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Economy 12/02/2008 China bid to link up with Central Asia

Energy rich and strategically important Central Asia will soon be bound even closer to China. Recently, Chinese media announced that the construction of two new railway lines linking China’s Xinjiang province to Kyrgyzstan, Uzbekistan, and Kazakhstan would commence later this year.

According to Xinhua, China’s official news agency, the 6.2 billion yuan (US$861 million) rail link between the land port of Korgas on the China-Kazakhstan border and China’s inland railways, expected to be completed within this year, will soon begin to be extended westward. The extension will join up with Kazakhstan’s Sary-Ozek railway to become the second cross border rail link between the two countries. Currently, the only rail linking Xinjiang with Central Asia is a 460-km line between the provincial capital Urumqi and Alataw Pass, where it connects to Kazakhstan railways.

The new link is expected to ease the burgeoning burden of cross-border traffic currently borne by Alataw Pass, the largest land port in northwest China. Alataw, also known as Alashankou, handled five million tonnes of train-laden exports last year, up 60 per cent from 2006.

Meanwhile, preparatory work has also been announced on the China-Kyrgyzstan-Uzbekistan Railway, which will start from Kashgar in south-western Xinjiang and extend through Kyrgyzstan to Uzbekistan. It is expected to be complete by 2010.

The import of this heightened rail connectivity must be understood in the context of both the historical and contemporary dimensions of the geo-political and economic significance of Central Asia and its links with Xinjiang.

Central Asia has historically been a site for the competition between great powers desirous of drawing it into their spheres of influence. Thus in the nineteenth century it was here that the Great Game played out as Britain and Russia competed for supremacy in the region against the backdrop of a weak Qing dynasty in China.

New players

In the 21st century, Central Asia remains coveted, but the players in this new post-Cold War scenario are a rising China, a resurgent Russia, and a somewhat anxious United States.

For China, enhancing links with Central Asia holds several advantages. On the one hand, the bazaars of the region are lucrative markets for cheap Chinese goods. On the other, the vast oil and gas fields are critical resources needed to keep China’s galloping economic growth on course.

Moreover, in the Chinese strategic calculus, a Central Asia that is economically oriented towards China would rein in any attempt by the U.S. to use the area as a counterweight to China’s rise. Thus, increasing cross-border rail linkages is of a piece with both the geo-political and commercial imperatives of connecting Central Asia more closely to China.

The role played by China’s Xinjiang province in this equation is critical. The province which comprises a sixth of China’s total territory, has for long been at a metaphorical and geographical cross-road. The area is the inheritor of the cultural fluidity facilitated by the ancient Silk Road that for centuries was the main trade route across the Asian continent, connecting Antioch in the west to Chang’an (today’s Xi’an) in the east.

For hundreds of years, Xinjiang was thus not only China’s but also India’s gateway to Central Asia and further west to the Middle East and Europe. The modern day province’s geographical centrality is illustrated by the fact that it borders eight countries: Mongolia, Russia, Kazakhstan, Kyrgystan, Tajikistan, Afghanistan, Pakistan, and India.

Border disputes with China means that India’s connectivity with the province, a region that it has long civilisational links to, is non-existent. According to China, Aksai Chin, which is claimed by India, lies within Xinjiang as do parts of Kashmir that were ceded to China by Pakistan.

Opening up to neighbours

But with the exception of India, China has spent the last couple of decades opening up and connecting the province to its neighbours. The idea is to ramp up cross-border infrastructure so as to revitalise Xinjiang’s pivotal position along a new silk route connecting the markets of Europe and Asia, while at the same time opening up fresh conduits for the expansion of China’s growing economic power.

In India, the recent infrastructure-related activity in Tibet, including the opening of the Beijing-Lhasa railway, is what has garnered most attention. However, the huge investments Beijing is making in developing infrastructure in Xinjiang should be of no less interest.

When the People’s Republic of China was established in 1949, Xinjiang did not have an iron stitch of railway to boast about. By the end of 1962, China had connected Urumqi to the capital of Gansu province, Lazhou, by train. Later, in 1984, a 476-km-long western section of the Southern Xinjiang Railway was opened to traffic connecting the cities of Turpan and Korla. By 2001, the operating rail network in Xinjiang totalled more than 3,000 km.

In 2006, the province was also knitted together with a 1,43,000-km-long road network, including 500 km of expressways. Today Xinjiang is home to around 20 land ports along its border regions. Moreover, two of its eleven airports fly international routes giving the province direct access to Almaty, Tashkent, Moscow, Islamabad and Jeddah.

Recently, plans to connect the province by railroad to Pakistan are also being looked into. The idea is to eventually link Xinjiang to Pakistan’s Gwadar port by rail and hence further enhance China’s connectivity to international sea trade routes. This way oil supplies from the Persian Gulf could be taken to Xinjiang over land, along the shortest route possible.

Given the almost manic pace of China’s cross-border infrastructure building most of the country’s neighbours can look forward to a future of increasing economic integration, a development that also has inescapable strategic implications.

Exception to rule

The exception to this rule is India. Already in the recent past India has found itself losing out to China in the attempt to secure Central Asian energy resources.

Thus, for example, in 2005, India’s Oil and Natural Gas Corporation was trumped by the China National Petroleum Corp when it came to the acquisition of PetroKazakhastan Inc. Later the same year, China and Kazakhstan began to operate their first cross-border crude oil pipeline from Atasu to Alataw, through which some 10 million tonnes of oil a year are transported .

The cold fact is that India’s continuing border dispute with China ensures that it remains cut off from the opportunities that are opening up following the enhanced land connectivity between Central Asia, Pakistan and China. In fact, far from being able to link up its border regions to neighbouring countries, India is still struggling with the Kashmir Railway project, so that even Srinagar lacks rail connectivity to the rest of the country.

Looking ahead, it is thus increasingly apparent that baring a dramatic shift in the geo-politics of the region, India, the cultural inheritor of the Mughal empire, will at best be sitting in the back seat of the Chinese-driven train to Central Asia.
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