Silk Road Economic Belt: deepening cooperation between EEU and China

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BISHKEK (TCA) — Elimination of internal barriers is a priority for the Eurasian Economic Union, the EEU Chairperson for 2017, President of Kyrgyzstan Almazbek Atambayev said.

 

The work in this area will be continued, but new goals should be set including building trade relations with third countries, said EEU Trade Minister Veronika Nikishina at the recent forum in Bishkek to discuss the Silk Road Economic Belt development.

New priorities

Last year, the Eurasian Economic Commission (EEC), the governing body of the EEU, revised the EEU trade policy towards third countries and concluded that there are more advantages in trade relations with the third countries than risks. Competition will decrease in the EEU market due to creation of preferential agreements with the third countries.

Cooperation with China is among the EEU priorities in cooperation with third countries. At the same time, the EEC sees its participation in the project as an opportunity to match the interests of the EEU and China’s Silk Road Economic Belt project.

The agreements will not concern customs duties because the EEU is not yet ready to discuss creation of a free trade zone with China, but it is ready to consider eliminating barriers that will help EEU entrepreneurs enter the Chinese market or implement joint projects.

Expanding business opportunities

This cooperation will expand business opportunities, the Kyrgyz business community believes. China is now among the main trade partners of Kyrgyzstan.

After entering the EEU, Kyrgyzstan is facing problems, in particular when exporting its products. The Government did not take timely measures, including the construction of laboratories, introduction of technical regulations and solving infrastructure issues.

For Kyrgyzstan, it is very important to be integrated into the Western China – Western Europe motor road transport corridor to get access to the sea.

In relations with China, it is necessary to create a legal framework for cooperation, EEU Business Council Chairman Viktor Khristenko said. Trade and economic agreements with China will create a legal basis for cooperation with all the EEU countries.

More than a hundred joint projects of China and the EEU as part of the program of conjugation of the Eurasian Economic Union and the Silk Road Economic Belt are now under consideration, the Russian Union of Industrialists and Entrepreneurs said. China works closely with the Eurasian Economic Commission to monitor and evaluate these projects.

Creating mutually complementary projects

It is extremely important for the EEU countries not to compete for Chinese investments, but to create mutually complementary projects. Chinese partners are very responsible, and it is more comfortable for them to work with projects that have already been agreed and approved, EEU Trade Minister Veronika Nikishina said.

Two global processes are developing simultaneously — the Eurasian Economic Union aimed to develop the economy of the EEU member countries, and China’s Silk Road Economic Belt which involves dozens of countries.

China has initiated the new One Belt, One Road economic strategy. In fact, this is the revival of the ancient Silk Road in a new format. To implement this initiative, China is ready to spend about $40 billion. Beijing will host a summit on this issue in May and representatives of more than one hundred states will take part in a big presentation of the major economic project.

Kyrgyzstan’s participation in this project is a chance not only to bring its economy to a new level, but also to improve its geopolitical status. According to experts, Kyrgyzstan has great opportunities to become a participant in global processes due to its advantageous geographical position along the Great Silk Road. In an updated format, it is a road to economic prosperity for all who take part in One Belt, One Road.

The project includes the construction of railways, logistics centers, ports and powerful power lines. Industrial facilities will link and unite the participating countries. The project involves access to the sea, which is of great importance for landlocked Kyrgyzstan.

Kyrgyzstan may become a connecting link

Some railway branches to seaports and towards European countries should pass through Kyrgyzstan, experts say. It is more convenient and profitable to build such roads through Torugart and Irkeshtam passes at Kyrgyzstan’s border with China. Paving such crossings over mountain ranges in other countries is more problematic, since they are higher and more complex.

Kyrgyzstan is now implementing important projects with the support of China. Alternative North-South road is under construction, and over a hundred roads in Bishkek are being repaired at the expense of a Chinese grant. The Datka-Kemin power line was commissioned, which allowed the country to create its own energy ring. Two oil refineries have been built in Kyrgyzstan.

There is a program of relocation of Chinese industrial enterprises to Kyrgyzstan. According to the Kyrgyz Union of Industrialists and Entrepreneurs, those enterprises should be safe, because the first requirement for them is not to violate the ecology, and domestic specialists will check their impact on the environment.

China will import more products from the EEU countries on a regular basis, the International Silk Road Chamber of Commerce said.

Kyrgyzstan may become a connecting link between the international capital markets and focus on the integration of financing and investment projects within such an ambitious project, the forum participants concluded.