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China vs. Central asiaThe achievemenTs of The pasT Two decades
aleksandra Jarosiewicz, Krzysztof strachota
45
China vs. Central asia The achievemenTs of The pasT Two decades
aleksandra Jarosiewicz, Krzysztof strachota
nUmBeR 45waRsawocToBeR 2013
co-operation: anna wołowska, marek matusiak
© 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
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
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