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Tajikistan-China Relations

Tajikistan's largest and most powerful neighbor, China plays an increasingly central role in Tajikistan's economic development. Beijing has made investments that western countries are unlikely to match. It has made massive state-led investments in Tajikistan's infrastructure, including roads and energy transmission lines, and Chinese imports increasingly dominate Tajikistan's markets. Some Tajiks worry, however, that Tajikistan's increasing indebtedness to its eastern neighbor may limit its future economic freedom. Over 50% of all Chinese ExIm loans to Central Asia have gone to Tajikistan, the region's poorest country. The Chinese presumably are well aware that Tajikistan cannot repay these loans in time.

The reasons behind China's burgeoning trade include a shared political vision; Chinese interest in opening new markets to the west, and ultimately establishing an energy corridor to Iran; a Chinese willingness to make state-led investments for political reasons; and low Chinese wages. A key reason for China to develop energy and road infrastructure in the small market of Tajikistan is that it provides a beachhead for reaching other, larger markets in Central Asia and beyond.

Beginning in the mid-1990s,Tajikistan signed a series of bilateral treaties with China, improving relations with that powerful neighbor. China is a major infrastructure donor, with over $1 billion in low-interest loans to Tajikistan to build roads and power line projects. Tajikistanís membership in the Shanghai Cooperation Organization (with China, Kazakhstan, Kyrgyzstan, Russia, and Uzbekistan) has not provided the expected improvement of commercial or security conditions.

Despite a long history of trade between China and Central Asia along the Silk Road, China's role in Tajikistan had been limited in the 20th century due to geographical challenges and the civil war in Tajikistan. Not until 2004, twelve years after the establishment of diplomatic relations, was the first and only direct road link between the two countries opened. The tortuous route winds through some of the most rugged territory in Central Asia, cresting at the 14,311-foot Kulma pass, located 850 km by road from Dushanbe and 220 km from Kashgar in China. Despite the difficulty of overland trade, China's influence on Tajikistan's economy has mushroomed and now rivals that of Russia.

The Friendship and Cooperation Treaty was signed with Tajikistan in January 2007 and contains features common to all the treaties. Both sides foreswear forming alliances with or hosting troops from countries or groups that might threaten the security of the other party. Both sides agree to hold consultations if there is a situation that threatens the peace or security of either side. They pledge to create opportunities for investment and trade, and to work both bilaterally and within the SCO to crack down on terrorism, separatism, and extremism, and cross-border organized crime, illegal immigration, and arms and drug trafficking. Both sides promise to guarantee the legal rights of each other's visiting citizens.

Tajik-China Border DemarcationSome suspect that Tajikistan may be ceding territory in exchange for investment. China had a territorial dispute with Tajikistan dating from the Soviet era and before. This enduring boundary dispute had long been considered as one of the most knotty to settle among the territorial disputes along the former Russo-Chinese border (the border between Tsarist Russia and the Qing Empire, then the Sino-Soviet boundary). the Gorno-Badakhshan Autonomous Oblastí (hereafter GBAO) was the southernmost point to which Russian influence extended. No treaty had previously existed to delimit the boundary in the Pamirs region located north of the tripoint between Afghanistan, China, and Tajikistan. Disputes over the area have continued since the second half of the 19th Century. Tajikistan inherited the boundary dispute from the Soviet Union at its independence in 1991 and agreed with China to delimit their boundary in 1996. Negotiations began the following year.

According to some media reporting and contacts among opposition parties, after Tajik independence China demanded over 20,000 square kilometers from Tajikistan -- almost 14% of Tajik territory. Although China previously had provided some small loans to Tajikistan, bilateral ties greatly improved after the two countries signed a border demarcation agreement in May 2002. Tajikistan's presidential spokesman said today that Tajikistan has agreed to hand over some 1,000 square kilometers of disputed land to China as part of a deal to set permanent borders between the two countries. Spokesman Zafar Saidov said the land was part of Tajikistan's eastern Murghab region. He also said both the Tajik and Chinese governments were satisfied with the agreement. Tajik President Imomali Rakhmonov signed the deal during a visit to China.

On 12 January 2011, Tajikistan ratified an agreement previously signed in April 2010 with China to demarcate their long-disputed boundary in the Pamir mountain range region. Based on the de facto/customary line observed by the Soviet Union, the new boundary sees China relinquish claims to 28,000 sq km of the disputed land in the Pamirs, accounting for approximately 20 percent of Tajikistanís overall territory. The new boundary also sees Tajikistan relinquish claims to approximately 1,000 sq km of claimed territory. Although the peaceful border settlement has laid the foundations for friendship between the two neighbours, Tajik attitudes varied significantly among different interest groups, ranging from overt opposition to overt support of the demarcation protocol.

In 2005, China announced loans of $110 million (for 20 years at 2% interest with a five-year grace period) to finance Chinese construction of two highway tunnels, one connecting Dushanbe to the southern city of Kulyab and the other connecting Dushanbe to the northern city of Khuj and. Many observers view the construction of these tunnels as potentially enhancing the Tajik government's control over the country. Construction on the Dushanbe-Kulyab tunnel project reportedly began in October 2006 and is projected to be completed in 2009. Other projects funded with Chinese loans include the rehabilitation of the highway from Dushanbe through Khuj and to Chanak (near the Uzbek border), modernization of the telecommunications system, and upgrading of electricity transmission lines.\164\ At the July 2006 ceremony to begin repaving the Dushanbe-Chanak highway, President Rahmon claimed that the Chinese firm doing the work would employ 2,500 local citizens, and that the road would be completed in 2008.

In January 2007, Chinese and Tajik firms signed an agreement in Beijing for the provision of a $200 million loan (for 25 years with an annual interest of 1%) to build a 150- megawatt hydroelectric power station on the River Zarafshon in northern Tajikistan. That same month, the visiting deputy head of China's Eximbank, Li Jun, praised Tajikistan as a leading country among SCO members in taking advantage of preferential loans to carry out projects. He also announced new loans to provide 23 Chinese locomotives to the Tajik railway directorate, and to finance work on a railway from Dushanbe to the southern city of Qurghonteppa, a railway from the southern city of Kolkhozobod to the town of Panji Poyon (on the Afghan border), and a railway from the northern town of Konibodom to the Uzbek town of Bekobad. The June 2007 purchase by the Chinese Zijin Mining Group of the controlling shares of a British company involved in gold mining in Tajikistan appears to be another example of China's interest in regional mineral resources.

Tajik President Rahmon generally viewed close economic ties with China as enhancing Tajikistan's development. During his January 2007 China visit, he stated that about 40 Chinese companies were investing and operating in Tajikistan, and at the August 2007 SCO Summit, he reported that he had urged China to increase investment and that it had agreed to explore joint ventures for cotton processing. In September 2007, he termed the expansion of the Tajik-Chinese ``partnership'' a priority of Tajikistan's foreign policy. Tajikistan's state-run news agency reported in January 2008 that Tajikistan owed China $217 million, the largest amount owed to one country. President Rahmon's daughter herself is reputedly heavily involved in the China trade, bringing containers over the border at Kulma without being examined by customs agents or assessed import tariffs.

Chinese work for wages below even Central Asia's meager standards. Where Tajiks may earn US $500 to $700 a month as labor migrants in Russia, Chinese laborers work for US $100 to $150 on roads and other projects in Tajikistan. As one of the world's largest labor exporters -- the ratio of remittances to GDP in Tajikistan is the highest in the world -- it might be expected that employers would have all the domestic labor they could want here. According to reports, however, many Chinese-funded infrastructure projects stipulate that a large percentage of the labor is conducted by Chinese workers. The figure is said to be 70% for major road and energy projects. Despite the negative implications for the local labor market, China's ability to provide its own army of trained, low-paid workers makes it very competitive against Russia and the west.

China is in Tajikistan's telecommunications sector through cell phone provider TK-Mobile and supplies telecommunications equipment from ZTE and Huawei Technologies to practically all state and private telecom companies in Tajikistan.

China clearly has economic interests in Tajikistan, as its neighbor and as an investment possibility, but seems unlikely to take a public role as a donor country influencing Tajikistan's foreign policy, preferring instead to influence regional policy through the Shanghai Cooperation Organization. Many Tajiks perceive Chinese products and labor as reliable and efficient. But some Tajiks laugh at the poor quality of Chinese goods available on the local markets, indicating that China could easily have competition if Russian or Western goods become available at comparable prices.

China has not been troubled by Tajikistan's poor business climate (in the World Bank "Doing Business" rankings Tajikistan places 159 out of 181 countries), because it does business the "local way" -- giving bribes and ensuring political support for its investments. The Chinese government and Chinese private investors must be making some kind of under-the-counter payments to key Tajik government officials, simply judging by the speed with which Chinese projects clear the bureaucratic obstacles that mire so many businesses in Tajikistan.

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Page last modified: 31-10-2021 12:52:46 ZULU