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China-Russia Competition Opens a Door for America

Authors: Jeffrey Mankoff, and Leland R. Miller, Avascent International; American Foreign Policy Council
April 22, 2010
Forbes Online

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For the past two decades, many in the West have worried about the growth of Russo-Chinese influence over the newly independent states of Central Asia. Through the mutual-security group called the Shanghai Cooperation Organization and in scores of joint military exercises, counter-terrorism maneuvers and energy projects, the two great powers collaborated closely in order to keep these buffer states peaceful, compliant and relatively free of American penetration. Lately, however, a perceptible shift has overtaken the region. In 2010, the biggest threat to China and Russia's Central Asian interests may now be each other.

Fueling these growing Sino-Russian tensions are the divergent prospects of the two economies. China's economy grew by 8.7% in 2009, despite the global slump, while Russia's economy contracted by 7.9%, with foreign direct investment (FDI) plummeting by nearly half. With Russia's prospects continuing to dim, China has accelerated its courtship, rapidly replacing Russia as the principal source of foreign investment and aid in Central Asia.

In the past year alone, China National Petroleum Corporation completed a deal to buy a 50% stake in Kazakhstan's largest oil company, outbidding Russia's Gazprom, while China's State Development Bank invested $4 billion in Turkmenistan's largest gas producer, allowing it to stay afloat during a "gas war" instigated by Moscow.

In December, China inaugurated the mammoth 4,350-mile Central Asia Natural Gas Pipeline, built to ship gas from Turkmenistan through Uzbekistan and Kazakhstan to China. And perhaps most notably, Russia was forced to borrow $25 billion from China last April in order to complete a planned pipeline between the two countries, conceding a 20-year sweetheart oil deal for the privilege. In all cases, Russia's inability to keep pace financially was decisive.

This weakening of Russia's traditional influence is changing the fundamental dynamics of the region, encouraging Central Asian leaders to become less deferential to the Kremlin. In August 2008, for example, following Russia's invasion of Georgia, the Central Asian states followed China's lead in refusing to recognize the Russia-backed separatist states of Abkhazia and South Ossetia.

Yet the other beneficiary of this increased Sino-Russian tension has been the United States, which many Central Asians would like to see play a greater role in the region to balance Russian and Chinese influence.

In Kyrgyzstan, for example, the government promised Moscow it would evict the U.S. military base at Manas in exchange for a $2.1 billion loan, but reversed course when Washington came up with more money. (This month's Russia-backed coup may ultimately negate those gains.)

More recently, Uzbekistan--which did evict U.S. troops from its bases in 2005--has turned against the Kremlin, boycotting a Russian-led regional security summit and announcing it would not participate in a joint rapid-reaction force while signing up to play a major role in America's "Northern Distribution Network" for supplying forces in Afghanistan.

The United States will never be able to replace Russia or China as the major power broker in Central Asia, nor is it much interested in doing so. But these developments provide an opening for Washington to look beyond its singular focus on the war effort in Afghanistan and develop a more comprehensive regional strategy designed to help Central Asia address some of the structural vulnerabilities that make it a perpetual flashpoint.

First, the United States should support Central Asian energy projects, which diversify the region's export options, thereby reducing these countries' economic and political dependence on Russia.

Second, the U.S. should take advantage of its greater physical distance from the region to act as an honest broker among the Central Asian states, whose mutual mistrust limits their cooperation. Working directly and through the Organization for Security and Cooperation in Europe (OSCE), the U.S. should spearhead an initiative to resolve border disputes and reach an accord on water-sharing and cross-border investment within Central Asia.

Third, the U.S. should work with the Central Asian governments to address key sources of radicalization, particularly the dearth of educational and economic opportunities that could be alleviated if Central Asia's economies are gradually opened, backed by a promise of eventual WTO membership. Closer intelligence sharing and counter-terrorism cooperation are a likely byproduct. Human rights reforms are not exactly welcomed by the region's KGB-trained elites, but Washington should leverage its influence to push for real progress.

With the United States focused on multiple war zones, the idea of marshaling resources for a more concerted Central Asia strategy may seem ambitious. But, as the U.S. has increasingly recognized, stabilizing Central Asia is critical to eventual success in Afghanistan. If the Afghan war provides a reason for greater U.S. involvement in Central Asia, the changing Russo-Chinese dynamic creates an opportunity. Now is the time for Washington to make a major diplomatic push into this long-neglected region.

Jeffrey Mankoff is associate director of international security studies at Yale University and adjunct fellow for Russia studies at the Council on Foreign Relations. Leland R. Miller is managing director of Avascent International, a global advisory firm, and fellow in international economics with the American Foreign Policy Council.

This article appears in full on CFR.org by permission of its original publisher. It was originally available here.

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