Time for Central Asia’s closer integration with rest of Asia - II
by Ramtanu Maitra on 20 Mar 2023 0 Comment

Growing Presence of China


China’s push to have closer relations with the Central Asian countries made headway following the collapse of the Soviet Union, an adversary to China at the time. In setting up the Shanghai Five, which evolved into the SCO, China’s diplomacy in Central Asia is motivated by its security threats and economic interests. Till Chinese President Xi Jinping unveiled his strategy, the Belt and Road Initiative, since renamed as ‘One Belt, One Road,’ during an official visit to Kazakhstan in September 2013, the SCO was the main instrument through which China interacted with Central Asia.


After that announcement, train lines linking Chinese industrial hubs to European cities began to materialize across Kazakhstan. According to the South China Morning Post, the railway crossing at the China-Kazakhstan border is the “world’s biggest dry port.” From that transfer hub, called Khorgos, the freight trains run north through Russia to the cities of Western Europe, selling Chinese goods.


In addition to linking up with Central Asia, Russia, and Europe to sell huge amounts of China-manufactured products of all kinds, one other purpose of Chinese investment was to secure dependable access to the vast energy sources of Central Asia – Kazakhstan, and Turkmenistan, in particular. Total Chinese investment in Central Asia amounted to about $40 billion by the end of 2020. The main beneficiary is Kazakhstan with its share of $ 21.4 billion. According to one People’s Daily report, 7,700 Chinese firms were in operation within Central Asia by the end of 2021. (China promises more investment at Central Asia summit: Almaz Kumenov: EurasiaNet: Jan 26, 2022)


Such a large sum of investments has opened doors to China to carry out wide-ranging trades with the Central Asian countries in recent years. According to Kazakh President Tokayev, trade between China and Kazakhstan, for instance, reached $ 17 billion during the first 11 months of 2021. During that period, China’s trade with all five Central Asian countries amounted to $ 44.6 billion. In 2021, Central Asian countries’ trade with Russia grew to $36.5 billion, which is about $ 8 billion less than its trade with China.


China has exhibited its ability and zeal in mobilizing huge investments in Central Asia, far more than what Western countries or Russia could offer. At the Virtual Summit of the leaders of Central Asia and China in January 2022, Xi Jinping made several important proposals including increasing China’s trade with Central Asia to $70 billion by 2030, deepening cooperation in the field of advanced technologies, and providing 1,200 government-sponsored scholarships. Traditionally, Kazakh elites are educated in Russia, some in Europe and the United States; but the number of scholarships that China offers now is far greater than those provided by any other country.


China’s investment in Central Asia is not confined to building only roads, railroads, bridges, or industrial facilities; President Xi has made education a key driver of his Central Asian diplomacy, proposing a ten-year education plan for the SCO member countries, four of which are Central Asian nations. “Researchers have found in surveys that university students from Central Asia report a conspicuous faith in Beijing’s rising influence over Moscow, with most of the view that China creates more gains than does damage to Central Asia.


Niva Yau, a researcher in Bishkek, has argued Beijing recognizes that ‘Chinese language promotion is the most effective way of encouraging a Chinese voice in global affairs.’ In Kyrgyzstan, some schools offer free and compulsory Chinese language classes from fifth grade and Yau found many pupils were persuaded by a positive image of China.” (China’s education diplomacy in Central Asia: Jon Yuan Jiang, The Interpreter of the Lowy Institute: Oct 28, 2021)


Despite the all-round rapid success of China in Central Asia, China’s presence has nonetheless created some issues. Vast investment in Kazakhstan has not endeared China among the Kazakh population. There have been several anti-Chinese riots in Kazakhstan during this period. Chinese policies toward the Uyghur minorities in Xinjiang have been attributed one of the causes. Ethnic Uighurs constitute about 1.5 percent of the Kazakh population.


China’s generous loans to the economically-weak Central Asian countries – Tajikistan and Kyrgyzstan, in particular – have created problematic debts. According to available data, about 40 percent of Kyrgyzstan’s and about 50 percent of Tajikistan’s public debt is owed mainly to the China Export-Import Bank. In addition, there is the Russia factor. Although China-Russia relations remain very friendly at the highest level, huge Chinese investments have created some frictions between Russia and some Central Asian nations.


For instance, Turkmenistan and Russia have been involved in a dispute over gas prices and an unresolved pipeline explosion in 2009 that led initially to the decline in Russia’s gas imports from Turkmenistan and then a complete supply stoppage in 2016. Turkmenistan directed much of its supply to China before it reached an agreement with Russia. But the whole thing left a bad taste in Russia’s mouth, and complaints were heard in Russia about China seeking economic opportunities from Central Asia.


In 2015, Moscow announced the establishment of the Greater Eurasian Partnership whose objective was to integrate the Russia-led Eurasian Economic Union (EAEU), of which Kazakhstan and Kyrgyzstan were members, with China’s Belt and Road Initiative (BRI). This worked for a while, but the Russian invasion of Ukraine marginalized Russian involvement in BRI as China began transporting most of its trade to Europe via the newly built Baku-Tbilisi-Kars railway and the China-Kazakhstan-Uzbekistan railway rather than through Russia. (China makes inroads into Central Asia at Russia’s expense: Asia Times: John P. Ruehl: Nov 15, 2022)


EU’s Trade Offer to Undermine Central Asia’s Russia Dependence


Notwithstanding their traditional dependence on Russia and its newly developed economic and security ties with China, the Central Asian nations are eager to broaden their economic relations with the rest of the world. Beside the regional countries in Asia, some Central Asian nations have begun modifying their economic ties with the European Union and Turkey, in particular. EU Commissioner Charles Michel was in Kazakhstan recently at the first high-level meeting in Astana with the presidents of Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and Turkmenistan (represented by Turkmen Deputy Chair of the Cabinet Ministers). During his meeting with President Tokayev, Michel discussed enhancing bilateral relations by bolstering connectivity, economic ties, the green agenda, and human rights. Reports indicate that Astana is seeking new routes for oil exports beyond Russia, and Tokayev has assured greater energy cooperation with the EU.


Subsequently, in Sharm El-Sheikh, during the 27th UN Climate Change Conference of the Parties (COP27), Kazakh Prime Minister Alikhan Smailov signed an agreement with the European Union on the development of a secure and sustainable supply of raw materials and refined materials, renewable hydrogen, and battery value chains to contribute to the green and digital transformation, reported the press service of the European Commission. (EU, Kazakhstan Ink Agreement on Raw Materials and Renewable Hydrogen at COP27: Zhanna Shayakhmetova: The Astana Times: Nov 8, 2022)


The EU’s trade with Central Asian countries is growing at a steady pace. The EU is Kazakhstan’s biggest trading partner, while Kazakhstan is the EU’s 33rd trade partner. According to the Kazakh Statistics Committee, from January to November 2021, Kazakhstan’s trade with the EU was $ 28.4 billion – about $ 6 billion more than the same period in 2020. EU imports consist mainly of fuel and mining products (93.7%); its exports are led by machinery and transport equipment (48.3%), chemicals (26.7%), and other manufactured goods (8.3%).


What is also obvious is that the EU’s growing interest on Central Asia has a geopolitical aim to drive a wedge between Russia and the neighbouring Central Asian countries. This became apparent during the recent visit of EU High Representative for Foreign Affairs Joseph Borrell to the area. On Nov. 17-18, Borrell was in Kazakhstan and then went to Tashkent to meet Central Asian foreign ministers. In a not-so-veiled reference to Central Asia’s dependence on Russia, Borrell told the EU-Central Asia Connectivity Conference held in Samarkand on Nov. 18: “Having connections and options is good. But excessive dependencies and the absence of choice can come at a cost.” (Europe Moves to Capitalize on Russia’s Waning Influence in Central Asia: Eurasianet: Nov 19, 2022).


Borrell drummed on the same theme in an article that appeared in the Europa.eu on Nov. 20. He said in that article that it is evident that “Russia but also China have played a major role in the region and continue to do so. Equally, it is obvious that the region is looking to diversify its relationships, and that they see the EU as a partner of choice.” Then he pointed out that the EU needs to deepen its “ties with the region and tap into the vast potential it has to offer, in terms of energy supplies, critical raw materials and new transport corridors that do not depend on Russia (to so-called Middle Corridor or Trans Caspian Corridor).”


Although not part of the EU, Turkey, a member of the West-based NATO and seeking to be part of the EU, is becoming more proactive in its foreign policy with Central Asia. The Turkish Minister of Foreign Affairs Mevlüt Cavusoglu met each of his five Central Asian counterparts in March. After visiting Turkmenistan, Uzbekistan, and the Kyrgyz Republic from March 5-10, the Turkish head of diplomacy hosted his Kazakh counterpart, Mukhtar Tileuberdi, in Ankara on March 17. Afterwards, he went to Tajikistan on a three-day visit between March 28-30.


These trips and discussions indicate Turkey is thinking of prioritizing its relations with Central Asia, along with other Asian countries. Earlier, in November 2021, Turkish President Recep Tayyip Erdogan declared that the name of the intergovernmental group, the Turkic Council, would be changed to the Organization of Turkic States (OTS). A map that was produced a few days later showed the Turkic world spanning beyond Turkey to include Azerbaijan, parts of Armenia, Cyprus, Greece, Iran, the Balkans, Central Asia, Russia, and China.


While much of Turkey’s stated initiatives toward Central Asia is indeed political, Turkey produces less than 5% of its energy needs. Hence, Turkey will focus primarily on energy in its relations with the energy-rich Central Asian nations. A joint project between Azerbaijan and Turkmenistan for exploration and use of hydrocarbon deposits in the Dostluk field in the Caspian Sea is a topic of interest to Turkish leaders. It is estimated that this hydrocarbon field may hold natural gas and up to 59 million tons of oil, reported Anadolu.


(To be concluded) 

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