Bruce Pannier
China has been a major investor and trade partner in Central Asia for some twenty-five years. For the first half of those years, Beijing was focused on oil and natural gas pipelines and roads and railways to bring energy resources and raw materials from Central Asia to China, spending tens of billions of dollars on these projects. When they were completed, Chinese investment in Central Asia tapered off. China remained a leading trade partner and investor for the Central Asian states but most of the projects in which China participated were worth millions, not billions of dollars. In the last two years, China launched a new investment offensive in Central Asia that reaches into a variety of sectors. These are the sorts of projects that do not make headlines but they represent billions of dollars in fresh investment and loans. The aim is not so much supplying goods and materials to China, though there are some projects that do this, as it is providing Chinese companies new opportunities to expand. The Central Asian states are benefitting from these projects, but at the same time, Chinese influence in the region will significantly increase and will be especially important in the coming years.
The Era of Mega Projects
China’s first large project in Central Asia was the construction of an oil pipeline capable of carrying 10 million tons of oil annually running some 1,380 miles from the oil fields of western Kazakhstan to western China. The agreement was signed in 1997, and the pipeline became fully functional in 2009. In 2006, China signed an agreement with Turkmenistan for construction of a network of four pipelines (Central Asia to China) to carry a combined 85 billion cubic meters (bcm) of natural gas more than 1,000 miles from Turkmenistan, through Uzbekistan and Kazakhstan (each can supply up to ten bcm of their gas), to China. The first of these pipelines, Line A, started operation at the end of 2009. Chinese companies participated in the construction and repair of new roads and railway lines to better connect Central Asia to China. Some of these roads and railways would later become part of the Belt and Road initiative and give China new routes to Europe, Afghanistan, Iran, and the Middle East.
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