China-Uzbekistan Economic Relations


Sevinç İrem BALCI

Following the disintegration of the Soviet Union in 1992, China and Uzbekistan established diplomatic relations. Since then, the two nations have maintained close ties and achieved a few diplomatic achievements. In 2001, Uzbekistan joined the Shanghai Cooperation Organization (SCO), a regional economic and security alliance comprised of China, Russia, Kazakhstan, Tajikistan, Kyrgyzstan, Iran, India, and Pakistan. Also, China and Uzbekistan signed the “China-Uzbek Pact of Friendship and Cooperation” in 2005, a bilateral treaty including several initiatives, including economic, trade, counterterrorism, and anti-drug trafficking cooperation, among others.

Uzbekistan has a significant place in the economic, cultural, and political project of China’s Belt and Road Initiative (formerly known as One Belt One Road Initiative), as Uzbekistan is one of the major countries in the Central Asia. Even though the two nations do not share a border, Uzbekistan’s position puts it directly in China’s path to Turkmenistan, a key supplier of natural gas to the west. The Central Asia-China Pipeline, which connects Turkmenistan’s gas supplies to China’s grid in Xinjiang’s Western area, travels via Uzbekistan.

With the election of President Shavkat Mirziyoyev in 2016, ties between China and Uzbekistan began to pick up momentum. The new president’s considerable market liberalization and economic reforms have made Uzbekistan one of the world’s five fastest growing economies, boosting bilateral ties as China’s regional development aspirations line with Uzbekistan’s economic ambitions. In addition, it has made the nation more investor-friendly and accommodating to Chinese investment than some of its neighbors.

Lately, China grew focus on Uzbekistan, starting from 2017. Uzbekistan will enhance her trade and economic capabilities with the new Central Asian Corridor. Exporting Uzbek commodities to new countries is a very appealing incentive for the country. Both presidents, Shavkat Mirziyoyev of Uzbekistan, and Xi Jinping of China, talked favourably of future partnership in BRI progress during the First Belt and Road Forum in 2017. During those discussions, the two countries inked 115 agreements worth more than US$23 billion in the areas of electrical power, oil production, chemicals, architecture, textiles, pharmaceutical engineering, transportation, infrastructure, and agriculture, totaling more than US$23 billion in value.

In 2018, there was a significant growth in Chinese investment in Uzbekistan’s economy. Their overall volume has been steadily expanding since then, reaching $9 billion USD by the end of 2021 (from the press service of the President of the Republic of Uzbekistan).

Most likely, the 9 billion USD you provided for Chinese investment was calculated by the Uzbek side, and it differs significantly from Chinese figures. With such a high amount, it’s likely that Uzbekistan’s departments evaluate not just investments, but also Chinese financing and credit. Lending and investing are two distinct financial mechanisms that must be differentiated.

On the other hand, recently, in the last week, China took another step towards developing the economic and political relations with Uzbekistan. President Xi Jinping of China urged for more efforts to be made to put China’s and Uzbekistan’s trade and investment cooperation plans into action. According to him, the two sides should work harder to identify and implement important flagship initiatives.

Xi said in a meeting with Uzbek President Mirziyoyev in Beijing that China is ready to assist Uzbekistan in developing a modernized industrial system, speed up the feasibility study for the China-Kyrgyzstan-Uzbekistan railway project, and work to get the project up and running as soon as possible.

As a response, Mirziyoyev said that he was delighted to have a long-awaited meeting with President Xi Jinping. “China conducted great festivities for the centennial of the foundation of the Communist Party of China and gained a major win in poverty alleviation last year under the wise and powerful leadership of President Jinping. China successfully hosted the Olympic Winter Games Beijing 2022 opening ceremony last night, highlighting China’s outstanding accomplishments in growth and significant contributions to international peace and prosperity. China has become a model for being devoted to the development of a modern, sophisticated, and democratic country.”


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