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.
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.
Though it has received comparatively little attention, one of the most profound geopolitical trends of the early 21st century is gathering steam: China’s pivot to Central Asia. As American military forces withdraw from Afghanistan and gaze toward the Asia-Pacific, and while Washington’s European allies put NATO’s eastward expansion on the back burner, Central Asia has become China’s domain of investment and influence. The Washington policy community finally woke up to this reality in September, when Chinese president Xi Jinping swept through Central Asia, signing tens of billions of dollars worth of deals and generally treating the former Soviet republics as if they were in China’s sphere of influence. Continue reading →
Alexandros Petersen is interviewed by The Gadfly on April 16, 2013
The Gadfly: You have referred to China’s growing influence in Central Asia as an “Inadvertent Empire.” Could you explain what you mean?
Alexandros Petersen: It’s an inadvertent empire in the sense that China is already the most consequential actor in the region and will soon be the dominant actor in a number of different areas. It already is the dominant actor in the economic sphere and definitely so in the energy sector, which is actually quite a significant accomplishment given Russia’s traditional role in that area. China has also become the go to place for loans and investments. One of the key needs in Central Asia is investment in infrastructure, and that requires funds. Russia doesn’t have the money; the United States doesn’t have the money in some cases and simply doesn’t care in others; the European Union is not comfortable giving money because of the nature of some of the regimes in the region, so China is really the only option to provide funding as well as institutional capacity building. So, it’s an empire in the sense that China is the player to watch and will be the dominate player in the future, but it’s inadvertent, in the sense that China doesn’t really have a strategy for the region. China doesn’t want an empire. As Seeley would say, it has an empire “in a fit of absence of mind.” Continue reading →
On April 2, 2013 Alexandros Petersen conducted an interview with Chris Rickleton, a Bishkek-based analyst and Instructor at the American University of Central Asia.
You have conducted in-depth research into Chinese plans for a refinery at Kara Balta in Kyrgyzstan. What exactly are these plans and on what sort of timetable are they to be carried out?
The refinery is already behind schedule, but is expected to be built by July of this year, and operating at full capacity by September. Local media reported some tough talk in January between Chu Chan, the director of Zhongda, the Chinese state-owned firm that will run the refinery, and Kyrgyz Prime Minister Jantoro Saptybaldiyev. Saptybaldiyev was clearly very keen to see the refinery working as soon as possible and asked Chu why the facility still hadn’t been built. Chu referred to “misunderstandings” having led to the wrong equipment being delivered to the site. Chu also wanted the “sanitary zone”, which governs the distance residential homes can be from the refinery, reduced from 500 metres to 300 metres, which would have helped the company out in some of its compensation battles with local residents. When Saptybaldiyev rebuffed this offer, Chu reminded him that the company have already paid something like $4,000,000 in taxes and that they will have invested $250 million into the project by the time it is up and running.
In the last two years, China has emerged as the most consequential outside actor in Central Asia. As we have described in other writings, China’s ascension to this role has been largely inadvertent . It has more to do with the region’s contemporary circumstances and China’s overall economic momentum than a concerted effort emanating from the Zhongnanhai. The implications for United States and NATO policy are nevertheless profound. Not only have the geopolitics of Eurasia shifted in ways little understood in Washington and Brussels, but the socio-political and physical undergirding of the post-Soviet space from Aktobe to Kandahar is being transformed.
Official Chinese policy in Central Asia is quiet and cautious, focused on developing the region as an economic partner with its western province Xinjiang whilst also looking beyond at what China characterizes as the “Eurasian Land Bridge…connecting east Asia and west Europe” (Xinhua, September 4, 2012). Chinese state-owned enterprises (SOEs) are active throughout the region on major infrastructure projects, but it is not clear how much they are being directed as part of some grand strategy as opposed to focusing on obvious profitable opportunities. The Shanghai Cooperation Organization (SCO), the main multilateral vehicle for Chinese regional efforts and reassuring engagement is a powerfully symbolic, but institutionally empty actor. Many smaller Chinese actors—ranging from shuttle traders to small-time entrepreneurs to schoolteachers and students posted to Confucius Institutes throughout the region—are the gradual vanguard of possible long-term Chinese investment and influence. Continue reading →
While the concept of a “New Silk Road” of trade, transport and telecommunications connections across Eurasia was formally endorsed by the US State Department, it is Beijing and Chinese companies that have taken the lead in realizing the immense infrastructure projects that will tie the mega-continent together. The latest is the completion of a second railway link between China and Kazakhstan at the burgeoning Khorgos crossing point and Special Economic Zone. This nearly 600-kilometer section is part of a larger project that connects China’s eastern port of Lianyungang with Kazakhstan’s rail system and points west toward Russia and the Caspian region. Chinese officials refer to it as part of the New Eurasian Land Bridge from China’s ports to Western European ports such as Rotterdam (Global Times, December 22, 2012).
Plans call for the railway to handle 20 million tons of freight by 2020, increasing to 30 million by 2030. The 292-km Chinese portion of the project was built for less than $1 billion—relatively inexpensive by global standards. Khorgos is already the key border crossing for the Central Asia–China natural gas pipeline from Turkmenistan and a new highway network under construction. According to Kazakhstan’s Minister for Transport and Communications Askar Zhumagaliyev, 800 km of this Western Europe–Western China highway will be completed in 2013, with much of the route running alongside the just-completed railway (Tengrinews, December 20, 2012). Continue reading →
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 →
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 →
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 →
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.
On a recent visit to China, Turkmenistan President Gurbanguly Berdymukhamedov smiled broadly as he was awarded the title of Emeritus Professor at Peking University. Yet his satisfaction was probably less the academic distinction than a lucrative energy export deal he had signed earlier that day — 65 billion cubic meters of natural gas, roughly half of China’s 2010 gas consumption, would eventually flow from Turkmenistan’s massive fields to China’s seemingly insatiable consumers.
This end-of-year agreement prompted some observers to proclaim that gas-rich Turkmenistan had achieved a coup against regional political powerhouse Russia: For years, Moscow has been negotiating a gas export deal with Beijing, but what would it do now that China was receiving so much supply from Turkmenistan? Yet that analysis is backwards: Rather than a Turkmen power play, the natural gas deal was a geopolitical chess move by Beijing, whose fundamental interest in the region is both raw resources, and raw power. While the West is focused on constraining China’s actions in the Asia-Pacific, Beijing is capitalizing on vast space for influence to its west in Central Asia.
An outpost of the China Road and Bridge Corporation (CRBC) responsible for repaving the Southern Transport Corridor highway in Kyrgyzstan from the city of Osh through Sary Tash to the Irkeshtan border with China. Photo by Sue Anne Tay.
BEIJING — Traffic around Tiananmen Square was even worse than usual last week as President Vladimir Putin rolled through town to cement the supposedly flowering Chinese-Russian relationship. A series of high-level deals were signed between Chinese and Russian state-owned enterprises and China announced a substantial infusion into the new Russian Direct Investment Fund.
While cordial, an unspoken undertone to the meetings was Russian concern about growing Chinese influence in the former Soviet Union and particularly Central Asia.