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Gas pipeline a symbol of China's rise in C.Asia: analysts

by Staff Writers
Beijing (AFP) Dec 20, 2009
China has quietly rewritten the geopolitical landscape in Central Asia in recent years, breaking Russia's monopoly over the export of the region's energy resources also coveted by the West, experts say.

The proof came last week when Chinese President Hu Jintao travelled to the region for the inauguration of a natural gas pipeline snaking from Turkmenistan through Kazakhstan and Uzbekistan into China's far western Xinjiang region.

"This creates a regional dynamic for China," said Thierry Kellner, a researcher at the Brussels Institute of Contemporary China Studies.

"In the 1990s, no one thought that China would become such an important player."

Tom Grieder, an analyst at IHS Global Insight, said in a research note: "The pipeline project is important for China as part of its broader strategy of stepping up energy investments in Central Asia to gain access to resources."

Energy-hungry Beijing's campaign to secure a solid foothold in Central Asia -- a vast resource-rich region nestled between Afghanistan, China, Russia and Iran -- mimic its efforts in Africa, where its presence has exploded overnight.

Jean-Pierre Cabestan, a professor and China expert at Hong Kong Baptist University, said Beijing had used "the same methods, but on a more modest scale" in Central Asia that it has employed in Africa.

Those methods include increased trade, investments in energy resources and installations especially Kazakh oil and gas, loans at advantageous rates and a willingness to tackle projects the West has deemed too costly or difficult.

"Chevron also wants a stake in Turkmen natural gas. But the Western firms have only progressed to the negotiations phase," Kellner said.

For Cabestan, "China has opened up Turkmenistan, a closed regime, by managing to shatter the quasi-monopoly of Russia... which does not look too kindly on these developments."

"This is the result of an economic and trade dynamism seen in China, and also its diplomatic skills in handling regimes, some of which are not democratic," he added.

Beijing has spent heavily across Central Asia this year, offering a 10-billion-dollar loan to Kazakhstan and a four-billion-dollar credit to Ashgabat in a bid for access to the massive South Yolotan gas field.

But its efforts to gain influence in the region date back much further, beginning shortly after the fall of the Soviet Union.

"It wanted to secure its borders and fight terrorism, even before 9/11," Cabestan explained.

China claims it faces a serious separatist threat in mainly Muslim Xinjiang, which borders several Central Asian states. But exiled Muslim Uighurs say Beijing hypes the threat to justify harsh controls in the energy-rich region.

Kellner said Beijing's efforts gathered pace after 2001, due to the creation of the Shanghai Cooperation Organisation, a regional security group dominated by China and Russia, and the 9/11 attacks, which made the area even more key.

In 2008, China's trade with the five countries of Central Asia -- Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan -- totalled 30 billion dollars, he said.

The downside of the massive trade boost? Chinese products have flooded into those countries, "helping to kill off the few industries that are left," Cabestan said.

Nevertheless, he said, "cooperation with China has loosened the Russian vice" gripping the former Soviet satellite states, but officials in those countries are "remaining careful not to go from one hegemon to another".

As a result, China now has its first international gas pipeline which will reduce its exposure to risks run by shipping much-needed hydrocarbons by sea, where it is vulnerable to pirate attacks and maritime accidents.

The China National Petroleum Corp. (CNPC) will eventually import up to 40 billion cubic metres of gas a year -- half of China's total consumption in 2008 -- through the pipeline when it reaches full capacity in 2012-2013.

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