Wed, 23 Sep 2020

China once again brandished both carrots and sticks in July.

The month saw the first of a new type of diplomatic arrangement in the region: a meeting of the five Central Asian foreign ministers with their Chinese counterpart by videoconference on July 16.

During his welcome speech, Chinese Foreign Minister Wang Yi said that engagement with the region is imperative for his country: "China has always believed that Central Asia has an important strategic position in today's international arena," Wang said, thanking the countries for "speaking and helping out on issues of major concern to China" - such as its takeover of Hong Kong and the gulag in Xinjiang.

Wang said the world is undergoing "big changes not seen for a century" - a phrase frequently spoken by his boss, President Xi Jinping, since the start of the U.S.-China trade war in 2018. Wang promised to step up cooperation with Central Asia in three areas: medical aid, trade, and security.

It is this last area that was on everyone's minds. The meeting was held in the shadow of a deadly border dispute between India and China that left at least 20 Indian soldiers dead, followed by new Chinese claims on Bhutanese territory.

So when Wang hailed progress "successfully resolving boundary issues left by history and turning the common boundary into a symbol of friendship and a bond of cooperation," he was reassuring his counterparts in adjoining Kazakhstan, Kyrgyzstan and Tajikistan.

Not for long. Days later, an article appeared in Chinese news outlets claiming that Tajikistan's Pamir mountains historically belonged to China and should be returned.

Though the article was penned by a nationalist historian and does not appear to be a veiled hint from the Party, the message hit Dushanbe in a sensitive spot. Tajik officials are perennially concerned about the Pamirs, a region where they have tenuous authority over the local population.

And anxieties about China's intentions in Central Asia run deep. It takes little to fuel fears that post-Soviet sovereignty will be a short-lived affair, that the peoples of Central Asia have traded one imperial master only to be dominated by another. Already in 2011, Dushanbe ceded over 1,000 square kilometers of the Pamirs to China in return for an unspecified amount of debt forgiveness. Five years later, it invited China to open a military base. Beijing owns over half of Tajikistan's foreign debt.

After the article filtered into Tajik-language media, on July 22 First Deputy Foreign Minister Noziri Khusrav called China's ambassador to Dushanbe, Liu Bin, to complain - an unusual development. He argued that Beijing should censor such "biased" accounts of history. The Chinese Embassy readout did not mention the article, though it has since disappeared from major Chinese blogging platforms such as Baidu.

Difficult conversations: Tajikistan's deputy foreign minister asks Beijing's envoy to censor territorial claims. (photo: Chinese Embassy in Dushanbe)

The foreign ministers' meeting also took place as Nur-Sultan was grumbling to the Chinese Embassy for undiplomatically warning that Kazakhstan was in the grips of a deadly "unknown pneumonia" - news that briefly attracted global headlines. The "pneumonia" outbreak was most likely a surge in COVID-19, which is running wild throughout Central Asia as governments muddy statistics to save face. The Chinese warning forced Nur-Sultan to concede the scale of its outbreak is far worse than it had previously admitted.

Infrastructure notes

The largest wind project in Central Asia is expanding. Zhanatas Wind-Power Station in Kazakhstan's Zhambyl region - a joint venture between state-owned China Power and Atlanta-based Visor Investment - has chosen Xinjiang-based Goldwind Science and Technology to assemble the second-phase of turbines and generators at the $136.2 million, 100MW Zhanatas farm, which opened last year. The Beijing-led Asian Infrastructure Investment Bank is loaning the project $46.7 million and says it will save some 110,000 tons of coal from the furnace annually. Since 2018, Goldwind has completed two wind farms in Almaty region. On July 1, state-owned China National Chemical Engineering Group Corporation received three 500-ton propane bullet tanks at its $2.6 billion plastic factory in Atyrau, Kazakhstan, the company reported, adding that social distancing measures were in place to keep delivery staff from coming into contact with employees at the factory. In the spring, workers were prohibited from entering or leaving the site. Production is expected to begin by the end of the year. On July 26, state-owned Power China completed repairs and tested electricity generation at the Shahrihan hydropower station in Uzbekistan's portion of the Fergana Valley. The project is being funded by a $63 million loan Beijing granted Tashkent in July 2018, reported Xinhua. A subsidiary of state-owned China National Petroleum Company (CNPC) reported on July 5 that nine Chinese specialists had returned to supervise Uzbekistan's only PVC factory, in Navoi, after a 14-day quarantine. Construction of the Uzbek state-owned factory cost $430 million and production began late last year. On July 27, Tajik Prime Minister Kokhir Rasulzoda visited Zijin Mining Group's operations in Zarafshan, the company reported. Rasulzoda praised the company's efforts to operate during the pandemic and pledged to ease any administrative matters for the company. Zijin, which is owned by the Chinese government, has a 75 percent stake in the Zarafshan mine, which is responsible for 70 percent of Tajik gold output.

Gas

China's gas purchases from Kazakhstan, Turkmenistan and Uzbekistan have fallen significantly during the coronavirus economic slowdown. Xinhua reported on July 30 that imports from the three in the first half of 2020 amounted to 19 billion cubic meters, a 17 percent decline compared to the same period in 2019 according to statistics from CNPC. In all of 2019, China imported 47.9 billion cubic meters from the three countries. It does not disclose what it pays. Even as China's goes on a Central Asian gas diet, Chinese capital is helping drill for new sources to supply domestic needs. After Washington-based Epsilon Development Corporation showed this year that fracking and horizontal drilling could make the Talimarjon-12 well in Uzbekistan's Kashkadarya province commercial viability, Tashkent turned to China for technical support. At the end of July, the Uzbek Embassy in Beijing held talks with the two top energy officials in China - Zhang Jianhua, director of China's National Energy Commission and Li Fanrong, director of CNPC - about transporting and processing the gas. In neighboring Turkmenistan, which still insists it is coronavirus-free despite reports of outbreaks nationwide, CNPC workers in Ashgabat and Lebap have gone into self-isolation after a number of workers at another gas company reportedly tested positive, reported Fergana.

Automobiles

Across the region, Chinese vehicles are gaining market share. On July 7, the Uzbek Health Ministry bought 15 more Chinese-made Foton ambulances, reported Podrobno.uz. In Namangan, an Uzbek businessman lured home as part of a government reform project has opened a production line to build small trucks for China's Changan Automobile, reported Podrobno.uz. Chinese bus manufacturer Yutong, after recent success in Kazakhstan, won another tender to provide Kyrgyzstan 100 natural-gas powered buses. On July 4, Hefei-based JAC motors delivered 181 police cars to the Interior Ministry in Karaganda, reported the Chinese Commerce Ministry. The state-owned company is also finishing up 300 new ambulances for Kazakhstan's Health Ministry. Since May 2019, JAC and China National Machinery Import and Export Corporation have together owned 51 percent of Kazakh Allur group's SaryarkaAvtoProm LLP, Kazakhstan largest auto manufacturer.

Aid

If someone were to subsist entirely on Chinese press releases about aid to Central Asia in the time of coronavirus, they would never go hungry. The flood of deliveries is a PR bonanza, especially in the able hands of government propagandists.

In Tajikistan, for example, the State Statistics Agency on July 28 offered a curious accounting of the humanitarian aid it has received this year. China provided 46.9 percent of aid to the government, followed by Uzbekistan at 17.4 percent (farther down the list Russia came in at 4 percent and the United States at 1.8 percent). Missing from local reporting was the fact that the Statistics Agency was speaking about volumes of aid, not value. The figures did not include direct budget support, which has arrived by the hundreds of millions of dollars from multilateral lenders, largely in the West.

Uzbekistan received something above and beyond aid: special treatment from Sinopharm. During a meeting with Uzbek Embassy officials on July 20, the state-run drug giant offered to run human trials of a new COVID-19 vaccine in Uzbekistan, reported the Foreign Ministry. Sinopharm added that it is also eager to invest in the country.

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