Russia, China and Central Asia: Cooperation over Competition

Amid a changing world order, when China and Russia are trying to become geopolitical and economic poles, it is important to investigate the interaction of these powers in Central Asia, which contains vast reserves of energy and is located at a key crossroads connecting East with West and North with South. 

But what are the Chinese and Russian strategic and economic interests in Central Asia? How are these two powers competing with each other to further their priorities in the region – and how are they finding ways to cooperate? 

Two non-western integration initiatives co-exist in Central Asia. The first is the Russian-led Eurasian Economic Union (EAEU), which includes two members from Central Asia – Kazakhstan and Kyrgyzstan. The second is China’s Belt and Road Initiative (BRI), an infrastructure investment program of over US$1 trillion, which is strengthening Beijing’s influence in every state in the region. 

For a long time, Central Asia has been under Moscow’s influence and has an important place in the geopolitical architecture of Russian foreign policy. Moscow has close relations with the political elites of the Central Asian states, as Russia and these countries have many political, economic, historical and cultural links, dating back to even before the founding of the Union of Soviet Socialist Republics (USSR) in 1922. Tajikistan, Kazakhstan and Kyrgyzstan are also military allies of Russia. All four are members of the Collective Security Treaty Organization (CSTO), a Russian-led strategic alliance dating back to 1992. 

China has been making vast investments in the region, thus strengthening Beijing’s economic influence and setting the stage for Chinese political influence to grow. For example, China’s export-import bank provided US$1.5 billion in loans to Tajikistan, accounting for 52 percent of Dushanbe’s foreign debt. Other investments include  US$20 billion in Kazakhstan (compared to US$14 billion by Russia) and US$245.6 million in Kyrgyzstan (US$124 million by Russia).

China is interested in Central Asia for four main reasons:

First, Beijing is investing in railway and highway projects to create alternative overland alternatives to its maritime routes to Europe, the Middle East and other regions where China exports to and from where it imports energy and other key products and commodities.

Second, Central Asia has vast energy reserves, which Beijing needs to supply its huge internal market and maintain economic growth. For instance, the China-Central Asia Gas Pipelines have been delivering natural gas from the border between Turkmenistan and Uzbekistan to the Xinjiang region of China for nearly a decade, while oil has been flowing through a pipeline from Kazakhstan to Xinjiang for slightly longer.

Third, after the collapse of the USSR, the Central Asian states lost much of their industrial capacity and need Chinese products. Thus, Central Asia’s 74 million people constitute an important market for China. In September 2019, China's trade volume with Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan had reached US$23.7 billion.

Fourth, China of course is interested in promoting stability of Central Asia because unrest in the majority-Muslim region could spread extremist religious ideologies and movements to Xinjiang, China’s restive autonomous region. 

Central Asia, therefore, has very important political and economic significance for China. This was underscored when Chinese President Xi Jinping proposed a “Silk Road Economic Belt” between China and Central Asia, a modern reprise of the ancient transcontinental trading network, in a speech at Kazakhstan’s Nazarbayev University in 2013. 

The announcement of what would evolve into the land component of the Belt and Road Initiative (BRI) had raised expectations that Russia and China would vie for power and influence in the region. But Beijing and Moscow appear to have chosen to focus on strengthening cooperation. The purpose of this collaborative approach is to present a joint front towards the United States. Beijing and Moscow understand that if they start a confrontation over Central Asia, they will weaken each other and as a result not be able to counter Washington’s own influence in the region.

In 2017, India and Pakistan joined the organization. New Delhi was attracted to the region because of its rapid growth and vast energy resources. Islamabad’s interests included Afghanistan, the security and stability of which is critical to Central Asian countries. SCO members have to deal with many difficult challenges. A top priority is to promote peaceful collaboration among them to counter security threats coming from Afghanistan and nearby areas – including problems such as drug trafficking and terrorism – that could spread to the region and into China. The SCO must also foster trade and economic cooperation across the grouping. 

EAEU meets BRI  To strengthen Sino-Russian cooperation and avoid a clash of interests in Central Asia, in 2018 China and Russia announced a trade and economic cooperation agreement between Beijing and the EAEU. This stemmed from the announcement by China and Russia three years earlier to coordinate the EAEU and Silk Road Economic Belt (SREB). The broader accord essentially linked the two signature regional integration efforts and set up cooperative trade facilitation mechanisms. While this new framework has so far yielded limited economic benefits for both sides, the mere fact of its signing is arguably its most important feature as it signaled that both countries are eager to avoid perceptions of colliding interests in the pursuit of their integration initiatives.

Transportation corridors   As part of the BRI, China is creating two key routes connecting Asia and Europe, both of which traverse Central Asia: the New Eurasia Land Bridge Economic Corridor (NELBEC) and the China-Central Asia-West Asia Economic Corridor (CCAWAEC). The entire length of the NELBEC railroad network is about 10,800 km, utilizing the Russian Trans-Siberian Railway and a second link from China through Kazakhstan and Russia. The CCAWAEC starts in Xinjiang and passes through the five Central Asian states to Western Asia, the Gulf and on to the Mediterranean and Arabian seas.

These extensive transportation links are part of China’s efforts to connect its own expanding domestic transport infrastructure, particularly its railroads, with those of its trading partners all the way to Europe. Already, cargo trains run (each journey taking 18 days) from London and Madrid to Yiwu, a trading hub south of Shanghai, while many other European cities have rail connections to China. Beijing is investing in building these rail and road transport corridors and other connective infrastructure to bolster the economic and trading competitiveness of economies in the region. Providing this support, the Chinese reckon, will yield benefits for China’s economy.

These modernized railroad links connecting China with Europe pass through EAEU territory. The EAEU-China trade-facilitation agreement is meant to ease the passage of trains and trucks across borders and through customs control points. Once vehicles pass through formalities in Kazakhstan or Russia, they are able to transit through other EAEU countries without additional stops and costs. This effective harmonization of the EAEU and SREB enables Russia and China to cooperate in Central Asia and avoid at least the semblance of any struggle for a dominant position in the region.

Asian Infrastructure Investment Bank  Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Russia are regional members of the Beijing-led and -based Asian Investment Infrastructure Bank (AIIB), which has invested in the infrastructure development programs of Central Asian states. Recently, Kazakhstan's Zhanatas wind power plant received loans of US$46.7 million from the AIIB. In Uzbekistan, the government says more than US$2.9 billion in AIIB-supported investment projects are under way for the development of water supply and sanitation, the reconstruction of roads in the Bukhara region, and modernization of transport infrastructure in Karakalpakstan. In 2019, AIIB decided to provide US$58.2 million for a road project to improve connectivity between Dushanbe and northeast Tajikistan and Kyrgyzstan.

The rival of my rival is my partner

In Central Asia, China and Russia are emphasizing cooperation for mutual benefit over competition. In effect, they have split responsibilities in the region, with Russia focusing on security issues and China contributing mainly to economic development, particularly through infrastructure investment. 

Through this collaboration, Beijing and Moscow are countering the US’s New Silk Road strategy announced in 2011, which aims to create a political and economic camp encompassing all the Central Asian states and Afghanistan that would present a unified front to counter Chinese growing influence and presence through its expanding BRI. Both China and Russia of course have testy ties with the US – Washington has imposed sanctions on Moscow over its conflict with Ukraine and the annexation of Crimea, while Beijing has been engaged in a trade dispute with the Americans. 

Sino-Russian cooperation in Central Asia has allowed the two countries to overshadow Washington’s regional initiative. It has also reduced the influence of the European Union, Turkey and Iran, all of which emerged as players in the region through soft-power policies following the collapse of the Soviet Union in 1991.

In comparing Russia's and China soft-power coefficients in the region, there is no doubt that Russia has some major advantages. Most of the population is fluent in Russian and have access to Russian television and other media. Millions of ethnic Russians live in the area, while millions of people from Central Asian states live and work in Russia. Russian universities and educational institutions attract thousands of students and teachers from the region. 

To be sure, China is no laggard in projecting its soft power and expanding its influence in Central Asia. In many cities in the region, China has opened Confucius Institutes that offer young people programs and classes in Mandarin and Chinese arts and culture. Thousands of students from Central Asia attend universities in China with the help of Chinese government scholarships. With the growth in trade and commerce between China and Central Asia and the increased presence of Chinese enterprises in the region, citizens of Central Asian economies see advantages for employment in building their China competence.  

China and Russia are each deepening their influence in the region, but in general are avoiding conflict and rivalry, focusing instead on wielding soft power and emphasizing cooperation. This collaborative relationship would seem beneficial for the countries of Central Asia and their economic growth, as they will not be caught in the middle of any intense Sino-Russian competition and be forced to choose a side. (Compare this with the pressure that Asia Pacific countries have come under in the context of US-China strategic competition in the region.) 

Indeed, the five Central Asian economies have been enjoying relative stability and rapid economic growth. The collaborative mechanisms designed by Russia and China – the SCO and the CSTO on the security side and the EAEU and the SREB (BRI) in the economic sphere – have for now promoted a geopolitical climate which, given the volatility and tension in nearby regions, might well have turned out to be far less favorable.