Civic IDEA’s 11th China Watch report discusses the controversies around China’s state-owned nuclear company China Nuclear Industry 23 Construction Co., Ltd., alternatively referred to as “CNNC No.23” or CNI23 operating since 1958. There is no record provided by internet sources about the misconduct related to particularly CNI23 and its representation in different states. Nevertheless, some problems and scandals are still associated with its founding investor firms: China National Nuclear Corporation and China General Nuclear Power Engineering Co., Ltd. China General Nuclear Power Engineering Co., Ltd. first appeared on the Georgian market in 2012 and since then has won several state procurements and made private investments.
For more information about the CNI23, see the attachment below: ?
Civic IDEA is pleased to share with you the 10th China Watch report related to another Chinese company operating in Georgia, China State Construction Engineering Corporation Ltd. (so-called CSCEC), and reviews its scandals and misconduct that occurred in Georgia and worldwide.
CSCEC is one of the largest Chinese state construction companies, founded in 1982. Since then, it has operated in more than 100 countries worldwide. The company’s main activities comprise real estate, construction financing, operation and engineering (housing and infrastructure), as well as design and survey. This company has been embroiled in numerous scandals in the past two decades. More precisely, the CSCEC and its subsidies have been exposed to corruption and fraud schemes in the US, Philippines, Pakistan, Hungary, and several other countries and have been blacklisted by different state and international institutions.
Read more about the company’s reputation and activities in our report: ?
Civic IDEA has the honor to share with the audience the second part of the series of Collection of Articles under the name “From Caspian to Black Sea: Economic, Academic and Digital Threats posed by the PRC”. Publication in front of you is the second edition of a collective effort by Civic IDEA and its partners and distinguished experts from the region to analyze and debate the Chinese activities in their respective countries in various fields, be it academia, business, politics, or other state matters. This time, the publication was inspired by the outstanding work of our Taiwanese partner Doublethink Lab about the Chinese influence operations assembled in China Index-2021, to be followed at https://china-index.io. This regularly updated web tracker allows all interested in monitoring and measuring PRC influence around the Globe.
The contributor authors to the second issue of the collection of articles are the following:
Tinatin Khidasheli – Chairperson, Civic IDEA
Ani Kintsurashvili – Senior Researcher, Civic IDEA
Vusal Guliyev – Fellow, the Davis Center for Russian and Eurasian Studies, Harvard University
Gubad Ibadoghlu – Senior Visiting Fellow, London School of Economics and Political Science (LSE)
Umedjon Majidi – Anti Corruption Expert, Sarajevo, BIH
Gia Jandieri – Director, New Economic School of Georgia
Civic IDEA published the second volume of the report “Chinese Leverage in Georgia’s Academic, CSO and Media Sectors: Post-Covid Reality”. The current paper reviews Georgia – Chinese cooperation in Academia, that is, among various universities, academic programs, scholarships, etc., analyzing realities created by Covid Pandemic and its consequences. Moreover, it gives a comparative analysis by evaluating foreign trends and policies toward Chinese malign academic activities. Mainly, the report focuses on the cases of the Netherlands, Germany, the UK, Hungary, Serbia, the US, and Sweden to demonstrate that, like other essential domains, Academia can be exploited by foreign actors.
The report is implemented with the support of the National Endowment for Democracy and the US Embassy in Tbilisi, in cooperation with the Central European Institute of Asian Studies.
Civic IDEA started observing Georgia’s foreign debt policy after the Georgian Dream officially refused financial assistance from the European Union. It turns out that Georgia is still actively borrowing from various financial institutions or directly from other countries, and the two main creditors of the country are the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB). On September 21, the Asian Development Bank (ADB), which is highly affected by China, officially announced that it would provide the Georgian government with a USD 100 million loan, aiming to strengthen Georgia’s electricity sector. On September 24, ADB already approved a USD 15 million loan to assist Georgia in effectively implementing the vaccination programs. Three weeks before the debt approval from the ADB, the Georgian government publicly refrained from taking 75 million Euros worth of aid from the European Union. According to Prime Minister Irakli Gharibashvili’s official statement, Georgia has begun the reduction of its foreign debt, and therefore, no additional assistance from the EU was needed.
Based on the information we have, the question naturally arises: Why does the Georgian government take debt from the Asian Development Bank and the Asian Infrastructure Investment Bank when their services are twice as expensive as the EU’s? We will provide our readers with a consistent history of when, why and under what conditions the Government of Georgia decided to cooperate with the bank, which was established only recently, in 2016.
After our Central Asia publication “Can Russia find more Friends and supports in War against Ukraine? Position and reactions of Central Asian Countries” we provide the interested audience with the compilation of tactical and strategic narratives coming from Beijing over the Russia-Ukraine war.
Russia’s invasion of Ukraine found Central Asian states in surprise. Undoubtedly their attention was occupied by events in Kazakhstan beginning of 2022 and developments following widespread unrest when Russian military aggression against Ukraine shook the world.
As for the facts, all Central Asian states and their economies are intertwined with Russia. Some are members of the Eurasian Economic Union as well. The cooperation and interdependency are so high that the threat of Western sanctions over the Kremlin having an effect on them is very tangible and high.
Moreover, three countries of Central Asia, Kazakhstan, Kyrgyzstan, and Tajikistan, along with Armenia and Belarus, are members of the Russian-led security/military alliance – the CSTO. Therefore, Moscow’s expectation of demonstrated support, including military, was rather realistic and projected.
Despite relatively clear links and bondages to Moscow, the reactions and political statements of national governments from Central Asia differed from complete silence to support or concerns over the developments in Ukraine. President Putin’s recognition of breakaway regions and dismissal of Ukrainian statehood should’ve rung a bell in some Central Asian states, particularly those with significant Russian minorities.
With the support of the European Values Center for Security Policy, USAID and MFA of the Czech Republic, Civic IDEA, with the local partners (GRASS, DFR Lab, MDF), contributed to the second volume of the joint research “Russian and Chinese Influences in Georgia”.
This Report is the second edition of the study launched in 2020 – Mapping Research: Comparing foreign influence in Georgia. This year’s issue – Russian and Chinese influences in Georgia – 2021 update monitors the development of foreign country influences in Georgia in 2021, especially in state institutions, NGOs, media, political parties, or the Church. This paper aims to further analyze a broad spectrum of problems already introduced in the previous report, such as campaigns and activities implemented and sponsored by third countries, ranging from political infiltration to corrosive capital flows with political goals.
It is a great honor for us to share with you the first part of the publication initiated by “Civic IDEA” and prepared together with partners, which will tell you the story of the growing influence of foreign countries in the South Caucasus and Central Asia. The second part of this edition is planned for 2022.
This publication is a collection of 8 analytical articles, which mainly introduce the dynamics of various projects, loans, and debts initiated by the People’s Republic of China (PRC) in the South Caucasian and Central Asian countries, the growth and expansion of the role of the Chinese Communist Party (CCP), as well as the existing threats and most notable events. While much is being written today about the operations of the People’s Republic of China and the Chinese Communist Party by various research institutes and organizations worldwide, very little is said about region of our interest and even less about the dynamics and patterns that are unequivocally evident in these states.
“Civic IDEA” has been studying Chinese influence operations in our region for more than three years now. We are interested in the policies of the Chinese state, its universities, and other educational centers, companies, and financial institutions, etc. Accordingly, in our previous publications, you will find materials about the activities of the Confucius Institutes, student and scientific exchange programs, the so-called “debt trap” practices, and security risks for different countries, etc.
In this publication, you will get more detailed information and knowledge about seven countries: Georgia, Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Uzbekistan, and Tajikistan. Unfortunately, despite our numerous attempts, we could not find a suitable partner in Turkmenistan who would agree to participate in the joint study.
The work about Georgia was written by Ani Kintsurashvili, a senior researcher at the Civic IDEA. The paper summarizes the Civic IDEA’s China Watch reports and measures the growing Chinese influence in critical infrastructure and defense sectors of the country by reviewing the misconduct related to the notorious and blacklisted Chinese companies (CEFC, Sinohydro, Motor Sich, Nuctech, CRBC) actively operating in Georgia within the BRI. Moreover, the research stresses that these Chinese companies usually mediate the massive corruption schemes orchestrated by the Chinese state officials and local business and political elites. This occasion explains the ignorance of the Georgian government in failing to investigate the company’s reputation with which they are signing the MoUs and handing the projects critical for Georgia’s natural security.
Artak Kyurumyan, an independent expert and a chairman of the board of Open Society Foundation, discusses Sino-Armenian political relations and the performance of Armenian investments in the People’s Republic of China. The paper highpoints the diversity of opinions in the experts’ community, as some believe that Armenia has working relations with China, while others think that Armenian-Chinese relations are in stagnation. Armenian authorities don’t have a vision or strategy on how to build ties with China. Russia had and has a significant impact on Armenian foreign policy and holds leverages to influence them. For several years different Armenian governments were optimistic about the Armenian-Chinese joint venture Shanxi-Nairit. Shanxi Nairit does not utilize its full capacity and could not cover its costs and accumulated huge losses. After 2018 the representatives of the Revolutionary government were also represented in the board of Shanxi Nairit and were assuring that they are doing important job. However, large parts of the Armenian community think that government officials use such opportunities to travel and don’t create any substantial value added.
Gubad Ibadoghlu, a senior policy analyst of the Economic Research Center, covers China’s mounting interests and influence in Azerbaijan, emphasizing the boosted trade between China and Azerbaijan and between China and Europe through the Baku–Tbilisi–Kars railway, which forms an integral part of the Belt and Road construction and serves as a critical bridge that connects the eastern and western ends of Eurasia. Moreover, Azerbaijan is devoted to building a new corridor for cross-border transportation designed to cut through the territory of Armenia to join up the Azerbaijan mainland and the Autonomous Republic of Nakhchivan. For China, this corridor will serve as the second South Caucasus route leading to Europe via Armenia, Nakhchivan, and Turkey. Azerbaijan’s economic diversification policy and China’s willingness to transfer industrial capacity facilitate more extensive economic cooperation between the two countries. Besides, China has failed to close several critical financial agreements at the governmental level to boost economic ties with Azerbaijan. There are currently no agreements on currency swaps, industrial transfer, or free trade between the two countries.
Research on informing the people of Kazakhstan about the activities of Chinese companies in the Kazakhstani extractive sector belongs to Danil Bekturganov, a political scientist and a Director of NGO “Civil Expertise” in Kazakhstan, who analyzes the coverage of activities of Chinese companies in the extractive sector of Kazakhstan by Kazakh media. In addition to analyzing the awareness of citizens, investigated the availability of statements and other documents issued by the government of Kazakhstan related to Chinese investments and BRI. The study examines specific cases related to the impact of the activities of Chinese extractive companies on local communities, and social, economic and environmental consequences of these activities. Mr. Bekturganov argues that Kazakhstan is one of the key places in the implementation of the BRI. Large Chinese extractive and construction companies operate on the territory of the country, railway and road routes, including the “Western Europe – Western China” corridor, pass through Kazakhstan’s territory. One of the important parts of the BRI implementation is the informing of Kazakhstani citizens about the initiative and about the opportunities, provided to businesses and local communities. The absence or lack of information gives rise to a large number of myths and phobias, and does not contribute to increasing public confidence in the presence of Chinese business in Kazakhstan. Another important aspect is the environmental impact of Chinese projects, which should be objectively and publicly assessed.
Bakytbek Satybekov, an expert and a co-chairperson of the National Open Government Forum in the Kyrgyz Republic explains China’s “debt trap” diplomacy in Kyrgyzstan by highlighting the obvious signs of the presence of such a policy in the country. Author starts with the description of a term China’s “debt trap” with examples of experience of other countries. After that mr, Satybekov describes history of Kyrgyz borrowings from China with details, such as purposes of loans, financial and other conditions and later emphasizes evolution of Kyrgyz debt management strategy with emphasis on limitation of share on a creditor in debt portfolio. At last, he provides the audience with the analysis of impact (outcome) the Chinese “debt trap” could bring to Kyrgyzstan.
Umedjon Majidi, political analyst and a postgraduate of the University of Sussex covers the topic of Corrosive inflows to the Republic of Tajikistan and how Chinese investments undermine good governance and transparency in Central Asian region. Corrosive capital coined by Center for International Private Enterprise based in Washington DC is defined the term “corrosive capital” to more clearly label financing that lacks transparency, accountability, and market orientation flowing from authoritarian regimes into new and transitioning democracies. It applies directly to big authoritarian countries which play a key role in Central Asia, they are Russia, China that lack true forms of transparency, accountability, good governance in their capital granting schemes. This paper based on wide variety of publications in various languages analyzes specifically how People’s Republic of China within its strategy of Belt and Road Initiative in Tajikistan brings bad governance schemes to Tajikistan local and national governance institutions in contrast of western countries when the capital and funds come usually with conditions to reform a local governance attached.
Farkhod Tolipov, a director of the non-governmental Research Institution “Bilim Karvoni” (“Caravan of Knowledge”) in Tashkent, finalizes the collection of articles with his input “China’s Power Projection in Central Asia and its Geopolitical Implications: The Case of Uzbekistan”. The state’s power projection capability means its ability to exert influence on other states by utilizing its real power. This utilization of power can take different forms from diplomatic communications and political pressure to open demonstration and application, separately or in combination, of elements of soft and hard power. So this paper is constructed around the main question as to what we know about China’s power projection undertakings in the Central Asian region with some more focus on Uzbekistan. Public and experts’ opinions in Central Asian countries are quite ambiguous about Chinese influence in the region; Sino-phobia and Sinophilia coexist among people, officials, and experts. In particular, Beijing’s repressive attitude towards Uighurs in Xingjian province also affected the perception of China by Central Asians. China as a great power cannot, but pursues great-power politics, which per se can bring with it opportunities and challenges for neighboring areas including the Central Asian region. Moreover, all great powers historically have always competed with each other and this competition, in turn, always caused significant geopolitical implications.
Civic IDEA’s work has been featured in the 2021 publication of Carnegie Endowment for International Peace, “China’s Influence in Southeastern, Central, and Eastern Europe Vulnerabilities and Resilience in Four Countries”. Part of the research concerns the Chinese influence and the activities of the notorious Chinese companies in Georgia, as well as, the PRC academic initiatives and its Covid-19 diplomacy in the country. Civic IDEA’s research is attributed to well-demonstrated uncertainties associated with the Georgia-China economic cooperation. Below we provide an extract from the Carnegie research mentioning Civic IDEA: “Georgian civil society organizations and experts—such as former defense minister Tinatin Khidasheli, now of Civic IDEA and Transparency International Georgia—enumerate multiple concerns about Sinohydro’s reputation, lack of transparency, and close relations with some government officials. The company has been blacklisted by the African Development Bank. The Georgian government’s transparency portal offered no record of how Sinohydro’s qualifications were assessed.
The China Railway 23rd Bureau Group is also controversial. The company has powerful backers in China. Initially the railway troops of the PLA, it became part of China’s Ministry of Railways. In 1989, the China Railway Construction Corporation was established as a stateowned enterprise. In June 2019, the World Bank announced “the nine-month debarment of China Railway Construction Corporation Ltd. (CRCC), a Chinese, state-owned construction and engineering company, and its wholly-owned subsidiaries, China Railway 23rd Bureau Group Co., Ltd. (CR23) and China Railway Construction Corporation (International) Limited (CRCC International), in connection with misconduct under the East-West Highway Corridor Improvement Project in Georgia.”This did not prevent the company from winning the contract for the new north-south bypass road shortly afterward.”
