Economic cooperation between Azerbaijan and China, which is one of the main import markets for Azerbaijan, is deepening every day. At the outset of September, the countries signed a framework agreement "On production capacities and strengthening of investment cooperation".
Report presents an interview with Ma Chi, Counselor on Trade and Economic issues of the Chinese embassy in Azerbaijan, who talked about the expansion of investment cooperation, the role of the Middle Corridor for China, cooperation between China and Azerbaijan within the framework of the Belt and Road initiative, as well as opportunities for conducting business on the liberated territories of Azerbaijan.
What do you think about deepening cooperation between Azerbaijan and China in the economic and investment fields?
Thanks to the close attention paid and great efforts made by President Xi Jinping and President Aliyev, the cooperation in trade and investment between the two sides has continued to deepen.
According to statistics in Azerbaijan, the volume of bilateral trade between China and Azerbaijan registered 1.62 billion U.S. dollars between January and July 2023, a year-over-year growth of 41.1%, making China the fourth largest trade partner and the second largest exporter to Azerbaijan. Currently, mechanical equipment, electronics, automobiles, and other products created via advanced manufacturing constitute the major items China exports to Azerbaijan, accounting for more than 50% of total exports. This has exerted a positive impact upon Azerbaijan’s economic and social development and improved the lives of its people.
Bilateral cooperation in investment has also increased, with the development of renewable energy and green industries growing into new highlights of cooperation. As the impact of the COVID-19 pandemic has gradually faded, the exchanges and associations of local governments and enterprises of the two countries have become unprecedentedly frequent. More and more Chinese enterprises visit Azerbaijan to investigate and deepen their understanding of the country’s business environment, market opportunities, and industrial policies, which has significantly boosted their interest in investing and seeking cooperation in Azerbaijan. It is believed that more technologically advanced and environmentally friendly projects, invested in and constructed by Chinese enterprises, will come into service in Azerbaijan in the years to come. China and Azerbaijan have cooperated successfully to implement the Belt and Road Initiative and will continue to improve their economic and trade cooperation, thus making new contributions to the improvement of the well-being of the peoples of the two countries.
What do you think of the cooperation between Azerbaijan and China under the framework of the Belt and Road Initiative?
Azerbaijan is one of the first countries to respond positively and render active support to the Belt and Road Initiative. Over the past 10 years, thanks to the attention and efforts of the heads of the two states, China and Azerbaijan have achieved solid progress in the Belt and Road Initiative. The bilateral relations between the two countries have continued to develop on the basis of mutual trust and benefit and reached an unprecedentedly high level—political parties and governments of the two countries have witnessed closer exchanges at different levels, communication over policies has deepened, and the institutional foundation for bilateral relations has been further consolidated. Since 2022, the development of the Trans-Caspian International Transport Route has accelerated, providing an important passage for China–Europe freight trains, which has further facilitated the connectivity of the facilities between China and Azerbaijan; bilateral trade has remained smooth and witnessed a trend of sustained growth, allowing the entry of products characteristic of Azerbaijan into the Chinese market at a faster rate; China and Azerbaijan have successfully carried out multiple projects in fields such as oil and gas technological service, information communication, new energy, and construction materials, alongside an ascendant trend in investment cooperation and financing; and there has been an increase in interactions between the provinces and states, young people, and the media of the two sides and a significant rise in cultural and people-to-people exchanges. More and more Chinese tourists have started to visit Azerbaijan to enjoy the beautiful scenery and delicious food of the “Land of Fire,” which has promoted the connection between the peoples of the two countries. With great confidence, China is willing to deepen the mutually beneficial cooperation between the two sides in all fields and will push forward the cooperation in jointly building the Belt and Road with Azerbaijan into the next golden decade.
Are Chinese enterprises interested in carrying out business in the liberated territories? What are the existing projects? Does China have plans to expand cooperation in the liberated territories?
Chinese enterprises pay close attention to the reconstruction progress of the liberated territories of Azerbaijan. A number of enterprises visited the lands and implemented projects such as “smart villages” and the supply of airport detection equipment. They now play an active role in promoting the investment and construction of photovoltaic power stations there. The Chinese enterprises have noted the measures that were adopted by the Azerbaijan government to attract investment, aiming to drive infrastructure construction and improve the investment climate and business environment within the liberated areas. They are ready to explore specific cooperation projects with friends from Azerbaijan in fields such as renewable energy, infrastructure construction, production of building materials, and info-communications.
Azerbaijan has opened a trade house in Beijing recently. What impacts do you think it will bring to the development of economic cooperation between the two sides?
The Azerbaijan Trade House-Beijing Pavilion (also known as the Trade House) is the fourth national pavilion of Azerbaijan in China and will play an important role as a trade and cultural exchange platform. It will also contribute to the establishment of Azerbaijan’s national image, the introduction and publicization of the “made in Azerbaijan” brands, and the promotion of the trade relations between Azerbaijan and China in a better manner, thus making it easier for more Chinese consumers to purchase products characteristic of Azerbaijan. Moreover, it will also allow more Chinese entrepreneurs to understand the market and industrial information of Azerbaijan. It is believed that China’s vast market and high consumer demand will bring more development opportunities to Azerbaijan.
Is China planning to launch new cooperation projects in Azerbaijan and provide it with assistance in industrial experience?
Since the end of the COVID-19 pandemic, all industries in China and Azerbaijan have made great efforts to make up for the “lost three years,” and the number of Chinese enterprises seeking cooperation opportunities in Azerbaijan has grown rapidly. Currently, discussion and consultation are proactively underway regarding projects in a wide range of fields, such as new-energy power generation, energy storage, chemicals, agriculture, and logistics and transportation. China not only sent a senior delegation to attend the Baku Energy Week, which has harvested a series of practical outcomes, but has also rendered active support to Azerbaijan in attracting Chinese investors with the help of such platforms as the China International Fair for Trade in Services and the China International Import Expo. China will also make use of the 74th International Astronautical Congress, which will be hosted by Azerbaijan, to advance mutually beneficial cooperation in space technology, digital economy, and other fields. Chinese enterprises have faith in the business environment and market potential of Azerbaijan, believing that more cooperation projects beyond the field of oil and gas will emerge and prosper in Azerbaijan in the near future.
Renewable Energy—Will Dongfang Electric from China expand its programs in Azerbaijan?
The construction of 230 MW solar photovoltaic plant by Dongfang Electric in Qobustan is now underway, which is one of Azerbaijan’s first large-scale new-energy projects, and the first one undertaken by a Chinese enterprise in Azerbaijan. Therefore, it is of great significance for consolidating the foundation of mutually beneficial cooperation between China and Azerbaijan and expanding the scope of cooperation between the two sides. Overcoming various difficulties, the Chinese enterprise has turned nearly five square kilometers of wasteland into a treasure trove in just a few months. At present, this project is in the final stage and is expected to generate power after its connection to the grid in the near future. It will then play a positive role in transforming Azerbaijan’s energy structure. It is believed that based on the success of this first large-scale project, Chinese enterprises will make greater contributions to Azerbaijan’s economic development with continued efforts.
Would you please expound on whether China is interested and will participate in the development of the potential of the Middle Corridor?
The Middle Corridor, which is highly consistent with the idea of jointly building the Belt and Road, is of great significance in improving connectivity across regions, promoting regional economic development and guaranteeing the stability of the global supply and industrial chains. It supports the stable and smooth operation of the China–Central Asia–Caucasus–Europe transport channel and contributes to the diversified development of China–Europe freight trains. Based on a new historical starting point for the development of bilateral relations between the two sides, China is willing to strengthen exchanges and cooperation with Azerbaijan and other countries along the route to continuously improve the facilities and services of the Middle Corridor, shorten transportation cycles and reduce transportation costs, and attract more sources of goods. China is willing to share opportunities with Azerbaijan, and the collaboration will be a win for both sides.
What do you think of the prospects for the cooperation in the digital economy between the two sides?
China has noticed the positive measures Azerbaijan has adopted in promoting economic diversification in recent years. Since China’s technology and application of the digital economy are among the world’s strongest, China is willing to share relevant experience with Azerbaijan to support it in improving network infrastructure, developing the digital industry, and safeguarding network security. Both sides can explore cooperation projects as regards Industry 4.0, the Internet of Things, blockchain, artificial intelligence, digital commerce, smart agriculture, and digital government to introduce fresh momentum for Azerbaijan’s economic transformation.