China vs. Central asia · nicholas furnival GRaphic desiGn paRa-BUch phoToGRaph on coveR...
Transcript of China vs. Central asia · nicholas furnival GRaphic desiGn paRa-BUch phoToGRaph on coveR...
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China vs. Central asiaThe achievemenTs of The pasT Two decades
aleksandra Jarosiewicz, Krzysztof strachota
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China vs. Central asia The achievemenTs of The pasT Two decades
aleksandra Jarosiewicz, Krzysztof strachota
nUmBeR 45waRsawocToBeR 2013
co-operation: anna wołowska, marek matusiak
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© copyright by ośrodek studiów wschodnichim. marka Karpia / centre for eastern studies
conTenT ediToRsadam eberhardt
ediToRanna Łabuszewska
co-opeRaTionKatarzyna Kazimierska
TRanslaTionilona duchnowicz
co-opeRaTionnicholas furnival
GRaphic desiGn paRa-BUch
phoToGRaph on coveRshutterstock
dTpGroupmedia
mapswojciech mańkowski
pUBlisheROśrodek studiów Wschodnich im. Marka Karpia centre for eastern studies
ul. Koszykowa 6a, warsaw, polandphone + 48 /22/ 525 80 00fax: + 48 /22/ 525 80 40osw.waw.pl
isBn 978-83-62936-30-4
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Contents
MAIN POINTS /5
I. ChINA ANd CeNTrAl ASIA – The bACkgrOuNd fOr MuTuAl relATIONS /7
1. The historical background /72. The strategic background for relations between China
and Central Asia /92.1. Central Asia as seen by China – key challenges /102.2. China as seen by Central Asian countries – key challenges /13
3. each party’s interests /15
II. ChINA ANd CeNTrAl ASIA – The keY ASPeCTS Of POlITICAl relATIONS ANd SeCurITY ISSueS /17
1. The borders and the uyghur issue – from conflicts to the Shanghai Cooperation Organization /17
2. The stability issue in Central Asia vs. relations with China /203. China in regional geopolitical games /214. The Chinese model of building its political position
in Central Asia /245. Central Asian countries on China /28
III. ChINA’S eCONOMIC PreSeNCe IN CeNTrAl ASIA – The AChIeveMeNTS Of The PAST TwO deCAdeS /31
1. regional differences in the level and nature of co-operation /322. China’s ‘assets’ in the region and plans for development /33
2.1. The oil and gas sector /33 2.2. The uranium sector /49 2.3. Other selected areas of co-operation /52 2.4. Trade /55 2.5. Transport infrastructure – the New Silk road /62
3. The instruments of co-operation: loans and the SCO /643.1. loans /643.2. The Shanghai Cooperation Organization (SCO) /68
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4. The balance of economic co-operation /694.1. The geopolitical dimension /694.2. The economic dimension /70
IV. ChINA’S PreSeNCe IN CeNTrAl ASIA IN The SOCIAl dIMeNSION – The AChIeveMeNTS Of The PAST TwO deCAdeS /72
V. CONCluSION – fuTure ChAlleNgeS /75
MAPS /78
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MAIN POINTS
• ThepasttwodecadeshavebeenaperiodoffundamentalchangeinCen-tralAsiatriggeredbythecollapseoftheUSSR.Oneeffectofthiswasthatfivenewstatesaroseintheregion.TheemergenceofChina’spresenceasamajorplayerinCentralAsiahasbeenamongthefundamentalaspectsoftheseregionalchanges.
• Security issues are at the core of Chinese engagement in CentralAsia.Intheregionaldimension,Chinawantstoprotectitswesternprovince,Xinjiang,frompossibledestabilisationwhichcouldspreadfromCentralAsiancountriesordrawinspirationfromthem.Inbroaderterms,BeijingwantstosecureitsinterestswithregardtoRussiaandtheUSA,whicharealsopresentandactiveintheregion.Inturn,fromCentralAsia’spointofview,securingtheregionagainstChineseexpansionisoffundamen-talsignificance.However,at thesametime, thecountries intheregionareawareoftheinevitabilityofco-operationwithChina,andhavebeenmakingeffortstouseitasatoolforstrengtheningtheirownstabilityandsovereignty.
• Althoughsecurityand(inbroaderterms)political issuesarethebasisforrelationsbetweenChinaandCentralAsia,themainfieldofplayfortheirco-operationiseconomicissues.Thisisaneffectoftworealities:theeconomic:thegreatareaandbasicwillingnessforco-operation,andthepolitical:mutual cautiousness and the self-restrictionof thepart-ners, and above all, resistance fromRussia.Despitemanydifficultiesencountered over the past twodecades, Chinahas become a strategiceconomicpartnerforthisregion.Thisismostevidentinthetrade,en-ergyandinfrastructuresectors.Beijinghasoutstrippeditscompetitors:Russia,theUSA,TurkeyandIranoverarelativelyshortperiod.Atthesametime,thescaleofco-operationhasmadeCentralAsiaanimportantregionforChina(especiallyasanelementofthestrategytobringstabi-lisationintoXinjiangandasamajorgassupplier).Chineseeconomicen-gagementinCentralAsia–consideringthespecificsandtheguidelinesofBeijing’spolicy–viablycontributestoChina’sgrowingpoliticalsig-nificanceintheregion;withregardtoindividualrepublicsandrelationsbetweenthemandalsowithregardtoRussiaandtheUSA.Atthepre-sentstage,theregion’scountriesbenefit,bothpoliticallyandeconomi-cally,fromthissituation.Itis,though,givingrisetoseriousconcerninstrategicterms.
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• WhateverattainmentsCentralAsiaorChinahavemadeoverthepasttwodecades,thegeneralsituationinandaroundtheregionremainsunstable,andtheparties’interestshavebeenfixedandsecuredtoalimitedextent.Therefore,theevolutionofChina’sregionalpolicytosecureitsowninter-estsbypoliticalmeans,theultimategeopoliticalbalanceofpowersintheregionbetweenChina,RussiaandtheUSA,andtheabilityofthecountriesofCentralAsiatocontinuetouseChinatoreinforcetheirpositionarestillopenquestions.However,China’s stance isplayingan increasing role ineachoftheseaspects.
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I. ChIna and Central asIa – the baCkground for mutual relatIons
A superficial evaluation of relations betweenChina andCentralAsiamighthavesuggestedthattheirnatureisstrictlylocalandtemporary.Informalandlegalterms,theirbilateralrelationsdatebacktothecollapseoftheUSSRin1991,when thenew independentCentralAsian republics (Kazakhstan,Kyr-gyzstan,Tajikistan,TurkmenistanandUzbekistan)wereestablished.AsseenbyChina,whosepoliticalandeconomicpotential isconcentratedintheeastofthecountry,thisisaremotearea,bothgeographicallyandstrategically,es-peciallyincomparisontothePacificorevenIndianOceanbasin.FromCen-tralAsia’spointofview,theinternalsituation(asseenbyboththeregionasawholeandindividualcountries),therelationswiththetraditionalpoliticalandeconomiccentre,i.e.Russia,andpossiblyrelationswiththeUnitedStates,whichwontheColdWarandwhichisactiveinpolitical,militaryandeconomictermsinAsia,aretheissuesofkeysignificance.
Today’sCentralAsia,however,islinkedtoChinabyalongandtempestuoushistoryandbynumerousbondsresultingfromsharedhistoricevents.China’sandRussia’sgeopoliticalinterestsinCentralAsiaaredeeplyrootedinhistory.Inthiscontext,thesuddenchangestakingplaceinCentralAsia(theappear-anceofnewcountries)andaroundit(primarily,therapidgrowthofChina’spotentialandeconomicandpoliticalambitions,andthedisintegrationoftheRussianempireofthe19thand20thcenturies)areturningtheregionintoady-namicfieldfortheprojectionofChineseinterests.Atthesametime,there-gion’scountries,Russiaandotherinternationalplayersaredevelopingamodus vivendiwithChina.TheseareprocessesofgreatsignificanceforbothCentralAsiaitselfandalsoforChinaandRussia.
GiventhespecialcharacteristicsofChina(suchasthevastandrapidlydevel-opingeconomy)andCentralAsia(suchastheenormousneedforinvestment,thesearchfornewmarketsandsignificantmineralresources),economicis-sueshavethusfarplayedaspecialroleinmutualrelations.Itiseconomicis-sueswhichhaveaffectedthenatureofmutualrelationsandhastangiblybeenchangingCentralAsia.
1. the historical background
Fromahistoricalpointofview,whataretodayCentralAsiaandwesternChi-na(theXinjiang-UyghurAutonomousRegion)usedtoformarathercohesive
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culturalandpoliticalarea1,whichwasdividedinthe18thand19thcenturiesintotheChineseandRussianzonesofinfluence,andwaseffectivelymadepartofthetwopowersovertime2.StrongsocialbondsbetweentheRussianandtheChineseTurkestanwereexpressedonnumerousoccasionsalsointhe20thcen-tury.Manifestationsofthesebondsincludedmassmigrationsofrefugees3andthepermeationofnation-buildingideas(fromRussia/theUSSRtoChina).
Throughoutalmosttheentire20thcentury,formerTurkestanremainedafieldoftacitalbeitbitterrivalrybetweenRussia/theSovietUnionandChina;Russiabeingclearly the strongerandmoreactive rival.MoscowstrengthenedBei-jing’sconvictionthatSovietCentralAsiaposedaseriousthreattoChinainthegeographicallydistantandunderdevelopedXinjiang,butalsototheterritorialintegrityofthecountryasawhole.ThestartingpointwasBeijing’scriticismofthenationalborderimposedbyRussiainthe19thcentury(itsCentralAsiansectionwasnotdelimitedthroughouttheentireSovietperiod).FrustrationswereworsenedbythemoreorlessopensupportMoscowusedtooffertotheUyghurseparatists(attemptsweremadetosetuptheso-called“FirstEasternTurkestanRepublic”in1933–1934andtheso-called“SecondEasternTurkestanRepublic”in1944–1949)4.Individualproblemsweremanifestationsofabroader(de factoglobal)rivalrybetweentheUSSRandChina.TensiongaverisetotheChinese-Sovietborderconflictin1969,oneoftheconflictsitesbeingtheKa-zakhsectionoftheborder(asaconsequenceoftheconflict,theCentralAsiansectionoftheborderremainedcloseduntil1992).Viewedfromthisangle,the
1 ThroughoutthefirstmillenniumA.D.,thiswastheareaofChineseexpansion(whichwasparticularlyevidentinitseasternpart).Fromcirca8thcenturyA.D.,itwasculturallyandpoliticallydominatedbytheTurkishandMongolianelement,whichwouldperiodicallyex-pandattheexpenseofChina.Overtime,Islamhasbecomeanotheressentialbindingfactor(inadditiontoethnicproximity)whichhasunifiedtheso-called“Turkestan”.
2 Theborderbetweenso-called“RussianTurkestan”and“ChineseTurkestan”wasimposedbyRussia inthe late19thcentury. ItcanbeassumedprincipallythattheregionhasbeeneffectivelycontrolledbyRussiasincetheendof thecivilwartriggeredbytheBolshevikrevolution(1920s)andbyChinasinceMaoZedong’svictoryinthecivilwarandthesettingupofthePeople’sRepublicofChina(1949).Inbothcasesincreasingcontroloftheregioninvolvedtheuseofvast-scalerepressionsagainstthelocalpopulationandresettlementac-tionsaimedatweakeningtheirdemographicpredominance.
3 Forexample,atleasthundredsofthousandsKyrgyzandKazakhsfledtoChinaduetore-pressionsfollowingthesuppressionoftherebellionin1916,andlaterasaconsequenceoftheGreatFamineinthe1930s;theDzungar/KalmykpeopledefeatedbytheChineseinthe19thcenturyandUyghursfollowingtherepressionsof1962movedtoRussia.
4 TheprecedentwassetwhenRussiarecognisedtheindependenceofso-called“OuterMon-golia”in1911,whichwasconfirmedbyforcingChinesetroopsoutofMongoliaandforcingMongoliatoacceptcommunismin1921.
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collapseoftheUSSR(1991)speltaseriouscrisisinthefragilestabilityaroundCentral Asia5, created opportunities for reconstructing relations, but evenmoresogaverisetofears,mutualdistrustandcautiousnessamongthepartiesinvolved.
2. the strategic background for relations between China and Central asia
RelationsbetweenCentralAsiaandChinaoverthepasttwodecadeshavebeenaneffectoftwoparallelprocessesoffundamentalsignificancefortheglobalorder.Oneof thesebeingthedisintegrationof theRussian/Sovietempire inAsia(especiallyitscentralpart),andtheother–thesuddenriseinChina’spo-sition(inAsiaandworldwide).
TheformerofthetwoprocesseshasinjectedagreatdealofdynamismintothesituationinCentralAsia:newstatesemerged,andattheonsetoftheiropera-tiontheyneededtofaceaseriouspolitical,social,economicandidentitycrisis.Thiscrisishasbeenmademanifest, for instance, throughmilitaryconflicts(e.g.thecivilwarinTajikistan),politicalcoups(Kyrgyzstan),thedevelopmentofnationalismsandIslamicradicalism,massmigrations,suddenpopulationgrowth,etc.Despitetheenormousprogressseenoverthepasttwodecades,itwouldstillbeinaccuratetoclaimthatthesituationhasbecomestable.Russiahasstrongconnections–boththoseinheritedfromtheUSSRandthosenewlycreated–andthusvastinfluenceinthisregion.Nevertheless,itsmonopolisticpositionhasbeenchallenged:theregionhasopeneditselfuptopolitical,eco-nomic,militaryandcivilisationalcontactswithMoscow’srivals,includingtheUSAandChina.Theregionhasbeenstronglyaffectedbynegative(e.g.thewarinAfghanistan)andpositiveexternalimpulsesalike.Bothtransientproblemslinkedtoregionalsecurityandbuildingdurablestabilityintheregionhaveal-waysbeengrantedtoppriorityinCentralAsia’srelationswithChinaandalsoRussiaandotherplayers.
Another–andbynomeanslesssignificant–factorinthebackgroundofrela-tionsbetweenCentralAsiaandChinahasbeentheenormousincreaseinthesignificance,activityandeffectivenessofChina’spolicyworldwide,thestart-ingpointforwhichwasChina’srapideconomicdevelopmentinthe1980s.The
5 ThisalsochallengedthestabilityofChinaitself–perestroikaposedaseriousthreattothesta-bilityofthePeople’sRepublicofChina,onesignofwhichwerethestudentprotestsinBeijing’sTiananmenSquare,whichwereinparttriggeredbyMikhailGorbachev’svisittoBeijing.
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localindicatorsofthesechangesincludeBeijing’stighteningcontrolofXinji-angandtherapideconomicdevelopmentofthisregion,thoughitremainsare-gionwithproblems. Ineconomicterms,Beijing’srapidly increasingdemandforenergyrawmaterialsandstrugglefornewoutletsnecessarytomaintaineconomicgrowthandinternalstabilityareimportantfactors.Instrictlygeo-politicalterms,thisisChina’sambition(whichissometimesunderstoodandrecognisedworldwide) to gain a position of a leading global power. China’sseriouseconomicinterestsandtheconstantlygrowingstrengthofitsimpactthrough economic influencehaveprovided a foundation for the spectaculardevelopmentofrelationsbetweenChinaandthecountriesofCentralAsiaandforagradualreinforcementofChina’spositioninthisregion.
2.1. CentralAsiaasseenbyChina–keychallenges
2.1.1.Xinjiangandstabilityissues
TheXinjiangissuehasbeenthefirstandtheforemostchallengeforChinainrelationswithCentralAsiaeversince1991.Thisregionhasbeenunderdevel-oped for centuries.Beijinghashad relativelyweak control over it. Further-more,ithasbeentormentedbyseparatismbasedontheethnicandreligiousdistinctnessofitsresidents(mainlyUyghurs,whoareMuslims).AllthishasmadeXinjiangpotentiallyvulnerabletotheseriousthreatposedbyanunsta-bleCentralAsia.ChinawasaboveallanxiousaboutXinjiangreceptivenesstotheideologicalfermentoriginatingbeyonditswesternfrontier(amixofna-tionalism,Islamanddemocraticslogans)andinAfghanistan(theradicalandmilitantIslampropagatedbytheMujahideenandtheTaliban)6.Therewasalsoaserious threat inwhichCentralAsiaeitherunintentionally–due tobeingunabletocontrolthesituation–orwilfully–whetherbyitselforinspiredbyRussia–wouldprovidealogisticbaseforUyghurseparatists.Objectivecon-firmationsof theexistenceof this threat included the increasing resistancedemonstratedbyUyghurstoBeijing7usingnational,religiousanddemocraticslogans,theexistenceofastrongUyghurdiasporainCentralAsia,thelimited
6 TheEastTurkestanIslamicMovement(ETIM),thepillarsofwhichareseparatismandradicalIslam,whichhasbeeninvolvedonasmallscaleinterroristactivity,includinginChina,hasbeenoperatingsincecirca1993inAfghanistanandPakistan’sWaziristan.Inpractice,Chinahasthusfarsuccessfullyneutralisedthisthreat,capitalisingonitsinfluenceinIslamabad(thePakistanisecretservices,ISI,haveamajorimpactontheoperationofMuslimradicalsandtheAfghaniTaliban,andarealsoabletochanneltheiractivitytowardsAfghanistanorIndia,whilerestrictingitinChina,onwhichPakistanisstrategicallydependent).
7 IncludingtheseriousriotsinGhulja/Yiningin1997andinUrumqiin2009.
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abilityofCentralAsiancountriestocontroltheirnationalterritoriesandbor-ders,and–inabroadercontext–conflictsinsidetheindividualcountriesintheregion8.Overthepasttwodecades,Beijinghasrelativelysuccessfullydealtwiththeproblemposedbythisprovinceemployingacombinationoftheuseofforce,demographicmethods(promotingthesettlementoftheHanChinesein the province, thusweakening the ethnic predominance ofUyghurs) andenormouseconomicengagement9.However,CentralAsiastillremainsahypo-theticalthreatduetoarelativelyhighlevelofinstabilitythereandtheneigh-bourhoodofAfghanistan. In this latteraspect, the threat is ‘militant Islam’,whichAfghanistanisstillacentreof,andalsomovementswhichfindshelterinAfghanistan,namelytheradicalUyghurorganisations:theEastTurkestanIslamicMovement (ETIM) and the Turkestan Islamic Party (TIP), linked totheradicalCentralAsianorganisationsoperatinginAfghanistan:theIslamicMovementofUzbekistan(IMU)andtheIslamicJihadUnion(IJU).
2.1.2.Thegeopoliticalrivals
ThecollapseoftheUSSRandtheemergenceofthenewstatesinCentralAsiaofferedChinatheopportunitytoradicallyimproveitspositionintheregioninitsdealingswithRussia:Moscowformallywithdrewfromtheregion,andanactualbufferwascreatedbetweenChinaandRussia,leavingBeijingmoreroomformanoeuvre.AlthoughChinatemporarilyusedRussia’sweaknessasanopportunitytoraisetheissueofborderadjustmentwiththeregionalheirstotheUSSRinthe1990s(seebelow),itrathertendednottoopenlyundermineRussia’s ambitions to retain political andmilitary hegemony in the region,partlyduetoseeingitasamajorstabilisingfactorthere.
TheweakeningpositionofRussiaandthefactthatCentralAsiawasopeninguptoexternalcontactsalsoinvolvedtheneedtoconfrontnewrivals.Theplayers
8 IncludingthecivilwarinTajikistan(1992–1997)and,whenitended,theactivityofsuprana-tionalradicalandterroristgroups(especiallytheIslamicMovementofUzbekistan);masssocio-politicalprotestsin2005and2010inKyrgyzstanusingdemocraticslogans,leadingtotheabolishmentofthethenpresidents;bitterethnicandsocialtensionswithIslamicun-dertonesinUzbekistan(forexample,theearly1990sandbetween1999and2005);primarilyconflictsinAfghanistan(includingthepromotionofthearmedandeffectiveMuslim‘In-ternational’undertheaegisofal-Qaeda,andtheeffectivenessoflocalradicals,theTaliban,backedbyforeignMuslimcommunitiesandPakistan,amongothers).
9 Includingthedevelopmentofagriculture,andthecommunicational (roadsandrailwaysconnectingtheregionwithcentresineasternChina)andeconomicinfrastructure(includ-ingthedevelopmentofspecialeconomiczones),formalisedinthestrategyforthedevelop-mentofthewesternprovincesadoptedin2000).
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interestedintheregionhavebeen:Turkey(posingapotentialthreattoChina,since ithasbeenplayingthecardof thecommunityofTurkicpeoples), Iran(potentiallystokingupIslamintheregion),Pakistan(althoughthiscountryisChina’sally,ithasactively–especiallyinAfghanistan–supportedMuslimradicalsandusedtheminitspoliticalgames)andIndia10.
However,itturnedoutthat,inadditiontoRussia,themainchallengeChinaneededtodealwithwastheUSA,thewinneroftheColdWarandtheindisput-ablegloballeaderinthe1990s.Theactivebutnotparticularlyeffectivepromo-tionofeconomicinterestandtransformationmodelslaunchedbytheUSAinthe1990sinCentralAsiain2001inthecontextoftheglobalwaronterrorismandtheoperationinAfghanistanturnedintoaUSmilitarypresenceinCentralAsia11.Giventheintensifyinggeopoliticalrivalry,theUSpresencewasseenbyChinaascontinuedencirclingbyUSmilitarybases12andaspotentiallypullingofCentralAsiaintotheorbitofUSpoliticalinfluence.TheUSpoliticalactivityincertainareasWashingtonisparticularlyinterestedin,especiallythedesiretoreconstructtheexistingsocio-politicalsystems,isalsoseenasathreatbyBeijing.FromChina’spointofview,thismeansdestabilisationinthecountriesaroundit,andgivesrisetosuspicionsoffomentingpoliticalunrest(e.g.thecol-ourrevolutionsoreventheArabSpring)andof–consciouslyornot–creatingthreats (thecase of intensifying Islamicradicalism inAfghanistan, startingwiththesupportofferedtotheMujahideeninthe1980sresultingultimatelyintheemergenceofal-Qaeda,uptotheriseofradicalgroupingsduringtheEn-duringFreedomandISAFoperationsafter2001).SinceChinese-Russianrela-tionsinCentralAsiahadbeenprincipallyregulatedandWashington’sactivityhadbeenontherise,theUSAbecamethemajorsecuritychallengeforChina,overtakingRussiaandotherminorplayers.
10 IndiaisoneofChina’skeygeopoliticalrivals.Alongwith(generallyunsuccessful)attemptsofeconomicactivationinCentralAsia,ithasconsistentlytakenactiontobuilditsmilitarypresenceintheregion:inthe1990s,itwasco-operationwithRussiaandIranaimedatback-ingtheanti-TalibancoalitioninAfghanistan(anIndianmilitaryforwardoperatingbaseandamilitaryhospital,whereAhmadShahMassoudreportedlydiedin2001,wereoperat-inginTajikistan).Overtime,effortstoopenanairbaseinTajikistan(IndiamodernisedtheAyniairport,butTajikistanreportedlyhadtowithdrawfromleasingthisairporttoNewDelhiduetoMoscow’sprotestsin2005).
11 StrongpresenceinAfghanistansince2001;in2001–2005militarybasesinKyrgyzstanandUzbekistan(andNATOmemberstatebasesinTajikistan),militarypresenceinKyrgyzstanandclosemilitaryco-operationbetweentheUSAandUzbekistanandTajikistan.
12 InadditiontothemilitarybasesinJapanandSouthKorea,theinformalalliancewithTai-wanandthepresenceonthePacificandIndianOceans.
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2.1.3.Theeconomy
ForChina,CentralAsiahasaboveallbeenamarketstimulatingtheeconomicdevelopment ofXinjiang (exports ofChineseproducts); and for years, thishas been themost tangible aspect of economic co-operation. Inparallel tothis,Chinawaspreparingitselftoentertheoilandgasmarketintheregion(especiallyinKazakhstanandTurkmenistan),whichwasexpectedtoensurefuel supplies for the Chinese economy.Unlikewhat has been thus far themostimportantfossilfuelimportroutes,thelandconnectionswithCentralAsiaareseenassafer;themaritimeroutesrunningfromthePersianGulfinthecaseofcrisiscanbeeasilyblockedbytheUSAorIndia,orparalysedduetopossibleproblemsintheStraitofMalacca.ThepartnersfromCentralAsiaareweak,andthusmorewillingtocollaborateandlesseagertousethe‘gasweapon’thanRussia.Inadditiontobeingafossilfuelsupplier,CentralAsiarepresentsenormoustransitpotentialforChina:itpotentiallyoffersacon-nection for theChinesemarket toEurope and theMiddleEast (thediffer-entvariantsof‘anewSilkRoad’),Afghanistanandtheports(PakistaniandIranian)bytheArabianSeaandinthePersianGulf.Ineffectoftherapidin-creaseintheChineseeconomicpresenceinCentralAsia,thereisagrowingneedtoprotectChineseinterestsintheregion,whichalsomeanstheprotec-tionofChina’spoliticalinterests.
2.2. ChinaasseenbyCentralAsiancountries–keychallenges
2.2.1.Theconcerns
TheapproachthecountriesofCentralAsiataketoChinaischaracterisedbythesenseofforeignnessandthreat.Theyoungnationswhosestatehoodisnotyetwell-established, face numerous domestic problems, inherited from theUSSRandawholehostoffearsandproblemslinkedtotheireasternneighbour.Chinahasbeenseenasatraditionallyexpansionistpowerenteringthephaseofaccelerateddevelopment.ItisworthnotingthattheChinesetransformationmodel–incontrasttofascinationswithWestern,TurkishandMusliminspira-tionsandvariationsofalltheseappliedacrosswhatwasnotsolongagoazoneofSovietinfluence–hasnotattractedsomuchinterest.Inturn,quiterealis-ticconcernshavebeenraisedbyChineseborderclaims,Beijing’sbrutalpolicytowardsUyghursandthethreatthatChinacouldinterferewiththeinternalaffairs of Central Asian countries. A deeper foundation for such concernsoriginatedfromthestate-andnation-buildingprocessesandthedevelopingnationalisminCentralAsiancommunitieswhichaccompaniedthemandwas
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reinforceddueto thealarmistandanti-Chinesetonepresent intheRussianmedia,whichhassignificantlyaffectedtheviewsinCentralAsia.
2.2.2.Theopportunities
Alongwiththeconcerns,relationswithChinabroughtopportunitiesforsupporttoCentralAsiafromBeijing:diplomaticrelationswereestablishedquicklythusaddingcredittothenewlyestablishedstatesintheregion,enablingeconomicdevelopmentandeasingtheconsequencesofthecrisisthecollapseoftheUSSRhadbrought about (especially at the social level, owing to the ‘suitcase trade’typicalofthe1990s).TherapidlyincreasingscaleofChina’seconomicpresenceintheregionsignificantlyaddedtotheattractivenessofChinaasakeyeconomicpartnerforCentralAsia(seebelow).ThefactthatChina(unlikeRussiaandtheUSA)demonstrateditslackofinterestinimposinganyofitsdomesticpolicyso-lutionsuponindividualCentralAsianstatesturnedouttobeamajorpositiveelementinrelationswithChina(especiallyinthefirstdecadeofthe21stcentury).ThusChinabecameafactorwhichhasindirectlybeenstabilisingtheinternalsituationandde facto reinforcingtheregimesoperatinginCentralAsia.
2.2.3.Chinaintheregion’sgeopoliticalgames
RussiahasbeenthekeypointofreferenceininternationalpoliticsforCentralAsiancountries.Thisapproach isbasedonthetraditionalcultural,politicalandeconomicbonds,thebeliefthatthisisacountrywhichguaranteeselemen-tarydurabilityoftheregionalorderandtheawarenessofRussia’sdetermina-tiontomaintainCentralAsiawithinitszoneofinfluencethroughtheuseofitsstrongpolitical,militaryandsocialinstrumentsintheregion.Inrelationsbe-tweenCentralAsiaandChina,Russiaaspirestobethepatronandcensorofthepoliciesadoptedbytheregion’scountries.Onespecialmanifestationofthisap-proachisthedominationoftheCollectiveSecurityTreatyOrganization13(con-trolledbyRussia)intheareaofregionalsecurity,andthesignificanceoftheShanghaiCooperationOrganization14asthemainplatformforpoliticalrela-tionsbetweenCentralAsiaandChina.AlthoughRussiastillhasaverystrongpoliticalpositionintheregion,ithasbeenconstantlyweakenedbytheactivity
13 ThemembersoftheCSTO,inadditiontoRussia,BelarusandArmenia,includeKazakhstan,KyrgyzstanandTajikistan(Turkmenistanhasconsistentlyremainedneutral,andUzbeki-stanhasjoinedandleftthealliancetwice–mostrecentlyin2012).
14 MembersoftheShanghaiCooperationOrganizationare:Chinaandthepost-Sovietcoun-trieswhichborderit:Russia,Kazakhstan,Kyrgyzstan,TajikistanandUzbekistan.
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ofChinaandtheUSA,whiledevelopingco-operationwithRussia’srivalsisanimportantelementstrengtheningthepositionoftheCentralAsianstates.
3. each party’s interests
Given thebackgroundaspresentedabove,China’s interests withregard toCentralAsiainpoliticalandsecuritytermscanbedefinedasfollows:
• tosecurethestabilityofXinjiangandtoavoidanynegativeimpactfromCentralAsiaonthisregionofChina;
• tomaintainandextendinternalstabilityinCentralAsiaasaconditionofsecurityinXinjiangandaconditionnecessarytoimplementeconomic(en-ergyandcommunication)objectives;
• tomaintainandstrengthenthesovereigntyofthestatesofCentralAsianand the regimesoperating there as a condition forunrestrictedChineseeconomic(andpolitical)activityintheregion;
• toweakenthedominationandinfluenceofitsgeopoliticalrivalsinCentralAsia:basically(especiallyintheinitialperiod)ofRussia,andtoanessen-tialandconstantlyincreasingdegreeoftheUSA(especiallyafter2001);
InthecaseofCentralAsia,subjecttoacertaindifferentiationoftheempha-ses,potentialsandpracticesofindividualcountries,theconstantgoals in the policy of Central asian countries towards China are:
• to protect themselves from Chinese expansionism, a special aspect ofwhichhasbeen theborder issue, i.e. resistingor restrictingChina’s ter-ritorialclaims;
• todevelopinacontrolledmannerthepoliticalandeconomicco-operationinitiated by China. At the same time, co-operation is the factor whichstrengthensindividualstatesandregimesbothathomeandontheinter-nationalarena(alsoindealingswithRussia),whileallowingthemtoavoidbecomingdependentonBeijing;
• tomaximisetheprofitsofeconomicandinfrastructuralco-operationwithChinaforinstancebyturningCentralAsiaintoaconveyorbeltforChinesegoodsexportedtoEuropeandthecountriesoftheMiddleEast.
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The interestsofChinaandCentralAsiapresented in thiswayputRussia inadifficultposition.moscow’s traditional interests are:
• tomaintainanddeepenitspoliticalandmilitarydominationandtoregaineconomicdominationinCentralAsia.Factorswhichcontributetothisin-cludetheweaknessoftheindividualstatesandregimesintheregionandMoscow’sabilitytouselocalconflictsandtensionsinitspoliticalgames;
• toblockandeliminatetheinfluenceofitsgeopoliticalrivals,especiallytheUSAandChina;
• tomaintainanddevelopstrategicco-operationonglobalissueswithChinaonequalterms.
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II. ChIna and Central asIa – the keY asPeCts of PolItICal relatIons and seCurItY Issues
Lookingbacktothepast,onecanclearlydistinguishbetweentwoperiodsofrelationsbetweenChinaandCentralAsia.Fearsandtension,mainlydue totheborderandtheUyghurissueswerepredominantinthe1990s,especiallyatthebeginningofthedecade.Inturn,thebeginningofthe21stcenturyhasseenaharmonisationofthepoliciesadoptedbyChinaandthecountriesofCentralAsiaresultinginrapidlydevelopingco-operation.Thefutureoftheserelationsisstillunclear,whichisduemainlytotheuncertainstabilityinCentralAsiaanditsimmediateneighbourhood,aboveallAfghanistan,andtheevolutionofChina’spolicy.ThedegreeofeffectivenessofthereintegrationactionstakenbyRussiaintheregionandthefuturenatureofrelationsbetweenMoscowandBeijingwillalsohaveanimpact.
1. the borders and the uyghur issue – from conflicts to the shanghai Cooperation organization
TheUyghurandtheborderissueswerethegreatestchallengesinbilateralre-lationsbetweenChinaandCentralAsia;andtheseissuesdominatedbilateralrelationsinthe1990s.
ThemostseriousproblemwastheunsettledborderissuewithChina,primar-ilyinKazakhstanbutalsoinKyrgyzstanandTajikistan.Fromtheearly1990s,Chinaopenlyquestionedtheexistingborders,andputmilitaryandeconomicpressure,especiallyonKazakhstan.Thetensionreacheditspeakin1993–1994,onemanifestationofwhichwas the concentration ofChinese troops on theborderwithKazakhstan15.Atthesametime,whiletheuseoffrontierrivershad not been regulated, China embarked on the construction of the BlackIrtysh–KaramaiCanalandonirrigationusingthewatersoftheIliRiver.BothprojectsadverselyaffectedtheeconomicinterestsofKazakhstanandcausedecologicalproblems16.
15 AccordingtounofficialstatementsbyKazakhanalystsandofficials,exchangesoffirewithChinese troopsandChineseraidson the territoriescontrolled thus farby theUSSR/Ka-zakhstantookplaceonseveraloccasionswithinthatperiod.
16 Cf.e.g.EffectsofinterdependencyintheXinjiang-CentralAsianregion,AnnMcMillanhttp://unpan1.un.org/intradoc/groups/public/documents/APCITY/UNPAN021190.pdf
TemirbolatBakhytjan,WaterDisputeThreatensCentralAsianstability,21February2005,IWPR,http://iwpr.net/report-news/water-dispute-threatens-central-asian-stability
SebastienPeyrouse,FlowingDownstream:TheSino-KazakhWaterDispute;16May2007;
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Thefinalestablishmentof theso-called“ShanghaiFive” in1996,whichcon-sistedoftheCentralAsianstatesborderingonChina,ChinaitselfandRussia,madeitpossibletofindapreliminarysolutiontotheKazakh-Chineseborderproblem (see below).Russia’s participation clearly strengthened theCentralAsianstateandallowedthepressurefromChinatotaperoff.Thebordertreatywassignedin1996(Chinareceived22%–whichitsawasofkeyimportance–ofthedisputedterritories).Sincethen,Kazakhstanhasonmanyoccasions(andwithnomajoreffect)resumedtheeffortstoregulatethewaterissues.Thewa-termanagementissueshavenotbeensettledsofar.
Thebordertreatieswiththeotherneighbouringstates,KyrgyzstanandTajik-istan,weresignedin1998and2002,respectively.Itneedstobementionedthattheprocessoftreatyratification,andthedelimitationanddemarcationofthesectionoftheChineseborderwithCentralAsiancountrieswassignificantlyextended17.Reasonsforthatincludedunfavourable–asseenbyTajikistanandKyrgyzstan–solutionstotheborderissueandthefearthatthepublicinthesecountrieswouldopposethedealswithChina.Ineffect,theCentralAsiangov-ernmentsdidnotinformthepublicofthetermsoftheagreements,andaboveallaboutthescaleofconcessionsmadetoChina18.
Inturn,theUyghurissuewasresolvedinarelativelypainlessway.DespitethepresenceofthenumerousUyghurminorityinCentralAsia(asignificantgroupofwhomwasformedbypeoplewhohadfledfromChinain1962)andsupportfromthepublicinKazakhstanandKyrgyzstan,whereUyghursarethemostnumerous,thegovernmentsinAlmaty/AstanaandBishkekdidnotallowthetensionbasedontheUyghurissuetoescalate.Overtime–astheShanghaiFivewasestablishedandlatertransformedintotheShanghaiCo-operationOrgani-sation–thecountriesintheregionmadeactiveeffortsaimedatsignificantly
ChinaBriefVolume:7 Issue: 10;http://www.jamestown.org/programs/chinabrief/single/?tx_ttnews[tt_news]=4131&tx_ttnews[backPid]=197&no_cache=1
ArthurDunn, The ProblemOf TransboundaryRivers BeingA FactorOf Strategic Secu-rityForCountries,http://www.eurodialogue.org/eu-central-asia/The-Problem-Of-Trans-boundary-Rivers-Being-A-Factor-Of-Strategic-Security-For-Countries
ErnstGiese,JenniverSehring,AlexejTrouchine,ZwischenstaatlicheWassernutzungskon-flikteinZentralasien,http://geb.uni-giessen.de/geb/volltexte/2004/1823/
17 TheTajikparliamentratifiedthebordertreatywithChinaaslateason12January2011,thusgrantingconsenttorelinquishingadisputedareaof1,000km²toChina.
18 Partof thetermsof thebordertreatiessignedbyKyrgyzstanwithChinawere leakedtopublicopinioninlate2001,whichledamongotherthingtoapoliticalcrisisandpublicpro-tests(whichwerebloodilysuppressedbythegovernmenton17March2002).
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reducingtheactivityofUyghurorganisations,especiallythecirclesengagedinanti-Chineseactivity.
from the shanghai five to the shanghai Cooperation organization
TheUyghurand theborder issues servedasa foundation fordevelopingthemodelof co-operationbetweenCentralAsiaandChinaandbetweenChinaandRussia,namelytheShanghaiFive,whichlatertransformedintotheShanghaiCo-operationOrganisation(SCO).TheonsetoftheShanghaiFivewasmarkedbythepost-SovietrepublicsborderingonChina(Russia,Kazakhstan,KyrgyzstanandTajikistan)signingtheTreatyonDeepeningMilitaryTrustinBorderRegionson26April1996.ThiswassupplementedayearlaterbytheTreatyonReductionofMilitaryForcesinBorderRegionssignedinMoscow.Inparalleltothis,co-operationoncombatingterrorismandseparatismwasdeclared(implicitly,thepartiescommittedtorefrainfromplayingtheseparatismcardagainsteachother).ItwasthefirsttimesincethecollapseoftheUSSRthattheformerSovietrepublicshadactedtogether(referringtotheirpost-Sovietbondsandcommunityofinterests)todealwiththedisputeswithChina(forthecountriesofCentralAsiathismeantreinforcingtheirpositionowingtoco-operationwithRussiaandanopportunitytomutuallycoordinatetheiractivity).Thedistrustthecoun-triesofCentralAsiafelttowardsChinadiminishedinlinewiththeirin-creasedsenseofself-confidence.ThisofferedBeijinggreateropportunitiesforco-operationonborderissuesandthestabilityofthefrontierareas.
As a consequence of the relatively positive co-operation as part of theShanghaiFive,(includingasignificantimprovementoftrustbetweenthestates) and ineffectof increasing tension inCentralAsia (theactivationof the IslamicMovementofUzbekistan in 1999–2001),Uzbekistan joinedtheShanghaiFive,andtheShanghaiCooperationOrganizationwasestab-lished(15June2001,Shanghai).Theprimarygoalofthisorganisationwasdeterminedtobethefightagainstterrorism,extremismandseparatism.ThusChina’skeydemandsweredecreedasthebasisforco-operationbe-tweenthecountriesintheregion,andatthesametimeaplatformwascre-atedforthedevelopmentofpolitical,securityand(potentially)economicco-operation.Thiswasalsobeneficial for theCentralAsianstates.How-ever, thisdidnotmean thedevelopmentofbilateral relationswasrelin-quished.Overtime,theSCOhasbecomethemostimportantplatformfordialogue(co-operationandrivalry)betweenRussiaandChinaregardingCentralAsianissues.
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2. the stability issue in Central asia vs. relations with China
CentralAsiaisaregionwithahighpotentialforinstability.Thishasbeenman-ifestedthroughmilitary19andethnicconflicts20,politicalcoups21,theactivityofMuslimradicals22andsocio-economictension23.Othersourcesofthreatin-cludethelimitedefficiencyofgovernmentstructures24andtheunstablepoliti-calsystems25.Post-SovietCentralAsiabordersdirectlyonAfghanistan,whichhasbeentraditionallyseenasahotbedofradicalIslamandethnicconflicts,andacradleofpowerful criminal structures involved in thedrugbusiness,whichareusedbyexternalpowersintheirpoliticalgames26.Neithertheindi-vidualcountriesinthisregionorRussia(whichaspirestohegemonyinCentralAsia)havethetoolstoresolvetheseproblemsinadurableandeffectiveway.ItisalsounclearpreciselywhatRussia’sintentionsare;shouldtheinstabilityissuesinCentralAsiaberesolved,Moscowwouldbedeprivedofitsmosteffec-tiveinstrumentofapplyingpressureontheregion.
19 Inparticular,thecivilwarinTajikistanin1992–1997,whichhadthefeaturesofbothanin-ternal(clan,politicalandideological)andregionalconflict(duetotheengagementofothercountries);andtoalesserextenttheactivityofterroristorganisations(mainlytheIslamicMovementofUzbekistan).ThethreatofinterstateconflicthasbeenregularlyreiteratedinUzbekistan’srhetoricaddressedtoTajikistan:attheturnofthemillennium,themainrea-sonforthatwastheshelterUzbekoppositionfoundinTajikistan,whereasnowitisacon-flictovertheuseofTajikistan’swaterresources(DushanbehasbeenpushingthroughtheconstructionoflargehydroelectricplantswhichcouldputUzbekagricultureatstake).
20 IncludingviolentKyrgyz-Uzbekconflictsin1990and2010.21 ThisconcernsespeciallyKyrgyzstan,wherepublicprotests (indirectlysupportedby the
circumstancesandexternalplayers)broughtaboutreplacementsofthepresidentsin2005and2010.Governmentchangesintheothercountrieswerecausedeitherbycivilwar(Ta-jikistan)orpalacecoups(Turkmenistanin2006).
22 Inparticular,theIslamicMovementofUzbekistaninoperationsince1998(andthegroupslinkedtoitandtoal-Qaeda).ThemostspectacularactionsweretheIMU’sattacksonKyr-gyzstanandUzbekistanin1999and2000.ThemountainousareasofTajikistanarereport-edlystronglyinfiltratedbytheMujahideen;whilelocalradicalgroupingshavebeenactiveinurbanareas(especially,butnotonly,intheFerganaValley).
23 E.g.the2005‘rebellion’inUzbekistan,aspecialmanifestationofwhichwerethebloodilysuppressedprotestsinAndijanon13May2005.
24 EspeciallyevidentinTajikistanandKyrgyzstan.25 The succession problems (and the questions about political stability and continuity) in
UzbekistanandKazakhstan.Inthepast,thepossibilityoftheviolentdemocratisationofKyrgyzstan(thecoupsin2005and2010wereaccompaniedbydemocraticslogans,andthefirstofthetwofittedinwiththewaveofthe“colourrevolutions”,whichwerebelievedtobelinkedtoUSpolicy)wereamongthesourcesofanxiety.
26 ThetensionhasbeenpresentinAfghanistan,withvariouslevelsofintensity,continuouslysinceatleast1979.AstheNATOandUSmissionsinAfghanistanaresettoend(besignifi-cantlyreduced)in2014,anewescalationoftensionisexpectedthere.
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ForChina,theinstabilityinitswesternneighbourhoodisaseriouschallenge;itposesathreattotheimplementationofeachofthegoalsoftheChinesepolicyintheregion.However,Chinahassofarmanifestedneitherthewillnoranyin-strumentsnecessaryfordirectengagementinthetensionsinsideCentralAsia.Formally,securitythreatstoChineseinterestsinCentralAsiaaresupposedtoberegulatedbytheShanghaiCooperationOrganization,whichhasnotpracticallydevelopedanyeffectiveinstrumentsnecessarytodealwithregionalsecurityis-sues27,andasaconsequencehasnotplayedanyroleinresolvingsubsequentre-gionalcrises28.Infact,BeijingrespectsRussia’sinterestsandinitiativesregard-ingregionalsecurityissues.Forthetimebeing,Beijinghasbeenabletoforgeitsweakness intoapositive imageofacountrywhichdoesnot interferewiththeinternalproblemsofitsneighbours.ThissituationhasalsostimulatedChinatodevelopbilateralpoliticalandmilitaryco-operationwithSCOmemberstates(andTurkmenistan),especiallyatthelevelofpolitical,financialand(toalim-ited extent)military support (supply ofmilitarymaterials and financial andtrainingsupport).However,itwouldbedifficulttostatethatthissituationhasbeenultimatelyresolvedinawaysatisfactorytoChinaandresistanttoregionalturbulences.InparticularsinceChinahasbarelyconcealeditsannoyancewithRussianactivityintheregion–aboveallwiththeconsentgrantedtotheestab-lishmentofUSmilitarybasesafter2001(whichwasseenbyChinaaseitherRus-sia’sweaknessorconsciousanti-Chineseactivity),and,inbroaderterms,withRussia’sinefficiencyinbringingstabilitytoCentralAsia.
3. China in regional geopolitical games
BothChina’sglobalambitionsanditsregionalpotentialandinterestsplaceitamongthestrongestgeopoliticalplayersinCentralAsia.Atthesametime,theinterestsofRussia,theUSAandChinaoverlapinthisregion,thusturningitintoaplacecontrib-utingtothedevelopmentofglobalrelationsbetweenthesecountries.
Chinese-RussianrelationsareofkeysignificancefortheregionitselfduetothehistoricalbackgroundandthefactthatbothofthesecountriesborderCentral
27 For example, one of the SCO’s flagship projects, the Regional Anti-Terrorist Structure(RATS),established in2002. Itstillremainsmerelyaplatformfortheexchangeof intel-ligenceinformation.Nopromisedconstantrapidreactionforces,nottomentionabasefortheoperationofsuchforcesintheregion,havebeencreated.Commonexercisesarelimit-ed.Furthermore,itwasadmittedduringtheSCOsummitin2012thatnon-militaryimpactremainedthemainareaoftheSCO’sactivityasregardssecurityissues.
28 Forexample,duringtheKyrgyz‘revolutions’in2005and2010,andespeciallyduringtheviolentethnicconflictbetweenKyrgyzandUzbeksinsouthernKyrgyzstanin2010.
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Asia. The first and the fundamental circumstancewhich has characterisedRussia-ChinarelationsinCentralAsiasince1991– inadditiontothechangeinbothcountries’globalpotential–isthefactthatMoscowhaslostitsdirectandunquestionablecontrolover theregion. It is thefirst timeoverthepasttwocenturiesthatRussiaisunableand,aboveall,hasnopoliticalwilltotreatCentralAsiaasitsbaseforexpansiontowardsChinaortouseCentralAsiaasameanstoapplymilitaryandpoliticalpressureonChina.Instrategicterms,thepasttwodecadeshavebroughtanabsolutelynewqualitytothegamebe-tweenBeijingandMoscowinCentralAsia.
Ashasbeenmentionedabove,Russia’sandChina’sstrategicinterestsdifferatsomeessentialpoints:Russia’sregionaldominationintheareaofsecuritywillbe irreconcilablewithChina’seconomicandpoliticalexpansion in the long-term. The two countries definitely have different approaches to the ‘sover-eignty’and‘independence’oftheCentralAsiancountries,whichareofferingmoreandmoreroomformanoeuvretoChinaandarereducingthesignificanceofRussiaasapatronandguarantorofregionalstability.Ontheotherhand,onemayalsonotice–inMoscowandBeijingalike–similaritiesofinterestsinglobalpolitics(primarily,restrictingtheglobalpositionoftheUSA)andthecommonwilltoreducetensioninbilateralrelations.Inthiscontext,CentralAsia isoneof themost interestingandmostversatilefields for thedevelop-mentofChinese-Russianrelations. In turn, thesearebest illustratedby theShanghaiCooperationOrganization:itwasestablishedpartlywiththeaimofneutralisingtensionbetweenRussiaandChina,ittakesintoaccounttheex-istenceofthenewrepublicsinCentralAsiaandcoversupthedifferencesex-istingbetween its twomajormember states.Characteristically, theRussianandtheChineseconcepts for thedevelopmentof thisorganisationhavecol-lided:whileMoscowhasseenitprimarilyasanewgeopoliticalblocwhichaddsstrengthtoMoscow’svoiceontheinternationalarena,ChinawouldliketoseetheSCOasaplatformofco-operationinsecurityandeconomicissues.TheSCOremainsapoliticaldialogueplatform:thisorganisationhasnotunderminedtheRussiandominationinthesecurityarea,neitherhasitchannelledChineseeconomicactivityawayfromtheregion.Noneofthecountriescanclaimthatstrategicgoalsarebeing implementedhere. It isstillanopenquestionwhatroletheSCOcouldplaywhentheISAFmissionisoverinAfghanistan.Onthelevelorrhetoric,theSCOaspirestosharetheresponsibilityforthefutureofAfghanistan,whileinpracticeitdoesnotseemtobepreparedforthis.
WhilerelationsbetweenChinaandRussiaaredevelopinginCentralAsiaatthelevelofpoliticalco-operationanddeclarationscorrectlyeconomicissues,tosay
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theleast,remainafieldofbitterrivalry.Afterthetwentyyearsoftheso-called“NewGreatGame”,i.e.vyingforaccesstoCentralAsianenergyresources(whichhavebeentreatedasausefultoolinthestruggleformaintainingpoliticaldomi-nation),itisChinawhohasmanagedtoimplementanddeveloptheoilandgasproductionandimportprojectintheregion.ThismeansthatthepreviousRus-sianmonopolyhasbeenbrokenandthatasteptowardsimplementingthestra-tegicgoalsofChinesepolicyhasbeenmade.GiventheconstantincreaseintradeandChina’sfinancialengagement,thisisaclearsignofthecontinuingweaken-ingofRussia’spositionintheregion.China’ssuccessesprovidedastrongstimu-lusforRussiatointensifyitseffortsaimedatthereintegrationofthepost-Sovietarea,includingeconomicreintegration.Constantlyrepeatedpromises(noneofwhichhavebeenfulfilled,andthusarebecominglessandlesscredible)thatseri-ousRussianinvestmentswillbemadeinCentralAsia,andaboveallthehurriedcreationoftheCustomsUnion(whosemembersatpresentare:Russia,Kazakh-stanandBelarus)areamongthefactorsintendedtocontributetotheimplemen-tationofthisgoal.ThetermsofeconomicrivalryinCentralAsiaaredictatedbyChinaandareclearlyfavourableforthiscountry–thepoliticalframeworkwith-inwhichthisistakingplaceseemstobemoreandmoreatvariancewithreality.
Asseenfromtheperspectiveofthetwopastdecades,China,incomparisontoitsAsiancompetitorsvyingforinfluenceintheregion,hasperformedreallywell:TurkeyandIran,whichhavebeenplayingthecardofculturalcommu-nitywithCentralAsiancountries,areplayingaverylimitedrole,asisthein-fluenceofIndiaandPakistan,forwhomthemainmotivationweretheircal-culationsregardingsecurity.Noneofthesecountrieshavemanagedtobuildastrongpolitical,economicormilitaryposition,andnoneofthemisplayingamajorpoliticalroleintheregion.
TheUSachievementsandpositionintheregionarestillanopenquestion.Ontheonehand,despitecleareconomic(includingtheexpansionofUSenergycompanies,especiallyinKazakhstan),political(theUSAhasbecomeasignifi-cantpoliticalreferencepointinCentralAsia,especiallyintheareaofsecuritypolicy)andmilitarysuccesses(USarmedforceshavebeenpresentinthere-gionsince2001),USpolicyappearstobelosingmomentum.Americanpoliticalandmilitaryengagementseemstohavereacheditspeakin2005,whenCentralAsiancountriesstartednoticingitssideeffects29,andnow,astheISAFmission
29 TheTulipRevolutionof2005inKyrgyzstanwasabreakthrough.ItwasseenintheregionasacoupplottedbytheUSA.ItwasfollowedbyarebellioninUzbekistaninMay2005(theviolentlysuppressedprotestsinAndijanandothercitiesintheFerganaValley),whichfrom
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isbeingwoundupinAfghanistan,itwillfurtherdecline.Economicengage-ment,includinganumberofinfrastructuralprojectsbackedbytheUSA(in-cludingaspartofCAREEC),hasalsofailedtotranslateintodurablebondsbe-tweentheregionandtheUSeconomy,whichwouldhaveprovidedgroundsforenhancingthepoliticalengagement.Asseenfromthisviewpoint,China’spo-sitionintheregionhasbeenrelativelygrowingascomparedtothatoftheUSA.However,ontheotherhand,consideringChina’sgrowingregionalandglobalambitionsandthefactthatitsrelationswithRussiahavebeennormalised,itistheUSAthatisbecomingChina’smainrivalasregardssecurityinCentralAsia.ThepresenceofUSmilitaryforcesintheregion(especially,theairbaseinManas,Kyrgyzstan)hasbeenperceivedasindirectlytargetedagainstChi-na. Inturn,America’sdetermination in itsefforts tocontinuetostrengthenitspresenceintheregiononcetheISAFmissioniswoundup(whichdoesnotmeanatallthattheAmericanswillnolongerbepresentinAfghanistan)hasgivenrisetogreatanxietyinChina.Furthermore,itisfearedthatthesitua-tionbothinAfghanistanandCentralAsiacoulddestabiliseasaconsequenceoftheweakeningWesternpresenceintheregionandthiscouldaffectChina’sre-gionalinterests.Theincreasingroomforco-dependenceandrivalrybetweentheUSAandChinaontheglobalscalewillcertainlybemanifestedinCentralAsia,andwillaffecttheChineseperceptionoftheregionandofUSpolicy.
4. the Chinese model of building its political position in Central asia
WhencomparedtoRussianorUSpolicyinCentralAsiaChina’spoliticalposi-tionintheregionisfarfromimpressive.Thiscanbejustifiedbycomparisonwith the spectacularmanifestations ofRussia’s andAmerica’s presence andengagement in thepolitical andmilitaryareas: the formalalliances (CSTO),economic(theCustomsUnion)andpoliticalorganisations(CIS),civilisationalbonds,militarypresence(includingUSbases),theinfluenceoninternalpoliti-calgamesinindividualcountries,etc.Formally,theSCOistheonlyregionalorganisationChinaisamemberof.Despiteitsenormousinterestinsecurityissues,Beijinghasnoneofthehardinstrumentsnecessarytobearinfluencein thisarea,and ithasbeenavoiding involvement indomesticgames in theregion’scountries.Nevertheless,Chinaisaveryimportantplayerinregion-al policy, primarily owing to its global significance and economicpotential.
Tashkent’spointofviewwasaneffectofUSpro-democraticpropagandaandattempt tointerferewiththecountry’sdomesticaffairs.Inthesameyear,Uzbekistanendedmilitaryco-operationwiththeUSAandNATO,andUSproblemsinKyrgyzstanandalsoinrelationswithRussiaintensified.
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Butthisisnotall:atypicallyChinesemodelofbuildingapoliticalpositioninagradualanddiscreetmanner(whichhasalsobeenobservedinotherpartsoftheworld)isemerginginCentralAsia,whichisdefinitelydifferentfromtheRussianandtheUSmodels.Fromtheperspectiveofthepasttwodecades,thismodelcanberecognisedasinternallycoherentandeffective.
the existence of the independent states which emerged from the rub-ble of the ussr has been the foundation of China’s presence in Central asia – supporting their existence and the governments which guarantee their existence has been a constant element of Chinese policy. ThishasbeenclearsincethecollapseoftheUSSR:Chinaimmediatelyrecognisedthesecountries’ independence and opened up to economic co-operation (primar-ilytrade).Its‘affirmative’approachtowardsthecountriesofCentralAsiahasbeenmanifestedthrough:thehighlevelofbilateralvisits,China’sinterestinsigningstrategicco-operationagreements,anditssupportforCentralAsiancountriesontheinternationalscene,especiallyintwoespeciallysensitivear-eas:thelegitimisationandthestabilityoftheregimes,andtheirindependencefromsuperpowers,especiallytheUSAandRussia.
China has consistently accepted and strengthened the rights of the coun-tries of Central asia to total freedom in creating their domestic situa-tion, andhasvehementlyopposede.g.theimpositionofWesterndemocraticstandardsor forcing themtorespecthumanrights.Thisproblemwasespe-ciallystronglyemphasisedafter2001,duringtheUSexpansionintheregionandattempts topush throughdemocratic solutions (anextremeexampleofwhichwasthesupportgrantedtothecolourrevolutions),whileChina(bothindividuallyandaspartoftheSCO)firmlydefendedthelocalregimesanditsowninternalstability.
OnespecialmanifestationofthisapproachwasthepoliticalsupportgrantedtoUzbekistanandPresidentIslamKarimovfollowingtheAndijanmassacre(May2005),whentheWest(includingtheUSA)wasinsistingthataninternationalin-vestigationintothemassacreneededtobelaunched,andtheEUimposedsanc-tionsonUzbekistan.Tashkentsawthisasdirectinterferencewiththecountry’sinternalaffairs.IntheweekswhichfollowedtheAndijanincidents,whileUz-bekistanwasbeingisolatedbytheWestandhaddifficultrelationswithRussia,ChinawasthefirstcountrytoacceptandbackIslamKarimov.
China’s relations with Turkmenistan serve as another vivid illustration ofitsapproach.China isacountrywhosestandardsareextremelyatvariance
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withtheWesterndemocraticstandardsandwhichisdistrustfuloftheexter-nalworld(aboveallRussia).HereChinahasconsistently turnedablindeyeonextremeshortcomingsregardingnotonlydemocracy,butalsotheruleoflaw.ThusithasbeengainingthetrustofTurkmenistan’sgovernmentandhasbeencapitaliseduponthisineconomicco-operationand,ineffect,inChina’sincreasinginfluenceonTurkmenistan’spolicy.
ThisapproachwhichChinatakestodomesticaffairsintheregioniscrownedwiththestrikinglymoderate stance it takes on internal political games in individual countries. Bycomparison,RussiaistreatedasastatewhichcantoasignificantextentcreatetheinternalsituationinCentralAsiancountries,proofsofwhichincludedthecivilwarinTajikistanin1992–1997andtheoust-ingofPresidentBakiyevinKyrgyzstanin2010.Russiaisalsoaconstantfactorbeingconsidered in thesuccessionscenarios inKazakhstanandUzbekistan(partlydue to its strongconnectionswith theoppositionand thegroupingsinside the government elite). The United States similarly has been accusedofinspiringtheTulipRevolutioninKyrgyzstan(2005)orthepro-democraticopposition (fromsupporting the freepressandNGOs tobackingpotentiallydemocratic parties, e.g. the Sunshine Coalition in Uzbekistan in 2004/05),i.e. of having a desire to gain direct influence on the local political scene.UnlikeRussiaandtheUSA,Chinahasneverbeenperceivedasapotentialpa-tronofanypoliticalgroupingintheregion.
beijing’s moderation in pushing through political and legal solutions or,morebroadly,promotingtheChinesevisionsforthemodernisationofCentralAsia,fitsinwiththisapproach.ThisisanotherfactorwhichmakesChinasig-nificantlydistinctespeciallyfromtheWest(open,thoughinconsistent,pres-suretoadopttheWesternmodelofpolitical,socialandeconomictransforma-tion)andalsofromRussia(cherishingtheelementsoftheSovietheritage,andosmosisbasedonparticipationincommonpolitical,economicandmilitaryor-ganisations).Ineffect,co-operation(especiallyeconomic)withChinadoesnotinvolvethesensationofadirectthreatbeinglevelledattheregionalregimesand is not conditioned by the policies the regimes adopt at home. Proofs ofthisincludeChina’sabilitytoco-operatewithcountriesfollowingsuchdiffer-entdevelopmentmodelsasTurkmenistanandKazakhstanand,ontheotherhand,thecontinuityofco-operationwithallthegovernmentsinKyrgyzstan,regardlessoftherevolutionsin2005and2010.
Anotheraspectof the ‘affirmative’policy towards theregion is thediscreet support for individual countries in case of tension in relations with
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russia or the usa:Chinahasoffereddisinterestedandbenevolentbacking.ThiswastheovertoneoftheaforementionedpoliticalsupportforUzbekistanin2005andthiswastheroleChinatookatthetimeofthechangeingovern-ment inTurkmenistan (theRussia-China-Turkmenistan talkswhichaccom-paniedthefuneralofSaparmuratNiyazovwereheldattheChineseembassyinAshgabat,whichwas ‘neutrallybenevolent forTurkmens’).Anespeciallyvividmanifestationofthiswasthefinancial,andde facto political,assistancegrantedbyBeijingtoAshgabatwhenthelatterhadfounditselfunderstrongpressurefromMoscowduringtheRussian-Turkmengascrisis(2009).AveryclearsymbolicsignofChina’ssupportforthedurabilityofthepoliticalorderinthepost-Sovietarea(andonedesiredbytheregion’scountries)wastheSCO’sstanceontheGeorgia-Russiawar(2008):thisorganisationdidnotrecognisetheindependenceofAbkhaziaandSouthernOssetia,whichMoscowwasin-sistingonandwhichthecountriesofCentralAsiawerereluctantto.SupportfromChinaallowedthemtostandtheirgroundindealingswithRussia.
AlthoughthepoliticalactivitymodeladoptedbyChinaoverthepasttwodec-adesisrelativelysuccessful(CentralAsiancountriesaretrustingChinamoreandmore,andare increasingly interested indevelopingeconomicco-opera-tion), itstilldoesnotguaranteeChineseinterests intheregionsecurityandsustainability.Chinaisunabletotakeanydirectactionincaseofmajorinter-nalcrises,especiallymilitaryconflicts,or–morebroadly–processesinwhichthemilitaryfactorplaysthedecisiverole.Thisfactorisofgreatsignificanceintheregion,wheretheriskofsuchconflicts–bothdomestic(e.g.theproblemwith‘militantIslam’andethnicconflicts)andexternal(e.g.threatsoriginat-ingfromAfghanistan,andthepresenceoftheUSandRussiaintheregionandwiththepossibilityofRussiausingforce;thisthreathypotheticallyalsoexistsinthecaseoftheUSA)–isquitereal.Beijinghasrealisedthisonseveraloc-casionsoverthepastdecade.ThefirstoccasionhappenedduringthemilitaryraidsbytheIslamicMovementofUzbekistan(in1999and2000),thenduringtheUSandNATOoperationsinAfghanistan(since2001),andfinallyatthetimeofthecoupsinKyrgyzstan(especiallyin2010)andtheviolentethnicconflictbetweenKyrgyzandUzbekpeopleresultingfromthelastcoup.IneachofthecasesChinahadnorealimpactonthesituation,despitethefactthatthebasicconditionforitsabilitytoinfluencetheregion,i.e.thestabilityandefficiencyoflocalgovernments,wasputatstakeinallofthesesituations.
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5. Central asian countries on China
ThespecialnatureofChinaanditspolicy intheregion(includingitspoliti-calandeconomicpotentialandtacticalminimalisminitspolicytowardstheregion) offers the countries ofCentralAsiano other choicebut tomaintainareactiveandconservativepolicytowardsBeijing.Furthermore,politicalre-lationsareafunctionofeconomicrelations.
Thisbecameawell-establishedstatus quooncetheproblematicborderissueshadbeensettled,theSCOhadbeenconstituted,andthecountriesofCentralAsia had accepted China’s key political interests. This status quo was testedinpracticebetween2001and2010,atempestuousdecadeforthisregion.NotevenoncedidChinatakeapoliticalstanceinthatperiod,nordidittakeactionthatcouldraiseconcerninCentralAsia.Asmentionedabove,Beijinghasonnumerousoccasionsofferedessentialpoliticalsupporttotheregionalregimes,andalsofinancialsupport,whichde factotranslatedintopoliticalsupport.
In currentpolitics, the countries of the regionhaveonnumerous occasionstreatedChina as a convenient counterbalance in their dealingswithRussiaand theUSA.Thehigh frequencyofvisitsbetweenCentralAsian countriesandChina,whichhavebeen focusedonbilateral co-operation,especially intheareaoftheeconomy,andwithnoelementsofpoliticaldispute,hasbeenaimedatprovingthatBeijingoffersanimportantalternative;primarilyfinan-cial,butalsopolitical.
However, given the positive atmosphere of current political co-operation(whichisevenmoretrueregardingeconomicco-operation),thewaybilater-al relationswilldevelop in the longer term is stillanopenquestion.This istheareawherethedifferencesinperceivingtheproblembyeachofthestatesshowupmostclearly.
The special features of the smaller states (especially Tajikistan and Kyr-gyzstan),theirpoliticalandeconomicweakness,andthefactthatcurrentin-ternalproblemsarepredominantintheirpolitics–allthiscausesthatitisdif-ficulttonoticeanypotentialinthepoliciesadoptedbythesecountriesortheambitiontocreatelong-termstrategiesfordevelopingrelationswithChina.
Thesituationlooksdifferentwhenseenbythelargerstates,whicharecompar-ativelybetter-establishedandhavepoliticalambitions (KazakhstanandUz-bekistan).Theyareforcedtomakelong-termplansduetotheneedtodevelop
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theenergysector(KazakhstanandUzbekistan,and–forslightlydifferentrea-sons–Turkmenistan). In thecaseof thesecountries, long-termcalculationsaremorenoticeable,andconcernscanbeseenalongsidethepositiveaspectsofdevelopingco-operationwithChina.Inpractice,thisboilsdowntoactionsaimedatthediversificationofbothenergyco-operation(allthecountriesaredevelopingenergyco-operationwithChina,andeachofthemhastakenactiontodevelopalternativeroutes),and–inthebroadersense–economicandpoliti-calco-operation.
InthecaseofKazakhstan,Chinaisakeypoliticalandeconomicpartneralong-sideRussia.Kazakhstan isopentoanykindofco-operationwithChina(es-peciallyintheareasofeconomyandtransport).Theirbilateralrelationsmaybetermedastrategicpartnership.However,inlinewiththedevelopmentofco-operationwithChina,Kazakhstanisbuildingakindofsecurityagainstbe-comingexcessivelyortooquicklydependentonChina.Oneexampleofthisisthedevelopmentofco-operationwiththeUSAandtheEU,andaboveallwithRussia,which isseenascounterbalance toChina.Kazakhstan’saccession totheCustomsUnionwassymptomatic,asthisprovidedAstanawithgroundsforrestrictingChineseeconomic,andconsequentlypolitical,expansion.
Uzbekistanhas treatedChinawithmuchgreater reserve.Despite the crisisinrelationsafter2005,Uzbekistanhasbeenactivelydevelopingpoliticalandmilitaryco-operationwiththeUSAandNATO,especiallyonthefoundationsoftheISAFandOEFoperationsinAfghanistan.Whiledevelopingeconomicco-operationwithChina(agaspipelineandtransportationprojects),Uzbekistanofall theCentralAsiancountriesisthemostactivelyengagedindevelopingeconomicco-operationwithEasternAsiancountrieswhichareChina’sde factocompetitors:SouthKorea, Japan,Malaysiaandothers; thisneeds tobe seenasasignofdistrusttowardsChina.However,UzbekistanistheCentralAsianstatewhichhasmoststronglybeenexpressingitsambitionsofbecomingin-dependentfromRussiainpoliticalandmilitaryterms,anditsgovernmenthasearnedareputationofbeingcapableofmakingsuddenturnsinforeignpolicy(balancingbetweenRussiaandtheUSA).TashkentisconcernedaboutbeingpossiblydominatedbyBeijing,butatthesametimecannotaffordtolagbehindtheotherCentralAsiancountries. It is thusset todeveloppoliticalandeco-nomicco-operationwithChina(oneproofofthiscanbePresidentKarimov’sproductivevisittoBeijinginApril2011).
ForTurkmenistan,Chinahasbeende factothemostimportantpoliticalpart-neroverthepastfewyears.Thisislinkedtodevelopingenergyco-operation
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and seriouspolitico-economic tensionswithRussia.However, following theeuphoriainrelationswithChinain2007–2009,Ashgabathassoberedup:thetemporarybenefitsofco-operationwithChinahavefailedtocompensateforthefinanciallossesresultingfromtheshrinkinggasexportstoRussiaandtheneedtoallocatepartoftheincomesfromgassalestoChinaforpaymentsfortheservicesrenderedbyChinesecompaniesengagedinTurkmenistan.Turk-menistan’spoliticalshifttowardsChinahasalsoturnedouttobeanillusion.Theshort-termbenefitgainedbyreducingitsdependenceonRussiawithChi-na’shelpposethethreatthatRussia’sdifficultpatronagewillbereplacedwithanequally inconvenientChinesepatronage.ThishasmotivatedAshgabat tosearchfornewpoliticalandeconomicpartners(thebestexampleofwhichisthefactthatTurkmenistanhasbeenlobbyingforagaspipelineprojectrun-ningtoIndiaandPakistan).Atpresent,however,therearenogroundstocon-cludethatAshgabathasfoundarealalternativetoChina.
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III. ChIna’s eConomIC PresenCe In Central asIa – the aChIevements of the Past two deCades
ChineseengagementintheCentralAsianeconomyhasbeenaimedatimple-mentingBeijing’sstrategicinterestsintheregionintheareaofsecurityinthestrictestsense, aswellastheeconomicsecurityofChinainvolvingsuppliesofnaturalgasanduranium.Giventhewiderangeofactionsandcloseconnec-tions,itiseconomicco-operationthatChina’spositionintheregionisbasedupon,includingitspoliticalposition.
Intheminimumoption,fromChina’sviewpoint,theeconomictoolsaremeanttopreventthecollapseoftheweakeststatesinCentralAsia,whilethemax-imumoptionprovides for theconstructionofa ‘welfarezone’ in theregion,thuscontributingtoanimprovementofitsstability.ThestabilisationofCen-tral Asia through economic development and achieving ‘welfare’ is in turnaimedatensuringstabilityinChina’sXinjiangprovinceowingtothecreationof economicbondsbetweenCentralAsia andXinjiang. Strong, consolidatedandwell-functioningstatesinCentralAsiawouldalsocreateabufferzonebe-tweenChinaandAfghanistan.Ingeopoliticalterms,Chinawantstouseeco-nomicco-operationtoreinforceitspositionintheregionandprovideabalancetoRussianandWesterninfluences.
However,economicco-operationwithCentralAsiaatpresentisofnostrategicsignificancefortheChineseeconomy:exportstoCentralAsiahaveamarginalshareinChina’sforeigntrade(lessthan1%in2012).Nevertheless,tradewithCentralAsia is of fundamental significance forXinjiang: in 2011, 78%of theprovince’sexportswenttoCentralAsiancountries30.
ChinaineconomicrelationswithCentralAsiais,then,focusedonachievingthreetangiblegoals.Firstly,itwishestocontinuedevelopingtraderelations,consideringthattheyareoffundamentalsignificanceforXinjiang.Secondly,itisinterestedinsuppliesofrawmaterialsfromCentralAsia(aboveall,naturalgasanduranium).Thirdly,itwantstoturntheregionintoatransmissionbeltforexportsofChinesegoodstotheWestandtheMiddleEast.
30 http://www.globaltimes.cn/content/722972.shtml
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1. regional differences in the level and nature of co-operation
Thelevelofeconomicco-operationbetweenChinaandthecountriesinthere-giondependsontheireconomicpotential,theleveloftheirfossilfuelresourcesandtheirsignificanceastransitcountries.TheinternalstabilityofeachoftheCentralAsiancountriesandtheirpolicyandattituderegardingco-operationwithChinaarealsokeyissues.
FromChina’spointofview,themostimportantoftheCentralAsiancountriesisKazakhstan,sinceuntilrecentlyitwastheonlycountryintheregiontohavesignedastrategicpartnershipagreementwithChina31.Kazakhstanhasenor-mouseconomicpotentialduetoitssignificantnaturalresources(oil,gas,ura-nium andmetals), geographic proximity, convenient transport connections(whichdonotrunthroughhighmountains,asisthecasewithKyrgyzstanandTajikistan),itspoliticalstabilityandtheessentialroleKazakhstanisplayingintheregion.Duetothis,economicrelationswithKazakhstanarethestrong-estandhavevastpotentialforfurtherdevelopment.
TheothertwoofChina’sCentralAsianneighbours,TajikistanandKyrgyzstan,aregivenfarlesssignificance.Kyrgyzstanplaystheroleoftheregion’scentrefortradeinChinesegoods,owingtoitsWTOmembershipandfavourablepo-liticalclimate.However,itsrolehasweakenedduetothedevelopmentoftradeandtheinfrastructuretosupportitbetweenKazakhstanandChina,andalsoduetotheemergenceofnewbarriersasaconsequenceofthecreationoftheCustomsUnion.Kyrgyzstanhasbeenattempting tomaintain itspositionasahubbyjoiningtheCustomsUnion.BothTajikistan(especiallysinceitsacces-siontotheWTO)andKyrgyzstancanpotentiallybehighlysignificanttran-sit countries in the transportofChinesegoodsandcanbecomeabridge forexportsofsuchgoodstotheotherCentralAsiancountries,AfghanistanandfurthertothePersianGulfandthecountriesoftheMiddleEast.
Inturn,theChinese-Turkmenco-operationisbasedsolelyonsuppliesofnatu-ralresources.TurkmenistanisseeninChinaasthemostimportantsupplierofnaturalgas,withpotentiallythegreatestcapabilityofincreasingsupplies.Forthisreason,andgiventherapidincreaseingasconsumptionandimportstoChina,relationswithAshgabatareofstrategicsignificanceforBeijing.
31 UzbekistanandChinasignedastrategicpartnershipdeclarationaslateasin2012.
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Uzbekistan isperceivedbyChinaas an important transit country forTurk-mengasandasourceofrawmaterials(gasanduranium).UzbekistanisalsothemostpromisingoutletforChinesegoodsintheregion,primarilybecauseithasthelargestpopulation.However,UzbekistanwasthelastCentralAsiancountrytoestablishrelationswithChina.IttookTashkentthelongesttimeofalltheCentralAsiancapitalstoembarkuponcloserco-operationwithChina.ItwasalsothelastintheregiontohaveacceptedloansofferedbyBeijing.Co-operationwithChinawillbecarefullychannelledandinpracticerestrictedbyTashkent(ascomparedtotheregion)asitwillcontinueaprotectionistpolicyonitsmarket.
AsregardsChina’sdirectinvestments,thekeytargetistheregion’sprimarysector. Therefore, a great part of the investments go to Kazakhstan and toalesserextenttoTurkmenistan.Chinahasalsobeenseentoinvestintelecom-municationandalsoinsectorslinkedtotradedevelopment(infrastructure).However, inpractice,Chineseinvestments inotherthantheprimarysectorarenotlargeanduntilnowhavefailedtoprovideastimulustomodernisation.
2. China’s ‘assets’ in the region and plans for development
2.1. Theoilandgassector
ChinahasbeenmostactiveandsuccessfulcountryinmakingeffortstogainaccesstorawmaterialassetsinCentralAsiaoverthepastdecade.China’sin-creasingpresenceintheregionhasledtoareductionintheroleofeconomicco-operationwiththeotherplayersengagedinCentralAsia(aboveallRussia)andtoamodificationofthesignificanceofthisrole.Theprimaryreasonsbe-hinddeveloping energy co-operation between the countries of CentralAsiaandChinaincluded:theirdesiretobecomelessdependentonRussia,theun-successfulWesternplanstobuildinfrastructurerunningfromCentralAsia,andthe increasingattractivenessofChinaitselfasaglobalplayerwithvasteconomicpotential.
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Table 1.China’skeyassetsintheCentralAsianoilandgassector(asof1January2013)
Purchase date
share owner
kaZakhstan
key upstream assets (companies, shares in projects) Production in 2012
AktobeMunaiGaz1997-2003
85% CNPC
6.1milliontonnesofoil,3.7billionm3ofgas
NorthBuzachi 2003 50% CNPC2milliontonnesofoil
KAMProject 2004 50%CNPCandChinaNorthIndustriesCorporation
0.7milliontonnesofoil
CNPC-Ai-Dan-Munai 2005 100% CNPC0.4milliontonnes
PetroKazakhstanKumkolResources(pleasenotethatCNPCsolda50%stakeintheShymkentrefinerytoKMG)
2005 67% CNPC6milliontonnesofoil(2011)
KarazhanbasMunai(NationsEnergy)
2006 50% CITIC2milliontonnesofoil
Mangistaumunaigaz(therefinerywasexcludedfromthetransactionandtakenoverbyKMG)
200950%-2shares
CNPC
5.9milliontonnesofoil0.5billionm3ofgas
KazMunaiGasE&P 2009 11%ChinaInvest-mentCorp.
7.9milliontonnesofoil
Urikhtaufield 2011 50% CNPCExplorationwork(gas)
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minor upstream assets
EmirOil 100% MIEHolding130thou-sandtonnesofoil
KMKMunai 100%YukonEnergyHolding
90thousandtonnesofoil
Sazankurak 100%FirstInterna-tionalOilCom-pany(Sinopec)
93thousandtonnesofoil
PricaspianPetroleumCo.
100%FirstInterna-tionalOilCom-pany(Sinopec)
33thousandtonnesofoil
SagizPetroleumCo. 100%FirstInterna-tionalOilCom-pany(Sinopec)
160thou-sandtonnesofoil
AdaiPetroleumCo. 50%FirstInterna-tionalOilCom-pany(Sinopec)
138thou-sandtonnesofoil
CaspianInvestmentResources
50% Sinopec n/a
TarbagatayMunai(Zaysanfield)
49%GuanghuiEnergy
n/a
refineries Capacity
Shymkentrefinery 2005 50% CNPC5.25milliontonnesofoil
transport infrastructure Capacity
Kazakhstan-Chinaoilpipeline(Atasu-AlashankouandKenkiyak-Kumkolsections)
1997-2009
50% CNPC
12milliontonnes(withtheoptiontoincreaseto20milliontonnes)
TheKazakhsectionoftheCentralAsia-Chinagaspipeline(A,BandClines)–thetransitpipelineforgasfromTurkmenistan,Uzbeki-stanandinthefutureKazakhstantoChina*
2007 50% CNPC55billionm3ofgas
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2008 50% CNPC10-15billionm3ofgas
Zaysan-Jeminay 2013 100%GuanghuiEnergy
0.55billionm3ofgas
uZbekIstan
upstream assets (companies, shares in projects) status
5investmentblockslocatedinUstyurtandAmuDaryaregionsandintheFerganaValley,operator:CNPCSilkRoadGroup
2006 n/a CNPCExplorationwork
RehabilitationofoldfieldsintheFerganaValley
2008 n/a CNPC Exploration
TheAralSeaProject2006-2011
26.6% CNPC Exploration
TheMingulakProject 2008 50% CNPC Exploration
transport infrastructure Capacity
TheUzbeksectionoftheCentralAsia–Chinagaspipeline(theA,BandClines),operator:AsiaTransGasClineconstructioncost:US$2.2billion
2008 50% CNPC 55billionm3
turkmenIstan
upstream assets (companies, shares in projects) status
TheBagtyyarlykfieldontherightbankofAmuDarya
2007
PSA(thenumberofsharesisunknown)
CNPC
Theoutputissettoreach17billionm3ofgas
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taJIkIstan
upstream assets (companies, shares in projects) status
KulobPetroleumLtd. 201233.33%US$30mil-lion
CNPC(partners:Total,TethysPetroleum)
Exploration
kYrgYZstan
upstream assets (companies, shares in projects)
batkenneftegaz 2007 100% ChungCompany
refineries Capacity
kara-balta refinery (annual capacity at 850 thousand tonnes of oil), greenfieldin-vestmentcost:US$250million
2009-2013
99%ZhongdaChinaPetrolCompany
Toreach850thousandtonnesofoil
tokmok refinery** (annual capac-ity at 500 thousand tonnes), greenfieldinvestmentcost:US$60million
2012-2013
n/a
ChinaNaturalInvestmentHoldingCo.,Ltd.viaXinjiangNaturalEnergyGroupCo.,Ltd
Toreach500thousandtonnesofoil
source:Companywebsites,newsagencies,Argus*ChinahasnoshareinthecentralsectionoftheKenkiyak-Kumkoloilpipeline,whichiscontrolledbyKazMunaiGas.**http://www.trend.az/regions/casia/kyrgyzstan/2084714.html
2.1.1.ThecharacteristicsofChina’spresenceintheoilsector
ChinahasmanyoilassetsinCentralAsiabutisnotthelargestoilproducerintheregion.Furthermore,theassetsheldbyChinaareoldanddepleted,whichmeans that theshareChinesecompanieshave in theregion’soilproductionwillfallunlessnewacquisitionsaremade.TheimpressionthatChinesefirmswereexpandingwithout restraint in theoil sectorwasaneffectof the suc-cessful asset acquisition strategy, beginning in 2005,which resulted in therapidgrowthofChina’spositioninthissector.However,thisdoesnotmeanthatChinaisplayingadecisiverolehere.FromCentralAsia’spointofview,co-operationwithChinaofferstheopportunityfordiversificationofoiltransport
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routesandrecipients. In this context, it isbeneficial andhighly significant.FromChina’spointofview,oilsuppliesfromCentralAsiaaresupplementaryto the imports from other directions.Whatmakes this region important isthefactthatitenablesoilsupplybyland.Ifexistingtransportroutesarede-veloped,itssignificancecangrowfurther,butthiswillnevercompensateformaritimeoil supplies.China’spresence in theoil sector isprimarilya chal-lengetoWesterninvestors,whoareforcedtocompetewithChinesefirms.Inturn,thisisbeneficialforthecountriesintheregion.
AsregardsChina’sactivityintheCentralAsianoilsector,itispresentprimar-ilyinKazakhstanandtoaverylimitedextentinUzbekistan.ThefirstChineseinvestments in theregion’soilsectorweremade in the late 1990s.However,theChineseexpansionbeganinearnestinthesecondhalfofthefirstdecadeofthe21stcentury,whenallthemostimportantandlargestenergyassetshadalreadybeenallocatedmainlytoWesterninvestors.Symptomatically,Chinesecompanies hold no shares in any of Kazakhstan’s three largest fields (Ten-giz, Karachaganak and Kashagan), whereWestern investors are dominant.Chinese investments were disfavoured by the government of Kazakhstan,whichfearedBeijing’sexcessiveexpansion,andalsobyWesternenergycor-porationsunwillingtoco-operatewithChina(oneexampleofthiswaswhenWesterncompaniesblockedCNPC’sacquisitionofsharesintheKashaganFieldin200332).Thesituationchangedin2005,whenChina’sCNPCboughtsharesinPetroKazakhstan,acompanyregistered inCanada.This transactionush-eredintheexpansionofChinesecompaniesinKazakhstan,andopenedanewfieldforco-operationbetweentheKazakhstate-ownedholdingKazMunaiGas(KMG)andCNPC33.Regardlessofthis,Chinesecompanieswerestilldeniedac-cesstothelargestupstreamprojectsinKazakhstan.
Before2010,investmentsintheCentralAsianoilsectorweremadepredomi-nantlybythestate-ownedcompanyCNPC.In2010,theChinesegovernmentmodifieditsstrategyandencouragedsmallprivateandlittle-knownChineseenergyfirmstoinvestinCentralAsia(oneexamplewasthepurchaseofthesmalloilproducer,EmirOil,byMIEHoldingsinFebruary2011).Investmentsinsmallfieldsarealsomadebylargecorporationsactingviasmallcompanies,whicharenot explicitly associatedwithChinese capital inKazakhstan. Forexample,Sinopec isoperatingvia InternationalOilCo.This strategymeans
32 http://www.gasandoil.com/news/central_asia/f31ce0c64e6401dfbf15e9f3baa5364833 WhenCNPCwasbuyingPetroKazakhstan,itagreedtorelinquisha50%stakeintheShym-
kentRefinerytoKazMunaiGas.
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thatBeijingismakingeffortstouseKazakhstan’spotentialtoamaximumex-tent,andatthesametimefearspublicreluctancetowardsChinesecapital,andalsoincreasingnationalisminthepolicyadoptedbytheKazakhgovernmentintheoilsector,whichbearsgreatestimpactonlargeprojects.AstanawantsthestatetoregainstakesinlargefieldsattheexpenseofWesterncorporations,oneexampleofwhichwastheacquisitionofKashagansharesin2008.
TheestimatedshareofChinesefirmsinoilproductioninKazakhstanis22%oftotalproduction(dataasof2010)34,andislowerthanthatofUSfirmspresentinKazakhstan(24%).TheassetsownedbyChinesefirmsincludeoldandpartlydepletedfields,whileoilproductiongrowthinKazakhstanwillbegeneratedprimarilybythelargenewprojects,TengizandKashagan.Thismeansthat,un-lessnewacquisitionsaremade,theshareofChinesefirmsinKazakhstan’stotaloiloutputwillcontractand,accordingtotheOilandGasMinistry’sforecasts,will reach 11% in2020.Given thecontroversies linked toChina’spresence inKazakhstan35andthereluctanceofWesterninvestorstoco-operatewithCNPC,Astanahasbeenquitecautiousaboutfacilitatingfurtherassetacquisition inKazakhstantoChinesefirms.ThesaleofsharesintheKashaganFieldbyCono-coPhillipswillbeatestforthisapproach.Kazakhstanhasdecidedtoacquiretheshares(whichIndia’sONGCwantedtotakeover),anditcannotberuledoutthatitwillresellthesharestoChina’sCNPCinexchangefornewloans.ThiswouldbringafundamentalchangetoKazakhstan’sapproachtowardsco-oper-ationwithChina,andwouldmaketheimplementationoftheWesternplansfortransportingoilfromKashaganviatheCaucasusmoredifficult.
One consequence of intensifying Chinese activity in the oil sector and thegradually improving disposition of Kazakhstan’s government was the con-structionoftheoilpipelinerunningfromKazakhstantoChina(cf.mapno.1).Thisroutewasconstructedinstages,startingin2001,andwasfullylaunchedin2012.Thispipeline isrunningfromtheKazakhshoreof theCaspianSea,wherethelargestoildepositsarelocated,throughcentralKazakhstan(whereCNPCoperatesonthesmallerfields), toAlashankouontheKazakh-Chineseborder.TherouteisusedfortransportingbothKazakhoilandsmallamounts
34 ArticlebyKanatbekSafinov, secretaryat theOilandGasMinistryhttp://www.kmg.kz/press/company_news/publication/5935
35 This issue is frequently raisedby themediawhich are opposed to the government, andChina’simpactonKazakhstanisbeingmythologisedamongtheresidentsofthiscountry.Thisispartlyduetothegovernment’sfailuretoinformthepublicabouttherealpresenceofChinesebusinessinKazakhstan.
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ofRussianoil(transportedintransit).Itsannualcapacityis12million(2012)andistoberaisedto20milliontonnesofoilincomingyears.ThepipelineisusedbyChinaasasourceofrawmaterialforrefineriesinthewesternpartofthecountry,whichmeansthatitsdevelopmentdependslargelyontherateofXinjiang’seconomicdevelopment.
ThenewroutehasallowedAstanatodiversifyoilexports,andhasprovidedChinawiththefirstlandroutewhichenablestheimportofoilviaapipeline36.Nevertheless,ChinaisnotamajorrecipientofKazakhoil.In2012,suppliestoChinareached10.4milliontonnesofoil,whichaccountedfor15%ofKazakh-stan’stotaloilexports(10.9milliontonnesofoilin2011).ThismeansthatRus-siaisstillthemaincorridorfortransitofKazakhoiltotheEuropeanmarket,andEuropeisthemainrecipientofKazakhoil,primarilybecauseoftheattrac-tivepricesthere.FromChina’sperspective,oilsuppliesfromKazakhstanareatthemostsupplementarytooilimportsfromothersources.In2012,theshareofKazakhoilintotalChineseoilconsumptionstoodat2.3%,anditsshareinimportsreached3%.
However,inthelongerrun,Kazakhstan’ssignificanceforChinawillbegrow-ing,especiallyifthecapacityoftheoilpipelinerunningtoChinaisincreased.KazakhstanandRussiaaretheonlytwocountriesfromwhichoilistransport-edtoChinaoverland,whichisof fundamentalsignificanceforsecurityrea-sons;mostoftheoilimportedbyChinaistransportedbysea.ChinaisunabletoguaranteethesecurityofmaritimeroutesduetothefactthattheUSAisthedominantnavalpower.TheincreasingsignificanceofKazakhstanasasuppli-erofrawmaterialstoChinaisalsoverylikelytobestimulatedbythecontinu-inginstabilityintheNorthAfricanandMiddleEasterncountries,whichareimportantsourcesofoil imports forChina.Regardlessof this,givenChina’senormousdemandforoil,thesignificanceofKazakhoilinChina’senergybal-anceshouldnotbeoverestimated;itwillneverbeakeysupplier.
Atthesametime,thepossibledevelopmentofexportstoChinawilldependonAstana’sroutediversificationpolicyandalsouponthestanceAzerbaijantakes,sinceitwantstobeatransitcountryfortheKashaganField(from2018).ThusthedevelopmentoftransportroutestoChinawilladverselyaffectabovealltheprojectenvisagingoilexportsintheWesterndirectionviatheCaucasus(usingtheBaku–Tbilisi–Ceyhanpipeline).
36 RailroadoiltransportfromRussiawaslaunchedbeforethis.
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ThepresenceofChinesefirmsintheoilsectorposesaseriousthreattotheoth-erfirmsoperatinginKazakhstan(predominantlylargeWesterncorporations)mainlyduetothefactthatChinesefirms,bothstate-ownedandprivate,havesignificantly largerfundsandfacilitatedaccessto loans,andinvestments intheoilsectoraregrantedstrategicprioritybyBeijingandarebackedateverylevel.Since2005,ChinahasacquiredthelargestnumberofassetsinKazakh-stan,oftenwinningoutagainstotherbidders,includingRussianones.
2.1.2.ChinaonCentralAsia’sfuelandpetrochemicalmarket
Twonewareasofco-operationintheoilsectorwereactivatedin2012:therefin-ingofKazakhoilundertollingcontractsatChineserefinerieslocatedclosetotheborder,andtheimportofChinesepetroleumproducts.Thesupplyvolumeisstillmarginal:itreached25,000tonnesoffuelin2012,butin2013Kazakhstanisplanningtobuy0.5milliontonnesoffuelfromChina.TheKazakh-Chineseco-operationcoveringpetroleumproductsisaneffectofmisunderstandingsoverRussianoilsuppliestorefineriesinKazakhstan37andclearancesforRussianfuelimportedbyKazakhstan.Itappearsthatco-operationinthisareawillseeen-hancements,atleastinthemediumterm.Kazakhstaniscurrentlymodernisingitsrefineries;andthisprocessistobefinalisedwithinthreetofouryears’time.Untilthen,Astanawillbeunabletoreducethedeficitontheinternalmarketandwillhave to importpetroleumproducts fromneighbouringcountries. In thiscontext,co-operationwithChinaisstrengtheningAstana’spositioninnegotia-tionswithMoscowconcerningtherulesoftradeinoilandpetroleumproductswithintheCustomsUnion.Furthermore,RussiaisatpresentthekeysupplieroffueltoTajikistanandKyrgyzstan(andindirectlytoAfghanistan),whileKa-zakhstanandChinaseemtobeinterestedindrivingRussiaoutoftheseposi-tionsandinembarkingupontheexportofpetroleumproductstotheneighbour-ingcountriesbythemselvesinthelongterm.Kazakhstan’srecentinvestigationsintothepossibilitiesofbuildinga low-capacity(1–1.5milliontonnesannually)productpipelineclosetotheChineseborderisyetanothersignofthelong-termplansfordevelopingco-operationcoveringpetroleumproducts38.
Chinahasalsobeenmakingeffortstoinvestintheregion’srefiningsector.Itspres-enceisstillmarginal,however,andisrestrictedtoKazakhstanandKyrgyzstan.Kazakhstan’sgovernmentisunfavourablydisposedtowardsChinese(andmore
37 TheKazakhrefineriesinPavlodarand–toalesserextent–inShymkentimportRussianoilduetotheinfrastructuralconnectionsmaintainedsinceSoviettimes.
38 ArgusRynokKaspiya,6February2013.
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broadly,foreign)activityintherefiningsector,andismakingeffortstoregaintherefinerieswhichwereprivatisedattheonsetofthecountry’sindependence.ProofsofthispolicyincludedforcingCNPCtorelinquisha66%stakeintheShymkentRefinerytothestate-ownedcorporationKazMunaiGasduringtheacquisitionofPetroKazakhstanin2005,andexcludingthesharesinthePavlodarRefineryfromtheprocessofthesaleofMangistaumunaigazcorporationtoCNPCin2009.Ka-zakhstanhasadoptedaprotectionistpolicywithregardtotherefiningsector,andoneshouldexpectpressuretobeputonCNPCtosellbackitssharesintheShym-kentRefineryratherthanconsenttofurtherChineseinvestmentsinthissector.
Inturn,Chineseinvestmentsintheoilrefiningsectorareoffundamentalsig-nificanceforKyrgyzstan.Chinaisbuildingsmallrefinerieswhichrequirelowoutlays(cf.Table1)inKyrgyzstan;theircapacitywill,however,besufficienttosatisfythedemandforthelessadvancedfuelsonthedomesticmarket.ThenewrefineriesarelikelytoadverselyaffecttheinterestsofGazpromneft,thekeyfuelsupplieranddistributorinKyrgyzstan39,andwillthusdepriveMoscowofsomeinstrumentsofpressureonBishkekandimproveKyrgyzstan’senergysecurityandstability40.NorcanitberuledoutthatfuelproducedinKyrgyzstanwillbeexportedtoTajikistanandAfghanistansincethiswillofferChinagreaterop-portunitiestobearinfluenceintheregion.Thepossibilitiesofco-operationwithChinaonbuildingrefineriesarealsobeingcheckedbyTajikistan;thistopicwasraisedduringthevisitbyPresidentEmomaliiRahmontoBeijinginMay2013.
ChinaisalsoconsideringtheuseofrefineryinfrastructureinCentralAsiatorefineCNPC’sAfghanoiloutputandre-exportpetroleumproductstoAfghani-stan,whichisthemostattractivefuelmarketintheregionduetothehighpetrolpricesthere.China’sCNPChasenquiredintothepossibilitiestorefineAfghanoilattheFerganaorShymkentrefineriesinearly201341.Likewise,fuelsmanu-facturedinKyrgyzstancanbeexportedbyChinesecompaniestoAfghanistan.
Over the past few years, Chinese-Kazakh and the Chinese-Uzbek co-oper-ationhasalsoseenexpansionintothepetrochemicalsector42.Theco-opera-
39 GazpromneftsuppliesfueltotheManasbase.Thisfirmalsoownsthelargestchainoffill-ingstationsinKyrgyzstan.
40 TheimpositionofcustomsdutyonRussianpetroleumproductsandincreasingpricesonthedomesticmarketprecededtheoutbreakoftherevoltinApril2010.PresidentKurman-bekBakiyevwasforcedtofleethecountryasaconsequenceofthis.
41 ArgusRynokKaspiya,13February2013.42 AlthoughCNPChasacquireda33%stakeintheShymkentRefinery,Chinesecompaniesare
notpresentintheoilrefiningsector.ThisisprimarilyduetothefactthatAstanatreatsitas
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tionformulaisbasedonloansgrantedbyChinafortheconstructionofnewpetrochemicalplantsinexchangeforsuppliesofpetrochemicalproducts.Oneexampleofsuchco-operationistheUS$1.25billionloangrantedbySinopecfortheconstructionofthepetrochemicalcomplexinAtyrau(Kazakhstan)43.Fur-thermore,Sinopec isalsoasubcontractor inthisproject.CNPCisalsoplan-ningtobuildarubberproductionplantinUzbekistanandisofferingahighfi-nancialcontribution.ThisstrategyisaneffectofChinesecompaniesadjustingthemselvestotheconditionsimposedbytheCentralAsianstates,sincetheyareunwillingtoselltheirkeyassetsintheprimarysectors.
2.1.3.China’spresenceinthegassector
ThekeyplatformofChina’spresenceintheCentralAsianenergysectorisco-operation in thegassector,and itsmostessentialelement is thenewCentralAsia–Chinagaspipelinerunning throughTurkmenistan,UzbekistanandKa-zakhstan.ThisisthefirstinfrastructuralprojectsincethecollapseoftheUSSRtoconnectmostoftheregion’scountriesandinwhichtheyareforcedtoco-oper-atewitheachother.Thisisalsotheonlylargegasroutetohavebeenbuiltintheregionsince199144.ThelaunchofthegaspipelinehasfundamentallychangedthebalanceofpowerinCentralAsiatothebenefitofChinaandattheexpenseofRussia.ThisturnedouttobepossibleeventhoughChinahasrelativelysmallas-setsintheregion’sgasproductionsector.Itsforceisprimarilyaneffectofbreak-ingRussia’smonopolyongasimportsfromtheregionandtheincreasingsignifi-canceoftheChinesemarketforgasexportersinCentralAsia.
The gas contract signed with Turkmenistan (April 2006), followed by thelaunchoftheCentralAsia–Chinagaspipeline,whichwasbuiltatanexpressrate(2008–2009),wasaturningpointinChina’spresenceintheCentralAsiangassector45.Beforethat,ChineseplansfortheimportofgasfromCentralAsia(despiteeffortsstartinginthe1990s)couldnotbeimplementedduetosuchfac-
astrategicsectorasaconsequenceofconstantproblemswithfuelsupplies.ThiswasoneofthereasonswhyrefineryassetswereexcludedduringthesaleofMangistaumunaigazandacquiredsolelybyKazMunaiGas.Chinahasacceptedthis,andhasfocusedondevelopingitsownoilrefiningsectorinXinjiang.
43 http://www.universalnewswires.com/centralasia/viewstory.aspx?id=379044 TwogaspipelinesrunningfromTurkmenistanto Iranhavebeenbuiltsince 1991 inCentral
Asia.However,intermsofcapacity,theseprojectsareincomparabletotheChinesegaspipeline.Furthermore,theyhaveneverbeenusedatfullcapacity,andarenowfilledtoaround30%.
45 Thetotalannualcapacityofthetwogaspipelinebranchesconstructedin2009is30billionm3.Thethirdbranch,currentlyunderconstruction,willhaveanannualcapacityof25billionm3.
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torsas:resistancefromRussia,whichwastreatingtheregionasitsexclusivezoneofinfluence,theconcernthecountr