Beijing changes its approach to economic expansion in Central Asia

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A Chinese-built railway in Kazakhstan (Source: CGTN)

China has quietly but radically changed its economic approach to Central Asian countries, a shift with enormous consequences not only for the region but also for Beijing’s relations with Moscow. Until recently, China had provided loans to countries in the region to build railways across Central Asia as part of its Belt and Road initiative. These roads connected China to Europe, bypassing the Russian Federation (see EDM, March 21, 2019). Today, he has largely halted such projects and, instead, is investing heavily in manufacturing companies in Central Asia. On the one hand, this suggests that China may now consider making more use of Russian roads, at least in the short term, which Moscow will certainly welcome. But on the other hand, it means that the countries of Central Asia are likely to become both more economically independent from Russia and more closely integrated into China’s growing economic empire, an outcome that will further diminish the economy. Moscow’s influence in the region and could even reduce the willingness of Central Asian people to settle in Russia as migrant workers. None of these effects are likely to please the Kremlin.

This change appears to be less the result of a Chinese recalculation and more of Beijing’s recognition that its earlier approach had intensified anti-Beijing attitudes among the people of Central Asia – as popular as it may have been among the people of Central Asia. some elites in Central Asia (see EDM, September 10, 2019 and March 30, 2021). China must offer more to people in general and their governments if it is to maintain and then strengthen its influence there (Ia-centr.ru, November 11, 2020; Globalaffairs.ru, March 18, 2020).

China’s change of course was recently documented in a detailed Carnegie Endowment study by two academics, Dirk van der Kley from the National University of Australia and Nina Yau from the OSCE Academy in Kyrgyzstan (Carnegieendowment.org, October 15, 2021). The Central Asian Analytic Network (CAAN) verified that these findings are both correct and statistically significant (Caa-network.org, October 20). But while the Carnegie authors emphasize the ways in which local elites have forced the hand of the Chinese, CAAN’s discussion of their work places more emphasis on the ways in which China is willing to change its approach in order to achieve goals. wider – a particularly useful fix for the widespread view that Beijing is using its higher power to move forward regardless of the obstacles it encounters.

Over the past five years, van der Kley and Yau show that “the major investments in infrastructure development, which characterized China’s earlier economic participation in Central Asia, have all but ceased.” Some of the earlier projects are continuing, but the money does not come from grants or loans, but from the participation of Chinese construction companies. “Instead,” says CAAN, “Chinese companies are now trying to build factories, expand the reprocessing of raw materials, and modernize local agricultural businesses. This pattern is found in all the countries of Central Asia with the exception of Turkmenistan, which remains much more isolated and dominated by the state than the others (Caa-network.org, October 20). However, even there China has made inroads with its new approach (Caa-network.org, March 16).

Governments in the region are encouraging this shift out of fear that anti-Chinese attitudes will turn anti-government (Carnegie.ru, January 22; Windowoneurasia2.blogspot.com, January 25). Populations in general, especially labor groups, insist on this course correction given that China’s previous approach relied heavily on imported Chinese labor, which was consistently paid better than local workers and offered few opportunities for local populations to move forward. What both the governments and the peoples of Central Asia want is Chinese assistance in the reindustrialization of the region, a process that began in Soviet times but largely collapsed with it. the end of the Soviet Union and the subsequent exit of Russian specialists. Therefore, what China is doing now serves as a substitute for what the Russians did under communism. To the extent that this happens, China and the people of the region will benefit, but their attitudes towards other foreigners will change, perhaps dramatically.

In short, Beijing took on a role similar to that of Moscow in Soviet times, with the establishment of special educational institutions to train locals and affirmative action for regional populations. For a while, this policy will certainly gain local Beijing support or, at a minimum, reduce anti-Chinese sentiments. But in the longer term, it can create a revolution of growing expectations among the elites and populations of Central Asia, who will come to see the approach of China, although initially beneficial, as neocolonial and ultimately unacceptable. as these elites and the people of Central Asia did with regard to Russian rule in an earlier era.

Governments in Central Asia are certainly aware of this likely outcome. And so they seek to manage the process by reducing the number of annual permits for Chinese workers, forcing China to hire more Central Asian people to complete or run local industrial and construction projects. Central Asians want what China offers, both in terms of technology and export markets; but they are certain to be increasingly resistant to any Chinese movement that resembles attempts to control them. This is perhaps the most important lesson of China’s policy change: it too, like Russia and the West, must increasingly approach the countries of Central Asia not simply as objects of policy. but as subjects with which Beijing must negotiate rather than simply impose its will.


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