Monday, May 25, 2009

The Great Game Afoot in Central Asia

AFP describes China's moves in Central Asia:
A China expert at Almaty's Institute for Economic Strategies, Adil Kaukenov, revealingly recalls a conversation with a Chinese counterpart who told him: "We're walking all over the world with suitcases stuffed full of money, because we have to spend it."

China's investment pattern in Central Asia fits with a broader strategy that has seen Beijing snap up assets across the world in a drive to convert its massive foreign currency reserves into concrete holdings.

But for nearly two decades since the 1991 Soviet collapse, Beijing has also shown special interest in using its pocketbook to secure stability along its Central Asian border, funding infrastructure projects and investing in key sectors.

Of primary concern for Beijing is the long, porous border between Kazakhstan and China's restive Xinjiang province, says Kaukenov.

Xinjiang is home to a Muslim Uighur ethnic group feared by Beijing for its supposed separatist views -- a tension critics say has resulted in human rights abuses by the region's authorities.

"China has always, since the collapse of the Soviet Union, been extremely worried that terrorists from Xinjiang would find support from the governments of Central Asia," Kaukenov said.

Now, with Russia and the United States struggling to compete in the face of domestic economic woes, China has a chance to secure the stability and assets it craves at bargain-bin prices.

Multi-million dollar infrastructure projects in Tajikistan and Kyrgyzstan -- both wracked by chaos and disorder since the fall of Soviet Communism -- are prime examples of China's strategy.

Electrification and road projects improving the quality of life in these impoverished regions make them less likely to spawn extremists, but also open up their markets to Chinese goods -- a win-win situation for Beijing.

Nargis Kassenova, a professor at the elite Kazakhstan Institute of Management, Economics and Strategic Research (KIMEP), has researched Chinese investment and development in Kyrgyzstan and Tajikistan and detects impressive gains for Beijing.

"Tajikistan is so isolated, and to see all these Chinese companies there and the investment in Tajikistan I was pretty surprised," she said.

"In pretty much all spheres now you have Chinese goods, Chinese companies.... The level of penetration is quite impressive."

No single move is more emblematic than the ten billion dollar loan package secured by Kazakhstan, the region's beleaguered economic powerhouse.

Under the terms of the deal, the China National Petroleum Company (CNPC), will loan up to five billion dollars to Kazakh energy giant KazMunaiGas, with a further five billion going to the Development Bank of Kazakhstan.

Although Syroezhkin described the loan package as "friends helping each other out", China also received a 49 percent stake in the country's fourth-largest oil producer, MangistauMunaiGaz, as part of the deal.
China also took a stake in a Singapore energy firm recently, and is hunting up deals elsewhere. The Great Game is alive and well in Central Asia -- as the first link below notes. And not just Central Asia either -- Sri Lanka's recent pounding of the Tamil Tigers was due to Chinese aid, and China is building a "commercial" port in that island nation.


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1 comment:

Anonymous said...

Chinese leave Central Asia..

Chinese traders leave as Kyrgyzstan closes markets