Friday, August 25, 2006

What is China's goal in Central Asia?

Martha Brill Olcott’s recent testimony before the U.S.-China Economic and Security Review Commission
on China’s role in Central Asia is a well documented discussion of the positive aspects on this engagement. Olcott appropriately points out that China has carefully pursued its economic goals in Central Asia, and it has done so often through fair competition with other international investors (or as fair as such competition can be in Central Asia). Dr. Olcott, however, ignores the more human aspects of China-Central Asian relations in her testimony.

As I pointed out in a recent post about joint Kazakhstan-China joint “anti-terrorist” exercises, there is serious distrust of China among Central Asians. Furthermore, my friend Edil Baisalov of Kyrgyzstan added a brief comment to that post noting that this “distrust of China is millenia old.” Those who have spent significant time in the region, and in Kazakhstan and Kyrgyzstan in particular, are well aware of this distrust, which is widespread through virtually all parts of society. There is also reason for this distrust that goes beyond historical vendetta. Central Asians fear the size of China and its apparent thirst for territory. Even if China is not to attempt to violate the territorial integrity of the Central Asian states in the upcoming decades, there is understandable fear that Chinese will do so through mass migration—something that is all too well known by much of Southeast Asia. Also, it is obvious that China’s massive energy needs will be increasingly important to the country in the upcoming decades and could eventually supercede any concerns of recognizing the sovereignty of neighboring states.

Furthermore, contrary to Dr. Olcott’s assertions that China only began to think about Central Asia economically in the last five years, Chinese businessmen in Central Asia have long had significant interest in entering and staying in the region. I remember talking to a group of Chinese businessmen in 1997 who told me quite bluntly that they thought it easy to take advantage of the Kazakhs due to their limited short-term perspective. As one of the businessmen said with a grin, “the Kazakhs only see the tenge; they do not see the dollar that lurks behind it.”

Finally, China’s engagement in Central Asia has begun to change significantly in the last three years with the growing power of the Shanghai Cooperation Organization (SCO) and China’s apparent desire to take advantage of the Central Asian leaders’ fear of “colored revolutions” that are seen as western-inspired plots. For the first time since the fall of the U.S.S.R., there is a sense that China wants to become politically involved in the events of Central Asia. This may be, as Dr. Olcott suggests, merely a reaction to the establishment of U.S. military bases in Central Asia, but it may also be a play to gain favor in the region vis a vis the United States and Europe.

I do not post these opinions in order to suggest that China is an imminent threat to Central Asia and western involvement in the region, but I do believe that the Chinese engagement in the region is less benign than Dr. Olcott suggests. Perhaps Dr. Olcott is correct that the United States has no need to worry about China’s involvement in Central Asia, but this is for reasons other than those she has stated. Rather, the U.S. has no need to worry because Central Asians will continue to be wary of China for both historical and more recent reasons. The question is whether the Central Asian states can continue their balancing acts of international interests enough to prevent a complete dependency on China in the next thirty to fifty years.

7 Comments:

Anonymous Edil said...

I don't always readily agree with everything Dr.Olcott says but I have to say her testimony on China's role in CA is accurate and quite insightful.

Dr.Olcott's is most correct to note that 'small and medium sized investors from China are now dominating a number of economic sectors in Kyrgyzstan'.

I know of dozens entrepreneurs large and small who either succeeded or are looking actively to find a partner from across the border. Most of our nascent middle class is made of literally tens of thousands of shuttle-traders b/w China and bazaars of Bishkek, Karasu, Almaty and Siberia.

If you look where we're importing from various business equipment, industrial goods and paraphernalia is coming - China will soon outpace Moscow, Europe, Turkey and Emirates. Many businesses and government agencies now discovering cheap Chinese suppliers, be it industry machines, print media or transparent ballot boxes.

While emergence of China as global warehouse is not new, it is quite a new and surprising phenomenon for Kyrgyzstan. Most of us never expected such a competitive and innovative presence by Chinese interest.

And if the US policy is to diversify trading partners and open markets for Central Asian countries (as to decrease their dependence on the country we will not name), then yes, indeed, Dr.Olcott is right with her positive assessment of China's role in the region.

Those fears and distrust will always be there but if we want to develop we better drop those xenophobic attitudes. the Kyrgyz have adapted to the new realities quite well - afterall, it was our former president Akaev who denied to admit our landlocked status, claiming that the country was located on the shores of the great Chinese Ocean! Akaev got many things wrong but he was right about China :)

9:47 AM  
Anonymous Anonymous said...

Awesome...time to start calling MBO's bluff on this. Her on-the-ground research is limited and completely hearsay.

As an aside and reply to edil, may I add this little tidbit: I recently visited one of the three oil refineries in Kazakhstan on a business trip. The refinery is owned by a Kazakh/Chinese consortium.

During the discussions it was pointed out that when dealing with large, important infrastructure projects (like oil & gas), Chinese companies do not use Chinese-made equipment, but in fact import European or American made high-quality equipment, tacitly acknowledging that most products which come from China are not world class now, or in the near future.

This adds to the consternation of Central Asian's views on China: unlike the 'Buy American', etc. policies of most multinationals, China has exactly the opposite view: let's dump low-quality commodity products on our neighbors, while we use the proceeds to buy 'the good stuff'...

China is seeking to dominate commodity markets, and to produce second-rate consumer commodities (furniture, being among the quickest growing).

With that analysis in hand, what incentive would any Central Asian country have in joining WTO?

And where is MBO on this?

5:29 AM  
Blogger Sean R. Roberts, PhD said...

Edil,

The only question is whether China is more likely to be the country on which Central Asia becomes fully dependent in the medium to long term. Controlling the flow from the "ocean of China" might become a difficult task for the countries of Central Asia.

12:04 PM  
Blogger clifford said...

Sean -- what is your email? Cliff Brown

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