Tuesday, April 13, 2010

China's rail goals raise regional doubts

China's rail goals raise regional doubts
By Roman Muzalevsky

Beijing's plan to build a high-speed railway network across Asia and Europe through Central Asia is its key project for the continent. A reflection of the rise of China on the global stage, the proposed network will connect 17 countries and comprises three major routes linking Kunming in China with Singapore via South Asia; Urumqi in northwest China and Germany through Central Asia; and Heilongjiang in northeast China with southeastern Europe via Russia.

The implications of such undertakings are more than substantial for Eurasia. From expanded trade and economic development, to inter-regional and global integration on Beijing's terms, the revival of the old Silk Road by the "middle kingdom" entails far-reaching
and controversial geopolitical ramifications, particularly for Central Asia.

For a part of its history, this region has been "landlocked" economically, politically, and geographically. In some measure, this was the case after the decline of the Silk Road trade in the 16th century and during the 70 years of the Soviet era. However, as Central Asia increasingly becomes the focal point of inter-state cooperation and competition over strategic locations and energy resources, it will face enhanced prospects of connectivity with the outside world, despite daunting security challenges. China's rise, and the high-speed railway network, therefore presents Central Asia with an opportunity as well as a geopolitical reality.

On March 11, a spokesman in China's Ministry of Railways confirmed that the network would consist of northern, southern, and western routes. This would make a two-day trip from Beijing to London possible by 2025. The western route of the network will connect Xinjiang with Germany, through Kazakhstan, Uzbekistan, Turkmenistan, Pakistan, Iran, and Turkey. The entire project is a part of China's Pan-Asian railway plan attempting to link 28 states with 81,000 kilometers of railroads.

China's high-speed railways are already the world's longest and fastest, with speeds of up to 350 km per hour. As Beijing Jiaotong University's Professor Wang Mengshu stated, China is "aiming for the trains to run almost as fast as airplanes." Cheap construction costs and technological expertise might enable China to outperform Japan, Germany, and France. Reportedly, other countries, particularly India, have reached out to China to construct railway networks, with Russia, the United States, Saudi Arabia and Poland already considering China for their railway plans. Central Asia and China, too, have an interest in such cooperation, but not without reservations.

Commanding considerable energy resources, Central Asia is also a trade conduit, the potential of which has not been fully utilized due to intra-regional, political, and infrastructure hurdles. Additionally, the region borders China's Xinjiang region, which trades with about 150 countries but exhibits separatist trends. China thus views the railway network as a tool to link Asian and European markets, tap into and ensure efficient delivery of Central Asian energy resources, develop its western regions, and advance regional security and its global role.

Central Asia will also benefit, and countries such as Tajikistan and Kyrgyzstan have already reached related agreements with China. Tajikistan now seeks a US$13 million loan from the OPEC (Organization for Petroleum Exporting Countries) Fund for International Development to build a Kuliab-Kalai Khum road connecting it with Uzbekistan, Afghanistan, Kyrgyzstan and China, while Kyrgyzstan relies on China-Kyrgyzstan-Uzbekistan railway links to develop its southern areas. China also plans to build 12 highways linking the region with Xinjiang.

China's railway plans are sure to elevate the region's importance as an East-West connector, facilitate its integration into the global economy, and enhance its trade with China, which soon may become the world's largest economic power. China is already investing heavily in regional trade, energy, and transportation projects that will only expand with the construction of the railway system.

Regional trade through Xinjiang reached $18.4 billion in 2007, up more than 60% up on 2006, and reaching $25 billion in 2008 - only $2 billion short of the Russian level for the same year. The pipeline between China and Turkmenistan, however, now leaves Russia with only 30 billion cubic meters (bcm) of gas annually (as opposed to a planned 80 bcm). China's 21% stake in Kazakhstan's oil production has further surpassed Russia's by 2.5 times.

Nonetheless, China faces other regional transport plans, such as the Russian Trans-Siberian railroad, European TRACEA and road projects funded by Japan, the World Bank and the Asian Development Bank. Yet, these projects lack similar proportions or financial resources.

This is not to say that China does not face challenges. High-speed lines are three times more expensive than regular ones, involve track gauges standardization, and could leave China with a $616 billion debt by 2020, despite its "technology for resources" railway construction scheme. There are also doubts about the cost-effectiveness of the railway project. Moreover, China's accelerating economic engagement might scare Central Asian regimes, which are sensitive to economic and political challenges, both external and internal.

It is too early to argue whether Chinese railway networks, and related Eurasian integration, will promote much-needed economic or, more contentiously, political liberalization across Central Asia. However, it is clear that its burgeoning economic presence will entail political and military engagement by Beijing to protect its expanding regional and continental interests.

China's growing influence in light of the region's imperial history is thus viewed with serious caution in Central Asian capitals, as well as by Moscow and Washington, which have already seen a relative decline in their regional influence. The task, and indeed the dilemma, of the Central Asian states is to benefit from China's regional involvement and proposed railway networks, but also to escape the potential pitfalls of changing geopolitical realities.

Roman Muzalevsky is an international affairs and security analyst on the Caucasus and Central Asia.