China in Central Asia – the Good, the Bad and the Ugly
Central Asia countries have abundant oil, gas and nonferrous metal reserves; at the same time they also have great potentials in hydroelectric power. The location of Central Asia area makes it a bridge between Europe and Eastern Asia. After the collapse of the Soviet Union, China started to develop economical and political relationships with five Central Asia countries. With its neighboring location and an economy that has big appetite for raw materials, China has unique advantages over other countries in terms of economic and trading with Central Asia countries. In this article, first, the China’s economic presence in Central Asia will ...view middle of the document...
After President Hu Jing Tao’s state visit in 2004, the two countries signed several investment and credit contracts (including 600 million US dollars worth oil and gas contract); the trading volume has been growing dramatically. In year 2010, the bilateral trading volume grew to 2.5 billion US dollars. China’s trading with Turkmenistan is also natural resource driven. And the trading volume grows from around 125 million US dollars between 1992 and 2005 to 663 million US dollars in 2010 (China Customs, 2010). China’s trading relation with Tajikistan and Kyrgyzstan follows roughly the same trajectory.
Figure 1 China-Kazakhstan bilateral trading volume
The trading structure between China and Central Asia countries is relatively stable: China exports finished products, and imports raw material from Central Asia countries. According to data from Kazakhstan Customs and as shown in Figure. 2 (), the structure of export commodities is rather single; there are only around 200 export goods. Among them, the percentage of revenue from raw material is around 80% to 90%; at the same time, the imports from China are mostly finished goods, including food, cosmetics, garments, electronics etc., among around 5000 different types of merchandizes. According to China Customs, the exports to Uzbekistan are mainly home appliances, computers, food, shoes, communication devices, etc.; and the imports from Uzbekistan are mainly cotton, plastic and petroleum products. In 2008, the trading volume between Kyrgyzstan and China was 772 million US dollars. Among them, the amount exports to China is 44 million US dollars, and the amount of imports from China is 728 million US dollars. The exports from Kyrgyzstan to China are mainly primary commodities and raw materials, including leather, cotton, metal, vegetables and fruits; the imports from China are mainly consumer products and electronics. The exports from China to Tajikistan are mainly electronics, mechanical products, textile and furniture; the imports from Tajikistan include aluminum and its products, metal, cotton and so on.
Figure 2 Exports and Imports structure of Kazakhstan
China is active in building infrastructures, such as energy pipelines, transportation, electricity and communication, in Central Asia area to promote trade. With funding from both public and private entities from China, the energy pipelines in Central Asia grow rapidly. China involves in the construction of three energy pipelines: China-Kazakhstan oil pipeline, Central Asia natural gas pipeline, and China-Kazakhstan oil pipeline. These pipelines have transported millions of tons of oil and hundreds of millions of cubic meter of gas to China. In 2009, China signed a contract to provide 10 billion US dollars of credit to Kazakhstan to support various infrastructure projects. In Kazakhstan, Chinese companies is involved in building the most modernized hydroelectric plant, which is the first hydroelectric project Kazakhstan embarked after...