When, in mid-January 2020, President of China Xi Jinping paid a visit to Myanmar, where he signed agreements on new infrastructure projects, it seemed that nothing could interfere with the Chinese Belt and Road initiative (BRI) [Koh, 2020]. Then, the probability of a global pandemic was low and China was fighting coronavirus by itself. However, COVID-19 has spread rapidly around the world, and countries introduced quarantine measures, putting any joint economic activity on pause. As of today, the COVID-19 pandemic is likely to lead the world into an economic crisis comparable to the times of the Great Depression. This situation would surely affect China’s active economic promotion of the BRI. Even though many countries prepare to experience turbulence, it now seems possible to outline some future directions for the development of the BRI. In this article, the author focuses on Central Asia and attempts to understand the future of the Chinese initiative in the region.
The BRI is a kind of an umbrella brand, which includes different projects that are credited or invested by China. Time has shown that the main objective of the initiative is the development of the Chinese economy. Regarding Central Asia, the BRI’s primary goal is the development of Western China, which is one of Xi Jinping’s domestic policy priorities [Takeuchi, 2019]. The second goal of the BRI in the region is to create a friendly environment around China. Beijing needs to pacify the country’s most troubled region, Xinjiang, and in the longer term keep the Central Asian region from joining the anti-Chinese camp.
Both of these goals will not lose relevance due to coronavirus. Moreover, the People’s Republic of China (PRC) can redouble its attention to the region, because the economic crisis will cause a contraction of the Central Asian states’ budget incomes, which means a decrease in living standards and an increase in risks of various social upheavals. However, in this case, anti-Chinese sentiments may intensify in the region. Economic cooperation with China has already become a constant cause of dissatisfaction with authorities in Central Asia [Fergana, 2019; EurAsia Daily, 2020a]. The resulting protests lead to real economic consequences. For example, because of the protests in Kyrgyzstan, a Chinese company abandoned plans to invest $280 million in the construction of a trade-logistics center in the Naryn region [EurAsia Daily, 2020b]. Growing anti-Chinese sentiments will also be helped by the spread of anti-Chinese information propaganda in the world, which may increase popular pressure on regional authorities. For example, as part of the ongoing information war, China is accused of creating the pandemic.
Beijing fears that instability may arise on the border with Xinjiang, and this is an essential issue for China’s security. Therefore, the PRC is compelled to provide support to the Central Asian countries to preserve and maintain stability. Moreover, it is possible that Chinese support will not be confined to investments in infrastructure projects but will even include indirect financial injections to fulfill budgetary obligations of Central Asian authorities. In addition, China can provide technology services to ensure effective security. Huawei has already installed a “safe city” system in Tajikistan and signed a similar contract with Uzbekistan [Huawei, 2019; Ozodi, 2019].
At the same time, the pandemic and the economic crisis have opened for China a “window of opportunity” to increase its political and economic presence in Central Asia at the expense of other external players. In the near future, the European Union will fully concentrate on its own problems, the United States will continue to lose its global leadership, and Russia will not have enough resources to help the Central Asian states recover from the economic shock. Consequently, China will be the only source of assistance for the region. Chinese business has a chance to increase its importance in the manufacturing sector in Central Asia. As the collapse in commodity prices has led to a sharp decrease in budget revenues, the Central Asian countries need to increase the export potential of other industries. For example, Kazakhstan can increase exports in metallurgy and the mining sector. Prices in these sectors have also fallen, but not so significantly, and it appears that the Chinese industry has no plans to reduce metal consumption. Without doubt, all such activities by China will take place under the BRI’s “umbrella”.
Increasing China’s political presence in Central Asia becomes possible amid an accelerating rapprochement with Russia. China has become a key economic partner for Russia in some areas, significantly narrowing Moscow’s ability to counteract Beijing’s policies in Central Asia. Currently, guaranteeing security and stability remains one of the important directions of the Russian policy in the region. However, the introduction of Chinese technology can reduce the Russian weight in this area. At the same time, Moscow is still the most important player in providing security of the region against external threats.
Forecasting the future of the BRI requires the assumption that China will be able to recover its economy relatively quickly. In this case, the development path of the BRI will not undergo significant changes. Today, the BRI is suspended due to interruptions in transport communications, as well as the diversion of China’s resources to fight the virus. Thus, an increase in Chinese investment in Central Asia will be a signal that the PRC is ready to return to the active implementation of the BRI. At the same time, Beijing will be able to impose its conditions upon the regional governments more easily, but the main thing is to maintain a balance to build up China’s reputation as a responsible power. Simultaneously, the Central Asian states need to take advantage of low hydrocarbon prices and create new industries with the help of Chinese investments. Interaction with China will reduce effects of the crisis on the Central Asian countries, as well as give hope for the diversification of economies. However, it can lead to an even greater dependence on Chinese investment and loans, and Kyrgyzstan and Tajikistan, which already have a significant external debt to China, may permanently fall into a debt trap. New circumstances increase dependence of Central Asia on the BRI and open up new opportunities for Beijing. Therefore, the Central Asian governments need to pursue a clearer and more precise policy. It is necessary to prepare for this process and calculate possible consequences of the increasing presence of Chinese business for the region.
To conclude, coronavirus and its consequences will increase the convergence of Central Asia and China. This will happen despite a significant level of mistrust towards China that exists in the region. To overcome this mistrust, a number of problems need to be solved. For example, Kazakhstan should handle the corruption scandal around the construction of a monorail in Nur-Sultan that involved a Chinese company. If not addressed, the mistrust will cause various disagreements. Recently, the Ministry of Foreign Affairs of Kazakhstan voiced a protest against an article posted on a Chinese website under a very provocative title [Tengrinews, 2020]. This incident has prompted the parties to reassure each other in their commitment to strategic partnership. In any case, at the moment, despite all potential negative consequences, the region has no choice but to work more closely with China.
References:
EurAsia Daily (2020a). About a thousand people attended an anti-Chinese rally in Kyrgyzstan. Retrieved from https://eadaily.com/ru/news/2020/02/17/na-antikitayskiy-miting-v-kirgizii-vyshli-okolo-tysyachi-chelovek. Accessed on 13.05.2020.
EurAsia Daily (2020b). Rallies in Kyrgyzstan scared away Chinese investors. Retrieved from https://eadaily.com/ru/news/2020/02/18/mitingi-v-kirgizii-otpugnuli-kitayskih-investorov. Accessed on 14.05.2020.
Fergana (2019). Anti-Chinese rallies in Kazakhstan. Retrieved from https://fergana.ru/stories/antikitajskie_mitingi_v_kazakhstane/. Accessed on 13.05.2020.
Koh, Collin (2020). Can Xi Jinping’s visit help China cash in on Myanmar’s image crisis? Retrieved from https://www.scmp.com/news/china/diplomacy/article/3046656/can-xi-jinpings-visit-help-china-cash-myanmars-image-crisis. Accessed on 13.05.2020.
Huawei (2019). President of Uzbekistan visits Huawei Research and Development Center in Beijing. Retrieved from https://www.huawei.com/uz/press-events/news/uz/2019/uzbekistan-president-visited-huawei. Accessed on 14.05.2020.
Ozodi (2019). In Dushanbe, street cameras will begin to recognize faces. Retrieved from https://rus.ozodi.org/a/30003322.html. Accessed on 14.05.2020.
Takeuchi, Hiroki (2019). Domestic politics of Chinese foreign policy: where will Xi Jinping bring China? Retrieved from https://www.tandfonline.com/doi/abs/10.1080/14799855.2019.1594782. Accessed on 14.05.2020.
Tengrinews (2020). Kazakhstan sent a protest to China. Retrieved from https://tengrinews.kz/news/kazahstan-napravil-notu-protesta-kitayu-398653/. Accessed on 14.05.2020.
Note: The views expressed in this blog are the author’s own and do not necessarily reflect the Institute’s editorial policy.