China’s Backdoor Breakout

While Washington was occupied with Thanksgiving and the health-care debacle in late November, the prime ministers of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan were meeting in Tashkent, the Uzbek capital, at a summit of the Shanghai Cooperation Organization to discuss economic and security cooperation. Handshakes were exchanged, photographs taken, and pledges of mutual friendship made. Outside the summit, however, a high-stakes game of geopolitical chess has been waging. Russia is being pushed out, China is moving in for trade and resources, and countries like Kazakhstan and Turkmenistan are playing the big powers against each other. Once in the Chinese sphere of influence, Central Asia was part of the Russian (then Soviet) empire for most of the past 200 years. Now it is contested again. And as the United States withdraws from Afghanistan, it needs to re-up efforts to stay a player in Central Asia.

Since Secretary of State James Baker’s historic pilgrimage to the new capitals of Central Asia in 1992, the United States has been active in Russia’s and China’s backyards. In the 1990s, after the Soviet Union’s collapse, the U.S. government and NGOs pushed democracy and supported civil society while U.S. oil companies invested billions of dollars in Kazakhstan. By 2003, Kazakhstan’s oil production topped 1 million barrels per day. U.S. efforts at democracy, however, were less successful — the region is home to at least four countries whose "elected" governments make only the slightest gestures at free and fair ballots. After the 9/11 attacks, American democracy promotion efforts took a back seat to the necessities of the war in Afghanistan: tracking cross-border terrorists and drug shipments and opening up routes for supplies and electricity needed to fight the war. While it would be tempting — with little direct security at stake — for the United States to pull out of Central Asia as the Afghanistan war winds down, Washington needs a new push based on new principles.

Much of the recent evolution in Central Asia has been positive. Central Asians have options like never before. Energy networks, in particular, are transforming the region. Pipelines now carry natural gas from Turkmenistan and Uzbekistan to China and from Turkmenistan to Iran. Electricity and gas lines no longer flow only north into Russia; Kyrgyzstan and Tajikistan now sell electricity into Afghanistan, and other lines are heading further south. There are even grandiose plans under way to extend gas pipelines and electricity lines into Pakistan and India and to bring Persian Gulf hydrocarbons across the region into China through the back door.

What this has meant for Central Asians is much-needed financial diversity. Initially, this meant better prices; Turkmenistan was able to insist that Russia pay "European prices" for its gas. But even with a softer energy market now, the countries of the region still benefit from diversified demand coming from growing economies from Europe to China. That independence unnerves the Kremlin.

Moscow has long seen Central Asia as part of its sovereign empire. Russia moved into the region in the 19th century by building military railroads; czars spent much of their effort falsely reassuring other powers, such as the British and the Turks, of their benign intentions. In the end, Russia won the Great Game by taking over the region and incorporating it into the Soviet Union, much to the detriment of the populations there. After the fall of the Soviet Union, Russia has played a different game to keep the Central Asia states under its yoke: Gazprom diplomacy.

As the sole purchaser of energy (and the most important trade partner) in the region, Moscow’s state-owned energy firm pressured the countries into delivering cheap fuel as a form of fealty. And trying to break that monopoly resulted in swift punishment: Russia is suspected in a mysterious 2009 pipeline explosion that cut gas sales from Turkmenistan. Elsewhere, Russia has pressured Kazakhstan, and now Ukraine, into a customs union that largely lacks substance. You can see Russian President Vladimir Putin’s muscle behind Ukraine’s rejection this month of an agreement with the European Union. Reports indicate that Russia offered cheaper gas to induce Ukraine to sign up with Russia’s customs union, while rumors point to a darker side: outright threats to cut off supplies this winter, as Russia did in 2009. Under the Soviet Union this was Russian territory; Putin wants it that way again.

But Russians have to put up with negotiators who have more choices now. Yes, Moscow is still the region’s big dog — as a Central Asian leader once reminded me, "We can’t change our geography." That much is still true, but now they can play countries off each other, diversifying their outlets and hedging against Russian blackmail.

And what’s really making this possible is that Beijing is back. For almost the last 200 years, China was largely absent in Central Asia, but now markets are swarming with Chinese traders buying raw materials, investing, and trading. China’s trade in 2012 was $46 billion with the region — 100 times what it was in 1992. Chinese officials are also interested in security concerns, such as stopping the Islamic terrorism that derives from this region. But there’s a bigger goal. Were China one day able to acquire significant energy supplies via overland routes across Central Asia — and perhaps, one day, able to efficiently move goods across land routes to Europe and the Arab world — it would reduce China’s dependence on shipping through the Indian Ocean and the Strait of Malacca, sea lanes largely guaranteed by U.S. naval power. Chinese strategic thinkers don’t want to depend on the kindness of strangers in either India or the United States. Having alternate routes for vital supplies is a strategic breakout for China from U.S. encirclement, one designed to alleviate America’s "strategic exclusion" of China, as one report describes the Chinese strategy.

What does all this mean for Washington? Is there really a Chinese strategic breakout? And who wins and who loses?

Well, that depends on whether you believe, as many Chinese strategists do, that the United States seeks to encircle or blackmail Beijing. India has been looking for inroads into Central Asia, rather unsuccessfully, but the country still has plenty of options to develop elsewhere. That said, neither New Delhi nor Washington is about to cede the region to China, but more options are good for sales, exports, and strategic balance for the countries of the region. Moscow is the big loser, however: Putin’s stranglehold on Central Asian gas and the region’s trade routes is over.

But the fundamental takeaway in this new Great Game is that the United States is only an interested outside power, not one with vital interests at stake. As Washington completes the pullout of combat forces from Afghanistan, the necessity of serious engagement evaporates: It no longer has money or treasure at stake. However, American presence has been good for the countries of Central Asia; it stirs things up in terms of investors and aid, provides a counterpoint to both Russia and China, helps a fragile civil society, and opens up private-sector flows. So, Washington needs to stay active, but in new ways:

• Pipes and routes: The United States can help relaunch private efforts for southern and western routes, working with Europe, India, Pakistan, and, yes, even Iran. Even some of the more fanciful routes across Pakistan to China may work, and America’s Persian Gulf allies want land routes to China too.

• Agriculture: The breadbasket potential is enormous. China, India, and the Arab world are all hungry customers. And in this, American know-how and industry — from John Deere to Cargill — are critical.

• International standards: With Turkey, South Korea, and other actors, the United States should push transparency, anti-corruption, and corporate responsibility as a basis for investment and trade, not Russian or Chinese sleaze. European standards, Organization for Economic Cooperation and Development practices, and World Trade Organization (WTO) rules would put trade and investment on a sounder footing.

• WTO: Can’t we finally, after some 15 years, finish the negotiation with Kazakhstan for it to join the World Trade Organization? Kyrgyzstan and Tajikistan are already members, but Kazakhstan would provide a critical addition.

• Water: This vital resource is in constant dispute in the region; upstream countries want to regulate hydroelectric output while downstream countries want consistent irrigation. The U.N. Economic Commission for Europe has been trying to mediate, but Washington could get behind the effort to resolve water allocations among the countries.

• Democracy: One downside for the United States is that Beijing and Moscow are an anti-model. They reinforce dictators, promote corruption, and countenance crackdowns. Kyrgyzstan is making a go of real democracy again; the country deserves the Obama administration’s every support: money, attention, visits, and increased aid.

In the end, independent countries with real choices, here as elsewhere, are better for the United States. Washington has helped and can help them further by providing options and standards that create new opportunities. The lines to the future, however, must flow in many directions, not just to Moscow or Beijing, but to Dubai, Delhi, and Des Moines too. If no one country dominates, it’s a win for the United States.