The Silk Road – a linkage once connecting the economies of Europe and Asia – is back in fashion. And everyone from Washington to Moscow to Beijing is talking about it. The leaders from the five Central Asian countries, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan, are rubbing their hands, knowing that it is the chance of a lifetime for their countries to shine and for their private fortunes to grow.
Landlocked between China, Russia, Iran, and Afghanistan, Central Asia was, until the collapse of the Soviet Union, a forsaken domain. However, its vital importance for the stability of the larger region and its rich energy deposits have brought it to prominence. Over the past decade, and with the support of the major geopolitical players, Central Asia’s geographical position has ceased to be a problem. On the contrary, today it looks like its key asset.
China, in contrast to the United States and Russia, in particular, was a latecomer in terms of building economic relations with Central Asia. Since the turn of the 21st century, however, Beijing has learned quickly the valuable offerings of the region and has firmly anchored itself there. By promoting regional development, China is not only opening new markets for its goods. It also wishes, through trade and economic growth, to counter the three evils: terrorism, extremism, and separatism. This especially pertains to the western province of Xinjiang, where the rebel Uyghur movement has its roots. Uyghurs are ethnically, culturally, and religiously tied to Central Asians. Thus the region, with which China shares a 3000 km border, is a strategic rear for Beijing.
Beijing’s strategy focuses primarily on energy and infrastructure-related investment, rather than security, in which its direct competitors, Moscow and (until recently) Washington, have the upper hand. Within the past decade, China has established itself as the primary source of capital inflowing to the region.
The announcement of the Silk Road Economic Belt initiative in 2013, along with its maritime equivalent – jointly known also as One Belt, One Road (OBOR) took Chinese outreach to the next level. The project comprises massive infrastructure investment and aims at integrating the countries of Eurasia. Central Asia’s status as a small, but important, element of a wider foreign policy concept designed in Beijing has been solidified. It was not by accident that president Xi Jinping decided to lay out this strategy in the capital of Kazakhstan – Astana.
China is projecting its political and economic power deeper into the Eurasian continent with an array of instruments in hand. The newly founded Asian Infrastructure Investment Bank – of which all of the region’s countries but Turkmenistan are members – the Silk Road Fund, and Chinese state companies will make their capital available for OBOR to materialize.
Such a large-scale economic undertaking could be perceived as a Chinese attempt to reshape the Eurasian geopolitical order. However, it is also an effort to increase the connectivity of the vast landmass between the two continents and promote free trade zones. The Central Asian regimes sit at the nexus of this grand plan.
Kazakhstan, a key partner for China, is a centerpiece of the regional mosaic. It attracts the majority of Central Asia’s trade and investment due to its rich energy resources and well-developed skeleton of roads and railways.
In 2006, the first oil was delivered from Astana to Beijing. Today, China owns about a quarter of oil production in the country and receives 55 percent of Kazakh uranium exports. The latest $18 billion infrastructure deal signed last year has sealed the partnership between the two governments.
Turkmenistan has followed the Kazakh example, with over two-thirds of its vast gas resources now directed eastward. And with the fourth spur of the Central Asia-China gas pipeline under construction, Ashgabat’s yearly gas exports, today at 35 billion cubic meters, are poised to double when the project is complete. In this way, Beijing has merely traded places with Moscow, leaving Turkmenistan as far away from energy diversification as it was after the dissolution of the USSR.
In Uzbekistan, the Chinese investments feed the largely undeveloped energy and construction sectors. Tashkent supplies its share to the Central Asia-China gas pipeline and has received a $350 million loan from the Export-Import Bank of China for the Angren-Pap railroad. The project is crucial to reducing transport costs and directly linking the country with the Ferghana Valley – an area spread across Uzbekistan, Kyrgyzstan, and Tajikistan. Once finalized, the connection will allow the Uzbeks to travel to their part of the valley without crossing the border with Tajikistan.
The two least developed and most energy-poor states of Central Asia – Kyrgyzstan and Tajikistan – are also benefiting from the Chinese-inspired rejuvenation of the Silk Road. China invests heavily in mining and oil refineries, as well as cement and gas purification plants. Present in both countries is the Chinese company Zijin Mining Group, which extracts 70 percent of the Tajik gold. Further, Beijing is considering building a direct railway with Kyrgyzstan to further facilitate the intra-regional trade.
Clearly, then, China is determined to leave its footprint in Central Asia. But is this affection reciprocated? The region’s rent-seeking and self-centered authorities cannot imagine a better partner. Yet the local communities often have a different view on the matter.
For one thing, Sinophobia is spreading among the Kazakh and Kyrgyz societies, where one-third of citizens perceive China as a threat. It is standard practice for Chinese companies to hire primarily their own countrymen and to pay local employees less. For another, the controversial issues of land and gold mines ownership will continue to surface in the region, as will the fear that the descendants of the Central Asian nomads could lose their cultural identities in the wake of China’s economic invasion.
Central Asia – relative to its actual political and economic gravity – is overrepresented in the Chinese foreign policy. Beijing, however, remains consciously and unconditionally engaged in the region. Moscow and Washington welcome the Chinese investment and the stability and development it brings. The Sino-Russian partnership is flourishing most notably, as evidenced by the $400 billion gas contract signed in 2014 between the two countries. Cooperation with the United States in such fields as trade or counter-terrorism could also produce positive outcomes. Will the interested parties continue to accommodate their positions? Or, in the long-term, is an open rivalry not to be prevented? This much remains to be seen.