China in Central Asia

Article excerpt


China recently scored a victory in the Great-Game struggle for influence in Central Asia. On Monday, China National Petroleum Corp. reached a $4 billion deal to buy Canada's PetroKazakhstan, which produces about 150,000 barrels of oil a day in Kazakhstan. The deal, if consummated as expected, will consolidate China's economic presence in the energy-rich and geopolitically important region, with potential consequences for U.S. interests.

In a meeting yesterday with reporters and editors at The Washington Times, Foreign Minister Kasymzhomart Tokayev was sober about China's rising clout. He said he encouraged a U.S. executive to bid on PetroKazakhstan, but the executive told him, "It's very difficult to compete with the Chinese." The difficulty for U.S. and other companies is that Chinese firms are willing to overpay for foreign assets, if those purchases will bolster China's clout abroad and help it secure energy resources. In that regard, the companies serve as a platform for Beijing's foreign policy goals, while U.S. firms consider market factors.

"We believe in Kazakhstan that there is no alternative to having a good, cooperative relationship with this country," Mr. Tokayev said, regarding China. "We don't have the choice of selecting our neighbors," he added. When asked how Kazakhstan sees the competition for influence in the region, Mr. Tokayev said, "Our credo is to maintain the balance of interests" of the big powers.

Mr. Tokayev recognized China's ascendancy in the region. "The potential and ambitions of China are growing," he said. China is already financing construction of an $850 million oil pipeline from Kazakhstan to China, capable of moving 400,000 barrels of crude a day. …