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Living in the Shadow of Manufacturing Giant

It is well known how stiff Chinese trade competition has forced many U.S. companies to close and lay off their workers. Less well-known is how China's international trade is also having an impact on its immediate neighbors, which must reckon with the presence of a manufacturing giant on their doorsteps. VOA correspondent Peter Fedynsky was in Kyrgyzstan recently and has this report.

Business is good at the Tataan Trade Center in Bishkek, the capital of Kyrgyzstan. Its Chinese owners would not disclose their sales figures, but say they provide employment for 600 Kyrgyz and pay more than $250,000 in local taxes. They also report paying about three and a quarter million dollars in customs fees.

Tataan sells mostly Chinese consumer goods - from cheap knickknacks and home improvement supplies, to electronics and luxury items such as Jacuzzis. Considerable floor space is devoted to furniture.

Trade center director Yan Tse Khun says his store's success in home furnishings comes at the expense of other foreign manufacturers. "Earlier, when there was no Chinese furniture, they had very expensive Italian and Turkish furniture. But the local people had a need for inexpensive and good quality Chinese furniture."

A Russian-language sign in the Tataan Center issues an implicit challenge to China's neighbors by Lokomotiv, a Chinese distributing company. The sign announces the company's strategic plan for a trade offensive in Central Asia.

When asked if the sheer volume of Chinese goods is smothering Kyrgyzstan's domestic manufacturing, director Yan pointed instead to Kyrgyz exports of apples, honey and leather goods to China.

But the Chinese also export food to Kyrgyzstan, which prompts a laugh from Murat Suimbayev, professor of international relations at the Kyrgyz State University. "We Kyrgyz are descendants of cattle herders and nomads. Yet, generally speaking, Chinese farmers are supplying us with meat. That one factor alone illustrates how serious the trade problem is."

Suimbayev says it would be better for the Kyrgyz people if China produced some of its goods in Kyrgyzstan. He says the nation's trade imbalance with China could be partially offset through development of the Kyrgyz tourist industry, and use of the country's abundant water resources to export hydroelectric power.

Russia, which shares a 4,300 kilometer border with China, is already supplying oil and gas to China to meet growing Chinese energy needs, and is constructing new pipelines to increase deliveries. Russia is also helping China build a nuclear power plant. Chinese industry, in turn, uses the energy to produce … more consumer products.

One of Russia's leading China experts, Vladimir Myasnikov, says China is merely carrying out a plan, which one of its former leaders revealed to Soviet officials decades ago. "Chou En Lai, when he was prime minister, once told our officials, 'While you build metallurgical facilities and electric power plants in places like India, we will conquer the world with towels and enamel kitchenware'."

Mysanikov says trade protectionism is not the way to stop China. Kyrgyz professor Suimbayev agrees. "How do we counter the Chinese project with one that is as competitive as theirs? Instead of engaging in trade wars, which indicate weakness more than they do strength, we all need to think. Perhaps we need to hold regular conferences and think. Otherwise, everything in your country and mine will be made in China."

Unlike the United States and Russia, which have military bases in Kyrgyzstan, China has no such presence. However, growing Kyrgyz reliance on Chinese towels and kitchenware would seem to indicate China has already conquered this part of the world.