China
The EU risks losing the contest for influence in Central Asia
Author: Donaev Mukhammadsodik, OSCE Academy
The EU and China have become more dynamic players in Central Asia since the United States withdrew from Afghanistan and Russia started losing its geopolitical reputation following its invasion of Ukraine. While Russia’s regional influence is gradually being replaced by China’s presence, the EU should adjust its strategy. Otherwise, the EU’s plans for closer connectivity with Central Asia will exist only on paper.
After the grandiose Shanghai Cooperation Organization meeting in Samarkand in September 2022, several summits were held to further EU–Central Asian connectivity. The President of the European Council, Charles Michel, visited Uzbekistan and Kazakhstan in October. Chinese President Xi Jinping also visited these countries — his first foreign visit since the beginning of the COVID-19 pandemic.
EU delegates, who have been making more frequent visits to Central Asia, often criticise China’s active engagement in the region. German Foreign Minister Annalena Baerbock stated during her last visit to Uzbekistan that ‘Germany does not threaten the sovereignty and integrity of the state by giving ‘tricky’ loans, but wants to establish partnerships on equal terms, honesty and transparency. When it comes to investment and loans, the EU does not assume subordination, and involvement in the sphere of influence unlike others’.
The EU claims that it is the biggest investor in Central Asia. But it is the largest investor in Kazakhstan only, which is the biggest economy in the region, and most European investment there has been directed towards the energy sector. Kazakhstan is considered less dependent on China compared to other countries in Central Asia. Although China was not among the top five investors in Kazakhstan in 2021–22, it is still the country’s biggest trading partner.
The other four countries in Central Asia have received most of their FDI from China. China’s investment in the region has been more diverse than Europe’s. According to statistical reports in 2021, China’s investment in Uzbekistan reached US$2.2 billion. This was followed by Russia — US$2.1 billion — and Turkey — US$1.18 billion. China’s investment in Tajikistan accounted for about 62 per cent of total inward FDI. As for Kyrgyzstan, 27 per cent of FDI was from China. There are no exact statistics for Turkmenistan, but according to some sources, China remained the biggest investor in 2021. As Chinese businesses steadily enter many sectors such as telecommunications, industry, manufacturing, construction and services, the influence of Chinese companies is becoming ubiquitous.
For China, Central Asia is an important geopolitical location and transport corridor. The China–Kyrgyzstan–Uzbekistan railway project is also expected to boost connectivity. China is not a member of the Paris Club — meaning it does not share information about its official loans to other countries — and is also known for ‘debt trap’ diplomacy. Because of this, loans and investments from China worry the intellectual elites of Central Asia.
Due to fears of economic dependence and China’s actions towards the Uyghur minority in Xinjiang, anti-Chinese sentiment has been growing, and several protests have occurred in Kyrgyzstan and Kazakhstan. Such protests are usually ignored and sometimes stopped with force because of strong diplomatic ties with China.
Central Asia does not want to disappoint either side and maintains equal diplomatic ties with the East and West. Uzbekistan reached a US$15 billion agreement with China in September 2022, and also cooperated closely with the EU to increase its export capabilities.
The same goes for Kazakhstan, whose relationship with China is at an ‘unprecedented level’. During Xi’s visit, both countries affirmed to respect and support each other’s sovereignty and territorial integrity. But Kazakhstan also agreed to step up its relations with the EU during a meeting of the Cooperation Council in Luxembourg on 20 June 2022.
The EU’s attempt to connect more with Central Asia is an opportunity for Central Asian states to cooperate with a ‘neutral and experienced’ partner to improve their economic situation and diversify political relations. The EU also provides a good example to Central Asia of a successful model of regional integration. Diversifying their relations and keeping a balance of power is important for both Central Asia and the EU — depending on just one partner in any sector comes at a heavy cost, as the energy crisis in both…
Business
Gordonstoun Severs Connections with Business Led by Individual Accused of Espionage for China
Gordonstoun school severed ties with Hampton Group over espionage allegations against chairman Yang Tengbo. He denies involvement and claims to be a victim of political tensions between the UK and China.
Allegations Lead to School’s Decision
Gordonstoun School in Moray has cut ties with Hampton Group International after serious allegations surfaced regarding its chairman, Yang Tengbo, who is accused of being a spy for the Chinese government. Known by the alias "H6," Mr. Tengbo was involved in a deal that aimed to establish five new schools in China affiliated with Gordonstoun. However, the recent allegations compelled the school to terminate their agreement.
Public Denial and Legal Action
In response to the spying claims, Mr. Tengbo publicly revealed his identity, asserting that he has committed no wrongdoing. A close associate of Prince Andrew and a former Gordonstoun student himself, Mr. Tengbo has strenuously denied the accusations, stating that he is a target of the escalating tensions between the UK and China. He has claimed that his mistreatment is politically motivated.
Immigration Challenges and Legal Responses
Yang Tengbo, also known as Chris Yang, has faced additional challenges regarding his immigration status in the UK. After losing an appeal against a ban enacted last year, he reiterated his innocence, condemning media speculation while emphasizing his commitment to clear his name. Gordonstoun, on its part, stated its inability to divulge further details due to legal constraints.
Source : Gordonstoun cuts ties with business chaired by man accused of spying for China
Business
China Dismantles Prominent Uyghur Business Landmark in Xinjiang – Shia Waves
The Chinese government demolished the Rebiya Kadeer Trade Center in Xinjiang, affecting Uyghur culture and commerce, prompting criticism from activists amid concerns over cultural erasure and human rights violations.
Demolition of a Cultural Landmark
The Chinese government recently demolished the Rebiya Kadeer Trade Center in Urumqi, Xinjiang, a vital hub for Uyghur culture and commerce, as reported by VOA. This center, once inhabited by more than 800 predominantly Uyghur-owned businesses, has been deserted since 2009. Authorities forcibly ordered local business owners to vacate the premises before proceeding with the demolition, which took place without any public notice.
Condemnation from Activists
Uyghur rights activists have condemned this demolition, perceiving it as part of China’s broader strategy to undermine Uyghur identity and heritage. The event has sparked heightened international concern regarding China’s policies in Xinjiang, which have been characterized by allegations of mass detentions and cultural suppression, prompting claims of crimes against humanity.
Rebiya Kadeer’s Response
Rebiya Kadeer, the center’s namesake and a notable Uyghur rights advocate, criticized the demolition as a deliberate attempt to erase her legacy. Kadeer, who has been living in exile in the U.S. since her release from imprisonment in 2005, continues to advocate for Uyghur rights. She has expressed that her family members have suffered persecution due to her activism, while the Chinese government has yet to comment on the legal ramifications of the demolition.
Source : China Demolishes Uyghur Business Landmark in Xinjiang – Shia Waves
China
China Expands Nationwide Private Pension Scheme After Two-Year Pilot Program
China’s private pension scheme, previously piloted in 36 cities, will roll out nationwide on December 15, 2024, enabling workers to open tax-deferred accounts. The initiative aims to enhance retirement savings, address aging population challenges, and stimulate financial sector growth.
After a two-year pilot program, China has officially expanded its private pension scheme nationwide. Starting December 15, 2024, workers covered by urban employee basic pension insurance or urban-rural resident basic pension insurance across the country can participate in this supplementary pension scheme. This nationwide rollout represents a significant milestone in China’s efforts to build a comprehensive pension system, addressing the challenges of a rapidly aging population.
On December 12, 2024, the Ministry of Human Resources and Social Security, together with four other departments including the Ministry of Finance, the State Taxation Administration, the Financial Regulatory Administration, and the China Securities Regulatory Commission, announced the nationwide implementation of China’s private pension scheme effective December 15, 2024. The initiative extends eligibility to all workers enrolled in urban employee basic pension insurance or urban-rural resident basic pension insurance.
A notable development is the expansion of tax incentives for private pensions, previously limited to pilot cities, to a national scale. Participants can now enjoy these benefits across China, with government agencies collaborating to ensure seamless implementation and to encourage broad participation through these enhanced incentives.
China first introduced its private pension scheme in November 2022 as a pilot program covering 36 cities and regions, including major hubs like Beijing, Shanghai, Guangzhou, Xi’an, and Chengdu. Under the program, individuals were allowed to open tax-deferred private pension accounts, contributing up to RMB 12,000 (approximately $1,654) annually to invest in a range of retirement products such as bank deposits, mutual funds, commercial pension insurance, and wealth management products.
Read more about China’s private pension pilot program launched two years ago: China Officially Launches New Private Pension Scheme – Who Can Take Part?
The nationwide implementation underscores the Chinese government’s commitment to addressing demographic challenges and promoting economic resilience. By providing tax advantages and expanding access, the scheme aims to incentivize long-term savings and foster greater participation in personal retirement planning.
The reform is expected to catalyze growth in China’s financial and insurance sectors while offering individuals a reliable mechanism to enhance their retirement security.
| This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
Read the rest of the original article.
- Gordonstoun Severs Connections with Business Led by Individual Accused of Espionage for China
- China Dismantles Prominent Uyghur Business Landmark in Xinjiang – Shia Waves
- China Expands Nationwide Private Pension Scheme After Two-Year Pilot Program
- How a scandal over sanitary pads is shaping feminist activism in China
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