Under the cover of Covid: China’s economic ingress into Central Asia
COVID-19 has impacted all forms of life and has taken up a large portion of government attention since early 2020. Covid-19 can also be construed as a distraction, or disguise, for states who have used the COVID-19 epoch as an opportunity to secure foreign interests. One such case is China’s economic ingress into Central Asia, a move that has been in many ways aided by the pandemic. The impact of the catastrophe allowed China to encourage the Central Asian Republics (CARs) to believe that China’s Belt and Road Initiative is the way forward for them to overcome the huge impact of COVID on their economies.
Due to COVID-19, Central Asian economies observed a fall in GDP, sinking trade statistics, plummeting remittances, and a decrease in foreign direct investment, which added to the possibility of economic collapse. As per the reports of the World Bank, these economies are massively dependent on remittances. For instance, Turkmenistan’s, Kyrgyzstan’s, and Tajikistan’s economies are all 30% dependent on remittances. This has plunged the region’s governments into anxiety, with administrations consequently struggling to prevent a major section of the population from falling below the poverty line.
The scenario presented an opportunity for China's "Vaccine Diplomacy" to make an appearance. China was the first state to reach out to Tajikistan amid COVID-19 and provided medical equipment, technical support, and a crisis recovery fund to help the country fight the pandemic. Such efforts were applauded by Tajik PM Emomali Rahmon. With the support, China continued to press Tajik leaders to see China's BRI as the long-term solution to the economic impact of COVID-19. Similarly, with Kazakhstan, Turkmenistan, Uzbekistan, and Kyrgyzstan, China provided medical supplies and pressed its desire to enhance cooperation with the CAR governments. From this, Beijing is developing grounds for its already comprehensive geo-economic and geo-political objectives in the region.
This created a dilemma in Central Asia regarding the way forward. Although the regional economies understand that their heavy reliance on China needs to be supported with alternative options, several other major players, Russia, Europe, and the US, have been reluctant to introduce any long-term alternatives. As per Connecting Europe and Asia: (The EU’s Strategy), the EU does not have the economic muscle to provide any long-term plan comparable to the BRI. At the same time, Russia remains busy with its revanchist ambitions in Ukraine. Finally, although the US aims to invest $25 million in Central Asia, it remains less effective than China's massive investment in the region.
The COVID scenario acted as a catalyst in the ongoing US-China tussle for regional influence. But the US' recalcitrant posture towards the region by keeping its engagement minimal has been a major fact why China has been able to expand its influence. The US strategy for Central Asia from 2019 to 2025 states that Washington aims to link Central Asia with Afghanistan, but with the US withdrawal from Afghanistan, the strategy seems less engaging. Similarly, Washington’s recent Interim National Security Strategic Guidance that provides Biden’s approach to dealing with China’s rise does not mention Central Asia, thus pointing at the limited interest of the US to enter into competition with China in the region.
In contrast to the BRI, the G7’s Partnership for Global Infrastructure and Investment (PGII), with its $200 billion investment, was launched as part of the Build Back Better World (B3W) plan. Although the EU members understand that the project cannot match the might of BRI, it is still perceived that maybe in the long run the investment will be able to counter China’s BRI. Nevertheless, the overall policy plans of the US only highlight its disengagement with the region. So as this approach keeps on continuing with less investment to balance China’s investment in the region, it only allows China the opportunity to make regional countries believe that the only way forward for economic development is through Chinese infrastructural development, including BRI.
The economies of Central Asia have become heavily dependent on China for trade and foreign direct investment. As government figures, the rate of Uzbekistan and Kyrgyzstan’s external debt to China is 50% and 40%, respectively. Somewhat similar scenarios among the regional members highlight that such a level of dependence, along with the increasing Chinese economic footprint in the region, presents a picture of China’s Pax Sinica in Central Asia.
Moreover, with Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan, the region remains home to China’s billion-dollar investment, mostly under its ambitious BRI. So China rightly took COVID as an opportunity to further consolidate, at a rhetorical level, its support from the regional actors by presenting itself as an external saviour. As stated, China’s vaccine diplomacy in the region was much greater in share numbers than was given to the CARs by other nations.
Therefore, while the COVID calamity impacted every sector of the global economy, at the same time it allowed China to grow in its reputation in the eyes of Central Asian leaders by illustrating that China stands with them amid the pandemic and is adamant about its promises in the shape of long term economic investment under BRI. However, the future is not yet entirely clear for China in Central Asia, as there exists the potential for the US-sponsored PGII.