China Shifts Toward Central Asia to Reduce Middle East Energy Dependence
- China is accelerating a strategic shift in its energy and logistics procurement, moving away from a heavy reliance on the Middle East in favor of expanding its footprint...
- By intensifying cooperation with Central Asian nations—comprising Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan—Beijing aims to mitigate the risks associated with Middle Eastern oil supply and reduce its dependence...
- China has positioned itself as a primary buyer, lender, and investor within the Central Asian energy sector.
China is accelerating a strategic shift in its energy and logistics procurement, moving away from a heavy reliance on the Middle East in favor of expanding its footprint in Central Asia. This transition is driven by escalating instability in the Middle East, specifically crises originating from Iran, which have disrupted global energy supply chains.
By intensifying cooperation with Central Asian nations—comprising Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan—Beijing aims to mitigate the risks associated with Middle Eastern oil supply and reduce its dependence on traditional energy corridors.
Expanding Energy Cooperation in Central Asia
China has positioned itself as a primary buyer, lender, and investor within the Central Asian energy sector. This expansion is part of a broader effort to diversify energy sources and secure more resilient, overland routes for resource transport.
The shift is particularly evident in Uzbekistan. Since 2020, Chinese investment in Uzbekistan’s energy sector has grown significantly. By the end of 2022, investment reached US$4.5 billion, an increase from US$2.8 billion the previous year.
The scale of Chinese corporate presence in Uzbekistan is substantial, with over 3,450 Chinese companies operating in the country. These firms account for approximately 20% of all foreign companies in Uzbekistan.
Trade patterns reflect this deepening relationship. China has become the primary importer of Uzbek gas, with its share of imports peaking at more than 80%. In 2022, Uzbekistan exported nearly US$2 billion worth of goods to China, a volume that matched its trade with Russia.
Reshaping Regional Influence
The pivot toward Central Asia also coincides with a decline in Russian influence over the region’s energy infrastructure. Historically, Central Asia was politically and economically dependent on Russia following the 19th-century invasions by the Russian Empire.
Much of the region’s existing infrastructure was originally designed to transport energy and commodities, such as cotton, to Russia, which then sold those resources to Europe at high prices. While this infrastructure remained largely unchanged for decades, several Central Asian countries have spent the last ten years reducing their reliance on Moscow.
China’s role as a major investor in new energy infrastructure allows these nations to bypass old Russian-led corridors, further reshaping the energy sector of the region.
Economic Scale and Strategic Diversification
The economic integration between China and Central Asia has scaled rapidly. Trade between China and the region grew to US$89 billion in 2023, representing a 27% increase over 2022. This growth was observed across all countries in the region except for Turkmenistan.
This strategic realignment is viewed as a method to mitigate the volatility of Middle Eastern supply risks. While Beijing is unlikely to completely eliminate its dependence on Middle Eastern energy, the move toward Central Asia represents a shift toward more diversified and resilient overland supply chains.
The utilization of the Belt and Road Initiative has facilitated these investments in low- and middle-income countries within the region, allowing China to secure significant reserves of oil and gas while providing the necessary capital for infrastructure development.