Publication: China Brief Volume: 3 Issue: 3

By Thomas Woodrow

The former Soviet republics of Kazakhstan, Turkmenistan, Uzbekistan and Azerbaijan sit astride some of the world’s most valuable oil and gas reserves or the routes to those reserves. Access to Central Asian energy resources, which are just now beginning to be exploited to their full potential, will be critical to fill the world’s ever-voracious appetite for oil. This is especially true for China, which has the most rapidly growing economy, and thus the greatest need for future oil imports, in the world. The gathering political, economic and military competition amongst China, Russia and the United States to control Central Asia’s energy resources is in effect a new Great Game, the victor of which will emerge as the major power of the 21st century.

A net exporter of oil before 1995, China is today one of the world’s largest importers and the third-largest consumer after the United States and Japan. Largely dependent on Persian Gulf oil to fulfill its accelerating need for energy resources, Beijing increasingly sees access to Central Asian reserves through pipelines stretching across its vast western desert as crucial for national energy security. In November 2002, China released its oil strategy for the 21st century, which includes the preparation of strategic oil reserves in northwestern China. What was left unsaid was growing Chinese unease at U.S. influence in Central Asian areas that China itself has had long historical ties to and claims over.

At various times in history, China has assimilated much of Central Asia into its empire. China controlled the Silk Road for hundreds of years beginning with the Han dynasty and again during the Tang. It continues to control Turkistan (Xinjiang Uighur Autonomous Region) and Tibet to this day. Chinese sovereignty over the entire South China Sea–another potentially oil-rich area–is also based on historical claims tied to ancient trade routes used by Chinese merchants. Does China cast a covetous eye on the oil riches of Central Asia? In 1996, Kazakh leader Nursultan Nazarbaev embarked on his first state visit to Beijing to discuss mutual relations. No one is quite sure what his Chinese hosts said, but immediately on his return to Almaty, Nazarbaev ordered the construction of a new national capital 1,000 miles to the northwest at Astana, well away from the Chinese border. Since that time, Beijing has used the soft-spoken approach, creating the Shanghai Cooperation Organization together with Russia, Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan to foster mutual relations. Ostensibly a forum for resolving border and migration issues, Beijing sees the “Shanghai Six” as a vehicle to assert Chinese influence in this oil-rich region and Russia, much to its chagrin, increasingly finds itself being consigned to second fiddle.

Chinese interest in Central Asia has increased markedly in recent years:

— In 1997, Beijing won the bidding for the Uzen oilfield against competition from U.S. companies, including Amoco, Texaco and Unocal. The Uzen oilfield is Kazakhstan’s second-largest oil reserve after the huge Tengiz fields managed by a U.S.-Russian-European consortium. China also won the competition to develop Kazakhstan’s Aktyubinsk oilfield and has acquired an interest in the Kursangi and Karabagli oil fields in Azerbaijan.

— Beijing has reached an agreement with Kazakhstan to build a pipeline that will extend 3,000 kilometers from the Chinese-controlled Kazakh oilfields to northwestern China. In addition to supplying Chinese needs, Beijing hopes that this pipeline will also be used to supply Korea and Japan, bypassing the sea routes controlled by the U.S. and Indian navies. Kazakhstan is currently transferring 95,000 barrels a day to the Chinese border by rail through a state-of-the-art Chinese-built rail transfer facility.

— China has joined a consortium to build a pipeline from the Caspian to Iranian oil refineries to carry out oil swaps in which Kazakh oil is shipped to northern Iran while equal amounts of Iranian crude are shipped from Iran’s ports on the Persian Gulf to China. Some analysts believe China’s involvement in the swaps and pipelines suggests that Beijing may be attempting to exert control over Kazakhstan’s exports both to the east and to the south.

China has also attempted to gain some measure of control over Russian oil and gas reserves in Siberia. The two sides, however, remain in disagreement on gas and oil development and on plans for a 2,400-kilometer pipeline from Siberia to China’s main oil/pipeline centre at Daqing. China wanted outright control over oil and gas, but offered to pay Russia only as much as Moscow sells gas for domestically. Beijing also wanted the right to bring in tens of thousands of Chinese workers to build the pipeline. Moscow, understandably upset at Chinese attempts to cheap-Charlie the contract, was probably more concerned at the prospect of a Chinese re-colonization of parts of Siberia that once belonged to the Chinese emperor.

Russia still exerts a great deal of influence over its former republics in Central Asia. Many of the military and technical elite are Russians and the transportation and power grids are oriented towards Moscow. However, Russian control of Central Asia–its fruits from the original Great Game–was a relatively recent and short-lived phenomenon. The Central Asian states appear destined to reassume their historical pattern of near-anarchy interspersed with brief periods of strongman rule.

This style of strongman rule is the unstable foundation of the oil-rich Central Asian states. Saparmurat Niazov, the leader of Turkmenistan, has assumed a mantle of megalomania that rivals that of Stalin and the family Kim. He has renamed the months of the year (January for himself, April for his mother) and the days of the week (all except, thank God, for Friday). Westerners may look upon this pretension to God-like satrapy with a certain Kiplingesque quaintness. For the people of Turkmenistan, however, it is no laughing matter. As Niazov holds the power of life and death over each of his subjects, for all practical purposes he is their god.

This, then, is the region where the New Great Game is about to play out. Central Asia is awash in treachery, intrigue and chameleon loyalties not seen, well, since the first Great Game in the mid-1800s, when Britain, Russia and the Ottoman Empire battled it out for influence and control over the trade routes to India. Today, tyrannical oil kingdoms possess enough power to control their subject populations but nonetheless will find themselves unable to protect their precious fluids against larger, hungrier and more powerful neighbors. Thus, stability for the former ‘Stans will be dependent upon playing the larger powers–Russia, the United States, China, Iran, Turkey and India–against each other, or in finding a patron state with the power to protect them without conquering them.

In this respect, the United States has a distinct advantage over the other contenders. Distance plays a part of course. We don’t want their land, just their oil. We also don’t care if the respective leaders rename all the months of the year, or fowl of the earth and fish of the sea, after their extended families, or even declare themselves to be gods. After all, it will be the nation that wins the New Great Game that will be the true Rome. As long as one of these leaders doesn’t fashion himself a new Tamerlane and sets out as a pyramid builder, the United States will be content to help protect the oil routes and look the other way. In the modern world, oil is thicker than blood.

The major problem with these Central Asian riches is getting the product to market. This accounts for the many competing pipeline plans: to gain control over the delivery chokepoints. Most pipelines currently go through Russia, but the United States has positioned itself for the future. The U.S.-supported Baku-Tbilisi-Ceyhan pipeline will likely become the major route for the oil to get to Western markets. As currently envisaged, it comprises a 1,743-kilometer route through Armenia and Georgia to Turkey, bypassing the Bosporus. With the Taliban out of the way, the leaders of Pakistan, Afghanistan and Turkmenistan signed an agreement last December with the U.S. firm Unocal to lay a gas pipeline through Afghanistan to serve Turkmenistan’s vast gas fields.

It appears the United States is planning to be in this area of the world for the long haul. China likely will move forcefully to expand its influence using Pakistan and Iran. Russia will attempt to retain its military presence in the region to protect its own assets. The stage appears set for some kind of Russo-American agreement to share the burden of defending this vital area against takeover by the Chinese, but, as in the first Great Game, the rules can change in an instant.

Whoever controls access to the Central Asian oil and gas will in effect control the resources themselves. This is the reason for the United States so forcefully injecting itself into this region of the world. September-11 presented itself as a marvelous opportunity to project U.S. military and political power. It is thus more accurate to see events in Afghanistan and Iraq as the first skirmishes of the New Great Game, which promises to the eventual victor bragging rights for the 21st century. Let the game begin.

Mr. Woodrow was a senior China analyst at the Defense Intelligence Agency.