One Silk Road, Two Great Powers

One Silk Road, Two Great Powers

By Ernesto Gallo, Giovanni Biava, Ernesto Gallo

The ‘New Economic Silk Road’ was launched by China’s President, Xi Jinping, in September 2013 in Kazakhstan’s capital, Astana. A few months later (in January 2015) Astana became one of the three capital cities of the Eurasian Economic Union (EEU), which started with Belarus, Kazakhstan, and Russia, and later enlarged to Kyrgyzstan and Armenia. Other governments (India and Japan among them) have since stepped up their engagement in Central Asia; last but not least, Iran has joined the game after its international ‘rehabilitation’ and gradual sanction-lifting. Is a new ‘Great Game’ under way? Who will control Eurasia? More specifically, how are relations between China and Russia evolving? Can the two ‘Great Powers’ co-exist in the region?

 

China and Russia in fact share many interests. The USA has long behaved as a common opponent in many controversies, from Ukraine to Syria and Taiwan to the South China Sea. Moreover, China and Russia have been championing the creation of an alternative economic and financial order, through institutions such as the BRICS Bank (which will soon start lending money) and the Asian Infrastructure Investment Bank (AIIB), in addition to the choice of gradually de-dollarising their economies and trade agreements. After all, China and Russia can jointly control Eurasia; China can be the leader in the economy, while Russia can continue play the role of main security provider. Both powers then see the fight on Islamic terrorism as a key priority. Yet China’s momentous economic penetration in Central Asia (where it is now the biggest trade partner in four out of five states) casts doubts over their future relations.

 

There are in fact a number of subterranean tensions between the two Giants. China keeps growing fast (6.7% in 2016’s first quarter, according to the latest estimates), while Russia’s economy is at the moment ‘stuck’ because of low oil prices. In addition, China has a solid one-party system, while Russian politics is more personalised; what will happen ‘after Putin’? Russia of course does not want to be China’s ‘junior partner’ and is concerned with China’s quest for resources, both in the Arctic and Central Asia. Beijing’s companies keep investing billions of dollars in Greenland in the search for uranium and rare earths, and already control about a quarter of Kazakhstan’s oil production. China National Petroleum Corporation (CNPC) and Kazakhstan’s KazMunayGaz have then developed a 2,228 km oil pipeline which now links Atyrau, on the Caspian Sea, to China. Even more important, Turkmenistan (which owns the world’s fourth largest gas reserves) is also connected to Xinjiang via Uzbekistan and Kazakhstan through a 1,833 km natural gas pipeline; and 77% of Turkmenistan’s exports go to China – a truly appalling figure. So far China’s hunt for natural resources has not created particular tensions, also because Russia has maintained cultural hegemony and control of security, especially through the CSTO (Collective Security Treaty Organisation). But how will relations between CSTO and China-led SCO (Shanghai Co-operation Organisation) develop over time? Can the two co-exist? The SCO mainly focuses on terrorism and will soon be officially joined by India and Pakistan; how can Moscow accommodate its rise? Furthermore, the construction of the ‘New Economic Silk Road’ will imply a more direct involvement of Chinese companies on Central Asia’s territory, with the building of railways, motorways, ports, and even cities; will Russia accept what has been labelled an ‘inadvertent’ Chinese empire?

 

Perhaps new players could be drawn into the game. Everyone at the moment is courting Iran. Tehran has enjoyed for years sound relations with both China and Russia, but last summer the West surprisingly stepped in. Is the USA trying to ‘use’ Iran to make inroads into Central Asia? In reality, Nazarbayev’s recent visit to Tehran (11-12 April) has brought economic advantages mainly to Kazakhstan. Hopefully the USA will stop meddling with Eurasian politics to fund or support protests or ‘coloured revolutions’ (Kazakhstan, Uzbekistan, Azerbaijan etc have so far been spared). It is difficult to see how the West, which is taking distance from the Middle East, could manipulate Iran, a country of about 80 million people with an extraordinary availability of resources. It is more likely neighbouring countries (such as India and resurrecting Pakistan) will join the game and try to reap the benefits. The Central and Southern Asia region is becoming more ‘Asian’, if anything.

 

Of course Eurasia’s complexity leaves a door open to a multiplicity of scenarios. Kazakhstan has about 4 million citizens of Russian descent and has been historically influenced by relations with Moscow. While it plays a key role in the ‘New Silk Road’ project, it will likely remain a close ally of Russia. Gas-rich Turkmenistan and Uzbekistan (the most populated among the former Soviet –stan) might instead look South (towards Iran and the Middle East) and be attracted by China’s strategy of connecting East, Central, and West Asia by improving infrastructure in Iran and Pakistan (see the 46 billion $ mammoth project, ‘China-Pakistan Economic Corridor’).

 

Another scenario – the one proposed by Kazakhstan’s president, Nazarbayev, would be that of a ‘Great Eurasia’, comprising the EU, the EEU and the New Silk Road. In this vision, India and the Middle East look marginalised, but the key weakness would lie in the EU. Politically disunited and subject to US hegemony, Europe could not really ‘partner’ with the EEU or China on an equal footing. While ‘Great Eurasia’ would be an ideal scenario, the feeling is the stress would be on Asia, rather than Europe. Russia and China are better positioned to extract the best of the two worlds, and their relations will likely shape the future of the Eurasian landmass in the years to come.

 

 

RIAC

 

 

06.05.2016

 

 

 
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