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BIZCHINA / Trade |
Time for a new Silk Road through Central AsiaBy ()
Updated: 2007-06-26 11:14 China's intentions in Central Asia is less a grand plan, but more about business and regional stability. From Almaty to Ashgabat China's corporate icons have created a trail of recognition and intent. The angular logo of the Industrial & Commercial Bank of China has become familiar as any Western corporate logo in Central Asia's larger cities. So too the red and orange of Chinese oil major Sinopec's corporate colors. Following the Chinese corporate champions along the Silk Road are the small traders carting televisions, pens and hair clips made in factories in Guangdong and Anhui. Chinese merchants were well known a long time ago in Central Asia, a vast, misunderstood and occasionally alluring place where explorers and adventurers made their own way. More recently a cottage industry of scholars has built up around the region's riches, real and imagined, often staffed by political conspiracy theorists and academics who in many cases have not even been in the neighborhood. Few academies or agencies know as much about the realities of the region as the Silk Road Initiative (SRI), a project administered by the UN Development Program. The story of the SRI goes back to the late 1990s when China's emerging economic power seemed the likeliest way of prompting economic growth in neighboring Central Asia. Administered out of a Beijing office, the SRI covers China and its westerly neighbors Kazakhstan, Kyrgyzstan and Tajikistan, as well as Uzbekistan. A small United Nations Development Program staff, spread across the countries, has set themselves the task of putting the old Silk Road back together. Most of China's exports once made their way along the Silk Road, for long the most dynamic trade channel in the world, linking east and west before alternative sea routes and political borders took over. Now the SRI sees China's rejuvenated economic clout powering up an economic zone stretching from Xi'an in Shaanxi Province through Central Asia, and built on trade, investment and tourism. While China has moved on with its own economic revolution to regain the global economic pre-eminence it enjoyed during the days of the original Silk Road days, most of Central Asia stays stuck in gear. After decades of stability under the USSR umbrella the nations of Central Asia found themselves suddenly standing alone, forced to join the free market global economy without any serious tradition of political or economic independence. Aside from Kazakhstan growth rates and salaries have been stagnant in much of the region's states, with economies dependent on remittances from emigrants working abroad. Something Central Asia does have - in abundance - is energy. Of all the guesswork as to why China should be motivated to re-enter Central Asia most analysts agree on energy as a primary motivator. And why not? China taps gas fields in Kazakhstan, Turkmenistan and Uzbekistan to help its growing economy. But those fields are also feeding pipes that ultimately supply America and Europe. Central Asia is less about gas grabs and grand schemes for regional domination and more about a region needing to reorient its economic relations in order to achieve prosperity. A partnership with neighboring China is logical. Chinese investment is needed in its western neighbors today, just as the Silk Road sustained regional trading posts here with Chinese goods and money over centuries. Logically China should not move low-value manufacturing over the border. Western regions bordering Central Asia still need investment. Rather, the kind of investment that benefits both sides. Kazakhstan has marked out eight priorities and China can assist in all of them: tourism, energy, machine making, food processing, textiles, logistics, building materials and agricultural processing as well as metallurgy. China, a neighbor, would seem even more eminently qualified to be a partner for the region as much as the Turkish and South Korean firms have moved into most business sectors in Central Asia, selling mobile phone network equipment, building roads and running hotels. Agriculture and infrastructure and telecommunications are only some of the common denominators tying China into a market of 140 million over the border. China is a net importer of food, something Central Asia traditionally exported to Russia. What has been stopping this more than anything is transport and communication. Even if it is because goods have slipped through in the past, losing tax revenue rightly due, there is no excuse for truck drivers steaming for seven hours in a queue at the China-Kazak border. Chinese construction and telecommunications companies have the know-how and equipment needed to modernize the region's infrastructure. Aside from oil and gas, China could well use the considerable talents produced by the universal education system of the former Soviet Union, which trained many of its space engineers and scientists in Kazakhstan and Uzbekistan. Already, computer programmers are making the 21-hour trip from the Kazak city of Almaty into China's westerly metropolis of Urumqi. Their talents are needed in China where a shortage of skilled staff has been slowing growth in several sectors. But Central Asia also needs more talents like businessman Emil Umetaliev to stay at home. Based in Bishkek, his Kyrgyz Concept company has seven offices around the country, running tours and events for foreign tourists and businesspeople. He sees his alpine homeland of steppes, lakes and mountains as a regional conference and tourism centre, providing information and services to its resource-rich neighbors, "just like our glaciers provide the region's water". A member of the Bishkek Business Club, Umetaliev's wishes are simple as they are logical, and China can help him with them all. He wants more Chinese tourists. It is a similar story throughout Central Asia - plenty of business brains and ideas but little government support. Kazakhstan has pistes to rival the Colorado and Uzbekistan has the incomparable Samarkand and Bukhara. What both lack is the know-how to help entrepreneurial types get started. China, the world's fourth largest economy and second largest tourism destination, can offer its neighbors plenty of advice on economic deregulation and tourism. Right now Umetaliev frets over the paperwork and visa process which puts people off visiting Kyrgyzstan's lakeside yurts, herdsmen and alpine mountain vistas. If China is engaging its neighbors like the Shanghai Cooperation Organization, so it should. Regional stability is good for China in its current early stages of economic development as much as it is essential for Central Asian states to exploit their natural resources. Political stability is essential for a region that has seen plenty of wobbles. Central Asia counts 80 ethnic groups among a population of 140 million - China has 56 for 1.3 billion people. Any nation would struggle with that kind of multi-ethnicity. But as has been shown in Kyrgyzstan and Tajikistan, fairly distributed economic prosperity is vital to secure the populations' loyalty. China's neighbors need economic reform as much as they need political reform - better policy and legal conditions for trade and attracting investment - to enjoy economic prosperity. China, and its economic success story, can offer examples and investment. Time then for a new Silk Road. From Ireland and based in Beijing, the author Mark Godfrey is completing a PhD thesis on the economic and political influence of China on three Central Asian states. He has traveled extensively in the region. (For more biz stories, please visit Industry Updates)
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