Merchants, Markets, and the State

The end of the cold war witnessed the emergence of a commercial web sprawling from the Xinjiang Uighur Autonomous Region in western China and extending into Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan), Pakistan, and Russia. Running parallel to the state-managed exchange in hydrocarbons, raw materials, technology, and infrastructure, this new Eurasian trade had an informal component as everyday consumer items manufactured in China were imported into neighboring countries, bypassing formal regulatory mechanisms. This inter-Asian trade began as shuttle trading by itinerant merchants for local markets; by the mid 1990s, shuttle trading was overshadowed by largescale export for national markets in neighboring countries without losing its informal character. This informality extending across national boundaries defined the post–cold war commerce in innermost Asia; at the same time, it also signaled a return to pre-cold war trading structures. Moving away from the "retreat of the state" thesis that found traction following the cold war, the author attributes informality in this inter-Asian trade to three factors: (1) a restructuring of state power where informal trade was a new comparative advantage sought in an evolving geopolitical climate; (2) the actors in this inter-Asian trade—party and regional officials in China, along with traders and intermediaries—who found and exercised agency through this exchange; and (3) a chain of inter-locking, commercial macro-regions, which are economically sustainable and which transcended international boundaries. Working in conjunction, these factors constitute a dynamic inter-Asian trade and challenge static state imaginaries of a "New Silk Road" or "Eurasian Continental Bridge." ACKNOWLEDGMENTS I am indebted to Caglar Keyder and Ravi Palat for critical feedback and constructive comments on earlier drafts of this article. Prasenjit Duara and Deniz Yükseker engaged with the ideas presented herein; their comments were crucial in my framing of the argument. I thank them all. Notes 1 For a recent example, consider U.S. Secretary of State Hillary Clinton's comments on 12 June 2012 at the Tokyo Conference on Afghanistan. Clinton spoke of a "New Silk Road" that would economically integrate Afghanistan with Central and South Asia, noting that foreign investment, jobs, and markets offer a credible alternative to insurgency. See Clinton 2012. Secretary Clinton has used the "New Silk Road" metaphor in 2011 in the same context: economically integrating Afghanistan with regional economies through state initiatives. 2 Spector 2008; Yükseker 2003; Yükseker 2004. 3 Piraldi 2005. 4 Sassen 2001, 290. 5 Ibraimov 2009; Spechler 2003; Roberts 2004; Wiemer 2004. 6 Liu 1998, 182. 7 Spechler 2003. 42 Beckwith 1991; Smith 1991. 46 Consider the map produced for the British Library's 2004 exhibition "The Silk Road: Travel, Trade, War and Faith": www.bl.uk/onlinegallery/features/silkroad/pdf/silkroadmap.pdf. Although beautifully produced, the bold lines depicting "the Silk Road" suggest a uniform interconnectivity across all of Asia that arguably never existed. It also sets down the Silk Road as one might depict an interstate highway. In fact, these pre-modern and early modern routes were ever shifting. 8 Kaplan 1994. 9 Held and McGrew 1998, 227–32. 10 See Ichiyo 1993. In the People's Republic the 1990s was seen as a decade of retreating state power from the public sector, frequently described as the smashing of the iron rice bowl. Although not under pressure from international regulatory institutions, divestment from the public sector was seen to lessen the fiscal liability of the state and encourage private enterprise. This retreating state power was witnessed in different sectors in China in the 1990s: in the educational sector, in the privatization of social welfare, and in the selling off of state-owned enterprises (SOEs) in the mid to late 1990s. See Huang 2008, 48–49; Mok 1997;Wong 1994. 11 Strange 1997. 12 Ibid., 4–5. 13 Mann 1997, 474. 14 Regional and provincial leaders in China saw the possibility of instability spilling from Central Asia into Xinjiang, a Turkic, Muslim-majority region, where segments from within the population periodically contested the region's ties to Beijing. Following the collapse of a centralizing Soviet state, the Chinese stepped up the presence of state security institutions; the visibility of these institutions continues to grow (Karrar 2009). 15 Christoffersen 1993, 142. 16 Millward 2007, 289. 17 Dautcher 2009, 230. 18 Telegraph Agency 1991. 19 Liu 1998, 182–83. 20 According to Xinhua on 13 April 1994, the premier's landmark visit, which enhanced China's image in the region, was unusual given that Li Peng was accompanied by the largest entourage of businesspeople to ever accompany a Chinese premier. See Xinhua 1994. Two years later, a multilateral forum the Shanghai Five mechanism between China, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan, was put in place to address confidence building and security measures in frontier areas. After 2001 the mechanism would be formalized as the Shanghai Cooperation Organization (Shanghai hezuo zuzhi) mandated wide-ranging cooperation amongst member states. 21 Liu 1995. 22 Dautcher 2009, 250. 23 Roberts 2004, 222–23. 24 Growth in formal trade marked broadening commercial engagement between China and the Central Asian republics. Formal trade between China and Central Asia leapt from US$457 million in 1992, to US$577 million in 1994, to US$773 million in 1996 (Xue and Xing 1999, 117). 25 Strange 1997, 4. 26 Quoted in Meisner 1997, 478. 27 Meisner 1997, 479-480; Yang 2004: 67. 28 Xinjiang Television 1992. 29 Xinjiang Ribao 1992. 30 Xinhua 1992 (SEZ). 31 Karrar 2009, 57. 32 Xinhua 1992 (Xinjiang). 33 Ibraimov 2009, 55. 34 Wiemer 2004, 185; Xinhua 1999. 35 Ibraimov 2009, 55; Wiemer 2004, 185–86.36. Wiemer 2004, 184–85. 36 On 3 January 2011, Edward Wong of the New York Times quoted PLA General Liu Yazhou as stating that "Central Asia is the thickest piece of cake given to the modern Chinese by the heavens." General Liu's remarks were lifted from his article in the Hong Kong–based Phoenix Weekly, where he also wrote: "China has begun stimulating feverish consumerism in the area." Since publication of the New York Times' article, Liu's comments have been cited and re-blogged repeatedly on the internet. While Liu may be overstating the importance of Central Asia for the Chinese economy—similar comments could be made regarding to Chinese economic inroads to other parts of the world—Liu's observations suggest how elite opinion in China sees commercial ties with Central Asia as being widely beneficial. 37 Evan 1995, 10; Wade 1992, xxiii; Weiss 1998, 103, 115. 38 Xinhua 2000. 39 Cohn 2002. 40 While the immediate benefits of this inter-Asian trade are enjoyed by people living in proximity to the border, some of the merchants are based further afield. Today, the majority of Pakistan's trade from Xinjiang is financed by merchants from the Punjab and Khyber-Pakhtoonkhwa Province, although conducted by intermediaries from Pakistani Northern Areas neighboring Xinjiang as they can cross into Xinjiang with a locally issued border permit —as opposed to requiring a passport and visa—and qualify officially for lower tariffs. Amongst Central Asians there is another phenomenon whereby merchants purchasing for wholesale markets in Central Asia take up residence in China, mostly in Urumchi and Yining, but also farther afield in Beijing and Guangzhou (Ibraimov 2009, 55). This Central Asian diaspora is a product of inter-Asian trade out of Xinjiang. 41 Chen 2010, 63. 43 Clunas 2004. 44 While John King Fairbank's framework (1973) of a regional order with a tribute-seeking Middle Kingdom in the center and tributaries on the periphery is still useful in explaining the Chinese state's commercial engagement with the outside world, this model was not rigidly imposed along the Inner Asian frontier (for a critique of Fairbank, see Hevia 2005). Not only did the Chinese state periodically permit trade outside the tributary system, but there was also an extensive network of traders operating in violation of state authority. This does not mean that there was an absence of state power, but only a difference in the way that the power of the state was projected and negotiated along the frontier. For examples of how trade along the frontier deviated from the ritualized Chinese approach towards foreigners see Bello 2000; Millward 1998; Newby 2005. 45 Hansen 2012, 7–8. 47 Skinner 1985. 48 The one exception was Chinese beer, which continued to be readily available in local markets. Beer, although produced in Pakistan, either has controlled circulation and is available only through select outlets (none of them in Gilgit-Baltistan Province), or sells for marked up prices on the black market. Given the lack of official distribution and an already marked up black market price for Pakistani beer, Chinese beer remained commercially viable even with the additional transport costs factored in. 49 The use of the term "Silk Road" is not limited to China and Central Asia. Consider a recent article in the business section of the New York Times, where the Silk Road was described as a commercial connection between China and the Gulf states, both "centuries ago" and presently. See Shah and Reed 2012. 50 Hansen 2012. 51 Sassen 2001, 291. 52 Tsai 2007, 39–40.