Tagged: Central Asia

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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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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Silk Road: China’s project could transform Eurasia

Photo: Thomas Depenbusch
Photo: Thomas Depenbusch

By Raffaello Pantucci and Sarah Lain

First published in the EU Observer, October 2015

Almost two years have passed since Chinese President Xi Jinping first gave a name to the strategy that China had been undertaking in Central Asia for over a decade. The announcement of the Silk Road Economic Belt in Astana in September 2013 was rapidly followed by the declaration of a number of other trade and economic corridors emanating out from China, which largely copied the Central Asian model.

At home in China there has been a flurry of activity to try to unpack at a regional and national level the roadmap of the leader’s vision, manifested in conferences, regional strategy documents, and various declarations.
Outside China there has been less clarity, with most in Europe (who have heard the message that they are the other end of this road) questioning what the Chinese vision looks like in practice. Continue reading

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China and Russia’s Soft Competition in Central Asia

By Raffaello Pantucci

First published in Current History, October 2015

China and Russia have a long history of conflict and competition in Central Asia. Sitting between the two great superpowers, the landlocked Central Asian nations appear to have little choice or control over their destiny, and are often considered to be pawns in a perpetual great game. Yet this narrow view misses the broader picture of the Sino-Russian relationship. It is undeniable that the region has been slipping out of Russia’s immediate economic sphere of influence for some time, but China has been making inroads with Russia’s full acquiescence. For Moscow and Beijing, Central Asia is increasingly a region of soft competition where they are very aware of and attentive to each other’s interests, rather than a source of conflict and tension.

Overriding any differences concerning the steppe are the larger realities of the Sino-Russian strategic relationship on the international stage, where the two permanent members of the United Nations Security Council continue to support each other’s refusal to bow to a Western-dominated global order. Russia may appear to be the loser in Central Asia, but the two powers have established a modus vivendi that suits the interests of both. The real geopolitical losers are likely to be the Central Asians, slowly slipping from Russia’s orbit into China’s.

Please follow for entire article in PDF

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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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Sinophobia: A Potential Knot in the Silk Road

By Raffaello Pantucci

First published in Central Asian Affairs, April 2015

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Sitting in a café in Bishkek recently, a foreign diplomat explained the Chinese problem in Central Asia with a rather simple characterization. The issue, he said, is a “genetic one,” whereby Kyrgyz have an in-built antipathy toward Chinese. While such a simplistic explanation is one that most international relations experts would shy away from, it is one of the clearest issues to leap off the page of Marlene Laruelle and Sébastien Peyrouse’s excellent The Chinese Question in Central Asia: Domestic Order, Social Change, and the Chinese Factor. The biggest factor in favor of the Chinese often seems to be their very overwhelming presence and the potential that their existence just across the Tian Shan mountains poses to the Central Asian states.

On the ground in the markets at Kara Suu, Dordoi, or Barekholka, the Chinese are largely seen in a fairly passive light. Bored and griping as one would expect from workers who are earning a living grafting and selling products to poor populations, the Chinese salesmen and workers largely operate on the fringe of local societies, aware that attracting too much attention can lead to trouble. Chinese energy giants operating in the region tell of training their workers deployed in country to avoid drinking in public and to always have their documents on them, as well as a phone number, in case they get into trouble with local authorities.
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Looking West: China and Central Asia

By Raffaello Pantucci

Delivered to the US-China Economic and Security Review Commission, March 18, 2015

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Background

In September 2013 during a visit to Astana President Xi Jinping spoke of establishing a ‘Silk Road Economic Belt’ (SREB) that would ‘open the strategic regional thoroughfare from the Pacific Ocean to the Baltic Sea, and gradually move toward the set-up of a network of transportation that connects Eastern, Western and Southern Asia.’ Made during the President’s inaugural visit to Central Asia, the speech was both an articulation of a policy in a region that had been underway for around a decade, as well as the first declaration of a foreign policy vision that has increasingly shaped China’s own projection of its approach to foreign affairs. Founded in Central Asia, the SREB and the development of trade and infrastructure corridors emanating from China that it has come to symbolize, is slowly becoming Beijing’s dominant and most vocalised foreign policy strategy and is possibly set to be the defining public narrative for Chinese foreign policy under Xi Jinping.

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Central Asia: the view from China

By Raffaello Pantucci

First published by EUISS, January 23, 2015

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China’s rise in Central Asia is not a new phenomenon. For the past decade, Beijing has gradually moved to become the most significant and consequential actor on the ground in a region that was previously considered Russia’s backyard. In September last year, President Xi Jinping announced the creation of a ‘Silk Road Economic Belt’ running through the region. Although this declaration is the closest thing seen so far in terms of an articulation of a Chinese strategy for Central Asia, it nevertheless offered more questions than answers.

To understand China’s approach to Central Asia, a wider lens needs to be applied to explore both the detail of what is going on and how this fits into a broader foreign policy strategy that is slowly becoming clearer under Xi Jinping’s stewardship.

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Sino-Indian Relations: Competition or Co-operation in Central Asia?

By Amitha Rajan

China and Pakistan: the world's highest border crossing. Photo by Pamir Times
China and Pakistan: the world’s highest border crossing. Photo by Pamir Times

Central Asia is emerging as a region that could test the influence of India and China. Although New Delhi is following Beijing’s lead and expanding into this resource-rich and strategically important region, it is set to play second fiddle.

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China’s Energy Security Strategy in Central Asia

By Fakhmiddin Fazilov & Xiangming Chen

Parts of this article were adapted from the authors’ “China and Central Asia: A Significant New Energy Nexus” in The European Financial Review, April 30, 2013, accessible here.

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China’s trade and energy cooperation with Central Asia has been expanding over the last ten years. Photo by Sue Anne Tay

Over the past decade China has aggressively developed its energy cooperation with Central Asia, which has an abundance of oil and natural gas deposits, and relative political stability. Through its energy relationship with Central Asia, China not only diversifies its access to new energy sources but also gains greater flexibility in playing regional geopolitics that advances its broader national interests.

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China’s Strategic Presence in Central Asia

By Sarah Lain

First published by IHS Jane’s, August 2014

RATS drills
Russia-China joint anti terror training October 20, 2014. Photo by China Central TV

(Any opinions expressed here are those of the author and not of IHS Jane’s)

China’s northwestern Xinjiang province has again made headlines in 2014, largely because of a number of brutal attacks carried out by militants within the province’s Muslim Uighur population. Among the most notable attacks, 29 people were killed in a 1 March knife attack at a train station in Kunming; on 22 May, 39 people were killed in a market attack in Xinjiang’s capital, Ürümqi; and in July, the Chinese authorities reported that 59 “terrorists” and 37 civilians had been killed in Shache county during an attack on a police station, followed by the murder of a Uighur imam.

The death toll among the militants may, in reality, be much higher as a result of the authorities’ hardline security response. Although the Chinese government interprets such attacks as a product of religious extremism, many Uighurs view them as protests against the discrimination they experience at the hands of the authorities.

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Kashgar, Nanjiang

By Benjamin Shook

View of Kashgar’s new city. Photo by Sue Anne Tay

Xinjiang will soon see the launch of its first high-speed railway train that will run from Lanzhou city in neighboring Gansu province to Urumqi, the capital of Xinjiang. The government has hailed this as a significant move that will boost Xinjiang’s economy through more open trade, tourism and connectivity into Central Asia as part of the leadership’s vision of the new Silk Road Economic belt. Yet, the Guardian has countered that the high-speed railway in Xinjiang may end up exacerbating the growing economic inequality in the province.

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China’s Inexorable Drive into Central Asia

By Raffaello Pantucci

First published by China Outlook, August 5, 2014

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Picture from China Outlook

In a speech last September at Nazarbayev University in Astana, Kazakhstan, China’s President Xi Jinping coined a new strategic vision for his country’s relations with Central Asia, calling for the creation of a Silk Road Economic Belt. Coming at the culmination of a sweep through Central Asia during which he signed deals worth $56bn and touched down in four out of five capitals, the declaration may be something that has now received a new moniker from President Xi, but the economic and geopolitical reality that it characterizes is one that has been underway for some time.

President Xi’s declaration of the Silk Road Economic Belt needs to be understood within a wider context, particularly in his October 2013 speech at a work conference on diplomacy in which he set out his first formal statement on foreign policy. There he highlighted the priority he wanted his administration to place on border diplomacy: “We must strive to make our neighbours more friendly in politics, economically more closely tied to us, and we must have deeper security cooperation and closer people-to-people ties.”
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Kazakhstan Defies Russia over Eurasian Economic Union

By Sarah Lain

Kazakh president Nursultan Nazarbaev and Russian president Vladimir Putin shake hands after signing the treaty on the Eurasian Economic Union Photo: kremlin.ru
Kazakh president Nursultan Nazarbaev and Russian president Vladimir Putin shake hands after signing the treaty on the Eurasian Economic Union Photo: kremlin.ru

On May 29 Kazakhstan, Belarus and Russia signed into existence the Eurasian Economic Union (“EEU”), set to come into force in January 2015. The EEU’s aim is the economic integration of ex-Soviet countries, based on a European Union-style collective model. It builds on the Customs Union, signed in 2010, which implemented a common customs territory and removed internal border controls between the three states. Against the backdrop of a shifting geopolitical landscape sparked by events in Ukraine, and strengthening Russian and Kazakh bi-lateral relations with China, the original vision of the EEU may no longer be viable. Although they wish to show they have a diversified partner base, Kazakhstan and Russia also want to avoid perceptions of any overt economic threat to its shared Chinese partner. This is particularly relevant to Kazakhstan, which has in fact suffered economically from the initial implementation of the Customs Union, as laid out below.

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China Relishes its New Role Fostering Regional Cooperation

By Raffaello Pantucci and Li Lifan

First published in the South China Morning Post, May 19, 2014

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China’s President Xi Jinping (left) and Kazakhstan’s President Nursultan Nazarbayev look on next to an honour guard during a welcoming ceremony at the eve of the fourth Conference on Interaction and Confidence Building Measures in Asia (CICA) summit, in Shanghai. Photo: Reuters

The Conference on Interaction and Confidence Building Measures in Asia, which begins today in Shanghai, largely passes unnoticed most years. But this year it is being touted as a major global event, largely due to Russia’s current awkward relationships elsewhere and China’s growing global profile.

It also offers a window into President Xi Jinping’s vision for China’s foreign policy.

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