BISHKEK (TCA) — As Central Asia lies at the crossroads of trade and transit routes between China and Europe, and is the place of a power struggle between several global players, we are republishing this article, originally published by Stratfor:
For thousands of years, Central Asia has served as a nexus between the world's great powers. Goods and ideas have flowed across the region since ancient times, connecting China, Europe and the Middle East and giving rise to countless trade hubs, from Samarkand in modern-day Uzbekistan to Kazakhstan's Almaty. In the 19th century, the British and Russian empires vied for dominance over Central Asia in the so-called Great Game (which Moscow ultimately won), a testament to the region's enduring significance. And today, a quarter-century after its five constituent states declared their independence from the Soviet Union, the region is again the site of a global power struggle. Countries from the United States to South Korea have turned to the vast steppes of Central Asia over the past decade to try to cash in on the wealth of opportunity that awaits in the resource-rich region. The surge of interest enabled landlocked Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan to forge trade and investment relationships with foreign powers beyond Russia. Most prominent among its new partners is China.
China's trade with and investment in the region has soared in the past 10 years. Central Asia's abundant energy and mineral resources enticed China, with its insatiable appetite for fuel and raw materials, while the region's strategic position offered Beijing alternative trade routes to reduce its reliance on its eastern coast. The area also has become a central component of Beijing's Belt and Road Initiative, a campaign to expand China's trade ties, and, by extension, its influence, around the world. Chinese President Xi Jinping signed hefty infrastructure agreements with the leaders of Kazakhstan, Kyrgyzstan and Uzbekistan during the Belt and Road Forum on May 14-15. Three weeks later, he traveled to Kazakhstan — his fifth state visit to Central Asia since unveiling the Belt and Road Initiative in 2013 — for a meeting of the Shanghai Cooperation Organization. Though China is now Central Asia's biggest investor and trade partner, it is far from the only foreign power interested in the region. As it pursues its vision of enhanced connectivity, Beijing will have to negotiate a crowded playing field.
Throwing Money at the Problem
Beijing's agenda in Central Asia is multifaceted. Beyond ensuring its access to energy and diversified trade routes, China hopes that enhancing connectivity to and within the region will encourage economic development there. Structural economic deficiencies and anemic infrastructure continue to hold Central Asia back. Three of the region's five countries depend on exports of oil, natural gas and minerals to fuel their economies, and manufacturing in the region is all but nonexistent beyond Uzbekistan and Kazakhstan. Trade among the Central Asian states accounts for less than 7 percent of the region's total trade flows, while inadequate transport infrastructure restricts trade with larger partners in the European Union and South Asia. On top of that, lower oil prices and reduced remittances from workers in Russia have slowed the Central Asian countries' economies over the past three years.
The economic decline, combined with political upheaval and security challenges, destabilized the region. For China, whose restive western reaches abut Kazakhstan, Kyrgyzstan and Tajikistan, Central Asia's volatility is a worrisome prospect. The region, after all, is not only home to a large Uighur diaspora, but it also serves as a corridor through which Uighur militants from Afghanistan and the Middle East return to China's Xinjiang province. To keep the threat in check, Beijing sent troops to the region to train and conduct joint exercises with local armed forces. Most Central Asian states see China's increased economic and military presence, which is still minimal, as a boon, expanding their strategic partnerships and bolstering security. Even so, lingering suspicions about Beijing's intentions, as well as resentment over its energy acquisitions and use of domestic workers and equipment for local infrastructure projects, have sparked protests across Central Asia.
Pipelines and Railways: The Backbone of Connectivity
China's planned initiatives in Central Asia range from electricity infrastructure to industrial zones. But pipeline and transportation projects form the backbone of its connectivity campaign in the region. Even before the Belt and Road Initiative, China built a 3,666-kilometer (2,278-mile) pipeline, linking it to lucrative natural gas reserves in Turkmenistan, Uzbekistan and Kazakhstan. The pipeline serves as the linchpin of Turkmenistan's scheme to export its natural gas to new markets, including South Asia and Europe, since Moscow restricted its access to Russia's pipeline system. The strategy is a long-term ambition, however, and in the meantime, Turkmenistan depends on China to buy up nearly three-quarters of its total natural gas exports.
This arrangement has worked out nicely for China, which receives about 15 percent of the natural gas it consumes through the pipeline. Beijing took advantage of a pricing dispute between Turkmenistan and Russian energy firm Gazprom to secure a favorable rate and leveraged its pipeline network with Central Asia in negotiations over a natural gas deal with Russia, as well. Further, the Central Asia-China system's fourth line connecting China to Turkmenistan by way of Uzbekistan, Tajikistan and Kyrgyzstan is expected to boost the pipeline's total capacity by 30 billion cubic meters once construction is complete.
Beijing's proposed rail projects in Central Asia show no less promise. Since 2013, a freight railway has linked the Chinese port of Lianyungang with Almaty, Kazakhstan's commercial capital and largest city. The line, called the Northern Corridor, extends beyond Central Asia to Europe, where it runs to several industrial cities such as Warsaw and Hamburg. Though China currently conducts a negligible share of its international trade over the railway, the line nonetheless affords the country an alternative to maritime trade routes, and one that would reduce transit times, especially on longer hauls. With these advantages in mind, Beijing is planning two parallel corridors linking southern China to Central Asia. The first will run from Khorgos, an emerging logistics hub near China's border with Kazakhstan, to the port of Aktau on the Caspian Sea and from there, perhaps to the Caucasus or beyond. Further south, Beijing is hoping to revive talks with the Uzbek government in Tashkent over a 270-kilometer line connecting the Chinese city of Kashgar in Xinjiang province with Andijan, an industrial city in Uzbekistan's Fergana Valley, through Kyrgyzstan. The prospective railway was designed to continue to Tajikistan and the Middle East before merging into Europe's rail network.
In addition to the opportunities the rail systems offer Beijing, they offer Central Asia a chance to capitalize on its geographic position to become a critical corridor between east and west. Most of the region's existing rail infrastructure dates to the Soviet era. The routes — thousands of kilometers of broad-gauge railway used nowhere else in the world — were drawn to serve Moscow's political, economic and military interests. And although countries such as Uzbekistan have undertaken their own rail projects since achieving independence, their rail networks are still insufficient to serve regional or even domestic demand, to say nothing of freight transit between Europe and China.
Facing the Divides
The potential gains notwithstanding, progress on China's rail lines in Central Asia has been halting. The difference in width between Central Asia's 1,520-millimeter broad-gauge lines and the 1,435-millimeter standard-gauge tracks common in China, Europe and the Middle East has made transport along the railway expensive and time consuming. To address the problem, Beijing proposed building the China-Kyrgyzstan-Uzbekistan line using standard-gauge track. But Tashkent turned down the suggestion because of concerns that a standard-gauge rail line would hinder internal connectivity and provide a new invasion route into the country.
Aside from the logistical concerns, the proposed railways, like most other connectivity projects across Central Asia, are running up against the region's geopolitical divides. Each of the Central Asian states favors improving connectivity in the region, but enduring disputes over borders and water rights, along with underlying conflicts among ethnic groups and clans, keep getting in the way. Any transport infrastructure project that extends beyond Kazakhstan is susceptible to interference from Tajikistan and Kyrgyzstan, both of which worry that greater connectivity would contribute further to Uzbekistan's regional dominance. The Kyrgyz government in Bishkek, meanwhile, also fears that the railway endeavor could aggravate ethnic tensions in the country, perhaps inviting greater Uzbek influence across its southern border in the process. Further complicating matters, political instability and the looming prospect of succession in Kazakhstan and Tajikistan cast uncertainty on the future of China's projects in Central Asia.
The Dragon, the Bear and Other Interested Parties
The Central Asian states aren't the only ones China has to worry about. Equally challenging is Russia's role in the region. As its relations with the West and its economic prospects at home have soured, Moscow has looked eastward. Though Russia approves of China's investment in Central Asia as a solution to the region's recurrent instability, Beijing's growing economic clout and security presence may in time start to impinge on its efforts to maintain its influence there. Central Asia will serve as a testing ground for Russia and China's delicate alignment, revealing just how well the two countries can navigate areas of mutual interest.
At the same time, other powers near and far will also turn their attentions to Central Asia. The United States probably will increase its activities in the region, albeit slightly, to try to contain Russia's activities there and to mitigate the threat of militancy spilling over from Afghanistan. Countries such as Japan, Iran, South Korea and Turkey, meanwhile, will continue looking for opportunities in the region. India and Pakistan's accession into the Shanghai Cooperation Organization, and the talk of Iran's prospective admission, illustrate the proliferation of the region's stakeholders. Despite the rivalries and conflicting goals that often separate these powers, their shared interest in improving Central Asia's connectivity could motivate them to work together, if only on a limited basis.