For Common Economic Development Cooperation between China and Central Asian Countries within the Belt and Road Initiative
Cooperation between China and Central Asian Countries within the Belt and Road Initiative
China and the Central Asian countries are seeking common development through win-win cooperation by complementing their respective resources and economic structures.
Recently, the cooperation between China and Central Asian countries under the framework of the Belt and Road Initiative has aroused some controversies. This article touches upon the intention and aim of the cooperation between China and Central Asian countries.
Promoting Economic Development
According to the World Bank, of its surveyed 185 countries China and the five Central Asian countries have a comparatively low GDP per capita at the current exchange rate. In 2017, the average GDP per capita in the world was US$10,715, while Kazakhstan and China only reached US$8,838 and US$8,827, ranking 71th and 72th respectively and nearly equating to 82 percent of the world average. And Turkmenistan, Uzbekistan, Kyrgyzstan and Tajikistan took the 80th, 150th, 154th and 164th places with 7,356, 1,504, 1,220 and 801 U. S. dollars of GDP per capita, respectively. So, China and all the five Central Asian countries have not arrived at the world average level in terms of GDP per capita.
This means that China and the five countries in Central Asia are all developing countries, with Kazakhstan, China and Turkmenistan being middle-income countries and the other three being low-income economies. So, the primary task of these six nations is to promote economic development, increase public income and improve the livelihood of their people in a short time.
Historically, China had long been the country with the largest economic aggregate, while the five Central Asian countries also had a splendid past. So, both China and the five Central Asian nations long for national revival although their economic growth is restricted by
current situations for the time being.
At present, the economic development of the Central Asian countries is primarily limited by transportation and communication infrastructure. In terms of highroad and railway, Kazakhstan and Uzbekistan enjoy comparatively better conditions, while the other three countries lag far behind. With regard to internet usage, Uzbekistan and Kyrgyzstan have only 30 percent of internet citizens. Moreover, these countries do not have advanced manufacturing industries. Although Uzbekistan’s joint ventures produce cars and buses and Kazakhstan and Uzbekistan make some chemical and medical products, the economic development in Central Asia still relies on exporting primary commodities (accounting for 70 percent of their exports) and importing finished goods (over 70 percent of their imports).
As for China, it lacks the supply of important resources including crude oil, natural gas, iron ore and soybean. In 2017, China imported 420 million tons of crude oil, accounting for 68.9 percent of its total demand, while importing 83.8 billion cubic meters of natural gas, occupying 35.3 percent of the year’s total consumption. The net import of soybean hit 95.42 million tons, taking up 86.3 percent of its total consumption of 110.59 million tons.
Win-win Cooperation
If China and Central Asia strengthen cooperation, both sides can greatly relieve their development restrictions and even eradicate some of them.
Firstly, within the Belt and Road Initiative, China and Central Asian countries have completed some major transportation infrastructure projects such as the Vahdat-yavan Railway in Tajikistan, the first Chinese-built railway in Central Asia. After only 15 months of construction, the railway was put into service on August 24, 2016. The Papu Railway Tunnel (Kamchiq Tunnel) in Uzbekistan, the first Chinese-built railway tunnel in Central Asia, began operation in June 2016.
Secondly, to enhance the energy rgy trade between China and Central Asian countries, China has built a pipeline network including natural al gas and petroleum pipelines. Line A and Line B of the China-central al Asia natural gas pipeline span a total otal of 10,000 kilometers, crossing the e border between Turkmenistan and nd Uzbekistan and running through Uzbekistan and Kazakhstan, and enter China via Xinjiang’s Alataw w Pass. Their annual gas transmission on capacity reaches about 30 billion cubic meters, with Turkmenistan as the primary source of natural gas. s. Line C of the gas pipeline traverses ses the border of Turkmenistan and Uzbekistan and arrives in Xinjiang’s ng’s Horgos Port, with a designed annual nual
transmission capacity of 25 billion cubic meters. These three lines have been put into service. Additionally, Line D is being constructed, with a designed yearly transmission capacity of 30 billion cubic meters. It also starts from the border between Turkmenistan and Uzbekistan and enters China via Xinjiang’s Ulugqat County.
As for petroleum pipeline construction, the China-kazakhstan oil pipeline runs from Atyrau in western Kazakhstan to Xinjiang’s Alataw Pass of China, spanning 2,800 kilometers with a designed annual transmission capacity of 20 million tons. Currently, the oil pipeline operates well.
Thirdly, China has greatly beefed up production capacity cooperation with Central Asia by setting up industrial parks and developing modern agriculture. For example, China set up a China-kazakhstan Production Capacity Cooperation Fund with US$2 billion to help China’s quality industrial capacity settle in Kazakhstan. And China and Uzbekistan jointly established the Pengsheng Industrial Park, which has boosted local manufacturing, created more than 1,000 jobs and added 20 percent of tax revenue. A Chinese private company opened the Asian Star Agricultural Industrial Park in Kyrgyzstan, speeding up the development of modern agriculture in Central Asia.
Finally, by the end of 2016,
China’s stock of investment in Central Asia had hit US$9.14 billion, of which US$5.43 billion went to Kazakhstan. China has become the second largest foreign investor for Kazakhstan and the third largest foreign investor for Turkmenistan, Kyrgyzstan and Tajikistan.
So, China and Central Asian countries are seeking common development through win-win cooperation by complementing their respective resources and economic structures. The cooperation allows the five Central Asian countries to get the commodities they need—of which four countries, except Turkmenistan, import the largest amount of commodities from China—and the investment which can help perfect local infrastructure and boost industrial development. Additionally, China is close to Central Asia and with improving transportation conditions, transport cost will be further lowered, which will greatly drive the economic growth of China and the Central Asian countries as well as advance the living standards of local people.