1

Red Star over Central Asia

Red Star over Central Asia

Slowly, steadily and quietly, China gathers influence in the heart of Eurasia.

As the United States and Russia continue to be in a relative deadlock over what should be done to resolve the Syrian crisis, Europe is increasingly focused on Moscow’s attempts to lure both Ukraine and Armenia into its projected Eurasian Economic Union. In this context, Chinese president Xi Jinping’s ten-day journey to Central Asia that ended on September 13 in Kyrgyzstan, where this year’s summit of the Shanghai Cooperation Organization took place, went largely unnoticed. Even the Russian media, usually attentive to key developments in the post-Soviet space, wrote and talked more about the Geneva meeting between John Kerry and Sergey Lavrov than about Xi Jinping’s meetings in Central Asia. However, it is these very meetings that can change the strategic face of the region to Russia’s dissatisfaction, with broader implications for other regional players, including the United States and the European Union.

While Central Asia plays a marginal role in both international trade in general and China’s foreign trade in particular, it also pales in comparison with most of its neighbors in demographic terms, since the combined population of the five Central Asian republics, known as the “stans”, is under seventy million people, fewer than in Iran alone. However, Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan and Tajikistan are located in what U.S. president Jimmy Carter’s national-security adviser Zbigniew Brzezinski once called the “Eurasian Balkans.” This comparison seeks to account for Central Asia’s strategic location at the crossroads of civilizations and the intrinsic instability caused by weak state structures and constant competition for primacy among great powers.

Apart from the geographic advantages that the region offers due to its positioning as a land bridge between Europe and Asia, Central Asia is also home to vast energy reserves. In the late 1990s, the mineral riches of Kazakhstan alone were famously compared by the U.S. State Department to those of some Persian Gulf countries, leading some officials to speak of Kazakhstan as
a second Saudi Arabia. Likewise, neighboring Uzbekistan and Turkmenistan quickly drew the attention of major international oil and gas companies after the proclamation of their independence from the Soviet Union in 1991. Even the region’s poorest states, Tajikistan and Kyrgyzstan, are thought to have considerable but yet untapped oil, gas, and gold deposits. Both of them will need massive investments in the years to come, and this is where China’s readiness to pour in billions of U.S. dollars from its enormous foreign-currency reserves is particularly pleasing for the local regimes.="#v=onepage&q=kazakhstan%20%22second%20saudi%20arabia%22&f=false">

At a time when the eyes of the international community are riveted to the U.S.-Russian balancing act over Syria’s use of chemical weapons, Beijing is further strengthening its hand in Central Asia with as much pragmatism as Chinese diplomacy has always had. On September 4, Xi Jinping and his Turkmen colleague, Gurbanguly Berdymukhamedov, launched production at the world’s second-largest gas field at Galkynysh, with estimated reserves up to 21.2 trillion cubic meters. The two leaders had earlier signed a formal agreement on the construction of an expanded gas pipeline between Turkmenistan and China’s Xinjiang. In December 2009, Xi Jinping’s predecessor, Hu Jintao, and the presidents of Kazakhstan, Turkmenistan and Uzbekistan inaugurated the Central Asia-China Gas Pipeline, which can now carry some 40 billion cubic meters of natural gas per year after its extension. As China plans to increase its gas purchases from Central Asia to over 65 billion cubic meters by 2020, Beijing is increasingly viewed by the local leaders as a privileged economic partner, ahead of Russia or any other foreign player.

On his next stop in Kazakhstan, Xi Jinping and his Kazakh counterpart, Nursultan Nazarbayev, finalized the purchase by the China National Petroleum Corporation of a 8.33 percent stake in the Kashagan oilfield. Last August, this giant deposit situated off the Caspian coast was ranked the world’s most expensive energy project ever by CNN Money, with its price tag around $50 billion. While the decision of ConocoPhillips, a U.S. oil and gas company, to sell its share in Kashagan was already made public in November 2012, Beijing still had to overcome competition from India, whose Oil and Natural Gas Corporation had been regarded for months as a prospective winner. Thus, even if China is absent from Kazakhstan’s two other largest energy projects, its entry into Kashagan has marked a significant victory for Beijing in what some experts call the “
New Great Game” in Central Asia. Clearly, New Delhi is the biggest loser, since its growing energy needs will continue to remain largely unsatisfied, despite its previous overtures vis-à-vis the Central Asian partners.="#v=onepage&q=kashagan%20%22new%20great%20game%22&f=false">

However, China’s power game in Central Asia will have even greater implications for Russia, the United States, and Europe. While Russia’s monopoly over Turkmen gas ceased to exist as of late 2009, when a pipeline towards China was inaugurated, its influence over the Europe-bound export routes of Turkmenistan’s gas sales offered it not only high margins for transit but also extra political leverage in Brussels. As Turkmenistan is increasingly oriented eastward and will export this year a meager 10-11 billion cubic meters of natural gas to Russia, against 40 billion cubic meters to China, Moscow’s bargaining chips in Europe will inevitably dwindle.

For similar reasons, Europe’s energy ties with the reclusive Turkmenistan are doomed to further slacken. Back in 2008, Brussels and Ashgabat signed a Memorandum of Understanding on energy issues, and both Turkey and Azerbaijan repeatedly attempted to lobby European interests by persuading Turkmenistan to join a network of projected pipelines running from Central Asia and the South Caucasus to Europe. With most Turkmen gas now diverted in the direction of China, prospects for Ashgabat’s full-fledged participation in the Trans-Caspian Pipeline presented by Brussels as one of the best ways to curb its energy dependence on Moscow are becoming thinner than ever.

Furthermore, Turkmenistan’s closer energy ties with China could eventually derail the Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline, also known as the “Peace Pipeline,” which Washington has lobbied for since the mid-1990s. As the United States plans to leave Afghanistan, its New Silk Road Initiative announced by Secretary Clinton in September 2011 is intended to serve as a replacement for America’s physical presence in Central Asia by fostering regional integration and shared prosperity. While the TAPI is a major element of this post-2014 strategy, its future remains dim not only because of numerous contradictions polluting everyday relations between Afghanistan, Pakistan, and India, but also in the context of uncertainty regarding Turkmenistan’s credibility as the only supplier of the pipeline. Should Ashgabat decide to supply even more natural gas to China in exchange for stable contracts, the TAPI would die and with it the American hopes for peace and stability in wider Central Asia.

Whereas China’s regional diplomacy was previously confined to trade and energy, Xi Jinping’s recent visit has imbued it with a new political dimension. Following the Russian, U.S., and EU examples, Beijing has inaugurated its own regional initiative called the Great Silk Road. Speaking at the brand-new Nazarbayev University in Kazakhstan’s capital city, the Chinese president urged his Central Asian colleagues to intensify cross-border cooperation, modernize road infrastructure, broaden cultural exchanges, and establish a coordinated policy dialogue. The Great Silk Road initiative actually runs contrary not only to Washington’s already mentioned New Silk Road but also to the EU’s Strategy for a New Central Asia Partnership and Russia’s long-standing tradition of dominance via several regional organizations. Even if Beijing still shares with Moscow the strategic direction of the Shanghai Cooperation Organization, it is increasingly trying to strengthen its economic clout in this bloc by offering unrivaled aid packages, low-interest loans, and other assistance to the Central Asian Republics.

 

However, it remains unlikely that Chinese actions will extend beyond the limits of great-power tolerance, as the very strength of Beijing’s diplomacy lies in the slow but steady advancement of its interests disguised as pursuit of the common good. As Napoleon once said, “when China wakes, she will shake the world”. Today’s China is already well awake and it only needs time to show the world where it truly belongs.

Georgiy Voloshin is a widely published Central Asia expert collaborating with the Jamestown Foundation and the Central Asia-Caucasus Institute of the John Hopkins University, among others.

 

Image: Wikimedia Commons/John Hill. CC BY-SA 3.0.