(MENAFN- AzerNews)
Ulviyya Shahin Read more
Trade relations between Azerbaijan and China have seensignificant growth in recent years, reflecting the strengtheningeconomic ties between the two countries. The first quarter of 2024witnessed a substantial increase in trade turnover.
During this period, the trade turnover between Azerbaijan andChina reached a noteworthy sum of $748,8 million. This figurerepresents a considerable surge compared to the same period in2023, with an impressive increase of $123,8 million, marking anotable rise of 19.8%.
Against the background of the economic relation between the twocountries, Dr Mehmood Ul Hassan Khan, an expert onChina, and Executive Director of the Center for South &International Studies (CSAIS) Islamabad shared his opinions withAzernews.
Azernews presents the interview:
Q. Dr. Hassan Khan, as a Chinese trade expert, whatfactors do you believe have contributed to the significant growthin trade relations between Azerbaijan and China in recentyears?
A. It seems that better politicalunderstanding; economic cooperation, enhanced inflows of FDIs,joint ventures, and energy cooperation between Azerbaijan and Chinahave trigged volumes of bilateral trade and economic ties.
The consolidation of relations between China and Azerbaijan inrecent years demonstrates mutual benefit and strategic partnership growth, the enhancement of investment cooperation, thedevelopment of transport infrastructure, and joint projects ingreen energy are the cornerstones of this cooperation.
Historically, China and Azerbaijan enjoy close exchanges at alllevels, solid political mutual trust, solid progress inhigh-quality BRI, and effective international coordination. Bothcountries are ready to work to earnestly follow through on thecommon understandings reached between the two heads of state, pushfor steady, deep, and solid bilateral cooperation in all fieldsfrom a strategic perspective, and constantly upgrade the level ofChina-Azerbaijan relations.
Additionally, Azerbaijan attaches great importance to developingAzerbaijan-China relations, supports the one-China principle, andis willing to firmly support each other with China on issuesconcerning each other's core interests, expand cooperation withChina in such fields as economy, trade, transportation, and newenergy, and achieve common development and prosperity.
According to official data, from January to October 2023, thevolume of China-Azerbaijan trade reached an impressive 2.57 billiondollars, marking a 47.5 percent increase compared to the previousyear which clearly demonstrates the growing significance of theeconomic relationship between the two countries. China, emerging asthe largest source of imports, has become Azerbaijan'sfourth-largest trading partner, reflecting the strategic importanceof this cooperation.
Critical analysis reveals that exports from China to Azerbaijanpredominantly consist of high-tech products which account for over50 percent of the total export volume. This focus on advancedtechnologies significantly impacts Azerbaijan's socio-economicdevelopment, opening new prospects for local businesses.
Greater socio-economic cooperation, banking & financialintegration, high qualitative industrialization, trans-regionalconnectivity, digitalization, e-commerce, AI, and last but notleast, green technologies cooperation is gearing bilateralrelations towards a greater sphere of cooperation, coordination,and collaboration between two countries.
Moreover, geo-politically Azerbaijan's strategic status as aMiddle Corridor and essential connecting hub in the greaterEurasian region, the formation of alternative routes havingseaports and integrated railways systems are also important factorsin increasing the trade relations between the two countries.
Geo-strategically Azerbaijan's positive and productive role inregional peace, stability, connectivity, and potential membershipin the SCO and BRICS makes it one of the most important countriesin the region for China's BRI connections in the Black Sea andEastern Europe and beyond.
Q. With Azerbaijan's imports from China experiencing anotable surge, what do you see as the primary drivers behind thisincreased demand for Chinese goods within the Azerbaijanimarket?
A. The emerging economic trends in the region and at theinternational level have forced the government of Azerbaijan toincrease trade and economic ties with China being the globalstimulator of industrial growth and supply chains. China's EVs,superiority in renewables mainly solar & wind apparatus,comparatively cheap but qualitative products, regional proximity,and last but not least infrastructure development of the newlyliberated areas provide a window of opportunity for Azerbaijan andits private companies to foster bilateral relations.
Furthermore, Azerbaijan's green transformation, COP29 ownership,booming services sector, tourism, cultural cooperation, and lastbut not least economic liberalization stimulate bilateral tradecooperation between the two countries. Last but not least, China'snew productive drivers, qualitative industrialization, and opennessremained the key drivers of greater economic ties and tradecooperation between the two nations.
Q. How do you interpret the upward trajectory in tradeactivities between Azerbaijan and China, particularly consideringthe notable rise in trade turnover compared to the same period in2023?
A. It is positive, productive, and participatory with brightprospects. It is a good omen that the pace of their bilateral tradeand economic ties remained upward providing a new window ofopportunities for both countries. Energy cooperation in terms ofoil & gas, chemical industries, agricultural cooperation, and greenenergy is one the main drivers of booming trade ties.
Bilateral relations between China and Azerbaijan have beenfurther strengthened after the meeting of two heads of state inSCO-2022. Azerbaijan is an important economic and trade partner forChina. China sees Azerbaijan as a single investment market. It hasa keen interest in cooperating with Azerbaijan in the financial andagricultural sectors. China attaches great importance to thedevelopment of mutually beneficial and close cooperation withAzerbaijan and has implemented several large-scale infrastructureand industrial projects that have played an active role in thesocio-economic development of Azerbaijan.
It is a good omen for both countries to view and plan forbilateral relations from a strategic height, increase strategicmutual trust, strengthen mutual support, deepen mutually beneficialcooperation, and work for steady, in-depth, and practicalcooperation in various fields between the two countries. Xi alsosaid China welcomes Azerbaijan to join China in implementing theGlobal Development Initiative (GDI) and the Global SecurityInitiative (GSI).
Q. In your opinion, what measures can both Azerbaijanand China take to sustain and enhance the momentum of theireconomic partnership in the face of global economic uncertaintiesand challenges?
A. Both countries should also expand trade, improve the trademix, increase the number of China-Europe Express freight trainservices, and ensure unimpeded international supply chains. Xi alsoexpressed confidence that the Belt and Road cooperation betweenChina and Azerbaijan enjoys broad prospects. For his part, Aliyevsaid that Azerbaijan and China are true strategic partners, thatthe two sides maintain close communication in internationalaffairs, and that bilateral cooperation is advancing steadily.
Q. How do you see the role of bilateral agreements andinitiatives in facilitating and fostering closer economiccooperation between Azerbaijan and China, particularly in thecontext of the Belt and Road Initiative?
A. It is estimated that BRI has a great impact on Azerbaijan'smacro-economy through Azerbaijan's connectivity and trade with theBRI economies. BRI projects have further improved its transport,power, and ICT infrastructure. Azerbaijan is a BRI partner countryin the South Caucasus strategically located between Asia andEurope. It can play the role of a strategic partner, middlecorridor, and hub connecting China with the Middle East and Europe this regard, Azerbaijan perceives BRI as a promising initiative Azerbaijani government has a strong political will, economicability, and the infrastructural capacity to contribute a win-winproposition for both countries.
Q. Are there any specific areas or opportunities forcollaboration that you would recommend exploring to furtherstrengthen trade and investment ties between Azerbaijan andChina?
A further strengthening of bilateral relations and wideningof scope, utility and strategic importance of mutual ties and BRI,China, and Azerbaijan should closely work to strengthen the BRI'sinfluence in Central Asia and South Caucasus and prioritise theTrans-Caspian International Transport Route (TITR) passing throughAzerbaijan. The TITR, known as the Middle Corridor, had been indevelopment as part of China's BRI for several years. The6,500-kilometer network of roads, railroads, and ports spanningKazakhstan, the Caspian Sea, Azerbaijan, and Georgia, then intoTurkiye and/or the Black Sea is intended to reduce shipping timesfrom 60 days by ocean to a fortnight. It is backed by billions ofdollars in loans and grants from the Chinese government.
Q. Looking ahead, what strategies or steps do youbelieve both countries should prioritize to capitalize on thecurrent momentum and maximize the potential benefits of theirgrowing economic relationship?
A. Both countries have already inked several agreementsincluding an investment of US$ 300 million by China NationalElectric Engineering Company (CNEEC) into a tire factory inAzerbaijan. It will create 800 new jobs and boost the plant'sproduction potential to 3.3 million tires per year. Anothermultimillion-dollar agreement would see investments into theagriculture sector.
In 2018-2019, imports from China increased by 40 percent andtrade turnover reached $1.3 billion. Azerbaijan has become China'snumber one trading partner in the South Caucasus compared toArmenia and Georgia. On the other hand, Azerbaijan's investments inChina's economy reached $1.7 billion, while China's investments inAzerbaijan's economy came close to $800 million. About 119companies relying on Chinese capital are operating in Azerbaijanwhich is indeed a good omen.
Energy cooperation between China and Azerbaijan holds asignificant place in their bilateral relations, especially in thecontext of transitioning towards sustainable and renewable energysources. In 2023, a substantial memorandum of understanding wassigned between the energy departments of both countries, aimed atdeveloping cooperation in the field of renewable energy.
The Chinese company Dongfang is currently involved inconstructing the 230 MW "Garadagh" solar power plants inAzerbaijan. This project is a crucial step towards increasing theshare of green energy in the country's energy balance. Furthermore,cooperation with China Gezhouba Group Overseas Investment opens newprospects for implementing renewable energy projects.
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