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International Relations Economy Regional Stability

Can China’s Silk Road Vision Coexist with a Eurasian Union?

Central Asia on an old globe. Image: Carol Van Hook/Flickr

This article was originally published by Eurasianet.org on 12 November, 2014.

There is a good chance that economic jockeying between China and Russia in Central Asia will intensify in the coming months. For Russia, Chinese economic expansion could put a crimp in President Vladimir Putin’s grand plan for the Eurasian Economic Union.

Putin has turned to China in recent months, counting on Beijing to pick up a good portion of the trade slack created by the rapid deterioration of economic and political relations between Russia and the West. Beijing for the most part has obliged Putin, especially when it comes to energy imports. But the simmering economic rivalry in Central Asia could create a quandary for bilateral relations.

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Kyrgyzstan: China Muscles into Energy Market, Fueling Suspicion

Image by Sergio Russo/Flickr.

China is financing the construction of Kyrgyzstan’s first major oil refinery, and excitement is building in Bishkek that the facility could enable the Central Asian nation to break Russia’s fuel-supply monopoly. At the same time, some observers express concern that the project may stoke local resentment, or become enmeshed in political infighting.

The refinery in Kara-Balta, about two hours west of Bishkek, is expected to produce 600,000 tons of fuel annually, enough to end Kyrgyzstan’s dependency on Russian imports, currently pegged at 1,150,000 tons a year, according to the State Statistics Committee. Slated to receive crude piped from Chinese-run fields in Kazakhstan, the project, operated by a smallish Chinese state-run entity called Junda, has already witnessed regular environmental protests and labor disputes, which one lawmaker claims are backed by opposition politicians bent on using the facility as a weapon in a political struggle against the government.