Central Asia is one of those regions that isn’t getting a lot of attention these days, as it’s not a major player in the escalating U.S.-China trade war. But that may soon change as both major powers look to the region to source energy, critical minerals, and build new logistics corridors.
Chinese Foreign Minister Wang Yi spent a few days in the Kazakh capital Almaty meeting with his five Central Asian counterparts to plan an upcoming leaders summit that will take place in June. Meantime, the Uzbek government this month confirmed an ambitious critical minerals deal with the United States, highlighting the region’s growing strategic importance.
Yunis Sharifli, CGSP’s non-resident fellow for Central Asia, joins Eric from Ankara, Turkey to discuss why this renewed attention on Central Asia will also propel the development of ambitious new transport routes linking Asia and Europe.
Show Notes:
- The China-Global South Project: Central Asia’s Mineral Magnet: Why China Is Doubling Down on Uzbekistan by Yunis Sharifli
- The Astana Times: Central Asia, China Strengthen Ties at Foreign Ministers’ Meeting in Almaty by Nagima Abuova
- Eurasianet: U.S. strikes mineral deals with Uzbekistan – Tashkent report
Transcript:
ERIC OLANDER: Hello, and welcome to another edition of the China Global South podcast, a proud member of the Sinica Podcast Network. I’m Eric Olander, and today I’m joined by CGSP’s non-resident fellow for Central Asia, Yunus Sharifli, who’s joining us today from Ankara, Turkey. A very good afternoon to you, Yunus.
YUNIS SHARIFLI: Thank you very much, Eric. Thank you very much for having me. I’m really happy to join.
ERIC OLANDER: Yeah, it’s the first time we’re having you on the show as our new non-resident fellow, and we have three new non-resident fellows, one in Africa, Latin America, and you for Central Asia, and we’re really looking forward to hearing more from all of our non-resident fellows about the work that you’re focusing on. Your expertise, of course, is Central Asia. Now, that’s been a very hot topic the past few days, one that doesn’t get a lot of coverage though in what we’ll call the mainstream media, in part because, well, nothing really is getting much coverage today in the mainstream media other than what comes out of Washington.
But for the most part, we do want to focus more attention on what’s happening in Central Asia. Let me back up a couple of days. Right now, Chinese Foreign Minister Wang Yi is in Rio de Janeiro, where he’s attending a BRICS foreign minister meeting and a gathering.
That’s very interesting because a few days earlier, he was in the Kazakh capital, Almaty, and he was meeting with the five foreign ministers of the Central Asian countries. And that’s what we’re going to talk about today. Interestingly, the between what are emerging out of the foreign ministers conference in Rio de Janeiro and what we heard in Almaty are very similar.
Let’s start with Yunus and what you saw in terms of the takeaways from what he did in Almaty. There was a foreign ministers gathering. There’s going to be a summit coming up in June.
Is that correct?
YUNIS SHARIFLI: Yes, absolutely.
ERIC OLANDER: So, presumably, the foreign ministers are gathering to kind of work on the agenda.
There was no big announcement that came out of this meeting. So, again, I think this was a preparatory meeting for the upcoming summit. This is the C plus C5.
That’s China plus the Central Asian five. Give us an overview of what came out of the discussions this weekend.
YUNIS SHARIFLI: So, as you mentioned, during the global geopolitical turbulence, Central Asia is getting attract the other regional powers and great powers interest is one of this China. And just two days ago, there’s a sixth meeting of China and Central Asian countries, foreign ministers, which is actually very important. There’s also differences when we compare it with the other meetings.
I would like to add the three points that we see differences in terms of similarities. We saw, again, emphasize for the political trust, cooperation, investment, increasing the trade. But there is also some differences when we compare with the others.
The first is about growing, emphasizing on institutionalism. So, this means more communication channel between China and Central Asia. So, we saw that both sides emphasize that they need to more working group on different sectors.
For example, there is one of the most important one on agriculture. We saw that China is getting increasing its interest to Central Asia’s agriculture sector. In addition to that, they emphasize that they need to create new work group for foreign ministers, for investment cooperation, for trade cooperation.
I think this is very important because in the past, we saw that there’s meetings between China and Central Asia leaders or the ministerial level, but we saw that in sub-sector level, the cold, that growing systematic communication channel. This is the first point. The second, I think, that main difference is about the more sector-specific approach.
In the past, when we talk about China-Central Asia cooperation, but not only China-Central Asia, but generally when we look also Western countries’ approach to Central Asia, it’s more broad calling. For example, cooperation, investment, but there’s a lack of specific sector. But currently, in the last meeting, we saw that there’s a growing cold or growing interest on agriculture, climate, sustainability, critical raw materials, renewable energy, electric vehicle sectors, and agriculture.
This means that China start to look more sector-specific and also Central Asian countries increase their negotiating power to keep more specific cooperation, which is very beneficial. Third difference is, I would say that we already saw that geopolitical turbulence started to affect China-Central Asia relations because during the meeting, both sides called their reject unilateral tariffs, which start by the current Trump administration, and also support multilateral approach, open free market. We saw that China started to use this power vacuum and started to use its power to fill, and they support the multilateral and they try to represent itself as the leader of the free market or leader of the new global integrationist tendencies.
ERIC OLANDER: Yeah. I mean, that message against the United States is very interesting because in the official Chinese readout by Xinhua that was posted on the Chinese government’s websites, not just on Xinhua’s websites, it leaded with this statement. I mean, and this is again, very interesting because usually they don’t put U.S.-China bilateral issues at the top of regional meetings, but it said Chinese foreign ministers said that the United States acting unilaterally has imposed arbitrary tariffs on more than 180 countries infringing upon their legitimate rights and interests. And it’s interesting because in Rio de Janeiro, after Wang Yi was in Central Asia, he repeated that same message and it found a lot of resonance among the members of the BRICS. Let’s back up a little bit and kind of step back and look at Central Asia again in the context of some of China’s other regional partners. Central Asia, of course, is part of what China calls its neighborhood diplomacy.
Neighborhood diplomacy, of course, are countries that border China or in the vicinity of China. So Xi Jinping was just in Southeast Asia in my neighborhood two weeks ago. Again, a big emphasis on neighborhood diplomacy.
There’s been a lot more communication between China, Japan, and South Korea, more emphasis on so-called neighborhood diplomacy. Central Asia fits within that. When we talk about Central Asia, we’re talking about five countries in particular, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.
And so those are the five countries that we’re talking about. Yunus, when we look at these countries individually, are there differences in their approach to China and some of the issues or is there a commonality across the different countries that China engages them as a group? Yes, I think that there’s absolutely differences.
YUNIS SHARIFLI: Particular, I would like to divide that we saw actually. Actually, the third, let’s say, divide the third. The first is more the countries, Kazakhstan and Uzbekistan, that they grasp more proactive diplomacy.
That means that they’re eager to attract China’s investment, but they’re also eager to negotiate with China’s part. And they also put their own bullet points, articles that they negotiate with China’s part, and they try to not only attract investment for raw material extraction or extract investment, they also want to attract investment, for example, for processing, not just more specifically for green technologies, for electric industry, critical raw materials, or even agriculture. So I will say that Kazakhstan and Uzbekistan is the lead countries currently, grasp more proactive diplomacy, and they frequently open new canals with China’s part to broad their trade and investment cooperation.
And I will say that they’re quite successful because when we look last 10 years, China’s involvement to, or China’s investment to Kazakhstan and Uzbekistan, we saw that there’s a growing value-added sectors, that investment to value-added sectors, not only extractive sectors. This means that this is actually a successful pattern when we look Kazakhstan and Uzbekistan. There is a second group, Kyrgyzstan and Tajikistan, they are more reactive group.
They’re not proactive, but they see the examples from Kazakhstan, Uzbekistan, or there are another tendency from China, and they respond. And they try to also follow the successful example. So we saw that currently Kyrgyzstan also try to follow Kazakhstan and Uzbekistan way to negotiate China and attract more investment, try to negotiate more specific sectors.
And Tajikistan, I would say it’s a little weaker than the Kyrgyzstan, Tajikistan, and Kazakhstan in terms of negotiations, but they also try to create new canals and attract investment from China side, particularly to renewable energy, electric vehicle, and critical raw material sector. And there’s other one, Turkmenistan, I wouldn’t say that it’s neither reactive or proactive because it’s very specific. Turkmenistan still continue to look only cooperation on gas sector or traditional energy sector, despite Turkmenistan has a huge resource for renewable energy, there is still weak negotiations with China.
So I would say that there’s a three example that when countries we saw that started to negotiate more, they have own requirement, we saw that China side try to accommodate it. And in terms of the other countries, when they pay attention to attract only investment, we saw that Chinese side also started to accommodate and invest wide range of sector. But I will say that currently Uzbekistan and Kazakhstan is a good example in same place that how they negotiate, attract, and also improve political, economic, and strategic relations with China.
ERIC OLANDER: Yeah, Xi Jinping has a soft spot for Central Asia, it means a lot to him for a number of different reasons. But if you recall, soon after he came to power in 2012, he went to Kazakhstan back to Almaty. And that’s where he, of course, he made the now famous speech introducing the Belt and Road Initiative.
And so there’s a lot of symbolic importance there. But also Xi Jinping has made reference in the past to the fact that Central Asia is one of the only parts of China’s periphery that doesn’t have a US or Indian security presence. And so when you look at the matrix of US security alliances that surround China, there’s a gaping hole in Central Asia.
And I think that means quite a bit. Also, when China was coming out of COVID, it was the C plus C5 conference that was one of the first diplomatic engagements that China participated in kind of signaling that they were back. And again, there was some symbolism to the fact that he chose the Central Asian countries as among the first to come to China to engage when China was starting to reopen.
So there is some importance. When we talk about Central Asia more broadly, this is where the great game took place, right, between the British and the Russians. And a lot of people talk about the great game between now the US and China, but they mistakenly talk about other regions.
The great game is a specific reference to Central Asia. So let’s kind of pull back the focus now and not only look at China, but also the fact that Central Asia is in a very complicated neighborhood. We’ve just seen a lot of announcements coming out of Washington about interest in critical minerals in Uzbekistan.
So the Americans are engaged. Obviously, the Russians have long felt that this was their traditional sphere of influence, even if Vladimir Putin is more focused right now on Ukraine. But historically, it’s always been something that they considered to be their sphere of influence.
And then, of course, as we know, the Chinese being very active in their diplomacy. Help us understand the great power politics in what is now the modern great game.
YUNIS SHARIFLI: So this is a very interesting point. So when we, as I mentioned before, so currently we saw that there’s a lot of different topics on Central Asia and there are a lot of emphasis on great power competition. And we saw that both regional and global powers tried to invest and increase their influence on Central Asia.
Let’s look first at the United States. Actually, when the United States started to withdraw from Afghanistan, we saw a huge decrease in the United States’ presence in Central Asia, not in terms of security presence, but in terms of trade and investment. And currently also, I said the United States’ presence in the region is very weak because it’s never been the main target of the administrations.
It’s only mainly they look as a part of the Afghanistan policy. Now there is a calling that we need to look South Caucasus plus Central Asia or they perceive as Russia’s backyard. So we saw that currently United States administration tried to focus at this on Central Asia, but I wouldn’t say not as again, much broader way.
Again, they were specific. They looked at critical raw materials. They think that they need to reduce their dependence on China’s, on rarer materials or more of the critical minerals.
And they start to sign new agreement. Particularly we saw that just two weeks ago, agreement between Uzbekistan and United States.
ERIC OLANDER: And just sorry to interrupt you, but how well endowed are these countries with critical minerals?
YUNIS SHARIFLI: So I will say that Kazakhstan has a huge resource, not only critical minerals, but if we look particularly the rare of materials, they have a lithium reserve in terms of critical minerals, cobalt, zinc, tungsten. They have a very huge resource and they’re untapped. That’s the very important part.
This means that there are few extraction. The China is the main partner in Tajikistan and Kyrgyzstan. They already start 20 years ago.
But when we look about the critical minerals, we saw that there is a huge reserve in Uzbekistan, Kazakhstan and same in Kyrgyzstan and Tajikistan. So these countries also want to attract. And we saw that United States particular attention to increase its presence through this investment of critical minerals.
However, I wouldn’t say that it’s a good strategy because when we look Central Asia and other examples, we saw that China Central Asia or more Russia Central Asia, the relations is more complicated because it’s not only focused on one sector. There’s a soft power, there’s a hard power component. They’re all mixed and they create deepening relationship with the region.
In terms of European Union, as you know, there’s a recently summit between European Union and Central Asia. Again, the main target of the European Union is specifically critical minerals, renewable energy sector and some part also transportation middle corridor. So we saw that European Union has a much broader agenda than United States currently and they try to invest it because they looked critical minerals and transportation.
They think that we need to invest critical minerals in order to reduce our dependence on China, but they need also middle corridor because of reduced their dependence on Russia, because Russia is the main transit country. When we look China, European Union land-based trade.
ERIC OLANDER: Let me just stop you there because you just referenced the middle corridor. And I think this is a new concept. So obviously that we’ve heard of the Belt and Road, and that is a vast trading network that puts China at the center.
What is the middle corridor that you’re talking about?
YUNIS SHARIFLI: So the middle corridor is the official name is Trans-Caspian International Transport Road, were established by Azerbaijan, Kazakhstan and Georgia. Shortly we can call it the middle corridor because there’s a middle corridor is the corridor that bypass Russia and Iran. And that’s why actually it’s very important because we currently looked at Russia is the most sanctioned country and Iran is the most sanctioned second country in the world.
And middle corridor actually offer more stable and unsanctioned the corridor that connect China and European Union. The corridor starts from China going through Kazakhstan, Azerbaijan and Georgia and Turkey to European Union. So that’s why…
ERIC OLANDER: Is this part of the China European Railway? Is that part of the middle corridor?
YUNIS SHARIFLI: Yes. When we talk about also Belt and Road initiative and also European Union Global Gateway initiative, they perceive the middle corridor as a part of the broader the trade, land-based trade relations. So when we look again the European Union, we saw that European Union increase its interest to the middle corridor also.
So get back to the Russia, due to the most… When the Russia-Ukraine war start, most of… There’s a range of opinion that yes Russia’s strategic focus in the Ukraine so means that probably there will be decrease in the Russian influence in Central Asia.
However, we last three years actually since the war began, we saw that Russia increases trade relationship with the Central Asian countries. Also Russia’s one of the energy pivot strategy is cover Central Asia because Russia want to export more gas and oil and also use the Central Asian infrastructure to export more gas to China. Because there’s already existing infrastructure between China and Central Asia for gas export.
Russia also interested to use this infrastructure. So we saw that actually Russia not in decrease its influence but economically at least we say that it added to its interest on Central Asia. And China, as you mentioned it, I will say that currently is the most important actor, has at least systematic approach to region.
They not only focus transportation, critical raw materials, not renewable energy, they focus electric vehicle, agriculture, also different mineral sectors and they also looking for the more technological lead. The sector such as the creation of the data centers in Kazakhstan, there’s a current discussion. So we saw that China has more agenda.
However, it’s very important when we talk about Central Asia. Yes, there’s a great game we can talk. It sounds very good.
But when we talk about great game, we mostly forget regional countries. We should always remember that regional countries, Kazakhstan, Turkestan, they are on agenda. They are very strong negotiator.
That doesn’t mean that there’s a great game. The only great powers affect their agenda. No.
Yes, and they negotiate very effectively. As I mentioned with China, they are effectively negotiate with Russia. Since the war began, we saw that Central Asia attract a lot of investment from Russia.
So they use it. So we look two different sphere. Yes, there’s a great power competition, but regional countries very capable to use for their own development.
ERIC OLANDER: Well, let’s keep that conversation going about these corridors. So you talked about the middle corridor, and that goes through from China all the way through Kazakhstan down to where you are right now in Turkey. If I’m correct here, that’s been the corridor that the Turks have been really promoting because they want to be at the center of all of this.
Then there is the northern corridor that goes from China all the way through Russia and then on to Germany and into Europe. And then there’s another corridor that the Americans and the Indians are promoting, and it’s called IMEC, the India Middle East Corridor. Now, all of these are intended to be either an alternative or a complement to the Belt and Road Initiative.
The challenge, though, is that the Belt and Road Initiative has been up for 15 years now, or actually, let’s see, not quite 15 years, but 13, 10 years, sorry. Let’s see, it started in 2012 or 2013. So we are, it’s going into its second decade now.
So it’s got a lot of proof points. There’s a lot of infrastructure that’s been built. The Belt and Road has become quite efficient now in transporting logistics and goods and things throughout its network.
These other corridors are starting up. Obviously, there’s a long way for them to go. How much should we take the IMEC and, you know, the northern corridor and the middle corridor seriously when it comes to actually providing a complement or an alternative to the Belt and Road?
YUNIS SHARIFLI: So the northern corridor actually is already one intermediate part of the Belt and Road Initiative. So before the Ukraine… Okay, so that’s the northern part of the Belt and Road then, right?
Yes. So before the war, actually, that’s the most efficient transport route for China, because there’s the Eurasian Economic Union. The member Russia, Kazakhstan, and Belarus is a member of this organization or institutions.
And they have also the common tariffs. This means that the train leave China and they only, there is a border check in, again, the Poland border between the, the border between Poland and Belarus. And it’s also relatively cheap, very competitive transport route, and also direct railway linkage.
So that’s actually the most efficient route for China before the war. However…
ERIC OLANDER: And when you say the war, which war are you talking about? Russia-Ukraine war. Okay, now, because the reason I bring this up is because a lot more rail traffic went on that route because of what’s happened in the Red Sea with the Huttese when Red Sea traffic got cut off.
And normally, that is a passageway for Chinese automobiles and other goods to go through the Red Sea to get into Europe. So these railway routes are becoming increasingly important as instability flares up in other parts of the world.
YUNIS SHARIFLI: Yeah, absolutely. So before the 2022, before the Russia-Ukraine war, as I mentioned, Northern Corridor is the most important route. However, after the, when the Russia-Ukraine war started, we saw that most of companies started to withdraw from this route because of the moral values, because of the uncertainty, sanction on banking sector of Russia, and also instability in domestic policy of Russia.
So we saw that growing interest to Middle Corridor. And in addition to that, we saw that Western countries also try to promote alternative corridors, as you mentioned, IMEC corridor is they announced, but I will say that IMEC currently hasn’t put a lot of chance to compete.
ERIC OLANDER: I mean, does anybody take this stuff seriously? Because I mean, the ambition of IMEC is just absurd. Yes.
About as many countries as it wants to go through. And let’s be honest, I mean, Donald Trump isn’t that keen on spending billions of dollars to build these trade corridors. The Indians, I don’t think they have the cash to do this.
And so I think it makes for a great talking point, but the reality is I don’t think they’re going to put up the cash to do it.
YUNIS SHARIFLI: Yeah, there’s a range of actual problem. Let me tell you some of the points. Actually, the first is logistical logic.
When we look the Middle Corridor, most of people criticize because Middle Corridor is a multimodal transportation system. Yes, there’s a road, railway, and sea route. However, IMEC is completely multimodal, the transportation route.
There’s a lot of different, they need to upgrade the infrastructure through the road, railway, sea route, and it need to attract billions of investment. That’s a fact, actually. And second, in terms of logistical logic, this means that huge the time.
And we know that business logic is just in time. The business work in principle that just in time, business principle. Actually, I can say that we’re sure that IMEC currently provide this.
And when we look the map, it seemed very good, but there are few, as you mentioned, investment. United States actually needs to invest in its own domestic infrastructure and also in the partner countries’ infrastructure rather than this type of full scale, the new transportation corridor. And as you mentioned, neither India nor the European Union countries currently show strong interest to invest in.
When they declared, yes, they attract a lot of media attention, but we saw that actually it’s very problematic. And I wouldn’t say that currently and new future hasn’t chance to compete actually Belt and Road initiated, because as you mentioned, we are in the second decade. There’s a lot of investment to Central Asia.
And currently, China involved more to development of middle corridor, in port development in Kazakhstan, Azerbaijan, try to invest Georgian port. Again, China led AIB, try to invest Turkey’s eastern, the railway, the section. So we saw that China properly, not only declare, not only sign memorandum understanding, but directly implemented the project.
However, in the IMEC side, I wouldn’t say that actually.
ERIC OLANDER: So the IMEC, of course, is again, the India, Middle East. I forgot to include India, Middle East, Europe economic corridor. That is the IMEC.
Yes. And it starts in India, passes through the United Arab Emirates, and then crosses all the way through Saudi Arabia. Just think of the expense of building all of that through Saudi Arabia.
Here’s what makes IMEC very controversial, is it passes through Israel as well, and it bypasses Turkey. So that’s the reason why Ankara and the Turks do not like IMEC and see it as a competition. And they’re talking up the middle corridor.
And then it ends in the port of Piraeus in Greece, which of course, is a Chinese operated port. So you’re trying to get away from the Chinese, but there you are, you land right in the Chinese operated port in Greece.
YUNIS SHARIFLI: And that also, there’s a lot of regional conflict where the IMEC going, particular Middle East.
ERIC OLANDER: It’s through a tough neighborhood there in the Gulf and the Middle East. I mean, it’s right up there against Iran. And so one would see that, you know, Iran, if there was ever to be a conflict between, say, the United States and Iran or Israel and Iran, Iran could look at shutting down some of those trade routes if they were to materialize as potential leverage in the event of a conflict.
Listen, we started the conversation on Chinese diplomacy in Central Asia following the Wang Yi’s meeting there with the C5 group. Presumably, again, as we mentioned, he’s getting ready for Xi Jinping to have the summit. Is the summit going to be held in Central Asia or is it going to be in China?
YUNIS SHARIFLI: In Central Asia.
ERIC OLANDER: OK, so Xi is going to travel back to Central Asia in June. What do you think is going to be on Xi’s agenda? Obviously, slapping the United States, talking up multilateralism, presenting China as kind of the alternative to the United States, much as what he did when he came here to Southeast Asia.
I expect to see a lot of the same type of messaging coming out. But what else do you think will be on Xi’s agenda when he goes to Central Asia in June?
YUNIS SHARIFLI: Actually, it’s good to first briefly at least look at the first summit and first summit topic in 2023. We saw that a range of agreements between China and Central Asian countries on particular renewable energy, also electric vehicles, again, agriculture. Also, China first time, I would say, officially actually at the middle corridor, it’s the agenda with the Central Asian countries.
So, I would say that during the two years, there are a lot of happen. There are a lot of new Chinese investment ongoing in Central Asian countries. But one topic also, I think that this summit will be added on particular critical materials.
Because in the first summit, yes, there’s again the mineral deals. But I will say that most important is renewable energy and electric vehicle agreement. However, in the second summit, I would say that China tried to also mention the critical minerals in Central Asia.
Because yes, China is currently, let’s say, the leader in the processing of the critical minerals. He is almost monopoly in international system. But there’s a growing competition in Central Asia.
And actually, most of Western countries think that if they invest critical minerals, they have a chance to at least relatively decrease or diversify there. But that’s just for extraction or is that for extraction and processing? So, when we look at current agreement with European Union and Central Asian countries and United States and let’s say Uzbekistan, we saw that most of agreements also cover processing.
However, there’s a lot of different stage of the processing. So, and currently in terms of deep processing, particularly of the rare earth materials, rare earth minerals, if we talk. But China has the technology and Western countries, both United States and European Union, yes, there’s a huge background on research and development, but they at least used to develop the same technology.
Particularly when we talk about separation of rare earth minerals and purification and also create value-added products. So, when we look the actual initial agreements, we saw that they cover extraction and initial processing means hiding, grinding, and also concentration, which that’s a very big.
ERIC OLANDER: But that’s very basic processing. And I think that’s something that our listeners should be careful of when you see these press releases that are coming out, both from the Uzbek government and from the United States, talking about processing deals. A lot of it is very basic processing, literally just cleaning the metal from the dirt.
And then it’s sent to China because China has the monopoly on the advanced processing methods. And right now, again, we can talk about processing all we want, but the Chinese still have the monopoly on those advanced. And not only just in terms of the technology, but they have the engineers, they have all of the technology ecosystem around this processing that very few places, if any, have as large a system as the Chinese have.
You know, we’ve been talking on the podcast for a number of months now, ever since Donald Trump came back into power, about certain winners and losers in this competition between the US and China. Brazil is poised to become a major winner of this, as the Chinese abandoned the United States for food, agriculture products, any number of different things that they used to source energy to from the United States. It’s going to shift to Brazil.
They’re going to be a big winner. South Africa looks like it’s going to be potentially a big loser in all of this because they depend heavily on trade with the United States to, you know, I think somewhere around two million jobs are tied to trade with the United States. Where does Central Asia fit in all of this and where do the different countries, are they going to stand to benefit?
You talk about the Chinese looking there for more agriculture. Could you see them offsetting the US with more purchases from Central Asia?
YUNIS SHARIFLI: Okay, so actually I will say that it’s a mutually beneficial cooperation because we saw that last, the case actually, all Central Asian countries want to develop their agricultural capacity and also improving their processing capacity for agricultural product and access to Chinese market. So they are interested. In the Chinese side, as you mentioned, due to the trade force and China also want to reduce their dependence on imports from the United States.
So Central Asia maybe can’t be actually the like same, similar actor like Brazil for the huge export, but it’s a huge opportunity again for export to agricultural products.
ERIC OLANDER: Yeah, it could be some. I mean, I mean, very few countries are like Brazil. I mean, they’re unique in that scale, but it’s certainly, China likes to diversify its imports of agricultural products and you could see some of the Central Asian countries being part of that mix.
YUNIS SHARIFLI: Yes, absolutely. And currently, I would say that actually every month when we look at Central Asian news, particularly in Uzbekistan, Kyrgyzstan and Kazakhstan, we saw that Chinese side interest agricultural cooperation, but most importantly, they are not looking for the import, let’s say, raw agricultural products. They also invest for the processing.
They also invest for the developed human capital, because again, when we look, the Central Asian countries, they want to add value, their product and export to Chinese product. And I think that both side has a complementary relationship in this context and they want it. And in addition, there is a benefit.
This is the benefit side that yes, China invests, not only agricultural, also other sectors, the renewable energy also, or critical minerals. This is very good. Central Asian countries can export more.
However, when we look the current geopolitical situation, the US protectionist, United States protectionist policies or let’s see, isolationist policies, European Union getting, starting to look the Central Asia, but I wouldn’t say that they have a consistent and systematic approach still to the region like Russia and China. In this context, actually, the most important market is the China that create promise for the Central Asian countries. They can secure new revenue generation.
They can attract new investment. However, they also increase their dependence on China. This is very important, because when we look other countries not invest the region or they just declare or they just sign Memorandum of Understanding, this means that these countries see only partner to China for attract investment or export.
In the long term, yes, there’s a double-edged sword, I would say. Yes, it’s good for their economic development, for adding industrialization or value addition, but there’s also risk that more dependency. And in past, we look China-Central Asian relations, they have an increasing dependence on energy export, gas, oil export, or coal export.
Now, look, it’s possible that there’s a growing dependence on export to critical minerals or processed critical minerals. It doesn’t mean raw or processed, but they have a huge dependency. In terms of green technology, the China invests in electric vehicle sector because they are the champion.
China start to involve renewable energy sector. So, there’s both export dependence and there’s a growing technological dependence also. So, this means that if there’s no normal balancing act from the Western side, there’s a risk for countries that, yes, maybe they reduce the dependence on Russia, but there’s also important for China to increase their country’s dependence on the Beijing.
ERIC OLANDER: Yeah, that’s what we hear in Southeast Asia quite a bit as well, the concern over becoming too dependent on the China market as appealing as that might be in the short term. And certainly, that’s a concern in Brazil right now. Again, lots of new business coming into Brazil for soybeans and beef, but at the same time, already 80% of Brazilian beef exports go to China.
Those same concerns are starting to pop up in Central Asia. Eunice, we’re going to bring you back in a few weeks to talk about Xi’s upcoming summit in Central Asia. In the meantime, I want to invite everybody to read Eunice’s latest column, Central Asia’s Mineral Magnet, Why China is Doubling Down on Uzbekistan.
I’ll tell you that Central Asia has been one of our weaker areas of coverage, in part just because it’s not easy to get analysis and to get news out of this region. There’s not a plethora of China Central Asia scholars and analysts out there, which is why we are so honored to have Eunice as part of our team of non-resident fellows joining us and contributing some excellent analysis on our website. And by the way, these articles from our non-resident fellows are free and open to everybody.
They’re not behind the paywall. So if you’d like to check it out, I’m going to put it in the show notes and you can follow all of Eunice’s analysis. So Eunice, thank you so much for taking the time to join us.
I really appreciate it.
YUNIS SHARIFLI: Thank you very much, Eric, for having me. Looking forward to future cooperation on podcasts.
ERIC OLANDER: It’s going to be great. And then I’ll be back again next week with Giro and Kobus, and we’ll be back to covering any number of issues around China and the Global South. If you’d like to follow the work that Eunice is doing and that Giro is doing and that Kobus is doing, all the great work that the CGSP team around the world is putting daily up on the website.
Again, we’re the only service of its kind. Go to ChinaglobalSouth.com and you’ll see just so much great content there. Also, if you’d like to support the work that we’re doing and to help support the work of people like Eunice and Giro and Kobus and all of us, subscriptions are super affordable.
Just go to ChinaglobalSouth.com slash subscribe. And don’t forget, if you are a student or a teacher, we will give you half off and 30 days free just to try it out. See if you like it.
If you don’t like it, you can cancel anytime. So that’ll do it for this edition of the show. For Eunice in Ankara, I’m Eric Olander.
Thank you so much for listening. We’ll be back again next week.
