Weekly News Roundup: Dispatches from the Silk Road Economic Belt

Xi's Russia visit to inject new impetus into bilateral ties, Eurasian integration: Chinese ambassador

Chinese President Xi Jinping's upcoming visit to Russia will inject fresh impetus into the high-level development of bilateral relations and the economic integration of the Eurasian region, said Chinese Ambassador to Russia Li Hui.At the invitation of President Vladimir Putin, Xi will pay a state visit to Russia in early July, which Li said marks "the most important event for bilateral ties this year."The two presidents will meet for the third time this year, following meetings on the sidelines of the Belt and Road Forum for International Cooperation in Beijing and the Astana summit of the Shanghai Cooperation Organization (SCO). (GT)

Beijing’s new Silk Road may extend to Moscow-led Eurasian union

China’s Ministry of Commerce said last Thursday that the two countries would sign an agreement for a study on the feasibility of linking China’s “Belt and Road Initiative” to the Russia-backed Eurasian Economic Union. As President Xi Jinping visits Russia today, the link will be on his agenda during his talks with his counterpart, Vladimir Putin. Cui Hongjian, head of European Union research at the China Institute of International Studies, said the connectivity statement released in 2015 indicated “a political consensus”.“This time, the two sides are expected to seek detailed cooperation in ... policies and regulations,(Scmp)

Chinese gas company buys 20% of Russian field from Rosneft for $1.1bn

China’s Beijing Gas Group has bought 20 per cent of a Russian oil and gas field from state-run Rosneft for $1.1bn, in a deal that also gives the Russian energy producer access to the Chinese domestic gas market. Beijing Gas’ stake in Verkhnechonskneftegaz gives the company a slice of one of the largest-producing fields in eastern Siberia and access to the Eastern Siberia–Pacific Ocean oil pipeline that connects Russia with China, Japan and South Korea. (FT)

China and Russia sign military cooperation roadmap

China and Russia aim to strengthen bilateral ties in multiple fields. On 29 June, the Chinese Defence Ministry confirmed that China and Russia has signed a roadmap on military cooperation for 2017-2020. On 7 June, Chinese Defence Minister Chang Wanquan met his Russian counterpart Sergei Shoigu in the Kazakh capital Astana during the summit of the Shanghai Cooperation Organization. According to the Russian News Agency, TASS, Shoigu suggested signing the military cooperation roadmap on the same day the two ministers met. China and Russia are strengthening cooperations comprehensively. Chinese President Xi Jinping will visit Russia and meet his counterpart Vladimir Putin on July 3 – July 4. According to the Kremlin, “the top-level talks will focus on the overall partnership and strategic cooperation” and “a number of bilateral documents will be signed” during the highest level meeting. (TheDiplomat)

Georgian government welcomes free trade agreement with China

When the Minister of Commerce of the People’s Republic of China (PRC) Zhong Shan and Georgia’s Minister of Economy Giorgi Gakharia signed a bilateral Free Trade Agreement (FTA) in Shanghai, on May 13, it all looked good on paper. Following a seven-month-long process of final-stage negotiations, which culminated in the signing, the Georgian government was quick to announce that the FTA—China’s second such deal with any country in Eurasia, after Switzerland—opens the world’s largest market of about 1.4 billion consumers to Georgian goods. Ninety-four percent of Georgian exports to China will now be tax free (Amerikiskhma.com, May 16). “Georgia has a steadily growing export to China. We see a great potential in concluding free trade agreements with big economies such as China,” Gakharia noted. Meanwhile, Prime Minister Giorgi Kvirikashvili enthused about “moving towards a higher level of cooperation” (Civil Georgia, May 14). (Jamestown foundation)

Silk Road North? 

Chinese Premier Li Keqiang met with Finnish Prime Minister Juha Sipila in Dalian in June during the annual World Economic Forum meeting known as the “Summer Davos”. Doug Tsuruoka reports that the talks saw China and Finland pledge more cooperation and included a potentially game-changing US$3.4 billion “Arctic Corridor” railway that, together with a “Northern Sea Route”, could transform trade transport between Europe and Asia. (Asia Times)

China, Kyrgyzstan border forces hold exercises to stop arms smuggling
Chinese and Kyrgyzstan border forces held exercises on Tuesday in China's Xinjiang region to bolster defenses against the smuggling of weapons, China's state media reported.China has stepped up security in Xinjiang in its far west amid fears of attacks by militants from the mostly Muslim Uighur ethnic minority. A car bomber attacked the Chinese embassy in the Kyrgyz capital of Bishkek last year.Helicopters, armored jeeps and 700 border police officers from the neighbors took part in the exercise in Xinjiang's Kirgiz Prefecture, China's official Xinhua news agency reported. (Reuters)

Forced Labor Continues in World Bank Project Areas in Uzbekistan
In a new report, Human Rights Watch says the World Bank’s Uzbekistan projects are tainted with forced labor. (Diplomat)

The Many Agents Of Tajikistan's Path To Peace

On June 27, Tajikistan marks the 20th anniversary of the signing of the Tajik Peace Accord that ended a five-year civil war there.The man who will be taking much of the credit for achieving peace in Tajikistan is President Emomali Rahmon, aka "Asosguzori sulhu vahdati milli -- Peşvo'i millat" ("Founder of Peace and Unity -- Leader of the Nation."). The first part of this title, bestowed upon Rahmon by Tajikistan’s parliament in December 2015, seems overly generous. (Rferl)

Pakistan faces challenges in building economic corridor with China: minister

Pakistan faces some challenges in steering an ambitious plan to build an economic corridor with China despite the economic benefits for the country, Planning Minister Ahsan Iqbal said on Wednesday."There are a number of challenges which have to be addressed," Iqbal, the Islamabad lead on the project, told the World Economic Forum in the northeastern city of Dalian. "There are actually many gaps that we have to correctly address. First and foremost is the coordination gap," he said. (Reuters)

Security clampdown in far-western China exacts toll on businesses
The economy of the vast Xinjiang region in far western China is officially growing at a robust pace, faster than the country as a whole. That is largely thanks to big investments in infrastructure from Beijing as the region - with its links to much of central Asia - is critical to Chinese President Xi Jinping’s new Silk Road initiative.But traders, business owners and residents in Xinjiang's capital, Urumqi, are seeing little benefit from the central government's cash injection, according to about 20 interviews with people in the city. Xinjiang's trade with other countries fell in the first quarter of this year, according to the customs bureau, and is still below the level it recorded in the first quarter of 2013, the year that Belt and Road launched.(Reuters)

SCO secretary-general refutes idea pitting SCO against NATO
The Shanghai Cooperation Organization (SCO) is not a military alliance like NATO and the regional body has no intention to target any country, SCO Secretary-General Rashid Alimov said here Tuesday.In response to netizens' questions during an interview with Xinhua, Alimov said the Western hype labeling the SCO as a "future Eastern counterweight of NATO," which emerges from time to time, deliberately distorts the SCO's essence and its practical activities.Speculations re-emerged that the SCO could be a potential antagonist of NATO following the accession of India and Pakistan into the bloc earlier this year.The SCO has never and will never go against any country, and this has been clearly stated in the organization's basic documents, Alimov said, adding that the bloc has vastly increased its influence and prestige in international and regional affairs within a relatively short period of time, and has always been advocating peaceful development and good-neighborly relations. (Xinhua)

China’s Belt and Road Initiative in Central Asia: insurmountable obstacles and unmanageable risks?
Central Asia and the Caucasus saw a tenfold increase in Chinese investment between 2005 and 2015, from US$5 billion in 2005 to US$48 billion in 2014, reflecting China’s growing geopolitical interest in the region.But BRI has dramatically escalated the scale of Chinese investment. Uzbekistan alone recently received promises of US$20 billion in investments, including a three-year natural gas supply contract and funding for a synthetic gas plant. That plan reflects the region’s fundamental importance to China’s BRI plans, with key western land corridors passing through the Central Asian republics. (The Strategist)

Getting the financing right is key to success of China's Belt Road Initiative, say experts

As a mega plan spanning 65 countries and connecting some 60 per cent of the world's population, China's Belt and Road Initiative (BRI) has far-reaching implications for the next few decades, said a gathering of global leaders on Wednesday (June 28) at the World Economic Forum's summer Davos meeting here.But the success - or failure- of the infrastructure-building plan rests largely on whether the projects make sound financial sense, which in turn hinges on getting investments and financing right, they said.(Strait Times)

Beijing-based AIIB gets top-notch credit rating from Moody’s

The long-term foreign currency issuer rating of Aaa granted by Moody’s Investors Service will put the Beijing-based multilateral lender on par with the World Bank and the Asian Development Bank and pave the way for the bank to sell bonds to international investors. The bank lent US$1.7 billion worth of loans last year into nine projects, from a natural gas pipeline project in Azerbaijan to a hydropower station in Pakistan. (SCMP)

China’s national rail company seeks to unify its fragmented network that hauls goods to Europe China Railway Corp. is trying to overhaul the fragmented China Railway Express system, and hopes to make changes in pricing and information sharing across its routes. Above, the China Railway Express prepares to leave its new station in Xi'an, Shaanxi province, for Moscow on Dec.16, 2016. Photo: Visual Chin On June 6, a train loaded with 123 Volvo automobiles departed Daqing, in north eastern China’s Heilongjiang province, beginning an 18-day, 9,800-kilometer journey to Zeebrugge, Belgium It is one of the hundreds of freight trains that now travel between China’s major cities and Europe each year, bearing goods like laptops, clothing and car parts. (Caixin)

Freight trains from China's Chengdu to Europe will top 1,000 this year, speeding up opening-up of inland cities

More than 400 China-Europe freight train trips were made from Chengdu in 2016, which topped the freight train service among Chinese cities, according to Chen Zhongwei, a customs logistic official in Chengdu, at the meeting.Chengdu has three freight train routes to Europe, including the middle line to Poland's central city of Lodz, the north line to Moscow in Russia and the south line to Istanbul in Turkey, he said. (Xinhua)

China, India border dispute bubbles over once more, but no one is quite sure why

Although it remains largely unclear what exactly happened along an unmarked border in the remote tri-junction of Sikkim, Tibet and Bhutan, as many as 3,000 troops have been deployed by each side in a “virtually eyeball-to-eyeball confrontation”, Indian media reported, citing army sources.Diplomatic observers from both countries said they were surprised that China’s building of a road in the Donglang area, also known as Doka La, so quickly turned into the biggest military stand-off between the two armies in years. (Scmp)

Tiny Bhutan protests to China over road building in disputed territory

The tiny Himalayan kingdom of Bhutan has protested to its mighty neighbour China over road building in disputed territory that set off new frictions between Beijing and the Indian government on Thursday (June 29).China made a new demand on Thursday that Indian troops return to their side of the border between India's Sikkim state and Tibet on the Chinese side.Highlighting the widening tensions over the remote mountain zone, Bhutan's ambassador to New Delhi, Vetsop Namgyel, said his government had called on China's People's Liberation Army to stop building the road near where the Bhutan, Indian and Chinese borders meet. (AFP)

Bhutan eyes China, but bond with India remains stronger

Is Bhutan getting closer to China? Chinese Premier Wen Jiabao briefly met the Bhutanese Prime Minister Jigmi Y. Thinley on the sidelines of the G20 Rio summit in June 2012. The 20th round of boundary talks between the two countries in August has also made the situation critically worth watching for India. India's Minister of State in External Affairs E Ahamed responded to a related query raised in Parliament in late August on the Sino-Bhutan relationship by stating that "the government keeps a constant watch on all developments having a bearing on India's security." Recent advances in the Sino-Bhutanese relationship have clearly been multi-faceted, touching on cooperation in political and economic matters, which link to India's regional strategic interests and its relationship with Bhutan, where India has traditionally been the "guiding" partner of Bhutan's foreign affairs. Bhutan currently does not have diplomatic ties with China, but in the light of the growing political understanding between them, mainly their regular border talks and attempt at demarcating their common boundary, it may not be long before Sino-Bhutanese diplomatic ties are formally established. (Global Times)

CENTRAL ASIA

Atambayev Offers Russia to Build Training Base in Southern Kyrgyzstan

Kyrgyzstan is against the expansion of the existing Russian airbase in the country, but is encouraging the Kremlin to build a separate military training base in the south of the country. That's according to Kyrgyzstan President Almazbek Atambayev, who said je discussed the matter with his Russian counterpart Vladimir Putin last week in Moscow. (Eurasianet)

Dictator’s relatives. Nephew of late Islam Karimov granted refugee status in Ukraine escaping extradition to Uzbekistan
The Office of the Prosecutor General of Ukraine denied the extradition request of Akbar Abdullaev by Uzbekistan, where he is accused of a number of economic crimes, his lawyer Oliver Wallash informed Fergana about it on 27 June. Akbar Abdullaev, 34, the son of Tamara Sobirova, the sister of the former first lady of Uzbekistan Tatyana Karimova, had already conviction in the past. (Fergana News)

Tajikistan’s Unity After War: Expectation and Reality

Tajikistan opted for Vahdat, or “unity” in Tajik, as the venue in which to commemorate the 20th anniversary of the end of the country’s traumatic civil war.It was a bitterly ironic choice.President Emomali Rahmon began his visit to the town on June 27 with the opening of a new multi-story police precinct. The old home for Vahdat’s police was a neat canary-yellow building a couple of streets away that authorities claim was attacked and rendered unusable during a coup attempt in September 2015 mounted by renegade deputy Defense Minister Adbuhalim Nazarzoda. (Eurasianet)