CENTRAL ASIA: China presence in Central Asia as part of global strategy

BISHKEK (TCA) — China is moving fast toward a consolidated infrastructure policy that expands in different parts of the world and toward Europe via Central Asia. The new China-led Asian Infrastructure Investment Bank (AIIB), a global multilateral bank, is just one element of a strategy that intends to bring China on par with other existing global financial institutions, providing to China the right place in the global competition for world leadership while making the yuan convertible. This strategy demands cooperation and agreement of many countries including the USA, Russia and several Central Asia countries and involves the abilities of Chinese diplomats of a careful balancing between their interest, local culture, and an increased nationalism. The objective is not humanitarian or philanthropic in any way, but to assure that Chinese manufacturers and Chinese economy can continue to grow, keeping and expanding the present export destinations and developing new ones. What China is currently doing is the securing of protection of its future interests in the years to come, developing a system that involves worldwide investment and acquiring political influence in exchange for financial support.

Investment in infrastructure is at the same time supported by an aggressive policy toward acquisition and joint investment in local industries and different types of activities. Not to mention Central Asia where Chinese presence is a fact that dates several years back, in Europe and elsewhere outside China not a single day passes without a new Chinese acquisition or participation in existing companies. The action is really global and spans across all the five continents including Africa and South America. This involves not only large infrastructural projects (roads, railways, ports) but also factories, fashion houses, tourism, investment, real estate, and even entertainment activities and football clubs. Today Chinese companies (large and medium) no longer limit themselves to acquiring only knows-how and technology, but are developing local industry to place a direct long-term presence in markets that are of utmost importance to Chinese goods.

The marketing of European products, their brands, and manufacturing facilities is seen as an indispensable tool for a long-term presence of China and the right solution to export products manufactured in China. The injection of cash into European companies with liquidity problems or under a secured expansion program is a good deal for China but it is also beneficial to maintain employment in Europe and consequently to preserve the purchasing power of the middle class that if out of work will stop buying Chinese and other products. China is well aware that the present deflationary situation is posing a great danger to the export of Chinese goods and it needs to be rectified not only by favoring local policy but also by supporting it with new investments.

To keep exporting, China needs to maintain the global trade at its maximum level and if it demands additional investment it will be done providing finance and long term assistance while guaranteeing to Chinese companies lucrative infrastructural contracts and stable presence in the foreign markets. The Chinese strategy of investing huge financial reserves into Western, Central Asian and Asian markets is clear and is more a matter of survival for the Chinese economy and a way to avoid any possible catastrophic unrest rather than support to economies of different countries. The presence of state-run Chinese companies and independent Chinese entrepreneurs is achieving different results, both economic and political. Besides the immediate impact on the economies where the investment takes place, the end beneficiary of this investment is China itself with its long-term economic goals and political influence that would stretch for many years around the globe.

Today the Silk Road is no longer the route between China and Europe, but rather a “Silk Belt” embracing the world that with finance and investment is helping China assert its global power. Chinese finance and economic development is already encompassing five continents, and the objective is clear to support a shift toward a new global political and economic policy that whatever its name will have China behind as a main player and the master of such unique approach.

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