Central Asian countries, which the Silk Road traverses, have a long history of economic and trade exchange with China. In recent years, bilateral trade volume has witnessed a sharp increase, reaching US $45.94 billion in 2012. In September 2013, Chinese President Xi Jinping unveiled China’s vision of building a Silk Road economic belt together with Central Asian countries, so committing to enhance further trade and economic exchange between the two sides.

Starting from Scratch

After the collapse of the Soviet Union, in January 1992 China sent a diplomatic delegation headed by Minister of Foreign Economic Relations and Trade Li Lanqing and Vice-Minister of Foreign Affairs Tian Zengpei to visit the five Central Asian countries – Uzbekistan, Kazakhstan, Tajikistan, Kyrgyzstan, and Turkmenistan. From January 2 to 7, at almost the rate of one country each day, China initiated diplomatic relations with the five countries.

In 1992, trade volume between China and the five Central Asian countries totaled US $460 million, accounting for 0.27 percent of China’s total foreign trade. In 1995, this figure almost doubled to US $847 million. However, its proportion in China’s overall foreign trade decreased.

In that period, China’s major commodities exported to Central Asian countries were everyday consumer goods including textiles, clothing and food, as well as food materials. The major imports from Central Asian countries to China were chemical fertilizer, steel, cotton, nonferrous metals, and industrial chemicals.

Back then China was also not overly active in its investment in Central Asia. In 1995, China’s registered joint-venture enterprises amounted to around 300 in Kazakhstan, 130 in Kyrgyzstan, and 80 in Uzbekistan. Most were lower-end industries like restaurants, trade, daily necessities, and food processing.

In 2001, the Shanghai Cooperation Organization (SCO) was founded. Its aim was joint work in combating terrorism, safeguarding regional security and stability, and promoting regional cooperation in such fields as economy and trade, environmental protection, culture, science and technology, education, energy, transportation and finance. The organization also set out to enhance comprehensive and balanced regional development in terms of the economy, society and culture.

Benefiting from the framework of the SCO, trade and economic exchanges between China and Central Asian countries have rapidly developed. China mainly imports energy and raw materials from Central Asian countries, and exports to them textiles, clothing, light industrial products and high-tech products. Today, China is Uzbekistan and Kyrgyzstan’s largest investor and second largest trade partner, and Kazakhstan and Turkmenistan’s biggest trade partner.

Deepening Diversified

Economic Cooperation

The 2013 Report on the Development of Central Asian Countries, released by the Chinese Academy of Social Sciences (CASS), said that China and Central Asian countries were expanding cooperation in such fields as trade, finance and investment, and that similar cooperation in such non-resource sectors as agriculture, manufacturing, high tech and renewable energy industries is taking off.