China-Russia power struggle in Central Asian markets

Two of the least developed Central Asian countries, Tajikistan and Kyrgyzstan, have been heavily dependent on Chinese investment lately. But it appears that Chinese investors may be more inclined towards favoring Tajikistan over neighboring Kyrgyzstan.

Neither of the countries boast an attractive investment climate. According to the World Bank, out of 189 countries surveyed, Kyrgyzstan ranked 102nd for overall ease of doing business while Tajikistan ranked 166th. But interestingly, China’s Tajik projects have fared better than they have in Kyrgyzstan. In 2014, Tajikistan broke its annual production record for cement and increased gold output by 25 percent but perhaps unsurprisingly, Chinese companies were responsible for this.

Regarding the back away from Kyrgyzstan, there are currently two factors involved: Firstly, Kyrgyzstan’s decision to join Kremlin-led Eurasian Economic Union (EEU) and secondly, its unstable political climate.

Russia’s economic crash is increasing the need of foreign investment for both Central Asian countries. But the problem is whereas Russia wants to retain economic control over them, it is not ready to invest. With Russia’s economic fall, China steps into the Central Asian market, risking Russia’s position further.

Moreover, both Central Asian countries rely heavily on remittances from Russia, but as the Russian economy dwindles, China seems to be the new replacement. Recently, the number of students learning Chinese grew in Tajikistan; they seem to look up on moving to China as the career-making move.

Den Xin, director of the Confucius Center for Culture and Language Studies in Tajikistan, states that the number of students enrolled to learn Chinese increased from almost 120 to over 300, which resulted in a lack of space for them to fit in.

What seems to be only a beginning, Tajik students already view China as a potential replacement for Russia in furthering their careers and gaining more opportunities. In the long run, it may mean good news for Tajikistan (although with heavy implications in political and economic sovereignty in future, but currently, it is bad news for Russia. In Tajikistan’s case, Deputy Finance Minister Jamoliddin Nuraliev told the Financial Times in October that Chinese officials had promised his country $6 billion in investments over the next three years.