Amid the chaos that have generated the tariffs of the United States, a theory as absurd as feasible begins to circulate. If in a few weeks we begin to hear that, for example, the Kyrgyzstan nation is shooting its exports suddenly and unexpectedly to the United States, it should not surprise us so much. It does not have to be Kyrgyzstan, of course, but, coincidences of a world more and more globalizedthe nation has become the protagonist for Russia … and China.
Boom. To understand how a site like Kyrguistan can be an important actor in a commercial war we must go back to the beginning of the war in Ukraine. Kyrguistan’s economic panorama changed radically as of March 2022. In a matter of months, country imports from traditional business partners began to grow, highlighting the case of China, whose exports almost tripled.
However, the most striking phenomenon was the sudden rise of trade with countries with which Kyrguistan barely had previous economic ties. From different points of the European Union (such as Poland, Czech Republic and the Baltic States) a wave of goods began to register. In some cases, the increases were so extraordinary that it was difficult to assimilate. Data from the Institute of International Finance revealed that, between March 2022 and October 2023, German cars and parts to Kyrgyzstan increased 5,500%. What the hell had happened?
The Ukraine War. The date, obviously, was not trivial. Despite the striking of growth, the origin and destination of many of these goods was diffuse. On numerous occasions, the products are classified as coming from an “unknown” country and with equally “unknown” destination, which generated enormous opacity in commercial statistics. However, for researchers and analysts there was no doubt what the true destination is: Russia.
Far from representing a genuine boom of the Kyrgyse economy, that phenomenon was interpreted as proof of the efficacy of the Kremlin to avoid the international sanctions imposed after its large -scale invasion of Ukraine. According to researcher Erica Marath, an associated professor at the National Defense University of Washington DC, these commercial flows are part of a mechanism that facilitates the evasion of sanctions by Moscow, a mechanism that has been skillfully adopted throughout the region.
Parallel imports. In May 2022, Russia promulgated legislation that institutionalized what it called “parallel imports.” This regulation allows the entry of sanctioned products through third countries, without requiring the permission of brand owners. It was enough to import products to another country (such as Kyrguistan) and then redirect them to Russian territory.
The system was adopted quickly by Russian and foreign companies. In addition to conventional supplies, it also included “double -use” products: appliances, electronic components and other civil goods that can be de -slasamed and reused for military purposes. Between May and December 2022, Russia admitted to having imported 2.4 million tons of goods worth $ 20 billion through this scheme.
Kyrgyzstan Map
KIRGUIZISTÁN, El Epicentro. No doubt, exports from the nation to Russia went from 393 million dollars in 2021 to more than 1,070 million in 2022. Not only that. The figures could be underestimated, since many countries (including Kyrgyzstan) classify large volumes of trade as appropriate or with “unknown” destination, using this emptiness as a legal loophole to channel goods towards Russia without raising formal suspicions. This practice, according to Marath, is not considered illegal, and therefore the authorities feel comfortable ignoring it while receiving economic benefits.
Plus: Kyrguistan is not the only country that facilitates the evasion of sanctions, but has particular characteristics that make it an ideal transit point. He is a member of the Eurasian Economic Union (EAEU), a block founded in 2015 that also includes Armenia, Belarus, Kazakhstan and Russia. This block guarantees the free circulation of goods and services among its members, which significantly reduces the bureaucratic burden for trade between them.
The Chinese friend ”. And what does China look in all this? As we said at the beginning, coincidences of a world globalized And in the midst of a commercial war marked by the tariffs of the United States, China has also set in Kyrguistan, although from another perspective. The Economist told this week: although Beijing proclaims a cooperation relationship “back with back, shoulder shoulder” with Russia, in practice it is taking distance in a crucial aspect: the security of its export routes to Europe.
Yes, despite its geopolitical alliance with Moscow, China prefers not to depend on Russia to maintain the flow of its assets to the European continent, especially in a context marked by conflicts and sanctions. Solution? In December, the construction of an ambitious rail project that is going through Kyrgyzstan and Uzbekistan, with the aim of creating a direct route to Europe that avoids the Russian territory. This new connection becomes more relevant to a possible intensification of the commercial war with the United States and the growing importance of the European market (China already exports more than America).
The impulse. Although the railway project had almost three decades under discussion, its materialization only materialized after the Russian invasion of Ukraine in February 2022. Before the conflict, the main railway routes to Europe passed through Russia, many times via Kazakhstan. The war, however, raised security risks, triggered insurance costs and weakened the Russian rail infrastructure due to sanctions, forcing transport companies to look for alternatives.
As a result, they began to deviate to the so-called “transpian route” or “middle runner”, which is going through Kazakhstan and the Caspian Sea. Connecting the Chinese rail network through Kyrguistan and Uzbekistan will allow an even shorter route within this middle corridor. Moreover, in June 2024, China agreed with both countries to build a 520 km line that will consolidate this strategic option.
Commercial Resilience. It is not the end of any “alliance”, because as El Economist said, China continues to consider Russia as a pillar of its ambitious global infrastructure project (the initiative of the Strip and the Route, launched in 2013 by Xi Jinping), its current enthusiasm by the middle corridor responds rather to economic interests. China’s growth, increasingly dependent on exports, has lost impulse, and guaranteeing stable roads to Europe is key to revitalizing it.
In addition, Russian routes remain essential for certain goods, as machinery for the Russian military industry. After the invasion of Ukraine, the railway trade between China and Europe decreased, but the exchange with Russia increased significantly. However, Beijing acknowledges that alternative connections with Europe allow faster access to market -sensitive markets, consolidate their influence on transit countries and create more resilient logistics networks against crisis.
Project status. The railway line between China, Kyrguistan and Uzbekistan will take several years to complete. Kirguistán has reported that China will grant him a loan of 2,350 million dollars to finance the work. At the same time, China and other countries (excluding Russia) are working to improve other sections of the middle corridor.
It is also important to note that, although the route offers a shorter connection with Europe than the Russian route, its route is more complex: it crosses more borders and must cross the Caspian Sea (and eventually the Black Sea) through additional shipments. This implies more transfers and higher logistics costs. From the Russian invasion, China has intensified efforts to modernize the corridor.
Friends of Friends. Movements such as Kyrgyzstan with Russia in 2022, where an intermediate country becomes a commercial elusion route, can become more common in the event that the tariff climb does not cease and China looks for to place Its products in the United States.
In addition, the Kyrgyte-Ruso model showed that, while the products change from country of origin in the paper and undergo some degree of transformation or replacement, it is even possible to avoid sanctions or tariffs with relative ease, thanks to legal gaps or the low inspection in many intermediary countries. If the fact that many of these countries have free trade agreements or lower scrutiny with the United States, the incentive is double: maintain commercial access and reduce costs.
Meanwhile, China has already assured its essential supplies (especially oil and gas) from Russia and Central Asia, strengthening its energy autonomy before an eventual conflict or an escalation in the tariff war of which right now does not glimpse a end point.
Imagen | Kyrgyzstan
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