Despite China’s zero-Covid policy error and persistent dog-barking rumors of separating from the United States and – more recently – Germany, China is moving forward with conquering Central Asia as one of its major investment hubs.
Meanwhile, Europe can hardly pay its electricity bills.
By comparison, the United States is doing quite well, except for the 40-year high inflation. But China, which claims to have only about 3% inflation, will not rest at night in the fourth year of the trade war.
Remember, Washington’s plans to portray Beijing as a kind of enabler for Moscow have failed miserably. Even ex-Brazilian president Luiz Inacio Lula da Silva (and the accepted future president for the third time) did not choose the side of the West when it came to Russia or Ukraine. Equally important, India, arguably the most important US ally in the region, has not turned its back on Russia or China, despite being more aggressive (and in some cases more aggressive) toward China than we are now. Remember, India banned Chinese TikTok in 2020.
Now the whole group gathers in Samarkand, Uzbekistan, on Thursday and Friday for the Shanghai Cooperation Organization summit. The focus will be on development in Central Asia, which is largely financed by China — with mountains of dirt and earth moved by Chinese mining equipment, computers to support new-tech economies made in China, and railways, highways and bridges financed. Most of them are from China.
What is this summit all about?
The Shanghai Cooperation Organization summit brings together China, India, Russia, Iran, Pakistan and all Stan countries, including event host Uzbekistan. These countries account for half of the world’s population and at least 25% of global GDP. War in Ukraine is unlikely, although Uzbek President Shavkat Mirziyoyev mentioned this, and other impacts on commodity trade in an opinion piece published in several SCO member newspapers, such as The Times of India, on September 12.
“Ongoing armed conflicts in different parts of the world destabilize trade and investment flows and exacerbate food and energy security problems,” he wrote, without referring to Ukraine, the world’s largest armed conflict at the moment. We are experiencing a profound crisis of confidence worldwide. Mutual alienation complicates the return of the global economy to its previous path of development and the restoration of global supply chains,” he wrote, referring to the West’s isolation of Russia and the ongoing great-power rivalry with China.
Mirziyoyev also mentioned climate change concerns, and a pandemic, acknowledging that all of these things can be headwinds for growth. This is especially true in countries like his, which are still developing.
The Shanghai Cooperation Organization is the largest economic cooperation organization in Eurasia. Think of it as the Organization for Economic Co-operation and Development in Europe. It enhances the trade and economic cooperation of its members, as well as connecting them to the larger markets - the United States and Europe.
For your information, some of the major development projects are railways. These are often seen as a means of getting Chinese goods - and eventually - from Central Asia to Europe. But, most likely, these logistical investments are geared toward building the region itself, as opposed to simply maintaining the position as a resource and manufacturing hub for Western consumers.
For its part, China wants to sell its manufactured goods to other markets as well. At the moment, China is almost completely dependent on the US and European markets for exports.
Some of the big projects include the Trans-Afghanistan Railway, which connects Uzbekistan to Pakistan via Afghanistan. Railways are supposed to create alternative transport routes for trade between Asia and Europe.
Other SCO projects include the China-Central Asia natural gas pipeline. the railway line between China, Kazakhstan and Uzbekistan; a railway between China and Kyrgyzstan; And the China-Kyrgyzstan-Uzbekistan Expressway.
“Whether we are talking about the International North-South Corridor, the Chennai-Vladivostok Sea Corridor or the Northern Sea Route, connectivity will play an important role in the development of our relations in the future,” Indian Prime Minister Modi said in his remarks in September. 7.
The Economic Times reported on September 14 that Modi and Putin will meet on the sidelines of the SCO meeting in Samarkand to discuss multilateral engagements including the G20, the Shanghai Cooperation Organization and the United Nations. This is especially important because India will chair the United Nations Security Council in December, and in 2023, India will lead the Shanghai Cooperation Organization and chair the G-20.
With the US and Europe leaving Russia, Indian retail chains are increasing their footprints there instead.
Russian companies are also looking to Indian markets to compensate for the severing of trade ties due to the sanctions.
Host country Uzbekistan, for its part, is seeing an influx of Russian IT professionals who have been essentially forced out of Belarus and Russia by sanctions, and a generally bad look at Western companies for hooking them up to Russian back offices, even if it's business in general. An innocent software engineer is considered an outsourcing.
“Uzbekistan is already seeing a significant increase in Russian tourists this year and has also attracted thousands of skilled Russians, many of whom may stay and help develop the technology sector,” Chris Weaver, CEO of Macro Advisory, wrote in a recent note to clients. Jun.
Uzbekistan has been on the fast track to modernization since the death of its leader Islam Karimov in 2016. Karimov was a relic of the days of the Soviet Union.
620 state-owned companies will be put up for sale in whole or in part over the next three years or so. Among these companies, about 15 are widely seen as world-class companies, ranging from Navoi Mining, owner of the largest gold mine in the world, to Uzbekneftegaz, the national carrier of oil and gas and contributing 15 percent of Uzbekistan's GDP. , says Fred Harrison, managing director of communications consultancy Belgrave Europe.
The United States is trying to court Asia, though, in light of China's expanding sphere of influence. Their Indo-Pacific economic framework is supposed to set ground rules for trade, but it's not a trade agreement with tariffs and open markets, something India, let alone most Americans, don't care about.
However, the SCO is moving forward. It's not a show of free trade, nor is it a sign that Central Asia is taking sides. it's not.
But as the West struggles embarrassingly with astronomical energy costs and political power shifts, Central Asia, largely led by China, is growing. It grows in an area that doesn't want to fight, really, despite the warring factions among them. Each country seems to be making its own way. Both Uzbekistan and Kazakhstan want good relations with the United States and have good relations (Mirziyoyev met with President Trump in 2018 in Washington).
"It is precisely the time of crisis when all countries - large, medium or small - must put aside their narrow interests and focus on mutual interaction, unite and increase joint efforts," wrote Mirziyoyev, host of the Shanghai Cooperation Organization. His editorial last week.
His country is growing, with GDP forecast at 3.4% this year, roughly on par with the International Monetary Fund's forecast for China, and larger than its neighbor Kazakhstan. Within the group, India is the most developed and Russia is facing the biggest problem due to sanctions and the war in Ukraine.