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Bilateral China-Central Asia Deals Reveal Forum's Shortcomings

Kyrgyz President President Almazbek Atambaev (right) and his Chinese counterpart, Xi Jinping, in Bishkek on September 11
Kyrgyz President President Almazbek Atambaev (right) and his Chinese counterpart, Xi Jinping, in Bishkek on September 11
Chinese President Xi Jinping arrived in Bishkek for this week's Shanghai Cooperation Organization (SCO) summit with a bundle of new Central Asian energy contracts already in hand.

Despite the opportunity for talks with heads of state from across the region during the September 13 summit, Xi did not wait to start strengthening Beijing's economic ties in Central Asia.

Instead, Xi visited the capitals of four former Soviet republics in Central Asia ahead of the summit and secured bilateral energy deals that are each worth billions of dollars.

The summit brings together heads of state from the SCO's six members -- China, Russia, Kyrgyzstan, Kazakhstan, Tajikistan, and Uzbekistan -- with Turkmenistan considered a "special invitee."

Iran, Pakistan, Afghanistan, and India are attending as "observers" and reportedly aspire to become members.

Bilateral Or Multilateral?

But Xi's energy and infrastructure deals ahead of the Bishkek summit show that the SCO -- created in 1996 with the aim of improving economic and security ties between members -- is not the region's primary forum for cooperation when it comes to investment and trade.

James Reardon-Anderson, a professor of Chinese studies and a senior associate dean at Georgetown University's School of Foreign Service, says that he believes as a multilateral forum, the SCO does not have "the same salience as any bilateral negotiations with established governments in the region."

READ MORE: Full Interview With James Reardon-Anderson

Andrei Lukin, an expert at the Moscow State Institute of International Relations, says one big drawback for the SCO's economic aspirations is its lack of a collective financing tool for major infrastructural projects. Despite years of discussions about creating a regional development bank, the SCO has yet to put the idea into action.

Xi has been offering funds from Beijing's state institutions, such as the China Development Bank, to finance projects under the new bilateral deals he has brokered across Central Asia.

Energy And Transport

For Beijing, the goal in Central Asia is to secure energy supplies and build transportation networks to carry mineral resources back to China.

Reardon-Anderson says that this has created a rivalry with Russia because Moscow wants to control Central Asian energy exports -- particularly from the region's main oil producer, Kazakhstan. "The big issue for the Russians is they want to be sure that they get the lion's share of the Kazakh oil," Reardon-Anderson says. "That means not having it siphoned off to China."

Kazakh President Nursultan Nazarbaev has been playing Russia and China off each other in his negotiations with the two countries. That has allowed Xi, with billions of dollars in state financing at his disposal, to get a foot in the door of Kazakhstan's oil sector this month during his trip to Astana.
Kazakh President Nursultan Nazarbaev (right) and his Chinese counterpart Xi Jinping applaud after a gas pipeline launch.
Kazakh President Nursultan Nazarbaev (right) and his Chinese counterpart Xi Jinping applaud after a gas pipeline launch.

Nazarbaev said after meeting with Xi that Astana and Beijing were "entering a new level" of cooperation with a deal that will see China help build "an oil refinery that Kazakhstan needs."

Xi said the deal made China a shareholder in Kazakhstan's oil sector with an 8.33 percent stake in the firm that is developing the massive Kashagan (Qashaghan) oil field.

First Stop Ashgabat

Xi began his Central Asia tour on September 3 in Ashgabat, where he and Turkmen President Gurbanguly Berdymukhammedov signed a natural-gas delivery contract meant to double Turkmenistan's gas exports to China by 2020.

That deal calls for the state-run China National Petroleum Corporation to help construct three new production facilities in the South Yolotan gas field near the Afghan border.

The Chinese president also visited Tashkent, where he initialed a protocol with Uzbek President Islam Karimov on extending an existing China-Kyrgyzstan-Uzbekistan pipeline to Turkmenistan's South Yolotan field.

That pipeline would have the same annual capacity as the three new gas facilities being built in Turkmenistan -- 30 billion cubic meters.

News Quiz: The Shanghai Cooperation Organization

News Quiz: The Shanghai Cooperation Organization

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Xi this month has also been signing deals to build new roads, railways, and other infrastructure to speed the transport of resources into China from Central Asia and beyond.

In Bishkek on September 11, during talks with Kyrgyz President Almazbek Atambaev, the two leaders signed agreements on infrastructure projects worth $3 billion. Those projects include construction of additional gas pipelines, a new highway to connect Kyrgyzstan's northern and southern regions, and upgrades for a Bishkek heating plant.

Security Too

Xi also has been talking with Kyrgyz officials about boosting security cooperation along their common border.

Chinese analysts say Beijing is worried about the infiltration of drug traffickers, religious extremists, and Uyghur separatists -- militants from a Muslim ethnic group that is present in western China and Central Asia.

Regional security concerns are compounded by NATO's plans to dismantle its supply corridors through Central Asia and withdraw from Afghanistan by the end of 2014.

That has created a scenario for the Bishkek summit where security cooperation in the SCO is outpacing the organization's significance for fostering economic development.

Written by Ron Synovitz with additional reporting by RFE/RL's Kyrgyz Service

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