China's "drive to convert its massive foreign currency reserves into concrete holdings".
+++SAUDI GAZETTE 25 May '09:" China spending big in Central Asia", Agence France Presse
QUOTE" 'We're walking all over the world with suitcases stuffed full of
money, because we have to spend it' "
FULL TEXT:WHILE the rest of the world reels from the global economic crisis,
China is using its deep pockets to bolster its position in strategically
vital Central Asia, analysts say.
In recent months Beijing has been on a spending spree among the Central
Asian states to its west, handing over a $10 billion loan to cash-strapped
Kazakhstan in April and stepping up construction projects and investment
from Ashgabat to Bishkek.
Studies.
"Everyone else is in such a sorry economic state and China has money to
invest." A China expert at Almaty's Institute for Economic Strategies, Adil
Kaukenov, revealingly recalls a conversation with a Chinese counterpart who
told him: "We're walking all over the world with suitcases stuffed full of
money, because we have to spend it."
China's investment pattern in Central Asia fits with a broader strategy that
has seen Beijing snap up assets across the world in a drive to convert its
massive foreign currency reserves into concrete holdings.
But for nearly two decades since the 1991 Soviet collapse, Beijing has also
shown special interest in using its pocketbook to secure stability along its
Central Asian border, funding infrastructure projects and investing in key
sectors.
Of primary concern for Beijing is the long, porous border between Kazakhstan
and China's restive Xinjiang province, says Kaukenov.
Xinjiang is home to a Muslim Uighur ethnic group feared by Beijing for its
supposed separatist views - a tension critics say has resulted in human
rights abuses by the region's authorities. "China has always, since the
collapse of the Soviet Union, been extremely worried that terrorists from
Xinjiang would find support from the governments of Central Asia," Kaukenov
said.
Now, with Russia and the United States struggling to compete in the face of
domestic economic woes, China has a chance to secure the stability and
assets it craves at bargain-bin prices.
Multi-million dollar infrastructure projects in Tajikistan and Kyrgyzstan -
both wracked by chaos and disorder since the fall of Soviet Communism - are
prime examples of China's strategy.
Electrification and road projects improving the quality of life in these
impoverished regions make them less likely to spawn extremists, but also
open up their markets to Chinese goods - a win-win situation for Beijing.
Nargis Kassenova, a professor at the elite Kazakhstan Institute of
Management, Economics and Strategic Research (KIMEP), has researched Chinese
investment and development in Kyrgyzstan and Tajikistan and detects
impressive gains for Beijing.
"Tajikistan is so isolated, and to see all these Chinese companies there and
the investment in Tajikistan I was pretty surprised," she said.
"In pretty much all spheres now you have Chinese goods, Chinese
companies.... The level of penetration is quite impressive."
No single move is more emblematic than the 10 billion dollar loan package
secured by Kazakhstan, the region's beleaguered economic powerhouse. Under
the terms of the deal, the China National Petroleum Company (CNPC), will
loan up to five billion dollars to Kazakh energy giant KazMunaiGas, with a
further five billion going to the Development Bank of Kazakhstan.
Although Syroezhkin described the loan package as "friends helping each
other out", China also received a 49 percent stake in the country's
fourth-largest oil producer, MangistauMunaiGaz, as part of the deal.
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