IA REX / News
2015.08.02 15:27

Central Asia: China returns Russia to the days of the "European concert"

Эта статья доступна на русском языке. / This article is available in Russian.

The emerging regional order in Asia brings us back to the beginning of the last century. China takes over the role of German empire, whose growing economy and population require new markets. Its strategic rival - India, conceding to the Chinese military potential duplicates France. Pakistan with its territorial disputes with India - is an "Asian Italy." A survivor of the collapse of its Empire, Russia is trying to regain power, as did the Soviet Union after the Civil War of 1917-1922. An "Asian England"- USA observes from a secure distance and tries to keep a vital "balance" on the continent. Central Asia, as once Eastern Europe or the Balkans has been turned into an object of geopolitical forces.

Paying tribute to each member of the "New Great Game", it is impossible to ignore the unique situation of China. The decline of demand in West and China's transformation into a "consumer economy" have increased the importance of Asia. The British economist Robert Skidelsky compares the "silk projects" of China with the revival of "Mongol period of prosperity» - «Pax Mongolica». The seriousness of the intentions of the Chinese leadership emphasizes not only the magnitude of its strategy, where Central Asia is only one link in a great chain. It also comes to the front that China uses the entire arsenal of geo-economic instruments for the implementation of the "Silk Road". Among them are trade, investments, transport infrastructure and energy projects.

Let us present some statistics and facts proving the economic activity of China in Central Asia. According to UN Comtrade, between 2002-2012 the Chinese share in trade of the subregion has increased from 5.7% to 20%. During the same period, Russia's presence has reduced from 18.2% to 15.7%. An inverse relationship was observed in the bilateral Russian-Chinese turnover as well. During early 2000s the parties reached parity by selling goods worth less than $ 20 billion, but after 2003 the "commercial balance" was broken in favour of Beijing. By 2014, Russia's exports, though having risen to $ 40 billion, were half of the Chinese ($ 87 billion.). Side-by-side with the trade Chinese investments were activated. The «IA REGNUM» underlines that the level of foreign direct investment (FDI) in Central Asian countries is comparable to the GDP of Tajikistan or Kyrgyzstan. «FDI markets» underlines the rise of Chinese FDI in 2013, whose favourite "target" becomes Russia today.

The Asian Infrastructure Investment Bank (AIIB) with a level of capitalization up to $ 100 billion provides the construction of transcontinental transport networks. The bank sponsors highways and railways both between and within countries. Among railway projects are: "Iran-Turkmenistan-China", "Kazakhstan-Turkmenistan-Iran", "China-Kyrgyzstan-Uzbekistan" and "China-Kyrgyzstan-Tajikistan-Afghanistan-Iran." Beijing encourages ambitious energy projects in Asia to quench the growing "thirst" of the Chinese industry. With Moscow it was agreed two schemes: "Power of Siberia" with a capacity of 55 billion cubic meters (BCM) and "Altai" with 30 BCM. The construction of the fourth line of the gas pipeline from Turkmenistan, "Central Asia-China" (totally - 85 BCM) comes also to end. With the signing of the agreement on the Iranian nuclear program Iran lays claim to the role of "gas donor". Islamic Republic has already built its part site of the gas-main to Pakistan. With the support of AIIB, where Beijing is the largest shareholder, nothing prevents Tehran from supplying its gas to the Asian market.

With the change in the geoeconomic map of Central Asia, the following questions will arise for Kremlin. How to find a compromise with China on regional order in the next 20-30 years? Is the coexistence of the "Great Silk Road" and the Eurasian Union feasible? Liu Jun from East China Normal University believes the development of Chinese-Central Asian relations does not threaten Russia. "It’s true that Russia would be concerned if China’s influence in Central Asia grew too much, but the concerns are not mainstream in the bilateral relations – there are more benefits in cooperation than otherwise". Zhang Hongzhou, fellow at Singapore's Nanyang Technological University considers that "despite China's growing economic influence in Central Asia, Russia will continue to play a substantial role in the region through a combination of energy, culture and military bonds."

How accurate the predictions and hypotheses of Eastern political analysts are, will become clear in the next ten years. Recognising that the "Russian bear" and the "Asian dragon" are the major actors of the "New Great Game", a clash of interests can not be excluded. Russia as a member of the previous "Concert of Europe" in XIX century should take into account its historical experience. The Order in Asia, as in the "Old World", is possible but through the maintenance of a reasonable "balance of power".

Kamran Gasanov

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