foir_3880

FOI-R--3880--SE
interventions similar to that in Georgia in 2008, China may be forced to revisit,
and perhaps even rebalance its relationship with Russia. The Chinese political
dilemma will centre on the importance of the principle of non-intervention on the
one hand juxtaposed with how Beijing values its special relationship with Russia.
This will directly affect bi- and multilateral cooperation between China and
Russia regarding Central Asia. Principles related to how to deal with separatist
movements in an SCO context and effects on economy are likely to come to the
fore.
ECONOMY
Party legitimacy in the view of policymakers in Beijing hinges to a large degree
on the economic performance of the country. To the Chinese government
supporting industry and enhancing economic opportunities is therefore always an
important goal, be it for the state owned or private sector. Trade with and
investment into some of the Central Asian states, notably Kazakhstan which is
China’s largest trading partner in the region, have seen a sharp increase during
the 2000’s, albeit from a low level. The economic links have two distinct
national interests to China, energy imports and trade with the underdeveloped
western regions, notably XUAR. The former is a large part of the increase in
imports from Kazakhstan and Turkmenistan. Import of Turkmen gas to China
has increased more than one-hundred fold, from 38 million USD in 2009, to 8
billion USD in 2012 (International Monetary Fund 2013, p. 156). A similar but
not so substantive trend is oil imports from Kazakhstan, up by more than 100%
since 2009. This increase from Kazakhstan depends on the relatively newly
opened Kazakhstan-China pipeline, which currently ends in the XUAR (U.S.
Energy Information Agency, 2013).
Albeit limited, the trade with Central Asian republics likely carries more
political, symbolic and even economic importance for Beijing than mere trade
figures suggest. As discussed above developing the western and less advanced
part of China has been a key policy objective of the leadership in Beijing for
many years. This is equally true of the new leadership under Xi Jinping. Even a
limited increase of trade westwards could make a big difference and possibly be
an important supplement to other measures the central government seeks in its
quest to develop the XUAR and other western provinces. Xi therefore took
another important step in advancing the economic links with Central Asia when
he made a state visits in the region in September 2013. The concept of a Silk
Road Economic Belt was introduced, a process that step by step will “gradually
form overall regional cooperation” (Xi Jinping, 2013). In fact Xi hinted at a
region broader than merely Central Asia and encompassing the whole Eurasian
landmass. This is an important next step in the economic relationship. China’s
economic priority is underlined by it hosting the 2014 Heart of Asia Istanbul
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