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Kyrgyzstan, China mull cooperation

16 June 2015 17:06 (UTC+04:00)
Kyrgyzstan, China mull cooperation

By Vusala Abbasova

China and Kyrgyzstan extend economic cooperation through participating in several projects such as the North-South highway construction project, as well as constructing the Economic Belt of the Silk Road.

The two countries discussed the issues on the third China-Central Asia Cooperation Forum in Rizhao, China on June 16.

The forum, which has a great importance for economic development between the two countries, brought together around 300 delegates from China and the five Central Asian countries.

During the meeting Kyrgyzstan stated its support to and readiness to participate in the construction of the Economic Belt of the Silk Road, what would increase the friendship and further mutual understanding between the two nations.

"We support the initiative of Chinese President to create the Economic Belt of the Silk Road" and ready to take an active part in the realization of this major project," said Valery Dil, Kyrgyz Deputy Prime Minister, in a meeting with Meng Jianzhu, the member of the China Communist Party Central Committee, in Rizhao.

The sides also mulled bilateral cooperation in the fields of energy, agriculture, mining, infrastructure and transport.

The Kyrgyz government signed an agreement with China on the allocation of new loan for the construction of the 95 km alternative highway North-South.

The aim of this international transport corridor North-South is to provide backhaul cooperation of the North European countries and Russia with the countries of the Persian Gulf, the Indian Ocean and South-East Asia through Iran. The international transport corridor North-South, which is an alternative to the sea route through the Suez Canal, primarily deals with container cargo traffic.

Moreover, the North-South highway offers advantages, enabling to halve the transportation distance, as well as reduce the container transportation cost as compared to those by sea.

Following the meeting the sides signed three bilateral agreements, including the framework agreement on provision of concessional loan by China to Kyrgyzstan, the governmental concession agreement on the loan for the project of North-South alternative road section of the Aral Sea - Kazarman (195-291 km), and the concessional loan agreement on the project of North-South alternative road section of the Aral Sea - Kazarman (195-291 km).

According to the agreement on the second phase highway "North-South" construction, which envisages the construction of a tunnel length of 700 meters, the China Export-Import Bank will act as a lender to the Kyrgyzstan Finance Ministry. The new phase of the highway "North-South" includes the area of the Aral village to village Kazarman in Jumgal area. The construction of this section will cost between $284 million to $300 million.

China will provide a loan in the same amount for funding the next phase of the project.

The first phase of the International North-South Transport Corridor construction, for which Export-Import Bank of China allocated $400 million in 2013, is underway. The China Road and Bridge Corp. will construct the corridor with the overall transportation capacity of 6 million metric tons of cargo per year, whilst further increase the figure to 15-20 million metric tons of cargo.

Currently, China is Kyrgyzstan's second biggest trading partner. The trade turnover between the two countries reached $2.23 billion in the first half of this year.

China has invested $1.7 billion in the Kyrgyz economy since 1991.

An agreement on the North-South international transport corridor was signed between Russia, Iran and India in St. Petersburg on September 12, 2000. The agreement entered into force on May 21, 2002 after passing the internal procedures in listed countries.

Later, the countries as Azerbaijan, Armenia, Belarus, Kazakhstan, Oman, and Syria joined the treaty, while Turkey and Ukraine applied to join.

The agreement includes all types of transport, providing transportation by rail, sea, land, river and air, with the exception of India, since its participation in the transportation agreement only provisions for maritime routes.

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