The notion of the World South has been characterised as “an intellectually elusive however emotionally wealthy time period.” The multifaceted time period World South can discuss with over 120 international locations. It’s used to explain areas and nations affected by widespread poverty and disadvantaged of financial well-being, but in addition as a political idea for international locations resisting Western hegemony and countering the legacy of colonialism. The international locations which are part of the World South, although, are extraordinarily numerous, so it may be fraught to think about World South international locations as a monolith.

The World South is central to China’s overseas coverage. Within the World South, Beijing needs to increase its affect to counter the U.S.-led rules-based order and thereby reshape the worldwide safety order whereas selling an atmosphere conducive to China’s financial growth. China has tried to attain this by selling its spectacular financial growth as an exemplary mannequin for different international locations and by providing an alternative choice to Western engagement within the World South.

These efforts embrace the Belt and Street Initiative (BRI) the place greater than $1 trillion has been dedicated to infrastructure funding in additional than 140 international locations and territories. Most lately China has launched three new initiatives, the World Growth Initiative (GDI) in 2021, the World Safety Initiative (GSI) in 2022, and the World Civilization Initiative (GCI) in 2023, as a method of selling core ideas resembling mutual respect, peaceable coexistence and win-win cooperation.

The 5 Central Asian international locations – Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan – are a part of the World South. Central Asia, though typically thought-about a regional bloc, is made up of nations with numerous histories, cultures, political traditions, pure useful resource endowments, and growth paths. China’s overseas coverage towards these international locations has had contrasting outcomes over time, with the case research of Kyrgyzstan and Kazakhstan exemplifying these variations.

China’s Technique in Central Asia: The Instances of Kyrgyzstan and Kazakhstan

The variations between Kyrgyzstan and Kazakhstan and the contrasting impacts of China’s overseas coverage in each international locations enable for fruitful evaluation of China’s challenges and alternatives within the World South. This may be illustrated within the disparity between Kazakhstan’s yearly GDP of $264.42 billion and that of its neighbor, Kyrgyzstan – $13.99 billion. Kazakhstan’s per capita earnings is $14,780 in 2024, which is sort of eight occasions greater than Kyrgyzstan, at $1,920. The scale of every nation’s financial system has been a significant factor in figuring out China’s influence.

China has made vital investments in Kyrgyzstan by each overseas direct funding (FDI) and loans. In 2023, China outpaced Russia in FDI in Kyrgyzstan with $220.8 million in funding, which is sort of 28 % of Kyrgyzstan’s complete FDI. China’s Export and Import Financial institution loaned $1.7 billion to Kyrgyzstan, which represents 27.4 % of the nation’s complete debt. This makes Kyrgyzstan the nation in Central Asia with the highest ranges of exterior debt to China.

Moreover, in 2023, China was Kyrgyzstan’s prime buying and selling associate, representing 35 % of Kyrgyzstan’s complete commerce quantity. Regardless that Kyrgyzstan is a member of the Eurasian Financial Union (EAEU), the place Russia is a dominant pressure, its commerce share with the EAEU was decrease at almost 28 %.

One other essential function of the China-Kyrgyzstan relationship is the commerce imbalance between the 2 international locations. In 2022, the commerce turnover between Beijing and Bishkek amounted to $4.07 billion with Kyrgyzstan importing $4 billion from China whereas exporting solely $60.8 million. This means Kyrgyzstan’s clear dependence on China for commerce and exhibits how Kyrgyzstan serves as a transit level for Chinese language merchandise to succeed in Russia, regardless of the tough financial sanctions applied in opposition to Moscow.

Since gaining independence, Kazakhstan has pursued multi-vector overseas and financial insurance policies by diversifying its overseas funding flows and avoiding dependence on one explicit nation. Consequently, Kazakhstan is the least depending on China in comparison with different Central Asian republics when it comes to  exterior debt and possesses a diversified funding profile, together with Western buyers.

By way of FDI in Kazakhstan, China ranks fourth, having invested $1.14 billion. The Netherlands invested essentially the most at $8.27 billion, adopted by the US and France. China’s investments signify solely 6.4 % of all FDI in Kazakhstan, and subsequently it has comparatively little influence on the nation’s financial system. Though China invests considerably extra money in Kazakhstan than Kyrgyzstan, Kazakhstan’s bigger financial system lessens Beijing’s influence. Equally, given the dimensions of Kazakhstan’s financial system, its debt to China is taken into account manageable at $9.2 billion, accounting for about 5.5 % of its complete exterior debt.

As dynamics with Russia have shifted, China has emerged as a strategic buying and selling associate for Kazakhstan. In 2023, China grew to become Kazakhstan’s prime buying and selling associate with a bilateral commerce quantity totaling $31.5 billion. Compared to China-Kyrgyzstan commerce, Kazakhstan has a much more balanced commerce relationship with China because it imports $16.8 billion and exports $14.7 billion. Kazakhstan can be much more diversified when it comes to commerce, and Italy stays Kazakhstan’s prime export vacation spot.

One other level of comparability between Kyrgyzstan and Kazakhstan lies of their respective safety cooperation with China. Over the previous seven years, China and Kyrgyzstan have considerably deepened their safety cooperation, with Beijing allocating $30.5 million in navy help to Bishkek from 2014 to 2017. China is actively concerned in coaching safety officers and strengthening Kyrgyzstan’s military by joint navy workout routines and help. China’s military-security technique focuses on humanitarian help, navy gear donations, and the implementation of safety applied sciences just like the Secure Metropolis system, permitting Beijing to increase its affect whereas sustaining a non-intrusive picture.

Comparable initiatives are simply starting in Kazakhstan, with Chinese language Protection Minister Dong Jun visiting Astana for the primary time in April 2024. These bilateral initiatives strengthen the continued military-security cooperation by the Shanghai Cooperation Group (SCO), to which all three international locations belong. The SCO is primarily centered on security-related issues, describing its predominant threats as terrorism, separatism, and extremism.

China’s Path Ahead

China’s overseas coverage has been extra profitable in Kyrgyzstan than in Kazakhstan. Kyrgyzstan, with a smaller financial system and an absence of profitable pure assets like oil and gasoline, has sought Chinese language investments and consequently wants China as a vital associate for its growth.

Alternatively, Kazakhstan has pursued a path of multi-vector diplomacy which has made China solely certainly one of Kazakhstan’s many useful companions. Russia’s warfare in Ukraine has created distance between Russia and Kazakhstan; Central Asian states like Kazakhstan are actually turning towards China as a safety and sovereignty guarantor, which is a brand new position that Beijing may embrace within the area. Given Kazakhstan’s financial place, it’s unlikely to develop the identical relationship with China as Kyrgyzstan, however China and Kazakhstan will seemingly proceed to develop a mutually helpful partnership.

Transferring ahead, there are three essential factors to bear in mind concerning China’s presence in Central Asia. 

First, the shift from the BRI reveals China’s want to put money into high quality over amount within the World South, as a result of an absence of sentimental energy beneficial properties and present financial stagnation in China. China’s GDI emphasizes smooth energy to optimize social impacts, specializing in training, well being, IT, and inexperienced vitality. Moreover, China needs to current an alternative choice to the Western rules-based worldwide order, which was additional entrenched by Russia’s warfare in Ukraine.

Second, China’s financial system has skilled financial contraction and a slowdown in development. China’s financial mannequin faces a quickly getting old inhabitants, an actual property disaster, and a dependence on manufacturing and exports. In essence, China is getting into “the middle-income lure” at $13,140 per capita earnings. This demonstrates that China’s financial mannequin remains to be in a formative stage. The long run prospect of China’s success or failure requires President  Xi Jinping to point out larger adaptability to deal with China’s present challenges.

And eventually, regardless of strong funding in Kazakhstan and Kyrgyzstan, public notion of China stays low in each international locations. A big share of the Kyrgyz and Kazakh populations are in opposition to shut integration with China. In line with the Central Asian Monitor, over 66 % of the respondents are very involved and 21 % are considerably involved that Chinese language growth initiatives may enhance the nationwide debt of Kyrgyzstan. In the same questionnaire, over 70 % of respondents in Kazakhstan said that they’ve little or no confidence that Chinese language funding will create jobs within the nation. 

Unfavourable public sentiment could stem from inconsistencies between China’s home and overseas insurance policies. Xi has said that China’s overseas coverage relies upon ideas resembling respect for sovereignty and peaceable coexistence. Due to this fact, China’s home coverage should be aligned with these ideas and this ought to be mirrored in how the authorities cope with points like human rights, COVID-19, or local weather change.

One other inconsistency might be seen in China’s relationship and assist for Russia and its warfare in Ukraine which disregards the significance of the sovereignty of states. Xi and Russian President Vladimir Putin have met greater than 40 occasions within the final 15 years. This poses an issue for Central Asian international locations which may be in danger given Putin’s imperialistic ambitions and subsequently have aimed to create distance between themselves and Russia.

China has achieved exceptional financial development and expanded its geopolitical affect beneath Xi, significantly by initiatives just like the BRI and GDI. Nevertheless, the Chinese language mannequin of a state-led financial system continues to evolve, and the outcomes of this ongoing course of can have a profound influence on Central Asia and past.

To realize respect as a worldwide chief, Xi should strategically distance China from Russia and North Korea, whereas restructuring domestically by loosening management, particularly in areas like innovation and political discourse. Moreover, managing delicate points with Taiwan with prudence and investing in training and world exchanges will strengthen China’s smooth energy.

Deng Xiaoping’s success was constructed on his willingness to adapt and be versatile, understanding that strict adherence to “socialism” couldn’t drive financial development. Having already achieved vital success, it’s now time for Xi to point out comparable resourcefulness and suppleness. China has proven unimaginable capability within the current previous to quickly rework and change into a dominant superpower on the world stage. It may well as soon as once more showcase its great capability to swiftly remedy its home points and proceed its sustained financial growth to the advantage of the world. By attaining a peaceable settlement of the continued warfare in Ukraine and contributing to peace and stability on the Korean Peninsula, China can overcome the present challenges it faces and proceed to offer a mannequin for international locations within the World South to emulate.