CENTRAL ASIA: CHINA'S DANGEROUS MEDDLING

As we revealed last week, Central Asia could soon see a face-off between NATO and its Russian counterpart, the CSTO. While Moscow and Washington should have no desire for conflict the Chinese have financial reasons for hoping that Russia will draw a line in the sand across the region.
China is trying to persuade the Russians return to a Cold War posture within The Stans, an energy rich part of the world, which includes Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Turkmenistan. There is more untapped energy in the region that anywhere else on the planet and the Chinese are greedy for oil and gas to maintain their growing economy, massive industrial base and ever expanding population of 1.3 billion.
While Central Asia offers Western corporations business opportunities, it also represents a potential threat because of the rise of Islamic militancy. Some defense analysts believe major attacks on the West could someday be launched from there. In the wake of the collapse of the Soviet Union, a civil war in Tajikistan in which a range of Islamic militant organizations were involved, saw the deaths of 100,000 people, though say the death toll was closer to 200,000. With NATO fighting Al Qaeda in Afghanistan, there is every reason for Brussels and Washington to be concerned about Al Qaeda and its Taliban allies attracting recruits from across the The Stans. Russia is aware of the terror threat but believes if it can establish more bases in the region it can eliminate it. From China’s perspective, the threat from terrorism pales in contrast to its goal of ensuring it keeps Western influence out of that region so Chinese state-owned energy companies can tap into vast oil and gas fields without competition.
To that end, China has been using its vast wealth to buy friends in the region and to portray Washington and NATO as bogeymen. The Chinese strategy is a clever one. China has known since 2001that the Russian economy has not been performing as well as its leaders had hoped and, in recent times, a down turn in crude oil prices had a negative effect on the country’s economic health. As a consequence, big Russian companies were starved of development money for oil extraction and research, as well as for oil infrastructure expansion. As American Free Press readers learned in February, China loaned $25 billion to Rosneft and Transneft, Russia’s state-controlled oil and pipeline companies at the start of 2009. In return, the companies agreed to build a pipeline from Russia’s Far East region to China. While, one could argue that the deal suited both nations, China saw it as yet another means to convince Russia that it was an ideal partner for much larger energy deals across Central Asia.
As part of China’s charm offensive, it has invested heavily in the large Russian oil corporation, LUKoil” and made large loans to Vnesheconombank, Russia’s national development and foreign investment bank, which had been hit hard by the subprime mortgage crisis.
Over the past two decades, Russia resisted China’s attempts to expand is energy horizons but the February 2009 deal signified a major shift in Russian policy. It was also the start of a devious plan by China to stress the need to keep NATO influence out of The Stans so that Chinese companies could buy up rights to oil and gas exploration in parts of region. In tandem with Beijing’s economic wooing of Moscow, the Chinese authorities held high level meeting with Russian financial figures. During one of those meetings, the Chinese delegation proposed creating a China-Russia economic alliance to make the Yuan and the Rouble more attractive reserve currencies than the Dollar and the Euro. As yet, there is no indication Russia wants to go down that road because it would lead to an economic confrontation with the West. However, that has not stopped China from doing more than $100 billion in deals with Russia in the past six months. Most of the deals were related to oil, gas, electricity and iron ore.
China’s eyes were firmly on Central Asia in 2001 when it realized it had to make nice to the Russian Bear to get what it wanted. For the last eight years, it has been quietly investing in Russian companies and making loans available to many of them at knock down interest rates – a foreign policy strategy it has used elsewhere, especially in Africa and Latin America. In terms of its generosity vis a vis Russia, China’s aim was to get permission to purchase energy rights in Kazakhstan and Turkmenistan. When NATO held a meeting in Kazakhstan this year, the Chinese went into a frenzy. Almost immediately, they told the Russians NATO and the U.S. were intent on taking over the Stans in the next two decades, using Afghanistan as a base of operations.
China is astute when it comes to dealing with Russia. It knows Moscow can be easily spooked if it can be convinced the West is encroaching on its borders. To that end, China has been scaring the Russians in the hope they will establish a Berlin-type “wall” across Central Asia to keep the West out.
It is a dangerous game and China has been playing it for some time. In 2007, while China and Russia were holding large military exercises, the Chinese persuaded the presidents of Iran and Russia to join them in warning Washington not to meddle in Central Asia. To d ate, China has succeeded in convincing Moscow that NATO poses a threat because Russia now plans to open a second air base in Kyrgyzstan.
Dr. Stephen Blank, a national security scholar and Russian expert believes Russia and China have grown closer because they seeking to limit what they perceive as a “U.S. challenge” to their interests in Central Asia.” He argues that their united front has happened despite “long standing rivalries” between them. Here is how he defines the results of this new Russia-China alliance:

“It has also led to the creation of international organizations and structures representing an alternative model. These organizations take the form of the CSTO, Russian proposed groups such as the so-called Caspian Force, and the SCO – Shanghai Cooperation Organization. The SCO exemplifies this new strategy and serves as a model for future organizations in Asia. Beijing also hopes to reshape its Asian security agenda in an effort to attenuate the US alliance system, replacing it with one that is ideologically and politically more congenial to Beijing’s desire for unfettered sovereignty and freedom of movement in world affairs.”

Dr. Blank warns there could be “a world evolving without the West” and he identifies China as a major player in that process, with Central Asia as a defining element. He believes new world would be based on a “new national order,” and an ideology defined in part by an “officially controlled media” and a military alliance structure. He is convinced it is critical we take note of what is happening in Central Asia. From his perspective, the U.S. can no longer see the region as a “backwater.” He has a final warning for those who do not get his message:
“It may well be the case that what transpires in Central Asia, such as competition between international powers, will shape the future order of the world. It is already is a political battleground of growing importance - a battleground in which future geopolitical destinies may well be prefigured.”

While Washington and Brussels manage the war in Afghanistan, they would do well to keep a careful eye on China and the Central Asia region. If China can persuade Russia to continue the expansion of its military presence in The Stans the region could become a flashpoint leading to a new Cold War. That would suit China whose only interest in Central Asia is feeding its increasing appetite for energy.