Uzbekistan’s reform and economic ambitions being fuelled by Chinese investment
- President Shavkat Mirziyoyev’s re-election gave him a seven-year term and showed his programme of reform will continue for the foreseeable future
- This has brought Uzbekistan expanded economic cooperation with China, which is increasing its investment in Central Asia and is looking for stable partnerships
Uzbekistan President Shavkat Mirziyoyev’s Strategy for the Development of New Uzbekistan and China’s investment policy in Central Asia are working together to strengthen cooperation between the two countries in Central Asia.
As Central Asia’s most populous country, Uzbekistan has the foundation to become a regional economic powerhouse. It is also the only Central Asian republic to share borders with every country in the region. This geographical position, in combination with reforms in Uzbekistan, has brought about expanded economic cooperation with China, which is looking for stable partnerships.
He has also made the fight against corruption a priority, making living and doing business in Uzbekistan safer. Most notably, he is working to eliminate barriers for trade and liberalised the foreign exchange market. He is trying to turn Uzbekistan into an attractive country for business and foreign investment.
Mirziyoyev’s level of popular support and his pending seven-year term are an indicator to foreign investors, including China, about the stability of the government. Chinese investment in the Uzbek economy has risen to about US$11 billion, with more than 1,700 enterprises in the country being funded by Chinese capital.
Qin Gang vows China will work with Uzbekistan on energy and projects
Trade between Uzbekistan and China has doubled in recent years, reaching nearly US$9 billion last year and elevating China to being Uzbekistan’s top trade partner. Uzbekistan’s exports to China have increased at an annualised rate of 14 per cent during the last 26 years.
Uzbekistan’s exports to China are mostly mineral resources, non-ferrous metals, cotton and agricultural products. However, they now also include electronic equipment and machinery such as industrial and lab electric furnaces, along with harvesting and threshing machinery. The expanding list of finished products destined for export shows that Uzbekistan’s recent economic reforms are being implemented efficiently.
Where there is demand for growth and infrastructure, China opts to step in. In turn, Uzbekistan aims to double its GDP to US$160 billion by 2030, increase its citizens’ purchasing power, and double exports of finished products during the next three years by becoming a member of the World Trade Organization.
Chinese capital is stepping in to help Uzbekistan reach its goals and is benefiting in the process. This mutually beneficial exchange is what the China-Central Asia summit was meant to achieve. It seems to be compatible with Mirziyoyev’s new strategy for Uzbekistan, which among other things aims to get the country on par with middle-income countries and transform it into a strong regional economy.
Chinese investment in Uzbekistan is growing at a steady pace. It has the potential to rise even further as long as Uzbekistan implements the president’s planned reforms and continues to create an environment that is appealing to business and foreign investment.
Mikhail Karpov is a PhD candidate of historical sciences at Moscow State University, Institute of Asian and African Studies