Xi builds up power in Central Asia
By Radio Free Asia
A new wave of Chinese investment in Central Asia is turning the region's focus from Russia toward the east.
In a far-ranging regional tour, President Xi Jinping swept through four Central Asian nations in September, bringing billions of dollars in energy and other deals. Xi's 10-day diplomatic circuit included summit meetings of the Group of 20 (G-20) leading economies in St Petersburg and the Shanghai Cooperation Organization (SCO) in Bishkek.
But the visits, beginning and ending in Central Asia, underscored the rising importance of the region to Beijing.
In Turkmenistan, Xi sealed an agreement to boost China's gas imports by over 60%, raising Turkmen supplies to 65 billion cubic
meters annually by 2016.
In Kazakhstan, Xi marked China's plans to acquire a share in the giant Kashagan oilfield for US$5 billion as part of a package of contracts valued at some $30 billion.
In Uzbekistan, China agreed on building a fourth strand of its Central Asia Gas Pipeline through the country and hailed a 59% increase in trade for the first half of this year, Interfax reported.
In Kyrgyzstan, Xi signed an accord on a strategic partnership with China, unveiling plans to invest $3 billion in the country including a new gas route from Turkmenistan to Xinjiang, the KyrTAG news agency said.
Speaking in Kazakhstan, Xi also called for a new level of engagement with Central Asia, urging creation of a "Silk Road economic belt", according to the official Xinhua news agency. Under the plan, countries would "green-light regional economic integration in terms of both policy and law", Xinhua reported.
Xi said neighboring nations should improve transit links and facilitate trade by promoting local currency settlements.
China has often invoked the Silk Road before, but Xi's proposals on transit links from the Pacific to the Baltic Sea suggested a new drive to reach a market that he called "unparalleled in scale and potential".
The scope and scale of China's attention to the region seems to have Russia worried that it is taking a back seat. On September 9, Deputy Foreign Minister Igor Morgulov tried to dispel that impression.
"Central Asia is an important area of Russia-China relations," Morgulov told reporters, according to Interfax. "We are not competing with each other in Central Asia but are adjusting our policies to reflect mutual interests," he said.
The explanation masked the seriousness of Moscow's concerns, said Edward Chow, senior fellow in the energy and national security program at the Center for Strategic and International Studies in Washington.
"I think they protest too much," Chow said.
At the SCO summit, Xi's statements on both economic and security development cast China in the leading regional role among member nations including Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan.
Chow noted that in the official photo of SCO leaders on September 13, Xi is positioned in the center to the right of the summit host, Kyrgyz President Almazbek Atambayev, while Russian President Vladimir Putin stands off-center to the left.
"These things don't happen by accident," Chow said. "If you had told me such a photograph was possible 10 or 15 years ago, I wouldn't have believed it."
Xi's proposal to turn the ancient Silk Road route into an economic belt is seen as a sign that China plans to extend its influence and economic power.
"It strikes me as China spreading its wings even more in Central Asia without encountering much Russian opposition," said Chow. "Is that because Russia has reconciled to the realities of what's going on?"
Part of the answer may be found in Russia's economy, which is facing its most serious problems since 2008, Economic Development Minister Alexei Ulyukayev said on September 18. Russia has cut this year's economic growth forecast from 2.4 to 1.8%, and may cut it again soon. In the first eight months, growth has weakened to 1.5%, Interfax said.
At the same time in China, officials are showing more confidence that this year's gross domestic product will meet the government's growth goal of 7.5%.
Even at the slower-than-usual pace, China has far more investment resources than Russia to channel into Central Asia, particularly for the energy supplies that it needs.
Turning a blind eye
So far, Russia seems determined to turn a blind eye to China's advances in the former-Soviet region, while minimizing the reasons behind the shift.
"Our Chinese friends recognize the traditional role our country continues to play in this region, so we do not see any regional rivalry problems," Morgulov said. "As you know, the Russian and Chinese economies mutually supplement one another. China possesses sizeable financial resources. Russia possesses experience, technologies, industrial skills and historical relations with the region," he explained.
Chow dismissed the arguments, noting that China's regional connections predate the Soviet era, stretching back to ancient times. By comparison, the Russians may be seen as "Johnny-come-latelies" in Central Asia, he said.
Last week, China hosted the annual Euro-Asia Economic Forum in northwest Shaanxi province's capital Xian, where Vice Premier Wang Yang promoted the Silk Road agenda. China's role in opening the trade route through Central Asia to the Mediterranean dates back over 2,000 years, Xinhua said.