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.
The Contradictions In Beijing's Russia Ties
From oil deals to diplomatic cover in international institutions, there's no denying that Beijing has supported Moscow throughout its war with Ukraine, but to what extent remains an issue of contention and highlights the deep contradictions in the China-Russia relationship.
Finding Perspective: China's growing appetite for discounted Russian oil made headlines in late June as Beijing overtook Germany as the biggest single buyer of Russian energy. India, which also has historic and complicated ties to Moscow, has also bought up Russian oil.
Despite being sold at a steep discount, the purchases -- along with climbing oil prices -- have allowed Russian revenues to grow in the face of Western pressure and given Moscow a crucial financial lifeline to keep funding its war effort.
But as Maria Shagina, a fellow at Britain's International Institute for Strategic Studies, told me: "China's rhetoric and deeds diverge quite a lot and that has been clear since 2014."
"China is eager to capitalize on Russia's isolation, including purchasing Russian cheap crude oil," she added. "But when it comes to violating Western sanctions, the Chinese private sector is usually quite cautious."
A recent study by the Peterson Institute for International Economics found that Chinese exports to Russia have plummeted during five months of war.
The study, which relied on data until the end of April, coupled with another analysis by the institute of China-only data through the end of May, shows that China's exports to Russia remained well below prewar levels.
Why It Matters: China has denounced sanctions and proclaimed that it will maintain normal economic relations with Russia, but Chinese exporters don't appear willing to risk violating export controls and sanctions.
At the end of June, the United States also placed five Chinese companies on an export blacklist for violating sanctions by allegedly providing support to Russia's military and defense companies before and during the invasion of Ukraine.
It wasn't specified what kind of support was provided, but a White House official clarified that they "have not seen China provide Russia with military equipment or systematic evasion of sanctions."
The Washington Post also reported that Russian officials are growing frustrated with Beijing pushing back against their calls for deeper economic support.
Another area that the Russians are hoping to get more Chinese support on is with advanced electronics and semiconductors, something that Russian officials have been outspoken about recently, including Deputy Prime Minister Yury Borisov.
"Of course, we are counting on help from colleagues in China, who received technological sovereignty 10 years ago," Borisov said on June 29.
Read More
● As Beijing has turned to cheap Russian oil, Iran -- another major supplier that relies on China -- is being forced to discount its already cheap oil even more to stay competitive on the Chinese market, Bloomberg reports.
● Whether the current state of close relations between China and Russia can last is a top question on many minds at the moment. Foreign Affairs surveyed a group of leading experts to see where they think things are headed.
Expert Corner: Kyrgyzstan's China Debt
Readers asked: "Kyrgyzstan has raised the alarm about its large debt owed to China and what could happen if it doesn't meet its payments. How likely is it that Bishkek won't be able to pay and what cards does the government have to play as it deals with payments owed to Beijing?"
To find out more, I asked Kubat Kasymbekov, a journalist with RFE/RL's Kyrgyz Service:
"Kyrgyzstan's debt to China's Exim Bank has increased by almost 12 times since 2010, reaching $1.8 billion. Now it makes up 42 percent of the country's total foreign debt. The foreign-debt-repayment volume is rising year by year. If $200 million were enough to settle the debt payment owed in 2020, the country will need to find at least twice that by 2024.
"This means that risks are high, as the government has warned, China might take control of some strategic Kyrgyz facilities where it invested, if payments are not met. Some experts believe extending China's involvement in Kyrgyzstan's mining sector could be one of the options to relieve the debt. Repeated warnings about 'the worst-case scenarios' could also galvanize public support for these previously unpopular government proposals.
"Despite growing debt pressure, the authorities seem to have a plan and an urgency to make their payment to China, with President Sadyr Japarov promising not to delay foreign debt repayment even for ‘one hour.'"
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. Watching South Asia
Citing Pakistani government sources, Nikkei Asian Review reported that China wants its own security companies to guard its citizens and assets in Pakistan after a series of attacks on Chinese interests over the last year.
The Details: According to the report, Islamabad denied the request, but Beijing is likely to push again as it faces a new era of security threats in Pakistan and across South Asia more broadly. (The Chinese Foreign Ministry denied that it had made such requests).
Pakistan is home to the $60 billion China-Pakistan Economic Corridor, a massive bundle of infrastructure and investment deals that is part of Beijing's Belt and Road Initiative.
But while China's economic footprint has grown and more Chinese workers have come to Pakistan, they've also increasingly been targeted.
Frustrated with this situation, Beijing is clearly not satisfied with the status quo when it comes to security in the region. Things also remain volatile in neighboring Afghanistan and despite warming ties with the Taliban and lots of rhetoric coming from Beijing, China is still treading cautiously in its engagement with the country.
That's tough news for Kabul and Islamabad, who see their economic futures relying heavily on Chinese investment, something Pakistani Prime Minister Nawaz Sharif said recently.
2. A Footprint In Bosnia
Despite lacking the necessary legal permits and facing growing pushback from local activists, a Chinese company is moving forward with plans to build a hydroelectric plant in southeastern Bosnia-Herzegovina, my colleague Goran Katic from RFE/RL's Balkan Service reported.
What It Means: The proposed plant is located close to the town of Foca within the Bosnian Serb entity of Republika Srpska, some 25 kilometers from the Bosnian-Montenegrin border.
The entire project is worth some $107 million and is the result of an agreement signed in Beijing in 2019 between Republika Srpska Prime Minister Radovan Viskovic and the state-owned China National Aero-technology International Engineering Corporation (AVIC).
But activists have sounded the alarm over the project, noting that it still does not have the necessary environmental permits to begin construction and is lacking an environmental-impact study on how the plant will affect the nearby Bistrica River.
Despite these lingering concerns, ground was broken on the hydroelectric complex in December 2021 at a ceremony attended by Republika Srpska officials and representatives from the Chinese Embassy in Sarajevo.
Boris Mrkela from the investment-monitoring group Just Finance International says that such cases are becoming more common in the Balkans.
"According to our research, the constant among all Chinese investors in the Western Balkans is the readiness to start work on projects that lack significant permits," he said.
3. Unrest In Central Asia
At least 18 people were killed and 243 wounded during unrest in Uzbekistan's autonomous province of Karakalpakstan that began on July 1, RFE/RL's Uzbek Service reported.
What You Need To Know: Security forces detained hundreds during the protests that erupted over plans to curtail Karakalpakstan's autonomy. Uzbek President Shavkat Mirziyoev dropped plans to amend articles of the constitution concerning Karakalpakstan's sovereignty and also declared a monthlong state of emergency.
Beijing has been comparatively silent on the protests, but Chinese Foreign Ministry spokesman Zhao Lijian said on July 4 that China supported the Uzbek government in maintaining national stability and believes in Mirziyoev's leadership.
China already watched unrest overtake Kazakhstan back in January and the prospect of deeper unrest spreading to another Chinese partner in Central Asia is worrying.
Across The Supercontinent
NATO and Asia: Following its summit in Madrid, NATO adopted a new strategic concept for the next decade, where it formally defined China for the first time as "a challenge." My colleague Rikard Jozwiac was in Madrid covering the summit and broke down the key takeaways here.
Beijing Responds: This didn't go unnoticed in China, which was already growing critical of NATO due to its growing ties with Asian countries. With an eye on NATO as it's set to expand, Beijing called on the Shanghai Cooperation Organization to oppose what it called "hegemonic bullying" by the military alliance.
The Springboard: A new study by the Digital Forensic Center finds that more than half of the investments or loans from Chinese companies in Europe have gone into the Balkans, RFE/RL's Balkan Service reported.
An Extra "I": Iran applied to join the BRICS group of Brazil, Russia, India, China, and South Africa that both Beijing and Moscow portray as an emerging-market alternative to the West.
One Thing To Watch
TikTok, the prolific social-media app that is owned by Beijing-based ByteDance, is under scrutiny after a series of investigations and lawsuits pertaining to the Chinese government being able to access the data of users collected through the platform.
The Trump administration launched an all-out war on TikTok, attempting to have the app shut down in the United States unless it fully spun off from ByteDance. His administration announced an ownership deal that would have moved TikTok's headquarters to the United States, but the deal was ultimately scuttled.
While the Biden administration has not followed its predecessor's scorched-earth approach, the White House has continued national-security negotiations with the company to make sure the data of Americans is safe and new measures could be on the way.
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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