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BRI and Uzbekistan’s Vision of greater regional connectivity

24 May 2023 19:08 (UTC+04:00)
BRI and Uzbekistan’s Vision of greater regional connectivity

By Dr. Mehmood Ul Hassan Khan

Most recently Uzbekistan’s President Shavkat Mirziyoyev attended the China-Central Asia Summit in Xi’an city and delivered a “keynote” speech during which he upheld that Central Asian countries and China have developed a “mature” relationship based on trust, respect and “mutual interest’.

During his speech Mirziyoyev he rightly proposed the “goals” of further increasing the trade volume between Central Asian countries and China by 2030 through promoting “balanced growth” in the supply of industrial goods and agricultural products, establishing effective trade and logistics infrastructure and modern wholesale distribution networks, as well as establishing “green channels” and unified e-commerce platforms. Thus he endorsed the “strategic importance” and utility of the BRI.

In 2015, Uzbekistan became a partner of the BRI and joined the Asian International Investment Bank (AIIB). Both countries signed over 100 bilateral agreements which have further strengthened their economic cooperation. China-Uzbekistan bilateral trade has increased “140 times” in the last 30 years. It increased by 21.8 percent to nearly “US$9.78 billion” in 2022-2023 which is getting momentum by each passing day. Uzbekistan also showed strong interest in cooperating with China on electric vehicles, new energy industry and digital cooperation. Moreover, Qamchiq Tunnel in Uzbekistan has revolutionized the concept of regional connectivity.

In the past, Shavkat Mirziyoyev, Uzbekistan’s President, participated in the BRI Forums in 2017 and 2019. During the visit of Chinese President Xi Jinping to Uzbekistan in September the two countries signed additional cooperation documents in various fields.

Interestingly, in the first meeting of the heads of C+C5 countries, China emphasized Uzbekistan to deepen industrial cooperation, investment, and win-win cooperation in BRI and to increase regional industrial development in sectors such as digital economy, energy, and agriculture.

China’s interaction with Uzbekistan is to further develop “South-South Cooperation” through BRI and the construction of an alternative route which would further strengthen existing maritime routes, regional hydrocarbon and mineral resources, export markets, loans, and investments in the local economy.

Interestingly, Uzbekistan holds “strategic importance” in the further development of BRI because in the China-Central Asia-West Asia BRI Corridor, two of the BRI routes pass through Uzbekistan, which will connect it to China and Iran. It also ideally positions in Kazakhstan, Uzbekistan, (Tashkent, Samarkand, Navi), and Turkmenistan Corridor, while it also keeps its key position in Kyrgyzstan, Uzbekistan (Andijan, Pap, Tashkent, Samarkand, Navi) and Turkmenistan-Iran Corridor.

Additionally, all “four corridors” of the “China-Central Asia” gas pipeline pass through Uzbekistan. Apart from the 25-year bilateral contract for the sale of natural gas, a fifth route to transfer gas from Turkmenistan to Uzbekistan is also being seriously considered.

Moreover, Power China invested the Uzbekistan market in 1999 which is now involved in BRI. China and the BRI is the largest source of foreign investment in Uzbekistan. Since 2017, China has invested more than US$10 billion in Uzbekistan.

More than “120 companies” registered in Uzbekistan are 100 percent Chinese capitalized, while the number of enterprises with Chinese capital participation Joint Ventures has exceeded 2,000.

Furthermore, bilateral agreements for the implementation of more than 150 joint projects are either to be implemented in the future or are ongoing. Significant Chinese companies such as Huawei, ZTE, and China’s Eximbank all operate in Uzbekistan.

China’s BRI has invested in Uzbekistan in sectors such as industries, raw materials, energy, infrastructure, telecommunications, advanced technology, construction of thermal power plants and upgrading of hydroelectric power plants, development of digital and fiber optic infrastructure, and 5G.

Chinese companies under the BRI are also active in the sectors such as renewable energy resources, and mining of Uzbekistan, especially in the cement sector and numerous factory projects, special economic zones, free trade zones, industrial parks (SEZs), building materials, chemical and chemical industry companies, agriculture and logistics, and textiles. Cooperation between the BRI and the development strategy of New Uzbekistan for 2022-2026 has also been taken on by Beijing.

More attention has been paid to the “China-Kyrgyzstan-Uzbekistan road corridor” and the “China-Kyrgyzstan-Uzbekistan railway”. In mid-September 2022, the representatives of these three countries signed a memorandum of cooperation for the implementation of the China-Kyrgyzstan-Uzbekistan railway or CKU project.

Uzbekistan is the “largest consumer market” in Central Asia and a major regional “agricultural” and “manufacturing” exporter. Uzbekistan-BRI can be an ideal “geographical axis” of connecting China, South Eurasia, South Asia and the Middle East, the Caspian Sea, Persian Gulf ports and the Black Sea. The completion of the BRI projects will greatly increase the trade, investment, and GDP of Uzbekistan, and the competitiveness of Uzbekistan’s exports.

China plans to increase trade with the five Central Asian countries to US$70 billion by 2030. Uzbekistan’s future potential for continued BRI inclusion is significant, with Uzbekistan signing BRI infrastructure related contracts worth US$16 billion with China in 2022. By using the BRI, Uzbekistan is diversifying its infrastructure network and reducing delivery times to the country by approximately 15 percent.

It is good omen that the Uzbek government termed BRI as an important contribution to reaching the national GDP goal of US$100 billion in GDP, doubling exports to more than US$30 billion dollars by 2030, and diversifying the economy.

In this connection, hopefully the China-Kyrgyzstan-Uzbekistan (CKU) railway will create more important business and economic opportunities, and will shorten access to the Persian Gulf, the Caucasus, Turkey, the Middle- East, and Southern Europe.

To conclude, Uzbekistan’s President Shavkat Mirziyoyev presented comprehensive “road map” of greater regional connectivity and pinpointed that the widening gaps in sustainable transport and logistics chains, food and energy security challenges, emerging socio-economic and geopolitical instability out of constant tight monetary policy, economic meltdown and high inflation causing serious risks for all the Central Asian countries which should be handled closer coordination and practical interaction. Thus he rightly supported the basic concept of China-Central Asia Summit and the BRI i.e. greater regional connectivity and immense socio-economic integration.

Uzbek president highlighted the importance of establishing the effective interaction mechanisms in the main areas of regional cooperation mainly trade, investment, transport, and humanitarian ties and fully supported the further development of BRI.

He emphasized strategic importance of achieving and securing sustainable development for improving the living standards of the population and the efficiency of poverty reduction. He suggested initiating a new economic dialogue and strengthening the interconnectedness for achieving of the Global Goals and 2030 Agenda for Sustainable Development.

He suggested doubling the trade turnover of the CIS countries with China by 2030 mainly through: balanced growth of mutual supply of industrial goods and agricultural products; formation of an efficient trade and logistics infrastructure, modern wholesale and distribution networks; introduction of the system of “green” and express corridors, creation of common e-commerce platforms.

In this regard, the creation of the Business Council of Central Asia and China and a multilateral Agreement on Promotion of Mutual Trade and Investments would be mutually beneficial.

Furthermore, deepening industrial cooperation, attracting digital technologies and introducing innovations, especially in agriculture, can be effectively resolved through direct interregional contacts with the provinces of China, he further added.

He rightly showcased that the revival of the “Great Silk Road and the Trans-Eurasian Highway would be key components of be the China-Kyrgyzstan-Uzbekistan automobile and railroad.

In this connection, the construction of the Trans-Afghan Corridor will further enhance connectivity with China and the countries of South Asia by alternative ways within the BRI mechanism.

It seems that Uzbekistan’s President Shavkat Mirziyoyev “Development Strategy 2022-2026” coincides with the Chinese president’s GDI, GSI and GCI consolidating the spirits of community with shared future. The dreams of CPEC greater regional connectivity directly relates to the further strengthening of China-Central Asia and BRI. Trans-Regional Rail project of Uzbekistan-Pakistan and Afghanistan would further strengthen the true spirits of greater regional connectivity in the days to come.

The author of this article, Dr. Mehmood Ul Hassan Khan is an Executive Director of the Center for South Asia & International Studies (CSAIS) and Regional Expert on China, CPEC & BRI

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