Collection of Articles Analysis of the Growing Chinese Influence in South Caucasus and Central Asia

Dear readers

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.

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