 Michael Schiffer- The Impact of China’s Economic and Security Interests in Continental Asia and on the United States, Testimony before the US-China Economic and Security Review Commission, 20 May 2009, pp. 2, http://www.uscc.gov/hearings/2009hearings/written_testimonies/09_05_20_wrts/09_05_2
5 Sebastein Peyrouse- Central Asia’s Growing Partnership with China,
EU-Central Asia Monitoring, Working paper no. 4, October 2009, p. 5
6 Sebastein Peyrouse- Economic Aspects of the Chinese-Central Asia Rapprochement, pp. 12
7 Jacob Townsend- China and Afghan Opiates: Assessing the Risk”, Central Asia- Caucasus Institute, Silk Road Papers, June 2005, pp. 42
8 World Drug Report 2009, United Nations Office on Drug and Crime, 24 June 2009, pp.37 and 41, http://www.unodc.org/unodc/en/frontpage/2009/June/world-drug-report-2009-released.html
9 Beijing’s definition of what constitutes terrorism remains widely debated, it classifies any form of political dissent in Xinjiang and Tibet (including activities of the Dalai Lama) as terrorism.
10 The full text of the convention can be accessed at http://english.scosummit2006.org/en_bjzl/2006-04/20/content_87.htm
11 Ingolf Keisow and Nikolas Norling- The Rise of India: Problems and Opportunities, Silk Road Papers, January 2007, p.86
12 Central Asia’s Energy Risks, Asia Report, No.133, 24 May 2007, International Crisis Group, Bishkek, p. 12
13 Sebastein Peyrouse- Central Asia’s Growing Partnership with China, pp.7
14 Igor Torbakov- The West, Russia and China in Central Asia: What Kind of Game is being played in the region?, pp. 35
15 Alexander Jackson- China and Central Asia, Caucasian Review of International Affairs, Caucasus Update No.33, May 19,2009
16 Sebastein Peyrouse- Central Asia’s Growing Partnership with China,
EU-Central Asia Monitoring, Working paper no. 4, October 2009, p. 8
17 This point was most lucidly underscored in the bitter rivalry that accompanied the fierce bidding for the acquisition of petro Kazakh. China clinched the deal hands down with US $4.18 billion takeover of the petroleum companys.
18 Isabel Gorst and Jamil Anderlini- Beijing offers 10 billion in crisis loans to Central Asian Countries, Financial Times, 17 June 2009.
19 Information about 10-years activities of Kazatomprom, http://www.kazatomprom.kz/en/news/2/Information_about_10-years_Activities_of_Kazatomprom
20 Sebastein Peyrouse- Central Asia’s Growing Partnership with China,
EU-Central Asia Monitoring, Working paper no. 4, October 2009, pp. 5,
www.eucentralasia.eu/fileadmin/user_upload/PDF/Working_Papers/WP4-EN.pdf
21 James P Dorian, Brett H Wigdortz and Dru C Glandey- China and Central Asia’s Volatile Mix: Energy, Trade and Ethnic Relations, East West Center, The Asia-Pacific Issues No 31, 1997, pp.4, http://www.eastwestcenter.org/fileadmin/stored/pdfs/api.031.pdf
22 Sebastein Peyrouse- Central Asia’s Growing Partnership with China, pp. 7
23 Sun Zhuangzhi- The Relations between China and Central Asia, pp.50,
src-h.slav.hokudai.ac.jp/coe21/publish/no16_1_ses/03_zhuangzhi.pdf
24 Erica Marat- China Seeks to Link Central Asia by Railroad, Eurasia Daily Monitor, Volume 7, Issue 30, 14 February 2010
25 Sebastein Peyrouse- Economic Aspects of the Chinese-Central Asia Rapprochement, Silk Road Paper, Central-Asia Caucasus Institute, September 2007, p. 9-10
26 Niklas Swanstorm- China and Central Asia: a new Great Game or traditional vassal relations?, Journal of Contemporary China, 2005, pp. 575
27 Ramakant Diwedi- China’s Central Asia Policy in Recent Times, China and Central Asia Forum Quarterly, Volume 4, No. 4, 2006, p. 142
28 Anotonia Blua- Central Asia: Militarization Could Come at a cost of regional stability, Eurasia Insight, 10 April 2010, http://www.eurasianet.org/departments/insight/articles/eav090702.shtml
29 V Paramonov and A Strokov- Economic Involvement of Russia and China in Central Asia, p.6
30 Niklas Swanstorm- China and Central Asia: a new Great Game or traditional vassal relations, pp. 579
31 Igor Torbakov- The West, Russia and China: What Kind of Game is being played in the Region? Transition Studies Review, 2006, vol 14, No.1, 2007, pp. 158
32 Jeremy Bransten- Central Asia: China’s Mounting Influence, Eurasia Insight, 11 March 2004, http://www.eurasianet.org/departments/insight/articles/pp112304_pr.shtml
33 Igor Torabakov- The West, Russia and China in Central Asia: What Kind of Game is being played in the region? Pp.35