Central Asia’s Dependence on Russian and Chinese Gas Demands - Hikmet Can Çakan


In this short article, I will discuss the potential Sino-Russian energy rivalry in Central Asia and the region’s economic dependence on Russia and China in light of Morena Skalamera’s remarks.


The efforts to build a gas pipeline connecting the Central Asian producers to the European markets have not yielded fruit thus far. At the end of the day, Central Asia has become dependent on exports to either Russian or Chinese markets. Moreover, the US, who helped the Central Asian countries balancing the Russian influence geopolitically since the collapse of the Soviet Union, now starts to drift away from the region, due in part to Trump’s “America First” policy.


For two decades from the collapse of the Soviet Union to the early 2010s, Russian Gazprom was purchasing landlocked Central Asian gas in an orderly fashion. Gazprom then would sell the same gas purchased at a low price to the European customers for higher prices. It was one of the salient methods serving the Russian gas monopoly in Eurasia. However, starting with the Great Recession in 2007, the European demand plummetted and Russia felt no need to purchase the Central Asian gas. In 2009, a suspicious explosion took place in the main Russia-Turkmenistan gas pipeline, which led Russia to reduce the annual gas inflow from 50 bcm to 10 bcm. Despite the lack of evidence, most commenters believe that it was a Russian plot in order to suspend the gas imports fixed in the long-term contract. Meanwhile, a new gas pipeline starting from Turkmenistan to China through Uzbekistan and Kazakhstan began operating in 2009. This new pipeline, which carries 55 bcm per year (its capacity has gradually increased), elevated China’s position to the largest energy customer of Central Asia. As a result of China’s involvement in the game, Uzbekistan’s exports to Russia fell from 15.4 bcm in 2009 to 1 bcm in 2015. By 2016, Turkmenistan completely cut its gas exports to Russia. Although it seems that the Central Asian republics have kissed off their Russian bully in terms of economic dependency, they now have become dependent on Chinese gas demand.


Over the past decade, the Central Asian states tried to gain satisfactory flexibility and bargaining power in triangulating relations with Russia, China, and the US. While the EU appears as an important investor and a potential market, it is far from balancing the other two, three geopolitically. When we look at the picture of Central Asia today, the countries in the region seem to have been stucked between the two giants.


Overall, it seems that China’s growing economic presence in Central Asia comes at Russia’s expense. Except for Kazakhstan, China is the largest trading partner of each Central Asian country. While Russia still being a vital trading partner, investor, and provider of employment to millions of expatriate Central Asian workers, it has been losing its economic weight in the region. In terms of security issues, however, China falls short to challenge Russia in Central Asia. Moreover, when it comes to soft power, Russia clearly outweighs China. Russian political and cultural influence in the region still remains dominant.


References

Skalamera, Morena. “The Silk Road between a Rock and a Hard Place: Russian and Chinese Competition for Central Asia’s Energy.” Insight Turkey 20, no. 4 (2018): 45–65. https://doi.org/10.25253/99.2018204.05.

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