Astana summit marks a pivotal moment for Azerbaijan-China strategic partnership
Why Asia matters?

ANALYTICS  04 July 2024 - 13:27

On July 3, the members of the Shanghai Cooperation Organization (SCO) gathered in Astana for the annual leaders’ summit. The significance of the recent meeting is that Belarus officially became the next SCO member after two-year-long negotiations. Although Belarus's willingness to join the bloc did not surprise anyone in the West, the SCO's further expansion moved it further away from its original regional mission. Since its establishment, the SCO has made it clear that “it has no plans for expansion or challenging the Western alliances and blocs.”

For a long time, China and Russia championed the SCO, gradually turning it into a closed Eurasian security club rather than a simple economic union. Undoubtedly, by strengthening the SCO's position, Moscow and Beijing aimed at countering Western influence and potential expansion in their close vicinity. The ongoing brutal Russo-Ukraine war makes the SCO expansion more relevant for Russia while giving its strategic partner China more space for diplomatic manoeuvring amid its diplomatic standoff with the United States (US).

SCO members comprise roughly 25 percent of the world's economic output and half its population, making it an ever-more-tempted tool for Moscow and Beijing's geopolitical ambitions. Unlike the SCO, Russia-led alliances and blocs in the Eurasian continent, namely the Collective Security Treaty Organizations (CSTO) and the Eurasian Economic Union, did not provide Moscow with the necessary geopolitical influence to set the regional agenda.

However, the SCO appeared more attractive even to non-member states like Türkiye and Azerbaijan, which attended the high-level meeting. In the last few years, Ankara developed individual partnerships with Moscow and Beijing to diversify the economy and decrease the Western monopoly. Ankara’s willingness to move toward the SCO first was announced publicly during the Samarkand summit in 2021. Indeed, the close partnership with the SCO would enable Türkiye to get more suitable conditions for business projects, considering the country's deep cultural and linguistic links to Central Asian nations.

In addition to Türkiye, Azerbaijan is a relative newcomer within the SCO community, and its interest in this bloc may be attributed to its long-term and fruitful partnership with China. As of 2024, China remains one of Azerbaijan's biggest trade partners by ensuring continuous good exports and cargo transportation through its territory using the Middle Corridor multimodal route. Amid the global geopolitical uncertainty, the Middle Corridor re-emerged as a viable and safe transit route for all major trade operations.

For example, recent statistics suggest that the growing traffic volumes along the Middle Corridor are attracting interest from global players. According to the TITR International Associations, the transportation volume of the Middle Corridor reached 771 million tons in the first quarter of 2024, up from just 1.7 million tons in 2022. Also 2022, goods transportation via Azerbaijani territory increased by 75 percent. As such, the total cargo transportation volume via the Middle Corridor is expected to reach 5-8 million tons after the Zangezur Corridor fully functions.

On the other hand, according to national statistics, in 2023, the volume of Azerbaijan—China bilateral trade accounted for $3.1 billion, while around 300 Chinese construction, agricultural, telecommunication, and other companies were registered in Azerbaijan in the same year.

Hence, the positive dynamic in trade and business paved the way for bilateral investments, as Azerbaijan's investments in China are estimated at $263 million, whereas China invested $930 million in Azerbaijan. As a result, the deepening partnership between Baku and Beijing in various fields enabled both leaders to upgrade it to a strategic level by signing a bilateral statement on the sidelines of the Astana summit.

With the new Astana statement, parties reaffirm their commitment to mutual respect for territorial integrity and sovereignty, non-aggression, non-interference in internal affairs, equality and mutual benefit, and peaceful coexistence. Notably, the statement particularly focused on cooperation within the Middle Corridor project. Azerbaijan expressed readiness to deepen cooperation with China regarding its flagship project, the Belt and Road Initiative (BRI), supporting its efforts to create a "common secure economic atmosphere."

As for China, the country expressed open support for the upcoming COP29 event to be hosted by Azerbaijan, reiterating its support for Baku's green energy policy. This point within the statement sounds relevant, as recently China agreed to export to Azerbaijan 100 electric buses manufactured by Chinese BYD Company Limited.

The recent Astana meeting of the SCO member and partner states is poised to be a milestone in terms of the Azerbaijan – China strategic partnership, opening new horizons for both states. Moreover, Azerbaijani and Chinese leaders' upcoming bilateral state visits will further enhance and cement this alliance.

Caliber.Az