China’s Growing Presence in Russia’s Backyard

By Neil Thompson. The diplomat reports.

Russia’s President Vladimir Putin famously described the collapse of the Soviet Union as “the greatest geopolitical catastrophe” of the 20th century. A conservative Russian nationalist, Putin has lamented the break-up of the old Soviet Union, not because he regretted the disappearance of communism, but because of the severing of the numerous and deep economic, linguistic, social, and cultural connections that linked most of the fifteen constituent republics of the old USSR. It is these ties he is keen to recreate, albeit in a looser supranational union than the old federal structure which bound the fifteen national-homelands into one communist “state.”

This vision, if not exactly shared by a majority of the peoples living in the lands of the former Soviet Union, was received with some sympathy – at least until Ukraine’s easternmost Russian-speaking regions were roused to revolt by Russian intelligence operatives. For example, Kazakhstan’s President Nursultan Nazarbayev pushed hard for a customs union encompassing all of Soviet space for almost two decades without any Russian pressure to do so. His efforts recently culminated in the official launch in January of the Eurasian Economic Union (EEU), with Kazakhstan, Belarus and Russia as the founding members and ex-Soviet states such as Armenia being enticed to follow.

The three countries presently in the EEU are home to 173 million people and have a combined GDP of $2.4 trillion. But they all have high levels of corruption and state interference in the economy. With their inefficient bureaucracies and brittle authoritarian regimes it is an open question whether their squabbling governments can integrate Eurasia into a rules-based market economy. The organization is already suffering from a credibility gap in Europe, with Georgia, Ukraine and the Baltic States having already tilted towards the West, while Azerbaijan treads warily between the EU and Russia. Perhaps more surprisingly in view of their lower levels of economic development and greater geographic distance from the lucrative markets of the West, most of the Central Asian republics have held back as well. This leaves the EEU unlikely to attract many other ex-Soviet states, except for Kyrgyzstan and Armenia.

Some of this reluctance is justified skepticism of the benefits of the EEU and the fears of authoritarian Central Asian governments that it could undermine their own shaky legitimacy. But it is as important to remember who is outside of the EEU as much as who is in it. Although on the map the EEU runs from Europe to the Pacific, it purposely does not include the most important Asia-Pacific state, China. Though landlocked Kazakhstan’s high transport costs are to be lowered through equal access to the Russian and Belarusian railway networks, creating transport routes linking up the European and Asian trade which flows to it, Kazakhstan’s border with China, the world’s second largest economy, will remain subject to stiff tariff barriers. While Putin has partnered with China in other non-Western international organizations, such as with the Shanghai Cooperation Organization on matters of security, he recognizes that Russia faces an economic threat to its influence from a competitor state on its southern flank as much as its western one.

A good example is the situation in the southern Central Asian state of Tajikistan. With a GNI of $870 per capita according to the World Bank, it is the poorest republic in the region. Since a civil war in the 1990s the economy has been kept afloat by remittances from Tajik guest workers in Russia. Control over Russian entry visas, and reliance on the Russian military to help counter security threats such as drug smuggling from neighboring Afghanistan, has meant that Tajikistan’s president-for-life Emomali Rahmon is presently very susceptible to pressure from the Kremlin. Rahmon has been in power since 1992, and there are many who would challenge his power at home. The emigration of many young people is a useful way to divert economic malcontents from challenging the status quo, one that Russia controls.

Chinese Influence

China’s influence in Tajikistan has been growing, with economic ties deepening extensively since the end of the civil war in 1997. The Chinese have extended credits and helped to build roads, tunnels and power infrastructure. Chinese firms are investing in oil and gas exploration and in gold mining, significantly so as mineral and energy exports to China could one day replace cotton as Tajikistan’s most important export. The economy still remains dependent on the agricultural sector, but if mining and energy were to become ascendant, Tajikistan’s economy would be reoriented towards its southern neighbor, with inevitable political consequences for Russia’s position as the dominant foreign influence there.

However, while China has talked up the prospects of investing in Central Asia since independence came from the Soviet Union, the actual sums spent have been fairly modest. Overwhelmingly, Chinese attention focused instead on security concerns, specifically the impact Central Asian nationalism and Islamic extremism could have on China’s north-western Xinjiang province. An ongoing uproar involving the discovery of fake Turkish passports in the hands of minority Muslim Uighurs attempting to leave China is a classic example. The Uighurs are a Turkic ethnic group and the Turkish government is suspected by China of complicity in the Uighurs’ ability to acquire the forged documents, as they are biometrically encoded to satisfy EU antiterrorist requirements and difficult for outsiders to forge without help. China has long found it convenient to blame foreign influences for its problems in Xinjiang.

But now a number of factors now may be coming together to change Chinese interests in Central Asia. China’s powerful strongman Xi Jinping has offered the notion of a “Chinese Dream” – a national rejuvenation that creates a prosperous society, with opportunities for China’s neighbors to participate. Xi often invokes the example of the legendary Central Asian Silk Road of the early Han dynasty. Highlighting ancient Chinese power and commercial dynamism suits a regime that bases its legitimacy on Chinese nationalism and raising living standards. A return to Central Asia as an economic force satisfies both premises, signaling that China has fully regained her old status as the world’s premier economic power under its new leadership. As a sign of Beijing’s shifting regional priorities, Xi has personally authorized a New Silk Road initiative that marries China’s economic ambitions to its concerns about security in its western regions.

Since the millennium, China has been engaged in a long-term effort to develop its impoverished western provinces. The Chinese regime believes this will reduce discontent amongst minorities there like the Uighur, who are presently drawn to Islamic militancy and separatist groups. If Xi’s initiative takes off, trade with, and through, the neighboring Central Asian states would speed this effort considerably. Moreover, Beijing is now the second largest hydrocarbon consuming country in the world. Energy is something Central Asia has in abundance to sell to anyone who can get it out of the ground and to market, and China has experience of extracting oil from dangerous conflict zones before in Sudan. Sales overland from its near-neighbors would usefully reduce China’s vulnerability to U.S. naval pressure on its overseas energy supplies at the Strait of Malacca should, for example, there be another crisis in the Taiwan Strait.

China deepening interest in the affairs of Central Asia is not something Vladimir Putin can outlast as easily as he was able to do with the West’s efforts. China is not bogged down in an expensive and intractable war in the area, and it has a direct territorial stake in regional stability. It is not going away and it is also a much more attractive market to Central Asian states than a Russian one that is presently reeling under the weight of collapsing energy prices and Western sanctions. China has already had a transformational effect on the economies of its south-eastern neighbors, where it sits at the center of a spider’s web of production, with parts and materials of goods crossing borders in multiple directions before assemblage. There is no reason to believe that if Beijing now wishes to craft Central Asian states onto its economic juggernaut, that the feeble barrier of the EEU will hold it back for long. Russia has survived as the dominant power in Central Asia as long as it has only because the area was poor and economically backwards enough to escape global attention. That dominance is soon to be tested against the Chinese model of economic development; it is unlikely to fare very well if China’s record elsewhere is any indication.