China and Azerbaijan:  the prospects for joint implementation of the project "One Belt, One Road"

  09 August 2018    Read: 2431
China and Azerbaijan:  the prospects for joint implementation of the project "One Belt, One Road" @fairplay.ihs.com

By Seymur Mammadov

Today Azerbaijan is a participant in the project "Economic belt of the Silk Road", which is part of the Chinese initiative. In December 2015, within the framework of the state visit of Ilham Aliyev to China, a memorandum of understanding was signed between the Government of the Republic of Azerbaijan and  People's Republic of China regarding the joint promotion of the creation of the "Economic belt of the Silk Road".

But before the signing of this memorandum, long before the activity about the Chinese initiative "One belt, one way" began, Azerbaijan has farsightedly chosen a transport and logistics segment that will become one of the most important components of the country's economy in the foreseeable future.

Due to its geographical location, Azerbaijan is situated in central place within the  international transport network. Since the first years of its independence Azerbaijan  has been implementing the necessary projects for the development of transport communication with the aim of attracting cargo flows through the Europe-Caucasus-Asia corridor. To develop the transport potential, Azerbaijan constantly works on the reconstruction, renovation and construction of a new transport infrastructure. This covers all segments of the transport sector - rail, sea, road and air. One of the successful transport projects is  - Trans-Caspian transport route (East-West) and "North-South".

The transport corridor "East-West" is a good prospect in the development of the "One Belt, One Way" initiative, which is designed to ensure the delivery of goods both from China to Europe through the territories of Kazakhstan, the Caspian Sea, Azerbaijan, Georgia and Turkey, and in the opposite direction . This route has already been tested in the framework of the "One Belt, One Way" initiative on January 19, after the launch of the Baku-Tbilisi-Kars railway. The cargo train left Urumqi, drove through the Alatau pass and on a ferry from the Kazakhstan port Kuryk arrived in Baku, and then by rail Baku-Tbilisi-Kars was sent to Europe. What is the advantage of this route? The route allows you to save more than two-thirds of the time compared to other transportation routes. The cargo from China to Europe along this route is planned to be delivered within 8 days. Although the delivery of goods from China to Europe via Azerbaijan can be shortened, if a new railway is built to the Kazakh cities of Aktau or Atyrau.

The Baku-Tbilisi-Kars railway, the construction of which began in 2007 and was completed in 2017, is the restoration of the ancient Silk Road on the steel highways. In comparison with sea transportations, the Baku-Tbilisi-Kars railway reduces more than twice the time of delivery of goods from China to Europe. By rail Baku-Tbilisi-Kars, serving stability and security, at the first stage, it is planned to transport 5 million tons per year, at the second stage -17 million tons, and later - even more cargo. The creation of this project on the historical Silk Road increases its attractiveness for the countries of the region, facilitates the exit of the Central Asian countries - Turkmenistan, Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan - to the European and world markets.

After the launch of the Baku-Tbilisi-Kars railway, many countries began to show interest in using this route. There is a great interest from the Chinese side, the delivery of cargo to Turkey, from the countries of Central Asia, as well as Russia, which plan to supply metal and wood to Turkey. By the way, some European countries - Austria and Bulgaria plan to transport their goods by railroad "BTK" to the Caspian countries. All these facts indicate the viability and reliability of this route, and has a number of advantages for China – which is to prompt the secure delivery of goods.

The major economic projects of Azerbaijan are also the creation of the free trade zone Alat, the development of the international sea trade port in Baku, which can contribute to the development of the mega-project "One belt, one way". And today steps are being taken in this direction - it is planned to create an Azerbaijani-Chinese free economic industrial town in Alat.

As for the development of bilateral economic relations, over 100 Chinese companies operate in Azerbaijan, and the trade turnover between Azerbaijan and China increased by 43% in 2017. According to the State Customs Committee, following the results of 2017, the trade turnover between Azerbaijan and China totaled 1.298 billion dollars, or 5.75% of the total Azerbaijani commodity turnover. By volume of trade, China is the fourth partner of Azerbaijan for foreign economic activity. At the same time, exports of Azerbaijani goods were in the amount of  $ 433.8 million (3.21% of total exports), while imports of Chinese products to Azerbaijan reached $ 854.5 million (9.73% of total imports). It is also important to note that the opening of the Trade House of Azerbaijan and the wine house in Shanghai and Beijing is a plan to be realized in Shanghai. Furthermore, China and Azerbaijan are planning to implement projects in the spheres of metallurgy, agriculture, petro-chemistry, all of which in the future will contribute to the further expansion of trade relations between the countries, and will contribute to the development and strengthening of cooperation between the two countries within the framework of One Belt, One Way.

 

The author is the director of the International expert club “Eurasia-Azerbaijan”, editor-in-chief of the Azerbaijani news agency Vzglyad.az .

 

 


More about: Azerbaijan   China