China looks to Central Asia as trade risks elsewhere loom

The escalating trade war with the U.S. has propelled Beijing to further expand its ties with Central Asia, analysts say, as state-backed firms look to substitute U.S. imports and reroute exports.

In what appeared to be an attempt to downplay tariff worries, Chinese state media on Feb. 10 — the day when Beijing slapped an initial 10% tariff on U.S. energy imports — reported a state-led trip to Kyrgyzstan, where dozens of Chinese corporate representatives traveled to the neighboring country to explore partnership opportunities.

“The ongoing trade war is expected to further drive China to deepen economic cooperation with Central Asian countries,” said Yunis Sharifli, a fellow at The China Global South Project, through diversifying export routes, increasing participation in regional connectivity projects, and expanding investment in infrastructure.

China has established itself as a leading trade partner and top foreign investor to the five Central Asian nations — Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan — a bloc viewed as a key gateway for its Belt and Road Initiative, a major infrastructure program announced by President Xi Jinping during an official visit to Kazakhstan in 2013.

In a significant show of commitment, Beijing hosted the first in-person summit with Central Asian leaders in 2023, where Xi pledged to upgrade bilateral investment and trade links. The coalition leaders are expected to huddle again in June at the next summit in Astana, Kazakhstan.

The U.S., however, has long been sidelined in the region, despite Washington’s aim to absorb the region into its sphere of influence as stated in a State Department strategy document titled “U.S. Strategy for Central Asia 2019-2025: Advancing Sovereignty and Economic Prosperity.”

But its efforts have fallen short.

“Central Asia remains a diverse region that receives too little U.S. attention,” said Curtis Chin, a former U.S. ambassador to the Asian Development Bank and senior fellow at Milken Institute.

“More than half the battle for influence is showing up in person [and] this is something China and Chinese businesses, often state-supported, know well, and Americans may be hard pressed to match.”

Bilateral trade between Central Asia and China, the largest trade partner to the landlocked region, has been rising steadily in recent years, hitting a record high of $94.8 billion last year. This far outstripped Central Asia’s trade with the U.S., which hit just above $4 billion last year, according to CNBC’s calculation of the official data.

China’s exports to the region are mostly machinery, electronics, manufactured goods and vehicles while Central Asia supplies primarily natural resources, critical minerals and agricultural products to China — in what Sharifli described as a “complementary trade relationship.”

Notably, two-way trade between Central Asia and China, while on a steady climb, is still at relatively lower levels when compared to the total goods trade between China and the U.S. at $582.4 billion.

Kazakhstan, a vast steppe nation with rich energy and agricultural resources, led with $43.8 billion last year, ahead of its target to hit $40 billion in annual two-way trade with China by 2030 — a pledge made by the country’s president Kassym-Jomart Tokayev in 2023.

Kyrgyzstan came in next with $22.7 billion in trade with China, then Uzbekistan with $13.8 billion, Turkmenistan with $10.6 billion and Tajikistan with $3.86 billion.

China’s imports from Kyrgyzstan surged over 30 times in 2024 and over 60 times in the first two months of 2025. Officials from Kyrgyzstan and China at a meeting earlier this month discussed boosting bilateral trade to up to $45 billion by 2030 as well as plans to accelerate construction of new checkpoint and opening of new flights, according to Kyrgyzstani local media reports.

In retaliation against U.S. President Donald Trump’s imposition of 20% new tariffs on Chinese goods, Beijing has slapped additional duties of up to 15% on coal, natural gas, cotton, agricultural products from the U.S.

Chinese companies could “double down on cotton imports from Uzbekistan and other Central Asian nations,” said Daniel Balazs, a research fellow at S. Rajaratnam School of International Studies. Though contribution of cotton imports from the region may not match that from the U.S., it could “mitigate some impact,” he said.

China obtained 35% of its cotton imports from the U.S. as of 2024, according to data compiled by a team of economists at Nomura, who expect Beijing to soon switch to other substitute sources.

The bulk of growth in outbound Chinese investment in Central Asia over the years has mostly been in Kazakhstan and to a lesser degree Uzbekistan, according to the China Global Investment Tracker compiled by the American Enterprise Institute.

The investment mostly flowed to sectors such as transport and infrastructure, renewable energy projects and increasingly the electric vehicles sector.

Chinese leading electric vehicle maker BYD last month made its foray into Kazakhstan, making it the third Central Asian market where the automaker has made a foothold, following Uzbekistan and Tajikistan.

Beijing seized the opportunity to expand its influence in the region as its thirst for energy snapped back after the COVID-19 pandemic, and at a time when Russia, which had dominant influence in the former Soviet states, was caught up in a grinding war with Ukraine and subject to international sanctions.

Going forward, “part of the Russo-Chinese strategic relationship will consist of Russia accepting a greater role in the region for Beijing,” said Matt Gertken, chief geopolitical strategist at BCA Research.

“Russia will struggle to maintain domestic stability and thus will lack the resources to maintain the same high degree of influence over Central Asia over the long run,” Gertken said.

The five Central Asian nations have maintained a neutral stance on the Ukraine conflict, refraining from supporting either Kyiv or Moscow, a move seen by some as a cautious distancing from Moscow.

Echoing that sentiment, Jeremy Chan, senior analyst at Eurasia Group, said, “Central Asian countries will also increasingly look toward China — and away from Russia — for their trade and investment needs.”