After years of negotiations, China recently succeeded in bringing Kyrgyzstan on board for the construction of China-Kyrgyzstan-Uzbekistan (CKU) railway project. An agreement for technical and economic assessment of the project was signed by the three countries on the sidelines of the Shanghai Cooperation Organization (SCO) Summit in Samarkand on September 14th, 2022. The agreement entails completion of a feasibility study by mid-2023 for the Kyrgyz leg, which is the missing link in connecting the existing railroads in China and Uzbekistan. According to Kyrgyz Transport Minister Erkinbek Osoyev, the 280-kilometer route in his country will cost $4.1 billion, to be funded either via direct investment or public-private partnership. However, the discussions and negotiations preceding the agreement were overstretched by years, apparently due to the visible asymmetry of opportunities available to the participating countries.
The CKU railway project is designed to provide China with an access to the markets of Southeast and West Asia, as well as the Middle East through Central Asia. The railroad will begin at Torugart and continue in the North through the settlements of Arpa and Makmal to Jalalabad, where it will get linked with Uzbekistan’s rail network. Notably, Makmal houses a goldmine managed by a Sino-Kyrgyz joint venture with majority Chinese ownership. Kyrgyzstan had pushed for a route that would serve more populated areas further north, but it appears to have settled on a route restricted to the South. Several commercial benefits withstanding, the railway route is likely to yield significant strategic advantages to China. At present, China is heavily engaged in sea trade, which has a huge dependence upon the Indo-Pacific maritime route. Hence, building arail route as an alternative will help Beijing against any possible blockade. Moreover, Moscow’s war on Ukraine has resuscitated plans for new regional transportation links bypassing Russia. Upon completion, the railroad would provide China with a shorter route to Europe while bypassing a sanctions-hit Russia. According to some analysts, it may shorten the China-Europe route by 900 kilometers while saving about eight days of travel time.
The new route is thus expected to effect a change in flow of trade traffic through Russian territory, which may also impact Moscow’s influence in Central Asia. After the disintegration of Soviet Union and the end of the Cold War, Central Asia became a region of various geopolitical forces, but Russia’s dominating influence continued in the region. Russia has always been a priority in the foreign affairs of Central Asian countries and among them Kyrgyzstan remained a closer partner of Russia. However, this perception may be in for change in the coming years. The construction of the CKU railway and the influx of the Chinese goods could also lead to a competition for Russian exports. Further, the new route will provide Beijing a way to reduce its dependence on Kazakhstan as a transit country.
In spite of the apparent advantages in terms of connectivity and trade, some aspects of the CKU can also turn it into a strategic nightmare for Kyrgyzstan. Its development would involve an investment of more than $4 billion which is a huge amount for an under-developed country like Kyrgyzstan and it would make the country dependent on foreign investment. The present external debt of Kyrgyzstan is approximately $4.8 billion of which around $1.8 billion is owed to China. Considering the existing debt level and expected Chinese investment in the project, CKU railway may entangle Kyrgyzstan into the signature “debt trap” of China. Furthermore, moving forward on the project while ignoring the local sentiments would not be easy for the leadership of Kyrgyzstan. The adverse local opinion towards China may hurt the prospects of timely completion of the project while increasing pressure on the Kyrgyz government. According to the recent Central Asia Barometer (CAB) survey, only 19 percent of people in Kyrgyzstan strongly support Chinese investment in energy and infrastructure projects, while 31 percent strongly oppose the same. Furthermore, 66 percent of people are “very concerned” that Chinese projects will increase Kyrgyzstan’s national debt to China. Domestically, the construction of the CKU railway in southern part of Kyrgyzstan may further aggravate the existing North-South division in the country. Completing CKU may be no-brainer for Beijing for all that it brings to the table for it. On the other hand, the project seems to be a great trade off puzzle for Kyrgyzstan; a solution of which will determine its strategic palace in the region.
