Strategic Pipeline Accord Masks Tension In Other Areas

Squeezed uncomfortably between China and Russia, Kazakhstan has always stressed the importance of the so-called “multi-vector” in its relations with its large neighbors. This approach allows Kazakhstan to strike the right balance of interests. During his recent visit to China, Kazakh President Nursulatan Nazarbayev was diplomatic enough to skirt such contentious issues as the problem of Uigur “separatists,” press reports charging that about two million ethnic Kazakhs in China are gradually losing their ethnic identity and the dumping of cheap Chinese goods on the Kazakh market. The visit was crowned by signing an agreement for construction of a 988-kilometer oil pipeline that will link Atasu railway station in the Karagandy region with Alashankou on the Chinese border. Construction work is scheduled to start in August and be completed in December 2005. Barring problems, 20 million tons of crude oil will flow through the pipeline annually, possibly eventually increasing to 50 million tons. The pro-government press in Kazakhstan praised the visit as “outstandingly fruitful” and commented that China, which is striving to build a closer partnership with Russia in oil and gas development, would like to see Kazakhstan as its partner as well (“Yegemen Kazakstan”, June 18).

But, apparently, the Sino-Kazakh pipeline agreement is not to the Russian taste. Earlier, China offered Russian oil companies a lucrative deal to build a similar pipeline connecting Angarsk in Siberia with Datsing in China. But China became impatient with Russia’s bickering over high tariffs. In this context, the Kazakh-Chinese pipeline deal may be interpreted by Russian leaders as Chinese pressure to force Moscow into accepting the Siberian oil pipeline. The mute confrontation between Moscow and Beijing may have a lasting negative impact on Kazakh-Russian economic relations (“Kontinent”, May 26 – June 8).

However strong Russian vexation over the deal may be, Sino-Kazakh rapprochement in the sphere of economics is gaining pace. For both sides, strengthening economic ties is politically important. The entire 1,700-kilometer stretch of the Kazakh-Chinese border passes along the Xinxiang-Uigur Autonomous Region, which is densely populated with ethnic Uigurs and Kazakhs. For decades, reports from the region have described Uigur uprisings against repressive Chinese policies. Persecution of Uigur nationalists in China has aroused protests from the sizable Uigur population in the Almaty region of Kazakhstan. Official declarations by Chinese and Kazakh leaders calling for joint efforts to eradicate terrorists are construed by Uigur nationalists as direct threats to their cause. A Uigur activist in Kazakhstan complained recently that Nazarbayev did not raise the issue of the Uigurs during his talks with Chinese leader Hu Tsintao. Although Kazakh leaders have been pliant on some territorial and ethnic issues in talks with Chinese counterparts, which have irritated some nationalists, Kazakhstan has otherwise given in to Chinese demands for the sake of economic interests. Xinxiang Uigur Autonomous Region accounts for 60% of the trade volume between the two countries (Yegemen Kazakstan, May 21).

The two sides have signed nine agreements that predominantly center on exploration and joint development of oil and gas fields in the Caspian. The most important part of the agreement is the planned construction of a narrow-gauge railway linking western China with Europe via the Caspian part of Kazakhstan and Iran. One of the stumbling blocks is a tariff that is currently two-and-a-half times higher in China. Nevertheless, China and Kazakhstan are set to increase annual freight transportation volumes through Dostyk and Alashankou stations to about 15 million tons. Despite relatively stable relations on an economic level, disputes between China and Kazakhstan over water management on the Irtysh and Ili Rivers continuously flares up. Kazakhstan repeatedly protests over Chinese attempts to build canals to divert the Irtysh, which runs through East Kazakhstan. The Chinese side invariably assures Kazakhstan that canals are being built only for irrigation purposes and pose no threat to irrigation. However, Chinese reassurances fail to convince Kazakh farmers who complain of a constant water shortage.

Traders in border areas continuously shuffle between Urumchi in Chinese Xinxiang and markets of Almaty, which are awash with cheap Chinese footwear, toys, clothing, prepared food and radios. Walking through the markets of Almaty, one gets the impression of being in a Chinese town. The population of Almaty is growing alarmed at the increasing number of foreign traders. Recently, the governor of the Almaty Region proposed a plan to government officials calling for establishment of a large market on an uninhabited stretch of the border. The Chinese side will allow 130 hectares of land for the purpose, which will be aggregated with 100 hectares to be allotted by Kazakhstan. The scheme received verbal approval from the government, but drew sharp protest from critics who fear an uncontrolled inflow of Chinese traders and goods, threatening the demographic mix. Analysts warn that an increasing presence of Chinese nationals in Kazakhstan may lead to increased tensions.