Academic journal article Asia - Pacific Issues

China and Central Asia's Volatile Mix: Energy, Trade, and Ethnic Relations

Academic journal article Asia - Pacific Issues

China and Central Asia's Volatile Mix: Energy, Trade, and Ethnic Relations

Article excerpt

Situated in the extreme northwest corner of China, the area now known as Xinjiang Uyghur Autonomous Region has long been famous as the site of the ancient Silk Route and other East-West trading routes. Lately, Xinjiang is in the spotlight for a different reason: increasingly frequent accounts of interethnic violence.

Xinjiang is Chinas largest and most ethnically diverse region, with 47 different ethnic groups dispersed across 617,760 square miles. Its per capita gross domestic product of US$598 makes it one of the least developed areas in China. The region, however, has substantial, largely undeveloped, oil, gas, and coal resources, as well as abundant gold ore. Thanks to Chinese and foreign investment, the area is now experiencing rapid growth.1 The capital city, Urumqi, is prospering, with 80 new skyscrapers built in the past 15 years. The boom in Xinjiang is partly the result of Chinas ambitious Eighth Five-Year Plan (1991-1995), which targeted western energy resources for development.

The Soviet Union, in contrast, made little effort to develop the enormous energy resources of the five nations of Central Asia (Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan, and Kyrgyzstan) which it ruled until 1991. As a result, many of these republics export mostly agricultural products such as cotton and are dependent upon imported energy and minerals. The republics taken together contain about seven billion barrels of proven oil reserves and at least 236.6 trillion cubic feet of natural gas reserves. Turkmenistan's gas reserves are estimated to be the world's third largest, after Russia and Iran. Like Xinjiang, these nations now view their resources as key to long-term economic growth, and are taking steps to woo foreign investors and increase international trade.

Russian Domination of Central Asia

Several years after the collapse of the Soviet Union, Russia still dominates its independent communist neighbors both economically and politically. Nearly three-fourths of the former Soviet Union's extensive pipeline network for crude oil, oil product, and gas lies in Russia. Belarus, Georgia, Lithuania, Ukraine, and Uzbekistan remain largely dependent on Russia for crude oil supplies. And 65.7 percent of the Commonwealth of Independent States' (CIS) crude refinery capacity is in Russia. Not wanting to loosen its grip on the region's oil, Russia has moved to exert control over large resource projects in Central Asia and elsewhere. A high-stakes power struggle is under way between Russia, Turkey, and Iran, with each country vying for rights to transport oil output from Azerbaijan and Kazakhstan. Russia is also insisting on joint development of the huge oil and gas reserves in the Caspian Sea which some countries feel they are entitled to develop independently.

Russia's efforts to assert authority over the "near abroad" extend beyond energy dependency and include military, economic, and political measures. Every former Soviet republic, except for Azerbaijan and the Baltic states, has permitted a Russian military presence on its soil. Azerbaijan, however, may soon allow Russia to establish two military bases on its territory, as well as locate troops along its southern border with Iran.

Loosening Russia's grip. Russia is not alone in its interest in the Central Asian republics. To the south, Turkey promotes itself as a secular model by emphasizing its ethnic and linguistic links with most of the countries. It argues that it has successfully managed the transition from a command economy to the free market system that Central Asia is attempting. Iran stresses its Islamic path and ethnic ties and presents its northern region as an ideal market for Central Asian exports, especially oil. Pakistan also emphasizes historical and ethnic relationships. India hopes to build upon its long-standing ties through trade and contributions to infrastructure development.

The Central Asian countries are also establishing ties both outside of the region and among themselves. …

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