Geopolitical Report ISSN 2785-2598 Volume 48 Issue 7
SpecialEurasia OSINT Unit

Executive Summary

China has intensified its investment and infrastructural commitments in Kyrgyzstan, seeking to establish strategic logistics and transport networks as part of the Belt and Road Initiative (BRI).

The construction of the At-Bashy Trade and Logistics Centre and the proposed China-Kyrgyzstan-Uzbekistan (CKU) railway underscores Beijing’s aim to enhance trade connectivity, bypass traditional routes through Russia, and consolidate its influence in Central Asia.

This report examines recent developments around the At-Bashy Centre, the associated regional infrastructure, and competitive dynamics with Russia. These projects position Kyrgyzstan as a critical transit point, potentially diminishing Russian dominance in Central Asia and reshaping logistical flows across Eurasia.

China’ Investments in Kyrgyz Infrastrutures:
Background Information

China and Kyrgyzstan have expanded their economic ties over recent years, with China emerging as Kyrgyzstan’s primary foreign investor in 2023, contributing significantly to infrastructure, mining, and energy sectors.

Since its launch in 2013, the Belt and Road Initiative has played a crucial role in Beijing’s plan to build stronger economic ties with Central Asia. Central to this effort is the construction of logistics hubs and railways to facilitate direct access to Middle Eastern and European markets without transiting Russian territory, as evidenced by recent infrastructure projects, including the At-Bashy Centre and the China-Kyrgyzstan-Uzbekistan railway.

The At-Bashy logistics hub, near the China-Kyrgyz border, is being developed in Kyrgyzstan’s Naryn Free Economic Zone (FEZ), which offers favourable tax conditions. Established in 2019 under a public-private partnership, this project aims to establish Kyrgyzstan as a central node in Eurasian transit logistics.

Meanwhile, Moscow has maintained an active regional presence through the Eurasian Economic Union (EAEU) and the Collective Security Treaty Organisation (CSTO), ensuring its influence on political, economic, and security dimensions. Yet, China’s investments, including the At-Bashy Centre, have sparked competitive undertones, marking a potential shift in regional power balances.

Geopolitical Context

1. At-Bashy Trade and Logistics Centre: The At-Bashy Centre, positioned 100 km from the China-Kyrgyz border, aims to serve as a major logistics hub connecting China with Central Asia and Europe. Services will include warehousing, customs brokerage, fuel stations, hospitality, and exhibition facilities. Once completed, the centre will increase the throughput capacity of the At-Bashy border point, boosting cross-border trade and annual cargo volume between Kyrgyzstan and China. The centre also plans to support export-oriented production for markets within the EAEU, the European Union, and the World Trade Organisation.
2. China-Kyrgyzstan-Uzbekistan Railways Project: The railway, which promises to reduce transit times from China to Europe by up to a week, remains stalled despite recent announcements by Kyrgyz officials. The route will avoid Kazakhstan, directly linking Kyrgyzstan with China and Uzbekistan. This railway plays a key role in Beijing’s strategy in expanding its export routes, providing alternatives to traditional routes via Russia. Construction delays have raised questions, but recent negotiations involving Chinese and Kyrgyz leaders suggest a renewed commitment to its commencement.
3. Increased Chinese Investment in Kyrgyzstan: Chinese direct investments reached $220.8 million in 2023, focused on strategic sectors, including manufacturing, mining, and logistics. China’s investment in the Naryn SEZ and the concurrent industrial developments within Kyrgyzstan signify long-term economic integration. Hunan Construction Investment Group, a major player in the Belt and Road projects, oversees the logistics centre, further embedding Chinese corporate interests within the Kyrgyz economic landscape.

Risk Assessment

1. Regional Economic Shifts: The completion of the At-Bashy Centre and the CKU railway could establish Kyrgyzstan as a significant logistics hub for Eurasian trade, realigning trade routes that have traditionally depended on Russian transit networks. By reducing reliance on the Russia-dominated Northern Corridor, these projects would strengthen China’s direct connection to Central Asia and Europe. If successful, Bishkek may witness an economic boost, benefiting from increased trade, job creation, and production for export markets.
2. Diminished Russian Influence: Russia perceives Central Asia as part of its strategic blizhnee zarubezhe (near abroad), and Beijing’s infrastructural projects present a direct challenge. The development of logistics routes circumventing Russian territory could marginalise Moscow’s role as a primary Eurasian trade conduit, thus undermining its influence over Kyrgyzstan and the wider region. Although Russia remains a key security ally, China’s BRI investments signal a long-term strategy that could recalibrate power dynamics, favouring Beijing’s economic presence.
3. Potential for Sino-Russian Competition: While both powers outwardly support regional stability and economic cooperation, underlying competition is clear. Projects like At-Bashy and the CKU railway, when implemented, heighten strategic competition. This situation might cause Russia to take more active countermeasures within the EAEU and CSTO, preserving their influence. Moscow may also seek alternative partnerships or increased military collaboration to counterbalance China’s economic ascendancy.
4. Long-term Regional Integration: The combination of Chinese investments, infrastructure projects, and economic incentives positions Kyrgyzstan to integrate further into Beijing’s sphere of economic influence. Local industries, including agriculture, mining, and light manufacturing, may pivot towards Chinese markets and standards. Bishkek’s collaboration with Chinese enterprises through the FEZ may lead to increased dependency on Chinese financing and technology.
5. Risks of Overreliance on China: While China’s financial involvement offers substantial development opportunities, Kyrgyzstan faces risks related to dependency on Chinese investments and the associated debt obligations. The influence of Chinese companies on significant projects could jeopardise Kyrgyzstan’s economic autonomy, prompting worries about national security, local employment, and environmental consequences. Furthermore, failure to meet project timelines could generate public scepticism, affecting future investments.

Conclusion

In the short term, the At-Bashy Centre is likely to boost cross-border trade and regional employment. The CKU railway, if operational within the expected timeline, will intensify trade integration with China, redirecting trade flows that bypass Russia and potentially affecting Central Asia’s alignment. Over the medium term, Kyrgyzstan’s economic landscape may shift towards increased Chinese economic influence, with China solidifying its position as a primary economic partner.

For further information, analyses, and reports on Kyrgyzstan’s economic performance and investment opportunities and the Chinese presence in Central Asia, contact us at info@specialeurasia.com