Money is expected from China, but what does Beijing want?

A lot of hope was put into the recently held “One belt one road” summit with the participation from 28 presidents, but the results disappointed – no nitty-gritty details were put forward in the realization of the initiative put forward by the Chinese leader back in 2013. Andrey Grozin – head of the department of Central Asia and Kazakhstan of the Institute of CIS countries explained what was the reason for this forum and in which was it interesting for the countries of the region.

In Russian political expert’s opinion, Chinese initiative “One belt, one road” is a massive project, whose purpose is to globally change not only economic, but possibly also political balance of powers on the massive continent of Eurasia, however it is too early to talk of any considerable projects within it.

Andrey Valentinovic, how do you evaluate Chinese initiative – One belt, one road? How realistic is it?

So far it is just an initiative. Some experts expected specifics from the recent forum like a list of projects etc., even though form the start it was clear that the event was planned and held not for these, but other largely domestic policy aspects in China, related to upcoming convention of CCP, inner transformation within Chinese elites and geopolitics.

As for the initiative itself, it is undoubtedly interesting. Because it is essentially an alternative to globalization, as Americans decrease their economic presence, including in Asia-Pacific region. And overlooking the trans-pacific partnership by the same Americans is viewed undoubtedly as US’s  retreat by the media, with US giving Beijing a check to implement globalizing, economic and logistical projects.

Also, Xi Jingping’s statements at the last summit in Davos regarding globalization speak of the fact that within Chinese administration, One belt, one road initiative is viewed as an integral part of the concept of world globalization of economy, and in perspective, possibly of politics through various projects.

Is it vital? Yes, because enough information was already published with numbers about how much  Chinese companies invested in the countries participants in the initiative. This is big money – tens of billions of dollars. Even more is expected to be invested through the Silk way fund and Asian bank of infrastructure investments, and through some other financial institutions, which Beijing will be implementing, so the process is in motion.

The other thing is that the Chinese evidently still didn’t construct schedule of realization and haven’t determined of the acceptance of idea of specifying of this initiative.


First of all, this isn’t in the tradition of Chinese political thought. As opposed to the west, there they do not construct specific business plans, especially with regards to initiative, related to geopolitics.

Secondly, there is Deng Xiaoping’s legacy, which is gradually being revised, but at the pace it is being revisited now, it could be revised for another several decades. I am talking about his idea that when you are strong you have to hide your power, showing partners your weakness, and when you achieved success do not yell about it and stay modest.

These are traditions of Chinese political axis, and thus one shouldn’t expect from them a western approach to realization of a project, when everything is clear and done on time.

On top of that, there is another moment. China ended up in a winning position with this initiative, so why would it concretize. The very same chairman Xi Jinping said at the forum it is expected to expand the funds, directly oriented at financing of the One road, one belt initiative, and there was even a 117 bil. figure voiced. However, where and into what will this gigantic sum will be invested, is unknown.

However, a lot of leaders of world countries, have come to the forum, because everyone wants to participate in some wat in the future Chinese globalization model. Especially considering the fact that China is still paying for everything. In the very same Central Asia, among presidents and expert circles an opinion prevails that China is sitting on suitcases with money, which it doesn’t know what to do with, and it would be good to help them.

In reality though, nothing has been that way for a long time, China doesn’t splurge money for nothing. The initiative isn’t some kind of charity. By bringing to life the project of One belt, one road China strives to first of all realize its own national projects. These can coincide with national interests of states, in which they plan to plant the segments of that road, or go against them. However, those are details that will be viewed individually in each separate case.

A little more on the summit. In Chinese media it is discussed in highly bright colors. All the while, speeches of Russian president Putin, Turkish leader Erdogan and even UN chairman Giterresh are placed on seventh and eighth pages and in small font. On the central spot, however, is always comrade Xi Jinping and emphasizing of the special role of China in the process of globalization. Thus, the forum was a strictly domestic policy affair with a goal of affecting the geopolitical perestroika in Eurasia.

Whether anything will come out of it or not is hard to say, but in any case the process is pretty long. Project One belt, one road was announced not so long ago – in 2013. Not enough time has passed to evaluate the success or lack thereof of the project, which aimed at changing global economic models and the whole economy, transport and financial system, that exist on the continent; thus giving any reviews can still only be possible depending on individual preferences: either to critique or to exalt.

So what are the benefits of the One belt, one road initiative to partner-countries of China. For example for Kazakhstan, Russia, Kyrgyzstan?

Here, everyone has their hopes and dreams. Russia, for example has now ended up in a good position. Look at how carefree Russian leader behaved at the forum. And why? Simply because China, due to its political paradigm tries to avoid sharp angles.

If you lay claim to a leadership role, especially leadership in the changing of paradigm of economic development of the entire continent, you need to get to the forefront and accept the strikes of opponents; even such painful ones as the one from India, which refused to participate in the Beijing forum, or from Europeans who refused to sign its final document.

Thus China, will gradually be forced to rebuild foreign policy and foreign economy mod of behavior.

For now they are saying that “we are for the good and against everything bad” and the realization of the initiative will simply create order, that will answer interests of everyone – Kyrgyz, Kazakhs, Russians, Pakistanis and mongols. But such things don’t happen. Everyone tries to receive their profit from the Chinese project.

Kyrgyz are simply counting on receiving some money – either from the implementation of project China-Kyrgyzstan-Uzbekistan, or through transfer of enterprises on their territory, which by the way the Chinese rely on. But this transfer has stalled, society in Kazakhstan and Kyrgyzstan has a critical view of project.

Moreover, there isn’t much specificity: what will be transferred, when, and under which conditions, how will it affect the ecology and jobs, etc. Thus, this still remains on the level of wishful thinking, and subjects for discussion. However, the Kyrgyz, just as Tajiks count on receiving a small piece of the pie of  future economic “belt” and feeding from this segment.

Kazakhs have a more massive project – they have prepared a project Nurly Jol which in essence poses itself as an effort to turn Kazakhstan into an irreplaceable transport hub at the central Asian side of the future economic Silk Way. And the talk is not only about the money, because even by the most overstated optimistic forecasts the profits from the transit aren’t that sky-high. We are talking about millions, maybe tens of millions annually. For Kyrgyz and Tajiks that is big money, but for Kazakhstani budget its not that important. Thus, the goals pursued are not only economic but also political.

Which ones for example?

Turn into an irreplaceable regional partner for China and derive from that position various material and other dividends.

But the Kazakhs might be dealt a bad hand due to the fact that Chinese economic model is transforming and even such simple things as the need for raw materials and processed mats is decreasing in China.

And what where does Russia’s interest lie?

Russia also sees itself as a geographically irreplaceable element of the future project or initiative, simply because it is theoretically impossible to go around it from the south, but the Middle east and central Asia is a different animal. Thus central Asia, with its infrastructure, spaces, political risks isn’t a good enough replacement for Russian territory.

Many risks, surcharges, national peculiarities, under which we can assume a presence of corrupt component, and inner potential instability of all political regimes that exists in central Asia, not to mention Afghanistan, Syria and others, that put to serious risk any good prospects.

Russia on the other hand wants a real integration, It counts on the fact that One belt, one road isn’t just a set of various transport projects, which in the end will ease the entry for Chinese goods to markets of Western Europe. In Kremlin, apparently the hope that this will be a geopolitical project for the entire continent, in which threr is a full-fledged, equal participation of all partners.

Moreover, it seemed to me, and I might be mistaken, that Putin positions Russia not only as a main transport-logistical space for Chinese railroads, but also as a leader of Eurasia Union which will be one of the cofounders of the new world order, in which there will be a role for EU, SCO and ASEAN.

But that very EU, has quite a critical view of One belt, one road.

Europeans right now put China in quite an uncomfortable position. Financial Times for example, before the forum in Beijing broke out with an article of the departing head of the European Union, Donald Tusk, in which he quoted an interesting statistic – turns out out of six echelons that leave China for Europe, only one comes back full. Of course, from the standpoint of the economy, Europeans don’t like that. They want opening of Chinese markets for their goods, while China in turn conducts its own policy, which can be mildly called protectionist. However, if Europeans will stall Chinese business, then the question of expediency of One belt, one road initiative arises. Why to break into Europe if it will guard itself through protectionist barriers from Chinese products.

But, in any case, Russia comes out a winner, because one way or another, either side will need a force that will put them at a meeting table and informally coordinate different points of view; thus it is impossible to ignore both central Asia and Russia.

So there are no problems with Russia and central Asian countries?

There is another tendency here that needs to be accounted for given all the problematics of the One belt, one road initiative. It is the changing of Chinese foreign policy in Central Asia.

How are they preparing for the upcoming summit of Shanghai organization in Astana right now? They almost arent. SCO isn’t really mentioned much in Chinese media, and every month they do even less and less. It seems like interest for multilateral foreign policy contact is dying in China, and there is more emphasis on bilateral format.

By the way, the One belt, one road initiative itself doesn’t suppose a multilateral format. I expected that they will mention some sort of multilateral format at the forum in Beijing, but haven’t heard anything of the sort. It is implied that China will solve issues with partners within the initiative on a bilateral basis, so they will talk with each side separately on given subjects.

Russia on the other hand would like some expansion and involvement on various institutes, unions and structures within the large continental project of Eurasian dialogue. But China hasn’t matured for such an approach. Thus, for now it is planned to solve issues on the subject of the China-Kyrgyzstan railroad with Bishkek and Tashkent separately. And this is assuming that the project will connect at least three countries and give additional transport opportunities outside the limits of implementation of the project throughout the region.

If such an approach from China, will stay then, most likely won’t see great results of the implementation of this initiative. Yes, China is rich now and it can afford to build a road of any difficulty, the way they built, for example a tunnel through Kamchik in Uzbekistan into Ferghana valley. It is hard from the engineering point of view, and an expensive structure with a weak economic motivation behind it, but with a large geopolitical weight for Tashkent, because it united countries avoiding Tajikistan. And this is something worth spending money on.

Thus, today China can technologically and financially implement any project. But they are starting to count money in China. And there are western critics that printed a bunch of articles in advance of Chinese forum, in which they noted that China’s investment into foreign projects will gradually decrease. By the end of 2016, the decrease was by 7%, and we are already seeing a gradual decrease in the first quarter. In other words, Beijing is splurging based on purely political motivations and wont do it if it doesn’t pay off.

Thus, there is a big pile of problems and controversies. China doesn’t want to worsen a negative perception form the partner countries. There, they understand that a growing of negative perception towards Chinese business and citizens might ultimately have bad results. This is why there are talks of using soft power and expanding of global network of Institutes of Confucius, quotas for students, etc. And this is completely right, and is a healthy approach. The issue is that output from such approach may be seen in ten- twenty years, or may not be seen at all; its hard to predict when the perception will change.

It is possible that the initiative of Chairman Xi One belt, one road that was voiced by him in 2013 isn’t just flashy and beautiful for domestic consumption and foreign policy. I think the issue also the understanding that Chinese economy is in fact starting to slow down, and the model that has worked successfully for at least quarter century and kept developing and now isn’t bringing results for China. Thus, we see a transformation of dominating economic model in China, and a desire to move away from economy of production, aimed at foreign markets to production economy aimed at domestic markets. Thus, the One belt, one road initiative that is supposed to lower expenditures – is a necessary step.

This is understood in China, as well as the fact there is no deposit of time for solving such difficult goals on implementing those transformations. Competitors are closing in. The forecasts that India will soon become the main economic competitor for China grow. All of this demands an impulse for development.

At the same time there are multiple limitations. Will the Chinese be able to outpace them? It is a difficult question because there are no criteria that would allow to objectively judge that. Yes, from the standpoint of resources it looks possible, but from the standpoint of global geopolitical tendencies there are many controversies, that play against Chinse initiative. Starting from the growth of conflict potential in zones of transportation of economic Silk road and ending with unsureness of the west towards “One belt”.

Look at how the forecasts have change throughout the months regarding how new American administration will build its relations with China. That is the example of how unpredictable the situation is. And who knows what will happen next? Who will win? Will it be wall street financiers? There are too many wild cards that make it difficult to analyze.

There is also an opinion that the One belt, one road initiative is an attempt to compete with EAEU. Is that so?

There is such a point of view, but there is also a competing one. Putin, I think, said at the conference that he doesn’t view the initiative as a competition. Russia doesn’t seem to worry about it absorbing EAEU.

However, I think that Kremlin views the situation objectively, and sees how strongly China has entered Central Asia in the economic and financial sense, and how it put everyone on its financial needle.

Why not? It is this dependency that is quite often used by some experts for scare tactics?

But how do you realize this dependency? For example in Bishkek, criminals blew up a bomb near the Chinese embassy. In response, China created problems via making it hard for Kyrgyz businessmen to get vsas. But I think that officials of even such economically limited country can handle it. What else? Will they postpone the building of the railroad China-Kyrgyzstan-Uzbekistan? What will that change if they already have been trying to build it for twenty years?

People have different problems and difficulties. If Chinese will give money –good, if not they will survive. What will Chinese absorb in these countries? Dushanbe today is the bastion of Chinese thought economically and of Russia in military sense. And what does that change within EAEU? Tajikistan wont be accepted within the EAEU? Good, I don’t think there needs to be another problematic country there.

Look at how the xenophobic discourse changed in Kazakhstan or Kyrgyzstan; twenty years ago everyone talked about an almost direct military overtaking by China, ten years ago they said that Chinese will intermarry with Kazakh girls and will take over the country form the inside and now they speak of the economic overtaking. So there is a lowering of perception of China as a threat.

Moreover, China already has all it needs in the region. Governments of countries aren’t pro-China but closely consider Chinese interests, and Chinese competitors wont pose a threat to china in a near future. A little dependency through financial way is the maximum of what China was striving for, at least in the short-term perspective. China shouldn’t take responsibility for everything that’s going on in these central Asia countries. It is satisfied with the level of dependency existing today.

By the way, in the early January of 2017, state committee of China published a white bool dedicated to politics of China in the sphere of cooperation and securing of security in the Asia-pacific region. In it, partnership with Untied States is put in the first place and partnership with Russia on the second, and then go all the others, with SCO in the last spot. This is a reflection how in reality Chinese foreign priorities account for interests of Central Asia or EAEU.

IF you remember, EAEU was initially viewed by Chinese as a Union, that is created among other things to make it harder for Chinse goods to flow through ex-Soviet Union space. But with time, relations between EAEU and China have changed. In the end everything turned out well, and instead of give borders there is one, etc. Also there is possibility of creating channels for Chinese goods at optimal prices.

Thus, I repeat, China has everything it needs in our region. On one hand, it is a more or less successful control over potentially separatist and islamist forces of evil. On the other it is a serious economic and financial dependency from China of political elites. But they don’t seem to worry much about it in Russia because they don’t see a serious potential in China, that put under question main zones of domination of Russia. China takes its own niche. Beijing understands that it secured itself a strategic base in Russia and CA and got access to resources. Nobody is expecting any threatening moves from China.

Thank you for the interview.


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