Russian Clout Fading, China Reshaping Central Asia Energy Sector

2025-04-30 07:01:14

(MENAFN- Asia Times) China has been developing closer ties with countries in Central Asia over recent years. Trade between China and the Central Asia region grew to US$89 billion in 2023, an increase of 27% on the previous year. Chinese trade rose with every country there except Turkmenistan.

In my paper from June 2024, which is part of a collection of studies looking at the impact of China's sprawling Belt and Road Initiative in low- and middle-income countries, I explored how Chinese investment is affecting Uzbekistan's energy sector.

Chinese investment in Uzbekistan has grown significantly since 2020. By the end of 2022, it had reached US$4.5 billion , up from US$2.8 billion one year before. There are now over 3,450 Chinese companies in Uzbekistan, accounting for roughly 20% of all foreign companies in the country.

One of the main reasons for China's expanding footprint in Central Asia is to intensify energy cooperation. By becoming a major buyer, lender and investor in the region's energy sector, China is hoping to reduce its dependence on countries such as Russia.

Central Asia has been politically and economically dependent on Russia since the Soviet Union invaded the region in the 19th century. Much of its infrastructure was built to provide commodities like cotton and energy to Russia, with the latter selling it at high prices to Europe. This infrastructure has, until relatively recently, remained largely unchanged.

However, some Central Asian countries have been able to reduce their dependence on Russia over the past decade or so. China has become the main importer of Uzbek gas, with a peak share of more than 80% . And Uzbekistan exported almost US$2 billion worth of goods to China in 2022, matching its volume of trade with Russia.

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