Tuesday, March 14, 2023
Compiled by Chris Devonshire-Ellis
Capital and trade investments continue to be drivers in Central Asia and the Middle East, while the emergence of new potential regional blocs is gaining significant academic traction. The China-Mongolia-Russia axis is discussed, as is a ‘tri-polarity’ involving India as the ‘middle-man’ between East and West as well as development plans for the Eurasian Economic Union. All could reshape global geopolitics.
Meanwhile, we go into some depth concerning China-Russia trade and development and take a look at prospects for Central Asia and China’s railway plans for increased EU connectivity. Stability and increasing trade are occurring in the Middle East with a China-brokered Saudi-Iran agreement, and the UAE signing trade deals with Turkiye and looking north to access Central Asia’s Islamic markets.
Russia’s Siberia is moving closer to China and Kazakhstan, while Russia and Iran have taken significant steps over their proposed ‘stablecoin’ – a financial mechanism that could change the way the world distributes financial settlements.
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CHINA
China, Mongolia, and Russia At The Centre Of A New Multipolarity
Numerous connectivity infrastructure projects are repositioning Mongolia as an energy and transit hub for Northeast Asia.
China-Russia Trade Breakdown and Future Development Trends
The increase in China – Russia trade is well acknowledged; however, details remain scarce as to the exact details. We provide a detailed breakdown and identify the coming trends – a US$400 billion bilateral trade potential and Russia’s developing use of China as a transit nation to markets in ASEAN.
CENTRAL ASIA
Expectations For Central Asia’s Development to 2030
Regional analysts from the Kazakh government and Ernst & Young give their views on Central Asian prospects.
China, Kazakhstan Expand Secure Rail Connections To Europe
China Railways and the Kazakhstan equivalent, the Kazakh Temir Zholy have had their first meeting to coordinate transport since the outbreak of Covid-19. An upward trend in cargo transport between the two countries was noted, reaching a record high of over 23 million tons in 2022, 15% more than the previous year.
EURASIAN ECONOMIC UNION
EAEU Integration Plans With China, India, and MENA Gain Momentum
According to the Eurasian Development Bank (EDB), the 2022 mutual trade turnover of the Eurasian Economic Union (EAEU) countries reached a record US$80.6 billion, with the export of goods from Armenia, Belarus, Kazakhstan, and Kyrgyzstan all significantly increasing. That is attracting the interest of China, India, the Middle East, and North African nations as they seek to expand trade ties.
INDIA
The Developing Of A Global Tri-Polarity
India and the Global South positioned as a potential Cold War bridge between the US and EU, versus China and Russia.
MIDDLE EAST
Saudi Arabia and Iran Rebuild Ties After Beijing Brokers A Deal
Saudi Arabia and Iran, estranged Gulf neighbors since 2016, have agreed to restore ties and reopen their respective diplomatic missions after talks in China. The agreement is a boost for INSTC and Eurasian trade connectivity.
UAE, Turkiye, Sign Closer Economic Partnership Agreement
The United Arab Emirates (UAE) and Turkiye have signed a Comprehensive Economic Partnership Agreement (CEPA) that aims to take economic relations between the two countries to a new phase and increase bilateral trade to around US$40 billion (TL756.8 billion) in the next five years.
Dubai Boosting Trade Potential With Central Asia
UAE exports to these Central Asian nations include electronics, vehicles, machinery, and tobacco. Central Asia is already an important market for Dubai: in 2021, Dubai’s non-oil trade with the three countries reached US$2.4 billion.
RUSSIA
Russia, Uzbekistan Bilateral Trade To Reach US$10 Billion in 2023
Uzbekistan is an observer member of the Eurasian Economic Union (EAEU) which also includes Russia in this free trade bloc together with Uzbekistan’s neighbors, Kazakhstan and Kyrgyzstan. Should Uzbekistan join the EAEU, multilateral trade would significantly increase.
Russia and Iran Taking Steps Towards a Gold Stablecoin
The use of this system in the future will mean that sanctions will be rendered ineffective if countries begin using cryptocurrencies. It will impact the entire current global financial transfer system and alter the world’s economic structure.
Siberia Attracting Mutual Investment From Kazakhstan and China
The Krasnoyarsk Economic Forum has been taking place in Siberia, an event at which the development of the region towards Asia, taking into account the current economic and geopolitical situation, is discussed. We detail the trade and development agenda as Siberian connectivity moves east and south.
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Dezan Shira & Associates provide business intelligence, market research, legal, tax and compliance issues for foreign investors throughout Asia, and have 28 offices across the region. We are members of the Leading Edge Alliance, a network of related firms with offices throughout the world. For assistance with Belt & Road Initiative research, please contact us at silkroad@dezshira.com or visit us at www.dezshira.com. To subscribe to our Belt & Road Initiative portal, please click here.