The Central Asian and Chinese governments approved US$3.72 billion in regional grants, signed 54 major multilateral agreements, created 19 new regional platforms and signed a further 9 multilateral cooperation documents. We highlight each of these regional development measures and discuss foreign investment potential.
Chinese Grants & Expenditure Mandate
China has agreed to provide RMB 26 billion (@US$3.7 billion) in grants to the five Central Asian countries attending the summit, including Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, as outlined by Chinese President Xi Jinping in his keynote address.
“To strengthen development potential, China will develop cooperation plans with Central Asian countries in the field of poverty reduction through science and technology. Chinese-funded businesses will be encouraged to create more local jobs. China will provide 26 billion yuan of financial support and grant assistance to Central Asian countries,” Xi said.
In total Xi touched on eight points that relate to various areas of cooperation with the Central Asian republics, including trade and investment, logistics, energy, green innovation, culture, and security, with these areas being where the money will be invested.
In particular, he announced support for the construction of an international transport corridor across the Caspian Sea and the development of China-Europe freight train hubs. It was also proposed to create a regional partnership for energy development, accelerate the construction of Line D of the China-Central Asia gas pipeline, increase oil and gas trade, develop energy cooperation along the entire production chain and intensify interactions in the field of new energy and the peaceful use of atomic energy.
In addition, Xi Jinping stressed that China is ready to help Central Asian countries improve their law enforcement, security and defense capabilities in an attempt to maintain peace in the region.
“Efforts should also be made to effectively use the coordination mechanism among Afghanistan’s neighbours and jointly promote peace and reconstruction in this country,” the Chinese leader said.
Continuing on the theme of Afghanistan, Xi stressed that China is willing to strengthen exchanges with Central Asian countries on modernisation concepts and practices, unify development strategies and make joint efforts to promote the modernisation of the six countries, thus placing Afghanistan on a par with the rest of the summit.
Central Asia – China: Main Multilateral Agreements
During the Summit, a number of agreements on cooperation between the states of Central Asia and China were reached, with 54 “Main agreements and cooperation initiatives” outlined. These are:
- Create a mechanism for meetings between the heads of state of Central Asia and China.
- Establish mechanisms for ministerial meetings of key and priority areas of cooperation.
- Consider the possibility of establishing a Central Asia-China Secretariat.
- Promote the linkage of the Belt and Road Joint Construction Initiative with the initiatives and national development strategies of the Central Asian states.
- Unleash the potential of the mechanism “Dialogue and cooperation in the field of electronic commerce.”
- Promote mutual trade, promote the diversification of trade structure, and continuously facilitate trade.
- Develop a joint strategy for the New Economic Dialogue “Central Asia – China”.
- Increase the interconnectedness of digital and green infrastructure.
- Consideration of the possibility of creating a Data Bank of priority green investment projects.
- Assistance in the implementation of the Qingdao Initiative on Industrial and Investment Cooperation “Central Asia – China”.
- Continue work on updating investment cooperation agreements between the states of Central Asia and China.
- Phased and gradual increase in the number of civil passenger and cargo flights.
- Consideration of the possibility of issuing a business travel card “Central Asia – China”.
- Modernize the infrastructure of border checkpoints.
- Expand the practice of “express corridor” for customs clearance of agricultural and food products at all border crossings.
- Increase the interconnectedness of “single windows” in international trade, promoting interaction on the simplification of customs clearance.
- Development of the “Central Asia – China” transport corridor. (see also here)
- Development of multimodal transit and transport transportation along the trans-Caspian routes using the seaports of Aktau, Kuryk and Turkmenbashi, as well as the transit and transport capabilities of the city of Termez.
- Intensification of transportation by China-Central Asia container trains.
- Development of transport infrastructure, including construction of new and modernization of existing railways and roads from China to Central Asia.
- Completion of the feasibility study of the China-Kyrgyzstan-Uzbekistan railway project and promoting the early start of its construction.
- Ensuring the smooth operation of the China-Kyrgyzstan-Uzbekistan highway.
- Implement regular operation of the China-Tajikistan-Uzbekistan highway and the Western China-Western Europe highway.
- Consideration of optimal opportunities for the transit of products from Central Asian countries to the markets of Southeast Asian countries and other Asian countries and vice versa.
- Expanding the range of imports of agricultural products from Central Asian countries to the Chinese market.
- Develop cooperation in the field of “smart” agriculture and exchange of experience on the introduction of water-saving, green and other highly efficient technologies and best practices.
- Exchange of technologies and specialists in arid, saline and saline soil reclamation, water-saving irrigation, pest control, animal husbandry and veterinary medicine.
- Exchange of experience in the field of modernization of the agricultural sector and the establishment of production chains between urban and rural areas in order to implement measures to reduce poverty.
- Intensification of cooperation in the field of poverty reduction through the introduction of effective social support programs for the population, the exchange of specialists and modern methodologies.
- Establishment of partnership relations “Central Asia – China” on energy development.
- Ensuring the stable operation of the energy corridor for the supply of natural gas “Turkmenistan – China”.
- Develop cooperation in the development of renewable energy sources.
- Development of cooperation between the regions of the states of Central Asia and China, the establishment of sister cities and partnerships between provinces and regions.
- Conducting joint archaeological expeditions, preservation and restoration of cultural heritage, museum exchanges, search and return of lost and stolen cultural property.
- Invitation by the Chinese side of the states of Central Asia to the implementation of the “Cultural Silk Road” project.
- Consideration of the possibility of developing a joint tourist route “Central Asia – China”.
- Promote the construction of centers of traditional Chinese medicine, including in the field of cultivation and processing of medicinal plants to form the “Silk Road of Health”.
- Support for the initiative to create a special multilateral body under the auspices of the UN – the International Agency for Biosafety.
- Launch of the Year of Culture and Art of the Peoples of Central Asia and China and the Youth Arts Festival “Central Asia – China”.
- Conducting academic and student exchanges, youth festivals, forums and sports competitions.
- Establishment of mutual cultural centers.
- Allocate a quota for government scholarships to the Central Asian states, and to train specialized Central Asian specialists in China.
- Development of vocational education within the “Lu Ban Workshops“
- Expand cooperation in high-tech areas such as artificial intelligence, smart city, big data and cloud computing.
- Development and practical application of “green” solutions in mitigating the negative effects of climate change.
- Conduct activities on green and low-carbon development “Central Asia – China” to deepen cooperation in the field of green development and combat climate change.
- Strengthen interaction between the relevant departments for emergency situations, deepen cooperation in the field of disaster prevention, mitigation and liquidation of their consequences, industrial safety, search and rescue operations, and the exchange of seismic safety technologies.
- Implementation of regional programs and projects in the field of “green” technologies.
- Consider the possibility of developing a Joint Anti-Drug Action Plan with the participation of the UN Office on Drugs and Crime.
- Organization of the mutual display of television films and television programs.
- Development of cooperation through the media “Central Asia – China”.
- Active cooperation within the framework of the Global Development Initiative, the Global Security Initiative, the Global Civilization Initiative.
- Implementation of the Roadmap for the Development of Regional Cooperation for 2022-2025 on the results of the online summit of the heads of state “Central Asia – China”.
- Holding the second Central Asia-China Summit in 2025 in the Republic of Kazakhstan.
Mechanisms and platforms for multilateral cooperation initiated by the Chinese side
- The mechanism of the meetings of the Ministers of Foreign Affairs “Central Asia – China”
- Mechanism of the meeting of ministers of economy and trade “Central Asia – China”
- The mechanism of meetings at the level of ministers in charge of industrial and investment cooperation “Central Asia – China”
- Mechanism of meetings of ministers of agriculture “Central Asia – China”
- Mechanism for cooperation in emergency situations “Central Asia – China”
- Mechanism of meetings of ministers of transport “Central Asia – China”
- Mechanism of the meeting of ministers of education “Central Asia – China”
- The mechanism of energy cooperation “Central Asia – China”
- Mechanism of meetings of heads of customs services “Central Asia – China”
- Dialogue of political parties “Central Asia – China”
- Network of cooperation of national administrative academies “Central Asia – China”
- Develop a “Central Asia – China” business council
- Develop a “Central Asia – China” Cooperation Forum
- Develop a “Central Asia – China” Regional Cooperation Forum
- Develop a “Central Asia – China” Forum of industrial and investment cooperation
- Develop a “Central Asia – China” think tank
- Introduce a dialogue mechanism on cooperation in electronic commerce.
- Establish a regional Health Industry Alliance
- Integrate and cooperate with “Central Asia – China” news agencies and media
Other Multilateral documents
- The Xi’an Declaration of the Central Asia-China Summit
- Memorandum of Understanding on Industrial-Investment Cooperation “Central Asia – China”
- Memorandum of Understanding on strengthening trade and economic cooperation in the “Central Asia – China” format
- Memorandum of Understanding between the states of Central Asia and China on cooperation in the field of digital trade
- Memorandum of Understanding to promote the development of cooperation in the field of infrastructure and engineering construction in the “Central Asia – China” format
- Memorandum of Understanding to Establish the Mechanism of the Meeting of Ministers of Agriculture “Central Asia – China”
- Regulations on the work of the mechanism of the meeting of the heads of customs services in the format “Central Asia – China”
- Memorandum of Understanding on technical cooperation in the field of import and export of animal and plant quarantine between the competent authorities in the “Central Asia – China” format
- Memorandum of Understanding on Cooperation in the Establishment of the Business Council “Central Asia – China”
Summary
As can be seen, the Central Asia-China summit was highly productive and has introduced a significant number of institutional platforms into multilateral development. This allows a considered, structured approach to be taken towards regional development involving six very different countries, additionally influenced by external partners. These include Russia, also heavily involved in the regional, mutual trade, investment and transport sectors in Central Asia, and Afghanistan, an area of serious regional security concern and a potential Central Asian connectivity hub in its own right.
Of particular note apart from the institutional platforms being built are the following sectors:
Trade
- Linking the BRI to Central Asian sovereign development plans;
- Developing electrical commerce (semiconductor manufacturing will be part of this);
- Improved multilateral economic dialogue;
- Green investments and mitigating against desertification;
- Improving and developing agricultural technologies;
- Increasing air traffic;
- Developing intra-regional tourism;
- Developing the Health Silk Road;
- Improving vocational training and student exchanges
- Negotiating transit agreements (hints of a regional trade deal here);
- Upgrading customs and border controls (digitisation technologies);
Logistics
- Securing and upgrading China-Central Asia corridors to Europe
- Building the China-Kyrgyzstan-Uzbekistan highway and railway
- Increasing Middle Corridor rail freight volumes
- Caspian Seaport developments
Energy
- Building new Turkmenistan-China gas pipelines with potential regional feeders;
- Investing in Renewables
A Role For Global MNCs
It should be noted that with these initiatives having come from the highest Ministerial levels in both China and Central Asia, and with the improvement of implementation structures and platforms, there are opportunities for foreign investors, and especially those based in China (and to some extent the Middle East and Russia) to become involved in sectoral aspects of these intentions.
While China may not be the most popular country at present in Western political eyes, in terms of providing access to the Central Asian markets, the country is very well positioned. Global MNCs should be looking at China, and especially its Western regions (Urumqi in Xinjiang is Central Asia’s wealthiest city and has the closest connections) as a springboard into Central Asia. While there are no China-Central Asia Free Trade Agreements – as yet – the issue is being discussed, and there is a G2G tariff reduction format in place between China, Kazakhstan, and Kyrgyzstan via the EAEU.
Source: Silk Road Briefing
