In 2013, the current President of the People's Republic of China, Xi Jinping, unveiled the new project, "One Belt, One Road". Alongside this, Beijing has gained regional clout in several areas.
In 2021 we witnessed the return to power for the second time of the Taliban regime in Afghanistan. This crisis showed the geostrategic importance of Central Asia for several powers. It should be mentioned that, Moscow and some former Soviet republics in Central Asia: Kazakhstan, Kyrgyzstan and Tajikistan conducted military manoeuvres on the Tajik-Afghan border.
However, Russia is not the only actor interested in Central Asia. The People's Republic of China has been closely following developments in this region of the world. The autonomous region of Xinjiang shares 2,800 km of borders with Kazakhstan, Kyrgyzstan and Tajikistan.
Beijing's interest in this region is not only limited to the military sphere. In recent decades, Beijing has returned to the superpower chessboard, experiencing rapid economic growth since 1979, with the Central Asian states playing a key role.
Recent ties between Beijing and Central Asia date back to the end of the 20th century. China was the second country to recognize the independence of the Central Asian states in early January 1992, after the United States. However, initially, due to the instability and uncertainty in these states during the 1990s, Beijing acted cautiously. This caution took the form of encouraging Chinese domestic economic development and a major diplomatic campaign to improve ties with its neighbors and attract investment.
Starting in 1996, the Shanghai Five (China, Kazakhstan, Kyrgyzstan, Russia and Tajikistan) held a summit where they agreed to withdraw military forces from the former Sino-Soviet border and established a mechanism to resolve any border issues. In 2001, the Shanghai Five was renamed the Shanghai Cooperation Organization (SCO) with the addition of Uzbekistan (and has since welcomed India and Pakistan as members).
During the first decade of the 21st century, successive governments in Beijing have managed to strengthen ties with Central Asian states over four periods. However, the U.S. perception of China as a competitor made Beijing attach greater importance to deepening ties across Eurasia.
The turning point was the 2008 financial crisis. Beijing managed to weather this crisis better than most countries, but there were problems of overcapacity in many of its industries and it needed access to new markets. As a result, by 2010, China overtook Japan as the world's second largest economy and many countries opened up to Beijing for investment and to boost their economies.
In 2012, Wang Jisi, an influential scholar at Peking University's School of International Studies, developed a strategy called "March to the West" for an economic and diplomatic push to gain influence in Eurasia. The ideas in this plan would be the basis for the Silk Road and Belt Project, which current President Xi Jinping would present in Kazakhstan in 2013.
Figure 1: "China's role as Central Asia's most important trading partner". Source: https://www.china-briefing.com/news/china-and-central-asia-bilateral-trade-relationships-and-future-outlook/
China's current strategy is in line with its approach to international relations. Its strategy focuses on two parts to make the Central Asian states orbit around its interests. Central Asia has faced an effective economic transition to a market economy after the dissolution of the USSR, a lack of investment in infrastructure among these states and to the outside world. Also, most of these new states have been corrupt authoritarian regimes, which wanted to reduce their dependence from the Russian Federation.
Map 1: Land and sea routes of the BRI project. Source: https://www.asiasentinel.com/p/china-bri-countries-confront-covid
First, China has prioritized infrastructure. Through the second phase (2011-2030) of "the Great West Development Strategy" and the tour of the current Chinese President, Xi Jinping in Kazakhstan in 2013, where the "One Belt, One Road" (BRI) project was unveiled for the first time.
In June 2016, President Xi Jinping and then-Uzbek President Islam Karimov, inaugurated a new $1.6 billion rail link between the Ferghana Valley and Tashkent, including the 19.2 km Qamchiq Tunnel, the longest in the region, built by the China Railway Tunnel Group.
In May 2017, Chinese companies COSCO Shipping Corporation and Jiangsu Lianyungang Port Co bought the Kazakh national railroad company, with a combined 49% stake in the dry port on the Kazakh side of the border. The latter project has allowed costs per container to be reduced and customs procedures at the Kazakh border have become more expeditious.
On the other hand, Beijing is focusing on strengthening trade ties. First of all, Chinese companies and the Chinese government focused their industrial projects without counting on the local population. According to the Central Asia Barometer, based in Bishkek conducted a survey asking what respondents think about China. In Kazakhstan, Kyrgyzstan and Uzbekistan the percentage of support has decreased in recent years.
One example of this increased antipathy is in Kyrgyzstan. The Full Gold Mining Company, a local company founded by a Chinese state-owned company called Lingbao Gold. A current employee of the company stated, "In my opinion, Full Gold Mining does not bring any benefit to the community, except providing jobs for local people."
Due to this increased local antipathy, the Chinese government is following suit. It is developing more formal arrangements for cooperation on Industrialisation and Upgrading, in addition to the pre-existing ad hoc agreements of the individual companies.
At a meeting in May 2021, Chinese Foreign Minister Wang Yi told his five Central Asian counterparts that the Chinese government will set up a vocational training center in each country, called a "Luban workshop" (named after a legendary Chinese craftsman), within the next three years. In general, the Chinese companies' training programs are a response to the immediate demand for skilled technical workers in Chinese projects in Central Asia. These programs are quite successful in creating a skilled workforce for specific tasks. The main avenues for this upgrading have been on-the-job training and apprenticeship, employee training in China, or a combination of both.
The other players in Central Asia are also investing in various areas, such as trade, raw materials and others. Beijing has an advantage over competitors such as Russia. This ace up its sleeve lies in a pragmatic policy line in its international relations, based on: non-interference in the internal affairs of other parties, the promotion of advantageous economic cooperation and the enhancement of its own reputation. Beijing has never placed conditions on cooperation and investment, such as respect for human rights or other political concessions. This line has been welcomed by Central Asian political rulers.
Beijing relies heavily on hydrocarbon imports to sustain its economic growth. Apart from its main supplier and partner, Moscow, other key partners are in the Middle East or Africa. This makes more than 70% of crude oil and liquefied natural gas exports through the Strait of Malacca. To this end, China sees Kazakhstan and Turkmenistan as a solution to this problem and at any time can maintain the supply of crude oil and natural gas by land.
Map 2: "China's global quest for energy security". Source: https://www.allchinareview.com/wp-content/uploads/2014/06/map1a.jpg
China supports the Central Asian states in the fight against terrorism and fundamentalist movements. To achieve this goal, the foundations were laid for the establishment and operation of the Turkmenistan-Kazakhstan-Uzbekistan-China gas pipeline and the Kazakhstan-China (Atasu-Alashankou) oil pipeline, which connect the East Turkestan region and the countries of the region.
The China-Central Asia gas pipeline from Turkmenistan to China was inaugurated on December 14, 2009 in Turkmenistan with the attendance of the presidents of Turkmenistan, Uzbekistan, Kazakhstan and China. As of today, about 90% of Turkmen natural gas exports are directed to Beijing. For example, in 2019, Turkmenistan sold just over 30 billion cubic meters (bcm) of natural gas to Beijing, and Uzbekistan and Kazakhstan sold 10 bcm each.
Beijing has gained control of approximately 20% of Kazakhstan's oil production. Kazakhstan National Oil and Gas Company, KazMunayGaz, and China National Oil and Gas Company, CNPC, agreed to build a gas pipeline between the Chinese city of Beyneu and the Kazakh city of Chimkent. This natural gas extracted in western Kazakhstan will be transferred to China.
In turn, Beijing built one of the longest pipelines in the world, running 2,300 km from the Caspian Sea to Xinjiang province. China National Petroleum Corporation (CNPC) owns a major stake in the Kashagan oil field in the Caspian Sea, while Chinese companies own several key fields around the western city of Aktobe.
These investments are not only concentrated in oil and natural gas. Another key resource has been water. While Moscow has made and reneged on many promises to finance large hydropower projects in Central Asia, for example in Kyrgyzstan or Tajikistan, Beijing invested in helping to develop hydropower potential in the region.
It is worth mentioning that in 2012, China International Water & Electric Corporation (CWE) completed the Moynak hydropower plant in Kazakhstan, located between Almaty and the Chinese border. Another example, was in late 2018, with the completion of a project on the on the on the Irtysh River in northeastern Kazakhstan, for which Nur-Sultan paid $23 million. These projects have enabled Kazakhstan to become an energy exporter.
In Tajikistan, state-owned Sinohydro signed an agreement with Tajik resident Emomali Rahmon to build two dams on the Zarafshan as part of a $1 billion investment package secured during a visit to Beijing.
In Uzbekistan, the Chinese company, Dongfang Electric Corporation completed construction in 2019 of a new $15.8 million, 11.4 MW hydropower plant at the Tuyabugiz reservoir, south of Tashkent, with $8.1 million in financing from China Exim bank.
Beijing is overseeing cooperation between Tajikistan and Uzbekistan on the $550 million Zarafshan project. This project will allow China to become the arbiter between the two countries in Russia's backyard.
In Tajikistan, domestic gold production increased from 2.4 tons in 2012 to 8.1 tons in 2019, when a Chinese-Tajik joint venture reportedly accounted for more than 70% of production. Similarly, in 2013 Tajikistan produced barely 30,000 tons of cement and imported about 3 million tons. In 2018, the country produced 3.8 million tons and exported 1.4 million tons. Almost all of it was manufactured by Chinese companies. Also, certain Chinese investors have announced plans in recent years to modernize the Talco aluminum smelter, the country's largest industrial asset.
The gold deposits of the Upper Kumarg and East Duoba mines in Tajikistan have been ceded to the Chinese company TBEA for exploitation as compensation for its expenditure on the construction of the Dushanbe-2 power plant. More than 80% of Tajikistan's gold is mined in joint ventures with China. In Tajikistan, there are about 40 gold mines with deposits estimated at 400 tons.
In Kazakhstan, Chinese companies have invested in a new Sino-Kazakh cement plant with a planned daily production of 2,500 tons of cement, the Orda glass plant and a new Yutong bus factory under construction in the Karaganda region. Manufacturing is now the backbone of Chinese economic engagement in Kazakhstan.
Tashkent signed a $1 billion deal with CITIC Group, a state-owned investment vehicle, and Huawei to build digital infrastructure for domestic use and a manufacturing plant for surveillance equipment. In addition, China has built cement factories and spent more than $250 million on textile plants since 2016; another $130 million is earmarked for industry.
Security plays a key role in safeguarding Chinese investments in the region. China's increased presence in the region has been met with uncertainty and suspicion by the Kremlin and after 2014, Moscow adopted a more pragmatic relationship with Beijing. It is worth mentioning that in 2015, Russian President Vladimir Putin and Xi signed an agreement to discuss the harmonization of the Eurasian Economic Union with China's Belt and Road, an important acknowledgement of respect for the Russian-led project, and the partnership between the two countries has continued to grow.
In 2015 and 2016, Beijing signed a secret agreement with Tajik authorities allowing Beijing to renovate or expand 30 to 40 military guard posts on the Tajik side of the country's border with Afghanistan. Also, in 2021, Beijing agreed to fund the construction of a separate military base in Tajikistan, in a village called Vakhon, on the western edge of the Wakhan Corridor.
Beijing has adopted a pragmatic policy over the past 30 years in the region. However, since 2013, China embarked on One Belt, One Road (OBOR), what is now known as the Belt and Road Initiative. Central Asia is a key player in this project, as, it connects Beijing by land to some of its markets in Europe. These countries benefit from the development of infrastructure, be it roads, railroads, pipelines or electricity grids. This is highly appreciated by countries that lack the resources to modernize or even maintain outdated infrastructure.
However, these investments are often accompanied by Chinese labor and some of the funds in some projects were not used or "disappeared". It is worth mentioning that in Kyrgyzstan, two projects were allocated for the development of the road network in the capital city of Kyrgyzstan worth $121 million. The quality of the reconstructed roads was poor, such as the road linking Bishkek to Manas International Airport.
Chinese investors continue to face deep local distrust in Central Asia. The attitude of the region's inhabitants towards China is increasingly negative, and there is a public perception that Central Asian governments make overly generous concessions to their Chinese partners. Added to this, the EU, the US, India and Turkey are new players that have set their eyes on the region at different levels according to each actor. Alongside these players, Russia still plays a key role in the region. Only time will tell whether Beijing manages to maintain and consolidate its clout in the region or not.
Recommended bibliography:
Alejandro Sánchez, W., 2020. Central Asia and China in the Post-Pandemic World. [online] Diplomaticourier.com. Available at: https://www.diplomaticourier.com/posts/central-asia-and-china-in-the-post-pandemic-world
Stallard-Blanchette, K., 2020. The Coming US-China Competition in Central Asia. [online] Thediplomat.com. Available at: https://thediplomat.com/2020/02/the-coming-us-china-competition-in-central-asia/
Umarov, T., 2020. China Looms Large in Central Asia. [online] Carnegie Moscow Center. Available at: https://carnegiemoscow.org/commentary/81402
Xichao, Y., 2014. China's Rise in Central Asia Implications for EU Interests. [ebook] European Institute for Asian Studies. Available at: https://www.eias.org/wp-content/uploads/2016/02/EU-Asia-at-a-glance-Yu_Xichao-China-Central-Asia.pdf
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