Weekly News Roundup: Dispatches from the Silk Road Economic Belt

China’s Military Base in Afghanistan
Beijing has long refrained from engaging militarily beyond its borders. However, as some recent reports suggest, this situation may soon change. Ferghana News reported that China will build a military base in the northern province of Afghanistan, and, according to the news agency, the Ministry of Defense of Afghanistan is already expecting a Chinese expert delegation to discuss the location and further technicalities for the base. If these reports are true, China will fully fund the new military base in Badakhshan, covering all material and technical expenses, including both lethal and nonlethal weaponry and equipment. (Diplomat)

China denies plan to build military base in Afghanistan

China’s Defence Ministry on Thursday denied that it was planning to build a military base in Afghanistan, branding such reports “groundless”.Russian news agency Ferghana News, which focuses on Central Asia, has reported that China will build the base in northern Afghanistan. The report was picked up last week by U.S. magazine The Diplomat and then in Chinese state media.

Pakistan looks to China after US-India alliance
During the 1960s, Pakistan was China’s diplomatic window to the West, eventually brokering the normalisation of China-US relations in 1971. Today, the physical facet of Mao’s depiction is becoming a reality in the China-Pakistan Economic Corridor. (Dawn)

Freight trains between EU and China see costs drop by 40%
The overall freight cost of the CHINA RAILWAY Express (CR Express), which operates rail cargo routes between China and Europe as well as other regions, has dropped by about 40% from what it was at the earlier stage of the service, an official from China's top economic planner said on 22 January. In 2017, the whole-year number of CR Express train journeys increased rapidly to 3,673, up 116% over the previous year, with that number surpassing the sum figure of all the CR Express services during the past six years, Yan Pengcheng, spokesman for the National Development and Reform Commission (NDRC), said at a regular press conference on 22 January.( Global Times)

China's Xinjiang to build 'Great Wall' to protect border: governor
China’s violence-prone far western region of Xinjiang will build a “Great Wall” around its borders to prevent the infiltration of militants from outside the country, state media reported on Tuesday citing the regional governor. (Reuters)

China sells exploration rights for three oil, gas blocks in Xinjiang-Xinhua
China has sold exploration rights for three oil and gas exploration blocks in the remote northwest Xinjiang region for more than 2.7 billion yuan ($422 million), the Xinhua news agency reported on Wednesday.It said that Shenergy Co, Xinjiang Energy (Group) Co and Zhongman Petroleum and Natural Gas Group Corp (ZPEC) secured the rights after a bidding competition that attracted seven companies.

China's war on smog slows December rail, truck freight volume

Rail freight volumes last month fell 3.8 percent from a year earlier to 303.87 million tonnes, the lowest since June 2017 and the first year-on-year decline since July 2016, the National Bureau of Statistics said.Road freight, China’s most popular form of freight transportation, grew by 5.6 percent to 3.3 billion tonnes, its lowest growth rate since January 2017.The transport slowdown reflects a decline in China’s fixed asset investment, which increased at its slowest rate since 1999 in December, signaling flagging growth in the world’s second-largest economy. (Reuters)

China’s ExIm Bank commits $4bn in push beyond infrastructure
Export-Import Bank of China is releasing a $4bn wave of private equity capital that will broaden the state-controlled overseas investor’s scope beyond infrastructure as it seeks to compete with global funds for diversified assets. (FT)

Japan, China, and the Western Balkans

On January 17, Japanese Prime Minister Shinzo Abe wrapped up a five-day trip to northern and southeastern Europe. After visiting Estonia, Lithuania, and Latvia, he went to Bulgaria, Serbia, and Romania. His trip to the Baltic and the Balkan regions fits within Tokyo’s decades-long attempts to establish itself as a global economic and political leader, and to increase its sphere of influence via the use of soft power and the employment of its financial prowess as a diplomatic lever. (DIplomat)

China-Europe trains connect Xinjiang to world

China-Europe freight trains that set off from Urumqi, capital of northwest China's Xinjiang Uygur Autonomous Region, made a total of 1,164 trips as of the end of 2017. The statistic was announced by Shohrat Zakir, chairman of the regional government, while delivering a government work report at the ongoing local parliamentary session. Urumqi, which saw the start of the first China-Europe train in May 2016, now launches three such trains on a daily basis. The trains can reach five Central Asian countries and 17 European countries. Xinhua

China Piles Up Free Trade Deals as Trump Abandons Them

Just as the U.S. throws up new barriers to cross-border commerce, its largest trading partner China is redoubling its efforts to seal free-trade agreements.From deals with blocs including the Association of Southeast Asian Nations to bilaterals with tiny countries like Maldives, China’s FTAs already cover 21 countries. That compares with the 20 countries covered by U.S. agreements. More than a dozen additional pacts are being negotiated or studied, according to the Ministry of Commerce. (Bloomberg)

Chinese contractors grab lion’s share of Silk Road projects

Beijing fails to share benefits of transport infrastructure programmes. Of the contractors working on China-funded transport infrastructure projects in 34 Asian and European countries, 89 per cent were Chinese, leaving 11 per cent from elsewhere, according to the study by the Center for Strategic and International Studies, a Washington-based think-tank. (FT)

DISAPPEARED CHINESE ENGINEER HOLDS TIES WITH PAKISTAN HOSTAGE
Amid a breakdown in relations with the US and questions over China’s commitment to its Belt and Road investments, the suspected kidnapping of Pingzhi Liu could not have come at a worse time for Islamabad. China has signalled that it is considering freezing further CPEC-related investment until the country’s domestic situation stabilises. (Scmp)

China to establish court for OBOR disputes

An international commercial court is to be set up in Beijing, Xi'an and Shenzhen to provide litigation, mediation and arbitration solutions (Asia Times)

White elephants out but China-backed AIIB still keen on infrastructure with room for growth

The China-backed Asian Infrastructure Investment Bank will steer clear of white elephants but invest in some New Silk Road projects that go beyond immediate needs, the lender’s chief said on Wednesday. (Scmp)

Georgia’s Communists, With Chinese Help, Fight to Preserve Stalin’s Press

The museum – formally known as the J. Stalin Underground Printing House Museum – nevertheless carries on. “In 1991 when the USSR fell apart, capitalists and counter-revolutionary traitors seized this building and threw us all out,” says Jiuli Sikmashvili, the 78-year-old leader of the United Communist Party of Georgia, who doubles as the museum's curator. “For years, academics and men of science worked here and thrived - now we survive on donations from tourists.” (Eurasianet)

Pakistan turns to Russia and China after US aid freeze
Defence minister flags ‘regional recalibration’ of foreign and security policy (Financial Times)

China’s ‘Soft Power’ in Central Asia Both More and Less than It Appears

From one perspective, China has enormous “soft power” in Central Asia, the ability, as Joseph Nye defined it (Bound to Lead: The Changing Nature of American Power, New York, 1990), “to persuade others to do what it wants without force or coercion.” It can and does present itself in the region as a non-European state without an imperial tradition—in contrast to the Russian Federation and the West. Moreover, it is capably presenting itself both as a counterweight to the influence of those countries in the region and as a rising power interested in promoting trade and development across Central Asia. (Jamestown Foundation)

CENTRAL ASIA

Tajik President Earmarks Thousands of Extra Jobs for Chinese Workers

Tajik President Emomali Rahmon has adjusted the country’s migration quota to allow in another 2,400 Chinese workers, Ozodi Radio reports referring to the Ministry of Labor, Migration and Employment.Chinese workers will primarily work on the construction of the Tajik section of the Turkmenistan-China gas pipeline. (Fergana News)

Kazakhstan: Businessman a Hostage in Astana-Ablyazov Feud?
Without warning one evening in November, agents from Kazakhstan’s security services mobbed the parking lot of a shopping center in Almaty to arrest Iskander Yerimbetov on charges of money-laundering. Family members of the 46-year-old entrepreneur have described the operation as a “hostage-taking.” (eurasianet)

Uzbekistan & Tajikistan: Catalysts for a Regional Water Solution?

The continuing rapprochement between Uzbekistan and Tajikistan could provide a boost to regional efforts that address one of Central Asia’s key strategic issues: the sustainable management of water resources.Uzbek President Shavkat Mirziyoyev has placed water management high on his reform agenda. At the United Nations General Assembly in 2017, the Uzbek leader discussed at length the importance of water in Central Asia (Eurasianet)