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China keen on Silk Road project

1 June 2015 17:26 (UTC+04:00)
China keen on Silk Road project

By Aynur Karimova

China's Deputy Prime Minister, Zhang Gaoli's recent statement at the international forum in Chongqing on his country's goal to create six economic corridors to link Asia with Europe shows that Beijing is keen on realizing its grand multibillion-dollar Silk Road project.

In his speech the deputy premier identified six corridors, in particular China-Mongolia-Russia; New Euro-Asian land bridge; China-Central Asia-West Asia; China-Indochinese Peninsula; China-Pakistan and China-Burma-Bangladesh-India, which are all part of the Silk Road Project, initiated by President Xi Jinping in 2013 with an aim to connect China with Europe and strengthen cooperation between Asia and Africa.

He noted the funds for realizing this project will be attracted from the China-backed Asian Infrastructure Investment Bank and the Silk Road Foundation. Earlier the Asian Infrastructure Investment Bank said the "one belt, one way" plan is aimed at investing over $890 billion in 900 projects in 60 countries.

An interactive map published on the Chinese state media outlet, Xinhua shows Central Asia at the core of the proposed project, which runs from the Khorgos economic zone on the Chinese-Kazakh border, through Kyrgyzstan and Tajikistan, before covering Uzbekistan and Iran.

The seriousness of China’s intentions to promote its Silk Road Project has been underpinned by a series of visits by Xi Jinping to each Central Asian state, where he voiced his commitment to invest $40 billion into the region’s infrastructure.

Central Asian states satisfied

China's active policy in Central Asia is desirable for the region's countries as well. Over the past years China emerged as a major economic player in Central Asia. If in 2000s the International Monetary Fund estimated the Chinese-Central Asian trade to hit $1 billion, this figure reached nearly $50 billion last year.

China is continuing to invest significantly into transport and energy infrastructures in Central Asia such as Atyrau-Alashankou oil pipeline and Turkmenistan-China gas pipeline.

China National Petroleum Corporation is one of the largest contributors to the budget of Turkmenistan. CNPC is currently acting as a mediator in Central Asia – the China-Central Asia pipeline consists of three separate enterprises with 50 percent ownership between China and Kazakhstan, China and Uzbekistan and China and Turkmenistan.

Apart from being a key trading partner in the region, China has become Central Asian countries' largest lender and financial source of development. Since its independence, Kyrgyzstan received nearly $1.8 billion from China in the form of loans and grants. The Export-Import Bank of China remains Tajikistan’s largest single creditor holding nearly 40 percent of Tajikistan’s external debt. During the financial crisis China provided two loans to Turkmenistan for energy projects.

One of the main factors in cooperation between China and Central Asia is trade. In Kyrgyzstan, the wellbeing of hundreds of thousands of people depends on trade with China; all markets in the region are flooded with Chinese goods.

In light of these developments, the Silk Road Project appears to be a logical step for Beijing to implement. Poor infrastructures remain one of the greatest obstacles for trade growth in Central Asia. Accordingly, Central Asian states are willing to accept Chinese investments into their Soviet-type infrastructure.

China's new policy demonstrates the willingness of this country's leadership to advance its vision of regional integration. Being the main foreign policy focus envisaging the replacement of great power relations to neighborhood diplomacy, this initiative is a milestone stage in Beijing's neighborhood policy, as the old Chinese proverb says “A near neighbor is better than a distant cousin.”

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Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

Follow us on Twitter @AzerNewsAz

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