China's Silk Road Economic Zone Policy to Promote Economic Cooperation with Central Asia

During Chinese President Xi Jinping's trip to Kazakhstan in 9th 2013, he envisioned the notion of the "Silk Road economic belt," which aims to revitalize the ancient Silk Road and to boost cooperation with countries, particularly those in Central Asia.

In Uzbekistan, there are roads and railways under construction to better aid future cooperation with China and countries of the Middle East. In Kazakhstan, the government has been making efforts to expand the transport capacity between Xinjiang's Alataw Pass and Kazakhstan, and rebuilding roads from the center of Kazakhstan to the Russian border.

According to Plamen Dimitrov, a visiting fellow at the L.N.Gumilyov Eurasian National University in Kazakhstan, Central Asian countries would rather cooperate with China or other countries than with each other for several reasons.

"First of all, the profiles of their economies are similar. Can they produce consumer goods like China? No. And Kazakhstan cannot export oil or gas to Turkmenistan because Turkmenistan also has oil and gas. Second, there are political obstacles. They do not have the best inter-neighbor relations. For example, Kyrgyzstan has border disputes with Uzbekistan. Also, there is competition between Kazakhstan and Uzbekistan over leadership in the Central Asian region," Dimitrov told the Global Times.

A model example of cooperation is the Peng Sheng Industrial Park jointly established by Wenzhou Jinsheng Trade Co and Uzbek business partners in 2009 in Sirdaryo Province, which is located in the center of Uzbekistan and 70 kilometers from its capital Tashkent.

The industrial park hosts seven factories producing ceramic tiles, leather shoes, mobile phones, taps, casings and pet food. Eighty percent of the employees are Uzbek locals, and the rest are Chinese at managerial levels.

According to Wang Xinghe, the general manager of the industrial park, the ceramic tiles are mainly sold to the Central Asian market, leather products are exported to China to be further processed, and the tap factory exports its goods to the Turkish market and is planning to expand its business to the European market, which "enlivens all of the Silk Road routes."

And most importantly, Wang told the Global Times that given the rising domestic labor costs in recent years, the Silk Road could help China save a lot of money, and that expanding with China's input could boost the country's economic transformation.

Justyna Szczudlik-Tatar, an expert at the Polish Institute of International Affairs, noted in her policy paper that as the current export- and FDI-driven economic model is performing less effectively for China, China needs to find new export markets in order to preserve stability inside China and promote relations with its neighborhood.