Premier Wen’s Eurasia Tour: Beijing and Moscow’s Divergent Views on Central Asia

On November 2, the sixth annual meeting of the Shanghai Cooperation Organization (SCO) Council of Heads of Government began in Tashkent, Uzbekistan. The six member states include Kazakhastan, China, Kyrgyzstan, Russia, Tajikistan and Uzbekistan [1]. India, Iran, Mongolia and Pakistan attended as observers and Afghanistan as a guest of the host country Uzbekistan. Xinhua News Agency, the mouthpiece of the Chinese government, breathlessly reported: “In a friendly, pragmatic, and constructive atmosphere, delegations of the member states held in-depth discussions on a host of pressing issues, including deepening economic trade and cultural cooperation within the SCO as well as safeguarding the region’s peace, stability and security”(Xinhua, November 3).

Behind all the camaraderie, two underlying issues permeated the discussions: joint military cooperation and trade, most notably in energy. It is on these two issues that Russian and Chinese priorities diverge, with the Central Asian SCO members watching from the sideline.

In spite of a 20-point declaration that was subsequently issued on strengthening cooperation among SCO member states in the economic, investment, innovation, science, educational and cultural fields, perhaps the most telling point was the seventh item, which stated “that the SCO member states should cooperate closely to map out a common position on energy issues.” Significantly, none of the items specifically mentioned deepening military cooperation, only a general commitment to deepening regional security.

Russia is most keenly interested in military cooperation, envisaging the SCO as an embryonic Eurasian counterweight to NATO and U.S. “hegemony.” Russia successfully linked the SCO to the Collective Security Treaty Organization (CSTO) through the signing of a memorandum that focuses on broadening cooperation on issues such as security, crime and drug trafficking. China is more interested in the SCO developing into a nascent trading organization loosely based on a European Union model.

Both interpretations can claim successes and failures. Russia has had remnants of the 201st Motorized Rifle Division based in Tajikistan since the Soviet Union’s collapse in 1991. In October 2003, the Russian Federation established an airbase at Kant, near Bishkek, ostensibly to provide immediate air support for CSTO ground units. The Kant airbase was Russia’s first foreign military facility established since 1991, and it is less than 30 miles away from the U.S. aerial facility at Manas (see Terrorism Monitor, January 18). The U.S. facility was established in the aftermath of the 9-11 attacks in December 2001, along with another airbase at Karshi-Khanabad in Uzbekistan. In contrast, China currently has no foreign military bases.

Both China and Russia have been opposed to the U.S. military presence in Central Asia. Following Washington’s ambivalent response to the May 13, 2005 tragic events in Andijan, the Uzbek government on July 29 told the Pentagon to evacuate the bases within six months, which it did in November 2005. The SCO saw the dispute as a heaven-sent opportunity, in stark contrast to Washington characterizing Andijan as a terrorist plot that subsequently lead to a resolution in July 2005. At a summit in Almaty, the SCO called for nations to deny asylum to Uzbek refugees who had fled from Andijan to Kyrgyzstan as well as for setting a timetable for the withdrawal of U.S. bases in the region (Pravda, July 22, 2005).

From August 8—17, the SCO staged “Peace Mission 2007,” an anti-terrorism exercise that was the SCO’s largest joint exercise in its six-year history, with nearly 6,500 troops and 80 aircraft participating. The exercise was held in two areas, first at the Russian Army’s 34th Motorized Rifle Division facility in the Volga-Urals Military District. Then at Chinese insistence, the exercise later shifted to Urumqi, capital of China’s Xinjiang Uighur Autonomous Region (XUAR). The one point of commonality between all six SCO members is the need to fight terrorism. In stark contrast to U.S. diplomatic fumbling in Central Asia, Russia, pressing forward wherever it might gain a military advantage, has convinced CSTO’s Secretariat and joint headquarters to finalize a draft agreement to form a single collective Central Asian air defense system (Agentstvo Voyennykh Novostey, November 6).

While Moscow and Beijing can concur about the need to diminish or even end U.S. military presence in Central Asia, their views on economic issues diverge sharply. Wen used the occasion to network with delegates and forcefully promote bilateral energy schemes with the attendees. Wen held talks with Iranian First Vice President Davudi on a host of issues, including energy. Iran gained a powerful ally in Wen over its nuclear dispute with the West, with Wen concluding: “China respects Iran’s right to peaceful use of nuclear energy … The Chinese side holds the view that peaceful resolution of the Iranian nuclear issue through negotiation is the best option” (Xinhua, November 3). As China is a member of the UN Security Council and thus able to block further sanctions proposed by the United States, it is likely that Tehran would return this favor and show its appreciation by allowing increased Chinese access to the country’s vast energy resources.

Wen followed up the SCO meeting with an official state visit to Uzbekistan on November 3; it was the first visit to Uzbekistan by a Chinese Premier in 13 years (former Premier Li Peng first visited in 1994). Wen met with Uzbek President Islam Karimov, Prime Minister Shavkat Mirziyaev, and leaders of the Oly Majlis legislature. For the first eight months of 2007, total Sino-Uzbek trade reached $750 million and China is now Uzbekistan’s fourth-largest trading partner (Zhongguo Tongxun She, November 6).

Wen then hurried to Ashgabat, meeting on November 3-4 with Turkmen President Gurbanguly Berdimukhamedov, where the prime topic of conversation was the construction of a Turkmenistan-China natural gas pipeline (Xinhua, October 26). More than any other Chinese Central Asian initiative, this is the one that rattles Moscow’s cage the most, as it currently has a lucrative export monopoly via its Transneft pipelines, buying Turkmen gas for $100 per 1,000 cubic meters while shipping its own natural gas to European consumers for $260 per 1,000 cubic meters. Loss of Turkmen gas would force Russia’s Gazprom to dig deep into Russia’s indigenous resources while depriving it of the added cash flow, should the 4,350 mile-long natural gas pipeline to China with a 30 billion cubic meters annual capacity, agreed upon in April 2006 by the late Turkmen President Saparmurat Niyazov, ever come to fruition.

While in Belarus, Wen signed a basket of agreements with Belarus President Alyaksandr Lukashenka totaling $530 million, and announced that China approves Belarusian acceptance into the WTO. As Belarus is energy-poor, it seems likely that the agreements paralleled those signed in Moscow for machinery imports (ITAR-TASS, November 5).

During Wen’s November 5-6 visit to Russia to follow up on the SCO forum, Wen put forward a four-point proposal in Moscow at the second high-level Sino-Russian economic forum to boost bilateral economic and trade cooperation (Xinhua, November 6). During the visit, the two sides were set to conclude 15 agreements worth $1.3 billion (ITAR-TASS, November 6). According to Russian Ambassador to China Sergei Razov, in 2007 Russian-Chinese bilateral trade will exceed $40 billion, a growth over 2006’s rate of $33 billion.

Russia, however, realized that it suddenly joined a host of nations in developing a trade deficit with China in 2007 for the first time (Xinhua, June 27). Moscow officials believe that the shortfall can be made up by increasing exports of timber, oil and machinery to China. Currently oil and oil products account for nearly 54 percent; in 2006, nearly 6 million tons of oil were exported to China, a 25 percent increase over 2005 exports. China is also Russia’s second-largest arms export market, only exceeded by India (ITAR-TASS, November 6).

The most interesting item on the Sino-Russian economic forum agenda for discussion between Zubkov and Wen was undoubtedly the agreement that the pair was expected to sign for constructing an oil pipeline from Skovorodino, Russia, to the Chinese frontier. While the interest might be there, Russia is insisting that the deal incorporates long-term import quota guarantees with pricing policy assurances. The pipeline would replace Russia’s current oil shipments by railway, which is believed in Beijing to be grossly inefficient (Interfax, November 5).

By any yardstick Wen’s visit can only be judged a grand success, but it also revealed the underlying rifts between China and its largest SCO partner, Russia. Moscow did not see off the American military from Central Asia only to see them replaced with multitudes of Chinese businessmen. Behind all the recent smiles, Beijing and Moscow’s shadow struggle for primacy in Central Asia continues unabated.