Dushanbe asks Beijing to send more Chinese specialists to Tajikistan

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The next 11th meeting of the Tajik-Chinese joint commission for trade and economic cooperation took place on December 8.  Due to the coronavirus pandemic, the meeting was held in a video-conferencing format.


Co-chaired by Tajik Minister of Economic Development and Trade Zavqi Zavqizoda and Chinese Deputy Minister of Commerce Yu Jianhua, the meeting was reportedly focused on issues related to the bilateral trade and construction of government buildings in Dushanbe.


Speaking at the meeting, Tajik minister, in particular, noted that China was one of major trading partners of Tajikistan.


According to the press center of the Ministry of Economic Development and Trade (MoEDT), a to-way trade between Tajikistan and China last year valued at 660 million U.S. dollars.


It was noted that within the framework of technical assistance agreements signed in 2018-2019, China had awarded 1.7 billion yuans in grants to Tajikistan for implementation of economic, infrastructure and social development projects.


The sides reportedly reached an agreement to take necessary measures to attract more Chinese specialists for construction of parliament and government complexes in the Tajik capital as well as rehabilitation of roads in Bokhtar and Kulob.


They reportedly also touched upon the issue of reconstruction of LLC Tajik-Chinese Mining Company, which was established in June 2007 in the northern Sughd province with an authorized capital of 30 million U.S. dollars.


Meanwhile, an article posted on Eurasianet’s website on November 23 notes that Beijing has changed course in Central Asia and it now rarely funds major infrastructure projects in the region.  Instead China has shifted to manufacturing: a bus factory here, a cement plant there.


China Diversifies in Central Asia says that when Beijing does lend, it is still from its policy banks (China Development Bank and China Eximbank), but preferably after securing joint funding from local partners or other countries.


This change, which has come into focus in the last two or three years, has reportedly had two drivers: recipient states are demanding projects that provide jobs, exports and industrial capacity; and Chinese policy banks that historically funded infrastructure now want to spread their risk.  This is playing out differently in each Central Asian state.


As far as Tajikistan is concerned, the article notes that large-scale Chinese government lending to Tajikistan has reportedly dried up over the last five years.


While Beijing has hit the brakes, Chinese firms have steadily increased investments (sometimes in the form of joint ventures) in mining, cement, textiles and agriculture.


Unlike loans from Eximbank, the Tajik government does not have to pay these back.  For joint ventures the Chinese partner will typically make the majority capital investment, with the Tajik side organizing land and regulatory approval.  Often the Tajik government provides tax benefits or free land for Chinese investments.


In select sectors, these Chinese investors have reportedly created an export industry.  Gold production rose from 2.4 tons in 2012 to 8.1 tons in 2019, when one Chinese-Tajik joint venture reportedly accounted for over 70 percent of production.


Similarly, in 2013 Tajikistan produced a mere 30,000 tons of cement and imported about 3 million tons.  By 2018, the country produced 3.8 million tons and exported 1.4 million.  Almost all of this was made by Chinese firms.


A Chinese-owned textile firm claims to be Tajikistan’s largest exporter in terms of foreign currency earnings.  Silver production also increased by 17 percent in 2019.


But with Tajikistan’s small market and hostile business conditions, major projects are harder to get off the ground.


Source: Asia Plus