The royal release of the China-Kyrgyzstan-Uzbekistan rail on December 27 was the latest evidence of China’s growing effect in Central Asia.
China’s growing deal with a crucial area that the US has de facto abandoned since its military withdrawal from neighboring Afghanistan in 2021 will be supported by construction, which is anticipated to take six decades.
China’s deal with Central Asia, comprised of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, hit US$ 89 billion in 2023, making it by far the state’s largest business partner.
China’s trade was followed by the EU with$ 53.9 billion, Russia’s$ 44 billion and Turkey’s nearly$ 13 billion. Russia’s sphere of influence has long been viewed as having a broader scope, but China’s affect is now clearly shifting, at least in part as a result of the Ukraine conflict.  ,
The Office of the United States Trade Representative has released data for the last year, but America’s combined deal with Central Asia in 2022 was a modest$ 4.4 billion.
This is in spite of the” United States Strategy for Central Asia 2019-2025: Advancing Sovereignty and Economic Prosperity“, published in February 2020 under the preceding Trump presidency.
India trailed behind at$ 2 billion in 2023 followed by Iran at$ 1.5 billion in 2022 and Pakistan at just$ 309 million that same year.
Given their involvement in the International North-South Transport Corridor and the US’s waiver to conduct business with Afghanistan from Iran’s Chabahar port ( and apparently throughout the rest of the place ), India and Iran’s lower level of business is relatively unexpected.
In that regard, next spring, India and Iran signed a 10-year deal with the Chabahar port, but the Biden administration unexpectedly threatened to impose sanctions despite the waiver for India’s use of the city’s facilities.
Pakistan’s sluggish trade with Central Asia is due to its worsening hostilities with Taliban-run Afghanistan, which scuppered plans to join with the area after the US government left in 2021.
There are still programs to reconstruct and upgrade the Pakistan-Afghanistan-Uzbekistan rail, but rising security-related conflicts and money problems have impeded development.
Even so, the Minister of Maritime Affairs of Pakistan asserted in early January that all of the nations in Central Asia still want to deal through Muslim ships.
Now, Central Asia’s most trusted business associates are neighboring China and Russia. Although EU business is higher than that of Russia, there are reasons to believe that a sizable portion of it is transshipments to Russia to avoid American sanctions, as Brookings Institute older brother Robin Brooks has suggested.
Their business must also pass through the Black Sea, the South Caucasus, and Anatolia or the Baltic Sea. Similar to Turkey’s deal with Central Asia, which is also bidirectional and results in significantly higher costs and longer travel times.
Georgia is a crucial factor in facilitating trade between the EU and Turkey along the so-called” Middle Corridor,” but a potential resolution of Baku’s Armenian-Azerbaijani dispute was ease this process in the future.
A flowing issue over that debate, but, risks disrupting their trade.
Last year, Azerbaijani President Ilham Aliyev stated to reporters that” Armenia does not have in our manner.” They shouldn’t serve as a boundary between Turkey and Azerbaijan. The Zangezur hall may remain and will be opened. The sooner they understand this, the better”.
He also called for demilitarizing Armenia and “eradicating” what he described as its “fascist philosophy” in vocabulary related to Russian President Vladimir Putin’s in the run-up to what the Kremlin has referred to as its” specific function” in Ukraine.
Even if a local conflict doesn’t start, the EU’s relationship with Georgia could be hampered by Tbilisi’s latest parliamentary elections and Tbilisi’s deteriorating unusual agents laws, which could complicate trade between the bloc and Central Asia.
Regardless of whether the Zangezur Corridor actually comes into being or not, China may end up being the biggest winner, which would cause the place to deteriorate further into its sphere of influence.
It is most likely that the US would be able to avoid that situation by facilitating Central Asia’s business with all of its partners, with the exception of China. That, in turn, would allow them to function as a social counterpoint to China.
For that to occur, the US will have to make some hard, if not controversial, decisions. For example, the incoming Trump presidency would need to evaluate some of its Russian punishment, many of which haven’t worked as punitively intended.
According to Maximilian Hess of the Foreign Policy Research Institute,” It may seem counterintuitive, given one of the key goals of the restrictions imposed on Russia has been to restrain deal with Russia, but deal with Russia has increased for Central Asia and the Caucasus since 2022,” according to Hess. Much of this has been caused by trade rerouting, whereby Western exports to Russia have fallen and were instead routed through the area.
Hess noted that sanctions have caused some difficulties in their trade, notably because Russia is no longer a member of SWIFT, but their only real impact on the area has been the de post forwarding of some pre-war Western business to Russia via Central Asia.
While specific information is hard to find, it’s obvious that a major share of the EU’s deal with the location is transshipments. That implies that true trade between the EU and Central Asia is likely to be lower than what is currently known, implying that China has more influence than the data suggest.
Greater financial clarity about Central Asia’s real existing business could be gained by reversing some sanctions, extending waivers to Western companies, or threatening secondary sanctions in response to violations, some of which might be included in a package deal with Russia on Ukraine.
That’s imperative to better understand the EU’s competitive advantages there vis-a-vis China, which could then be more effectively leveraged.
The second difficult choice is whether or not Iran will continue to impose sanctions on India for trade with Afghanistan ( and presumably also Central Asia ) via Iran’s Chabahar port.
Significantly, Trump’s Ukraine envoy, Keith Kellog, revealed over the weekend that the incoming administration  , plans to revive , its “maximum pressure” policy against Iran.
India’s trade with Central Asia lags far behind its potential, and if the US wants to keep China’s influence in check in the strategic region, then it must rely in part on India as a counterbalance.
If India and Central Asia are confident that their businesses won’t face secondary sanctions for trading with Iran and other countries, this only can occur.
Pakistan’s best course of action would be to reconcile with Afghanistan and India, allowing India to establish a pioneering overland route to Central Asia, but that’s currently politically unrealistic. That’s why Iran must be relied upon as a transit state, which requires the US to be flexible with sanctions.
Finally, Trump ought to think about changing Biden’s pressure policy toward Georgia and urging the EU to do the same. Such a rapprochement would ensure the EU can continue trading with Central Asia across Georgia’s territory, thereby lifting present uncertainties.
In parallel, Trump’s incoming government could also consider taking the lead in resolving the Armenian-Azerbaijani dispute over the so-called” Zangezur Corridor” in order to avert another war.
Trump and his advisors are known for their business-minded worldview and thus may agree that compromises toward Russia, Iran-India and the South Caucasus ( Georgia and Armenia-Azerbaijan ) are acceptable to counter China’s rising influence in Central Asia.
If the US doesn’t take action, China will undoubtedly grow to be a dominant economic force in the strategic region, giving it more access to its resources and minerals and acting as a ready hub for more trade with Iran.
Because China already relies on imported energy by sea to give the US Navy leverage in any potential conflict with China, including through a blockade of the Malacca Strait chokepoint, those outcomes would conflict with US interests.
Meanwhile, greater overland trade between China and Iran via Central Asia would serve to neutralize Trump’s “maximum pressure” policy on Tehran.
Thus, it would be wise for the incoming Trump administration to emphasize Central Asia more prominently in its foreign policy strategy; otherwise, its planned pressure tactics against China and Iran will be less likely to succeed.