As China comes of age in the modern global economy, its approach to global diplomacy is evolving as it advocates a greater role for itself in the international order. According to Foreign Affairs, the People’s Republic of China’s grand new geostrategic focus lies in its western frontiers – targeting economic potential in Xinjiang and regions west, in Central and South Asia. This calculated shift to the west redefines China’s geostrategic vision and is part of its ambitious “one belt, one road” initiative, the integral element in China’s ambitious and renewed push to cement its global position.
Xinjiang, China’s lesser-known autonomous region located in the northwest of the country, plays an increasingly significant role in the PRC’s national designs as one of China’s top gas-producing regions and as a critical pathway into Central and South Asia – new markets for energy resources and trade. China National Petroleum Corporation (CNPC) has developed two West-East gas pipelines connecting Xinjiang to Guangdong, Shanghai and Beijing, greatly expanding the upstream potential to supply markets in eastern China. However, in recent years ethnic tensions, riots and civilian attacks by fundamentalists have embroiled the region in a hotbed of social and political unrest. National security concerns in the form of homegrown terrorism are at the forefront of PRC concerns – an unstable western frontier in Xinjiang could translate into disruption of vast economic potential in Xinjiang and western regions beyond.
Securing Aternative, Strategic Trade Routes
CPEC (China Pakistan Economic Corridor), a bilateral agreement valued at US$46 billion, made headlines earlier this year when it was officially signed into agreement. This treaty links Kashgar, Xinjiang to Gwadar, Pakistan, and will see China invest significant amounts into energy and transport infrastructures along this route. CPEC’s benefits to China are multifold. The treaty’s blueprint strategically secures an alternative trade route other than the vulnerable, U.S.-controlled Strait of Malacca. A new trade pathway and new entry port advances China’s land and maritime power, allows resources to flow more easily from the Persian Gulf into China, and demarcates a shorter route for Chinese goods to enter world markets.
Chinese president Xi Jinping hopes this will help stem the flow of fundamentalist doctrines and individuals to China’s restive western regionHowever, Chinese influence in South Asia is not limited to CPEC and Pakistan. China, as The Economist points out, has also been playing mediator in Afghanistan, hosting meetings between the Taliban and the Afghan government in May 2015, illustrating Chinese economic clout and increasing soft power in the region. By investing in Pakistan’s development and facilitating dialogue in Afghanistan, the PRC aims to stir Pakistan Prime Minister Nawaz Sharif and Afghan President Ashraf Ghani into deterring religious radicalism in their territories. In turn, Chinese president Xi Jinping hopes this will help stem the flow of fundamentalist doctrines and individuals to China’s restive western region. Influencing regional peace would not only help stabilize and neutralize the critical region of Xinjiang, but also accord the PRC with further legitimacy, influence and soft power.
China Pours Billions Into Go-West Strategy
The close connection between China and Central Asia is another manifestation of China’s go-west strategy, with capital-intensive energy ventures at the heart of these partnerships. State-owned oil and gas producer/supplier CNPC has been staking its claim on Central Asian resources and utilizing the area to diversify its oil import routes. The Central Asia-China Gas Pipeline, starting from Turkmenistan and running through Uzbekistan and Kazakhstan before reaching Xinjiang, is estimated by CNPC to hit 55 million cubic metres by the end of 2015, totalling 20 per cent of China’s annual gas consumption. In 2013 alone, CNPC purchased an 8.33 per cent stake in the world’s most expensive energy project, Kazakhstan’s Kashagan Oilfield, and signed US$30 billion worth of deals with the nation, mainly in the form of energy projects. The newly-launched Asian Infrastructure Investment Bank (AIIB), which will finance development along the “one belt, one road” route, highlights four Central Asian republics (Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan) as its founding members, further signifying China’s enduring stake in Central Asia.
Currently, only two per cent of Canadian oil makes it to ChinaWith tangible and highly-profitable ventures in Asia’s western regions, Canada is now “off the beaten track [for China],” according to the CBC. China is the world’s second-largest importer of crude and petroleum products, with an increasing demand for natural gas imports such as LNG; however, this pivot to the west eases potential sourcing of energy commodities from more costly and geographically distant locations such as Canada. Currently, only two per cent of Canadian oil makes it to China. “China’s interest in Canadian crude is well-established,” added a CBC report. And Canada can certainly be a “very stable and reliable supplier to China . . . only if the relationship gets going.”
Diversification of Canadian energy exports to new markets could be beneficial in various ways. As Chinese capital flows to infrastructure projects linked to the AIIB, Canada’s FDI flows are decreasing, as it lacks the capital needed to develop its own energy infrastructure. The Great White North potentially risks missed economic opportunities in the form of infrastructure and energy projects with the PRC if it does not engage China in a timely, effective and intelligent manner. Opined the CBC’s Patrick Brown in an analysis piece earlier this year: “The latest catchphrase [The Silk Road], describes the extraordinary campaign to recreate and surpass the glory days of the [ancient] Silk Road; they also explain some of the reasons why, in the past two years, Chinese investment in Canada has dropped from billions of dollars a year to next to none, and why no Chinese leader has visited Canada in close to five years.”