ABSTRACT
The rise of China in the global geopolitical arena sets off new balances among major powers in different regions. To diversify energy import and ensure its energy security, China seeks closer ties with Central Asian states, and becomes both a primary partner and competitor with Russia in the region at all political, economic and security levels. While Central Asia is a competing ground for China to display its ‘banking diplomacy’ power vis-à-vis Russia, the recent Ukrainian crisis resulted in a revival of the Sino-Russian Strategic Partnership. In May 2014, Russia’s eastward shift in foreign policy was well represented by a USD 400 billion gas supply agreement with China. The subsequent summit meetings between Chinese president Xi Jinping and Russian president Vladimir Putin as well as Chinese premier Li Keqiang and Russian premier Dmitri Medvedev led to an exponential increase of bilateral trade agreements, mainly for oil and gas supply. China’s ‘One Belt One Road’ (OBOR) initiative introduced in late 2013 encompasses a broader area with multiple stakeholders across the globe, and makes all Central Asian countries potentially important economic partners (Xinhua News, 2015). Although the Eurasian Economic Union (EEU) initiative sponsored by Russia only weakly moderates Beijing’s economic influence in Central Asia, Moscow’s firm grip on the regional security clearly supersedes any other external powers, which can be attributed to the former Soviet military structures. The 2015 World War II Victory Day Parades on May 9 in Red Square and
on September 3 in Tian’anmen symbolize a renewed shared stance against America’s ‘pivot to Asia’. Nevertheless, the economic support from China could only momentarily sustain the rouble’s free fall. The persistent decline in oil price, due to the Iranian capacity increase after the termination of the embargo, will hurt Moscow’s overall economic capacity if without a reform (Kolyandr, 2015). Moreover, China is still in dire need of both the EU and U.S. markets, which complicates its cooperation and negotiation with Russia. In addition to the great power politics, domestic factors of the Central
Asian states also casts shadow on China’s new initiatives in the region. Each Central Asian republic has its unique different development patterns and state
capacities, given different features of history and culture, natural resources, and legacies of the Soviet Marxist economic planning. Although all the countries in the region have several misconceptions and biases against China’s ‘march’ into Central Asia, they have responded and digested Chinese investment differently. Kazakhstan, Turkmenistan and Uzbekistan are more able to keep China’s investment in natural resources in check and steer it to promote national economic growth. However, more fragile states such as Tajikistan and Kyrgyzstan are in need of immediate and profound structural reforms before foreign investment can be utilized for domestic sustainable development. Moreover, multilateral initiatives – Shanghai Cooperation Organization (SCO), Collective Security Treaty Organization (CSTO), Conference on Interaction and Confidence-Building Measures in Asia (CICA) and the newly created Asian Infrastructure Investment Bank (AIIB)1 – are likely to further influence the economic and political outcomes in the region. The chapter starts with an analysis of Chinese economic footprints in Central
Asia, particularly the projects that both boost energy cooperation and logistics and negatively affect the already scarce agricultural land and hydro resources. The second section investigates Sino-Russian energy relations since the 1990s and the political implications of China’s recent involvement in the development of the Eastern Russia energy infrastructures. An excursus on the history of Sino-Russian energy relations provides a wider analytical angle for forecasting future trends. The third section discusses the SCO as an example of a regional multilateral facilitator of dialogue and cooperation despite recent setbacks in the overall security stabilization in Central Asia. As a whole, the chapter intends to bring resource politics in the Central Asian region back to the multi-layered inter-state relations, particularly great power politics. The evolving bilateral relations between China and Russia will have a significant impact on the Central Asia region, as they compete at the regional level and at the same time may rally against the American unipolarity at the global level.
