Russia and China Compete over Central Asia

There’s an interesting editorial in the Japan Times today about how China has made so many inroads into Central Asian energy investment, especially in just the past few years.  Many governments in the region, such as Turkmenistan and Kazakhstan, are eager to avoid dependence on Russian infrastructure, which could be a sign of the times to come … Gazprom might need to tune down its political plays.

Beijing’s gains come at Moscow’s expense. Russia had taken about 70 to 80 bcm of Central Asian gas annually, which it then exported to Europe or used itself, allowing it to redirect Siberian gas to European markets — again, maximizing Russian influence in the region. Gas exports were significant not just in themselves, but also because they provided a means for Russia to acquire interests in downstream companies in Europe. With Russian natural gas production now stagnant, the loss of Turkmen gas considerably diminishes Russian leverage.

The new pipeline also changes the dynamics of China’snegotiations with Moscow to secure Russian gas. The two countriesconcluded a memorandum on the supply of natural gas in March 2006, butno final contract has been agreed. This matters to Japan, as it toocould use the natural gas that will flow through the pipeline. At thispoint, however, it appears destined to go to China.

Competition is and will remain a defining feature ofthe relationship between China and Russia. But both governments arealso smart enough to recognize their shared interests, and worktogether when possible to realize them. Helping to stabilize thecountries of Central Asia is one such concern. Both Moscow and Beijingare aware of the dangers posed by political instability on their owndoor steps. That will reign in their competitiveness — and it shouldinspire other nations to get involved as well. Abstract calculations ofthe balance of power should not overshadow the very real consequencesof neglecting this critical region.