China Plays Dominoes Well

January 6, 2010 |  by  |  Economics and Finance, Politics and Society  |  Share

Photo by Adam Cohn

Photo by Adam Cohn

This column is a commentary on China’s recent natural gas pipeline deal with Turkmenistan.  The author asserts that this landmark deal is actually a very serious example of how China is drawing potential allies away from the Western world.

I.    Introduction

History is marked by a series of conflicts – kinetic and potential; Chinese activities in Central Asia are exemplary of this.  On December 14, 2009, Turkmenistan began its exportation of 40 billion cubic meters (bcm hereafter) of natural gas to the Chinese Xinjiang Province, with contributions of 10 bcm from both Uzbekistan and Kazakhstan over 30 years.  Historically, Turkmenistan has exported gas through Russia en route to China yet this particular deal conveniently bypasses Russia.  To complicate matters more, the European Union shares an interest in this region vis-à-vis their Nabucco gas line planned to run through southern Europe into Turkey.  Needless to say that while much commotion is made over oil and gas bonanzas in the Middle East these days, nations like Turkmenistan and other central Asian countries have untapped oil and gas reserves and naturally stand as open targets as both potential trading partners and secondary allies for nations such as China, whose intentions are altogether unknown.  As such, the benevolent guise of trade very easily becomes the hook by which nations such as China are able to rally seemingly insignificant states to their side.  In essence, while the powerful nations of today are playing hard politics in the Middle East, China is playing soft politics in Central Asia as a precursor to the domino effect in that region with Turkmenistan as the battlefield for trading rights.

II.  Brief History

As a nation formerly under Soviet rule, Turkmenistan unwillingly became the reciprocator of Russia’s attempts at showing the world, specifically the former Soviet states, that it still retained influence over its satellite states.  As such, Turkmenistan somewhat grew into the role of exporting gas exclusively to Russia (Turkmenistan sought many possible avenues of escaping trade with Russia through various methods but to no avail).  Relations between the two were not as cordial as the Soviet authorities may have hoped for; constant disagreements over pricing became hallmarks of Turkmenistan-Russian trade deals.  In 1993, Russia exported 11 bcm of Turkmenistan natural gas to Europe.  Russia failed to pay for the Turkmen gas for two months (worth about $185 million) “and then informed Turkmenistan it would transport Turkmen gas only to the former Soviet republics and not to Europe” [1].   This only added insult to injury by virtue of the $1.5 billion due to be paid to Turkmenistan for natural gas exported to Azerbaijan, Armenia, Georgia, Kazakhstan, Ukraine, and Uzbekistan.  In January 2007, Newsweek reported that Russia bought Turkmen gas for $100 per thousand cubic meters only to resell the same gas with a markup of $230 [2].  Between 1993 and 2007, then-President Saparmurat Niyazov made few independent moves and concessions to the Russian government making useless headway in relations with Russia favoring Turkmenistan.

III.  Present Day

With a history like this with an export partner like Russia, why would any self-respecting, sovereign nation continue to trade in this manner?  It is because of this abusive trade relationship that Turkmenistan was forced to seek trading partners elsewhere.  In its early days as a Communist state, China began to befriend certain other developing states like Iran primarily as a front against Western influence in the Central Asian and Middle Eastern regions.  By extension, China began trading relations with other such countries as Turkmenistan; it is at this point of conjunction that both countries found their trading relationship to be mutually beneficial.  In January 2008, China agreed to annually export 40 bcm of natural gas for a period of 30 years [3], paying Turkmenistan $195 per thousand cubic meters [4]; this is a considerable increase from the $100 per thousand cubic meters that Russia decided to pay Turkmenistan back in 1993.  Clearly Turkmenistan gains here.  An additional gain for Turkmenistan falls into the category of ‘perception’ in that Turkmenistan may very meaningfully perceive that China is dependent on them for natural gas (a half-truth as there are other sources of natural gas just as plentiful as those found in Turkmenistan) and is thus yielding power to Turkmenistan in the game of politics however short this political power play may persist [5].

IV.     China’s Gains

China’s gain here is one of a strategic nature, as alluded to above.  Due to the fact that China does not have the refinement capabilities that other developed nations have [6], it cannot immediately utilize this natural gas towards its thriving economy.  The alternative then comes to increasing current reserves.  Reasons for this include wartime scenarios, hegemony and/or political leverage.  In the event of a war, likely enemies of China will include the United States, several European countries, Israel and potentially other Asian and Middle Eastern countries.  Thus it is likely that sanctions may be placed on China in an effort to sway the war in one direction or another.  If this does happen, China is wise in preparing for such a scenario.  China may also be looking towards hegemony in the region.  At present, China is arguably the hegemon in Asia yet no single country, however powerful within its continent, can stand against a host of other countries unless it controls a common thread linking them all together.  This thread happens to be a dependence on oil and natural gas.  As mentioned before, China pales in comparison to the refining capabilities of other nations but if it controls (or has a more secure hold on) the supply of oil and natural gas, it becomes more of a power player against its likely enemies; this is the third possible reason for China gathering natural gas from Turkmenistan.

V. The Problem

Graph 1 (Click to Enlarge): Created by John Bolan

Chart 1 (Click to Enlarge): Created by John Bolan

Graph 2 (Click to Enlarge): Created by John Bolan

Chart 2 (Click to Enlarge): Created by John Bolan

The potential for undesirable future are clearly depicted above.  In 2008, 50% of Turkmenistan’s export base was grounded in its natural gas.  In 2007, the UN reported that its gross supply of natural gas amounted to 68.6 bcm [7].  More recent estimates put Turkmenistan gas production levels near or at 70 bcm [8].  Thus, as Graph 2 shows, it is troubling to hear that close to 75% of all Turkmenistan’s produced gas will go right to China, a country that does not currently possess adequate refining capabilities but for any number of reasons, is amassing this gas.

VI. Solutions

There are certain things that can be done by both Eastern and Western countries to hedge out (to a greater degree than exists to day) Chinese influence in the region.  One such solution involves the EU and its pipeline running through Southern Europe into Turkey.  At present, there are plans to build a pipeline in the aforementioned region of Europe into Turkey via an energy company known as “Nabucco”.  The first stage of this 3,300km pipeline is scheduled for completion in 2013 [9].

Image 1 (Click to Enlarge): from Wikimedia Commons

Image 1 (Click to Enlarge): from Wikimedia Commons

This stands as a strong solution to counter Chinese influence because earlier this year, the EU signed an agreement with Turkmenistan in which the Nabucco pipeline would receive gas from Turkmenistan through Turkey [10].  Although the amount the EU will receive will not compare to the amount that is exported to China, contracts can always be negotiated mid-term (as Russia aptly showed the world in its dealing with Turkmen gas).  The EU now has an open window to influence Turkmenistan in buying its gas and by extension having a hand in contributing to its economic growth.  Though this by itself is bound to decay, unless supplementary action is taken on the part of the EU and other nations as well.  These actions are the second set of solutions.

Just as Turkmenistan and the other Central Asian countries that are members of the Commonwealth of Independent States (CIS hereafter) are considered developing countries, there is a need to develop the infrastructure and environment where a government, an economy and society can develop holistically.  If either the Western countries or Eastern countries (or a combination of both) can have a hand in developing the infrastructural makeup of what makes Turkmenistan unique in its region of the world, this will (more likely than not) indebt Turkmenistan to the good-Samaritan countries involved.  Not only will Turkmenistan have improved as a country (i.e. social and economic development) but it will be in a better position to ally itself with nations that have deep concern over its security and sovereignty as an understandably vulnerable country in that region of the world [11].

This Turkmenistan-China gas pipeline agreement benefits both China and Turkmenistan in terms that both are willing to accept (for the time being, at least).  Although, Turkmen political leaders cannot expect that China views it the same way it views a world power (ex. Great Britain).  Herein lies the problem because Turkmenistan has the potential to become such a world power, but lacks the capabilities, infrastructure and overall development.  China, taking advantage of this handicap, swoops in and pays Turkmenistan a handsome price for their natural gas while hidden behind a guise of mutual need and free-market trade is the possibility of colonization, oppression and control.  Iran is just beyond Turkmenistan; if Turkmenistan falls in favor with China, Iran and China have more room to collaborate against the West (early Chinese-Iran cooperation to act against Western influence in the region – see above).

Graph 3 (Click to Enlarge): Created by John Bolan

Graph 1 (Click to Enlarge): Created by John Bolan

It is because this threat exists that the West and some Eastern countries (ex. South Korea, Taiwan, Japan) cannot allow China to influence countries through their pockets and thereby pull them into their camp – China is creating a new kind of domino effect in this way.  Although Turkmen imports of Chinese goods have increased over the years, the percentage of Chinese imports (as compared to the entirety of its other imports) is decreasing over this same period of time (see Graph 3).  This is the opportunity that other countries must take advantage of [13] and not let Turkmenistan fall prey to Chinese antics.

A third solution involves gradual movement away from and establishing an independence from international institutions such as the UN (specifically).  Time and time again, the UN has shown itself to exist merely as a politically correct body of sovereign (but feeble) nations too weak to act in its own interest, bowing before the hard-line politics of rebellious political and non-political figures.  Whether it be a Nikita Khrushchev, Hamas or allowing a conniving, inhumane man like Mahmoud Ahmadinejad to humiliate the Jews in his recent speech in the UN, the United Nations appears to lack a backbone in standing up for what is true, good and just in the world; Pluralism will only yield a higher cost in paving the many entry roads that lead nowhere.  It is because of this that the CIS and other states cannot depend on the UN to protect its sovereignty or security – nor should the UN take such a role in the world.  Inroads such as the Nabucco pipeline and the track record of American democracy [12] that nations like the CIS can depend on countries to help itself become greater than it is today and protect those gains from future malefactors.

Other viable solutions include some form of culture exchange (as the New York Philharmonic demonstrated on February 26, 2008 [14]) and creating incentives for American civil engineers to construct infrastructure akin to those found in today’s developed nations insofar as communication and transportation exist to such a degree where a substantial portion of Turkmenistan’s economy is not based on natural gas.

VII.  Conclusion

Ultimately, every nation has the duty to act in its own self-interest by virtue of a fact that it is a nation – not a tool in the hand or name of global cooperation.  Although where this self-interest borders (or potentially borders or may lead to) infringing on the rights of others in the name of one’s self-interest, action must be taken to put this to a halt.  Offshore security measures such as the current U.S. involvement in Iraq and Afghanistan are well intentioned but while the U.S. and NATO forces are tethered to their efforts in the Middle East, nations that have little involvement with operations in that region are casting their eyes on other jewels like Turkmenistan gas and the geographically and politically strategic benefits that come with entering into mutually benefiting trade relations with said country.  Sooner, rather than later, the fervor caused by present activity in the Middle East will cease and other threats and sources of concern will take its place.  At present, one such source of concern is flowering and threatens to stand as the problem in the near future if steps are not taken to quench it.  The world has already seen one malefactor claim victory in the game of dominoes – history cannot afford to repeat itself.

Works Cited

[6] Andrews-Speed, Philip, and Sergei Vinogradov. “China’s Involvement in Central Asian Petroleum: Convergent or Divergent Interests?” Asian Survey 40.2 (2000): 391-392. JSTOR. Web. 23 Dec. 2009.

AriRusila. “EU’s Big Choice – Nabucco or South Stream?” N.p., 15 May 2009. Web. 6 Jan. 2010.’s-big-choice-–-nabucco-or-south-stream/

[9] Charter, David. “Nabucco pipeline will ease Europe’s dependence on Russian oil.” Times Online 6 Jan. 2009: n. pag. Web. 24 Dec. 2009.

[8] “China President Opens Turkmenistan Gas Pipeline.” BBC News. N.p., 14 Dec. 2009. Web. 5 Jan. 2010.

“China Wins Struggle for Pipelinestan.” Arab News Blog. N.p., 15 Dec. 2009. Web. 6 Jan. 2010.

The Dais. “China-Turkmenistan Pipeline Opens.” Nhsmun2010. N.p., 23 Dec. 2009. Web. 6 Jan. 2010.

De Leon, Philip H. “China Secures Gas Supply from Turkmenistan.” Trading Metro. N.p., 23 Dec. 2009. Web. 6 Jan. 2010.

[3] FSU Oil and Gas Monitor 532 (2009). Print.

Frost, Patrick. “Afghanistan, Turkmenistan & Uzbekistan: NATO Summit.” Central Asia: The World Affairs Blog Network. N.p., 2 Apr. 2008. Web. 23 Dec. 2009.

[1] Hancock, Katherine J. “Escaping Russia, Looking to China: Turkmenistan Pins Hopes on China’s Thirst for Natural Gas.” China and Eurasia Forum Quarterly 4.3 (2006): 67-87. Google Scholar. Web. 21 Dec.2009.

HK. “Turkmenistan Gas Is Now Flowing to China Overland.” Wonders of Pakistan. N.p., 16 Dec. 2009. Web. 6 Jan. 2010.

[11] Krauthammer, Charles. “The Unipolar Moment Revisited.” National Interest (Winter 2002): n. pag. Print.

[12] Krauthammer, Charles. “The Unipolar Moment Revisited.” National Interest 70 (Winter 2002): 5-17. Web. 5 Jan. 2010.

Natural Gas in China, People’s Republic of in 2006 International Energy Agency. N.p., n.d. Web. 24 Dec. 2009.

Natural Gas in Turkmenistan in 2006 International Energy Agency. N.p., n.d. Web. 24 Dec. 2009.

The New European. “Russia: If We Can’t Own the Pipeline, We’ll Control the Faucet.” Transatlantic Politics. N.p., 2 June 2007. Web. 6 Jan. 2010.

[14] “The New York Philharmonic Live from North Korea.” Great Performances. PBS, 26 Feb. 2008. Web. 5 Jan. 2010.

[2] Owen Matthews.  “No More Mr. Nice Guy; Vladimir Putin slaps down hapless Belarus. But eventually the hard-fisted Russian president will find that the name of this game is blowback :[International Edition Edition]. ” Newsweek22 Jan. 2007: Platinum Periodicals, ProQuest. Web.  22 Dec. 2009.

Petersen, Alexandros. “Azerbaijan’s Gas Going East?” EU Observer. N.p., 10 Dec. 2009. Web. 6 Jan. 2010.

[4] Pomfret, Richard. “Turkmenistan’s Foreign Policy.” China and Eurasia Forum Quarterly 6.4 (2008): 19-34. Web. 23 Dec. 2009.

[10] Rettman, Andrew. “China Beats EU in Race for Turkmen Gas.” N.p., 15 Dec. 2009. Web. 24 Dec. 2009.

Snuffysmith. “China Just Broke Russia’s Monopoly on Central-Asian Natural Gas.” Now Public. N.p., 15 Dec. 2009. Web. 6 Jan. 2010.

“Trade by Region.” International Trade Statistics 2006. 74-75. World Trade Organization. N.p., 2006. Web. 24 Dec. 2009.

“Turkmen-China Gas Pipeline Nearly Operational; China’s President to Attend
Inauguration.” Guardian Press. N.p., 10 Dec. 2009. Web. 6 Jan. 2010.

“Turkmen Gas Pipeline to China Opens.” All Vocies. N.p., 14 Dec. 2009. Web. 6 Jan. 2010.

[13] “Turkmenistan Indicates Interest in EU Nabucco Gas Pipeline.” The Agonist. N.p., 11 July 2009. Web. 6 Jan. 2010.

[7] “Turkmenistan Natural Gas (including LNG).” UN Data. United Nations, n.d. Web. 24 Dec. 2009.

U.S. Department of State. Background Note: TurkmenistanU.S. Department of State: Diplomacy in Action. N.p., n.d. Web. 24 Dec. 2009.

[5] Van Evra, Stephen. “Offense, Defense, and the Causes of War.” The Use of Force: Military Power and International Politics. Ed. Robert J. Art and Kenneth N. Waltz. 5th ed. Plymouth: Rowman & Littlefield, 2009. 46-69. Rpt. in The Use of Force: Military Power and International Politics. N.p.: n.p., n.d. N. pag. Print.

Van Ryan, Jane. “China Buys Oil and Gas; America Dithers.” Web log post. Energy Tomorrow. American Petroleum Institute, 16 Dec. 2009. Web. 7 Jan. 2010.

Original Appearances of Data Visuals and Media

1. Cover image by Adam Cohn, from Flickr

2. Nabucco Pipeline map from “Wiki Media”

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