Countries of Central Asia announced their official positions on the “Taiwan issue” by Madi Tazhikenov

Countries of Central Asia announced their official positions on the “Taiwan issue” by Madi Tazhikenov

The situation around Taiwan, which China considers its territory under the “One China” policy, and not a separate island state, escalated in the first days of August 2022. This occurred when the speaker of the U.S. House of Representatives, Nancy Pelosi, despite the warning from the Chinese government, arrived in Taiwan to show the support of the United States of America to the island. This visit heated the tense situation in the region.

The ministries of foreign affairs of Central Asian countries reacted to the recent visit of Pelosi, and officially announced their positions regarding the current situation in Taiwan. Each out of 5 countries (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) expressed their commitment to the “One China” policy and considers Taiwan an integral part of the territory of the People’s Republic of China.

What are the reasons for Central Asia to support China on this issue?

Since the disintegration of the Soviet Union, relations between China and Central Asian countries have been developing dynamically. Currently, China is the key partner for each of the countries in Central Asia. According to the National statistical offices, in 2001 the trade turnover between China and Central Asian countries was $1.5 billion, 20 years after this amount increased more than 20 fold (Fig. 1).

Particularly, the trade turnover between China and the most economically developed country in the region, Kazakhstan, increased almost 14 times, from $1.3 billion in 2001 to $18 billion in 2021, which is equal to 9.4% of the GDP of the country.  Kyrgyzstan and Uzbekistan have also improved significantly their economic cooperation with China. In 2001, the mutual trade between Kyrgyzstan and China amounted to $118.9 million and Uzbek-Chinese trade to $58.3 million. In 2021, it has increased to $1.5 billion and $7.4 billion respectively. This equals to almost 18% of the GDP of Kyrgyzstan and 11% of Uzbekistan’s economic wellbeing. Tajikistan had the same positive trend and the trade turnover increased by $0.67 billion in 2021, which constituted around 8% of Tajikistan’s GDP. Turkmenistan was the one who benefited the most from the cooperation with China. International trade between the countries skyrocketed from $37.7 million in 2001 to $5.8 billion in 2020. The main contributor to the growth was Petroleum Gas ($5.25 billion) the majority of which Turkmenistan exported to China.

Figure 1. Trade turnover between People’s Republic of China and Central Asian Republics

Source: National statistical offices

Moreover, China is a key source of direct investments in Central Asia. In 2020, they amounted to almost $40 billion: in Kazakhstan, they reached $21.4 billion; Kyrgyzstan – $4.6 billion; Uzbekistan – $10 billion; and Tajikistan – $3 billion.

China is not only an important trade and investment partner, but also a powerful source of loans. External debt of Central Asian countries to China has been growing in the last decades. In 2020, it has increased in all countries, except for Turkmenistan, and China remained the main source of loans in the region. Thus, 52% of the external debt of Turkmenistan belonged to China and in Kyrgyzstan, it equated to 45%. In both of these cases, the amount of debt to China was more than 20% of the GDP of these countries. The rest of the Central Asian countries had fewer debts to the People’s Republic of China: Kazakhstan owed 6.5% of its external debt and Uzbekistan 16%.

The increase in debt is an important political issue, as debt increases political dependence on creditors. Nevertheless, China provides a lot of loans and according to the World Bank, this figure has already reached around $170 billion worldwide. However, according to the research by Aiddata, at least half of lending from China is not officially reported. As a result, the world’s total debt to China is significantly greater. While the share of Central Asia in this amount is much smaller than other countries.

Conclusion

The world is divided into two camps. One supports Taiwan, and the other – The People’s Republic of China. And as it can be seen, Central Asian countries follow the “One China” policy, which is, probably the better option for countries that are in close proximity to one of the largest economies in the world and, at the same time, the leading external trade and investment partner. On top of that, current tensions between the U.S and China remain far from Central Asian context and potential consequences will not directly influence the region or any foreign policy preferences.

Taiwan Issue:

Taiwan declared its independence from PRC in 1949, but Beijing considers the island its own territory and declares its intention to reunite with it. The U.S. does not recognize Taiwan as an independent state, nor do most of the UN countries, but firmly opposes Chinese threats to annex the island by force. The Chinese authorities criticized Pelosi’s visit, saying that she deliberately committed a provocation and violated the “one China” principle.

Author: Madi Tazhikenov is a statistician from Kazakhstan with over 7 years of experience in different sectors of national and international statistics. He previously headed the International Statistical Cooperation Division at the Committee on Statistics of the Ministry of National Economy in Kazakhstan. Madi is currently a data innovation and capacity intern at the United Nations Statistics Division and a graduate student at Duke University, focusing on Economics, Statistics, and Policy Analysis.

Disclaimer: The opinions expressed in this publication are those of the author(s). They do not purport to reflect the opinions or views of the Navanti Group or its partners.