Economic and trade cooperation between Peoples Republic of China and the Republic of Turkmenistan in 1992-2010

After the collapse of the Soviet Union Turkmenistan was theonly country within the new newly established Central Asia region that have accomplished equidistance from major centres of power in itseconomic policy and diplomacy. But the situation changed dramatically in 2006 after the death of President S. Niyazov (Turkmenbashi). Fromthe beginning of the new President G. Berdymukhammedovs rule, Turkmenistan became more and more clearly involved in the main regionalactivities. But it is still not a part of such regional structures as the Shanghai Cooperation Organisation (SCO) or the Collective Security TreatyOrganisation (CSTO), so it has fewer chances to use these organisations assistance. Leading trade partners of Turkmenistan are Turkey, Iran,Russia, Western countries. But one of the regional great powers - Peoples Republic of China (PRC) - also planned to support their industrieslocated mostly in the East and South areas by Turkmen gas. After the construction of the gas pipeline through the territory of three Central AsianStates (Eastern Turkmenistan, Uzbekistan and Kazakhstan) with Chinese assistance (known also as The Central Asia-China Gas Pipeline orTurkmenistan-China Gas Pipeline), Turkmenistan will find a way not to rely on the Russian pipeline system solely. At the meeting with hisTurkmen counterpart Gurbanguly Berdymukhamedov in Ashgabat held on December 13, 2009, the Chinese President Hu Jintao said the Chineseand Turkmen economies are highly complementary to each other, and bilateral cooperation of mutual benefit in all dimensions and variousfields accords with the needs of economic development of both countries. Also they agreed to set up some bilateral projects and investment inthe construction, transportation, and military spheres. Notwithstanding the rapid growth of bilateral trade in recent years, China is still at thebottom of the Turkmenistan trade partners list. The newly managed transregional gas pipeline project could help both parties to find the newcooperation fields and also to boost the trade relations. But the core Chinese interest is in gas and oil reserves. After the construction of the secondstage of the pipeline China plans to increase gas consumption and to freeze similar gas and oil reserves extraction in Xinjiang. So themain purpose of the modern Chinese economic policy in Turkmenistan is to enlarge the energy cooperation and to maintain and enlarge thepresence in the Turmen market.

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