Central Asia: New Trade Deals Signed on Sidelines of BRI Forum

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Our weekly update on recent developments in Chinese-Russian-Central Asian affairs.

Central Asia

Details are emerging on the bevy of deals signed between Central Asian states and China on the sidelines of the Beijing jamboree celebrating the 10th anniversary of the Belt & Road initiative. 

Kazakhstan’s presidential press service reported that while President Kassym-Jomart Tokayev was in China in mid-October, officials signed 30 commercial documents worth an estimated $16.54 billion, “including investment and trade agreements, agreements on the transfer of technology for production, the opening of credit lines, etc.” Perhaps the most significant deal aims to increase the capacity of the Trans-Caspian International Transport Route (TITR) fivefold to 500,000 containers per year. During his press availability, Tokayev noted that “about 85 percent of all land transit traffic from China to Europe occurs via Kazakhstan,” adding that $35 billion has been allocated for the development of highways over 15 years. The country plans to build another “1,300 kilometers of new railway tracks within three years,” a government statement added.

Meanwhile, Uzbek leader Shavkat Mirziyoyev announced after a one-on-one meeting with Xi in Beijing that Chinese investment in Uzbekistan had increased fivefold “in recent years.” He also expressed hope to increase annual trade turnover to $20 billion. At the meeting, “promising projects” in the field of metallurgy, electrical engineering and others were discussed. Uzbekistan and China also signed several agreements, although details were scant. For example, Uzbekistan’s Ministry of Energy of Uzbekistan and China’s State Energy Administration pledged to “contribute to further strengthening cooperation in the field of renewable energy sources.” In a similar expression of intent, the Uzbek Ministry of Digital Technologies and China’s Ministry of Industry and Informatization expressed a desire to cooperate “in the field of infrastructure connectivity, construction of communication networks, 5G, network security, information and communication technologies.” Meanwhile China Southern Power Grid International and Uzbekhydroenergo JSC signed a deal worth upwards of $1 billion to construct the Yukori Pskem hydroelectric power station with a capacity of 600 MW.

Gurbanguly Berdymukhamedov, Turkmenistan’s ultimate power broker, led his country’s delegation to the Belt & Road forum. In Beijing, he signed agreements laden with pomp, but lacking in substance, such as a vaguely phrased pact on “technical and economic cooperation.” The state news agency Turkmenistan: Golden Age also touted a memorandum on understanding between the State Customs Service of Turkmenistan and China’s customs agency to strengthen the capacity of the Authorized Economic Operators Program. The official Chinese outlet China Daily, meanwhile, published an analysis piece that claims work on a fourth line (Line D) of the China-Central Asia gas pipeline, which connects Turkmenistan to China via other Central Asian states, is “in full swing.” When completed, the fourth line is projected to increase annual natural gas export capacity by 30 billion cubic meters.

Kazakhstan

Data published by Kazakhstan’s Ministry of National Economy shows Kazakh-Chinese trade turnover for January-August 2023 amounted to $19 billion, a 23 percent increase over the same period the previous year ($15.5 billion).” But growth is mostly a one-way street: Exports from Kazakhstan to China amounted to $9 billion, representing a modest increase of 2.1 percent over the same period in 2022. Imports to Kazakhstan from the PRC totaled $10 billion, an increase of 49.5 percent year-on-year, according to the ministry. To confuse matters, Jiang Wei, Consul General of the People’s Republic of China in Almaty, reported starkly different trade figures. Referring to Chinese statistics for the same eight-month period, Jiang pegged bilateral trade at $25.23 billion. Economic observers believe the discrepancy in statistical data is associated with smuggling and corruption.

After participating in BRI-related events in Beijing in mid-October, President Tokayev traveled to China’s western-most XinjiangProvince, where he met with the regional Communist Party boss Ma Xingrui. According to official accounts, bilateral discussions focused on expanding trade and developing tourism. Xinjiang is the epicenter of a continuing crackdown on Muslim minority groups, including ethnic Kazakhs. The province, which borders Kazakhstan, also accounted for over 40 percent of China’s overall trade with Kazakhstan during the first half of 2023.

Kazakhstan’s Foreign Ministry announced that a bilateral agreement on a 30-day visa-free travel regime between Kazakhstan and China would go into effect on November 10. 

Uzbekistan

China is Uzbekistan’s top trade partner so far in 2023. The Uzbek governmental statistical agency, publishing data covering the first three quarters of the year, valued bilateral trade for the period at $9.45 billion, a 36.2 percent increase over the same period in 2022. Uzbek exports to China during the period amounted to $1.85 billion, while imports topped $7.59 billion. Following China in the trade standings is Russia, which registered turnover of $7.03 billion, a 6 percent year-on-year increase. Kazakhstan was third with $3.22 billion, a decrease of 1.5 percent over the 2022 timeframe. Overall, trade turnover for the January-September period reached $44.8 billion, a 22 percent increase over 2022’s numbers. Uzbekistan is still running a deficit, however: of the $44.8 billion in trade, $17 billion were exports and $27 billion were imports.

Tajikistan

Tajikistan and China have signed an agreement to conduct “anti-terrorist exercises” at least once every two years, the Russian news agency TASS reports. One objective outlined in the pact is to “increase the level of coherence of command-and-control bodies in the management of special anti-terrorist formations.”

Source : Eurasianet