Trade between China and Central Asia grew to $89bn in 2023, an increase of some 27% on the previous year. More than $60bn of the total was Chinese exports.
Trade rose with every Central Asian country except Turkmenistan. Kazakhstan traded $41bn with China, an increase of almost one-third in 2022, while Tajikistan saw a 50% uptick to $3.9bn.
Beijing’s diplomats have also been busy signing deals and building influence in the region. The list of agreements with China is enormous in cost and scope. And as always with its trade diplomacy, money, and prosperity are understood to come with political strings attached. As neighbors and partners, the countries of the region know their freedom of maneuver is constrained.
Uzbekistan’s relationship was enhanced to an “all-weather” comprehensive strategic partnership following a visit by Uzbek President Shavkat Mirziyoyev to the Chinese capital in January, and the two countries pledged to increase their bilateral trade to $20bn from $14bn in 2023.
The Uzbeks also discussed green energy initiatives with their hosts, the world’s biggest producer of renewable power. There is massive potential for Chinese companies in Central Asia and Chinese investments in Uzbekistan, particularly in the renewable energy sector, which the latter said had grown fivefold, though without specifying a time period.
The development followed agreements signed in May 2023 to construct facilities with a collective capacity of 6 gigawatts, representing foreign direct investment of $5bn-$6bn.
Two photovoltaic power stations are being built in the Bukhara and Kashkadarya regions, each with a capacity of 500 megawatts, and the regional government of Samarkand has ordered 100 electric buses from Yutong, a Chinese manufacturer, in a deal worth $62m over three years.
The contracts mark a shift in China’s approach after years of investment concentrated on large-scale physical infrastructure and resource extraction under the sprawling Belt and Road Initiative (BRI.)
Uzbek President Mirziyoyev also visited Shenzhen to tour the headquarters of Chinese carmaker BYD, which will work in partnership to produce hybrid and electric vehicles in Uzbekistan’s Jizzakh region. The venture, in collaboration with UzAuto, will help expand the Uzbek automotive industry, and production is projected to reach as many as 300,000 vehicles a year.
China is also involved in the joint production of cars in Kazakhstan, as Central Asia increasingly becomes an export producer for Chinese models — many are then sent onto Russia.
Recent events in the Red Sea will only increase China’s attention on Central Asia after Houthi attacks on commercial shipping forced companies to circumnavigate Africa to preserve trade links between Asia and Europe.
While the crisis caused delays and an uncomfortable uptick in prices, it highlighted the importance of Central Asia as a secondary route between China and Europe.
Beijing committed to expediting the China-Kyrgyzstan-Uzbekistan (CKU) railway project during President Mirziyoyev’s visit, in a move that would give China a direct route into the heart of Central Asia, circumventing Russia.
While the effectiveness of this corridor remains to be seen, the CKU railway is integral to China’s broader strategy to improve its infrastructure connectivity.
Beijing’s increased activity in the region has effects that go far beyond investments and bilateral trade. It has increasingly served as a model for Central Asian states when it comes to surveillance and law enforcement methods.
For example, Uzbekistan, in 2019, signed a $1bn deal with Huawei to establish surveillance activities in the nation. Furthermore, the Chinese CITIC Group and COSTAR Group too were involved within the framework of Uzbekistan’s push for the controversial Safe Cities monitoring initiative.
While the European Union (EU), too, is touting its Global Gateway infrastructure program to the region, it starts from a less advantageous position given its geographical distance. It also insists on a human-rights approach, which is not to the taste of some among the region’s elites.
Nevertheless, some positive steps have been taken. In late January, the EU announced it will be investing roughly $10.8bn towards the development of 33 sustainable transport projects in Central Asia.
China’s growing influence poses questions about Moscow’s posture in the region, which has faced significant resistance since the full-scale invasion of Ukraine in February 2022.
The Kremlin is unhappy about China’s success, but it cannot be vocal about it. The importance of Chinese aid and indirect support for Ukraine takes precedence for Moscow and will shape its approach toward Beijing as long as the confrontation with the West continues.
Emil Avdaliani is a professor of international relations at European University in Tbilisi, Georgia, and a scholar of Silk Roads.
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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