Baku and Beijing deepen cooperation Investments and innovation

The long-standing friendly relations between Azerbaijan and China have traditionally been based on mutual respect for sovereignty, territorial integrity, and support on international platforms. In recent years, the rapidly developing interstate ties have elevated Azerbaijani-Chinese business cooperation to a qualitatively new, investment-oriented level. A vivid testament to this progress is the ongoing state visit of Azerbaijani President Ilham Aliyev to China. During the visit, Azerbaijan’s Ministry of Energy and several Chinese companies signed agreements focused on attracting investments and technological expertise in the field of domestic green energy.

The expansion of trade and economic cooperation with China has been a consistent policy of the Azerbaijani government for more than two decades. These efforts gained momentum in December 2015 with the signing of the Memorandum of Understanding between the Governments of Azerbaijan and China on the Joint Promotion of the Silk Road Economic Belt. Subsequently, by joining China’s Belt and Road Initiative, Azerbaijan steadily enhanced bilateral ties in the field of transport and logistics cooperation.

In September 2022, during a meeting between Azerbaijani President Ilham Aliyev and Chinese President Xi Jinping at the Shanghai Cooperation Organisation Summit in Samarkand, new avenues for business and humanitarian cooperation were outlined. Over the next two years, numerous high-level bilateral exchanges, reciprocal visits by heads of state and government officials, helped elevate interstate relations to the level of strategic partnership.

Today, China and Azerbaijan—steadily increasing their trade turnover—are entering a new phase, with a focus on expanding investment and cooperation in joint industrial, energy, and high-tech projects. The prospects for enhancing bilateral business cooperation were thoroughly discussed last week during the 10th session of the Azerbaijan-China Intergovernmental Commission on Trade and Economic Cooperation, held in Baku. These developments were detailed in an article published by Caliber.Az.

The new directions have been most clearly demonstrated during the current state visit of the Azerbaijani President to China. On April 23, in Beijing, a signing ceremony was held in the presence of President Ilham Aliyev and Chinese President Xi Jinping. Among the bilateral documents signed, the most significant was the Joint Declaration on the Establishment of a Comprehensive Strategic Partnership between Azerbaijan and China.

At the same time, representatives of the relevant agencies of both countries signed a number of important documents, including an intergovernmental agreement on mutual visa exemption for holders of ordinary passports—an initiative expected to significantly boost mutual tourism.

Key agreements were also reached to strengthen business ties, including an intergovernmental agreement on technical and economic cooperation, as well as memoranda on cooperation in the space sector and the peaceful use of outer space. Another notable development was the signing of a memorandum of understanding between the State Oil Fund of Azerbaijan (SOFAZ) and China Investment Corporation.

Several other documents were also signed, laying the groundwork for enhanced partnership between the two countries in the fields of science and technology, intellectual property, environmental protection, industry, information exchange, and the digital economy.

Baku and Beijing are also steadily advancing their cooperation in trade and the transport-logistics sector. These efforts are underpinned by a memorandum on deepening bilateral cooperation for unhindered trade, as well as new intergovernmental agreements related to the joint promotion of the Belt and Road Initiative and international multimodal transportation.

The agenda of the visit also proved to be highly productive in the field of alternative energy. A number of documents and agreements were signed between Azerbaijan’s Ministry of Energy and Chinese companies. These include:

• The Investment Agreement between the Government of Azerbaijan and Universal Solar Azerbaijan LLC on the 100 MW Gobustan Solar Power Plant project;

• The Implementation Agreement between the Ministry of Energy of Azerbaijan and China Energy Overseas Investment Co. Ltd for the assessment, development, and implementation of an offshore wind energy project;

• The Implementation Agreement between the Ministry of Energy of Azerbaijan, China Datang Overseas Investment Co. Ltd, and SOCAR Green LLC for the assessment, development, and implementation of a 100 MW floating solar power plant and a 30 MW battery energy storage system on Lake Boyukshor;

• The Implementation Agreement between the Ministry of Energy, PowerChina Resources Limited, and SOCAR Green LLC for the assessment, development, and implementation of a 160 MW solar power plant project.

Among the documents signed by the Ministry of Energy are also two memorandums of understanding. One was signed with the China Electric Power Planning & Engineering Institute and covers the development of renewable energy and electricity system planning. The second memorandum, signed jointly with SOCAR Green LLC, China Datang Overseas Investment Co. Ltd, and PowerChina Resources Limited, envisages the development of a 2 GW offshore wind energy project in the Azerbaijani sector of the Caspian Sea.

Notably,  Azerbaijan and China are currently engaged in negotiations on the prospects for joint cooperation in the non-oil sector, particularly in attracting direct investments in high technologies and innovations—primarily in the field of renewable energy sources (RES) and the development of energy efficiency in the transport sector. Baku and Beijing plan to implement renewable energy projects with a total capacity of 2 GW. This work is already actively underway, with Chinese companies participating in the construction of a 160 MW solar power plant (SPP) in Fuzuli.

Cooperation in the wind energy sector is also progressing successfully: nearly all specialised equipment imported into Azerbaijan in recent years has been of Chinese origin. For instance, in just January–February 2025, Azerbaijan imported 33 wind turbines from China worth $39.9 million.

Cooperation in the field of green energy also holds great promise for attracting Chinese investors to development projects in Azerbaijan’s territories liberated from occupation. “Given China’s extensive experience in green energy and digital technologies, Chinese companies have significant potential to participate in the reconstruction of the Karabakh region,” said Kang Jie, a research fellow at the China Institute of International Studies, in a statement to the media.

Azerbaijani-Chinese cooperation in the electrification of public transport has also been progressing successfully. Last year, a framework agreement was signed with China’s BYD Company Limited for the purchase of electric buses, the localisation of their assembly in Azerbaijan, and the creation of charging and maintenance infrastructure. Over time, the agreement with BYD envisions the production of electric freight and utility vehicles, and starting in 2028, the assembly of batteries for energy storage.

The current visit also saw the active involvement of specialists from Azerbaijan’s Ministry of Economy and its subordinate body—the Export and Investment Promotion Agency (AZPROMO)—in expanding Azerbaijani-Chinese business cooperation. In collaboration with the Office of Azerbaijan’s Trade Representative in China and the International Cooperation Centre of China’s National Development and Reform Commission, Azerbaijani entrepreneurs were given the opportunity to visit enterprises located in the Beijing Economic and Technological Development Area.

These visits included advanced companies operating in the fields of biotechnology, artificial intelligence, transport, e-commerce, ICT, and robotics. The delegation toured a number of innovation centres, including the research centre of Yongtai Biopharmaceutical Co. and pharmaceutical laboratories, where they were introduced to cutting-edge innovations in biotechnology. The delegation also viewed unmanned public transport vehicles, as well as the showrooms of JD.com Group—one of China’s largest e-commerce platforms—and ICT solutions provider HollySys.

At the “World of Robots” exhibition centre, the Azerbaijani delegation explored various robotics models used in industry, healthcare, and domestic sectors. In this context, it is worth highlighting the efforts of AZPROMO aimed at attracting Chinese investors and know-how to Azerbaijan. During the China-Azerbaijan Industrial and Investment Promotion Conference, discussions were held on the potential participation of Chinese company Shenzhen Hasee Computer Co. in the localisation of laptop production in Azerbaijan. A corresponding memorandum of understanding had previously been signed with the company.