In hunt for Caspian Gas, the EU can learn from China

By Alexandros Petersen

First published by EPC October 17, 2012

The prospect of reaching European markets once excited oilmen in the energy-rich Caspian countries of Azerbaijan, Kazakhstan and Turkmenistan. Now, the famed Baku-Tbilisi-Ceyhan oil pipeline has been built and the State Oil Company of Azerbaijan Republic (SOCAR) is on the cusp of realising a natural gas line through Turkey that will finally get the long-stalled Nabucco project going. On the eastern side of the Caspian, Kazakhstan and Turkmenistan’s major energy partner is China. As the uneasy grouping of European governments, EU negotiators and Western companies dithered, China worked to create the world’s fastest-built natural gas pipeline, linking Turkmenistan’s vast southeastern gas fields with Kazakhstan and Uzbekistan’s formidable reserves to help slake the second-largest economy’s seemingly unquenchable thirst for resources. This has caused a split down the middle of the sea. For the moment, most resources on the western side go West, and most resources on the eastern side go East. Continue reading

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China in Afghanistan

By Raffaello Pantucci and Alexandros Petersen

First published in the Washington Times October 11, 2012

On Sept. 23, a top Chinese security official and Politburo member, Zhou Yongkang, made a surprise four-hour visit to Kabul during which time he reportedly met with Afghan President Hamid Karzai. This was the first high-level visit by a Chinese official to Afghanistan in half a century — a clear signal of a policy shift on Beijing’s part and probably the harbinger of further engagement to come.

Until now, China’s approach to its Eurasian neighbors, including Afghanistan, has been “soft,” primarily based on investment, infrastructure projects, promoting Chinese language and the multilateral body of the Shanghai Cooperation Organization. Beijing has stayed away from difficult political issues — so much so that U.S. diplomats have actively courted China to become more involved in ensuring Afghanistan’s stability after the 2014 withdrawal of Western combat forces. The accusation against the Chinese government and Chinese state-owned enterprises has been that by investing in Afghan natural resources such as copper and oil, they are reaping the benefits of American efforts without expending any political capital. As the 2014 deadline approaches, however, this is quickly changing. Continue reading

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Kazakhstan Cabinet Reshuffle Promotes Massimov

By Alexandros Petersen

First published in Eurasia Daily Monitor September 25, 2012

The first autumn winds in Kazakhstan’s capital brought with them a major cabinet reshuffle that promoted popular, effective Prime Minister Karim Massimov to head the preeminent presidential administration and moved First Deputy Prime Minister Serik Akhmetov to the premier spot. President Nursultan Nazarbayev confirmed both appointments on September 24, after one of his advisors spoke to the press two days earlier about the possible shift (Tengrinews, September 22). The musical chairs at the top of Kazakhstan’s government structures come amid widespread speculation and reported wrangling over who will succeed Nazarbayev to become the country’s second president. Continue reading

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Senior Chinese official visits Afghanistan for first time in 50 years

Raffaello Pantucci is quoted in The Telegraph.

“It’s clearly a big thing,” said Raffaello Pantucci, a visiting scholar at the Shanghai Academy of Social Sciences who studies Chinese foreign policy. “China is increasingly firing all cylinders on its relationship with Afghanistan.”

Mr Pantucci said that while security concerns meant China would “still be quite hesitant” about future investments in Afghanistan, Mr Zhou’s visit would strengthen his country’s hand there. “It’s not just talk,” he said. “Zhou Yongkang has these connections to natural resources companies [and] China is certainly eyeing the US report that said there were $1 trillion of resources in Afghanistan. By being there first – and on the ground – it will make it easier for them.”

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Chinatown, Kazakhstan?

By Raffaello Pantucci and Alexandros Petersen

Is there a Chinese restaurant in town? The front desk clerk at our hotel answered that he knew of none in the city and could only direct us to a Japanese-Korean establishment, complete with waitresses in kimonos and chopsticks sanitized in Seoul. While the food was good, it wasn’t what we were looking for.

Aktobe is our latest stop through the region tracking China’s influence in Central Asia. We had heard this was the oil town where China National Petroleum Corporation runs the show and we wanted to try to get a sense of China’s role on the steppe. Local Kazakhstani’s have nicknamed the city ‘Chinatown’ – a reflection of the size of the Chinese population. But, how could there be no Chinese restaurants in Chinatown? Continue reading

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Xinjiang: struggle to revive Silk Road

By Raffaello Pantucci

First published in the Financial Times Beyond Brics September 4, 2012

Picture courtesy here

What do you do about attracting investment if you are a remote corner of China, best-known internationally for your ethnic tensions?

If you are Xinjiang, you invest heavily in a blockbuster economic exhibition. Urumqi is this week hosting its second annual China-Eurasia Expo, opened this year by premier Wen Jiabao, a clear upgrade from last year’s star host, vice premier Li Keqiang.

Leaders and/or ministers from seven countries flew in, giving credence to Wen’s claim that the Expo aimed ‘to build a new bridge of friendship and cooperation across the Eurasian continent…and make Xinjiang a gateway.’ But it’s along way from prime ministerial declarations to the investment that Xinjiang badly needs.

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Borderlands

By Raffaello Pantucci and Alexandros Petersen

First published in Caravan September 1, 2012

A Kyrgyz guide takes his horse for a drink in Lake Karakul, roughly halfway between Kashgar, in the Chinese autonomous region of Xinjiang, and the Pakistan border. By Sue Anne Tay

On paper, the Karakoram Highway stretches from Kashgar in China’s far western province of Xinjiang to Islamabad. In reality, it unfolds like a ribbon across China’s westernmost border before its tarmac comes to an abrupt halt at the Khunjerab Pass on Pakistan’s border – the highest spot on the world’s highest paved international highway. China scholars often point out that domestic concerns colour Beijing’s foreign relations, but the multifarious stops and diverse communities along the Karakoram reveal that China’s domestic concerns are anything but uniform.

Our journey starts in Ürümqi, a grubby metropolis of more than 2.3 million people that looks like many other second- or third-tier Chinese cities. Large boulevards cluttered with imposing buildings are filled with frenetic construction as the city rushes to erect more shopping malls to appease insatiable local consumers. As the capital of an autonomous region which is China’s largest political subdivision, and home to a substantial portion of China’s natural wealth, it is also a draw for poor fortune-seekers from neighbouring provinces. A taxi driver from the adjacent province of Gansu boasted how opportunities in Ürümqi are plentiful, with girlfriends to match—one for each day of the week.

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China and Russia are no more than allies of convenience

By Raffaello Pantucci

First published in the South China Morning Post August 23, 2012

Foreign Minister Lavrov meets State Councillor Dai. Picture from here

State councillor Dai Bingguo’s visit to Russia this week for strategic security talks has once again focused attention on the supposedly close relationship between the two BRICS powers.

An image of alliance thrown up by their parallel voting in the UN and Western analysts’ inability to look beyond former cold war alliances mean that suspicion is often cast on a relationship that has as many fractures as it does cohesion. The reality is China and Russia disagree as often as they agree.

On the chaos in Syria, the two have shown they are willing to support each other by holding up the UN as a reason for their refusal to countenance action on Syria. But while both may see eye to eye on this issue, this is not always the case. Looking in the annals of Security Council resolutions over the past few years, one can find a few instances where China or Russia found themselves abstaining alone.

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Finding Common Ground in Afghanistan

By Raffaello Pantucci and Alexandros Petersen

First published in Foreign Policy’s Af-Pak Channel August 16, 2012.

A beat was missed on U.S. National Security Adviser Thomas Donilon’s late July visit to Beijing. Described in the Chinese press as a “fire extinguisher visit,” it came as tensions continue to ratchet up in the South China Sea and the United States continues to butt heads with China over Iran, Syria and theoretical war plans. These disputes obscure the one area with scope for much greater cooperation between China and the United States: Afghanistan. Building on mutual goals in Afghanistan could have a positive effect on the overall relationship, showing that the distance between the two sides is not the Pacific-sized gulf that it is sometimes made out to be.

In discussions with Chinese officials about their objectives, the uniform answer is “a peaceful, stable and prosperous Afghanistan.” This is almost identical to answers given by their American counterparts. That said, there is a difference in tone that reflects the underlying concerns that craft it. Continue reading

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Kazakhstan Puts Components in Place for Caspian Shipping

By Alexandros Petersen

First published in Eurasia Daily Monitor July 31, 2012.

On July 25, Kazakhstan’s coastal city of Aktau hosted an expert-level conference on implementing global standards for maritime shipping at Caspian ports (News.az, July 25). Organized by TRACECA’s Logistics Processes and Motorways of the Sea (LOGMOS) project, the conference signals the inauguration of an important stage in the development of “New Silk Road” corridors from East and South Asia to Europe. As the European Union’s trans-Eurasian transport coordinating mechanism, TRACECA provides a regional forum and technical assistance for countless projects across the continent. However, while TRACECA can help on the margins, for a project to go forward, it requires political and financial commitment from host governments. For this reason, a number of LOGMOS projects have stalled, most notably the planned Turkmenbashi-Baku connection. But, the Aktau-Baku link seems to be moving ahead, with key managerial, logistical and technical issues addressed, to tackle one of the New Silk Road’s most vexing obstacles: the Caspian Sea Continue reading

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Chinese Traces in Gorno-Badakhshan

by Raffaello Pantucci

Lenin greets visitors to Murghab, Gorno-Badakhshan, Tajikistan

Attention has been focused in Tajikistan’s Gorno-Badakhshan region this week, as a government operation in retaliation for the murder of a Major General Abdullo Nazarov, a senior intelligence official, has been launched in the region’s Pamir Mountains. While the regional capital Khorog has apparently now re-opened for business, it seems as though hostilities continue in the mountains.

Earlier this year, we made a trip to this part of Tajikistan, on our way through to the Kulma Pass, Tajikistan’s border post with China. Closed to anyone but Chinese or Tajik passport holders, we instead went right up to the border on either side, driving from Kashgar to Tashkurgan, pausing at Kara Suu to see the brand new border post that has been built on the Chinese side of the Kulma Pass and sat empty waiting for business. It was a crystal clear day, with the border post and army base next to it seemingly abandoned. From what we could see on the Tajik side, nothing was stirring.

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Uzbekistan’s Balancing Act With China: A View From the Ground

By Raffaello Pantucci and Alexandros Petersen

First published in China Brief July 19, 2012.

The exact reasons for Uzbekistan’s decision to withdraw from the Collective Security Treaty Organization (CSTO) at the end of June remain unclear (Xinhua, June, 29; Russia Today, June 28, 2012). However, while Tashkent seems to have soured on the Russian-led regional organization, President Islam Karimov took time in June to pay a state visit to Beijing that included attending the Chinese instigated Shanghai Cooperation Organization (SCO). In addition to attending the SCO Summit, President Karimov held separate bilateral meetings with President Hu Jintao, signed a strategic partnership agreement and approved a raft of new measures to strengthen Sino-Uzbek relations (Gov.uz, June 8; Xinhua, June 7). At this high level, relations are clearly moving in a positive direction. The view from the ground, however, is far more complex with Uzbekistan’s traditional vision of itself as a regional powerhouse and industrial power potentially at odds with China’s growing influence in Central Asia. Continue reading

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Khorgos to Become Kazakhstan’s Trans-Eurasian Transport Hub

By Alexandros Petersen

First published in Eurasia Daily Monitor July 10, 2012.

On June 28, Kazakhstan’s Senate amended the country’s transport regulations partly to allow for the state railways operator, JSC “NC” Kazakhstan Temir Zholy (KTZ), to develop a transport and logistics company, spearheading the country’s transformation into a Eurasian transport hub (Kazinform, June 28). Exactly how this new state-led company will be organized remains to be seen, but KTZ seems to be preparing for an expansion of its scope and activities. In early July, it placed $800 million in 30-year Eurobonds on the London and Kazakhstan stock exchanges, and KTZ is expected to be a major part of Kazakhstan’s so-called People’s IPO in the coming years, wherein ordinary Kazakhstanis will be able to invest in some of their country’s largest enterprises (IFR, July 7).

But, the focus of KTZ’s activities in the transport area is the burgeoning “land port” at Khorgos on the China-Kazakhstan border, northeast of Almaty. As a result of a number of agreements between Astana and Beijing, the area around Khorgos is set to become a Special Economic Zone (SEZ), with 30-day visa exemptions for businessmen operating in the zone. Plans call for centers for trade, tourism, culture and sports, a number of hotels, as well as an airport and the terminus of a railway to Almaty, which is to connect with the Chinese-funded high-speed railway project planned to run from Almaty to Astana (Tengrinews, May 25, 2011). According to the World Bank, Khorgos is to be a key node on the Western Europe-Western China International Transit Corridor, coordinated by the Central Asia Regional Economic Cooperation (CAREC) program (World Bank, May 1). An immense new freight terminal has already been built, with bays for six trucks to be inspected simultaneously.

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Featured: “China’s Footprint Beyond Its Western Borders”

On the photography front, our project has been gaining strong traction with both Mainland Chinese and Western outlets. In particular:

Southern Window (南方窗), a leading Chinese commentary magazine, has published our photo essay entitled “China’s Footprint Beyond Its Western Borders” or “西陲之外的中国足迹” which looks at China’s wide array of interests and Chinese trader communities in the Central Asia region.

Based on numerous interactions with local Chinese here in Shanghai, granted a limited research pool, one discovers that layman awareness of China’s numerous western neighbors is quite limited. China’s tourists still prefer to travel to Europe, Southeast Asia and the US, and apart from specific industries (infrastructure, oil, gas etc) and goods trade run from Xinjiang province, the Chinese man/woman on the street does not feel that Central Asia has any significant impact – economic or cultural – on their daily lives. Continue reading

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After CSTO Withdrawal Uzbekistan Also Looks East

By Alexandros Petersen

Uzbekistan’s decision to withdraw from the Russia-led Collective Security Treaty Organization (CSTO) for the second time does not come as much of a surprise for long-time observers of Tashkent’s foreign policy. Before finally calling it quits, Uzbekistan’s leadership had expressed frustration with the group’s overtly anti-Western guise, its fealty to Moscow and its pretensions at competition with NATO and the Shanghai Cooperation Organization (SCO). Uzbek forces have not participated in the group’s military exercises and President Islom Karimov made a point of not attending CSTO summits. In contrast, his recent visit to Beijing for the SCO summit was highly publicized, as was a new strategic partnership agreement signed with China. Continue reading

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