China taking a lead in the New Great Game – Part 4

Strengthening relations with CAS

The bilateral relations between the PRC and Kyrgyzstan have fortified in the post-Cold War era. Beijing sees Kyrgyzstan as a strategic base for trade expansion across Central Asia and the former Soviet space.

Kyrgyzstan seeks to make best use of its profits from re-exporting Chinese goods. That trade is worth an estimated US$ 250 million each year for Kyrgyzstan. China has granted Kyrgyzstan a loan of US$ 5.7 million and Tajikistan US$ 5 million to purchase Chinese
products.

Pakistan’s intent to become a “passageway for trade and energy” for western China and Central Asia by connecting Gwadar through upgraded Karakorum Highway with these areas entails favorable prospects.

Though the rest of the nations haven’t really been able to keep up with the Chinese in this New Great Game,a lot still remains to be seen as new scenarios will keep on unfolding over the next few years.

Uzbekistan, despite gaining freedom after the fall of the Soviet Empire, is largely reliant on Russia for crude oil supply.

A high-stake power struggle for CAS is underway between China and Russia. However, Russia and China are not alone in their interests in the Central Asian republics. Turkey has a big interest in the CAS and supports the free market system that Central Asia
is experimenting. For its part, Iran also seems to be an ideal market for Central Asian exports.

Impact of Chinese Policy on Central Asia

The Central Asian Republics are trying to diversify their infrastructural linkages with the rest of the world. During the Soviet time their communication linkages were Moscow-oriented. After independence, the Central Asian States started to develop roads,
railways and pipelines with almost all neighboring countries. In this context developing economic relations with China is helping Central Asian states to strengthen their independence.

Central Asia is getting capital and expertise from China to explore and exploit its hydrocarbon resources. Many Chinese experts and skilled labor force are now busy in development projects. The Central Asian States have succeeded in resolving border issues
with the PRC to a great extent.

China supported Uzbekistan`s government during the 2005 massacre in Andijon and Uzbekistan President`s first foreign visit following the Andijon crackdown was to China. Since then many steps have been taken by the two countries to strengthen their bilateral
relations.

During the same year, China signed 20 investment agreements, credit contracts, and other deals for a total sum of about $2 billion. The China National Petroleum Corporation (CNPC) has agreed in principle to purchase 10 billion cubic meters of natural gas
annually from Uzbekneftegaz.

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Posted by Taimoor Tariq on Aug 4 2012. Filed under Opinion. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry