26.08.2017
In August of this year, one of the leading German think tanks SWP published an extended research report on “The Chinese initiative” One Belt One Road “as an incentive for interstate cooperation and reforms in Central Asia “(Chinas” Gürtel und Straße” Initiative als Anreiz für Zwischenstaatliche Cooperation und Reformen Ein Zentralasiens Grenzen).
The European Union and Germany in particular (as participants in the growing cooperation within the framework of the belt and road) have long been trying to understand the essence of the Chinese initiative, which changes the geo-economy of Eurasia and opens up new opportunities for East-West cooperation. The Kazakhstan Center for the Study of China (the Kazakhstan Center for the Study of China (the Kazakhstan Center for the Study of China) publishes one of the sections of this study for readers.
China’s Rise in Central Asia
The time since the beginning of the century has been marked by the rise of China in Central Asia. The Central Asian states play an insignificant role in Beijing’s foreign policy strategy. But China’s Asian policy falls under the category of “neighborhood policy”, which, in turn, ranks second in the country’s foreign policy after “relations with great powers”.
The volume of trade between Kazakhstan and China in 2016 amounted to more than 7 billion rubles. euro, which is 12.7% of Kazakhstan’s foreign trade.
On the contrary, the volume of trade between China and Uzbekistan amounted to only 3.34 billion rubles in absolute terms. euro, which accounted for 20.8% of Uzbekistan’s foreign trade.
Meanwhile, China is the most important trading partner, investor, lender and buyer of energy resources for Central Asia.
Since the 2000s, China has become the main importer of oil and gas from the region and thus has become their “most important trading partner”. Due to the ever-growing energy needs, China has been dependent on oil imports since 1993, and on gas imports since 2006. It is estimated that by 2022, the country will cover two-thirds of its oil needs through imports.
According to experts from SWP, trade between China and Central Asia is balanced. About 85% of China’s exports to Central Asia are products of the processing industry and consumer goods.
In imports from Central Asia, 85% are unprocessed products. First of all, we are talking about energy carriers and metals. For a long time, most of the trade was conducted through Kyrgyzstan, as imported goods from China were sold there. With the formation of the Eurasian Economic Union in 2014, the situation has changed significantly.
Kazakhstan is the main supplier of oil to China in Central Asia. In 2014, China received 2% of the total volume of oil imports from it. China agreed on gas supplies with Uzbekistan in 2009. But while gas exports to China certainly play an important role for Uzbekistan, it is less than 0.4% in the Chinese energy balance.
Even as a major investor in Central Asia, China is at least ahead of Russia. Officially, China has invested 6 billion US dollars in Uzbekistan by 2016, Russia claims the same amount. China’s investments in Kazakhstan exceed these amounts many times. This is especially evident in the energy sector.
All 22 Chinese energy companies are actively involved in the oil sector of Kazakhstan, ten companies in Kazakhstan are 100% owned by the Chinese. About 40% of Kazakhstan’s oil sector is controlled by Chinese companies led by the state oil company China National Petroleum Corporation (CNPC).
China is also investing in the banking sector of Kazakhstan. The investment partnership at the new stage involves the relocation of 51 Chinese factories to Kazakhstan. They agreed on this in September 2016. The total investment volume is 26 billion US dollars.
In addition to bilateral economic relations, China can claim two successful regional projects. The Central Asia-China gas pipeline is China’s first transnational infrastructure project in the region. In 2009, an 1833-kilometer pipeline was put into operation, through which Turkmen gas primarily passed to China.
This pipeline is of great importance because China covers almost 50% of its gas needs with Turkmen gas. The gas pipeline through was built through a joint venture of CNPC with companies in the respective countries, in the case of Uzbekistan with the state holding Uzbekneftegaz.
In Kazakhstan, in particular, the Asian Gas Pipeline company was founded for this purpose. However, the pipeline agreements were concluded exclusively on a bilateral basis. Unlike the transit issue, the construction and operation of the gas pipeline does not require institutional reforms or intensive cooperation between the countries.
Nevertheless, the project has a regional dimension. Kazakhstan and Uzbekistan have the opportunity to sell their gas or buy it themselves. In 2016, the gas transit of Kazakh gas to China amounted to about 34 billion cubic meters, while Kazakhstan itself received more than 1 billion cubic meters. cubic meters.
The second regional project deals with the Shanghai Cooperation Organization (SCO) initiated by China. This is important because it was created based on the results of a careful selection of topics of interaction, an appropriate organizational structure for creating a stable multilateral forum in the field of non-traditional security.
While Uzbekistan has already twice withdrawn from the CSTO, which is dominated by Russia, its membership in the SCO continues without interruption. Through the SCO, China has managed to test and strengthen its leading role in the region, while simultaneously interacting with Russia. However, the SCO was not completely successful.
In addition to traditional security, China has tried to strengthen the economic component of the organization. This included promoting good bilateral relations between the Central Asian countries. The Chinese government’s proposals to create a free trade zone within the SCO have been repeatedly rejected, although recently not as much as before.
The role of China is perceived differently among the population and political elites of the Central Asian states. It is possible to notice both trends of “sinophobia” and “sinophilia” among the inhabitants of Central Asia. Along with the growth of economic involvement, China is also trying to increase its legitimacy in the region, primarily through student scholarships and language courses.
However, some of the population is suspicious of the new regional superpower. In addition, there have been repeated attempts to use fear of China to mobilize the public against the regime. The political elites of Central Asia, however, mostly welcome China’s participation.
According to German analysts, China is very different from Russia in its approach. As an influential regional power, Russia pays little attention to the development of intraregional cooperation, rather pursues the goal of post-hegemonic control. China, however, is more interested in good-neighborly relations between states.
It should be noted that the rise of China in Central Asia has allowed the country to gain more influence in the region. Thus, increasing the probability of diffusion processes. However, they will not pass automatically, as they depend on many other factors.
Source: https://www.swp-berlin.org/fileadmin/contents/products/studien/2017S16_ses.pdf
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