Chinese Vector

By Arthur Dunn

Another Summit of BRICS held in China and the oncoming anniversary Summit of the SCO to be held in Kazakhstan once again should remind everyone about intensively growing role of the Tianxia in the world. Modern China today dominates within the frameworks of these two international Forums.

Rapid economic development and increasing military potential of the most densely inhabited state in the world incites much worries. And world powers are afraid of the enhancement of China within a long-term prospect so much that they already now are forced to trade-off with their sovereignty. This way Russia has made to China come territorial concessions with several islands of Far East rivers. As greed by the Parties, Damansky island was given to China in May 1991, and the island of Tarabarov and the half of Bolshoy Ussuriysky were conveyed in 2004. Neighboring Kazakhstan has granted China about 1,1 thousand square kilometers in August 1999, and in the beginning of 2011 the Lower Chamber of Tajikistan Parliament approved  the interstate treaty on demarcation and delimitation of Tajikistani-Chinese state border, according to which China gained 1,1 thousand of square kilometers of territory in Western Pamir. The decision of Tajikistani authorities gained ambiguous estimations, some experts state that the region has plenty of gold deposits and other rare-earth metals.

However trade-economic benefits from cooperation with Beijing are observed as more significant for Dushanbe. In recent years China has actively invested into energy sphere extremely important for Tajikistan. Except for that very significant is the construction of trans-continental rail way Kashgar-Herat. This way shall connect Central Asia with Persian Gulf and provide access to China and Near East states independent from Uzbekistan.
Adventure Without Prospects

At the moment “border problem” between the People’s Republic of China and the states of Central Asia in principle is officially considered to be solved. However, definite forces that play in practice destructive role are trying to raise this “problems” with all means and use it in their sordid motives.

Thus, literally on the eve of snap Presidential elections in Kazakhstan the ex-Ambassador of Kazakhstan to Austria Rakhat Aliyev reported “sensation”. He decided to play on the fears felt probably by all the neighbors of the People’s Republic of China, that are afraid of economic hegemony of the Tianxia and migration from the most densely populated country. He states as if Astana has signed a secret treaty with Beijing in accordance to which it gave a million of hectares of fertile lands for 99-years rent. This is a peculiar payment for security, if Kazakhstan faces the events like it Tunisia, Egypt and Libya.

It is urgent to note that the possibility of such a deal was completely excluded by Kazakh and other specialists. In particular, as the Senior Researcher of Kazakh Institute of Strategic Studies Konstantin Syroezhkin noted, the right on temporary onerous use of lands for farming or agricultural goods production (i.e. land rent) is provided to the citizens and non-state legal entities of the Republic of Kazakhstan up to 49 years, and to foreigners and people without citizenship up to 10 years. There is nothing specified about 99 years in the land law of the Republic of Kazakhstan. As for allegations of Mr. Aliyev about Chinaization of Kazakhstan by laying oil- and gas pipeline to Chinese direction  and as if already belonging to Chinese, here we observe the intention to misinform everybody.

As known, the number of investors working within oil and gas sector of Kazakhstan includes not only Chinese but also Russian, German, American and many other companies. And concerning gas and oil pipelines, which China has been actively constructing, this fact is not opposed by Astana. It perfectly fits the policy of Kazakhstan within the context of diversification of energy delivery ways. As for current in the essence criminal activity of fugitive Aliyev on dissemination of gossips about Chinaization, than the reasons are routed in personal revenge to his ex-relative – the President of Kazakhstan, who didn’t defend Aliyev after he committed severe crimes.

“The worst things claimed by this person were that as if he discussed with me all his steps which I approved – remembered Nazarbayev. – Unfortunately, no one attempted to verify his words. Big evil was made. For me it was a disaster, stab in the back, moreover that he was my son-in-law”.
Beijing - Astana

As for the development of relations of China with Kazakhstan, than during recent years they have invested into the economy of Kazakhstan more than 15 billion dollars.

However, as experts note Beijing is not capable to control the regions of Kazakhstan which possess the most economic and strategic significance: the last one preserves firm relations with Russia and has chosen the way of economic integration with the Russian Federation. Many of its important oil fields as well as the most part of industry lay along the cross border Russian regions.

Except for that, Kazakhstan intensifies relations within economic and energy spheres also with other states, which reduces the influence of China. So the attempts of adventurists as the ex-son-in-law of the President of Kazakhstan to destroy the established atmosphere of trust within bilateral relations with the Tiaxia by all means are observed as a blind-alley, but insecure as their objective is to destabilize the situation in the country and Central-Asian region in general, where the interests of not only China, but the EU, USA and traditionally Russia, as the USSR successor meet for often.

The interests of China towards oil resources of Central Asia are related with Kazakhstan as this is the only country in the region that possesses relatively high oil exporting facilities.

The share of oil within energy balance of China is not less than 30%. China depends seriously from oil import. Within medium-term prospect this dependence most likely will only increase.

Thus, according to the Ministry of Natural Resources of China, in 2009 it produced 189 mln tons of oil, and imported – 199 mln tons. In respect to the estimations of the State Committee on Development and Reforms of the People’s Republic of China, by 2010 the demand of oil will reach about 560-600 ml tons, and dependence of China from import of the “black gold” will be not less than 65%. This means that China in 2020 will have to import 365-390 mln tons of oil. China keeps on investing into a great infrastructural project – oil pipeline Kazakhstan-China. Considering these circumstances, China undertakes more active attempts to entrench itself within oil fields of various states and regions of the world, including Kazakhstan. The level of Chinese presence in Kazakhstani oil and gas industry is already much higher than the Russian one.
Pre-Caspian Interest

In recent years we have observed significant increase of volumes of investments of China not only into the economy of Kazakhstan, but also of Pre-Caspian Turkmenistan.

After the cool-down of relations between Ashgabat and Moscow due to the blast in the gas pipeline in April 2009 and suspension of supplies of Turkmen gas to Russia almost for a year, the relations of Turkmenistan with China have expressly intensified. In the end of that year the pipeline construction to China was finalized, that was so important for Ashgabat because of the reduction of gas import into Russia. The construction of Chinese gas pipeline Turkmenistan-Uzbekistan-Kazakhstan-China began yet in 2007. It is suggested that the gas pipeline of 1833 km long will work in full capacity by 2012-2013 with the flow capacity up to 40 billion cubic meters. In the situation when Turkmenistan really lacks of real sector of industry, it is extremely dependant from natural gas selling, and Russia as its main partner has rapidly reduced the scopes of gas purchasing, which doesn’t leave Ashgabat another chose but to establish contacts with China and hope for sooner cooperation in gas sphere with the European Union.

At the same time, Turkmenistan as Azerbaijan, doesn’t border China, which impedes the promotion of its interests there. Nevertheless, these difficulties don’t frighten Beijing. But the strengthening of China positions in Turkmenistan is observed as unwished from the view of long-term and strategic interests of Russia. This is explained by the fact that the Russian Federation not to less but to greater extent than the People’s Republic of China is interested in the access to Turkmen gas. Gas supplies from Central Asia which mainly flow from Turkmenistan, already play a significant role within assurance of energy security of Russia.

Turkmenistan risks more to introduce mainly artificial difficulties into their relations with China, as well as with Russia. But the kind of role doesn’t threat Uzbekistan.

Almost 60% of Uzbekistani territory possess promising fields of hydro-carbons. The scope of investigated deposits of oil and gas in discovered fields comprise more than 2 trillion tons of oil equivalent. Uzbekistan exports oil products, natural and condensed gas to the CIS states and bordering regions. Oil-gas sector is the most significant direction of investment cooperation with Chinese companies. Within this context the treaty on founding of a joint venture with the scope of direct investment about 600 mln dollars, signed during the last year visit of the President of Uzbekistan to China, between the company “Uzbekneftegaz” and Chinese national oil-gas corporation is an important step within the development of such cooperation.

It’s noteworthy that it is performed within the frameworks of the accomplishment of the program and plan on events of multilateral cooperation between the SCO member-states. One of main directions set there include energy and transport.

Relatively small Kyrgyzstan (198,5 square kilometers) has turned out to be one of the most complicated partners for China in Central Asian region. First it approved the dislocation of American troops on its base in Manas (which is considered by Pentagon as a key one for its actions in Afghanistan), later as it turned out, it is not able to assure its security due to political instability in the country.

China was the first willing to invest. Its strategy in the whole region, including towards restless Kyrgyzstan, reminds the one which can be observed also in other Chinese initiative, for example in Africa.

Although neighbor states are attracted by the example of successful economic reforms of China, an important negative factor for the promotion by Beijing of its interests among Central Asian republics is distrust of these states’ elites towards the eastern neighbor. Studies illustrate that China faces the problem of deep distrust also at the level of public consciousness.
European Interest

The main interest of the EU towards Central Asia focuses first of all on oil-gas industries of Kazakhstan and Turkmenistan.

In Kazakhstan Europeans are primarily interested in oil, as gas exporting options of the Republic of Kazakhstan are small, and in addition, almost all Kazakhstani gas in prospect is already contracted by Russian “Gazprom”. On the opposite, Turkmenistan is attractive for the European Union as a potential gas supplier, as oil exporting capabilities of Turkmenistan are insignificant and are not able to be of some importance for the EU. At the moment, almost all European investments are concentrated within oil-gas industry of Kazakhstan, meanwhile within oil-gas sector of Turkmenistan the presence of European companies possess political, rather than real, economic character.

Out of the frames of oil-gas segment the European Union almost has no energy interests in Central Asia, if to omit recently outlined interests of France to nuclear sector of Kazakhstan..

In general the EU presence within energy of Central Asia as well as the character of the region within energy sphere is observed as ambiguous.

The prospects of energy cooperation between the European Union and the states of Central Asia in general are significantly complicated with geographic isolation of Europe and Central Asian region. Particularly, transit of Central Asian gas is only possible through the territory of the same Russia, which competes with the states of Central Asia for European market and attempts to “push” into Europe first of all its “blue fuel”. By this, the EU striving to diversify hydrocarbon import, considers as the main principle of its energy policy the independence from Russia within energy carriers transit, and in case of Central Asian gas it would be hardly possible even in a medium-term prospect. In its turn, supplies of Central Asian (Kazakhstani) oil to Europe are also performed via transit through the oil pipeline “Baku-Tbilisi-Ceyhan”. However this direction can be significant for Europe only in case of “big oil” from Caspian shelf, also if the hopes for North-Caspian project justify.

China is able to become a strategic Partner of Russia, thus assuring a breakthrough within development of Russian-Chinese-Central Asian oil-gas, and in general economic cooperation on multilateral ground. That is why, will Russian-Chinese oil-gas interaction in Central Asia transform into partnership or on the opposite into rivalry depends much from Russia itself, and precisely from its readiness to revise completely the main principles of its domestic and foreign energy strategy, reorienting it on the strengthening of economic re-integration within post-soviet area with the help of such projects as the Customs Union (CU) and Common Economic Space (CES) as well as developing economic relations within the frameworks of the SCO.

In the report of Pentagon “Military and Defense Development of the People’s Republic of China - 2010” it is noted that, within Asian-Pacific region the balance of power leans to Beijing.

American analysts also state that in a long-term prospect China observes Russia as a rival: “Beijing keeps on considering Moscow as the most reliable international partner, however, suggests that long-term interests of Russia do not perfectly fit with Chinese ones”. According to Pentagon despite that most military forces of China are located within Eastern part of the country, sufficient defense means of China are placed within the striking distance from Russian border.
Will SCO Help Everyone?

Chinese policy towards the states of Central Asian region has become the target of its economic expansion and strategic activity.

The EU and the USA are more prone to perceive the SCO founded 2001 as a political and military union, which openly opposing itself to the interests of West.

Middle Asia takes a very important place within Beijing plans. Here join the three spheres of Chinese interests: energy resources, ethnic tension and recently new investments and funds. A great breakthrough was the enhancement of the SCO and its transformation into a multi-profile institution of interstate cooperation. China has become not only one of the initiators, but also the locomotive of the multi-profile regional organization. Together with the intensification of interaction with the states of Central Asia on the issues of policy and security, a specific impulse was given to the development of economic relations.

Due to this China has gained a unique opportunity to participate directly and which is the most important legitimately within the life of Central Asia, having become by this one of the key elements of the forming system of regional security. A significant stage of this process, as expected, should become the SCO Summit, to be held this summer in Astana.

Main objectives of foreign policy of China within Central Asia remain to be the following ones: establishment of the area of security within western borders of the People’s Republic of China; prevention of inclusion of the region into the sphere of the USA influence as well as coming to power of non-friendly regimes in Central Asian states; provision of guaranteed access to reach mineral-raw materials basis and further opening of the markets of region’s states for the selling of Chinese goods. By this we should note still preserving intention of Beijing to get closer with Moscow, grounding on the similarity of evaluations of geopolitical situation in Central Asia and around it, first of all within the context of tactic tasks of limitation of regional influence of Washington and its closest allies. However, it is also evident that Chinese strategy is oriented on defending of its own, even long-term, but still purely national interests. At the background of the kind of Chinese strategy own national interests are also protected by the states of Central Asian region with not only participation in such regional bodies as the SCO, EurAsEc and CSTO, but also with extension of bilateral interests with the USA, EU and NATO. In any case while foreign policy of China towards the neighboring sovereign states still remains to be of peace. All Chinese army, navy and air forces are dislocated with their borders and Beijing has never attempted to use them outside.