China-Kyrgyzstan-Uzbekistan-Afghanistan Link

Proposed Corridor Would link Afghanistan to South Asia and the INSTC

Uzbekistan has proposed the launch of a new Central Asian “China-Kyrgyzstan-Uzbekistan-Afghanistan” transport corridor. It is according to Uzbekistan’s national railway company Temir Yullari.

This initiative was discussed during a meeting between the acting chairman of the board of Uzbekistan Temir Yullari, Khusnutdin Khasilov, and the heads of the railways of Kyrgyzstan and Afghanistan.

The meeting was attended by the Director General of Kyrgyz railway company (Kyrgyz Temir Zholu), the Director General of the Afghan Railways, as well as representatives of the Chinese Wakhan Corridor logistics company. The Wakhan Corridor is a narrow strip of territory in Afghanistan, extending to the border with China and separating the Gorno-Badakhshan Autonomous Region of Tajikistan from the Gilgit-Baltistan region of Pakistan-administered Kashmir.

According to the Uzbek side, the key point in organizing a new corridor is to create mutually beneficial conditions for cargo transportation. And most importantly, to introduce competitive tariffs.

It is planned to transport goods along this corridor from the Kashgar railway station in China to the Osh railway station in Kyrgyzstan by road. And then from the Osh station to the Hairatan station in Afghanistan by rail.

To date, the annual volume of cargo transportation is 3,500 containers. Plans are to increase this to 60,000 containers per year. The parties agreed to discuss the issue of tariff discounts and to present an updated tariff rate at their next meeting.

To help reconstruction of Afghanistan

The development of such a corridor would help with the reconstruction of Afghanistan and assist with the transformation from a nation at perpetual war to production and peace. Afghanistan is a key part of Central Asia,

bordered by Pakistan to the east and south, Iran to the west, Turkmenistan to the northwest, Uzbekistan to the north, Tajikistan to the northeast, and China to the northeast and east. This position marks it out as a Central Asian hub, which could connect with ocean ports via Pakistan, Turkmenistan, and Iran, which would also assist landlocked Uzbekistan reach markets in South Asia and to Europe. Iran has recently announced it intends building rail connections through to Herat, which would provide access to the INSTC.

Beijing has previously announced it is prepared to support the development of trans-Afghan railways.

Argentina joins China’s Belt and Road Initiative

The Latin American country is seeking a way out of US and IMF ‘debt diplomacy’

Argentine President Alberto Fernandez added another event to a highly politicized Winter Olympics when he met in Beijing last week with Chinese President Xi Jinping and agreed to join China’s Belt and Road Initiative.

Argentina becomes the 20^th of 33 countries in Latin America and the Caribbean to sign up for the Belt & Road. An official seal on what was already an extensive and growing economic relationship.

In addition to expanding trade and investment opportunities with China, joining the Belt & Road should make it easier for Argentina to obtain funding from the China-led Asian Infrastructure Investment Bank (AIIB) and the BRICS New Development Bank.

And this should reduce its dependence on the International Monetary Fund (IMF), a top priority for Fernandez.

Prior to the February 6 meeting in Beijing, Fernandez dropped by Moscow. There he told Russian President Vladimir Putin: “I am determined that Argentina has to stop being dependent on the Fund and the United States. Here I believe that Russia has an important place.”

Coming in the midst of the Ukraine crisis, this was the first of two diplomatic slaps in the face of the US government, which is boycotting the games in Beijing. Fernandez attended the opening ceremony.

The UK had a slap of its own when China took the opportunity to support Argentina’s position on the Falkland Islands (Islas Malvinas). That is another story. It does underline the Global South versus Imperial North nature of the dispute.

This year marks the 50^th anniversary of the establishment of diplomatic relations between Argentina and China. More recently, relations between the two countries have advanced considerably during and after the presidency of leftist Cristina Fernandez de Kirchner, who led Argentina from 2007 to 2015.

Difficult relations with the US

She had difficult relations with the US, which she blamed for Argentina’s sovereign debt default in 2014, and she put relations with China on the course they are on today, as is demonstrated by this statement from the Chinese Ministry of Foreign Affairs:

On April 23, 2014, President Cristina Fernandez de Kirchner of Argentina met with Foreign Minister Wang Yi at the Pink House in Buenos Aires.
Cristina said that the Chinese government promotes reforms with keen determination, and the whole country is dedicated to the national construction with concerted efforts, by which China has scored great achievements well-known worldwide and become a model for developing countries. The Argentinian side highly values Argentina-China strategic partnership, and is willing to strongly boost political mutual trust between the two countries and to deepen cooperation in economy, trade, infrastructure, agriculture, hydroelectricity, scien-tech and other fields, so as to promote Argentina-China relations for greater development.
Wang Yi said that … China views China-Argentina relations from a strategic and long-term perspective, and stands ready to work with Argentina in maintaining high-level exchanges and deepening strategic communication.

Argentina has the reputation of being an economic basket case, but it has a fairly sophisticated economy and now runs a trade surplus, with exports exceeding imports by 23% in 2021.

Exports were led by agricultural products (35.5%), industrial manufacturing (29.1%) and primary goods (26.9%). Imports were led by intermediate products (36.9%), capital goods (18.8%) and parts and accessories for capital goods (18.1%), according to statistics from Trading Economics.

Argentina’s top three export markets are Brazil, China and the US. Its top three sources of imports are China, Brazil and the US. Total trade with China has expanded by several times in the past 20 years and is now nearly double the total trade with the US.

Significant trade is already in place

Argentina is a major exporter of soybeans and soybean-derived products, corn and beef, competing with the United States in China and other markets. Like Brazil, it offers China an alternative to dependence on the US in the middle of a long-term trade dispute and increasingly acrimonious rivalry.

Also in January, China’s Zijin Mining announced it had completed the purchase of Neo Lithium of Canada and its 3Q lithium brine project in Argentina. According to the press release, the project “is one of the largest and highest-grade projects of its kind in the world. The property is the fifth-largest lithium brine project in the world, and ranks among the top three in terms of grades.”

The Canadian government approved the deal without a security review and “the project has been approved by the Environmental and Mining Authority in Catamarca Province, Argentina.”

Canadian conservatives and American China-bashers were outraged. Florida Congressman Michael Waltz, a Republican member of the House Committee on Science, Space and Technology, said:

Was the Biden administration notified and, if it was, why did it green-light this acquisition? And if it wasn’t, why wasn’t it in accordance with the agreement [the Canada-US Joint Action Plan on Critical Minerals]? Obviously, we’re NATO allies. We, I think, have a common view of the Chinese Communist Party as an increasingly dangerous and threatening adversary.

5G rollout with Huawei and Nokia

In addition to that, Telecom Argentina began to roll out 5G telecom services last year in partnership with Huawei and Nokia.

The Americans didn’t like that either. But what more attractive alternative to any Chinese project in Argentina have they offered?

On the other hand, the United States is closely identified with the IMF, which is not popular in Argentina. Here’s how Fernandez explained it to Putin:

Argentina has experienced a very special situation as a result of its indebtedness and the economic situation that I inherited. From the 1990s onwards [actually since the Latin American debt crisis of 1982], Argentina has looked to the United States, and the Argentine economy depends a great deal on the IMF debt and the US influence in the Fund … In 2015 we had a government that once again turned its gaze to the United States and generated the tremendous debt we have.

Not a word about financial irresponsibility

Not a word about financial irresponsibility and the workings of Argentine democracy, but that is not the point.

The final sentence of Fernandez’s comment refers to Mauricio Macri, the center-right businessman and politician who succeeded Cristina Fernandez de Kirchner in the presidency in 2015 and served until 2019.

Macri repaired relations with the US and liberalized the economy. And when a severe drought crippled the agricultural sector, inflation ran out of control and the government could not meet its obligations, he turned to the IMF.

That led to an even worse disaster.

On December 22, 2021, the IMF published the following press release and staff report: Argentina: Ex-Post Evaluation of Exceptional Access Under the 2018 Stand-By Arrangement. Its summary:

On June 20, 2018, the Executive Board approved the largest stand-by arrangement in the Fund’s history, in support of Argentina’s 2018-21 economic program. After an augmentation in October 2018, access under the arrangement amounted to US$57 billion … The program saw only four of the planned twelve reviews completed, and did not fulfil the objectives of restoring confidence in fiscal and external viability while fostering economic growth. The arrangement was canceled on July 24, 2020.
IMF Country Report No. 2021/279

The IMF defines “stand-by arrangement” as follows:

In an economic crisis, countries often need financing to help them overcome their balance of payments problems. Since its creation in June 1952, the IMF’s Stand-By Arrangement (SBA) has been the workhorse lending instrument for emerging and advanced market countries.

Unfortunately, the stand-by arrangement required fiscal and monetary austerity, which caused a recession. Argentina’s GDP dropped by 2.6% in 2018 and by another 2.1% in 2019. Then, with the onset of the pandemic, it plummeted 9.9% in 2020. Poverty increased by an estimated 50% and capital flowed out of the country.

In this situation, Fernandez headed to Moscow and Beijing to broaden his options, stirring up opposition to his leadership on the right as well.

But default has been averted, the IMF has abandoned “tough love” for what could be called constructive sympathy, and currency swaps between the Argentine and Chinese central banks have added to Argentina’s foreign currency reserves.

This should stabilize the economic situation and allow the Chinese to continue expanding their role in Argentina’s economy. They are not wasting any time.

On January 19, agreements aimed at upgrading Argentina’s railway system were signed by the Minister of Transport, the president of the national railway company and representatives of engineering contractor China Railway International Group and rolling stock maker CRRC Qindao Sifang.

Why is the president of Argentina going to Russia and China?

At a critical juncture in Argentina’s $40 billion IMF debt talks, President Alberto Fernandez will travel to China on Feb. 2, stopping in Russia en route. The reasons and purpose of the trip are reported by the Argentine news agency Pagina12

The most important political aspect of the trip is joining China’s new Silk Road, a strategic investment project in regional infrastructure promoted by Beijing. The visit to Asia will pave the way for many projects launched after the signing of a bilateral cooperation agreement during the Kirchner period . The main project financed by China will be the construction of the fourth nuclear power plant. Beijing will invest more than $7.9 billion in it, which will be 85% of the total project budget.

The issue of attracting investments from Russia was not officially discussed, however, some facts point to the possibility of its implementation. The last major investment was made at the end of December, when the government won a $864 million tender to supply 70 electric trains from Russia’s TransMashHolding.

It is also known about negotiations with Lukoil , which is interested in the Vaca Muerta shale oil field in Neuquen, Argentina. The company plans to implement a project to develop it jointly with the Argentinean oil and gas company YPF.

As for nuclear energy, Rosatom also plans to take part in the construction of a nuclear power plant in Argentina. The company also plans to conduct research into the peaceful atom.

Argentinian experts compare Russia and China as a South American country, noting that “Russians are more difficult as they are forced to inherit complicated geopolitical relations with the American region and also enter the market with a state-run market economy” . China, on the other hand, has “more capital” and intends to invest in infrastructure and geopolitics much more than Russia.

Spectacular Turkey: Central Anatolia itinerary

Turkey outside of all inclusive hotels

‘The country that bombed you is your friend…

The one that built your new railway is your enemy’

This is the Western media’s bizarre messaging to the people of Laos. The nation that was carpet-bombed by America, and which is now being vilified for accepting a new $9 billion railway line paid for by China.

Tom Fowdy

is a British writer and analyst of politics and international relations with a primary focus on East Asia.

Thursday was National Day in Laos. A celebration marking 46 years since the landlocked Southeast Asian nation deposed its monarchy and became a revolutionary communist state. An effort which was supported by Vietnam.

This year, the anniversary had added significance, as it saw the opening of a major new project. It is an electrified high-speed and freight railway system connecting the capital city, Vientiane with its northern neighbour, China.

The $9 billion project is part of the Belt and Road Initiative, and has been hailed as one of its flagship achievements. It is the first commercial and industrial railway in Laos, which, given its geography and the fact it is surrounded by mountainous terrain, has not previously had many options to expand its exports and generate economic growth.

Now, though, it has a direct rapid link into the world’s second largest economy and the world’s largest consumer market by population, and a connection to the booming ports of Guangdong. In terms of what it will bring to Laos, it is a game changer. So, what’s not to like about it?

To nobody’s surprise, the mainstream media have responded to the railway with the usual anti-China negativity. A plethora of articles sought to paint the project as a ‘debt trap’. Promoting the accusation that Beijing loans countries money for projects they cannot afford and then exerts political leverage over it.

”China, but at what cost?”

The Financial Times, for one, ran with a cynical article headlined ‘Laos to open Chinese-built railway amid fears of Beijing’s influence’. It implied that somehow Laos feels threatened or fears the construction of this very pioneering railway project. This suggestion of ‘fears of Chinese influence’ has become a common feature on such stories. It seek to cast doubt over anything positive China may be achieving or doing.

A common Twitter meme among pro-China users which has followed from stories like this asks: “but at what cost?” highlighting the frequency of such negative coverage.

And if you Google “China, but at what cost?” you can find a great many examples of articles published in major outlets. In producing such pieces, the broader intention is to depict Beijing’s actions as unwanted, threatening and constantly facing opposition. In the case of the Laos railway project, the ‘problem’ is it was financed by debt, and therefore it is not a positive step.

Yet this argument is as insulting as it is outright insensitive to Laos’ contemporary history. Anyone who knows anything about Laos’ relatively recent past will be well aware that China is not the country to fear, but the United States – the nation that dropped over 260 million cluster bombs on Laos and completely devastated the country as an extension of the Vietnam War, making it the most single bombed nation in history and claiming over 50,000 lives.

What is the cost of unexploded bombs clearing?

Many of these bombs remain unexploded and litter the countryside of Laos, continuing to kill civilians. In constructing the new railway, workers first had to clear the unexploded ordnance. How is it that the world and the mainstream media remain indifferent to this atrocity? And how, by any stretch of the imagination, can they claim that China is the true threat to Laos, and that the US and its allies act in the true interests of the country?

Herein lies the problem. Such a mindset symbolizes the elitism, chauvinism and self-righteousness of the countries of the West. Countries which are ideologically inclined to believe that they stand for the ‘true interests’ of the ordinary people in the countries they profess to liberate.

Western politics peddles the assumption that through countries’ adherence to liberal democracy, they exclusively hold a single, universal, impartial, and moralistic truth, derived from the ontological legacy of Christianity, and they must introduce it to others. The West always acts truthfully and in good faith, while its enemies do not. And therefore, so the logic goes, any policy the US or its allies direct towards Laos is motivated by sincere intent and goodwill for its interests. In turn, anything that China does is bad-faith, expansionist and power-hungry behaviour motivated by a desire to influence or control the country.

This creates the bizarre scenario whereby Beijing is depicted as evil and sinister for building a railway to connect to its neighbour. However, we should forget America dropping millions of bombs on the country because it was done in the name of ‘freedom’. I’m sure you can imagine how the media would react if China did the latter.

Pro US media distorting reality

The Laos-China railway has provided a textbook example of how the media can distort a story in order to fortify an incriminating narrative, while brushing aside brutal realities. We are shown a lopsided world, where the travesty of a country being bombed into oblivion with consequences lasting decades is ignored, and the preference is to try to convince us how that same country’s first commercial railway line is, in fact, what it should really be scared of.

It is a demonstration of how the power of the English-language, pro-US media distorts reality itself and how they can blow up an issue, yet hide the truth, by professing to care dearly about the wellbeing and interests of a country which the West poured death, destruction, and carnage upon in the name of freedom.