Central Asia and China's Taiwan Dilemma

The existence of the Republic of China in Taiwan as a separate entity from the People’s Republic of China in Beijing is the single largest threat to the survival of the Chinese Communist Party. For years, Beijing has pursued steps to create global conditions favorable for “reunification”–including a military scenario. If a war breaks out over Taiwan, China will be unable to secure energy supplies by sea. To withstand the economic disruption caused by a conflict in the Western Pacific, China has turned its focus to Central Asia as part of Chinese strategic thinking. Beyond increasing its military capacity, China has put serious attention to the decoupling scenario with the West. To avoid economic disruptions, it has been promoting the global use of the Chinese currency, setting up its own multilateral financial institutions, and deepening ties with regimes in critical developing countries for strategic resources. Central Asia offers a land-based trade and energy route alternative to the sea-based international political economy foundational to the current geopolitical environment. Xi in Central Asia On September 14, General Secretary Xi Jinping made Kazakhstan his first foreign visit since the start of the pandemic. In a letter published by a local Kazakh media, Xi praised the success of Kazakhstan in establishing itself as the key connectivity hub in Eurasia, that the country made “important contributions to ensuring stability of the global supply chain.” Since Central Asian states became independent in 1991, China eyed this opportunity to make steps toward building such Eurasian land-based logistics routes for its trade and energy needs in case of a conflict in the East. Talk of “reviving the old Silk Road” was started by then-Premier Li Peng when he toured Central Asian states in 1994. He proposed a number of large projects–such as oil and gas pipelines, railways, and highways–that has created regional connectivity and economic integration between China and Central Asian states.   The China-Europe train system for example, which exits China at separate locations along the Russian or Kazak border, has been operational since 2011. While it has faced obstacles, such as the different gauges of Chinese and Kazakhstan and Russian railroads, poor port governance, and international management of cargo transit, this Eurasian train system is undergoing expansion and continuous performance upgrades that will make it a valuable strategic asset for China’s long-term geopolitical goals. As shown during the pandemic, the trains have drastically increased their capacity in the past decade. They are developing towards being able to absorb a serious number of containers opting away from sea-based and air-based shipping. In 2021, the China-Europe train managed to run over 15,183 trains carrying 1.46 million twenty-foot equivalent units (TEUs), compared to 171.1 million TEUs operated via sea. This is up from only 1,702 trains in 2016, 8,225 trains in 2019, and 12,406 trains in 2020. Immediately after Russia started its war on Ukraine, the incidence of Chinese cargo trains opting to bypass Russia by going through Kazakhstan (then to Azerbaijan via ferry on the Caspian Sea) increased six times. In 2020, the two main cargo transit hub on the border of Kazakhstan and China, Alashankou and Khorgos, saw a 41.8 percent and 37 percent increase in volume compared to pre-pandemic. Now, a third transit hub on the border is under construction. Kazakhstan is planning to increase cargo transit capacity on the Caspian Sea to two million tons by next year. The possibility of constructing a China-Kyrgyzstan-Uzbekistan railroad gained new traction this year as Uzbekistan eyes connecting its trade to South Asia. Chinese governmental representatives have begun emphasizing the efficiency of the “Middle Corridor,” linking Kazakh rail to Turkmenistan, Iran, Turkey, and onwards to Europe. A 2021 report on the China-Europe train by China Railway lists “ensuring security of the global supply chain” as one of its priorities of development, directly spelling out the role of the trains as “emergency measures” stabilizing unexpected events affecting sea-based trade. When Xi left Kazakhstan the next day for the Shanghai Cooperation Organization Summit in Samarkand, Uzbekistan, he again raised the role of the region in stabilizing global supply chains, and urged regional countries to increase connectivity. Xi announced that the Shanghai Cooperation Organization will create a forum dedicated to this next year. The opportunistic timing for China to consolidate this land-based trade and energy route across Eurasia has now reached its peak as regional countries are facing economic disruptions due to the Russia-Ukraine War. Many in the region, particularly Uzbekistan, have come to view connectivity as a matter of survival and are supportive of China’s route diversification plans.