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Azerbaijan as significant segment of Middle Corridor in terms of Europe's access to Chinese market

31 March 2024 09:00 (UTC+04:00)
Azerbaijan as significant segment of Middle Corridor in terms of Europe's access to Chinese market
Qabil Ashirov
Qabil Ashirov
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China-Azerbaijan economic cooperation has been growing over the past years, with a focus on various aspects such as trade, investment, infrastructure projects, and energy cooperation. The economic relations between the two countries has been characterized by mutual trust and friendship, with both sides determined to raise their cooperation to a new level.

Trade has been a significant aspect of Chinese-Azerbaijani economic cooperation, with the trade turnover reaching $2.2 billion in 2022. Moreover, Azerbaijan's exports to China have seen a recent uptick, signaling further potential for growth in trade relations. Investment has also been a key area of cooperation, with up to $1 billion invested in Azerbaijan by Chinese companies, and Azerbaijan reciprocating with investments of $1.7 billion in Chinese securities.

Hikmet Hajiyev, the Head of Foreign Policy Affairs Department of the Azerbaijani Presidential Administration also touched on the issue in an interview with Chinese TV on March 28. He spoke about Chinese-Azerbaijani economic relations and underlined the contribution to Azerbaijani economy by Chinese companies.

Speaking to AZERNEWS on the issue, CEO, Belt and Road Consultant Pvt Limited Muhammad Asif Noor noted that Chinese companies, numbering around 120, are actively involved in various sectors of the Azerbaijani economy, contributing to its diversification and development. He said that Infrastructure projects have received substantial investments from China, enhancing connectivity and facilitating trade routes. Azerbaijan's membership in the Asian Infrastructure Investment Bank has further bolstered infrastructure development, with significant investments in economic projects across the country.

“Energy cooperation remains a strategic priority, with Azerbaijan focusing on renewable energy projects, including wind and solar energy production capacities for domestic consumption and export. Moreover, Azerbaijan views China as a crucial ally in its pursuit of green growth and digital transformation, leveraging Chinese expertise and technology to achieve national development goals. The Middle Corridor initiative within China's Belt and Road Initiative (BRI) further amplifies the economic partnership, presenting opportunities for enhanced connectivity and cooperation in infrastructure development.

Discussions between the two countries have also explored cooperation in energy storage systems and green hydrogen production and export, showcasing a commitment to sustainable energy solutions. Overall, Chinese-Azerbaijani economic cooperation continues to succeed across multiple sectors, driven by shared interests and mutual benefits, laying the foundation for further collaboration and growth in the future,” Asif Noor said.

He pointed out that Chinese companies have made significant contributions to the Azerbaijani economy through investments, trade, infrastructure projects, and energy cooperation. In 2022, the trade turnover between the two countries reached $2.2 billion, with Azerbaijan accounting for 47-48% of China's trade portfolio with the South Caucasus. He underscored that Chinese companies have invested up to $1 billion in Azerbaijan and are represented in various fields of the Azerbaijani economy. China has invested in several infrastructure projects in Azerbaijan.

“Azerbaijan has been developing renewable energy projects, with a focus on wind and solar energy production capacities for domestic consumption and export purposes. China has expressed interest in cooperating on energy storage systems and green hydrogen production and export. Azerbaijan has invited Chinese companies and investment funds to invest in its industrial parks. These contributions have been instrumental in driving the economic development of Azerbaijan and strengthening the strategic partnership between the two countries.

Chinese companies significantly contribute to the Azerbaijani economy by diversifying industries beyond energy, transferring technology and expertise to support digital transformation, boosting trade and investment between the two countries, and promoting green growth and sustainability initiatives. Their involvement spans various sectors, facilitating economic modernization and fostering closer economic ties between China and Azerbaijan, ultimately contributing to mutual prosperity and development,” the expert said.

He also added that China has shown interest in cooperating on energy storage systems and green hydrogen production and export, which could further enhance the use of renewable energy sources in Azerbaijan. The two countries have also discussed the development of offshore wind energy resources, which is expected to promote the use of renewable energy and support the participation of the private sector in this area. Asif Noor emphasized that Azerbaijani-Chinese economic cooperation holds significant potential for further development based on several key factors outlined in the articles. Both countries have emphasized their historical friendship and mutual respect, with Azerbaijan prioritizing the development of strategic cooperation and partnership with China.

“This commitment is underscored by Azerbaijan's participation in initiatives like the Belt and Road Initiative (BRI), particularly through projects like the Middle Corridor, which aims to enhance connectivity between China, Central Asia, and Europe, presenting opportunities for trade and investment. Additionally, Azerbaijan has identified green growth and digital transformation as national priorities, areas where China's expertise and technological advancements can contribute significantly. While trade relations between the two countries have seen steady growth, there remains untapped potential for further expansion, particularly in diversifying economic activities and increasing business collaboration.

Moreover, Azerbaijan's chairmanship of COP29 presents an opportunity for collaboration between the two countries on climate change initiatives, further strengthening economic ties and fostering innovation. Overall, Azerbaijani-Chinese economic cooperation will deepen in the coming years, driven by shared interests, strategic priorities, and collaborative efforts across various sectors, ultimately contributing to mutual prosperity and strengthening the bilateral relationship. In addition, Azerbaijan has strategically positioned itself as a key player in the Middle Corridor, which is gaining traction as an alternative to the trans-Russia passage for transporting goods between Europe and Asia. The Baku International Sea Trade Port, the Baku-Tbilisi-Kars railway line, and other infrastructural projects form a comprehensive network that offers efficient routes for transporting goods.

The potential for business partnerships between the two countries is higher, with Azerbaijan expecting more Chinese companies to establish production lines for renewable energies in the country. The development of relations with China has been a top priority for Azerbaijan, as the country sees China as a good friend and partner,” Asif Noor concluded.

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Qabil Ashirov is AzerNews’ staff journalist, follow him on Twitter: @g_Ashirov

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