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China-Central Asia Summit: “Beijing involved in a security issue for the first time”

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The China-Central Asia Summit convened on May 18-19 in Xi’an, the capital of China’s Shaanxi province. The summit, chaired by Chinese President Xi Jinping, was attended by Kassym-Jomart Tokayev of Kazakhstan, Sadyr Japarov of Kyrgyzstan, Emomali Rahmon of Tajikistan, Shavkat Mirziyoyev of Uzbekistan and Serdar Berdimuhamedow of Turkmenistan.

This was the first face-to-face summit between China and the leaders of the five Central Asian countries since the establishment of diplomatic relations 31 years ago. It was agreed to hold the summit on a rotating basis, with the next summit to be held in Kazakhstan in 2025. The leaders also agreed to establish a permanent secretariat of this mechanism in China.

“We’ll resolutely withstand foreign powers staging color revolutions”

“The sovereignty, security, independence and territorial integrity of Central Asian countries should be safeguarded, the development path independently chosen by the Central Asian people should be respected, and the Central Asian region’s efforts for peace, harmony and tranquility should be supported,” Xi Jinping said at the opening of the second day of the Summit, which began with a grand opening ceremony on the first day.

Xi also called for joint efforts to enhance strategic trust and strengthen security ties between China and Central Asia, saying, “We’ll resolutely withstand foreign powers interfering in the internal affairs of regional countries and staging ‘color revolutions’, have zero tolerance for the three forces (terrorism, separatism and religious extremism), and work to solve the regional security dilemma.”

Xi said China is willing to help Central Asian countries strengthen their law enforcement security and defense capabilities “to independently maintain regional security,” adding that China will support the “peaceful reconstruction” of Afghanistan. 

Declared goal: Expand trade and economic cooperation

According to state news agency Xinhua, Xi pledged to expand trade and economic cooperation with Central Asia and said Beijing would deepen connectivity in the region and expand energy cooperation, among other things.

Central Asia, “with its unique geographical advantage, can become an important interconnection hub in Asia and Europe,” Xi said, adding that he hopes to accelerate the construction of the China-Central Asia gas pipeline as well as the Line D gas pipeline (which will run from the border with Turkmenistan through the territory of Uzbekistan, Tajikistan and Kyrgyzstan) and expand the scale of oil and gas trade with the region.

The construction of the China-Europe Railway will be accelerated and Chinese enterprises will be encouraged to build overseas warehouses in Central Asian countries.

Cross-border transportation and logistics network between China and Central Asian countries will be improved, and joint work and projects in the context of high-tech and green development will be developed.

“We need to strengthen dialogue among civilizations,” Xi said, inviting Central Asian countries to join the “Cultural Silk Road” program. Xi noted that they will establish more traditional medicine centers and cultural centers in Central Asia, increase student exchange programs and interaction between universities.

Xi also announced that China will provide 26 billion yuan (USD 3.7 billion) in financial support to help Central Asian countries develop.

This year also marks the 10th anniversary of the “Silk Road Economic Belt” initiative proposed by Xi during his visit to Kazakhstan in 2013. In the decade since Xi launched the Belt and Road Initiative, trade between China and the five Central Asian countries has grown rapidly. Last year, it reached USD 70.2 billion, up 40 percent.

Beijing sees Central Asia as a critical frontier for expanding its trade and energy security. The region is also seen as crucial for stabilizing Xinjiang, where the Uyghurs are one of the most contentious issues between China and the West.

Three topics stood out: trade, security and cultural integration

We discussed the China-Central Asia Summit, its outcomes and future plans with Assoc. Professor Nurbek Isabay, Dean of the Faculty of Law at Astana International University.

“A great new page has opened for the Central Asian countries,” Dr. Isabay said, recalling that the United States also established such an initiative with the Central Asian countries in 2015, called C5+1, but underlined that this new format with China is very important for the Central Asian countries.

Isabay stated that Xi Jinping emphasized 3 important points in his speech today: development of trade corridors, security cooperation and cultural integration:

“The first point is very important for China. Before the war in Ukraine, there was the Trans-Siberian Railway through Russia. There is also the Central Corridor from Beijing to Europe through Kazakhstan and the Southern Corridor from China to the Caspian Sea and Turkey and then to Europe. A branch of this goes through Uzbekistan and Iran to Turkey and then to Europe.

There is also maritime trade through the Strait of Malacca, but since the US is trying to establish dominance there via Singapore, China is keen to diversify its trade routes without getting stuck in Malacca. The Trans-Siberian corridor, which was busy before the Russia-Ukraine war, is in trouble because of the war. Therefore, China is trying to mobilize the Southern Corridor through Central Asia.”

He said that the summit agreed to build a railway from China to Kyrgyzstan and Uzbekistan, and agreed with Kazakhstan to develop that infrastructure through the port of Kuryk and the Caspian Sea. According to Dr. Isabay, important agreements were reached on the development of trade corridors, and this is part of the strategy to revitalize the Southern Corridor.

Nurbek Isabay noted that in 2015, China set a target to increase trade volume with Central Asia to USD 70 billion by 2030, and last year the target was achieved, and emphasized that this data shows how dynamically the trade volume is progressing.

“China is filling the area left by Russia”

“The second important issue is security and defense. Xi Jinping emphasized that the sovereignty, independence and internal affairs of Central Asian countries should not be interfered with. There was a message of joint struggle against terrorism. He emphasized that China opposes color revolutions in Central Asian countries. I think Xi Jinping sent a message to both sides here. Both to Russia and to the West. In December last year, former Russian PM Medvedev made a statement claiming Kazakhstan and other Central Asian countries on behalf of Russia. Putin also made a speech in 2015 claiming that Kazakhstan has no state traditions. Russian MP Fyodorov has also previously made a speech claiming that northern Kazakhstan is Russian territory. Therefore, the emphasis in Xi Jinping’s speech on not allowing color revolutions and protecting territorial integrity sends a message to Russia, as well as a message to the US and the West. This is how the speech was interpreted in Kazakhstan public opinion,” he said.

Isabay emphasized that China will provide 26 billion yuan (USD 3.7 billion) to Central Asian countries for security and defense, and noted that Beijing has not been involved in the field of security outside of trade before, but it has been involved in this field in Central Asia, noting that this is a first. Stating that Russia’s influence in Central Asia has weakened with the war in Ukraine, Isabay commented that China is filling this gap in order to prevent color revolutions that may be attempted by the West. “China has been focusing on trade and cultural exchanges, which are its traditional methods in foreign policy, but for the first time, it has made its position on security and defense very clear,” he said.

“China was culturally alien to Central Asia, this gap is being closed”

“The third issue is cultural cooperation and integration. You know that one of China’s weakest points is the Uighur region. Kazakhs also live there. Officially, nearly 1 million 300 thousand Kazakhs live there. There are also Kyrgyz and Uzbeks in that region. Until now, culturally, China was alien to the Central Asian countries in terms of language, culture and lifestyle. However, in recent years, especially in the last 5 years, China has started to attach great importance to the Central Asian countries in the field of culture. Scholarship programs were opened in Chinese universities. At this Summit, student exchange programs were developed with agreements. Agreements were signed between Kazakhstan’s largest university and several Chinese universities,” Isabay said.

“Confucius institutes became influential in Central Asia,” he added, “scholarships were provided to students and researchers. As far as I know, there are nearly 70 Confucius institutes in Central Asia. There was also an agreement to increase the number of these institutes. Decisions were taken at the state level to intensify cultural integration. In other words, China was a cultural outsider in Central Asia, it was not recognized. Now it wants to close this gap.”

“Mechanism could be expanded with Türkiye”

According to Isabay, this mechanism may expand with other countries in the coming period. Pointing to Turkey in particular, “Developing the Southern Corridor is not possible without Türkiye. Xi Jinping said that this format will expand with other countries later on. Therefore, Türkiye is important here,” Isabay said. He also said that Azerbaijan, Georgia and Iran could also be included in this format.

Isabay noted that China’s growing influence in Central Asia is being discussed from Russia’s point of view, and said that official statements from the Russian Duma have come from Russia that they look favorably on this summit. “Even if Russia is uncomfortable, it will not openly express this discomfort in official terms due to its negative relations with the West,” he added.

ASIA

Afraid of the gun; Taliban supreme leader fears of a coup

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Hibatullah Akhundzada, the supreme leader of the Taliban, has ordered the security institutions that without his permission, “no one can distribute or use the military equipment registered by the ministries of defense and interior, the directorate of intelligence and other independent institutions.”

Experts and analysts have considered this move by Hibatullah as last resort to weaken the position of defense minister, Yaqoob Mujahid, interior minister, Sirajuddin Haqqani and the head of Taliban intelligence, Abdul Haq Wasiq in order to prevent a possible internal coup that was initiated by these three top officials.

In the first article of the order, it is mentioned that no person can distribute military equipment registered in the reserves of the ministries of defense, interior and intelligence, or issue an order to distribute it without the order of Hibatullah.

This decree titled “Regarding the distribution, protection and supervision of registered military equipment”, specifies that whenever an Emirate entity (Taliban-related entity) needs weapons, ammunition, night vision cameras, telecommunications and other military equipment” must receive the approval order from the leader of the Taliban.

Also, in the second article of this decree, it is stated that whenever one of the military departments of the Taliban needs military equipment, it must send its request to Hibatullah’s office in Kandahar.

In the third article of the decree, it is emphasized that if the military equipment was distributed or used without the permission of the Taliban leader before the issuance of this decree, they must be returned to the reserves.

Ministries of defense, interior and head of intelligence department are banned from disturbing military weapons.

According to this article, Hibatullah entrusted the ministries of defense and interior, as well as the general directorate of Taliban intelligence, with the responsibility to report the list of available military equipment to the directorate of registration, and protection of military equipment.

This order of the Taliban leader has been considered as another step in the direction of concentrating more power in the hands of Mullah Hibatullah in Kandahar. Many have seen it as a sign of Hibatullah’s increasing distrust of senior Taliban officials in Kabul. Previously, some senior Taliban officials, including Sirajuddin Haqqani, have openly disobeyed Hibatullah’s order to prohibit photography and filming and have not followed the order of their supreme leader.

(R) Defense Minister Mullah Yaqoob Mujahid and (L) Interior Minister Sirajuddin Haqqani.

Previously, several reports have been published about the sale of military equipment left over from the US troops and Afghan security forces during the republic government. Even the US-elected president Donald Trump, repeatedly mentioned this issue during his election campaigns. Not long ago, the government of Pakistan also announced that the Pakistan security forces have discovered and confiscated a car carrying US weapons smuggled from Afghanistan.

Pakistani media reported that this equipment included M4 assault rifles, night vision cameras and thousands of rounds of ammunition, which were transported in a truck carrying vegetables. Pakistani security officials have estimated the total value of weapons smuggled from Afghanistan in this truck to be 126,354 US dollars.

The cost of US’s remaining equipment in Afghanistan estimated over 7 billion US dollars

The Pentagon has already announced that after the withdrawal of US forces from Afghanistan, about 7 billion dollars of military equipment fell into the hands of the Taliban. This equipment reached the hands of the Taliban after the fall of Afghanistan on 15 August, 2021.

It has been reported that when the US forces left Afghanistan, there were 78 US-made aircrafts in the country, whose value reached 1 billion dollars. According to CNN, with the end of the US military presence, a total of more than 9,000 air-to-ground munitions worth more than six and a half million dollars have remained in Afghanistan.

The report also states that out of a total of 96,000 military vehicles, more than 40,000 units, including 12,000 Humvees (armored tanks), fell into the hands of the Taliban. Moreover, out of a total of more than 400,000 weapons that the US gave to the forces of the former Afghan government, about 300,000 remain in the country.

Almost all “communications equipment, including mobile base stations, portable and hand-held commercial and military radio systems, and associated transmitters and encryption devices, all remain in Afghanistan,” according to the report.

The report added that “almost all” of the equipment for night vision cameras, surveillance, biometric and positioning equipment,” a total of nearly 42 thousand pieces of specialized equipment, remained in Afghanistan.

Meanwhile, Five Mi 17 helicopters of the then Afghan army, which were transferred to Ukraine for repair before the collapse of the government, have also returned to Afghanistan and now are used by the Taliban.

It should be noted that the internal rivalries in the Taliban, especially among the different factions of this group, is one of the important reasons for Mullah Hibatullah’s distrust of some Taliban officials. Some officials, including interior minister Sirajuddin Haqqani and defense minister Mohammad Yaqub Mujahid, gained a lot of power, especially during the Taliban’s war against foreign forces, and Mullah Hibatullah may be worried that these officials are trying to expand their power, which is a clear threat to his position as the Taliban leader.

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China’s BYD prepares to launch latest SUV, the Sealion 07, in Europe despite EU tariffs

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BYD, the world’s largest electric vehicle (EV) maker, is set to launch its latest SUV, the Sealion 07, in Europe, undeterred by recent tariff increases on Chinese-made electric vehicles. This strategic move highlights BYD’s commitment to expanding overseas sales despite economic barriers.

Deliveries of the Sealion 07 are scheduled to begin in 2025, marking BYD’s seventh all-electric model in the European market, the company announced on Wednesday. Additionally, BYD plans to enter the South Korean market next year, adding to its existing presence in 95 countries worldwide.

This European expansion comes on the heels of the European Union’s decision last month to impose new tariffs—ranging from 17% to 35.3%—on Chinese electric vehicles following an anti-subsidy investigation. BYD’s EVs are subject to a 17% tariff, in addition to the standard 10% tariff applied to all pure electric cars imported from China. These tariffs, which took effect last month, will remain in place for five years. Meanwhile, U.S. tariffs on Chinese-made EVs increased from 25% to 100% as of September, citing similar concerns.

Despite the added costs, BYD’s vehicles continue to hold strong appeal in export markets. “BYD’s vehicles remain attractive even after the additional tariffs, so it’s not really a big problem for the company,” said Chen Jinzhu, CEO of Shanghai Mingliang Auto Service, a leading industry consultancy. “The Sealion 07 exemplifies how BYD’s cost advantage enables it to counteract such trade barriers in key export markets.”

Shenzhen-based BYD has yet to disclose the European pricing for the Sealion 07. On the mainland, the SUV—featuring a range of 450 kilometers—starts at 189,800 yuan (approximately US$26,272), with deliveries beginning in May.

According to a report last year from UBS analysts, BYD has a sustainable cost advantage of 25% over traditional European brands.

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Singles’ day promotions target overseas Chinese as China’s domestic demand slows

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After last year’s Singles’ Day shopping festival in China was dubbed the “quietest in history,” China’s e-commerce platforms focused on a new strategy this year.

For this year’s Singles’ Day event, major e-commerce companies such as Alibaba, JD.com, and Pinduoduo invested heavily in expanding overseas markets, targeting the estimated 100 million Chinese living abroad with offers like discounts and free or low-cost shipping.

The central question, however, is not whether these efforts will succeed in the short term, but rather if this shift can help platforms grow their user bases as online sales growth in China reaches a bottleneck.

“Domestic consumption is quite weak right now, and every company is certainly considering new ways to drive growth for Singles’ Day,” said an executive at a leading online retailer, who requested anonymity. “The overseas market is widely seen as a promising source for additional growth,” he added in an interview with Nikkei Asia.

Singles’ Day, a one-day sales event launched by Alibaba in 2009 as a celebration for singles, has since evolved into a month-long campaign with special offers and deep discounts, culminating on or around November 11.

This year, China aimed to revitalize its retail sector with the event. Total consumer goods sales rose by 3.3% year-on-year in the first three quarters of 2024, though high-end consumer spending remained stagnant. Cosmetics sales fell by 1%, while gold and silver jewelry sales declined by 3.1% year-on-year.

Last month, Alibaba’s Taobao launched a significant marketing campaign in Hong Kong and Taiwan, flooding subway stations with advertisements for “free shipping on orders over 99 yuan,” among other offers. According to the company, the campaign cost 2 billion New Taiwan dollars ($61.7 million) in Taiwan and 1 billion yuan ($138 million) in Hong Kong.

Following Alibaba’s move, JD.com announced it had invested 1.5 billion yuan to offer discounted product prices and cheaper shipping to Hong Kong shoppers. Bargain platform Pinduoduo took it a step further, offering free shipping via courier SF Express for Hong Kong shoppers, regardless of the item’s price. All products on these platforms are shipped from mainland China.

A spokesperson from Alibaba’s International Digital Commerce Group noted that since the overseas initiative launched in October, Taobao Hong Kong has achieved double-digit growth in both orders and gross merchandise value (GMV)—a metric that excludes canceled orders—on both a monthly and year-on-year basis.

The platforms are also targeting Chinese shoppers in Malaysia, Thailand, and Singapore.

This year, unlike in previous years, shoppers could combine online discounts with a subsidy program introduced by the Chinese government to boost domestic consumption, primarily for home appliances and household products. Analysts suggest these incentives will likely boost sales for JD.com, which is known for selling high-quality large appliances and offering after-sales services.

While JD.com has yet to release sales or GMV figures for home appliances during the shopping festival, it is expected to share its June-September results, along with Alibaba, later this week.

Last year, data provider Syntun estimated that total GMV on major e-commerce platforms grew by only 2.1% to 1.14 trillion yuan, falling short of the 2.9% growth forecast for 2022. Similarly, consultancy Bain predicted that Singles’ Day sales would reach 1.15 trillion yuan in 2023.

On Tuesday morning, Alibaba announced “strong GMV growth” and a “record number” of active shoppers for this year’s Singles’ Day event.

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