Beijing Changes Its Approach to Economic Expansion in Central Asia

China has quietly but dramatically changed its economic approach to the countries of Central Asia—a shift with enormous consequences not only for the region but for Beijing’s relationship with Moscow. Until recently, China had provided loans to the countries of the region to build railway routes across Central Asia as part of its Belt and Road Initiative. These routes linked China with Europe, bypassing the Russian Federation (see EDM, March 21, 2019). Now, it has largely ended such projects and, instead, is investing heavily in manufacturing firms in Central Asia. On the one hand, this suggests that China may now plan to use Russian routes more heavily, at least in the short term, something Moscow will certainly welcome. But on the other hand, it means that the Central Asian countries are likely to become both more economically independent of Russia and more closely integrated into China’s growing economic empire, an outcome that will further diminish Moscow’s influence in the region and could even reduce the willingness of Central Asians to move to Russia as migrant workers. Neither of these effects is likely to please the Kremlin.

This shift appears to be less the result of any new Chinese calculation than of Beijing’s recognition that its earlier approach had intensified anti-Beijing attitudes among Central Asian populations—however popular it may have been with some Central Asian elites (see EDM, September 10, 2019 and March 30, 2021). China needs to offer more to the general populations and their governments if it is to maintain and then build on its influence there (Ia-centr.ru, November 11, 2020; Globalaffairs.ru, March 18, 2020).

China’s change of course was recently documented in a detailed Carnegie Endowment study by two scholars, Dirk van der Kley of Australia’s National University and Nina Yau of the OSCE Academy in Kyrgyzstan (Carnegieendowment.org, October 15, 2021). The Central Asian Analytic Network (CAAN) verified that these conclusions are both correct and statistically significant (Caa-network.org, October 20). But if the Carnegie authors stress the ways in which local elites have forced Chinese hands, the CAAN discussion of their work gives more prominence to the ways in which China is ready to modify its approach in order to achieve larger ends—a particularly useful corrective to the widespread view that Beijing uses its superior power to push ahead regardless of the obstacles it encounters.

Over the last five years, van der Kley and Yau show, “major investments for the development of infrastructure, which had characterized China’s earlier economic participation in Central Asia, have practically ceased.” Some of the earlier projects continue, but the money is coming not from grants or loans but from the involvement of Chinese construction companies. “Instead,” CAAN summarizes their conclusions, “Chinese firms now are trying to build factories, to expand the reprocessing of raw materials and to modernize local agricultural enterprises.” This pattern holds in all the Central Asian countries except Turkmenistan, which remains far more isolated and state-dominated than the others (Caa-network.org, October 20). However, even there, China has been making inroads with its new approach (Caa-network.org, March 16).

The governments in the region are promoting this shift lest anti-Chinese attitudes become anti-government ones (Carnegie.ru, January 22; Windowoneurasia2.blogspot.com, January 25). The general populations, especially labor groups, are insisting on that course correction given that China’s earlier approach relied largely on an imported Chinese workforce, which was always better paid than native laborers and provided few opportunities for local people to advance. What both the governments and people of Central Asia want instead is Chinese help in re-industrializing the region, a process that began in Soviet times but that largely collapsed with the end of the Soviet Union and the subsequent exit of Russian specialists. Consequently, what China is doing now is serving as a substitute for what the Russians did under Communism. To the extent that happens, China and the peoples of the region will benefit, but their attitudes toward other outsiders will change, possibly dramatically.

In short, Beijing has assumed a role resembling that of Moscow’s in Soviet times, complete with the creation of special educational facilities to train locals and affirmative action for the regional populations. For a time, this policy will certainly win Beijing local support or, at a minimum, reduce anti-Chinese sentiments. But in the longer term, it may create a revolution of rising expectations among elites and populations in Central Asia, who will come to view China’s approach—however beneficial at the outset—as neo-colonial and ultimately unacceptable, just as these elites and local Central Asian populations did with regard to Russian dominance in an earlier era.

The governments of Central Asia are surely aware of this likely outcome. And so they are seeking to manage the process by cutting back the number of annual Chinese worker permits, thus forcing China to hire more Central Asians to complete or run local industrial and construction projects. Central Asians want what China offers, both in terms of technology and export markets; but they are certain to be more and more resistant to any Chinese moves that look like attempts to control them. That may be the most important lesson from China’s change of policy: it too, like Russia and the West, increasingly must approach Central Asian countries not simply as objects of policy but as subjects with which Beijing must negotiate rather than simply impose its will.