Experts from the Russian Analytical Credit Rating Agency (ACRA) says China's most relevant strategic objectives in Central Asia include creating transport corridors under the "Belt and Road Initiative" and diversifying access to resources.
ACRA's report, titled "Between East and West," notes that China provides external financing to achieve these goals, often at rates lower than market borrowings.
"For instance, the Export-Import Bank of China has granted Tajikistan 18 loans at interest rates of 2–2.5%, with grace periods of five to nine years and repayment terms of up to 25 years," the report states, citing data from Tajikistan's Ministry of Finance.
The report emphasizes that the Belt and Road Initiative (BRI) aims to expand China's foreign trade channels and further integrate it with Western markets.
"Expanding land routes through Central Asia—a traditional transport corridor between East and West—is one of the key directions of this initiative. Customs points on the Kazakh border have already been expanded, and roads are being built in Kyrgyzstan and Tajikistan," the ACRA analysts note.
They argue that China's growing economy requires the resources available in the region's countries: oil, gas, ores, uranium, copper, gold, and more.
However, the report also notes that China's economic growth is slowing, and internal risks are increasing, which could make resource demand less stable in the medium term.
The authors estimate that the region's financial dependence on China is increasing. While Kazakhstan and Uzbekistan maintain relatively lower levels of dependency, Tajikistan faces significant challenges in servicing its debt to China.
"In 2019, Tajikistan transferred rights to develop two gold deposits to a Chinese company as part of its debt repayment," the publication recalls.
The report highlights that since 2013, cooperation forums between China and Central Asia have been held regularly, attended by government officials and business representatives from the region.
"However, last year (in 2023), the forum was held at the level of heads of state for the first time. At this inaugural summit in Xi’an, Chinese President Xi Jinping offered regional countries assistance in maintaining internal security and national defense," the study notes.
It also underscores the region's growing involvement in international trade, with increasing external demand for its resources (gas, oil, uranium, gold, and rare earth metals).
"To expand cooperation with China and move up the value chain, it would be logical for regional countries to establish joint ventures with China to produce higher value-added goods, gain access to technology, and conduct collaborative research," the ACRA analysts conclude.
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