Why China’s belt and road plans for Central Asia are changing

Amid demands for more jobs, exports and skills training, Beijing is helping Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan to industrialise

Analysts said China was focused on keeping Central Asian governments happy as the US and Russia look to increase their own power and influence in the region

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China’s Foreign Minister Wang Yi pictured with his counterparts from Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan at a meeting in May. Photo: Xinhua

Published: 12:30pm, 18 Dec 2021

China is changing the way it invests in Central Asia under its Belt and Road Initiative to grow global trade, as Chinese companies increasingly have to adapt to the demands of the region’s governments and citizens who want more jobs, exports and skills training.

Instead of large-scale infrastructure projects, Beijing’s emphasis has shifted in recent years towards helping Central Asian economies – Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, in particular – to industrialise, according to a report from the Carnegie Endowment for International Peace think tank.

“Almost all Chinese companies are trying to be seen as serving the local community better,” said Dirk van der Kley, a research fellow at the Australian National University’s School of Regulation and Global Governance and one of the authors of the report: “How Central Asians Pushed Chinese Firms to Localise”.

China has shifted its focus away from large-scale infrastructure projects such as pipelines in Central Asia. Photo: Handout

He told This Week In Asia that Chinese lending in Central Asia is becoming more discerning and has veered towards projects that transfer manufacturing or production capacity, adding that Chinese policy banks are funding fewer coal-fired power plants than before while Chinese firms are building more renewable power plants in the region.

Chinese companies have also “steadily increased their proportions of local hires” in Central Asia by upskilling workers both on-site and in China, the Carnegie report found, as Beijing is in the process of setting up a network of vocational training centres across the region named after the legendary Chinese inventor and craftsman, Lu Ban.

Since the launch of the Belt and Road Initiative in 2013, China has overtaken Russia to become the largest investor in Central Asia, attracted by the region’s mineral deposits, export markets and a desire to ensure stability in western Xinjiang.