Kyrgyzstan: China’s Economic Influence Fostering Resentment

By Chris Rickleton

Gulsara Rysulbekova, a retailer at Bishkek’s Osh Bazaar, refuses to buy Chinese foodstuffs. “Chinese rice is made out of plastic,” she says. She then points to a sack of red-brown rice grown in Kyrgyzstan’s Uzgen province. “That is what real rice looks like. If I stock Chinese rice, my customers won’t buy it. How can they make plov with Chinese rice?”

Rysulbekova’s comments are a reflection of the uneasy relationship that many Kyrgyz have with Chinese goods. One the one hand, the flood of Chinese imports into the country since the 1991 Soviet collapse has been a blessing. Affordable imports have helped many Kyrgyz cushion themselves against the impact of persistent inflation. At the same time, an open trade policy has created an avenue for Kyrgyz entrepreneurs to gain profits by re-exporting Chinese goods to larger, better-protected markets in Kazakhstan, Uzbekistan and even Russia. On the other hand, the rise of China’s economic influence in Kyrgyzstan has fostered sovereignty concerns, with many Kyrgyz complaining that their country has become a dumping ground for Chinese junk.

Though Kyrgyzstani consumers choose China on a daily basis, pro-Russian rhetoric still registers best with voters. In the local media, reports playing on fears of Chinese in-migration make for hot copy, while a prevailing sentiment that Kyrgyzstan experiences the butt-end of China’s economic miracle continues to color domestic perceptions of Beijing.

Svetlana, 28, a regular shopper at Osh Bazaar, echoes concerns shared by a large number of Kyrgyz, who are feeling overwhelmed. “I don’t want to buy Chinese products, but sometimes I think they are forced on me,” she told EurasiaNet.org. “Sellers lie and tell us they [the products] are local.”

Research by the Central Asia Free Market Institute (CAFMI) confirms that China has a hammerlock on Kyrgyzstan’s informal economy. Over 75 percent of the goods at Dordoi and 85 percent of the goods at Kara-Suu – the country’s two largest bazaars – come from China. In 2009, Kyrgyzstan surpassed Kazakhstan as the China’s top destination for exports in Central Asia. Because so much of the trade is informal, numbers vary wildly: For example, estimates of the value of imports from China in 2009 range from $2 billion to $10 billion. Few goods move the other direction.

“[Proximity] is an overall advantage,” said Azamat Akeleev, Director of Promotank, a market research and consultancy firm based in Bishkek. Although many local manufacturers have struggled to compete with the influx of Chinese imports, Akeleev cites the textiles manufacturing industry as one of several who have “benefited enormously” from “cheap Chinese inputs” and an open border.

Clothes made in Kyrgyzstan are the most competitive in the neighboring Kazakhstani market, he added.

Kyrgyzstan’s heavy reliance on Beijing increases the Kyrgyz economy’s vulnerability to sudden swings. Quality control is also a major issue. Last year, for example, activity at the he Kara-Suu bazaar outside of Osh experienced plunged after Kazakhstan and Uzbekistan sealed their respective borders amid ongoing political turmoil in Bishkek and southern Kyrgyzstan, according to a CAFMI study.

Akeleev noted that many of the goods “dumped” by China on the Kyrgyz market often fail to comply with basic health and safety standards. “[Quality] controls exist, but it is possible to buy a way through them,” he said, going on to describe how corruption renders inspections almost meaningless. “We cannot be sure of the quality of the food and household products entering our market, because traders tend to buy from the lower spectrum of Chinese goods. Much trade with China is contraband and this can impact the health of the population.”

Kyrgyzstan’s political elite still places more emphasis on relations with Moscow than with Beijing. While the April 6 visit of now-suspended Deputy Prime Minister Omurbek Babanov to China received minimal media coverage, Prime Minister Almaz Atambayev’s late March trip to Russia received wide play in the local press. He was there in part to express Kyrgyzstan’s enthusiasm to join the new Customs Union, which currently comprises Russia, Belarus and Kazakhstan. The Customs Union is widely seen in Bishkek and elsewhere as a vehicle designed to check China’s growing share of regional trade.

Just as Russia remains the top destination for thousands of Kyrgyz migrant laborers, fears that Chinese migrants will follow Chinese goods into Kyrgyzstan in massive numbers have, since the early days of independence, been a source of unease in Bishkek. A recent article in the Kyrgyz-language newspaper Sayasat, titled, “How to Stop the Sinification of Kyrgyzstan,” turns to mythic history to describe Kyrgyzstan’s historic mission of keeping out the Chinese. The author recounts battles fought by national folk legend Manas against the “countless” armies of China before citing an unnamed border official claiming that “150-200” Chinese cross the border into Kyrgyzstan every month, but “not all of them return.”

While counseling against sensationalism, Promotank’s Akeleev expressed the belief that even current levels of unofficial Chinese migration could lead to “social problems” in the future.

“We are a society that has problems with ethnic conflict,” he said. “I personally know companies hiring Chinese because they work harder than local people, and for less money. This may be good for the economy as Chinese are very industrious. However, they are culturally very distant [from the Kyrgyz] and have a different approach to assimilation. In other countries where Chinese dominate the economy, such as Malaysia, Thailand and Indonesia, it has led to some conflicts.”

Sebastien Peyrouse, a senior analyst at the Central Asia-Caucuses Silk Road Studies program at Johns Hopkins University, agrees that while economic cooperation between Kyrgyzstan and China may continue to increase, intractable differences, as well has Bishkek’s traditional dependence on Russia, place limits on the relationship.

“China is perceived [in Kyrgyzstan] as being foreign, and even as incompatible, whereas there is still a dominant feeling of proximity and even of intimacy with Russia,” Peyrouse says. “Compared to potential Chinese domination … Russia continues to be seen as a lesser evil,” he said.

Chris Rickleton is a Bishkek-based journalist.