Tajikistan in the shadow of China
As the most pro-Russian republic of Central Asia became an economic appendage of the PRC
After the collapse of the USSR, for many years, Tajikistan was considered the most pro-Russian republic of Central Asia. But by the end of the first decade of the 21st century, new economic realities actually turned this republic into the periphery of the PRC and the pump for pumping money from Russia to China.
China's return to Central Asia
At the very end of the 19th century, the interests of four states — three empires and one emirate — clashed in the Pamir Mountains. So as a result of maneuvers and small clashes of border detachments of Russia, Britain, China and Afghanistan, the modern border of Tajikistan appeared randomly.
At the end of the XVIII century, being at the zenith of its power, the Chinese empire of the Qing quite seriously claimed all the lands of Central Asia. Then, almost until the end of the 20th century, China was in a protracted crisis. Any noticeable Chinese influence on the Central Asian republics was absent until the collapse of the USSR. Tajikistan was no exception.
For the first time in stories a high-ranking representative of new China appeared on the territory of the Tajik SSR 18 June 1991: Ambassador Extraordinary and Plenipotentiary of China to the USSR, Yu Hongyan and his wife, visited Dushanbe on a familiarization visit. The main newspaper of the republic “Communist of Tajikistan” happily wrote about this event in those days.
A few months later, at the end of December 1991, the Soviet Union disappeared. Already 4 January 1992, China was one of the first to recognize the independence of Tajikistan and established diplomatic relations with it. The Chinese Embassy in Dushanbe opened 13 March of the same year.
At that time, Tajikistan had no time for international relations - there was a civil war in the republic, the number of those killed, according to the most modest estimates, was tens of thousands. Once again, the embassy of Tajikistan in Beijing opened only five years later, on April 7, 1997.
The former director of the state farm named after Lenin Emomali Rakhmonov, one of the winners in the civil war, became the official head of Tajikistan at the end of 1992. Over the next ten years, President Rakhmonov strongly emphasized his pro-Russian orientation, but his first official foreign visit as head of state was a trip to China in March 1993 (the first meeting with Yeltsin took place only in August of the same year).
In Beijing, the highest officials of the PRC and the Central Committee of the Communist Party of China received the head of Tajikistan. It was then that, at the request of the Chinese side, Rakhmonov signed a declaration in which he acknowledged that Tajikistan and China "will continue the discussion of unresolved border issues." So in a veiled diplomatic form were called the old territorial claims of China to the borders of the former USSR.
Mountain roads in Tajikistan, 1982 year. Photo: Ratushenko / RIA News
China was in no hurry - he built his relations with Tajikistan carefully, measuredly, but persistently. To begin with, Beijing required communications that reliably connect Tajikistan with China. The border of both countries passes in the high-mountainous region of the Pamirs, previously only shepherd's trails existed here.
In December, 1996, the countries signed an agreement to open a temporary Kulma trade passage on the border between Tajikistan and the PRC. At the same time, China began large-scale road construction on its territory in order to open a modern road to the border with Tajikistan in the high mountains. The construction of high mountain roads took almost eight years.
For all 90-s, China limited itself to providing loans of $ 10 million and a batch of humanitarian aid for $ 200 thousands - for interstate relations the amounts are very modest, almost symbolic. At the same time, Chinese loans were provided under the obligations of Tajikistan to buy Chinese goods.
China’s direct participation in Tajikistan’s economy in 90 was minimal and limited to the creation of several joint ventures for the processing of cotton and the reconstruction of the Dushanbe tobacco factory.
In Dushanbe, in every way stressing their friendship with Russia in these years, they considered Beijing to be the most important foreign policy partner. The last 1 secretary of the Dushanbe city committee of the CPSU, Jamshed Karimov, who led the government of Tajikistan at the height of the civil war, became the first ambassador of Tajikistan to the PRC.
Before 2000, the President of Tajikistan 12 once held summits with the head of the Chinese Communist Party, Jiang Zemin - more often than with heads of other states, including Russia. The outcome of such meetings were dozens of Tajik-Chinese agreements in all areas of interstate cooperation, as well as the “rectification” of the border of Tajikistan in favor of the PRC.
For the first time in 1999, Dushanbe agreed to transfer 200 square kilometers to China in the valley of the Markansu River at the junction of the borders of China, Tajikistan and Kyrgyzstan. Exactly one year later, when the transfer was completed, the CCP General Secretary Jiang Zemin visited Dushanbe - this was the first visit by the head of China to Tajikistan.
In his official address to Rakhmonov, the head of China advised "to make joint efforts to improve relations between our countries to a new qualitative level in the new century."
Tajiks in Chinese clothes
In May 2002, President Rakhmonov again arrived in Beijing to commemorate the decade of establishing diplomatic relations between Tajikistan and the PRC. By the anniversary, the parties signed another agreement “On the Demarcation of the Border and Settlement of Territorial Disputes”, under which Tajikistan agreed to transfer a thousand square kilometers to China in the mountains of the Pamirs.
Cotton harvest in Tajikistan, 1985 year. Photo: Ratushenko / RIA News
Tajikistan, by the standards of China, is a very small country - in terms of population 200 is smaller. Therefore, the scale of China's economic assistance to Tajikistan is of a modest size. In exchange for the first concession of the territory, Jiang Zemin in 2000 decided to allocate assistance for Dushanbe in the amount of slightly more than $ 3 million.
In 2004, an agreement was signed between the ministries of defense of Tajikistan and the People's Republic of China on gratuitous provision of military aid to China for Dushanbe in the amount of 8 million yuan - that is a little over $ 1 million. For comparison, this is the cost of one new T-90 tank that year.
Cooperation of Tajikistan and the PRC in the military sphere developed without a pump, but very intensively. The leadership of the two countries coincided interests in the fight against Islamic extremism. Since 1994, China has begun to train small groups of Tajik officers in counter-partisan activities. And since the beginning of the 21st century, both countries have been conducting regular joint anti-terrorism exercises in the mountains on the border with Afghanistan. Such teachings are referred to as "anti-drug."
In addition to the next rectification of the border in favor of China, Beijing and Dushanbe in 2002 year agreed to speed up the completion of the construction of the highway through the Kulma Pass, which, finally, was supposed to connect China with Tajikistan.
All 1990-ies Tajikistan almost did not buy anything in China. First, the poor republic and its population did not have money after the civil war. Secondly, despite the permission of cross-border trade, the lack of modern roads between countries affected. Thirdly, the economy of China itself and the Xinjiang-Uygur Autonomous Region bordering on Tajikistan only gained momentum.
In those years, strategic raw materials — cotton and mainly aluminum — produced at the Tursunzade plant built at the USSR were supplied from China to Tajikistan. The trade balance of Tajikistan with China was in favor of Dushanbe.
At the beginning of the XXI century, the situation has changed dramatically. According to statistics in the 1999 – 2004 period, exports from Tajikistan to the PRC doubled, while imports from China increased by 22 times. According to the Customs Committee of Tajikistan, in the 2004 year, the country imported from China only underwear worth more than one and a half million dollars. According to the results of 2004, Tajikistan has a trade balance with a negative balance of more than $ 50 million in favor of the PRC - the amount is very impressive for a small Tajik economy.
The massive economic expansion of China to Tajikistan began precisely with the 2004 year, when the Chinese completed the construction of a road in the area of the Kulma Pass. The modern highway, in some places passing at a height of more than 4000 meters above sea level, has significantly simplified economic relations - the cost of transporting cargo between the two neighboring countries has decreased almost three times.
Since Soviet times, Tajikpotrebsoyuz remained in Tajikistan - a cooperative trade enterprise operating according to Soviet patterns, uniting thousands of stores and markets throughout the country. In the 2005 year, immediately after the opening of the highway in the People's Republic of China, Tajikpotrebsoyuz made a deal with China for a record $ 1 billion for Tajikistan.
Under the contract, the Tajik cooperators undertook in the next ten years to buy clothing, consumer goods, agricultural products, building materials, machinery and other goods from Chinese Xinjiang enterprises. In response, the Chinese side has pledged to build in Tajikistan new processing enterprises and a new infrastructure for stores and markets.
The opening of convenient and relatively cheap communication with China gave rise to a “shuttle trade” in Tajikistan. By approximate estimates, the number of people employed in such a private “business” and earning Chinese goods from resale quickly reached about 70 thousand people, that is, almost a percentage of the total population of Tajikistan.
Aluminum plant in Tajikistan, 1996 year. Photo: Ratushenko / RIA News
Already in 2008, according to local statistics, of all the clothing and household appliances sold in Tajikistan, 96% were made in China. From 2002 to 2009, the trade turnover between Tajikistan and the PRC grew by a factor of 100, primarily due to the massive import of Chinese products. Even the flour, previously supplied mainly from Russia and Kazakhstan, could not stand the competition, and many areas in eastern Tajikistan switched to flour from the PRC.
"Investments in exchange for natural resources"
By 2005, Russia, in exchange for the 201 military base and space tracking complex, Nurek restructured, that is, in fact, forgave Tajikistan a significant part of its debts. At the same time, the International Monetary Fund also wrote off a large part of the Tajik debt, which was formed over the 90s. Tajikistan successfully threw off a significant part of the debt burden, but, remaining a poor country, was forced to look for new sources of credit — neither Russia nor the international financial structures were in a hurry to lend out.
By that time, China had not only built the necessary transport infrastructure for communication with Tajikistan, but had also become convinced of the strength of the regime of the non-alternative President Rakhmonov. If earlier the PRC was cautiously limited to very small, stingy loans, then after 2005, it was Beijing that became the main source of loan money for Dushanbe.
Already in 2006, China provides the Tajik neighbor with its first three large loans totaling over $ 600 million. By 2012, the debts to the PRC already amount to 41% of the external debt of Tajikistan.
China provided its loans formally without any political conditions. Official Dushanbe was all the more pleasant after the IMF loans, traditionally accompanied by rhetoric about deepening democracy. But at the same time, a significant part of Chinese loans was allocated for projects that actually serve China’s strategic interests.
For example, a significant part of the loan went to the construction and reconstruction of roads and other communications connecting the main cities and districts of Tajikistan with the highway to China. These roads, tunnels, bridges and power lines tied the Tajik economy more closely to the Chinese. One of the key credit conditions - it was the Chinese companies that should have been involved in construction.
The growth of economic and financial dependence on China naturally turned into a new correction of the Tajik border. In January, the Parliament of Tajikistan voted 2011 for the transfer of more than a thousand square kilometers to the People’s Republic of China in the Sarykol Range in the Eastern Pamirs. Already in October 2011, this territory was transferred to the jurisdiction of China.
In May, 2013 published contradictory reports in the media that China unilaterally occupied some of the disputed border areas in the Pamir Mountains with its troops. There were rumors that Tajikistan, under the guise of exercises, sent army units and military equipment to the area. However, both countries officially denied any information about such incidents. Who actually controls these hard-to-reach highland areas is still unclear. And the growing economic dependence of Tajikistan on China does not allow Dushanbe to publicly oppose Beijing even in the case of real complications of interstate relations.
China’s direct investment in Tajikistan remains very modest, lagging behind Chinese loans in order of magnitude. Investors and lenders from China carefully avoid investments in those manufacturing and processing enterprises in Tajikistan that are or may become potential competitors to Chinese industry.
Basically, investors from China are interested in the mining industry in Tajikistan. The only gold mining and refining enterprise in Tajikistan, Tajik Gold Mining, in 2007 was bought by the largest gold mining company in China, Zijin Mining Group Ltd. The largest lead and zinc deposits in Central Asia - the Tajik mine Altyn-Topkan on the border between Tajikistan and Uzbekistan - is owned by the China Mining Company.
On the territory of the 201 military base in Tajikistan, 2008 year. Photo: Sergey Guneev / RIA News
Over the past few years, Tajikistan’s economic interaction with China has been proceeding according to the scheme recently announced by the Tajik ambassador to the PRC, Rashid Alimov, “investment in exchange for natural resources”. A typical example here would be the construction of the Chinese corporation Tebian Electric Apparatus of a power station in Dushanbe in exchange for the transfer of mining rights in the territory of the Aini district of the Sughd region in northern Tajikistan. Coal, antimony and precious metals are mined in this area. Here 10% of world reserves of antimony is concentrated - a chemical element, without which the modern electrotechnical industry cannot do. Tebian Electric Apparatus Corporation is just one of the major electronics manufacturers in China.
Money pump from Russia to China
In exchange for Chinese industrial goods of the whole spectrum, Tajikistan can provide only aluminum, cotton and the contents of its subsoil. At the same time, the PRC has long held strong positions in both the cotton processing and mining industries in Tajikistan.
But the role of Chinese capital is growing steadily, even in areas previously traditionally controlled by Russia. So in 2008, China intercepted contracts with Rusal for the construction in Tajikistan of two plants for the production of aluminum fluoride and cryolite, products without which modern aluminum production cannot do. This will allow China to indirectly influence the functioning of the Tajik Aluminum Plant, the country's main export enterprise, a prominent aluminum producer in Asia.
In 2013, exports to China of products from Tajikistan amounted to about $ 90 million, while imports from China exceeded $ 400 million. To cover the trade imbalance, Tajikistan, more precisely, its population, has to look for sources outside its own country.
China itself, to put it mildly, does not experience a shortage of labor. For many reasons, the Asian republics of the former USSR surrounding Tajikistan cannot provide either jobs or sources of income for Tajiks. Under these conditions, Russia became such a source.
Already at the beginning of the XXI century, the number of citizens of Tajikistan, legally and illegally working in Russia, was estimated from 450 to 650 thousand people. Since then, according to statistics from the World Bank, Tajikistan has been one of the leaders among countries in which remittances from labor migrants make up a significant part of gross domestic product. In 2008 – 2010, the income of “guest workers” ranged from 35 to 49% of Tajikistan’s GDP, each year steadily exceeding $ 2 billion.
At least two thirds of this amount was made by transfers of Tajiks working in Russia. Here, the citizens of Tajikistan were ceded only to Uzbeks, citizens of the most populated Central Asian republic of the former USSR. According to the Central Bank of the Russian Federation, the amount of remittances from Russia to Tajikistan in 2013 year exceeded $ 4 billion (the amount of reverse transfers from Tajikistan to the Russian Federation was about half a billion).
This statistic clearly shows that the source of covering more than three hundred million dollars of trade deficit in Tajikistan with China has become Russia. Tajik migrant workers earn money that is at least one-third of Tajikistan’s GDP, and the money earned is spent at home, where 90% of industrial goods of wide and daily consumption are of Chinese origin.
This “pump” has been successfully working for the second decade, guaranteeing Russian owners profits from cheap labor, Tajik citizens the ability to maintain an acceptable standard of living by exchanging Russian wages for affordable Chinese goods, and growing industry and the entire economy of China are an additional source of external financing. The current reality does not give any reason to assume that this economic model will change in the near future.
- Alexey Volynets
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