Cross-border market opportunities beckon

Greater business ties between China and Central Asia to enrich BRI

Companies in China as well as Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan are rushing to pursue cross-border market opportunities and seek new growth avenues in green development, digital technologies and services, as China and the five Central Asian nations expand programs to deepen and diversify cooperation in a range of sectors.

For instance, Kazakhstan's flagship carrier Air Astana has unveiled new offers to attract more Chinese passengers into the country as well use the airline for travel to other foreign destinations.

State-owned China Energy Engineering Group is building a large-scale wind power project in Bukhara province of Uzbekistan, while Huawei Technologies Co is helping local companies build digital transportation projects in some cities of Tajikistan.

These enhanced business ties, experts said, will further enrich the growth of the Belt and Road Initiative to the next stage.

To inject strong positive energy into regional peace and stability, leaders of China and the Central Asian countries signed the Xi'an Declaration at the China-Central Asia Summit on May 19, adopted a list of summit outcomes, and charted a blueprint for the future development of China-Central Asia relations.

The six countries also agreed to promote in-depth cooperation across the board, prioritizing transport, economy and trade, investment and industry, agriculture, energy, Customs and people-to-people exchanges.

The China-Central Asia Summit — held in Xi'an, in Northwest China's Shaanxi province, on May 18 and 19 — has revitalized the ancient Silk Road through the tangible growth of the BRI.

The initiative places a strong emphasis on collaborative contributions and shared benefits, said Liu Huaqin, head of the Institute of Eurasian Studies at the Chinese Academy of International Trade and Economic Cooperation in Beijing.

Since all the six countries have deepened and strengthened their relationship in areas of mutual interest, such as manufacturing, transportation, green development, finance and telecommunications, Liu said these moves will broaden economic cooperation in the next stage.

"China and the Central Asian countries have complementary advantages in resources and industrial structure. Their close collaboration not only benefits China's economic and social development, but also contributes to the growth of the Central Asian countries," said Zhao Fujun, a researcher at the Development Research Center of the State Council, China's Cabinet.

Green bond

Zhengzhou Yutong Bus Co Ltd, a Zhengzhou, Henan province-based bus maker, said it will supply 800 new energy buses to improve public transport in Tashkent, capital of Uzbekistan, within the year, as green development remains high on the Uzbek government's agenda.

The order, for 300 electric buses and 500 compressed natural gas ones, is the largest of its kind from Uzbekistan for Chinese buses, the company said.

Li Haifeng, a senior executive at the company's overseas business unit, said Tashkent purchased 20 of Yutong's new energy buses in early 2022 after a two-year comparison of models from major bus makers around the world.

The fleet, which has been operational in the Uzbek capital for more than a year, has won the approval of passengers thanks to its safe, green and cost-efficient operation.

Yutong said its global cumulative exports stand at around 86,000 buses, of which 68,000 were sold in countries involved in the BRI.

State Power Investment Corp, a Beijing-based State-owned enterprise, has also been heading in the direction of green development. The company said in May that its 206 megawatt wind power project in Akmola region of Kazakhstan is expected to be fully operational by October this year. It will become the largest wind power project cluster in Kazakhstan.

The project will benefit residents in the region, greatly strengthen local power supply capacity and help transform the energy infrastructure in Kazakhstan, said Chen Yan, director of SPIC's overseas business unit.

Benedikt Sobotka, chief executive of Eurasian Resources Group, in which the Kazakh government holds a 40 percent stake, said his company has strong ties with Chinese stakeholders, with a significant portfolio of joint ventures. China is also a highly important strategic market and key sales destination for the group, accounting for more than one-third of its total sales volume, Sobotka said.

The BRI enables greater access to markets across Central and East Asia, allows for increased trade volumes, and more effectively connects Central Asian countries with global markets, further enhancing trade and prosperity, he said.

China and Central Asian countries have also planned and implemented multiple infrastructure projects within the framework of the BRI.

China, Kyrgyzstan and Uzbekistan signed a memorandum of understanding on cooperation on the Kyrgyz section of the China-Kyrgyzstan-Uzbekistan railway last year, making significant headway in the construction of a transport corridor on the Eurasian continent.

The China-Europe freight train service and the China-Kazakhstan International Logistics Base in Lianyungang, East China's Jiangsu province, will also play a pivotal role in facilitating Central Asian countries' access to foreign markets, said Zhou Zhicheng, a researcher at the Beijing-based China Federation of Logistics and Purchasing.

Record trade

Thanks to factors such as the tangible growth of the BRI and the complementary trade structure, trade between China and the five Central Asian countries reached a record $70.2 billion last year, data from the Ministry of Commerce showed.

The momentum has also been sustained this year, with bilateral trade soaring 37.4 percent year-on-year in the first four months of 2023, according to China's General Administration of Customs.

Crude oil, natural gas, minerals and agricultural products are the main shipments by Central Asian countries to China. China exports mainly manufacturing equipment, steel, vehicles, electronics, textiles, garments and household appliances to these countries.

China, which is encouraging its companies to set up warehouses in Central Asian countries, will open up its e-commerce platforms to Central Asian businesses, said Shu Jueting, a spokeswoman for the Ministry of Commerce.

The country will expand digital trade with Central Asia, and share experiences in developing cutting-edge digital technologies such as artificial intelligence, big data and 5G, Shu said during a news conference in late May.

By the end of 2022, China's direct investment value in the five Central Asian countries had reached nearly $15 billion, with a number of cooperation projects launched in fields such as oil and gas exploration and processing, manufacturing, regional connectivity and digital technologies.

She said China will promote the construction of cross-border infrastructure facilities, strengthen cooperation in crude oil, natural gas, new-energy minerals and other sectors, and expand imports of quality farm produce from Central Asian countries.

Lyu Jun, board chairman of COFCO Group, China's largest food trader in terms of sales revenue, said the company will continue to import agricultural products from Central Asian countries in the coming years, since agriculture is a key area of cooperation between China and Central Asian countries.

Lyu said agricultural cooperation had become a strong driver of bilateral trade growth, as the two sides are highly complementary in this field.

Kazakhstan has become an important source of wheat for China, along with other countries such as Canada, the United States, Australia, France and Russia. China imported 2.6 million metric tons of wheat from Kazakhstan between 2009 and 2022.

Among the total, COFCO Group had imported 1.33 million tons of Kazakh wheat, accounting for more than 51 percent, becoming the main channel for Kazakhstan's agricultural products to enter China.

In addition to wheat, the Chinese company also imports barley, oilseeds and edible oils from Kazakhstan, and exports tomato products, condiments, clothing and other products to the country, Lyu said.

This cooperation, he added, has created a mutually beneficial supply chain system between the two countries.

A great variety of Central Asian agricultural products have entered the Chinese market in recent years, including camel milk from Kazakhstan, honey from Kyrgyzstan, dried fruits from Tajikistan, cotton from Turkmenistan and cherries from Uzbekistan.

Last year, China's imports of agricultural, energy and mineral products from these countries jumped over 50 percent year-on-year, according to Customs statistics.