The China-Central Asian Summit Begins In Xi’an
The China-Central Asian Summit will take place in Xi’an on May 18-19, 2023. Beijing views the summit as one of the most important during 2023. We provide analysis and background.
From May 18-19, all five Presidents of the Central Asian countries are visiting China for the China-Central Asian Summit and including Chinese President Xi Jinping as well as Presidents Kassym-Jomart Kemeluly Tokay of Kazakhstan, Sadyr Japarov of Kyrgyzstan, Serdar Berdimuhamedow of Turkmenistan, Emomali Rahmon of Tajikistan and Shavkat Miromonovich Mirziyoyev of Uzbekistan.
They will meet with Chinese President Xi Jinping as part of a regional overview and hold separate bilateral talks. They are expected to discuss the international agenda, including the Ukrainian crisis and its economic consequences. In addition, they will talk about regional issues such as the abolition of visas and the construction of a new gas pipeline.
The China-Central Asia Summit is being held in Xi’an, with Beijing emphasizing the importance of the upcoming consultations. The Chinese Foreign Ministry said that the summit will be one of the two main events of this year (the second is the Belt and Road Initiative forum). The leaders of the six countries will also meet in person for the first time, with previous discussions being held via video link, and is taking place at nearly the same time as the G7 summit is being held in Japan.
There are already expectations as to regional developments. Astana has reported that Kazakh President Tokayev and Xi Jinping would sign a visa-free agreement. That was previously detailed on Silk Road Briefing here. Citizens of Kazakhstan in China and Chinese in Kazakhstan will be able to stay without a visa for up to 30 days after crossing the border and 90 days for a 180-day period.
Uzbekistan expects to discuss the construction of a new railway. Turkmenistan analysts think that Turkmen President Berdimuhamedov will raise the issue of building a fourth branch of the gas pipeline to China, which also requires joint work with Tajikistan.
China-Central Asian Trade
The basis of relations between China and Central Asia is the economy. According to Chinese Customs, in 2022, trade with five countries in the region grew by 40 percent, reaching US$70.2 billion, a historical record high. In Q1 2023, mutual trade increased by another 22 percent and amounted to US$17.8 billion.
The Central Asian countries export raw materials, including oil, gas, gold, and aluminum. China supplies goods with high added value: machinery, equipment, electrical equipment, and spare parts. There is a noticeable asymmetry in mutual trade. The share of the Central Asian countries in China’s foreign trade is only 1.1 percent. That means there is plenty of room for development, especially as China is looking for new partners as its trade with the United States and European Union declines. What China previously sourced from the West, such as agriculture products, is now looking to obtain from the rest of the world, with Central Asia very much part of this.
In terms of Central Asia, China has become one of the region’s key partners. For example, in Kyrgyzstan, China accounts for 34 percent of all foreign trade, and Kazakhstan for 18 percent.
China-Central Asian Investments
The volume of Chinese investments in Central Asian countries has reached US$15 billion. Chinese Minister of Commerce Wang Wentao recently specified that in 2022, projects were launched in such areas as geological exploration, oil and gas production and processing, interconnectedness, and digital technologies. As part of the Belt and Road Initiative, roads are being laid in the countries of Central Asia and new trains are being purchased. The flagship project is the construction of the China-Kyrgyzstan-Uzbekistan railway line. According to the signed documents, the feasibility study of the project will be completed this year, the first operational trains are expected to be running in 2028.
China is also establishing defense cooperation with countries in the region. Of particular importance in this sense is the interaction with Tajikistan, which partially acts as a buffer between China and Afghanistan as the Afghan-China connecting Wakhan Corridor runs between them.
In November 2021, Beijing and Dushanbe signed an agreement according to which the armies of the two countries conduct exercises every two years. Beijing is also modernizing old and building new frontier posts along the Tajik-Afghan border, building a base for Tajik special forces in the Gorno-Badakhshan Autonomous Region.
Other countries in the region also participate in joint multilateral (usually within the framework of the SCO) and bilateral exercises with China, most of which practice the fight against terrorism. In addition, the Central Asian countries buy weapons from China. Kazakhstan received drones, Tajikistan armored vehicles and patrol vehicles, and Uzbekistan and Turkmenistan anti-aircraft missile systems.
China is actively presenting itself in the educational field. Thirteen Confucius Institutes have been opened in Central Asian countries, where students study the Chinese language and culture. In addition, the Chinese Ministry of Education provides grants for those who want to receive higher education in China. Before the coronavirus pandemic, 35,000 students from Central Asia were studying in China. During the quarantine, however, most of them left and are now studying online.
There are difficulties between China and the countries of Central Asia. Older officials and post-Soviet republic elites are concerned about the growing influence of a huge neighbor. From time to time, corruption scandals associated with Chinese firms erupt in Central Asia.
For example, in Uzbekistan at the beginning of this year, millions of dollar worth of unrecorded gas exports were allegedly discovered. In Kyrgyzstan, inaccurate customs statistics worth billions of dollars were uncovered, probably related to smuggling. That said, digital infrastructure will help combat these types of activities in the future, as all countries lose out on tax revenues, drug addiction, and security problems.
Russia is a keen observer of the summit, with all of the attendees bar China either members of the Commonwealth of Independent States (CIS), Eurasian Economic Union (EAEU), or Shanghai Cooperation Organisation (SCO). Andrey Kazantsev, professor at the Faculty of World Economy and World Politics at the Moscow State Research University, Higher School of Economics, believes that there will be no revolutionary decisions at the summit.
“I think the Chinese noticed that the Japanese, Americans, and Europeans have their own dialogue platforms with the Central Asian countries and decided to copy the format. It is likely that economic issues will be on the agenda; China usually relegates political issues to the background. Probably, they will announce some new initiatives, but I do not expect any breakthroughs,” Kazantsev says.
Sergei Lukonin, head of the Chinese Economics and Politics Department at IMEMO RAS, explains that Beijing is striving to solve post-COVID-19 economic problems, plus it sees itself as a global geopolitical player
“To realize these ambitions, it creates a new format of relations with the Central Asian countries. Yes, we could try to communicate within the framework of the SCO. But there are many participants, and it is difficult to establish targeted interaction with the region. Therefore, the decision was taken to create a new discussion forum” he emphasizes.
Lukonin adds that it is not worth talking about the intensification of competition between Russia and China.
“Beijing plays an important role in the region’s economy. But Russia also remains in the leading position. In addition, Russia is indispensable in terms of security and strategic stability. Moscow and Beijing rather than compete, but complement each other” he said.
Our March 20th report on the 2023 China-Central Asian trade and development outlook can be read here.
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