Page 2 of 3 China resets terms of engagement in Central Asia
By M K Bhadrakumar
By the time the US woke up to China having a clear energy strategy for Central
Asia, the strategy was already working. Western calculations went awry in two
directions. First, they estimated that, in the ultimate analysis, Central Asian
states would be wary of dealing with their giant neighbor and prefer Russia and
the West. Second, they blindly assumed that Russia in any case was bound to
perceive the Chinese gains as a threat to its own strategic interests and would
therefore resist and checkmate Beijing at some stage, indirectly serving
Western interests.
To the dismay of the West, not only have the Central Asian states warmed to
Chinese overtures, but they are basking in all the Chinese attention and
relishing the harder bargains they are able
to strike in negotiating prices and contracts with Western companies.
Again, China's engagement in Central Asia has been comprehensive and not
confined to oil and gas. Central Asians have been seeking precisely such input
from foreign countries as Nazarbayev voiced in Astana. Speaking to Chinese
media in Ashgabat on the eve of Hu's arrival for the commissioning of the gas
pipeline on December 14, Turkmen President Gurbanguly Berdymukhamedov
highlighted repeatedly how his country's relations with China have become
"multi-faceted".
"They now cover all major areas - politics, economy, trade, culture, science,
education,'' Berdymukhamedov said. "And, so, of course, there are a lot of
topics for discussion during our meeting with the president of China. The main
thing is that they all have a positive context, the very favorable background
as the basis for negotiations, and their starting position on both sides favors
complete mutual understanding and trust, equality and respect, unity of views
on key issues of world politics and bilateral relations."
Western experts often speak in a dismissive tone that the Central Asians prefer
the Chinese because they never raise difficult issues such as democracy and
human rights. But this is far too simplistic a reading. Central Asian countries
see Western discourse on democracy and human rights as doublespeak from
countries that pander to authoritarian regimes without scruples when it suits
their business interests.
Central Asian countries draw satisfaction that eventually Washington is no more
trampling on the region's sensitivities and ethos. The fashion in which
Uzbekistan taught an enduring lesson to the European Union and the US regarding
mutual respect and equitable relationship was widely noted in the region's
capitals.
But that is only part of the story. The main thing is that China has reset the
terms of the West's engagement with Central Asia. Western countries need to
negotiate hard with Central Asian interlocutors squarely. Secondly, while they
are under compulsion to abandon the cherry-picking approach they once took -
touching the region's precious minerals and shying away from any further
involvement such as in the manufacturing sector or agriculture - the ground
rules of engagement that Nazarbayev spelt out at the investors' forum in Astana
give a foretaste of what is to come.
China's track record in Turkmenistan displays the new standards for the west.
China-Turkmenistan trade has jumped 40 times since 2000; 35 enterprises are
working in Turkmenistan today with Chinese capital. Chinese companies are
active in sectors of the Turkmen economy as diverse as oil and gas,
telecommunications, transport, agriculture, textile, chemical and food
industries, healthcare and construction.
From Ashgabat's point of view, China's interest in comprehensive engagement
with the Turkmen political economy stands in contrast with the predatory
instincts of the Western companies that zero in on the mineral industry with
maniacal zeal. Certainly, in the process, China also ends up taking a big share
of the Turkmen energy sector.
... but reassures Moscow
The second aspect to be noted is that with the commencement of China's Central
Asia pipeline, Russia's post-Soviet control of gas exports from Central Asia
has ended. The American commentators have tried to propagate this in terms of
China's gain turning out to be Russia's loss. But it isn't quite a zero-sum
game in that sense. Beijing has been unusually forthright in discussing the
delicate issue of whether China is locked into competition with Russia over
Central Asia's energy.
"China is pursuing diversification of energy imports, while the Central Asian
countries are pursuing diversification of exports,'' said Zhang Xiyuan, the
Chinese foreign ministry official briefing the press on Hu's visit to Ashgabat.
"This kind of cooperation will naturally continue and has room to develop."
In other words, China's cooperation with Central Asia rests on a convergence of
mutual interests. Chinese commentaries have stressed that "export
diversification" as a strategic option has became necessary for Central Asian
countries after the financial crisis and as European countries' demand for the
region's natural gas has decreased.
Pan Guang, director of the Shanghai Center for International Studies and a
prominent scholar, says China's "huge foreign-exchange purchasing capacity and
advantageous geographical position is extremely attractive" to the gas
exporters of Central Asia. China's energy cooperation will also promote
development of non-energy industries in the region such as chemical,
agricultural, transport infrastructure construction and light industries,
according to the Chinese analysts. Russia's security interests would also be
served, as unemployment, a root of instability, will be cut, they said.
Taking all factors into account, therefore, the People's Daily newspaper
concluded that the Chinese pipeline was an opportunity for Russia.
"Some people in Russia are concerned and media agencies have exaggerated the
event to attract public attention, asserting that China will become Russia's
major strategic competitor in the Central Asian energy industry,'' the
newspaper said. "In fact, it is not the case.
"Experts believe that the pipeline can transport natural gas produced both in
Turkmenistan and in Russia ... [the] China-Russia pipeline mainly transports
oil and natural gas produced in the eastern Siberian region. It is difficult to
transport natural gas produced in both the western Siberian region and Russia's
European part, so the China-Central Asia natural gas pipeline will perhaps act
as a 'key' to addressing the issue.
"In addition, the natural gas cooperation between China and Central Asia is
open and non-exclusive, and does not seize Russia's market or compete with
Russia for resources," the People's Daily said.
In essence, the Chinese argument is that while the Turkmen-Uzbek-Kazakh
pipeline possibly makes inroads into Europe's energy options it won't hurt
Russia's interests. The argument is well founded. With the commissioning of the
Turkmen gas pipeline, there is no doubt that US and European energy diplomacy
in Central Asia has been rendered a lethal body blow.
Through one mega project, Beijing has what Moscow has been striving for over a
decade with a piecemeal approach. The European Union's chances of winning
Turkmen supplies for its US-backed Nabucco pipeline project (connecting the
Caspian with southern Europe) now seem severely diminished. Moscow can heave a
sigh of relief, as the Nabucco project planned to cut Russia out of Europe's
direct gas trade with the Caspian.
Therefore, if there is a zero-sum game, it is like this: China's gain is
Europe's loss, which in turn can be Russia's gain since Russian gas is now
certain to remain Europe's main energy source for the foreseeable future.
Needless to say, Europe's continued dependence on Russian energy constitutes a
vital chip for Moscow in its efforts to forge partnerships with major European
countries.
Indeed, Russia can now advance its ambitious North Stream and South Stream gas
pipelines to Europe without constantly having to look over its shoulder for
competition from rival US-backed Trans-Caspian pipelines such as Nabucco.
Again, the US and Europe couldn't have missed the Chinese warning that Beijing
intends to make a serious bid at some time for the Russian gas produced in its
western Siberian region as well as its European part (which are at present the
principal sources of supply for Europe). In effect, China has projected itself
as a competing consumer of Russian gas.
All in all, the Chinese pipeline considerably strengthens Russia's stance. This
probably explains the quiet satisfaction in Russian Prime Minister Vladimir
Putin's voice when he was asked about the implications of the
Turkmenistan-China gas pipeline.
"The commissioning of the Turkmenistan-China pipeline is not going to affect
our plans to expand our own pipeline network, which could possibly also reach
China,'' Putin said. "I am referring to China's growing consumption of primary
energy resources. We maintain regular, close contact with our Chinese
colleagues on this issue. We know how fast the demand is growing there, and
they too are closely monitoring the situation. The gas link to Turkmenistan
will not undermine our plans."
Most important, the "loss" of Turkmen gas for Nabucco means that the project
itself now critically depends on sourcing Iranian gas. In other words, Iran
figures prominently in any serious European plans (strongly backed by the US)
to diversify its gas imports so as to cut down dependence on Russian energy
supplies.
US draws Central Asia into AfPak ...
To be sure, 2009 will be noted by historians as a landmark year for Central
Asian security. For the first time in the post-Soviet period, a truly regional
project has taken shape in Central Asia. It is a novel experience for a region
torn asunder by numerous intra-regional tensions, irritants and
misunderstandings - be it over water-sharing, Islamists, the environment or the
"great game". This was underscored by the presence of the presidents of
Turkmenistan, Uzbekistan and Kazakhstan at the ceremony launching the Turkmen
gas pipeline project.
It cannot be lost on the Central Asian elites that China has made such a high
level of regional cooperation possible. Hu in his speech at the ceremony cited
the Turkmen pipeline as a model of regional cooperation. China is reaping the
benefit of some 15 years of patient, painstaking diplomacy. It will now be a
Herculean task for the West to whip up Sinophobia among the Central Asians.
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