Azerbaijan is at its center in the South Caucasus, which serves as a vital power hall and cushion area between Russia and the Middle East.
At this year’s Shanghai Cooperation Organization conference in Astana, Kazakhstan, Azerbaijan and China signed a Joint Declaration on establishing a proper relationship, which underlined China’s geo-economic method to the area.
The Joint Declaration was a lengthy, varied file. Financial articles focused on prospects for cooperation in important sectors, particularly natural strength, oil and gas production, transport infrastructure and digitization. The charter also emphasized Azerbaijan’s position in the Belt and Road Initiative, China’s$ 1 trillion world infrastructure-building system.
In particular, both parties committed to enhancing connectivity through the Middle Corridor, also known as the Trans-Caspian International Trade Route ( TITR ).
The declaration’s material coincides with Azerbaijan’s longstanding policy of multi-vector politics, through which it seeks to stabilize relationships with various international powers. Increased Foreign investment and economic assistance provide potential economic benefits as well as yet another “vector” in foreign policy to lessen Russian reliance on Russia and the West.
The focus on cooperation for proper global trade corridors and supply stores suggests that China has come to see Azerbaijan as a significant person in its wider Eurasian economic strategy. The agreement improves Azerbaijan’s reputation as a middle-class and improves its political standing.
Azerbaijan in China’s approach in the region
China has been pursuing the South Caucasus for some time. However, the Joint Declaration with Azerbaijan, which established a proper relationship, and Georgia’s choice of a Chinese collaboration to create the Anaklia port all come together to identify Beijing’s elevated profile in the political and geo-economic environment.
These actions come at a time when it seems as though European effect in the area is waning. The emphasis of Europe has been stifled by internal problems and the ongoing fight in Ukraine. However, the United States is preoccupied with local issues, prominently the present election cycle.
In this environment, Azerbaijan’s status as a vital link in global supply chains and local trade corridors becomes extremely important for China’s broader ambitions.
Beijing’s approach in the region is varied, with Azerbaijan at its base. Due to its role in the Belt and Road Initiative and its strategic position within the European supply chains, Azerbaijan is a crucial lover for China.
On the one hand, at the geo-economic levels, Beijing seeks to establish alternative trade routes, including through Azerbaijan, to lessen its dependence on ocean paths controlled by the US and its supporters. This goes along with China’s search for new businesses and tools.
On the other hand, China’s involvement in the South Caucasus is a component of its wider revision strategy to establish a Sinocentric system of economic and political associations, challenging the West’s dominance over the global system.
China’s strategy in the South Caucasus exemplifies its attempt to project its influence throughout Eurasia at large through financial diplomacy and network development.
China may eventually confront more scrutiny from places in and outside the region, as has happened somewhere in Eurasia. After the November elections, the US may start to play a stronger role in the region once its local social position settles. Some European countries, such as Italy, have now reassessed their strategy to Azerbaijan and Georgia.
The Anaklia deep-sea port initiative in Georgia, which is strategically located on the eastern border of the Black Sea, is another excellent illustration of China’s growing structural presence in the area.
The project, which had previously been contracted to a Georgian-American consortium comprising Georgia’s TBC Bank and the US-based Conti International, will now potentially fall under Chinese control.
The cancellation of the previous contract in 2020 was caused by political controversies and legal issues. A new tender was eventually offered, and this year, a Chinese consortium was the sole bidder. It is now ready to begin constructing the port.
The Anaklia port might eventually become a crucial component of the Middle Corridor if additional infrastructure is built and the Black Sea’s cargo transit capacity is significantly increased.
Regardless, its geo-economic implications highlight Georgia’s growing ties with China and China’s expanding footprint in the South Caucasus. These implication only serve to deepen the current inquiries about Georgia’s relations with the West that are the result of its anti-democratic domestic political evolution.
For Russia, the dominant power in the South Caucasus for the last two centuries, China’s expanding influence there presents both opportunities and challenges. Russia may be suspicious of China’s growing presence in Georgia and Azerbaijan, where Russia is accustomed to have a proprietary sphere of influence, despite the fact that Moscow and Beijing have established closer ties in recent years.
Given Russia’s current relative isolation abroad and its related domestic economic challenges, it may have only limited ability to counteract China’s growing influence in Azerbaijan and the South Caucasus.
China and other powers, including Russia, have a chance because of the relative absence of Western involvement in the South Caucasus. After removing the Russian so-called peace-keeping force from formerly occupied Karabakh, Moscow has rekindled its relations with Azerbaijan.
Tehran may achieve better relations with all of the countries in the South Caucasus, as suggested by the recent cosmetic change in Iran’s political leadership.
The West and the Armenian diaspora
Although Azerbaijan’s overall foreign policy has been balanced between the various global powers, recent myopic political stances from the US and the EU have influenced its decision to support China.
These included a number of resolutions recently passed by the European Parliament as well as the US Congress ‘ decision to impose a restriction on the president’s ability to waive Amendment 907 of the Freedom Support Act, which imposes restrictions on aid to Azerbaijan.
All these political maneuvers were spearheaded by the international Armenian diaspora and its lobbies in various capitals, leading to Azerbaijan’s isolation from Western diplomacy and its pivot toward China.
In consequence, the United States and Europe are at risk of losing some of their influence in this crucial region, as well as any potential liberalizing effects that might affect the development of Azerbaijan’s domestic political system.
Despite having a population that is more than one and a half times Armenia and Georgia combined and twice their combined gross domestic product ( GDP ), Azerbaijan is strategically the most significant country in the region.
China’s growing presence in Azerbaijan, through infrastructure investments and strategic partnerships, could complicate Western strategic calculations, particularly when it comes to ensuring European energy security.
Specifically, Chinese investments in Azerbaijan’s energy sector already offer Baku alternatives to Western financing, potentially reducing its reliance on Europe as an energy market.
By allowing Azerbaijan to pit its partners against one another, the increased flexibility that comes from this development would weaken Western bargaining power.
Chinese-backed projects may also affect the ability of the Southern Gas Corridor to meet the needs of Europe. This could change energy flows toward Asia at the same time. China has already become the second-largest buyer of Azerbaijan’s oil.
A stronger Chinese presence in Azerbaijan and Georgia could have long-term effects on Russia, the West, and the Greater Middle East as a whole.
Robert M Cutler was for many years a senior researcher at the Institute of European, Russian and Eurasian Studies, Carleton University, and is a past fellow of the Canadian International Council.