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Analysis & Opinion
21.06.11 Secrets Of The Asian Court
By Pavel Koshkin

The Summit of the Shanghai Cooperation Organization held in Astana on June 15 showed that contrary to its expectations, Russia does not play the leading role in this organization. China has been supplying the organization’s members with extensive loans, thus taking the lead away from Russia. In an attempt to counterbalance China, Russia is seeking to expand the SCO by bringing India into the organization. But while Russian experts believe that this policy will not affect the Russian-Chinese partnership because the countries have common geopolitical goals, their Chinese counterparts say that this rivalry may well extend beyond the SCO framework.

China's economic success and emerging influence seem to have puzzled both the United States and Russia. While America is afraid of losing its influence in Southeast Asia, Russia is discouraged by China's political ambitions in the Central Asian republics of Kazakhstan, Kyrgyzstan, Uzbekistan, and Tajikistan (all members of the SCO). Founded in 2001 and comprised of six permanent members and four observers (India, Iran, Pakistan and Mongolia), the SCO is aimed at campaigning against global terrorism and balancing out the West and NATO.

Moscow initially expected that the SCO would strengthen its position in the region. But instead of furthering Russia’s interests, the organization increased China’s political influence, which allows Beijing to dictate the rules of the game in controversial cases, such as issues concerning energy and territorial disputes on the Russian-Chinese border. Thus far China has been trying to establish close ties with Central Asian countries in an attempt to get reliable access to their energy reserves. The global economic crisis seems to have strengthened China and weakened Russia and the Central Asian states, thus making the latter financially dependent on China.

For instance, economic challenges forced the Russian state oil companies Rosneft and Transneft to ask the Chinese Development Bank for a $25 billion loan. At present China is also a major creditor to Kazakhstan, which received a $15 billion loan from 2009 to 2011, with $10 billion of that amount granted in exchange for access to some of Kazakhstan’s energy companies’ assets for the China National Petroleum Corporation.

In contrast, the Russian-Chinese energy relationship is rather rocky, since Moscow and Beijing can’t agree on pricing for deliveries of Russian oil and gas to China. “China doesn’t want to buy expensive gas and oil, while Moscow is too reluctant to sell it cheaply,” said Evgeny Minchenko of the International Institute of Political Expertise.

While China feels its power and influence growing and doesn't want to yield its advantage, Russia is well aware of its own weaknesses. China has been playing the leading role in the SCO since its establishment, while Russia has always been of secondary importance, Minchenko said. “Russia is a regional power, but not a super power now,” he said. “In reality, this legitimizes Chinese power and influence in Central Asia, because Beijing’s financial and resource potential is much greater than Russia’s.” But Clement So, a professor at the Chinese University of Hong Kong, is not convinced that Beijing can claim leadership in the SCO. “I am not sure if China wants to take the leading position in the SCO, but it surely wants to increase its influence,” he noted.

In order to curtail China’s growing might within the organization, Russia may try to bring India into the SCO as a potential ally. But the problem is that India, currently an observer at the SCO, will not have any political heft in the organization until it becomes a full-fledged member, while Russia’s insistence on India's membership could compromise its own energy collaboration with China. It is “possible that Russian-Chinese relations may be affected by Russia's move [to integrate India in the SCO] because Russia and China are still competing for international influence,” said So.

At the same time, Minchenko thinks that the two countries might actually find a compromise instead of competing. “India’s accession would be possible if Pakistan [another observer] joined the SCO bloc,” he said. While China views India as a rival, Pakistan is perceived as a partner. Beijing and Islamabad “have already established close ties and, furthermore, Beijing is ready to support its ally in case of a U.S.-Pakistani military confrontation,” Minchenko added. Notably, Pakistan has been waiting for admission to the SCO since 2006, while India only applied for membership in 2010.
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