Earlier this month, Pakistan was plunged back into political turmoil after former Prime Minister Imran Khan was arrested, sparking protests and violence across the country. But what does it mean for China, Islamabad’s largest lender and increasingly important ally? Daud Khattak, the managing editor for RFE/RL's Radio Mashaal, joins host Reid Standish to discuss.
China In Eurasia
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Wednesday 17 May 2023
Welcome back to the China In Eurasia briefing, an RFE/RL newsletter tracking China's resurgent influence from Eastern Europe to Central Asia.
I'm RFE/RL correspondent Reid Standish and here's what I'm following right now.
Why China's Central Asia Summit Is A Big Deal
Chinese leader Xi Jinping is set to host all five of his Central Asian counterparts at a high-profile summit on May 18-19 that Chinese officials have said will mark "a new era of cooperation."
Finding Perspective: The summit, which will take place in the central Chinese city of Xi'an, is important for an array of practical and symbolic reasons, as I reported here.
The gathering will be the first-ever in-person summit for Chinese and Central Asian leaders and the decision to hold it in Xi'an also comes with its own symbolism. The city has cultural and trade connections to Central Asia that go back millennia and it was a crucial stop on the ancient Silk Road that Beijing has used as the basis for its Belt and Road Initiative (BRI).
China will be looking to channel that symbolism as it looks to show that its economy is reopened for business.
The focus of the summit is set to be on boosting regional infrastructure and increasing connectivity in the region.
A deal on a 30-day visa-free regime between China and Kazakhstan is expected to be signed into law after a draft bill was approved by the Kazakh parliament in April. Kyrgyzstan is pushing to ink its own visa-free arrangement, although it's unclear exactly where that stands.
LISTEN: Earlier this month, Pakistan was plunged back into political turmoil after former Prime Minister Imran Khan was arrested, sparking protests and violence across the country. But what does it mean for China, Islamabad’s largest lender and increasingly important ally?
The long-discussed China-Kyrgyzstan-Uzbekistan railway is also expected to get a mention. A feasibility study for the $5 billion project is said to be complete and all parties will be looking to tout its progress after so many years of delays.
Why It Matters: At a time of major upheaval in its ties with Russia -- and long-lingering questions over Western, particularly U.S., interest in the region -- Central Asia is keen to have the red-carpet treatment from China.
It's "a clear message that China is open for business and that Central Asia is open to China," Raffaello Pantucci, a senior fellow at the S. Rajaratnam School of International Studies in Singapore, told me.
China's economic footprint in Central Asia is growing despite pandemic-caused setbacks. By the end of 2020, total Chinese investment in the region reached $40 billion, a figure that grew to $70 billion by the end of 2022.
In advance of the summit, Chinese officials have continued to give it top billing, calling it a milestone, "a top diplomatic event," and saying that an "important political document" is due to be signed that will "draw a new blueprint for China-Central Asia relations."
Expert Corner: The All-Weather Friendship Hits A Storm
Readers asked: "Islamabad's relationship with Beijing has been under strain for some time, so how does the recent unrest in Pakistan sparked by former Prime Minister Imran Khan's arrest affect the country's ties with China?"
To find out more, I asked my colleague Abubakar Siddique, who covers Afghanistan and Pakistan at RFE/RL:
"Earlier this month, the visiting Chinese Foreign Minister Qin Gang told Pakistani political leaders to 'build consensus, uphold stability, and more effectively address domestic and external challenges so it can focus on growing the economy.'
"As one former Pakistani official recently told VOA, China wants Pakistan to know it will not let it fail completely, but also that it will not support mismanagement. His comments encapsulate over a decade of Beijing's frustration with Islamabad to uphold an effective economic partnership. Once billed as a 'game changer' for Pakistan's foreign-aid- and debt-dependent economy, the China-Pakistan Economic Corridor (CPEC) is largely stalled -- undermining the overall impact of President Xi Jinping's Belt and Road Initiative.
"Domestic tensions have also overlapped with the China relationship. The current ruling coalition led by former Prime Minister Nawaz Sharif and former President Asif Ali Zardari had reputedly accused Khan of derailing the CPEC by launching a monthlong sit-in protest in 2014 and then attempting to renegotiate various CPEC agreements following his election victory in 2018.
"Beijing is also disappointed by the deterioration of security in Pakistan, where Islamist and Baluch separatist militants have targeted Chinese workers. Looking at public comments from Chinese officials, they're clearly worried about mounting security, economic, and political crises in Beijing's key South Asian ally."
Do you have a question about China's growing footprint in Eurasia? Send it to me at StandishR@rferl.org or reply directly to this e-mail and I'll get it answered by leading experts and policymakers.
Three More Stories From Eurasia
1. Searching For Unity
In the latest sign of its evolving tightrope with China, the European Union's leadership is calling for new urgency to tensions with Beijing, while also pushing for continued dialogue, according to an internal document drafted by the European External Action Service seen by RFE/RL.
What You Need To Know: The document comes ahead of a June summit for EU leaders to discuss China policy and as the bloc looks to find its footing amid an intensifying global competition between Beijing and Washington.
It calls on member states to "be prepared" for a crisis over Taiwan and that Europe should be taking measures to prepare for supply-chain disruptions. It also says that the bloc should speed up plans for reducing its overdependence on China through "de-risking."
Still, the document also says that Europe should keep engagement going with China and not seal itself off from the country. "Systemic rivalry may feature in almost all areas of engagement. But this must not deter the EU from maintaining open channels of communication and seeking constructive cooperation with China," the document reads.
The approach was met with some derision by more hawkish member states who see the call for continued dialogue as naive and it highlights that there still isn't unity on how to deal with China within the EU.
But Brussels' line is evolving and the temperature is slowly being turned up on China.
A draft for the next package of EU sanctions seen by RFE/RL contains eight Chinese companies over their potential role in assisting Russia's war in Ukraine and while it's unclear if they'll make it to the final version, the prospect is already sparking warnings from Beijing.
During a recent visit to Berlin, Chinese Foreign Minister Qin Gang cautioned his German counterpart, Annalena Baerbock, that Beijing would react strongly if the EU were to impose sanctions on Chinese companies.
2. Chasing Beijing
Faced with growing economic pressure over looming debt payments and a lack of foreign investment, Bosnian Serb leader Milorad Dodik is seeking a financial lifeline from China, my colleagues Goran Katic and Milorad Milojevic from RFE/RL's Balkan Service report.
The Details: The turn to China by Republika Srpska -- Bosnia-Herzegovina's predominantly Serbian entity -- comes as Dodik grapples with a struggling financial outlook and deteriorating relations with the West over his secessionist calls.
In particular, Dodik is hoping to borrow from Chinese financial institutions and get China to accept bonds leveraged by Republika Srpska so that it can meet a series of debt payments to Western lenders that start coming due this summer.
Dodik said in late March that Chinese institutions had agreed to accept the bonds as financial guarantees that they will be repaid for any loans, but many economic analysts are still unsure about the Bosnian Serb leader's plan, which they say lacks bargaining power and could lead to unfavorable terms.
3. Banking On Budapest
Hungarian Prime Minister Viktor Orban personally greeted the president of the China Construction Bank (CCB) as it opened its first branch in Hungary amid hopes in Budapest that the institution can help bring in more investment, my colleague Tamas Wiedemann from RFE/RL's Hungarian Service reports.
What It Means: As Tamas notes, the CCB has a colorful history in Budapest, having been part of a controversial settlement program in Hungary where wealthy foreigners, particularly Chinese citizens, could purchase a resident permit in the country.
Many Chinese business owners explored this path to get a footing in the EU and used the bank to leverage the bond needed to get the permit.
Now, the bank is looking to launch large-scale projects inside Hungary. Both the CCB and the Bank of China, which already has an office in Budapest, are slated to play a role in financing the construction of a new battery factory in Debrecen for the China-based Contemporary Amperex Technology Limited.
Across The Supercontinent
'Peace Mission': Li Hui, China's special representative for Eurasian affairs and a former ambassador to Russia, has begun his first trip as Beijing's peace envoy for the war in Ukraine. In addition to Russia and Ukraine, he will also visit Poland, France, and Germany on the tour.
One China, One Central Asia: Kazakh President Qasym-Zhomart Toqaev said it was "absolutely clear" that Taiwan is a part of China as the Central Asian country continues to prioritize deepened ties with its eastern neighbor, RFE/RL reports.
The View From Tokyo: Japanese Foreign Minister Yoshimasa Hayashi expressed concern on May 13 about Russian and Chinese military cooperation in Asia and said the security situation in Europe could not be separated from that in the Indo-Pacific region since Moscow's full-scale invasion of Ukraine.
From 17 to 7: China hosted its third annual trade expo with Central and Eastern Europe. Unlike in past years, only seven countries sent representatives this year, another indicator of how far its standing has fallen across much of the region.
Partners In Arms: It took 14 months, but Chinese leader Xi Jinping spoke with Ukrainian President Volodymyr Zelenskiy. But does it mean that China is prepared to broker peace in Ukraine?
Listen to the last episode of Talking China In Eurasia, where guest Finbarr Bermingham, Europe correspondent for the South China Morning Post, explains what it means for Beijing's relationship with Europe and the balance that it's trying to strike amid the war.
One Thing To Watch
Terry Gou, a Taiwanese billionaire who founded the tech conglomerate Foxconn, is making an early push to be the presidential nominee for the country's main opposition party, the Kuomintang (KMT).
Gou is presenting himself as the best option to avoid war with China and that he hopes to "resolve the crisis" through dialogue and does not espouse the pro-independence views of President Tsai Ing-wen's Democratic Progressive Party. He also has deep personal and business ties to mainland China.
Should he get the nomination for next January's vote, he'd be up against Vice President Lai Ching-te, who is considered to be even more pro-independence than his predecessor. Gou currently has a tough road ahead. Hou Yu-ih, the mayor of the northern city of New Taipei, is widely considered to be the front-runner for the KMT ticket and is seen as a more moderate choice with a better shot against Lai.
That's all from me for now. Don't forget to send me any questions, comments, or tips that you might have.
Until next time,
Reid Standish
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About The Newsletter
In recent years, it has become impossible to tell the biggest stories shaping Eurasia without considering China’s resurgent influence in local business, politics, security, and culture.
Subscribe to this weekly dispatch in which correspondent Reid Standish builds on the local reporting from RFE/RL’s journalists across Eurasia to give you unique insights into Beijing’s ambitions and challenges.
To subscribe, click here.
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