International Relations | February 14, 2013 By Kunduz Rysbek. Securing the energy supply necessary for China’s continued economic growth is heavily dependent upon mutual cooperation between China and energy providing countries. The joint development of Kyrgyzstan’s hydropower resources illustrates the importance of enhancing strategic mutual cooperation between China and Central Asian countries. Initially, China’s foreign policy toward Kyrgyzstan dealt predominantly with securing Kyrgyz backing for Beijing policies in China’s Xinjiang Uyghur Autonomous Region (Xinjiang). Certainly, this issue remains high priority for China’s national interest, but such overtures were not focused on building a strategic relationship. This situation is now changing rapidly. Lucrative oil and gas deposits in Xinjiang are the engine for its economic boom. As such, arid Xinjiang is in dire need for additional water and energy resources. Demand has hastened the use of water resources and research into the hydro energy potential of the Tarim River, which flows to mid-western Xinjiang from Kyrgyzstan. Three-quarters of the river and its major tributary the Sary-Djaz (Aksu) river lies in Kyrgyzstan. Recently, China pledged to invest approximately 3 billion USD to build a cascade of hydropower plants down the Sary-Djaz. Sary-Djaz is a trans-border river. According to the water convention of the United Nations Economic Commission for Europe (UNECE) only two states, Kyrgyzstan and China, have legal rights to use its resources. So, what are the potential gains from this project for both China and Kyrgyzstan? The Sary-Djaz project presents a solution to significant development issues China faces. Summer floods from the river do great damage to areas of Xinjiang. Its energy supply is mainly coal-power plants, which are not efficient in summer months and do not assist China in facing its commitment to reduce atmospheric emissions by 2020. However the dam project can resolve these problems in four ways. First, hydroelectricity provides an energy security net for Xinjiang with the potential to export to Central China. Secondly, the area of irrigated land is increased by using the water accumulated in reservoirs. Thirdly, the dams will allow for better control of water inflows and outflows, thus preventing summer floods. Lastly, China will acquire clean energy, thereby contributing towards the 2020 emissions reduction goal. Contrary to dry Xinjiang, Kyrgyzstan possesses abundant water resources and a vast untapped hydropower potential. The majority of hydroelectricity is produced in the south. A proportion of the produced hydropower is transported to the north of Kyrgyzstan via the territories of Uzbekistan and Kazakhstan, thus forming the volatile Central Asian energy circle. Taking into account the outdated transmission lines infrastructure, and recent statements by both Kazakhstan and Uzbekistan about their potential exit from the Central Asian energy circle, the north of Kyrgyzstan’s energy-security remains under threat. The Chinese government has issued Kyrgyzstan a USD 289 million loan package to construct new power transmission lines that will connect the south of Kyrgyzstan to the north. Construction of these lines will help to efficiently allocate energy throughout the country, as well as increase export volume to neighbouring countries. This will ensure Kyrgyzstan’s own energy security, and allow the country to emerge as a stable energy link between Central Asia and China. The above analysis reveals cooperation between Kyrgyzstan and China in hydroelectricity development is mutually beneficial and is of strategic importance. Should the Sary-Djaz project be successful, it will serve as a showcase for other energy rich states in the region, boosting confidence in energy alliances with China.  The author would like to express her profound gratitude for cooperation to the Institute of Water Issues and Hydropower under the Kyrgyz Academy of Science, whose professional expertise and innovative thinking contribute to greater energy security in Central Asia and China. Kunduz Rysbek is a visiting teaching fellow in globalization studies at the Public Policy Academy under the President of the Kyrgyz Republic, and a graduate researcher at the Organization for Security and Cooperation in Europe Academy in Bishkek (Kyrgyzstan). Opinions expressed in the CPI blog do not represent the views of the China Policy Institute or the School of Contemporary Chinese Studies at the University of Nottingham. They are the personal views of the bloggers/authors. Bilateral trade between Xinjiang and Kazakhstan: challenges or opportunities? How would China benefit from a united Korea?