Azerbaijan-China cooperation: Relations entered path of development -ANALYSIS

Azerbaijan-China cooperation: Relations entered path of development -ANALYSIS
# 05 September 2023 15:03 (UTC +04:00)

Recently, the high dynamics of political, economic, and transport relations between Azerbaijan and China have been observed, APA-Economics reports.

2023 can be called a successful and full development year between both countries.

Outline of interactions

The growing relations between the two countries further strengthened thanks to joint cooperation within the framework of the Shanghai Cooperation Organization in the economic field, activities of the Azerbaijan-China Intergovernmental Commission on Trade and Economic Cooperation, projects implemented with the Asian Infrastructure Investment Bank (AIIB), Azerbaijan joining China's "One Belt, One Road" initiative, partnerships under the East-West and Middle Corridor projects, and opening of the Azerbaijan Trade House in Beijing, the capital of China last week. In addition, during the official visits, the sides noted the importance of establishing and developing cooperation relations between the regions and cities of the two countries.

Expanding political dialogue, and successful cooperation in economy, transport, logistics, infrastructure, investment, energy and other fields has led to the active participation of Chinese companies in the restoration and reconstruction works carried out in the liberated territories of Azerbaijan, which, in turn, has caused Azerbaijan-China relations to rise up to the level of strategic partnership.

Joint participation in infrastructure projects

The bilateral economic relations of Azerbaijan and China, which are located on the ancient Silk Road, developing along the rising line, mostly in infrastructure projects can be seen. The implementation of joint infrastructure projects by both Azerbaijan and China is an indicator of work based on mutual trust. The mutual economic relations of both countries are getting stronger with the cooperation on the Baku International Sea Trade Port, railway infrastructure, shipbuilding and other transport-transit and logistics projects, as well as the Azerbaijani segment of the Middle Corridor, the participation of Chinese companies in the construction works on the territories liberated from occupation, and Azerbaijan joining the "One Belt, One Road" project, investing in the development of the infrastructure of the Middle Corridor, participating in the China International Trade Fair of Services (CIFTIS).

The Trans-Caspian International Transport Corridor connecting China and Europe was formed at the initiative of Azerbaijan as a result of the launch of the Baku-Tbilisi-Kars railway line in 2017.

The Middle Corridor is a large-scale transport project that reflects the economic interests of not only both countries but also other countries in the region. Today Azerbaijan is one of the main countries contributing to the realization of the Middle Corridor. The mentioned itinerary is about to become one of the important transport corridors connecting Asia and Europe. Significant infrastructure projects such as the Baku-Tbilisi-Kars line, which provides the shortest railway connection between Europe and China, the Baku International Sea Trade Port, Alat Free Economic Zone, are of great importance for this global initiative and regional cooperation in general.

Besides, the sides discussed cooperation in solar, wind, hydrogen energy and seawater desalination projects, information exchanges about the "green energy" potential of Azerbaijan, the projects implemented in this direction in liberated territories of Azerbaijan during mutual state visits of the delegations of both countries.

Interest in Zangazur corridor

The Patriotic War, which ended with the victory of the victorious army of Azerbaijan, revealed a new geopolitical sight in the region.

In the last article included in the trilateral statement signed by Azerbaijani, Russian and Armenian leaders, ensuring the construction of new transport communications connecting the Nakhchivan Autonomous Republic and the western regions of Azerbaijan is mentioned, which necessitated the opening of the Zangazur corridor. This corridor will bring a new breath to the region and thereby the Nakhchivan Autonomous Republic, which has been blockaded for many years, will play the “lung” role for the cargo transportation from China to Europe and vice versa over a long distance and time.

Another factor that raises the importance of Zangazur corridor is its location on the route where annual trade turnover of 600 billion dollars takes place. The transportation of cargoes that will be delivered quickly and in short period of time by land from China to Europe, from China to Türkiye and from Europe- Türkiye to Central Asia, China are on the focus.

Thus, if there were frequent problems happening due to technical limitations in the Poland-Belarus border before the start of Russia-Ukraine war, right now, the war has turned this route into a problem once and for all. China also supports the Zangazur corridor, which is located on the Middle Corridor and creates diversification opportunities, in order to develop the western regions of its country. All these factors show how much China values this corridor. Chinese President Xi Jinping has talked about the importance of routes located on the Belt and Road Initiative and reminded of the support he will give to these routes during the meetings with President of Azerbaijan Ilham Aliyev, and also in official letters.

Indicators of economic relations

Of course, the aforementioned issues could not be reflected in the figures highlighting the bilateral economic relations.

So, according to both the State Statistics Committee and the State Customs Committee, China ranks fourth in the list of main countries in Azerbaijan's trade turnover this year. This year alone, the value of goods and products exported from Azerbaijan to China was 63.5 mln dollars. Export of non-oil products amounted to 23.3 mln dollars.

The volume of imports from China to Azerbaijan is 1,556,200,000 dollars, which means that 15.4% of the total value of products imported into the country fell to China. Thus, China ranks second among the countries where Azerbaijan imports goods and products.

Apart from that, Azerbaijan received 1.6 mln dollars from exports to Hong Kong, a special administrative region of China. The volume of products imported from Hong Kong to our country this year was 1.1 mln dollars.

The figures suggested by the Central Bank of Azerbaijan also included economic relations with China. So, according to the indicators of the first quarter of the current year, the direct investment attracted from China to Azerbaijan's economy amounted to 3.54 mln dollars. Compared to the corresponding period of last year, a 2.6 times increase was recorded.

Also, if we look at the amount of funds transferred from Azerbaijan to China, we can see an increase here as well.

So, in the first quarter of this year, according to the indicators highlighting the information on the remittances of physical persons transferred abroad from Azerbaijan, 1.2 mln. USD was transferred, which means a 41.7% increase compared to the corresponding period of last year.

It seems that the economic and political relations between Azerbaijan and China are developing on an upward trend. This can be considered as an important factor for the development of both countries.

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