Tajikistan and China Discuss Improving Bilateral Economic Relations
Jul 20, 2020
Chinese President Xi Jinping stressed the importance of bolstering Chinese-Tajik economic relations in a June 17 phone call to his Tajik counterpart, President Emomali Rahmon. The two presidents discussed continuing work on Belt and Road Initiative (BRI) projects in Tajikistan and ongoing Chinese-led assistance to the country throughout the COVID-19 pandemic. Xi referenced the team of medical experts he dispatched to Tajikistan in late May to assist the country in handling the pandemic and the medical video link that was established to facilitate streamlined communication between medical professionals in the two countries. President Rahmon responded with gratitude and announced that he would ensure that Tajikistan’s national development strategy continue to become more amenable to BRI investment.
The Belt and Road Initiative is at the forefront of many bilateral discussions between Central Asian countries and China. While trade between the Caspian region and China generally grew due to BRI projects, Tajikistan saw its trade numbers with China decline in the past decade. In 2010, Tajikistan’s total trade with China was valued at $685.13 million, but this number dipped to $588.43 million by 2018. Moreover, during this timeframe imports from China grew while Tajik exports declined. Although Tajikistan has the least trade volume with China out of the five Central Asian republics, Tajikistan imports more goods from China than it does any other country, at a volume of $1.43 billion in 2018.
To improve Tajikistan’s economic standing in the eyes of China, President Rahmon is shaping the National Development Strategy of Tajikistan around Chinese investments through the BRI. Tajikistan was one of the first countries to announce its participation in the initiative after its rollout in 2013 and was one of the first members in the Asian Infrastructure Investment Bank (AIIB) launched by Beijing.
Attempts to attract Chinese investment however have proven to be risky. In 2009, the Tajik government and Chinese company TBEA agreed to construct a 200 MW coal power station in Dushanbe. Funding conflicts in the first phase of construction and possible political pressure from President Xi on the Export-Import Bank of China led to the bank providing Tajikistan directly with $331 million to finance the second phase of construction. When construction on the plant was completed in 2018, Tajikistan was left with a $331 million concessional loan to Eximbank and granted TBEA full mining licenses for two gold mines to cover the costs of construction. This will likely force Tajikistan into further economic reliance on China and disrupt the legitimacy of its own economic sovereignty. Tajikistan also collaborates with China through its participation in the Shanghai Cooperation Organization (SCO), a Eurasian international organization comprised of China, India, Kazakhstan, Kyrgyzstan, Russia, Pakistan, Tajikistan, and Uzbekistan. Founded in 2002, the SCO aims to promote multilateral cooperation between member states in the economic, political, and security fields. The military and security alliance facilitates collaboration that can translate to economic advantages for members. Infrastructure built to transport troops and military weaponry can be repurposed to carry goods across the country. Furthermore, due to the COVID-19 pandemic, China is using the SCO as a platform to encourage economic investment projects in the region by emphasizing the importance of maintaining open trade and transit corridors. Tajikistan can benefit greatly from increased investment through the SCO because of its strategic geographical location. It can exercise influence by acting as a transit bridge between China and the Middle East, Central Asia, and South Asia. Tajikistan can capitalize on its geographic location to compel larger actors
in the alliance to invest more money into its infrastructure in the name of promoting regional security.
President Rahmon’s efforts to appease China by supporting Chinese economic ambitions will likely make Tajikistan more palatable to Chinese investment and trade opportunities. In addition, political and military compliance with China, through the Shanghai Cooperation Organization and other international bodies will likely result in greater bilateral cooperation between the two countries. However, while Tajikistan could benefit from Chinese investment projects through the BRI and SCO, it must remain cautious of Chinese intentions to avoid indenturing itself to China and losing control of its mineral reserves. It is important that Tajikistan use Chinese investments while also seeking to diversify its economic relations to prevent the country from becoming fully economically dependent on China.