Having consolidated its status as a major economic player in Asia, China is now positioning itself to play an expanded economic and geopolitical role within and among the post-Soviet states.
But just as along the Pacific rim, Beijing's growing influence in these states is also generating a kind of backlash that the Chinese authorities have not yet found a way to overcome. Consequently, China's impact on developments in these countries--both intentional and unintentional--may prove to be large but very different from what the leaders in Beijing almost certainly would like to see.
That downside risk helps explain why Beijing has moved so cautiously in the political realm up to now. But an event last week signals that at least some in the Chinese capital are prepared to take the greater risks associated with a higher political profile.
On 10 December, Beijing successfully sold more than $500 million in bonds on the international market. This sale has attracted international attention not only because it was the first such offering by an Asian country since the August collapse of the Russian ruble but also because it was so clearly political.
Beijing currently has more than $140 billion in foreign currency reserves and thus has no immediate need for the cash raised by this sale. Instead, it appears to have made this offering in order to highlight its stability, economic progress, and growing political influence.
Not surprisingly, that aspect of the sale has sent shock waves through many Asian capitals. But those capitals may play an equally important role in the postSoviet states, helping Moscow rein in its restive Far East while giving the other countries of the region expanded freedom of action.
China's impact on the Russian Far East is likely to be especially great, but it may prove the most complex. On the one hand, increased Chinese involvement in the economy of that hard-pressed area is likely to be welcomed by the population, as long as it does not entail large-scale Chinese immigration. Such economic improvement, in turn, could push some regional leaders to think about pursuing an even more independent course, one that some have said might even include eventual independence as a Pacific rim state.
But on the other hand, Moscow will almost certainly use any increase in Chinese participation there to generate Russian nationalism and hence increase cohesion of the Russian Federation. Over the past five years, Moscow officials and especially those in the military have sought to frighten Russians in the region by suggesting that an overpopulated China continues to look "greedily" at the wealthy but underpopulated Russian Far East. And Russian generals frequently have dramatically overstated the number of Chinese migrants there in order to press the case for greater vigilance against what they say is the Chinese threat.
Such campaigns have not always worked, but they have proved effective in countering nascent secessionist movements in the region. They are likely to be tried again and may be more effective if China becomes the dominant player in the region, thus eliminating or at least reducing the possibility that leaders of the Russian Far East could play off China against Japan.
China's impact on other post-Soviet states is likely to be larger and also less contradictory. Until recently, China has pursued a relatively low profile in both Central Asia and further afield, including the southern Caucasus and Ukraine. Now, it appears likely that China will choose to increase its economic presence and hence its political influence in these countries. Such a development would likely have three major consequences:
First, it would give the economies of these countries a boost. Second, it almost certainly would lead other Asian countries to increase their participation in the economies of these countries, thus diversifying the latter's economic ties. And third, it would give these countries expanded opportunities to stand up to Russian pressure while participating in economic ties with a country that in most cases would be less likely to provoke Moscow than would greater attachments to Western states.
In all these ways, China's latest sale of bonds may have an impact on the entire post-Soviet region. In itself, that sale is yet another indication of the way in which these countries are now being integrated not just into the West but into the world economy.
KUCHMA SUGGESTS REFERENDUM ON UKRAINIAN CONSTITUTION. Ukrainian President Leonid Kuchma has said he may call a referendum to extend the president's right to issue economic decrees for five more years, Reuters and Interfax reported on 15 December. "I do not see any other way in the future than to hold an all-Ukrainian referendum on major articles of Ukraine's constitution," he added. Adopted in 1996, the Ukrainian Constitution contained so-called transitional provisions that granted the president three years to issue economic decrees on matters not covered by existing legislation. The term of these transitional provisions expires in June 1999. Kuchma added that a proposal to replace the current unicameral parliament with a bicameral one could also be put to a nationwide discussion. According to ITAR-TASS, Kuchma said that "it is not expedient to hold presidential elections in the present economic and political situation." Kuchma's term in office expires in October 1999. JM
UKRAINIAN PARLIAMENT REJECTS CRIMEAN CONSTITUTION. The Supreme Council on 15 December voted by 210 to 89 to approve the new constitution of the Autonomous Republic of Crimea but fell 16 votes short of the required majority of 226 votes, AP reported. Lawmakers from the pro-government Popular Democratic Party criticized Crimea's basic law for containing "separatist provisions," in particular those allowing Crimea to engage in economic activities abroad and the Crimean parliamentary speaker to sign international agreement and treaties. The opposition Rukh, Hromada, and Green parties opposed the provision stipulating that taxes collected in Crimea are to be channeled only to the autonomous republic's budget. They added that the document fails to ensure the official status of the Ukrainian language and to provide for the rights of Crimean Tatars. The Supreme Council has set up a commission composed of Crimean Tatar and Kyiv legislators to examine the disputed provisions. JM
Having consolidated its status as a major economic player in Asia, China is now positioning itself to play an expanded economic and geopolitical role within and among the post-Soviet states.
But just as along the Pacific rim, Beijing's growing influence in these states is also generating a kind of backlash that the Chinese authorities have not yet found a way to overcome. Consequently, China's impact on developments in these countries--both intentional and unintentional--may prove to be large but very different from what the leaders in Beijing almost certainly would like to see.
That downside risk helps explain why Beijing has moved so cautiously in the political realm up to now. But an event last week signals that at least some in the Chinese capital are prepared to take the greater risks associated with a higher political profile.
On 10 December, Beijing successfully sold more than $500 million in bonds on the international market. This sale has attracted international attention not only because it was the first such offering by an Asian country since the August collapse of the Russian ruble but also because it was so clearly political.
Beijing currently has more than $140 billion in foreign currency reserves and thus has no immediate need for the cash raised by this sale. Instead, it appears to have made this offering in order to highlight its stability, economic progress, and growing political influence.
Not surprisingly, that aspect of the sale has sent shock waves through many Asian capitals. But those capitals may play an equally important role in the postSoviet states, helping Moscow rein in its restive Far East while giving the other countries of the region expanded freedom of action.
China's impact on the Russian Far East is likely to be especially great, but it may prove the most complex. On the one hand, increased Chinese involvement in the economy of that hard-pressed area is likely to be welcomed by the population, as long as it does not entail large-scale Chinese immigration. Such economic improvement, in turn, could push some regional leaders to think about pursuing an even more independent course, one that some have said might even include eventual independence as a Pacific rim state.
But on the other hand, Moscow will almost certainly use any increase in Chinese participation there to generate Russian nationalism and hence increase cohesion of the Russian Federation. Over the past five years, Moscow officials and especially those in the military have sought to frighten Russians in the region by suggesting that an overpopulated China continues to look "greedily" at the wealthy but underpopulated Russian Far East. And Russian generals frequently have dramatically overstated the number of Chinese migrants there in order to press the case for greater vigilance against what they say is the Chinese threat.
Such campaigns have not always worked, but they have proved effective in countering nascent secessionist movements in the region. They are likely to be tried again and may be more effective if China becomes the dominant player in the region, thus eliminating or at least reducing the possibility that leaders of the Russian Far East could play off China against Japan.
China's impact on other post-Soviet states is likely to be larger and also less contradictory. Until recently, China has pursued a relatively low profile in both Central Asia and further afield, including the southern Caucasus and Ukraine. Now, it appears likely that China will choose to increase its economic presence and hence its political influence in these countries. Such a development would likely have three major consequences:
First, it would give the economies of these countries a boost. Second, it almost certainly would lead other Asian countries to increase their participation in the economies of these countries, thus diversifying the latter's economic ties. And third, it would give these countries expanded opportunities to stand up to Russian pressure while participating in economic ties with a country that in most cases would be less likely to provoke Moscow than would greater attachments to Western states.
In all these ways, China's latest sale of bonds may have an impact on the entire post-Soviet region. In itself, that sale is yet another indication of the way in which these countries are now being integrated not just into the West but into the world economy.