China-Central Asia summit has become exceptionally important for Russia
The China-Central Asia summit ended on Saturday, where for two days the leaders of China and our neighbors (Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan and Tajikistan) discussed plans for the future. In our Russian media, emphasis was placed on the activation of the New Silk Road project in the part that goes through the Caspian and bypasses the Caspian - as the commentators put it, "without Russia's participation." In fact, what happened in Xian needs to be dealt with much more carefully.
The final phase of cluster consolidation
This summit is a kind of final phase of many processes. Some of them are rather “technical”, while others, on the contrary, are long-term and strategically significant. Central Asia (in this case, in the traditional sense for us, “Central Asia”) has been preparing for such a development of events for several years.
The author repeatedly wrote about many preparatory steps in the Military Review: both about preparations for the political and economic unification of the region, and about political and social reforms, about the military-political union of Kazakhstan and Uzbekistan, about the significance and issues in changing the constitution, elections, problems in energy and irrigation, features of the functioning of the EAEU format, etc.
The chain of events, objective and subjective reasons, suggested that sooner or later China would have to decide on the policy of interaction and investment in Central Asia. For their part, our neighbors have gone through a series of conceptual changes in a year and a half that guarantee long-term stability for Chinese investment. They even tried to resolve internal conflicts on their own, through internal mechanisms, which was shown by the autumn events in the Ferghana Valley.
The concept of a single sub-region was taken from theory into practice, and the time has come to address the issues of development, water supply, energy, transport routes - respectively, the choice of investment leverage. Investments from Russia are not obvious, and from the countries of the Arab world - insufficient.
The entire sub-region has moved and is moving briskly into the Chinese eastern economic cluster, of which the production sites of Southeast Asia and Japan are part, it is time for China itself to give an answer regarding its vision and policy concept of the "Community of Common Destiny" and "Strategy 2030".
This answer is disclosed in some detail in the final Declaration of the last summit, and it is disclosed in such detail that it is not necessary to focus on subsequent statements by politicians and administrators - we can directly refer to its points and analyze each of them carefully.
First of all, one should pay attention to the symbolic details, which (like everything related to China) are sometimes as important as the wording in the documents.
The summit was held in Xi'an, China's central Shanxi province. Not in the main trading territories that provide the main flows from and to the Celestial Empire, not in the most populous province. However, Xian for Central Asia is the same “middle point” - the former imperial capital, part of the lands of Qin Shi Huang, who assembled a single state, the site of the sacred mountain Hushan, the famous “terracotta army” still stands there. So Uzbekistan included in the new Constitution the thesis about the Uzbek culture that existed for 3 years, and its representatives went to the summit to the city founded in 000 BC. e., not to Shanghai.
Today, Xi'an is not a trading stronghold, not an endless trading port, but a technological and university cluster well-known outside of China. These are complexes of high-tech industries (automotive industry, aviation, electronics) and dozens of large educational institutions.
China does not have such symbolic coincidences - the empire offers Central Asia, first of all, technological development, such a combination stories and modernity. Symbols should not be underestimated (as well as overestimated, by the way) - they just always contain the conceptual and “image of the future”, but the details can already be considered in the joint declaration itself.
Actually, in the very first paragraph, the parties note that "they confirm the desire to jointly create a closer community of a common destiny for Central Asia and China." Thus (unlike many other countries), our neighbors directly declared not just common interests or attention to certain provisions of the Chinese concept, but full unity of views. Here they go further than many of China's neighbors and partners.
By the second point, the parties established the summit as a permanent organizational structure. With a separate secretariat, coordination mechanisms through various departments, that is, the summit has acquired an institutional form, and hence a focus (albeit at the level of intentions) on the practical sphere.
In the third paragraph of the declaration, our neighbors confirmed that: "The states of Central Asia highly appreciated the unique experience of the Communist Party of China in public administration, confirmed the great importance of the path of Chinese modernization for the development of the whole world." Why is this particular item important?
And the fact that the rhetoric of EU and US officials constantly rests on the theses about the allegedly “dictatorial”, “authoritarian” or even “totalitarian” nature of the political system of the Celestial Empire, and it is no secret that over the past year in the region the US, EU and Britain have spent a lot of meetings, testing the waters, not only on anti-Russian sanctions, but also on China policy. Here in the declaration there is a response to these efforts.
The fourth point is also very important, although outwardly declarative - it concerns general security. If the parties officially recorded the intention to "deepen cooperation" and help defend sovereignty, then Xinhua quotes more specific words of the head of the PRC:
"China is ready to help the Central Asian countries to strengthen the capacity of their law enforcement agencies in the field of security and defense, as well as support countries in their efforts to maintain regional security and fight terrorism."
For obvious reasons, the problems associated with terrorism and drug trafficking are regularly discussed in the region, but this is the first time that “strengthening the defense capability” has been spoken of in such a direct manner. China is not going to conclude military alliances - this imposes unnecessary obligations, but the leaders of the Celestial Empire did not previously seek to strengthen the defense capability of their neighbors in a direct (organizational) form, and not in terms of military-technical cooperation.
The fifth paragraph of the declaration is interesting in that it reflects references to such regional program documents as: “New Economic Policy of the Republic of Kazakhstan”, “National Development Program of the Kyrgyz Republic until 2026”, “National Development Strategy of the Republic of Tajikistan for the period up to 2030 .", "Revival of the Great Silk Road" (Turkmenistan) and "Development Strategy of New Uzbekistan for 2022–2026". This means that China agrees to include regional strategies as part of its own - until 2030. Fixing strategies as synergistic with China-wide has long been one of the difficult issues for launching large investments.
The sixth point concerns the further institutionalization of the China-Central Asia dialogue: the creation of a Business Council, the development of e-commerce forms and the establishment of an investment forum.
The seventh point caused, perhaps, the greatest reaction in Russia, since for the first time in one document those specific routes that China considers as priority in the region are described there. This is important because in over twenty years, about four dozen such projects have been developed, and here Beijing is finally giving an answer to the sacramental question for the region, where exactly does it want to invest large amounts of money.
Priority directions-corridors: "China - Central Asia", "China - Central Asia - South Asia", "China - Central Asia - Middle East", "China - Central Asia - Europe", including along the route "China - Kazakhstan – Turkmenistan – Iran”, trans-Caspian projects, including the ports of Aktau, Kuryk and Turkmenbashi, development of Termez as a logistics hub.
Separately, the China-Kyrgyzstan-Uzbekistan railway, the Ayaguz-Tachen railway, the China-Kyrgyzstan-Uzbekistan highway, the regular operation of the China-Tajikistan-Uzbekistan highway and the Western China-Western Europe automobile route were noted. .
For their part, Russian observers began to ask the sacramental question, where is Russia here? Indeed, where? And the point is not even in the “naivety” of the questioners, but in a kind of ideological, systemic crisis of our goal-setting.
In fact, how did it take us a long time to consider the projects of the "Silk Road"? But as something very important for China in terms of selling its goods to European countries. So important that for years they expected large investments in roads, warehouses, ports, airports. The problem is that the long overland route project itself, with its volume limitations, should have raised some doubts about the correctness of this approach.
Firstly, the world economy is really stagnating, growth is nominal, and in conditions of nominal growth, investments are directed primarily to the absorption of working supply chains. Your neighbors may not grow in consumption, but control over logistics, even in stagnation, gives you a stable additional income. It’s just that this logistics is required to be bought from neighbors, which, in fact, Beijing did, only very carefully choosing points for applying money. Absorption is, in fact, the only rational way of growth in times of crisis, and absorption and the development of logistics are generally win-win, since it allows you to respond flexibly to demand by industry. An analogue of this process is the absorption of financial transaction operators.
The second point is that the priority for China in such corridors, obviously, was not European, but specifically regional trade. Demand in the region will not grow - the income from logistics will work, it will grow, and logistics will generate income, and the commodity filling of the markets with its products, especially since Central Asia is growing in population, and some countries are going with a good GDP growth.
In this regard, is it not obvious that the main emphasis in the trade corridors towards the EU was made by Beijing on filling the Mongolian, Kazakh and our Russian markets with Chinese goods. And if there is no trade with Europe, even transit is limited, then what kind of Chinese investments in logistics to the European market through us can we talk about? If we want to fill our market with Chinese products (and we will do this), then Beijing will consider projects where we have financial participation. And the longer we wait, the more we will be pushed towards this.
Why do China need Russian roads for trade with Iran, Pakistan, Iraq? But if we ourselves want (or don’t want to, but we have to) connect to these routes, then no one bothers Russia to offer Kazakhstan to expand the railway network, expand the tracks in Mongolia or reconstruct the Baikal-Amur Mainline and the Trans-Siberian Railway, which Beijing is counting on, since they rationally distribute facilities.
The regret that Beijing did not include Russia in the Central Asian trade corridors is really a crisis of worldview, part of which is the perception of itself as the bearer of the fate of the "transit country". And in some ways there is even a positive point that the specific provisions of the declaration well highlight the limitations of such an approach. The manufacturer himself creates routes for his products, and does not wait for goods made by neighbors to pass by, in the hope that the neighbor will build a warehouse, a road and give a percentage for the transportation.
In this regard, we can only welcome that we have finally become substantively interested in deliveries to and through Iran, as evidenced by the steps of last year and the regular forum "Transport Logistics of the Caspian Region - 2023" held at the end of April. Prior to this, for a long time, ITC projects went in the form of multi-volume declarations.
The eighth and ninth points of the joint declaration relate to such basic topics for Central Asia as energy, water supply and irrigation. The countries of the region simply do not have sufficient own funds to recreate a full-fledged energy circuit, taking into account the growth in demand, as well as to reconstruct the sewerage system and clean it. Actually, all conversations with international organizations, foundations, especially with Beijing, began and ended with these questions. What was missing? Unity in matters of security, reforms of the socio-political system as guarantees of investment, a strategic horizon, which has been actively pursued in the region for the past year and a half.
The ninth paragraph also reflects Beijing's vision for gas projects in the region, and it spells out the creation of a fourth branch of gas supply from Turkmenistan to China. Taking into account investments in the energy circuit for Ashgabat, this means a tangible inflow of money to the budget, but China does not yet consider such a project as TAPI as necessary for inclusion in program documents.
The remaining six points of the declaration relate to the cultural sphere, education, interaction within international platforms, primarily the UN, etc.
For Russia
What conclusions can be drawn from all of the above for Russia?
First of all, we must pay tribute to the aspiration to solve specific problems that the countries of Central Asia have demonstrated over the past year and a half. In fact, they ran a distance of a decade and a half during this period. Already according to the Samarkand Declaration last year, which, by the way, the parties mention in the Xi'an document, it was obvious that the region is firmly aimed at realizing itself as a single economic entity.
Samarkand ended in December with a union treaty between Uzbekistan and Kazakhstan, and other countries also participated there. It should also be noted that political reforms were carried out quickly, in Kazakhstan and Uzbekistan they found a new form of social consensus with the elites, and something similar is somehow waiting for the rest. This was achieved by bringing to the elites the need for unity and a new social consensus. This is exactly what we don't have. And here it is quite possible to take innovations from neighbors “in the piggy bank”.
The next conclusion is that it is required to “turn the tap” on the public discussion on the topic of united Eurasia, the USSR-2.0, and so on. As a result of both past years and objective reasons, we and Central Asia are moving together to the Chinese economic supercluster. But we are moving apart. Our difference is that for China, Central Asia is a part of the future production site, like the countries of Southeast Asia, and we are a supplier of raw materials and a consumer of products.
On the other hand, we are a military-political factor that relieves China of the burden in the confrontation with one of the Western global projects, moreover, an aggressively exalted project. Our positions and functions are not one with Central Asia, and China cannot and will not consider Eurasia as a whole. The symbolism of the Xi'an summit clearly works here.
The synergistic window of opportunity for restoring and strengthening our influence has been and still is towards Iran and the Middle East through the Iranian trade corridors. The Middle East is surplus in hydrocarbons, but all other resources are in short supply, and here we can develop trade in commodities, even in the absence of a base for manufactured goods. The potential for wood and agricultural products alone in this area amounts to several tens of billions of dollars.
Moreover, in central Iran we can also dock with the transport corridor of Beijing. The Middle East is just starting the process of new consolidation, but the priority there is still the repayment of old conflicts, the concepts of the future have not yet been developed there, and it is not obvious for the region which economic supercluster to stick to. This phenomenon is temporary, but the possibilities of this direction are still high.
From the point of view of relations with Central Asia, the time has come for us to finally decide what the EAEU is. Without breaking this association, it is required to come to something in between the former EurAsEC and the EAEU. The EAEU for the needs of re-export (namely, re-export has always been a real priority) as an organizational form is obviously redundant, for the needs of parallel imports in the current situation, the EurAsEC is insufficient.
In general, it is a big question how deepening the unified tariff and tax policy is needed after the Xi'an declaration. We must be fully aware of the fact that Beijing will not finance Central Asia free of charge - China pays us for raw materials, we pay for the attracted labor force, these funds fill the region's economy and return to China. If we do not define the mathematical limits of this process, then, taking into account our system, we will play the role of a specific macro-financial transit country.
The fourth conclusion is that we should not worry at all about the growth of trade turnover with Beijing. It is based on the fact that China does not depend on trade with us for industrial goods, we are not a priority market for it. Here it is necessary to separate political declarations and geopolitics from mundane specifics.
For China, even the problem is that Russia has multiplied its demand for the yuan and is switching to international payments in yuan. We can and will objectively increase our turnover at the expense of energy sources, even a directive reduction in the supply of household goods will not affect work in critical industries, but will stimulate our own production. It's a matter of changing the approach.
In general, the results of the summit in Xi'an really became a consequence and result of serious preparatory steps. And the conclusions that are given here are only necessary, but by no means sufficient. These processes need to be deeply and carefully studied from different angles.
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