By Tristan Kenderdine

April 16, 2018, the CACI Analyst

Following high-profile visits by Premier Li Keqiang in 2015 and Xi Jinping in 2016, China’s is domestically devolving its trade and industrial relationship with Uzbekistan to provincial and prefectural levels of government. However, financing for China’s investment in Uzbekistan remains either directly invested or indirectly coordinated by one of China’s three central policy banks, Export-Import Bank of China, China Development Bank, and the Agricultural Development Bank of China. Since 2014, the Exim Bank has committed to fund Belt and Road projects worth around US$ 120 billion, which corresponds to nearly a full year’s GDP for Uzbekistan. These quasi-sovereign wealth funds certainly pose a systemic debt risk, but are not necessarily a debt-trap.

 By Stephen Blank

April 12, 2018, the CACI Analyst

During January and February, several reports surfaced of a new Chinese military base in Afghanistan’s Wakhan corridor. According to Afghan officials, China and Kabul discuss building a base in Badakhshan and China will send an expert delegation to Kabul to determine the exact site, and will fund the base and all of its material and technical expenses, including weapons and equipment. China has denied these reports as they contradict its long-standing position that it is not seeking foreign bases or intends to intervene militarily in Central Asia. However, witnesses have reported seeing Chinese and Afghan troops on joint patrols. Moreover, there is a long record of signs of a growing Chinese military interest in Central Asia.

 By Emil Avdaliani

March 15, 2018, the CACI Analyst

The Free Trade Agreement between China and Georgia, signed in 2017, came into force on January 1. This will allow Georgian products free access to one of the world’s largest consumer markets, and will free approximately 94 percent of Georgian products from customs taxes. The growth of China’s economic interests has increased Georgia’s hope of playing a role in in Beijing’s Belt and Road Initiative (BRI). By extension, China’s increasing presence in the South Caucasus raises questions regarding the compatibility of Beijing’s interests with those of the region’s traditional hegemon, Russia.

 By John C. K. Daly

March 9, 2018, the CACI Analyst

In December 2017 during a meeting in Beijing between Chinese Defense Minister Chang Wanquan and Afghan Defense Minister Tariq Shah Bahrami, China’s Central Military Commission vice chairman Xu Qiliang stated that China would build a military facility in Afghanistan’s northeastern Badakhshan province to “strengthen pragmatic cooperation in areas of military exchange and anti-terrorism and safeguard the security of the two countries and the region, making contributions to the development of China-Afghanistan strategic partnership of cooperation.” China’s main motive is to interdict the flow of Uyghur militants to and from Xinjiang, yet the initiative potentially has wider implications for Afghanistan and the region. 

 By Dmitry Shlapentokh

November 15, 2017, the CACI Analyst

At first glance, Turkmenistan’s decision in January 2017 to stop selling gas to Iran was a minor episode in the context of an otherwise friendly relationship between Tehran and Ashgabat, as indicated by several meetings of high Iranian and Turkmen officials following the clash over gas deliveries. However, the tension with Iran could imply serious problems for Turkmenistan and lead to increasing dependence on Beijing, regardless of all Ashgabat’s maneuvering. Turkmenistan’s fallout with Iran also limits the ability of both the West and the South to access Central Asian gas and facilitates an increasing Chinese influence in this part of Eurasia, providing additional opportunities for China’s resurrection of the Silk Road.