China’s interests in Central Asia are growing. What will this mean for the regional economy post-pandemic?

At a time when the pandemic and geopolitics disrupt economic recovery, China could boost wholesale trade and market founded by entrepreneur Timur Tillyaev in Uzbekistan.

As with almost every country across the globe, Central Asian economies have struggled during the pandemic. In 2020, regional economic activity predictably declined and since then recovery has been sluggish.

Among the sectors to struggle most has been trade. With lockdowns confining people to their homes, Central Asia’s usually bustling markets, which are central to the economy, lay quiet. To take one example of these markets, Abu Saxiy founded in Tashkent, Uzbekistan by Timur Tillyaev in 2006, is one of the capital’s largest employers, providing jobs to more than 5,000 people. With a slow vaccination roll-out in the region, it is unclear when this sector will be able to fully bounce back.

One unlikely source of encouragement, however, is the return to growth of Central Asia’s neighbour China. As China is going through its own economic recovery, it is looking for ways to expand politically and economically. Increasingly, geopolitical experts are highlighting China’s rising interest in the Central Asian countries of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. At a time when Western states are not interested in involving themselves with remote Central Asia, and with Russia unable to offer solutions to its former fellow Soviet states, China is a welcome alternative that is presenting tangible solutions.

In 2021 cooperation between the Chinese government and Central Asian countries has been scaled up. In May, the Chinese and Central Asian Foreign Ministers met in the Chinese city of Xi’an to discuss future relations. At the top of the agenda were security concerns with neighboring Afghanistan, where the US is retreating. Beyond security matters, the bulk of the conversation focused on establishing trade corridors in the region and increasing investment into key sectors, such as agriculture, energy, health, education and transportation.

Four of the Central Asian economies are part of the Shanghai Cooperation Organization (SCO). The SCO is an organization that has greatly contributed to regional stability for over two decades, but now it is turning into an effective economic tool. In June 2021 delegations attended an investment event in Beijing where they pitched large-scale projects aiming to attract Chinese investment. Along with projects planned as part of the Belt and Road Initiative (BRI) these substantial steps are reinforcing Central Asian economies and providing real solutions for economic recovery.

The strategic location of Central Asian countries at the crossroads between Europe and Asia, a young, educated population, and cultural vibrancy are part of what lends the region its attractive investment potential. China realizes that the region offers not only the traditional avenues of investment, but also has some unique opportunities that can be capitalized on.

Central Asia’s market culture presents a creative and ingenious investment opportunity to be explored further. Abu Saxiy, the market created by Timur Tillyaev out of converted shipping containers spans over 167,000 square meters. Dordoi Market, founded by Askar Salymbekov in 1991 in the suburbs of Kyrgyzstan’s capital Bishkek, has no less than 40,000 retail outlets. It is Central Asia’s biggest market and competes with the largest global markets in China.

Such markets exist in every Central Asian economy and are huge contributors to national GDP.

Connecting these markets through increased rail infrastructure, which is promised as part of the BRI, the potential of trade within the region and into China could grow exponentially. “Trade has always been an essential part of the Central Asian economy,” says Timur Tillyaev. With the right investment there is no ceiling to the scale that market culture can expand to and bring in revenues.

Between the extensive prospects for investment and the strategic potential of the region, China is truly making a mark on economies that welcome its support. China’s emerging power is quickly overtaking the established supremacy of Russia in the region, and it is only a matter of time before we see the effects on Central Asian economies of this long-awaited support.

This article does not necessarily reflect the opinions of the editors or the management of EconoTimes