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China, EU Wait In The Wings For Access To Central Asia

The German end station for Nabucco, the planned gas pipeline intended to access Central Asian resources and bypass Russia
The German end station for Nabucco, the planned gas pipeline intended to access Central Asian resources and bypass Russia
Although Russia and the United States are most often mentioned as the contestants of the "new Great Game" that began after the fall of the Soviet Union, other players have also entered the arena.

Central Asia, possessing billions of barrels of recoverable oil and trillions of cubic meters of natural gas, is located fortuitously between Europe and China -- two massive consumers of energy resources. The region also sits on the frontier of the Islamic world, and Beijing and Brussels are among those who see Central Asia as a potential bulwark against potential security threats emanating from Iran, Afghanistan, and Pakistan.

China has multiple motives in Central Asia, and has adopted an ingenious policy for dealing with the region, according to James Nixey, manager and research fellow for the Russia and Eurasia program at Chatham House.

"I would assess it as being a considerable degree of genius,” Nixey said. “Chinese foreign policy is very long-term and they're much happier as they were -- just to give an example of Hong Kong -- to sit back and wait for things to come their way, as they know it will."

As for security concerns, Beijing has found success in exerting its influence through a regional alliance.

China, Russia, and four of the Central Asian states -- Uzbekistan, Tajikistan, Kyrgyzstan, and Kazakhstan -- compose the Shanghai Cooperation Organization (SCO), formed in 2001 after Uzbekistan joined a grouping known as the Shanghai Five.

Security Threats

Matthew Clements, a country risk analyst for Eurasia at London-based IHS Jane's, says the SCO is China's means of preventing threats from Afghanistan and Pakistan from spilling into Central Asia and into its own Muslim regions.

China is “also in a position where it is able to, to a degree, enable the security of the region, the stability of the region,” Clements said. “China doesn't want any instability in the region, especially as it is very sensitive about the Uyghur separatism in the region."

After riots broke out between Muslim Uyghurs and Han Chinese in China's western Xinjiang Province in July, Beijing's Central Asian partners in the SCO were noticeably silent, even those countries are also home to hundreds of thousands of Uyghurs.

A statement issued by the SCO after the violence simply offered sympathies with the family members of those killed, and said that the SCO's member states regarded the situation in Xinjiang as a Chinese internal affair.

Nixey says China uses the SCO for political leverage in the region, at the expense of fellow member Russia, which also wields influence through the Collective Security Treaty Organization (CSTO). He notes that at the 2008 SCO summit, the grouping rejected Russia's proposal for independence for Georgia’s breakaway regions of Abkhazia and South Ossetia, to Russia's chagrin.

“The SCO is effectively China's method for influence and persuasion and power projection in Central Asia,” Nixey said. “And the Chinese SCO is far more powerful than the Russian-led CSTO, which is essentially the same sort of thing -- Russia's method or instrument of influence in Central Asia. So the Chinese are playing a multilateral, clever, and long-term game."

Energy Strategy

Although security issues often make the headlines, China's main interest is gaining access to its neighbors' energy resources, and there too it enjoys a number of advantages over regional player Russia, and outsiders such as the United States and the European Union.

Central Asian states see neighboring China as a potential consumer of their own exports, and Beijing never seems to be short of money. China also refrains from criticizing the internal politics of Central Asian governments, something that can't be said of the West.

Chinese companies have been active in building the pipelines, roads, and railways needed to carry the resources back to China. Chinese companies, which enjoy a reputation for completing projects on time, train and employ local workers as well as bringing in their own labor.

The approach is bearing fruit, Clements explains. China is “starting to receive oil and gas and also uranium and other minerals, so natural resources are coming from the region," he said.

Russian companies had a near monopoly over the export of Central Asia's energy resources in the 1990s, but much has been done to even the playing field.

China has helped build an oil pipeline from western Kazakhstan that is already in operation, and a gas pipeline from Turkmenistan that is expected to go online at the end of this year.

EU In The Game

The European Union, too, is looking to break Russia's monopoly over Central Asian energy resources.

Europe receives Central Asian oil and gas via Russia, and some in the EU have raised concerns about a heavy reliance on Russia for energy supplies. Incidents such as the suspension of Russian gas supplies at the start of this year, owing to a dispute between Ukraine and Russia, reinforce the view that the EU needs urgently to diversify its energy import sources.

To help offset such fears, the EU is supporting the 3,300-kilometer Nabucco pipeline project to bring gas from Azerbaijan and some Central Asian nations to the heart of Europe.

This year, the EU unveiled its "Southern Corridor-New Silk Route" strategy that aims to greatly develop and enhance road and rail links and pipelines between the Caspian area and Europe.

The EU strategy is having some success, Clements said, but “they're still limited in the progress they've made in terms of trying to engage Turkmenistan into a trans-Caspian pipeline deal. We have seen some progress there. We've seen states that previously turned away from the West, especially Uzbekistan, again maybe altering its course into a sort of middle path between the West and Russia."

The recent signing of an agreement between Nabucco transit countries brings the project closer to realization.

The EU will pay the cost of construction so that the Central Asians have a new export route to one of the most valued energy customers in the world -- the EU.

The EU's strategy also serves to strengthen Central Asia's hand in dealing with Russia.

A pipeline explosion that cut off Turkmenistan's gas exports to Russia in April is one example. Turkmen officials blamed Russia, and Moscow rejected the blame. But the events may have helped lead Turkmenistan to pursue other energy partners.

Turkmenistan has since signed a deal with Germany's RWE for rights to explore a bloc on the Turkmen Caspian shelf. In July, Turkmenistan's foreign minister went to Brussels and Washington for energy talks. The same month, Turkmenistan said it would sell gas to Nabucco.

"If you look at the trends I tend to think there's a bit of ebb and flow,” says Nixey of Chatham House. “At the moment [the EU is] on a bit of a high so they may be feeling quite pleased with themselves.”

“The fact that the Kyrgyz have reversed their decision on Manas air base or that the Uzbeks are making more overtures toward the EU right now is a good thing in so many ways,” he said. “But the fact of the matter is what is given can just as easily be taken away."

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