Belt And Road Weekly Investor Intelligence #69
There are significant trade and connectivity development issues this week as Eurasia intensifies its transportation and trade links in the face of mounting pressure for sanctions on Russia, which would impact the entire region. A new Eurasian trade ecosystem is emerging with implications for EU and Asian trade corridors and supply chains.
Russia’s state-owned oil company Rosneft has signed a US$80 billion 10-year deal to supply China’s National Petroleum Corporation (CNPC) with 100 million metric tonnes of oil, or about 200,000 barrels a day. According to official state announcements, the oil will be shipped via Kazakhstan to refining plants in China’s Xinjiang Province, together with other exports of Russian crude oil to China.
Serbian President Aleksandar Vučić has stated that Serbia and China are talking through a free trade agreement in 2022; the Chinese side are yet to confirm. Currently, China and Serbia grant each other the most favorable nation (MFN) treatment in trade. For some products, the tariff ranges from 10 to 35 percent, which is still high compared to the rates under FTA arrangements. If China and Serbia concluded an FTA by the end of 2022, the scope of trade exchange between the two countries will significantly increase.
The new RCEP Free Trade Agreement has had a significant impact on foreign investment into Asia in the last quarter of 2021. Tracking where the money has been heading is an excellent way to find new investment trends and where the best and fastest returns are likely to be found. In our upcoming Q4 report, Asia Investment Research looks at where capital has been flowing from the United States, EU, and UK into China and Asia – the volumes, companies, and the projects involved. We also examine the latest news about Singapore SPACS and Crypto, and include Asian investment flows featuring Australia, Bangladesh, China, Hong Kong, India, Indonesia, Japan, Laos, Malaysia, Oman, Pakistan, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Turkey, & Vietnam.
Azerbaijan has been very active in developing infrastructure and industrial processing zones as its strategic position along the Belt and Road Initiative serves as a focal point between East and West. It is connected to Central Asia and China by maritime routes across the Caspian Sea Port at Baku, and to Russia, Iran, the Gulf, East Africa and India by the INSTC multimodal network. It can access Turkey and markets in the EU to the west by rail links heading to the Black Sea.
The International North-South Transportation Corridor will shortly offer Suez alternatives with links between Iran’s Chabahar Port and Qatar’s Hamad Port as the two countries discuss increasing maritime and air connectivity.
Uzbekistan’s 2021 total exports reached US$12.5 billion in 2021, an increase of 34.4% compared to 2020, according to the Uzbek State Statistics Committee. The bulk of exported goods and services in 2021 went to China, Russia, Turkey, Kazakhstan, Kyrgyzstan, Afghanistan and Tajikistan. Their share in total volume of exports reached 56.5% of the total. Uzbekistan’s exports to the other CIS states – Armenia, Azerbaijan, Belarus, Georgia, Moldova, Turkmenistan, and Ukraine reached 32.6%.
The new industrial park is expected to be built in the Mary region’s bordering Serhetabat district, where the processing enterprise will have access to road and rail infrastructure. That has a border crossing with Afghanistan, and the main road leading to Herat, one of Afghanistan’s key commercial hubs with road links also to Iran. It also has direct links to the Turkmenbashi Port on the Caspian Sea and will connect Afghanistan indirectly to the INSTC and markets in Russia and India.
There are significant e-commerce opportunities in one of Central Asia’s largest cities while increasing financial ties with Urumqi will see both develop further as investment bases for Central Asia.
Bilateral trade at record highs while EU misfires on Belarus sanctions policy and Minsk looks East for new trade partners. There are lessons from Minsk about how to prepare for trade sanctions and how not too.
All the latest international news headlines about China’s Belt & Road Initiative.
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