Expert: By means of Silk Road China is trying to keep alive its Rusty Belt

The Belt and Road Forum has taken place in China. It was attended by almost 30 heads of states and prominent Eurasian politicians. This global project is a way for China to play the first fiddle in Eurasia. It is not yet clear who is ready to dance to this tune but there are a number of crisis-stricken countries who may have no choice.

Present at the forum were also representatives of Central Asia, who also are interested in China’s initiatives. Industrial policy expert at Kyrgyzstan’s Commerce and Industry Chamber Kubat Rakhimov has answered EADaily’s questions concerning the prospects of this and other initiatives and China’s policy in Eurasia.

As far as I know, almost all of the guests got something at the forum. The Kyrgyzs were promised a railroad, which is supposed to connect China with Uzbekistan. In contrast, the Uzbeks signed contracts worth $23bn. What else?

Initially, the Chinese had a program entitled Silk Road Economic Belt. But it seems that they have revised their plans and at the forum they appeared with the Belt and Road initiative. The forum was opened by Russian President Vladimir Putin, Chinese President Xi Jinping and UN Secretary General Antonio Guterres. The UN is a global project, Russia and its Eurasian Economic Union are partners.

The Indians boycotted the forum as they are displeased with China’s contacts with Pakistan, with the Chinese assistance of $62bn, and, especially with the China-Pakistan Economic Corridor and the fact that it will run via Gilgit-Baltistan, part of disputed Kashmir region. The Chinese said that the China-Pakistan Economic Corridor would be part of the Belt and Road project. So, the Indians had no other choice but to boycott the forum. That demarche might well be masterminded by the Americans. India and China are not only geopolitical but also economical rivals. So, for the Americans it is important to show the Chinese that until they solve their problems with India and Pakistan (something that will hardly happen soon), they will face such demarches. It was a serious blow – I would say, a slap in the face for the Chinese initiative.

This project is getting more and more layers and configurations, isn’t it?

The Belt and Road project is supposed to comprise only multilateral projects with multilateral financing. All the rest is a matter of bilateral relations: China, Uzbekistan, China-Kyrgyzstan, China-Kazakhstan, etc. This is not Silk Road. The Chinese are using the divide and rule policy and are stimulating rivalry among potential sponsors.

The Uzbeks have gotten a package of investments worth $23bn, while the Kyrgyzs just the promise of a railway from China to Uzbekistan. This is a controversial project with lots of supporters and opponents. I think that it is possible but I would like to warn the Kyrgyzs against providing state guarantees for it. It must be a private project as direct state investments by China would be a challenge to Kyrgyzstan’s sovereignty.

Nor must the Kyrgyzs provide any access to their natural minerals. They already have the benefits the Chinese are promising them under this project. They have lots of roads leading to seaports. So, they have no vital need for this project.

The Kyrgyzs say that the Chinese have given guarantees that this project will be carried out.

I doubt that the Chinese will give guarantees to the current Kyrgyz president, who is due to resign next spring. So, their promises mean nothing. Besides, they are faced with strong opposition inside Kyrgyzstan. Lots of people there do not want to see their country owing China even more than it already owes.

It seems that China is not afraid of crises and is ready to invest more and more money…

They don’t have as many projects as they seem to have. Yes, China is a big player but last week, The Financial Times reported that the Chinese had cut their budget for new projects by 20%. Their Silk Road Fund has so far financed five projects – two of them in Russia’s gas sector. In its turn, the Asian Infrastructure Bank has faced a number of poor projects. This is why, all Silk Road projects have been moved from multi- to bilateral level.

India’s behavior has proved that China’s global projects may face lots of problems. Its biggest mistake is that it is mixing multilateral projects with bilateral relations. You can’t bring very different pieces together into one puzzle.

What interests do the Chinese have in Central Asia? Markets? Infrastructure?

They are very pragmatic here. When they were building their motor- and railroads, they neglected the fact that once the roads were ready, they would get a lot of excess capacities. They were forced to shut down as many as 3,000 big companies. They have the so-called Rusty Belt in their northeast: a complex of companies producing metal, machines, locomotives and carriages. If those companies are shut down, the Chinese economy will be shattered as the Rusty Belt is a source of job for a huge number of people. So, now the Chinese are looking for ways to use those capacities outside their country.

And are ready to build roads even in Afghanistan?

They are ready for anything. Were there a program on Mars, they would be the first to join it. They have just one condition for such projects – state guarantees. Kazakhstan, Uzbekistan and Russia can afford this but for Kyrgyzstan and Tajikistan this may be fatal.

EADaily’s Central Asian Bureau