The "Made in China" label can be found on goods sold worldwide. For Central Asia, most of what is new in the last five years was "Made by China." But that appears to be coming to an end, at least temporarily.
"The China Petroleum Daily" recently quoted Wang Dongjin, the deputy general manager of the China National Petroleum Corporation (CNPC), as saying that the CNPC would be taking a five-year break in investment. Wang said that in order "to evaluate an overseas project we should look at overall returns instead of just production." "The China Petroleum Daily" went on to report that the CNPC would "no longer be targeting fast expansion" and would cut its annual overseas oil and gas investment for the five years ending 2015 to focus on returns rather than output.
That is very bad news for Central Asia's governments, which in the last half-decade have grown accustomed to having Chinese energy companies, such as the CNPC, come to their countries and sign extremely lucrative contracts. Not only have those contracts led to huge amounts of revenue at home, but Chinese companies have developed a system whereby Chinese companies involved in projects in Central Asia build export -- be it pipeline, rail, or road -- plus guarantees to buy large amounts of the product, whether oil, natural gas, uranium, etc. To keep the individual Central Asian states on as partners, China has also lent them money, when necessary, to cover their portion of the investment in the project.
For the next half-decade, the Central Asian states will have to find new investors. Well, almost all the Central Asians. "The China Petroleum Daily" did mention some exceptions, writing that CNPC units in Kazakhstan and Turkmenistan would develop new projects in the coming five years, while maintaining steady output growth in existing projects.
-- By Bruce Pannier
"The China Petroleum Daily" recently quoted Wang Dongjin, the deputy general manager of the China National Petroleum Corporation (CNPC), as saying that the CNPC would be taking a five-year break in investment. Wang said that in order "to evaluate an overseas project we should look at overall returns instead of just production." "The China Petroleum Daily" went on to report that the CNPC would "no longer be targeting fast expansion" and would cut its annual overseas oil and gas investment for the five years ending 2015 to focus on returns rather than output.
That is very bad news for Central Asia's governments, which in the last half-decade have grown accustomed to having Chinese energy companies, such as the CNPC, come to their countries and sign extremely lucrative contracts. Not only have those contracts led to huge amounts of revenue at home, but Chinese companies have developed a system whereby Chinese companies involved in projects in Central Asia build export -- be it pipeline, rail, or road -- plus guarantees to buy large amounts of the product, whether oil, natural gas, uranium, etc. To keep the individual Central Asian states on as partners, China has also lent them money, when necessary, to cover their portion of the investment in the project.
For the next half-decade, the Central Asian states will have to find new investors. Well, almost all the Central Asians. "The China Petroleum Daily" did mention some exceptions, writing that CNPC units in Kazakhstan and Turkmenistan would develop new projects in the coming five years, while maintaining steady output growth in existing projects.
-- By Bruce Pannier