Category: Publications

One Belt, One Road and Many Countries

The inaugural train from Angren to Pap. (photo: Railway Gazette)
The inaugural train from Angren to Pap (photo: Railway Gazette)

by Dr Farkhod Tolipov

After the collapse of the Soviet Union the newly independent countries of the Central Asian region for the first time in their modern history looked beyond the iron curtain with which they were isolated from the world within the Soviet era. They quickly remembered that in ancient times they were an important part of what today can be called a global system of communication and trade – the Great Silk Road, which connected China to Europe through the Eurasian continent. Central Asian countries desperately needed to break their newly land-locked status. Forming a trade path from East to West was part of their unique selling point. However, such a position is not merely their geographical destiny. It is also a geopolitical condition due to the fact that unlocking the region depends largely on neighboring great powers – namely China and Russia. But interestingly, the opening and unlocking of Central Asia appears to be a more complicated and protracted process than expected, in which the ‘Modern Silk Road’ needs to balance multiple national interests. Continue reading

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Chinese Companies Increasingly Employ Central Asians

by Dirk van der Kley

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It’s often received wisdom that Chinese companies mainly employ Chinese workers on their projects in Central Asia (for example David Lewis of Exeter University recently on the Majlis podcast). This view fails to recognise that Chinese companies have been localising for some time, and that old narratives on Chinese labour practices in Central Asia need to be reexamined.

There is significant evidence of Chinese companies employing Central Asians, particularly in labouring, clerical and interpreting jobs. Criticism of a lack of opportunities in management and technical positions is probably justified but some companies, such as Huawei, offer opportunities at that level too.

Chinese firms are acutely aware of the public relations benefits of hiring (or being seen to hire) locals. Most of the big Chinese projects now purport to employ a significant number of Central Asians. For example, Xinjiang Zhongtai claims that it will employ more than 3000 locals at a textile park it is constructing in Dangara, Tajikistan. These kind of statements are repeated again and again on cement plants, mining companies and oil refineries etc.
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Trade Connectivity: The Missing Link in the Belt and Road

By Sarah Lain

Photo credit: Khwahan
Photo credit: Khwahan

First published in The Diplomat, 23 November 2016

On Li Keqiang’s recent visit to Kyrgyzstan and Kazakhstan, the economic emphasis in discussions was China’s objective of helping to increase the countries’ “production capacity.” Building up production capacity is crucial to Central Asia’s ability to boost exports. This will facilitate the trade promotion that accompanies all China’s engagement on the Silk Road Economic Belt (SREB) and broader Belt and Road Initiative (BRI) which will be key to the projects’ long-term success. This is particularly true if China is serious about the project being “win-win.”

During past interviews in Central Asia with experts examining the SREB, concerns were repeatedly raised regarding the lack of clarity on how Central Asian populations will benefit from the project. There is a perceived risk that the “corridors” of China’s overall BRI will mainly provide China with benefits through the transport of resources to China or Chinese goods passing through Asia. It may also benefit political elites, who negotiate many of the deals with Beijing, and who may be in charge of the large state-owned enterprises participating in them. If tangible benefits are not identified and communicated to local populations, then the SREB will not only fail to reach its full potential; it could also raise suspicions that this is more of a geopolitical project than China says, with China benefiting far more than the Central Asian populations and gaining further leverage over the region’s political elites through economic influence. Continue reading

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The Great Bargain between Russia and China for Central Asia

The chiefs of staff of the armed forces of Afghanistan, China, Pakistan, and Tajikistan watch military exercises in Urumqi. (photo: Inter Services Public Relations)
The chiefs of staff of the armed forces of Afghanistan, China, Pakistan, and Tajikistan watch military exercises in Urumqi. (photo: Inter Services Public Relations)

By Daniyar Kosnazarov and Iskander Akylbayev

The recent terrorist attacks in Kazakhstan, considered to be the most stable and prosperous state in Central Asia, followed by the assault on the Chinese Embassy in Kyrgyzstan exposed the vulnerability of the domestic and regional security environment. In addition to that, the ongoing power transition in Uzbekistan and Taliban activity near the Afghan-Tajik border raise serious security questions among geopolitical heavyweights such as Russia and China. Continue reading

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How New Is The Belt and Road

By Raffaello Pantucci

World Economic Forum - Annual Meeting of the New Champions in Tianjin, People's Republic of China 2016

First published on China Policy Institute: Analysis, October 7, 2016

Back in the late 1990s, then-PRC President and Communist Party leader Jiang Zemin noticed that the country was facing an imbalance. Deng Xiaoping’s economic reforms had opened up the coastal cities, transforming them into beacons of international industry and development. Cities like Shanghai, Shenzhen and Guangzhou were on their way to becoming international hubs. And yet looking inland, the difference was stark, with parts of the centre or border regions with neighbouring Southeast, South and Central Asia remaining poor and underdeveloped. Seeking to rectify this, and in part to help Chinese companies go out, Jiang Zemin instigated a ‘Develop the West’ or ‘Great Western Development’ strategies.

Academics like Zheng Xinli came back from their travels along China’s borderlands with southeast Asia with ideas of developing multilateral institutions that would help address one of the key problems in the region, a lack of infrastructure to help accelerate trade between parts of the world that were already deeply economically interdependent. To China’s west, the problems were political and had a security bent to them thanks to the proximity of Afghanistan, historical conflicts with Russia and an angry resident Uighur population. As the Soviet Union fell apart, China accelerated a process of border demarcation going on between itself, Russia, Kazakhstan, Kyrgyzstan and Tajikistan into a process called the ‘Shanghai Five’ – named after the city in which they met. The priority was largely to define what China’s borders were, with a later attempt to move the discussion towards other economic and political goals.
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Why do Kazakhstanis Fear China?

By Umida Hashimova

Photo by Sania Tolken, RFERL
Photo by Sania Tolken, RFERL

At the end of May 2016, Kazakhstan experienced unexpected protests sparked by proposed amendments to the Land Law adopted in 2014 that were to enter into force in June 2016. The changes would have allowed foreigners to rent agricultural land for 25 years, up from the previous 10. There was some misunderstanding over an assumption that the amendments would allow foreigners to own land, which officials say is not the case. It is unlikely, however, that these changes to the law were the primary cause for the protests, instead reflecting underlying discontent with government actions and a popular fear of growing Chinese economic influence in the country.

A major underlying reason for popular discontent was the state of the economy, given that the price of oil had crashed and the Russian economy with it. This led to the devaluation of the Kazakh tenge, and a reduction in the value of savings, salaries, and social benefits. This, along with historical Kazakhstani fears of a more powerful China that might expand its territory into Central Asia under the cover of land deals, were the main significant contributing factors that led people to the streets. The amendments to the national law simply snapped the patience of Kazakhstanis with the state of economy and unsatisfactory government service. Continue reading

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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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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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Connecting the Eurasian Economic Union and the Silk Road Economic Belt: Current Problems and Challenges for Russia

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By Ivan Zuenko

During the Putin-Xi summit that took place in Moscow on May 8, the leaders of Russia and China signed a joint declaration “on cooperation in coordinating the development of the Eurasian Economic Union (EEU) project and the Silk Road Economic Belt (SREB)”. Moscow and Beijing’s declared goal in combining the two projects was to build a “common economic space” in Eurasia, including a Free Trade Agreement between the EEU and China.

The positive implications of such a connection are obvious. Cooperating with China can provide Russia and other post-Soviet countries with much-needed funding and technologies for the implementation of large-scale infrastructure projects, primarily in the sphere of transcontinental logistics. It is this auspicious aspect of the EEU-SREB merger that has attracted the most attention in academic papers published by experts. Continue reading

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Europe: The other end of China’s Silk Road

By Raffaello Pantucci

First published by EU Observer, May 18 2015

61/365 March 3 - Still on Top

All of the attention around Xi Jinping’s recent European trip was focused around his visit to Moscow in time for the May Day military parade.

By focusing so singly on the Moscow stop, however, the importance of the route he took was missed.

Coming soon after the President’s visit to Pakistan in which he laid out the China-Pakistan Economic Corridor (CPEC), this trip affirms one of the key routes of the Silk Road Economic Belt – running through Kazakhstan, Russia and Belarus to ultimately end in Europe.

This final link is the key which Europe needs to wake up to, to understand that this Chinese outward push is one that is both a reality and one that can advance European interests.
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The Asian Infrastructure Investment Bank: a Test of Leadership for the US and China

By Qingzhen Chen

First published by RUSI.org, April 17 2015

Picture from China Daily

China has established a global financial institution that focuses on building roads, railways and other key infrastructure projects crucial to development in Asia. Though there are concerns raised by the United States, the formulation of the AIIB ties China further into a multilateral system.

China has emphasised tirelessly that the Asian Infrastructure Investment Bank (AIIB), its new financial institution initiative, is an open and inclusive multilateral institution. The United States has presented the main opposition to the AIIB, but recently many of the US’s allies have joined the financial institution as founding members.

The AIIB is a test of leadership both for an existing superpower and a rising power. The sharp difference between the US and many of its close allies’ reaction to the China-led AIIB shows the US’s dominance over leading financial institutions is waning. However, a lot remains to be decided as to how the AIIB will work and how far it will test the US’s dominance in this field.

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The Bear and the Dragon

By Sarah Lain

First published by RUSI Journal, March 13, 2015

After the deterioration of Russian–Western relations over Ukraine, Moscow has shown itself keen to reinvigorate its relationship with Beijing as a preferred partner – especially but not exclusively in the all-important energy sector. In addition, the two countries’ common ambitions for a multipolar international structure enhance the mutual benefits of a strong partnership. Yet, Sarah Lain argues, the Sino–Russian relationship is characterised by increasing inequality, as Moscow finds itself needing Beijing more than Beijing needs Moscow.

For the full article, please click here.

Picture from the National Defense Magazine
Picture from the National Defense Magazine

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Will China Bring Peace to Afghanistan?

By Raffaello Pantucci

First published by RUSI Newsbrief, February 27, 2015

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After years of fence-sitting, Beijing appears to have finally decided to admit that it is willing to play a role in Afghanistan’s future. While the exact contours of the part it seeks to play are still uncertain, China’s willingness to be seen to be involved in brokering peace in Afghanistan is surprising for a nation that continues to profess non-interference in other countries’ internal affairs as the core of its foreign-policy credo.

It also remains unclear exactly how China can help to bring the Taliban to the peace table: while it may have the links to both the government in Kabul and the Taliban, it is uncertain that it knows how to bring them together, beyond offering a platform for talks. This activism is nonetheless likely to be welcomed by Western powers. Yet high expectations are not warranted; even if China does ultimately prove that it knows what to do with these talks, its efforts in Afghanistan will ultimately seek to advance its own interests rather than those of the West.
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European energy security and Turkmenistan

By Sarah Lain

First published by The Diplomat, January 15, 2014

A country that could benefit from Russia’s cancellation of South Stream is Turkmenistan. A country that holds almost 10% of the world’s gas reserves, and is home to the globe’s second largest gas field, Turkmenistan certainly has enough gas to supply more markets. After various gas supply disputes with Russia, and a general weakening in geopolitical relations, there is no doubt the European energy security would benefit from a boost in supplies from Central Asia.

Ministry of Oil and Mineral Resources, Turkmenistan. Image Credit: Jim Fitzgerald
Ministry of Oil and Mineral Resources, Turkmenistan. Image Credit: Jim Fitzgerald

Recent steps indicate Turkmenistan is showing renewed signs of interest. In November 2014, Turkmengas signed a framework agreement with Turkey to supply the Trans Anatolian Natural Gas Pipeline project (TANAP), a section of the Southern Gas Corridor project, set to be completed by 2018. The project proposes to transport 16 billion cubic metres (bcm) of gas a year from Azerbaijan’s Shah Deniz II field in the Caspian Sea to Europe via Turkey, aiming to reach a capacity of 31 bcm by 2026.

There are very few details in the public domain about the Turkish-Turkmen deal. And it all sounds a bit familiar. It is not the first time that such a Turkish-Turkmen agreement to cooperate has been signed, and it is unclear if anything concrete has actually been decided.

Furthermore, there are many challenges to Turkmenistan’s participation in the project, the key one pertaining to the long-standing dispute over Continue reading

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