Baku, February 26, AZERTAC

The Azerbaijan State News Agency (AZERTAC) presents an interview with Wang Guan, Chinese expert, Anchor of China Media Group, Founding Fellow of Taihe Institute.

- How do you assess the current state of economic cooperation between Azerbaijan and China? What are the main achievements in recent years?

- According to Chinese figures, in 2023, bilateral trade between China and Azerbaijan reached $3.1 billion, marking a 43.5% year-on-year increase, with both imports and exports seeing double-digit growth. That is encouraging. The recent visa free travel policy for Chinese citizens open new doors for Chinese tourists, many of whom have not visited this “mysterious” country in the Caucasus.

In my interview with President Ilham Aliyev in 2023, he highlighted the strong trade turnover and mutual investments between our two countries. He stated that "trade turnover is growing, and mutual investments are also in place," which demonstrates the deepening economic ties.

One of the biggest drivers of our cooperation is Azerbaijan’s active role in the Belt and Road Initiative (BRI). As President Aliyev noted, Azerbaijan was one of the first countries to support the Belt and Road Initiative, and this partnership has led to significant projects, such as the Baku-Tbilisi-Kars (BTK) railway, which strengthens connectivity between China, Central Asia, and Europe.

Beyond infrastructure, China and Azerbaijan have expanded cooperation in energy, agriculture, digital economy, and logistics, areas that align with both countries’ strategic interests.

- Which key sectors of the Azerbaijani economy are the most promising for Chinese investors?

- There are several high-potential sectors for foreign investment, including those particularly attractive to Chinese businesses:

• Energy: While oil and gas remain central, renewable energy projects in solar and wind offer a new frontier for cooperation.

• Infrastructure & Logistics: Azerbaijan’s Middle Corridor is a vital transit hub for China-Europe trade, making investments in railways, highways, and logistics centers highly valuable.

• Digital Economy & Smart Cities: China’s leadership in 5G, AI, and digital payments creates an opportunity for collaboration in e-governance and smart infrastructure.

• Agriculture: Azerbaijan’s agricultural products, including pomegranates, nuts, and wines, are gaining recognition in the Chinese market. Joint ventures in modern farming, food processing, and agri-tech can boost exports to China.

By investing in these areas, Chinese enterprises can benefit from Azerbaijan’s business-friendly environment and strategic location while supporting the country’s economic diversification strategy.

- What are the main areas of Chinese investment in Azerbaijan? In which sectors of the economy are they concentrated?

-Chinese investment in Azerbaijan has been diversified, spanning infrastructure, energy, digital economy, and industrial parks. Azerbaijan is becoming one of the important international transportation and logistical centers. This vision is reflected in Chinese investments in Infrastructure & Transport. Projects like the Baku International Sea Trade Port and Baku-Tbilisi-Kars railway facilitate faster China-Europe trade. In Energy: Chinese companies have partnered in oil, gas, and renewable energy projects, contributing to Azerbaijan’s green energy goals. In Technology & Digital Economy: Collaboration in telecom infrastructure, cloud computing, and fintech solutions is growing.

These investments not only benefit Azerbaijan’s economy but also enhance regional connectivity, aligning with both countries’ long-term economic objectives.

- How does China see Azerbaijan's role in the Belt and Road Initiative?

- Currently, my sense is that China sees Azerbaijan as a good friend and a strategic link in the Belt and Road Initiative (BRI). Azerbaijan’s investments in transport corridors and logistics hubs make it a vital partner in the China-Central Asia-Europe trade network.

Projects like the Middle Corridor and Baku-Tbilisi-Kars railway are crucial in reducing transit times between China and Europe, making Azerbaijan an indispensable player in global supply chains.

- What problems or challenges arise in the process of economic cooperation between the two countries?

-While economic cooperation has been highly successful, some challenges remain, including:

Geopolitical Considerations: Regional dynamics can affect long-term investment strategies;

Regulatory and Customs Efficiency: further streamlining of customs processes would boost trade efficiency;

Infrastructure Modernization: While Azerbaijan has made significant strides in connectivity, continued investment in digital logistics and railway networks is needed.

These challenges are not unique to China-Azerbaijan ties, and both sides have been proactive in addressing them through bilateral trade and investment dialogues.

-What opportunities for cooperation in infrastructure and logistics exist between Azerbaijan and China?

-I talked to a lot of leading Chinese enterprises in agriculture, digital technology, infrastructure. They are all interested in exploring opportunities in investing and cooperating with Azerbaijan. From how I see it, opportunities for collaboration include:

Railway Upgrades: Expanding and modernizing the Baku-Tbilisi-Kars railway;

Smart Ports & Logistics Centers: Enhancing Azerbaijan’s port infrastructure to boost trade efficiency;

Digital Trade Platforms: Establishing cross-border e-commerce hubs to facilitate trade between Azerbaijan and China.

China’s experience in large-scale infrastructure projects and Azerbaijan’s strategic location create a natural synergy for deeper cooperation.

- In what direction are trade relations between Azerbaijan and China developing? How can the trade balance be improved?

-Trade between China and Azerbaijan is expanding, but diversifying trade flows is key to reducing trade imbalances. Azerbaijan can expand Agricultural Exports: Azerbaijan’s fruits, wines, and nuts have a growing market in China; Develop Manufacturing for Export: Creating industrial parks with Chinese partners can boost value-added exports; Enhance Digital Trade: Leveraging platforms like Alibaba’s Tmall Global could facilitate Azerbaijani products’ entry into China’s vast e-commerce market.

By boosting non-oil exports, Azerbaijan can strengthen its trade position with China.

- How can Azerbaijan use its strategic geographical position to deepen economic ties with China?

- Azerbaijan’s geostrategic position as the "Gateway to Eurasia" allows it to expand Transport Links: Strengthen rail, road, and maritime trade corridors; Develop Industrial & Free Trade Zones: Attract Chinese firms to set up regional production hubs; Strengthen Financial Cooperation: Promote Baku as a financial hub for BRI investments.

- What are the prospects for the development of joint ventures between Azerbaijan and China?

-The future of China-Azerbaijan cooperation lies in joint ventures (JVs) in High-tech & Digital Economy: Partnering in AI, fintech, and smart city development, Renewable Energy: Developing solar and wind farms through Chinese-Azerbaijani energy JVs, Advanced Manufacturing: Establishing specialized industrial parks for electronics, automotive, and machinery production, and Agriculture & Food Processing: Co-investing in modern agro-tech projects for exporting premium Azerbaijani products to China.

China welcomes deeper engagement with Azerbaijani businesses to create long-term economic value.