Central Asia has again emerged as a center of geopolitical rivalry between great powers competing for natural resources and political influence.
Instead of Great Britain and Russia vying for control of trade routes and territory in the 19th century's "Great Game," the European Union (EU) and China are currently courting the region's leaders. Both seek access to the region's vast oil, gas, and mineral wealth.
Central Asia holds massive deposits of raw materials. The region has 38.6% of the world's manganese ore, 30% of chromium, 20% of lead, 12.6% of zinc, and 8.7% of titanium.
As China expands its footprint in the region, the EU seeks to increase its influence in Central Asia. Uzbekistan, Kyrgyzstan, Kazakhstan, Tajikistan, and Turkmenistan are critical for the bloc's energy supplies and green transition.
"Central Asia is becoming a magnet for global powers," Mehmet Fatih Oztarsu, a Senior Researcher at Hankuk University of Foreign Studies in Seoul, wrote for the Center for European Policy Analysis (CEPA). "The EU aims to strengthen its presence and reduce Chinese influence."
EU officials are courting Central Asian leaders as they try to protect the eurozone from the uncertainty surrounding US trade policy under President Donald Trump. They are concerned that Trump's economic policies could further disrupt global supply chains.
China Chips Away At EU's Role in Central Asia
While the EU is the region's main investor, China is chipping away at that lead. Beijing has invested heavily in the region as part of its Belt and Road Initiative (BRI). It has poured vast sums of funding into infrastructure projects, surveillance systems, and military assistance.
China accounts for roughly 22% of Central Asian exports and 37% of their imports. This trade grew to $89 billion in 2023, representing a 27% increase from the previous year. Significantly, China has surpassed Russia as the region's largest trading partner, according to CEPA.
Along with closer ties, though, Kyrgyzstan and Tajikistan now owe nearly half of their sovereign debt to China. Public concern about falling into a Chinese debt trap has sparked more than 150 protests across the region since 2015.
China's financing aims to expand its geopolitical influence, secure trade routes, and build large-scale infrastructure. In comparison, the EU instead offers loans designed" to accelerate economic transformation, adaptation to a free-market economy, and promotion of human rights," Oztarsu wrote.
Beijing Makes Political Overtures in Central Asia
Beijing has made political overtures in the region. President Xi Jinping visited Kazakhstan for the fifth time in July last year since assuming power in 2012.
Apart from Russia, this fact marks Kazakhstan as one of the Chinese leader's most frequently visited nations, alongside the US and France. President Xi has visited Russia more frequently, nine times, according to the Carnegie Endowment for International Peace.
"China's growing attention to Central Asia is perceived as a harbinger of tectonic shifts in regional geopolitics," Temur Umarov, a fellow at the Carnegie Russia Eurasia Center, wrote last year.
China's Central Asian push has not gone unnoticed in Brussels.
EU Maneuvers To Offset China's Expansion
EU representatives and the five former Soviet republics of Central Asia met on April 4 to strengthen their strategic partnership. The first EU-Central Asia Summit in Samarkand, Uzbekistan, focused on expanding trade and EU investment.
"After years of successful cooperation it is time to take our partnership with Central Asia to the next level, deepening trade, strengthening regional collaboration and expanding people-to-people ties," António Costa, President of the European Council, said. "The EU remains a reliable forward-looking partner for Central Asia, investing in its long-term sustainable development for mutual, long-lasting benefit."
The delegations discussed the contemporary developments of the Trans-Caspian International Transport Route (TITR). It connects the two regions via Central Asia, the Caspian Sea, the South Caucasus, and Turkey.
Its freight transportation volume increased by 63% to 4.1 million tons in the first 11 months of 2024. The TITR Coordination Center aims to enhance its competitiveness by reducing the transit time between Europe and China to under 15 days.
Bypassing Russia, the TITR has also become an alternative to China's BRI. The corridor became more critical for China and Europe after Russia invaded Ukraine. The sanctions imposed on Moscow exposed the EU to global supply chain disruptions that drove eurozone inflation to 10.6% in October 2022.
EU Boosts Investments In Central Asia
The European Commission President, Ursula von der Leyen, pledged EU investments of €12 billion. The bloc allocated €3 billion for transportation and €2.5 billion for raw materials projects, von der Leyen said.
The EU will also provide €6.4 billion for water, energy, and climate protection. It pledged an additional €10 million to enhance Central Asia's connectivity.
"Countries in the region –particularly Kazakhstan and Uzbekistan – have become more significant partners for the EU and its member states," Marcin Popławski, a research fellow for the Centre for Eastern Studies, wrote on April 9. That is "due to increased exports of oil and uranium, a shift facilitated by their cautious stance on the war in Ukraine," Popławski added.
In the first quarter of 2024, Kazakhstan supplied 10.9% of the EU's petroleum oil imports, as reported by Eurostat. Kazakhstan, the largest economy in the region, supplies 19 of the EU's 34 critical raw materials, according to Eurostat.
European Companies Have Presence in Central Asia
European companies have significant interests in the region. France's TotalEnergies TTE holds a 16.8% stake in the North Caspian Project consortium to develop the Kashagan oil field.
Dutch Shell plc SHEL has a 16.8% stake in the Kashagan oil field, one of the world's largest offshore fields. Shell also holds a 5.4% interest in the Caspian Pipeline Consortium, which exports production from western Kazakhstan to the Black Sea.
To support European corporate interests, the EU has started to focus more heavily on trade. This approach aligns with the expectations of the Central Asian states, according to Popławski.
"The relationship now focuses on targeted cooperation, particularly in areas such as raw materials and transport," Poplawski said. This has expanded "since Russia's full-scale invasion of Ukraine," he added.
Disclaimer:
Any opinions expressed in this article are not to be considered investment advice and are solely those of the authors. European Capital Insights is not responsible for any financial decisions made based on the contents of this article. Readers may use this article for information and educational purposes only.
This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
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