Wednesday, 14 April 2010

CHINA: THE SILENT GIANT AND KYRGYZSTAN’S UNREST

Published in Analytical Articles

By Niklas Swanström (4/14/2010 issue of the CACI Analyst)

Chinese government officials in both Beijing and Xinjiang are greatly concerned about the current developments in Kyrgyzstan, but have largely refrained from commenting on the situation. Trade and regional stability are two of the main reasons behind China’s concern. However, possible consequences such as an impact on China’s domestic political discourse, and fears of the crisis leading to a more pivotal U.

Chinese government officials in both Beijing and Xinjiang are greatly concerned about the current developments in Kyrgyzstan, but have largely refrained from commenting on the situation. Trade and regional stability are two of the main reasons behind China’s concern. However, possible consequences such as an impact on China’s domestic political discourse, and fears of the crisis leading to a more pivotal U.S. role in the region may be even more important. The unpredictable nature of the changes in Kyrgyzstan and the region is in many ways the most threatening development for Beijing.

BACKGROUND: The Chinese leadership, intelligentsia as well as its netizens appear all to be in agreement that the regime of Kurmanbek Bakiyev fell as a result of its failure to sustain the population’s livelihood and in preventing the criminalization of the economy and the political system. Chinese observers noted the continued regional divisions in Kyrgyzstan, and the slow economic growth that kept at least a third of the population under the poverty line. Sentiment amongst Chinese officials is that Bakiyev’s government brought this upon themselves.

In no way does this mean that the Chinese government, or the regional government in Xinjiang, support these events. On the contrary, the chaos in Kyrgyzstan is painfully similar to earlier abrupt changes of government in the post-Soviet space, to which Chinese officialdom were highly apprehensive. However, non-governmental forces, especially China’s netizens, are more or less open in their support of the changes in Kyrgyzstan.

There is a striking difference between media and leaders in China and the West in terms of their perception of Roza Otunbayeva, and the direction in which she may lean. A former Chinese diplomat in Kyrgyzstan, Zhao Mingwen and other officials have depicted Otunbayeva as a strongly pro-American politician; there have even been rumors of the U.S. being behind the political unrest. The West, on the other hand, mostly views Otunbayeva as a leaning toward Moscow, potentially a Russian puppet. The latter view relates mainly to her recent criticism of Bakiyev’s failure to “show respect” for Russia and her acknowledgement that Russia “played a role” in the transition. The reality is that Otunbayeva cannot succeed in the short term without the assistance of the Russian FSB. However, many Chinese fear that this will soon shift into a more pro-western position.

This political chaos is especially troublesome for China due to the 858 kilometer (533 mile) long and easily accessible Sino-Kyrgyz border. China has always feared that state failure or radicalization (whether Islamic or pro-American) of neighboring governments could have a negative impact on China. The former scenario, in particular, appears possible if the opposition fails to consolidate its power within a short period of time. Some Chinese government officials have indicated a hope that Russia will, in the short run, assist whatever force comes out on top in the Kyrgyz power struggle to establish security and stability - something China can and will not do – rather than introducing another large actor into the region, i.e. the United States.

What is already evident is that this political chaos will have a major negative impact on Sino-Kyrgyz trade, the area where China is most dominant. China has been one of Kyrgyzstan’s major partners in the region and internationally, and despite the sizable reduction of imports and exports (60.1 and 43.3 percent drops respectively) during the financial crisis, Chinese economic interests still loom large. Chinese Huawei, as one example, dominates the telecom equipment sector with a whopping 80 percent share and the direct investments amount to some US$80 million from 200 Chinese companies. Continued economic chaos, or a diversion from the Chinese-led trade pattern, would not be devastating for the Chinese economy, but it would most certainly be an annoyance in the face of the business established there.

IMPLICATIONS: China’s major concerns are divided into several fields; the perhaps most important is the domestic impact. The obvious concern is whether the unrest will impact the Uyghurs in Xinjiang; potentially more explosive is the impact on the netizens, and over time the population at large, in China. There has been considerable support for the rebels in their fight against social inequality and corruption, and for political democratization. The Chinese government will do its outmost to prevent the spread of such trends to China. There is no doubt that there is a fear of a repetition of the “color revolutions” and that demands for political and economic rights in China loom large in the mind of the Chinese leaders.

Regional instability is a concern for the Chinese government, but the current view is that the rest of the Central Asian states are relatively stable and the risk of instability spreading into Uzbekistan and Kazakhstan are minor. There is a limited concern that continued political chaos could impact other regional governments negatively and cause further destabilization.

Otunbayeva’s reputation in China as a pro-American politician is further cause of concern. Beijing’s concern is the possibility of a change in Kyrgyzstan’s foreign policy to one that explicitly supports a U.S. presence in the region. Beijing appears to have accepted that the political change in Kyrgyzstan could possibly lead to a larger U.S. influence but argues for a more balanced foreign policy – in essence a policy that does not neglect the Chinese presence in the region. All officials that this author spoke to are clear on one issue: Otunbayeva, if she maintains power, is unlikely to lean in the direction of Beijing. The prevalent sentiment in Beijing is that Moscow can be handled, but that U.S. influence poses more difficulties. This contrasts greatly to the view in Moscow that assumes that the U.S. can be handled in Central Asia, but that China is a more pressing problem.

Even if China were to miscalculate Otunbayeva’s pro-western inclinations, there is little concern over Russian attempts to minimize the Chinese influence in Kyrgyzstan, though Beijing is well aware of these intentions. Beijing has long followed the relative and absolute decline of Russia in all sectors, at a time of its own economic rise; therefore, it does not view Russia as a long-term threat, but as a short-term necessity. Chinese officials have acknowledged that Russia was quick in supporting the new government, maybe even too quick, if not involved in the events. This view is attributed to the fact that Russia was well informed about developments and shifted sides early and opportunistically (before the riots started) to increase its own influence and decrease the possible U.S. influence. Chinese officials conclude that this will not help the Russians over time, as the U.S. will gradually increase its influence, unless China improves its own strategy. Overall, there appears to be a rather pessimistic and potentially exaggerated view in Beijing of the U.S. future role in Central Asia.

In the economic field, apart from the obvious concern over the impact on trade, there is a concern of how the new government will position itself in relation to the prior Chinese economic and political aid to outgoing President Kurmanbek Bakiyev. If the new government refuses to acknowledge prior contracts and engagements, there is a risk that Chinese business would be excluded or short-handed, something that would be devastating for the trade between China and Kyrgyzstan. Sources in Beijing do not, at this time, rule out the possibility of sweetening the current dealings with the new government to further improve conditions for bilateral trade – with a view not to reap economic benefits, but more importantly to maintain economic and political clout.

Unlike Moscow, the Chinese government is reluctant to act prematurely by embracing a specific political force. On the one hand, China has still not ruled out Bakiyev as part of a grand compromise – not because he is liked, but because he is a known quantity. On the other, Beijing wants to avoid being accused both in Kyrgyzstan and internationally of meddling on other states’ internal conflicts.  

CONCLUSIONS: Beijing could be forced to take a more interventionist approach in case of the introduction of the U.S., and to some extent the EU, in developments to a degree that both China and Russia would feel inappropriate. Should developments indicate a growing Western influence in Kyrgyzstan, however unlikely that may seem, Beijing appears ready to react. This is particularly true when looking at China’s military and political clout, but China intends to focus on consolidating its economic influence. 

On the positive side, Chinese leaders feel that ongoing cooperation within the Shanghai Cooperation Organization and growing economic cooperation is a bulwark against losing too much of its leverage in the region, as long as China and Russia continue to cooperate. That said, it is clear that China’s potential to wield considerable influence in Kyrgyzstan has taken a beating, and will take months to recuperate.

AUTHOR’S BIO: Niklas Swanström is a Director at the Institute for Security and Development Policy, Stockholm, and Editor-in-Chief of the China and Eurasia Forum Quarterly.
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