Gradually, China is moving into the Central Asian energy development market. Kazakhstan is already China's largest trading partner in the region, with official bilateral trade in 2007 totaling over $13.9 billion in U.S. dollars.8 China has allowed Kazakhstan to trade on its ocean port of Lianyungang maintaining the latter's independence from Russian controlled transport passages. Moreover, the opening of the Almaty-Urumqi rail lines shows their relationship is more than just commercial trade.
Other Central Asian nations are also seeing increased trade with China. In 2006, China signed a bilateral contract with Turkmenistan, agreeing to buy 30 billion cubic meters of natural gas exports a year between 2009 and 2039.9 In addition, Uzbekistan signed an agreement to build a gas pipeline of 530 kilometers with the capacity of 30 billion cubic meters between the two countries10; and the China National Petroleum Company (CNPC) signed a $600 million agreement with Uzbekistan's state owned company, Uzbekneftegaz, for some 23 smaller oil fields in the Bukhara area.11 Bilateral trade between China and Tajikistan was $158 million in 2005.12 Tajikistan was also the largest recipient of China's $900 million of privileged export loans to members of the Shanghai Cooperation Organization? (SCO).
China's interest in hydropower generation is also growing. The country has established partnerships with Tajikistan and Kyrgyzstan for constructing power lines, and has become a member of a water and energy resources consortium set up by Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.13
The rapid economic growth of China has increased energy demand considerably, making Central Asian energy security very attractive and strategically important for China's growing energy needs. The Shanghai Five was a group (comprised of Kazakhstan, Kyrgyzstan, Tajikistan, China and Russia) established in 1996 through the signing of the "Treaty on Deepening Military Trust" for the border regions around Shanghai.14 The Shanghai Five group was later renamed the "Shanghai Cooperation Organization" (SCO) when Uzbekistan joined the group in 2001.15 While the foremost focus of the SCO is terrorism, separatism and extremism, the primary policy interest of China relating to the region involves avoiding regional instability,16 securing access to energy resources,17 and expending economic cooperation.18 China's membership in the SCO increases Chinese influence in the region, allowing it to advance shared policy interests though an intergovernmental organization. Notably, China at the Yekaterinburg SCO summit, expressed willingness to provide a loan to members amounting to $10 billion in US dollars in order to bolster their stressed economies in the face of the global financial recession.19
1.Bruce Pannier, "Central Asia: SCO Leaders Focus On Energy, Security, Cooperation" (August 2007).
http://www.rferl.org/content/Article/1078178.html, Viewed on December 30, 2010.
2. Mark Burles, "Chinese Policy Toward Russia and the Central Asian Republics," 1999.
http://www.rand.org/pubs/monograph_reports/MR1045/ p. ix, Viewed on December 30, 2010
3. James Fishelson. "From the Silk Road to Chevron: The Geopolitics of Oil Pipelines in Central Asia" (December 12, 2007)
http://www.sras.org/geopolitics_of_oil_pipelines_in_central_asia Viewed on December 30, 2010.
4. Mahmoud Ghafouri. "The Caspian Sea Rivalry and Cooperation" Middle East Policy (Summer 2008), p. 81.
5. Energy Information Administration. "Country Analysis Briefs" (February 2008). p.1.
http://www.eia.doe.gov/emeu/cabs/Kazakhstan/pdf.pdf [PDF format: 257 KB / 10 pp.] Viewed on December 30, 2010.
6. Pan Guang, "China and Energy Security in Central Asia." Journal of Social and Political Studies CA&CC Press Publishing House (No. 6 (48), 2007).
Full text available by subscription only. Summary available from the publisher at http://www.ca-c.org/journal/2007-06-eng/08.shtml.
7. Lita Epstein. "China's foreign exchange reserves top $2 trillion for first time," Daily Finance. (July 2009)
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=alZgI4B1lt3s Viewed on July 16, 2015.
8. Hou Xiaoying. "China-Kazakhstan cooperation continues" (July, 2008)
http://china.org.cn/business/news/2008-07/11/content_15995033.htm Viewed on December 31, 2010.
9. Asian News. "Turkmenistan: gas pipeline to China is ready" (20 August, 2009). http://www.asianews.it/index.php?l=en&art=6997 Viewed on December 31, 2010.
10. Kozlova, Marina. "Natural Gas: Uzbekistan Tilts to China." BusinessWeek. May 29, 2007.
http://www.businessweek.com/globalbiz/content/may2007/gb20070529_845977.htm Viewed on August 29, 2011.
11. Martha Brill Olcott, "Is China A Reliable Stakeholder in Central Asia?" (August, 2006). Testimony before the U.S.-China Economic and Security Review Commission.
http://www.carnegieendowment.org/publications/index.cfm?fa=view&id=18606 Viewed on December 31, 2010.
12. RIANOVOSTI, "China, Tajikistan sign friendship economic pacts" (January, 2007)
http://en.rian.ru/world/20070115/59101377.html Viewed on December 31, 2010.
13. Valentin Bogatyrev, "Tough Politics: On Water Management in Central Asia," Institute for Public Policy, Bishkek, Kyrgyzstan (November, 2006)
14. The Global Security. Shanghai Cooperation Organization (SCO).
http://www.globalsecurity.org/military/world/int/sco.htm Viewed on December 31, 2010.
15. Prajakti Kalra and Siddharth S. Saxena. "Shanghai Cooperation Organization and Prospects of Development in the Eurasia Region. The European Stability Initiative."
http://www.esiweb.org/pdf/esi_turkey_tpq_id_98.pdf , p. 2. [PDF format: 47 KB / 4 pp.] Viewed on December 31, 2010.
16. Ariel Cohen. "The Dragon Looks West: China and the Shanghai Cooperation Organization". (September 7, 2006). Heritage Foundation.
http://www.heritage.org/Research/AsiaandthePacific/hl961.cfm Viewed on December 31, 2010.
17. Hsiu-Ling Wu; Chien-Hsun Chen. "The Prospect for Regional Economic Integration between China and the Five Central Asian Countries," Europe Asia Studies (November 2004), p. 1070.
18. Pan Guang, Alyson J.K. Bailes, Pál Dunay, Mikhail Troitskiy. "Chinese perspective on the Shanghai Cooperation Organization" (May 2007), p. 50. SIPRI Policy Paper #17
http://books.sipri.org/files/PP/SIPRIPP17.pdf [PDF format: 705 KB / 66 pp.] Viewed on December 31, 2010.
19. Window of China. "China provide 10-billion-dollar loan to SCO members" (June 2006).
Last updated: 11/17/2015
http://news.xinhuanet.com/english/2009-06/16/content_11552439.htm Viewed on December 31, 2010.