Western Balkans citizens legally resident in EU equal to 14% of region’s population
International Ice Hockey Federation (IIHF) has stripped Belarus of the right to hold the World Championship this year
Alexei Navalny arrested on arrival as he returns home
LONG READ: The oligarch problem
Consumer confidence index drops q/q, y/y in 4Q20
M&A in Central and Eastern Europe fell 16% in value in 2020, says CMS report
Russia’s grain harvest may fall to 131mn tonnes in 2021 from 133mn tonnes in 2020
ING: Russia balance of payments: supportive of ruble in the near-term, but risks for 2H21 mount.
Western Balkans and Ukraine urged to scrutinise coal subsidies
Oligarchs trying to derail Ukraine’s privatisation programme, warns the head of Ukraine’s State Property Fund
Private finance mobilised by development banks up 9% to $175bn in 2019
VISEGRAD BLOG: Central Europe's populists need a new strategy for Biden
OUTLOOK 2021 Lithuania
EBRD says loan to Estonia’s controversial Porto Franco project was never disbursed
Czech Pirates and Mayors approve final coalition agreement for 2021 elections
Hungarian vehicle makers hit by supply chain shortage
COVID-19 and Trump’s indifference helped human rights abusers in 2020
OUTLOOK 2021 Poland
OUTLOOK 2021 Slovakia
BRICKS & MORTAR: Rosier future beckons for CEE retailers after year of change and disruption
FDI inflows to CEE down 58% in 1H20 but rebound expected
BALKAN BLOG: US approach to switch from quick-fix dealmaking to experience and cooperation
Corona-induced slump in global clothing sector dragged down Albania’s 2020 exports
BALKAN BLOG: The controversial recipe for building up Albania
Turnover rose on Bosnia's two stock exchanges in 2020 while prices fell
Bulgaria’s government considers gradual easing of COVID-related restrictions
Sofia-based LAUNCHub Ventures holds first close of new fund on €44mn
ING: Growth in the Balkans: from zero to hero again?
Spring lockdown caused spike in online transactions in Croatia
Labour demand down 28% y/y in Croatia in 2020
EBRD investments reach record €11bn in pandemic-struck 2020
OUTLOOK 2021 Moldova
Storming parliaments: New Europe's greatest hits
World Bank revises projection for Moldova’s 2020 GDP decline to 7.2%
Montenegrins say state administration is most corrupt institution
North Macedonia plans to cut personal income tax in IT sector to zero in 2023
OUTLOOK 2021 Romania
Romania’s central bank cuts monetary policy rate by 25bp to 1.25%
OUTLOOK 2021 Slovenia
Slovenia’s opposition files no-confidence motion against Jansa cabinet
Slovenia’s government to release funds to news agency STA after EU pressure
UK Moneyhub picks Slovenia for post-Brexit European base
Turkey’s benchmark rate held as concerns over faltering recovery come to fore
Turkish lira breaches HSBC’s stop-loss, Turkey ETF signalling outflows
ISTANBUL BLOG: Biden must find a way to work with Trump’s strongman pal Erdogan
CAUCASUS BLOG : What can Biden offer the Caucasus and Stans, all but forgotten about by Trump?
Armenia ‘to extend life of its 1970s Metsamor nuclear power plant after 2026’
OUTLOOK 2021 Armenia
COMMENT: Record high debt levels will slow post-coronavirus recovery, threaten some countries' financial stability, says IIF
OUTLOOK 2021 Georgia
Iran’s technology minister indicted for failing to properly implement internet censorship
No US move to rejoin Iran nuclear deal imminent say Biden national security nominees
TEHRAN BLOG: Will Biden bet on a quick return to the Iran nuclear deal?
Tehran Stock Exchange chief quits amid “Black Monday” fury
Central Asia vaccination plans underwhelm, but governments look unruffled
Fears of authoritarianism as Kyrgyz populist wins landslide and backing for ‘Khanstitution’
Mongolia's winter dzud set to be one of most extreme on record says Red Cross
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
Mongolia in lockdown after suffering first local coronavirus transmissions
OUTLOOK 2021 Tajikistan
OUTLOOK 2021 Turkmenistan
Turkmenistan: How the Grinch stole New Year
COMMENT: Uzbekistan is being transformed, but where are the democratic reforms?
Download the pdf version
More...
In Beijing, it is considered polite to message your friends when they win reelection. No stranger to protocol, President Xi Jinping fired off a quick telegram to congratulate his Tajik counterpart Emomali Rahmon on a fifth election victory on October 12.
But Xi is keeping Kyrgyzstan’s acting leader Sadyr Japarov, who muscled into power in mid-October, at arm’s length. Japarov has received no telegram.
China is not happy.
During the unrest that followed legislative elections in Kyrgyzstan on October 4 – stoked by Japarov who was sprung from jail amid the chaos and proceeded to seize all levers of power – Chinese businesses were targeted for shakedowns nationwide, at times accompanied by violence, a security contractor said: Women were threatened with rape, men were savagely beaten and the Chinese flag set alight. On October 6, 35 Chinese executives fled to a hotel in Bishkek, only to be surrounded by an armed mob seeking ransom. Elsewhere, over 100 Chinese workers spent that night in a snowy forest after fleeing a mob that had occupied their mine. The next day, men wielding Kalashnikovs visited the Chinese oil refinery in Kara-Balta demanding a $350,000 protection fee, threatening to set the plant on fire. When hundreds of protesters surrounded the plant, the men with AKs were paid, the source said.
Through it all, the Chinese Embassy said nothing. Then, on October 16, Ambassador Du Dewen was finally called in to meet the acting Kyrgyz foreign minister. In some of the more direct comments one can find on the Chinese Embassy’s mannerly website, Du asked for help protecting the rights of Chinese investors. “China is highly concerned about the current situation in Kyrgyzstan,” the readout said. “Ambassador Du focused on protecting the safety and legitimate rights and interests of Chinese citizens and enterprises in Kyrgyzstan, and maintaining communication [with Kyrgyz counterparts] regarding these issues.”
Three days later, Cheng Guoping, external security commissioner at the Chinese Foreign Ministry, summoned Kyrgyz Ambassador Kanayym Baktygulova. This is a significant gesture. When Beijing is concerned about the safety of its citizens abroad, the Ministry of Public Security makes the calls. Cheng gets involved only when China feels its domestic interests are threatened. Cheng’s meeting signalled that Beijing sees the unrest as more than a Kyrgyz issue.
For business ties, the damage had already been done. The chaos confirmed the worry that Chinese in Bishkek have long expressed: that Kyrgyz officials “don't care” enough to protect them. Some are saying the violence was the last straw.
That would be catastrophic for Japarov, whose government on October 28 telegraphed its desperation by asking China’s official Association for the Development of Enterprises Abroad to organise a trip so Chinese investors can see for themselves how the political situation in Kyrgyzstan has “normalised,” Kyrgyz state media reported.
Needless to say, this is not a good environment in which to negotiate debt forbearance. Bishkek has asked Beijing twice this year and is still waiting for a response. China holds around $1.8bn or over 40% of Kyrgyzstan’s external debt.
Finally, on October 30, Ambassador Du met Japarov and offered her congratulations. “The ambassador said that China hopes Kyrgyzstan can maintain stability and realise its social and economic development,” reads the clinical bromide of Chinese government media. The English-language CGTN report added that the acting prime minister “said that the country would spare no effort in protecting the legitimate rights and interests of Chinese citizens and enterprises in Kyrgyzstan.” Japarov’s website did not mention the meeting.
Border troubles
It’s not only the political unrest that has dented relations. For almost five months, Kyrgyz importers have not been receiving many goods from China, reported 24.kg.
Though both governments claim the border is open, it is effectively closed. China suspended arrivals from Central Asia in March, as COVID-19 spread in the region; Kyrgyz drivers thus cannot cross into the People’s Republic. Chinese nationals, on the other hand, must submit to a 14-day isolation period after returning from abroad. Thus Chinese drivers are unwilling to cross the border to Kyrgyzstan; they would be waylaid for too long.
China’s customs service says exports to Kyrgyzstan were down 44.7% in the first three quarters of 2020.
Members of the Kyrgyz Association of Markets, a trade lobby, are now threatening to stop paying their taxes in November if the border remains closed. Some tried to storm the government headquarters in Bishkek on November 2.
COVID is also frustrating business ties with neighbouring Tajikistan. On October 6, the Civil Aviation Agency there announced that flights between Dushanbe and Urumqi, in Xinjiang, would resume by mid-month, reported Centralasia.news. But as of November 3 no flights from Dushanbe have landed in Urumqi. Asia-Plus reported on October 19 that Tajik authorities had not obtained permission from the Chinese aviation authorities to land in Urumqi.
Infrastructure notes
Elsewhere in Central Asia, Chinese operations are easing into a new, COVID-era normal. After 70 Chinese gas engineers returned to Turkmenistan on September 29, two more wells at the Saman-Depe field in Lebap Province each expanded capacity from 175,000 to 300,000 cubic metres per day, reported state-owned CNPC. Chongqing-based SAIC Iveco Hongyan delivered 64 heavy trucks to Turkmenistan on October 27, reported Xinhua. A cascade of four electricity generators at Uzbekistan’s Kamchik hydropower station has also begun operating, said state-owned Dongfang Electric.
In Kazakhstan, a $2.6bn plastics factory under construction in Atyrau is finally coming together. On October 14, two compressors were successfully installed, reported state-owned China National Chemical Engineering Group. A $150mn glass factory under construction in Kyzylorda by state-owned China National Building Material Group is 70% finished, the Chinese Embassy in Nur-Sultan announced.
Chinese knowhow is also attracting attention at the grassroots level, at least according to Beijing’s propagandists. On October 15, Xinhua featured the story of one Uzbek cotton farmer’s new love affair with Chinese drip irrigation technology.
Abdullah Bekmatov was sceptical earlier this year when he installed the watering equipment on fewer than half his acres. By harvest time, he was a fanatic: “No longer able to hide his inner joy,” according to Xinhua. “Compared to traditional cotton planting methods, using China’s drip irrigation technology reduces the total cost [of inputs] by 40 to 50%,” Bekmatov allegedly exclaimed. “Next year, all my cotton fields will use Chinese drip-irrigation technology.”
Tashkent’s openness to Chinese products will likely intensify with a new freight connection. On October 13, the first regular train service launched between Hebei Province (adjacent to Beijing) and Tashkent, carrying goods worth $4.5mn, reported China News Service. At least 12 trains weekly will now depart from Hebei for Central Asia, including to the border with the region at Khorgos. (The report did not say how many would travel on to Tashkent.)
These trains are not just for facilitating Chinese exports. For most of Central Asia, China offers the closest port. Docks on China’s east coast have been accommodating an influx of cargo from Central Asia in recent years. On October 6, 21 containers of Uzbek potash fertilizer departed Guangzhou for Indonesia.
Trade
A bad cherry harvest following spring frosts in Uzbekistan saw Chinese imports fall 83% in the first seven months of 2020, part of an overall 44% y/y drop in Uzbek fruit and vegetable sales to China, the East Fruit industry digest reported. But Uzbek confectioners substituted for the lack of fresh fruit, increasing candy exports to China by over five times year-on-year in the first nine months of 2020, reported UzDaily.
Officials in Tashkent seem unruffled by one poor harvest. On October 24, the Ministry of Investment and Foreign Trade said exports to China would be worth $3bn by 2025 and projected Chinese investments in Uzbekistan to reach $5bn that year, reported Kun.uz. Uzbekistan’s China-bound exports have increased in the last five years, according to Chinese customs data, from $1.2bn in 2015 to $2.1bn in 2019.
Uzbekistan’s Association of Exporters last month became an official partner of China’s Alibaba e-commerce platform, UzDaily reported on October 8. The designation makes it much easier for Uzbek sellers to list their wares on Alibaba – by some measures the world’s largest online marketplace – and reach Chinese buyers. The association’s chairman said that, as a result, he expects Uzbek exports to China to increase by two or three times. The Uzbek Embassy in Beijing also hosted a webinar for Uzbek exporters eyeing opportunities in China. Over 200 reportedly logged in.
Uzbekistan is not alone in seeing China as the marketplace of the future. On October 27, Kazakh Minister of Trade and Integration Bakhyt Sultanov told journalists that his office has selected 35 Kazakh grain and agriculture businesses to receive training on how to meet Chinese customs regulations, building on recent successes shipping food products eastbound. In a nod to the burgeoning competition with Uzbekistan for Chinese custom, he added that the ministry will help 50 more Kazakh companies register on Alibaba by the end of the year.
The only potential hiccup with such increasingly cosy ties is unhappy Central Asians.
Sultanov noted that “some people on social networks expressed dissatisfaction with the ministry’s plan to expand meat exports to China, believing that this may lead to a rise in domestic meat prices in Kazakhstan,” the Chinese Embassy reported in its summary of the briefing. Sultanov assured journalists that only processed meat products would be exported to China and that domestic prices would not be affected.
Sultanov’s comments give texture to rising concerns about Chinese business intentions across Central Asia. Polling data supplied to Eurasianet in October showed highly negative opinions of Chinese businesses in Kazakhstan and Kyrgyzstan. In Uzbekistan, respondents were more confident that Chinese investments will benefit the country, though the percentage of Uzbeks calling themselves “very concerned” about an increase in national debt jumped 18 points in the last year; those “very concerned” about Chinese nationals buying land shot up from 30 to 53%; and confidence that the Chinese will create jobs dropped significantly.
Niva Yau researches China in Central Asian affairs at the OSCE Academy in Bishkek.
This article originally appeared on Eurasianet here.
Register here to continue reading this article and 5 more for free or purchase 12 months full website access including the bne Magazine for just $250/year.
Register to read the bne monthly magazine for free:
Already registered
Password could contain only a-z0-9\+*?[^]$(){}=!<>|:-_ characters and have 8-20 symbols length.
Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.
Forgotten password?
Email field can't be empty.
No user with this email address.
Access recovery request has expired, or you are using the wrong recovery token. Please, try again.
Access recover request has expired. Please, try again.
To continue viewing our content you need to complete the registration process.
Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.
If you have any questions please contact us at sales@intellinews.com
Sorry, but you have used all your free articles fro this month for bne IntelliNews. Subscribe to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free subscription to bne's digital weekly newspaper to subscribers to the online package.
Click here for more subscription options, including to the print version of our flagship monthly magazine:
More subscription options
Take a trial to our premium daily news service aimed at professional investors that covers the 30 countries of emerging Europe:
Get IntelliNews PRO
For any other enquiries about our products or corporate discounts please contact us at sales@intellinews.com
If you no longer wish to receive our emails, unsubscribe here.
Magazine annual electronic subscription
Magazine annual print subscription
Website & Archive annual subscription
Combined package: web access & magazine print annual subscription