After summit, six nations veer toward enhanced long-term collaboration

The decisions reached during the China-Central Asia Summit, which concluded in Xi'an, Shaanxi province, on May 19, will foster enhanced collaboration between China and the five Central Asian nations in the coming years.

Despite the obstacles presented by protectionism and geoeconomic fragmentation, the summit set up a strong basis for long-term cooperation in many areas, such as infrastructure, trade, regional connectivity, green growth and cultural exchanges.

China said it will align its development goals and plans with those of the Central Asian countries and work together for modernization and shared prosperity.

Enriched by closer political and business ties, they have made significant strides in enhancing economic cooperation, transitioning from predominantly bilateral interactions to encompassing both two-way and group collaborative endeavors.

The nature of cooperation has evolved from being primarily function-based to adopting a rule-based approach. These developments have resulted in a multifaceted trade of goods and services, fostering a win-win economic relationship founded on mutual respect, mutual benefit and enduring friendship.

In addition, as 2023 marks the 10th anniversary of the Belt and Road Initiative, the initiative can serve as a catalyst for the implementation of reform programs in Central Asian countries, playing a crucial role in improving the wellbeing of their populations and boosting economic growth.

Integrating the BRI with the new development plans of Central Asian countries is also practical.

It is imperative for the five Central Asian countries to collaborate and establish a joint economic corridor to foster mutual development. As landlocked economies, the Central Asian countries can greatly benefit from enhanced cooperation with China, which provides them with more convenient access to seaports and global markets.

Judging from their trade structure, China and Central Asian countries possess distinct comparative advantages in various goods. China excels in three categories — processed goods primarily based on raw materials, machinery and transportation equipment and light industrial products — with a focus on industrial manufactured goods.

On the other hand, Central Asian countries specialize in three categories — energy, mining and agricultural products — mainly resource-based goods.

Therefore, the trade synergy between China and Central Asia is relatively high, indicating promising prospects for trade cooperation between the two sides.

Under the cooperative framework of the BRI, it is necessary to strengthen the interconnection, information flow and win-win cooperation between China and Central Asian countries. In the development of bilateral trade, it is crucial to fully utilize the comparative advantages of each other's products.

To expand bilateral trade and cooperation, both sides should encourage their companies to make full use of facilitative conditions, such as the BRI-related fund and preferential policies. This will push trade between the two sides to a deeper level and shift the comparative advantage from resource-based to technology-based.

China and Central Asian countries also need to strengthen cooperation and expand global markets. Even though trade between them has achieved considerable results, it is vital to recognize that the domestic markets of Central Asian countries are relatively small, and their infrastructure is still not strong enough. Under such circumstances, expanding third-party markets through cooperation is expected to be an effective way of expanding China's trade and economic cooperation with Central Asian countries.

Given China's ongoing transformation of its manufacturing industry, it is advantageous to capitalize on the opportunities arising from Central Asian countries' endeavors to enhance their own economic development and expand foreign trade.

In this regard, China can strategically invest in and establish beneficial industries within Central Asian countries through collaborative initiatives, including joint ventures and international economic consortia.

These partnerships will enable China to leverage its expertise and resources, thereby contributing to the growth and competitiveness of industries in Central Asian countries. By adopting this approach, China can enhance its economic engagement with Central Asian economies, while also bolstering its own international influence and trade relations.