China’s Belt and Road: A View From Delhi

By Raffaello Pantucci and Sarah Lain

First published by RUSI, 29 June 2016

Proceedings of a workshop held in New Delhi in March 2016 to explore the challenges that China’s strategic Belt and Road vision to connect Central Asia hopes to address.

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In March 2016, RUSI, in collaboration with the Vivekananda International Foundation (VIF) hosted a workshop in New Delhi to discuss the challenges of connectivity facing China’s strategic Belt and Road vision, which aims to connect Central Asia and develop strategic economic corridors across the region.

The workshop covered the different economic corridor concepts initiated by China and India and their aim of enhanced connectivity in Central and South Asia, how such visions will be realised and how they could enhance the security and economic development of the region.

The report summarises these discussions and provides insights into co-operation between China and its regional partners.

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China’s Place in Central Asia

XJP Nazarbayev

By Raffaello Pantucci

First published in Eurasianet, June 20 2016

China’s rise in Central Asia marks one of the most consequential changes in regional geopolitics since the turn of the century.

China announced that it intended to be a major player in Central Asia back in September 2013, when Chinese President Xi Jinping gave a speech in Astana that inaugurated the “Belt and Road” vision — the most dominant expression of Chinese foreign policy from his administration. Yet this declaration notwithstanding, it remains unclear whether Beijing has a coherent vision for Central Asia. Instead, Beijing continues to grow into a role of regional prominence without a clear plan to manage the ramifications of its growing role.

The narrative of spreading Chinese influence throughout the region is not new. Indicators of China’s influence are plentiful. Markets are full of Chinese products, infrastructure is heavily built by Chinese firms with Chinese loans, leadership visits — either Chinese to the region or regional to China — are followed by announcements of massive deals being signed, and increasingly China is playing a more prominent role in regional security questions. Even so, China remains a hesitant regional actor, and is keen to continue casting itself as subordinate to Russia. Beijing is also eager to avoid becoming embroiled in inevitable regional economic and political complications.

Most recently, these complications have manifested themselves as protests in Kazakhstan, where locals have expressed anger at the government’s decision to change legislation governing foreigners’ ability to rent land for lengthy periods of time. Public anger is rooted mostly in concerns that Chinese firms will exploit this legislation to slowly lease ever larger tracts of Kazakhstani land. Such problems have arisen in the past. In 2009, for example, when President Nursultan Nazarbayev announced a leasing arrangement, Chinese and Tajik censors blocked references in the media to a similar deal in Tajikistan in 2011.
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China’s Big Hedge

Karzai Yuanchao

By Raffaello Pantucci

First published by Durham Global Security Institute, May 19 2016

In November of last year, Chinese Vice President Li Yuanchao visited Kabul to celebrate 60 years of diplomatic relations between Afghanistan and China. The most senior level visit to Kabul by a Chinese official since the now-defenestrated former Politburo member and security minister Zhou Yongkang visited in 2012 the visit showed China’s continuing commitment to Afghanistan, whilst also highlighting its limits. Sitting awkwardly in President Xi Jinping’s ‘Belt and Road’ vision, Afghanistan remains a foreign policy conundrum to China who continues to see the potential risks from the neighbouring country, but that Beijing understands it has a particularly central potential role to play and whose proximity negates a completely detached approach. The result has been a hedging policy in which China continues to show some level of commitment towards Afghanistan whilst not going so far as to taking on the mantle of leadership.

The Belt and Road

One of the central topics of conversation during Vice President Li’s visit to Kabul was the ‘Belt and Road’ concept. In official read-outs from the meetings, both sides agreed to work on cooperatively to help develop Afghanistan’s role in the vision and thereby deepen the link between China and Afghanistan. ‘Belt and Road’ is the term used to describe the vision laid out by President Xi Jinping that is on its way to becoming his defining foreign policy legacy. First publicly raised during a visit to Astana, Kazakhstan in September 2013 when President Xi coined the term ‘Silk Road Economic Belt’ to describe the trade, infrastructure and economic corridor emanating from China’s westernmost region of Xinjiang through Central Asia ultimately to European markets. The next month during a speech at the Indonesian Parliament he built on this characterization to announce the 21st Century Maritime Silk Road that recreated the land model advanced across Eurasia out from China’s ports to the seas. Over the next few months these trade corridors proliferated as a China-Pakistan Economic Corridor (CPEC), Bangladesh-China-India-Myanmar (BCIM) corridor, China-Mongolia-Russia corridor and a New Eurasian Landbridge were all increasingly discussed. In fact, the Pakistan corridor was one that had been agreed prior to the September speech and had been raised during a visit by Premier Li Keqiang’s visit to Pakistan in May 2013 and signed in MoU form on a return visit by President Nawaz Sharif in July 2013. But the corridor was only later identified and absorbed under the logic of the grander vision. The logic of these various routes was largely the same and drew from the same structure as the Silk Road Economic Belt laid out in Astana, but over time was increasingly all captured under the rubric of the ‘One Belt and One Road’ (OBOR) and is now abbreviated to the ‘Belt and Road.’
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China’s Silk Road in Central Asia: transformative or exploitative?

Silk Road
Jin Liqun, AIIB president © AFP

By Sarah Lain

First published in the Financial Times, 27 April 2016

The Silk Road Economic Belt (SREB) builds on China’s long-standing economic investment in Central Asia, and it has the potential to further develop Central Asian economies. However, China’s historical track record of investment engagement in the region raises concerns that the SREB could instead exacerbate economic inequalities and poor governance.

China has long been a key driver of infrastructure investment and construction in Central Asia, covering a wide range of sectors. It has invested heavily in the region’s natural resource extraction, with gas, oil, uranium, gold and copper making up key exports from the region. Continue reading

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China and Russia in Central Asia: Cooperation and Conflict

CAP logo

by Sarah Lain and Raffaello Pantucci

First published by Central Asia Program, April 25, 2016

Despite the significant rise of China’s economic influence in the region, Russia continues to maintain its political leverage in Central Asia. In contrast to China, it explicitly states its intention to keep its grip on this influence, as highlighted by Medvedev’s speech in 2008. This declared commitment to preserving Russia’s ‘spheres of privileged influence’ certainly includes Central Asia. The key aim for Russia is to ensure, at least in theory, loyalty to the Russian government, seeking countries it can depend on for support. The various alliances Russia plays a crucial role in alongside the Central Asian states, such as the EEU, SCO, CSTO and CIS, also have a utility of legitimizing Russia’s position in a visibly multipolar world. Indeed, the SCO is a platform shared with China, but they all act as a way of overtly demonstrating structural equivalents of Western-dominated organizations such as the EU and NATO.

The Ukraine crisis has undermined Russia’s legitimacy by raising suspicions for both Central Asia and China about Russian intentions in the region. The prevention of color revolutions, which was enshrined in the recently updated version of Russia’s Military Doctrine, has potential implications across the former Soviet space. Indeed, Russia’s commitment to protect Russian- speakers and ethnic Russians abroad causes concern for Central Asians. Although Russia has almost exclusively acted on this in the more Western-leaning post-Soviet countries, such as Ukraine and Georgia, a speech by Putin that addressed Kazakhstan was provocative in light of events in Ukraine. Not only did Putin praise Nazarbayev, but he also highlighted that Kazakhs realized the value of being part of the “greater Russian world,” which raised alarm bells in Astana. Russia has proven it has no issues in leveraging its position over former Soviet states for certain self-interested strategic purposes.
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The China Knowledge Gap in Central Asia

A textile processing park being built by a Xinjiang firm in Dangara, Tajikistan
A textile processing park being built by a Xinjiang firm in Dangara, Tajikistan

By Dirk Van Der Kley

China’s rise has been the major change to the Central Asian foreign policy environment over the past decade. Yet despite China being a major trader, investor and source of aid for the region, specialist knowledge of China among Central Asian governments, business people and academics remains limited. There are signs that this is changing somewhat in business, but much more slowly in government and academia.

For the last three months I have been in Central Asia, interviewing government officials, scholars, and business people about China’s influence in the region. The lack of China specialists was most clear in academia. Every scholar I interviewed openly acknowledged that there are very few China specialists working in Central Asia. There are several identifiable Sinologists in the region, such as Constantine Syroezhkin at the Kazakhstan Institute for Strategic Studies in Astana, but they remain small in number. During an interview in Tajikistan, an academic responded to the question “Is Tajikistan prepared for China’s rise?” by saying “we don’t have a clue…how could we?” On another occasion I asked an interviewee in Bishkek to help set up interviews with China specialists. The answer: “Sure…but who to ask.” Continue reading

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Security and Stability along the Silk Road

By Raffaello Pantucci and Sarah Lain

First published by RUSI, February 29, 2016

Proceedings of a 19 January 2016 workshop on the security context for the Silk Road Economic Belt (SREB) across Central Asia and the stabilising effects of investment and infrastructure development

Download the report here

On 19 January 2016, RUSI in collaboration with the University of World Economy and Diplomacy hosted a day-long workshop in Tashkent on the security context for the Silk Road Economic Belt (SREB) across Central Asia and the stabilising effects investment and infrastructure development could have on the region.

The workshop included a specific discussion about Uzbekistan’s role in regional security in light of the SREB initiative, as well as China’s views and approaches to security questions throughout the broader region. The event brought together participants from Uzbekistan, China and the UK, including representatives from academia and think tanks.

This workshop report summarises the discussions from the conference and offers insights into the current state of the Chinese-led project.

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China’s new silk road is designed to cut Russia out of Eurasian trade

By Raffaello Pantucci

China train arriving Tehran

First published by South China Morning Post, February 16, 2016

President Xi Jinping’s ( 習近平 ) visit to Tehran – the first by a foreign leader since the lifting of sanctions – highlights the potential centrality of Iran to China’s broader regional foreign policy. The opening up of Iran, a country in which China has long maintained substantial interests, means Xi’s “One Belt, One Road” vision can now go cleanly across Eurasia without ever going through Russia. Moscow can be cut out.

Visiting Tashkent, one can see the ancient routes laid out by the Timurid empire that constituted the ancient silk road. Rather than track through Russia, most would go below the Caspian and Black seas to reach Turkey and Europe.

Soon after Xi visited Tehran, a train laden with goods left Yiwu, Zhejiang province (浙江), headed to Tehran following this route. On February 10, it crossed the border from Turkmenistan and arrived in Iran this week. The Ukrainian minister of infrastructure announced at the same time that, by the end of the month, a direct rail line would open between Ukraine and China, cutting across Georgia, Azerbaijan, the Caspian Sea and Kazakhstan. An iron silk road has been established that will track the old silk routes.
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India and China key partners in keeping Afghanistan stable

By Raffaello Pantucci

Li Ghani_FEb 2016

First published by Reuters, February 15, 2016

Landlocked in the heart of Eurasia, Afghanistan sits in between superpowers. Previously this was Russia and the United Kingdom, using its territory as a chessboard across which they would plot intrigue against each other.

During more recent history, it became a covert battlefield between Russia and the United States as the wider ideological struggle between communism and capitalism was played out. Nowadays, however, a new momentum is building behind cooperation between two superpowers whose domestic security is linked to Afghanistan’s stability.

Beijing and Delhi’s ability to cooperate in Afghanistan is likely to be a key axis through which long-term Afghan stability will come.

Both China and India are already active players in Afghanistan. In November last year, Vice Premier Li Yuanchao visited Kabul and offered a package of $79 million for housing construction in the city. Just over a month later, Prime Minister Narendra Modi visited the city to inaugurate the Indian built Parliament building.
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In Central Asia, China’s New Silk Road stirs memories of over-reach and entanglement

By Raffaello Pantucci

Registan

First published in The Interpreter, February 10 2016

Once the heart of the Timurid Empire, the city of Samarkand now sits in the middle of Uzbekistan, relegated to a splendid tourist attraction. Sitting atop the city with a clear view in every direction is the great astronomer Ulugh Beg’s observatory, from where he mapped the stars while his grandfather’s empire ebbed away.

Samarkand was at the heart of the ancient silk trading routes, which went cleanly around Russia, crossing Central Asia, Afghanistan and Iran to reach Turkey and Europe’s shores. Track forwards to today, and this straightforward route across the continent is being replicated by China. The first freight train left from Yiwu in China’s Zhejiang province en route to Tehran in the wake of President Xi Jinping’s recent visit to Iran.

Beijing, it seems, has the ancient silk routes in mind.
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Communication, Co-operation and Challenges: A Roadmap for Sino–Indian Engagement in Afghanistan

By Shisheng Hu, Raffaello Pantucci, Ravi Sawhney and Emily Winterbotham

afghanistan-india-pakistan-map

First published by RUSI, February 4, 2016

The politics of Afghanistan remain precarious. But if undertaken correctly, regional engagement by China and India can play a positive role in consolidating security and the economy

Download the full report here

Communication, Co-operation and Challenges: A Roadmap for Sino–Indian Engagement in Afghanistan concludes a research project which brought together influential thinkers and experts from China, India, Pakistan, the UK and Afghanistan in a number of workshops in London, Beijing, New Delhi and Qatar, and outlines areas of common interest between China and India in Afghanistan. The project spanned several years, starting in 2012. While participants’ opinions and responses were therefore likely influenced by developments in Afghanistan at the time the workshops were held it is, however, still possible to draw out the key commonalities and divergences between each country’s participants to map out policy ideas for co-operation and ‘burden-sharing’ between India and China in Afghanistan.

Both China and India have unique and strong relationships with Afghanistan and, in addition to co-operative efforts, both countries can play a number of bilateral roles. This paper presents some ideas for thinkers and strategists in Kabul, Beijing and New Delhi on how to help Afghanistan move forward and achieve stability.

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How China’s Power Runs Through a Peaceful Afghanistan

By Raffaello Pantucci

afghanistan-india-pakistan-map

First published by RUSI, February 2, 2016

China is playing a positive role in Afghanistan, but needs to take a greater ownership and direction of the potential peace process. As a partner with positive relations in both Kabul and Islamabad, Beijing is well placed to play this role.

The latest round of the Quadrilateral Group (Afghanistan, China, Pakistan and the USA) is being held in Islamabad this week. This round builds on an effort instigated by Beijing earlier in 2015 and has been one of the hallmarks of Afghan President Ghani’s presidency. The question, however, is whether China has the power to be a decisive player in Afghanistan that it has been increasingly hinting at with its role in these talks.

China has long been playing a productive role in the country. Whilst Beijing maintains awkward relations with Washington across the Pacific Ocean, on land, it is undertaking joint training programmes with the United States for Afghan diplomats and officials. It has helped facilitate discussions between Afghanistan and Pakistan and has helped soothe relations between Islamabad and Delhi. Most significant, however, has been the official diplomatic track that it has helped open between the government in Kabul and the Taliban. Though unofficial contacts existed previously, President Ghani’s ascent to power in September 2014 gave the relationship renewed impetus. This included a focus on a key role for China in the Afghan peace process, a point highlighted by Ghani’s first formal overseas trip being to Beijing.

This was not the first time discussions between the government in Kabul and the Taliban had been mooted. Previous dialogue tracks through institutes like Pugwash, in Chantilly, France or through the Taliban Doha office had not appeared move very far forwards with little evidence that the Taliban were taking the negotiations seriously. In contrast, the track opened with Beijing’s support appeared to draw its influence directly from the heart of the Taliban in Pakistan. Consequently, there appeared to be greater confidence that those talking were able to deliver what they were discussing. This was a key aspect to make the talks genuinely useful.
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The Economics of the Silk Road Economic Belt

By Sarah Lain and Raffaello Pantucci

First published by RUSI on November 27, 2015

On 20 October 2015, RUSI held a day-long workshop in Almaty, Kazakhstan, in collaboration with KIMEP University and the Friedrich Ebert Stiftung (FES). The focus of the workshop was the economics behind the Chinese Silk Road Economic Belt (SREB) and its impact in Central Asia. The key areas of discussion examined the potential benefits that the SREB could bring to participating countries, the integration of the SREB with other economic projects and the various funding mechanisms through which the SREB will be financed. The workshop brought together participants from Almaty, Astana, London, Beijing, Shanghai, New Delhi and Russia, including representatives from academia, the private sector and think tanks.

The first session discussed the real benefits of the SREB to both China and participating countries along the road. There is a risk that the SREB will simply turn Eurasia into a set of transport routes emanating from China, aimed at increasing the volume of Chinese goods going to Europe. Other than transit fees, China has not made it explicitly clear as to what other value participating in the SREB can add to economic development. Special economic and free-trade zones are one opportunity, such as that of Khorgos on the border of Kazakhstan and China, or those planned for Pakistan. However, the extent to which these are benefitting Central Asia is still unclear, and those for Pakistan are still under discussion. Kazakhstan’s side of this free-trade zone is noticeably less developed than that of China’s, highlighting that not all of these projects are implemented to meet maximum potential.

Furthermore, China’s emphasis on connectivity as a key goal of the SREB runs the risk of over-emphasising railway development as an end goal, since not all goods are cost-effective to transport by rail. High-value goods are the ideal product: one participant from Kazakhstan noted that Kazakhstan Temir Zholy, the national railway operator, had begun transporting Apple products from China, cutting down delivery time from sixty days (by sea) to eighteen days (by rail). For the SREB project to be successful, therefore, both Xinjiang, the northwestern Chinese province, and the countries along the Silk Road route need to increase their high-tech manufacturing capacity to produce these high-value goods for transport, neither of which are currently visible.
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China And Russia: Locked In Reluctant Embrace

By Raffaello Pantucci

china russia image

First published in China Economic Quarterly, November 2015

The dynamic of the Sino-Russian relationship is one that has long perplexed Western decision makers and thinkers. At a geopolitical level they appear in lockstep in an anti-western front, but below the surface they seem willing to engage with the west against each other’s interests while also sharing some fundamental disagreements. The reality is that Moscow and Beijing have a sophisticated modus vivendi that both allows for a clear disparity in the relationship in Beijing’s favor, while at the same time retaining an equal sense of importance of the broader strategic relationship. The overriding priority for both remains to ensure that they have an ally against the West and as long as this need remains the axis of authoritarianism will persist.

The archetypal space to explore this complex divergence is Central Asia. On the one hand it is a region where China has gradually increased its footprint to become the most consequential actor on the ground, while on the other it remains linked inextricably to Russia through multilateral vehicles and long-standing ties. And while in other parts of Eastern Europe or the Caucasus Russia has reacted negatively to encroaching external influences with armed conflict (like Georgia or Ukraine), in Central Asia the slow creep of Beijing’s influence has happened largely with Moscow’s acquiescence, though not without some counter-reaction.
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How China rediscovered Central Asia

Xi Jinping Central Asia

By Tao Xie

From 1949 until the late 1990′s Central Asia was conspicuous in Chinese foreign policy by its absence. China has since “rediscovered” Central Asia. Twice.

China first rediscovered the five Central Asian republics as a crucial source of energy and the key partner in fighting against separatists in North-west China. In the first decade of the 21st century, bilateral trade—primarily in the form of Chinese imports of energy and exports of manufactured products—witnessed extraordinary growth, reaching $51.1 billion in 2013. Meanwhile, the Shanghai Cooperation Organization was established in 2001, and one of its main missions continues to be to “maintain and ensure peace, security and stability in the region”. Continue reading

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