Opinion

Chinese investment in Azerbaijan is a win-win for both countries

Azerbaijan stands in the so-called middle corridor of the transportation links between China and Europe

Oil-rich Azerbaijan, a participant in the Belt and Road Initiative, is also keen for more Chinese investment

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The volume of bilateral trade between China and Azerbaijan has increased by 67 per cent so far this year from the same period in 2019. Photo: AFP

Bahruz Babayev is a policy analyst & researcher at the Centre for Foreign Trade Support and serves as a faculty member at the UNEC Business School at the Azerbaijan State University of Economics (UNEC).

Published: 5:30pm, 27 Aug 2020Updated: 5:30pm, 27 Aug 2020

Azerbaijan, located in the centre of the so-called middle corridor of the transportation links between China and Europe remains a reliable transit partner for China. This ongoing successful business cooperation will contribute to increasing the economic trade links between the two countries.

A perfect example of this happened on June 20 when a cargo train consisting of 43 cars from China headed to Istanbul, passing through Azerbaijan. The cargo was received at the Port of Baku and successfully delivered to Turkey through the Baku-Tbilisi-Kars railway. The Xi’an Free Trade Port Construction and Operations logistics platform regularly transports cargo from China to Turkey through Azerbaijan.

Furthermore, Azerbaijan’s role as a transit country for China is not limited to cargo, as it is keen about becoming a regional hub for the establishment of the Asia-Europe telecommunications corridor and the transmission of Chinese internet traffic.

A strategic memorandum of cooperation signed between China Telecom and AzerTelecom in 2019 is a crucial framework agreement to achieve this objective. Becoming a telecommunications transit country between Europe and China is of great benefit to Azerbaijan. Indeed, Azerbaijan gains both transit revenues and Chinese technical assistance to strengthen the country’s telecommunications and logistic capabilities.

The middle corridor through Azerbaijan is the least costly transit route for China. The shortest rail route to deliver goods from China to Europe runs through Azerbaijan. The middle corridor passing through Azerbaijan has several advantages over other trans-continental transport corridors in terms of existing infrastructure and proximity to Europe.

Azerbaijan’s positive attitude towards the Belt and Road Initiative is an important prerequisite for increasing the volume of trade cooperation beyond the transit partnership

Azerbaijan has placed great emphasis on developing transport routes connecting China to Europe since President Ilham Aliyev visited China in 2015, and the two countries signed the ‘Memorandum of Understanding on Joint Encouragement of the Establishment of Silk Way Economic Belt’. Azerbaijan’s positive attitude towards the Belt and Road Initiative is an important prerequisite for increasing the volume of trade cooperation beyond the transit partnership.

Azerbaijan is a more than a reliable trading partner and transit country for China. Oil-rich Azerbaijan is one of the few countries on the historic Silk Road which has an interest in developing the East-West transport corridor, which is China’s grand plan.