Chinese-Central Asian Energy Nexus and the New Great Game
China is one of the most populated countries, consuming about twenty per cent of the world’s energy resources. Its hunger and thirst for energy is increasing with the passage of time. Along its coast China has built many factories which are referred as factory-cities and has the largest auto-market in the world. China’s economy is expanding so it desires to oil that it needs to feed its industries. According to the International Energy Agency (IEA), oil security has gained a vital position in the Chinese external affairs strategy. According to US energy information administration, by the year 2035 China’s energy demands per cent. It has vastly expanded its industries and to feed them China is currently importing energy resources from the Middle East and the African region. These regions are politically unstable and would not be able to fuel the industries of China for a longer period of time, so the most suitable option for China is to explore the energy resources is Central Asia. The Central Asian region, full of energy resources, contains almost four per cent of global energy deposits. With enormous amount of natural gas and oil deposits, the region has game. Russia, United States and China are the important players in this game as all of them are looking to have a control over the reservoirs of the Central Asian region. Currently China is leading this new great game since the 2014 when the US and NATO forces would withdraw from the Afghanistan. This article would basically try to dig in the energy opportunities available for China and that how would the Chinese Energy policy in the region, affect the new great game?
The Central Asian Region
independent countries i.e. Kyrgyzstan, Tajikistan, Turkmenistan, Kazakhstan and Uzbekistan. Russia is situated in the North of the central Asian region, Turkey is in the West, China in the East and Afghanistan and Iran are in the South. After becoming sovereign states in 1991, the CARs initiated a friendly policy towards the bordering countries. Although this region has enormous natural resources but unfortunately, the Central Asian states are landlocked. The region is home to about four per cent of global energy deposits. Consequently this region is an attractive destination for the global super powers as in today’s modern age the control over the energy resources will determine the future of the super powers.
China and Central Asia
China is much cautious about its energy needs and is developing “energy diplomacy” with the region. Trade ties between China and Central Asia have increased over the period of time as in 2011 it was at $40 billion. China is looking to make this region a regional trade free zone to sneak into the region’s huge energy reservoirs. In the near future the expansion of the energy projects between China and Central Asia, will involve a ChinaArab line to the oil terminals of the Persian Gulf. These energy paths and corridors will make China an important part of “Pan-Asian global energy bridge” which will connect the energy providers such as Iran, Russia and Central Asia to energy consumers. It will increase the Chinese role and
Kazakhstan has huge reservoirs of oil and it is very tempting for the Chinese industries. Kazakhstan oil reserves are 37 billion barrels of oil and the natural gas resources are at 8.6 trillion cubic meters. Chinese companies are operating and investing in Kazakhstan. China National Petroleum Corporation (CNPC) has the whole shares of the Kazakhstan oil company Aktobemunaigaz and was renamed as CNPC- Aktobemunaigaz. CNPC is trying to have a 49 per cent minority shares in Kazakhstan’s AO Mangistan Munaigaz Company from Kazmunai gaz. This agreement would give the Chinese government the power over almost 15 per cent of Kazakhstan total oil production. Kazakhstan has for the Chinese oil companies. The development of energy relations will bring more opportunities for both the countries. The cooperation according to China will help in strengthening and securing its north-western boundary of the unstable Xinjiang Uyghur independent area. It will also help the China in her “go west” policy. But the cooperation be depending on the digging and searching of new oil and natural gas deposits present in the shelf areas of
the Caspian Sea. This might help in inviting more Chinese oil and natural gas exploration companies in the region and might reinforce Chinese companies’ presence in the region at the cost of European, American and Russian companies.
One of the huge natural gas exporters to various regions of the world is Turkmenistan. According to the oil and gas journa,l Turkmenistan has proven natural gas reserves of 265 TCF. The Turkmenistan-China gas pipeline came into existence due to China’s thirst for energy. In 2009, the then president of Turkmenistan Gurbanguly said that Turkmenistan would raise its gas exports to a volume of 65 bcm a year. This gas pipeline is considered to be China’s chief exporter of natural gas via the pipeline that goes through Uzbekistan and Kazakhstan. By improving its energy nexus with Turkmenistan, the Chinese the geopolitics of the region. Beijing has a huge advantage as it is and will be a huge importer of oil energy from Turkmenistan and will not have to look towards the politically instable regions. The IEA reports that by 2020, China’s production will be 120-140 bcm while its consumption would be 180 to 200 bcm. China would be buying more from Turkmenistan due to this supply and demand gap. Chinas relations with Uzbekistan have improved over the years. The oil and gas journal reports that Uzbekistan sits on 65 tcf reserves of natural gas, making it 4th largest in the Eurasia region and 19th in the world. China has also sneaked into the resources of Uzbekistan. It has setup 65 large companies including GTIC, CNPC, and China machinery. Two companies are the main cooperators namely CNPC and Uzbekneftegaz as in 2004 they inked a treaty on energy collaboration. Two more contracts were signed in 2006 to explore and expand potential petroleum deposits Sea together with Russia’s Lukoil, Malaysia’s PETRONAS, and South Korean National oil cooperation. One more joint venture was to explore oil between Uzbekneftegaz and The crossroads of Uzbek-Chinese gas pipeline has added momentum to the energy cooperation. Uzbekistan is gaining, as they are attracting the Chinese investment to its energy sector with spillovers to other sectors of its economy. Chinese investment has exceeded $4 billion making her the largest investor in Uzbekistan, third prime trading collaborator, and main purchaser of cotton and principal supplier of telecom apparatus. The bulge in the economy of China and increase in the industrial growth has compelled it to think about its energy needs. The domestic production of oil and natural gas are not enough to depending on political instable Middle East for its energy needs but now china towards Central Asia to explore the energy needs. The advantage is that the Central Asian resources will be available to China for a longer period of time. All the major powers are looking towards Central Asian states to fuel their industries but China is in a better position.
Replaying the Great Game
The Central Asian republics share a same strategic environment. Multilateralism is the principal factor of their foreign policy. China has risen to one of the world’s largest economy
and has brought the Central Asian Historically over the years China had great relations with Central Asian states but during the last century CARs might be witnessing a replay of great game, with China and US as the new actors. CNPC is state owned oil giant and has penetrated fully in to the Central Asia region, making China a top player. The exit of US and NATO forces from Afghanistan in 2014 will it would open up more geo-strategic gates for it. In the long run China sees Central Asia as a gateway of trade with gulf and Europe. The regional energy nexus of China and Central Asia makes the nexus of a new great game that will be there and continue for a long period of time. During the 19th Century, the Great Game was a political rivalry between the empires of British and Russia. The “New Great Game” is a fresh phrase used to explain the contemporary geopolitics. It also points towards neo-colonialism and the geopolitics of pipelines. With the emergence of the new states in the Central Asian region in 1991, the super powers hastened towards this region. At that time, the newly liberated nations were not in a position to establish their precise foreign relations and policies but, as the time passed they learned the art, and the attitude of the great powers. The production of Oil and Gas is the backbone of CARs economy, thrown to several constraints, they depend on their bordering countries to pump Oil and Gas out of the region. Since the contemporary geopolitics in the Central Asian region is very dense to get hold of, so it is very tricky to determine which country is the leader of this new great game in Central Asia. However it has been noticed that because of this geopolitical game, CARs have been in pain as they they expected to have. Even after 20 years, oil supply out of the region is not very noticeable. There is a race between two forces for pulling Central leading role from the western side in the Central Asian region being played by the US and from the Eastern side China and Russia are the main players. And then there is a contest within a contest as Russia and China are trying U.S have made huge investments in the Central Asian region to increase their super powers have made investments in the region to establish the pipelines that would work under their power and wish. Since it is a contest between the regional and extra-regional powers these players are surrounding the natural resources of the Central Asia. Central Asia has a huge disadvantage of it being a landlocked region. The Central Asian republics don’t have the infrastructure like the roads, pipeline players in the region are collecting natural wealth like oil, gas and valuable minerals to improve the economy of their countries. The regional and big powers had developed their politics on the pipeline networks. The goal of the great powers is to create a course through the Central Asian their national interests. Strategically the Caucasus has been a main region West and U.S. for the shipping of energy wealth. The game of pipeline this region. The Russian government controlled pipelines are crossing through this important area, although, Washington is trying to deteriorate and destabilize this network of pipelines. The U.S has developed a pipeline to the Mediterranean, setting-up a new bloc with Azerbaijan, Georgia and Turkey.
Looking at the complete picture, the behavior and policies of CARs are sustain the symmetry in the relations between regional and extra-regional powers. Apart from the diplomatic dealings, Central Asian states have paid attention towards their goals which are heading them to establish close economic and political relations with the Western powers. The Central Asian countries should establish their precise foreign policy with understanding of the current game so the new great game. This new great game is very essential to determine not only the future of the international politics but also of the central Asian region. China did not have that much now. The Chinese role and investment in this region would now increase as their demand for the energy has increased with the passage of time and on the contrary, the role of US in the region would be decreased since they are leaving Afghanistan in 2014. The CARs should now realize their importance and should play this game very seriously, taking the maximum out of the super powers and cashing their natural resources. *The writer is working for Institute of Strategic Studies, Islamabad.