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China Eclipsing the US in Asia with Business, Diplomatic Ties


From the northern edge of the Caspian Sea in Kazakhstan to the coast of Vietnam, with seemingly endless cash, diplomatic charm, and industrial resources, China is wooing countries in its neighborhood and beyond at a brisk pace. Beijing is buying gas, building pipelines, financing oil refineries, selling nuclear reactors, launching efforts to settle territorial disputes, and much, much more.

On a trip to the former Soviet republics in central Asia, Chinese President Xi Jinping tied up deals worth billions of dollars—a sign that China’s increasing prestige and influence in this region is eclipsing the US and even Russia. Xi finalized a $5 billion gas deal in Kazakhstan, opened a new onshore gas field, the second biggest in the world, in Turkmenistan (which will send gas through a China-financed pipeline all the way to Shanghai, despite high interest from Western oil companies), and spoke in emotional terms about a new “Silk Road” that would run from China’s eastern shores through Central Asia. “The ring of camel bells” would echo in the mountains, Xi said, “the wisp of smoke [would rise] from the desert.” This new order was symbolically encapsulated by the group photo of national leaders at the annual meeting for the China-bankrolled Shanghai Cooperation Organization in Kyrgyzstan: Xi Jinping took center stage, pushing Vladamir Putin off to one side.

China’s interest in Central Asia is mostly about energy and opening up resource trade routes that can serve as alternatives to the America-dominated (and crowded) sea lanes running off the coasts of South and East Asia. Elsewhere, China is using money and diplomacy to woo neighbors into its orbit.

Apart from North Korea, Cambodia and Pakistan are China’s best friends in Asia, and China would like to keep it that way. Energy-starved Pakistan will soon get two new nuclear reactors from China. These will help Pakistan both keep the lights on (parts of Pakistan are without power for as many as 22 hours a day) and keep pace with India’s  nuclear capabilities. Pakistani and Chinese officials say the move will balance India’s civil nuclear agreement with the US, signed under George W. Bush. China will build the reactors and provide 82 percent of the funds through a loan bearing what one Pakistani official called “very soft terms.”

China also intends to provide $1.7 billion in loans to Cambodia for the country’s first oil refinery. That deal, a huge boost for Cambodia’s domestic oil industry, caps several weeks of frantic and successful Chinese diplomacy in Southeast Asia. Earlier this month, President Xi went to Indonesia and Malaysia to elevate China’s relationships with both countries to “comprehensive strategic partnerships.” In Vietnam, a few days later, Premier Li Keqiang agreed to form a diplomatic working group to discuss territorial disputes. This was done over protests from Washington, which would prefer to see Asian countries discuss these issues with China in a multiparty setting, preferably with the US as moderator. After that Li spent two days in Thailand, inspected a Chinese high-speed rail exhibit, and met with Princess Sirindhorn, who is beloved by the Chinese government for her frequent visits to China and interest in its culture. By contrast, Secretary of State John Kerry, who was filling in for President Obama, stayed in Malaysia for less than 24 hours and skipped a visit to the Philippines because, he said, an incoming typhoon would have prevented him from leaving. Chinese media relished the opportunity to call the US a “fair weather friend.”

Even before China’s diplomatic offensive in Southeast Asia, analysts were already wondering if the United States was giving up on the “pivot to Asia.” “What a difference two years makes,” wrote two advisers to Mitt Romney’s presidential campaign in Foreign Policy. “U.S. influence in Asia has diminished. China’s growing military presence and deep U.S. defense budget cuts threaten the longstanding preponderance of American military might in the region.” Only a handful of US Marines have made it to Darwin, Australia, threatening a plan under the “pivot” to permanently station 2,500 Marines there by 2017. “The image of a dysfunctional, distracted Washington adds to perceptions that China has in some ways outflanked the U.S. pivot,” Reuters reports.

On this evidence, that’s a difficult argument to dispute.

[(R-L) Tajikistan’s President Emomali Rakhmon, Russia’s President Vladimir Putin, Kyrgyzstan’s President Almazbek Atambayev, China’s President Xi Jinping, Kazakhstan’s President Nursultan Nazarbayev and Uzbekistan’s President Islam Karimov pose for a family photo during a summit of the Shanghai Cooperation Organization (SCO) at the Ala-Archa state residence in Bishkek, on September 13, 2013. Photo courtesy of Getty Images.]

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  • Atanu Maulik

    WRM should relax. US is going nowhere. With every facebook account and McDonalds outlet being opened, with every new Hollywood movie being screened, US is burrowing its way deep into the global consciousness. The Chinese can huff and puff and blaster, but as long as America remains the world’s principal producer of high value stuffs and ideas, China can do very little which will make any material difference.

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