Why Central Asia Remains an Underrated Overseas Market
When talking about going global, businesses tend to prioritize Europe, America, the Middle East and Southeast Asia, while seldom putting Central Asia high on the list. Such perception is seriously out of touch with reality.
Key Statistics
Bilateral trade volume between China and the five Central Asian nations hit roughly 94.8 billion US dollars in 2024, nearly quadrupling since the Belt and Road Initiative was proposed in 2013.
China’s cumulative direct investment in Central Asia has exceeded 40 billion US dollars.
China ranks first or second largest trading partner of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.
Around 9,000 to 10,000 China-Europe freight trains pass through Central Asia every year, accounting for over 70% of the total volume.
Chinese brands take more than 30% of Central Asia’s new energy vehicle market share, far higher than in European and American markets.
Chinese smartphone brands including Xiaomi, OPPO, realme, vivo and Huawei hold a combined market share exceeding 65% in Kazakhstan.
Central Asia has evolved into a core market for Chinese products, brands and industrial standards.
We divide Chinese enterprises’ expansion into Central Asia into three phases with real cases, covering major players, business layouts, profits gained, practical pitfalls and future prospects.
Phase 1: State-owned Energy & Infrastructure Enterprises (Since 2000)
1. CNPC: Core Operator of China’s Oil & Gas Layout in Central Asia
As China’s earliest and most influential strategic player in the region, CNPC executes national energy strategies comprehensively.
Core Assets & Projects
Acquisition of Kazakhstan-based PetroKazakhstan in 2005 at 4.18 billion US dollars, one of China’s largest overseas mergers and acquisitions back then.
Majority stake in the major Aktobe Oilfield in western Kazakhstan.
Joint takeover of Mangyshau Oilfield with Kazakhstan’s national oil firm in 2006 to build large-scale production bases.
Purchase of an 8.33% stake in the world-class Kashagan offshore oilfield from ConocoPhillips for 5 billion US dollars in 2013.
China-Kazakhstan Crude Oil Pipeline, launched in 2003 and fully operational in 2006, China’s first cross-border crude oil pipeline with an annual capacity of 20 million tons.
Central Asia-China Gas Pipeline Lines A, B and C completed successively from 2007 to 2014, with an annual transmission capacity of 55 billion cubic meters.
Lead general contractor for Phase I, II and III development of Turkmenistan’s Galkynysh Gas Field with total investment surpassing 8 billion US dollars.
Multiple natural gas exploration blocks in southern and western Uzbekistan.
By 2024, CNPC’s total investment in Central Asia has exceeded 45 billion US dollars, boasting annual equity crude output of 30 million tons and equity natural gas output of over 40 billion cubic meters, standing among the largest foreign energy investors in the region.
Experience & Challenges
Resource nationalism in Kazakhstan: Frequent revisions of oil and gas laws between 2007 and 2012 reshuffled equity distribution. CNPC retained core assets through strenuous negotiations.
Geopolitical coordination: It needs to maintain sound cooperation with global energy giants including Chevron, ExxonMobil, Lukoil and Eni.
Localization requirements: Kazakh laws mandate local employees account for no less than 85% of staff in Chinese-funded projects. CNPC meets the standard via vocational training and long-term localized operation.
2. Sinopec: Differentiated Industrial Layout
Unlike CNPC’s all-round layout, Sinopec focuses more on downstream refining and engineering services.
Renovation project of Atyrau Refinery in Kazakhstan (2009-2017) undertaken by SEG under Sinopec Group with total investment of 2.2 billion US dollars, turning it into Kazakhstan’s largest refinery.
Overhaul of Pavlodar Refinery.
Joint gas field development projects with Kazakhstan’s national oil company.
3. CRCC & CREC: Backbone of Central Asian Infrastructure Construction
The two major railway state-owned enterprises dominate railway, highway and tunnel projects across the region.
Kamchik Tunnel in Uzbekistan, a 19.2-kilometer mountain railway tunnel completed in 2016, the longest of its kind in Central Asia, connecting Tashkent and Fergana Valley and greatly improving domestic transportation connectivity.
Complementary Angren-Pap Railway in Uzbekistan.
Dushanbe-Danghara Highway in Tajikistan and north-south trunk roads in Kyrgyzstan jointly constructed by Chinese railway enterprises and CRBC.
Almaty-Khorgos Expressway in Kazakhstan.
China-Kyrgyzstan-Uzbekistan Railway started construction in late 2024, with CRCC taking charge of construction within Chinese territory.
4. State Grid & China Southern Power Grid
Power grid interconnection projects linking Kyrgyzstan and Uzbekistan.
Supply of equipment and construction services for 500kV ultra-high voltage power grids.
Provision of power distribution automation facilities for Kazakhstan’s smart grid development.
5. NFC: Representative of Chinese Non-ferrous Metal Enterprises
Equity investment in multiple gold mines in Tajikistan.
Lead-zinc mineral projects in Kazakhstan.
Polymetallic mineral development in Kyrgyzstan.
6. CGGC: Hydropower & Civil Engineering
Supply of core equipment for Tajikistan’s Rogun Hydropower Station.
Construction of numerous small hydropower stations across Central Asia.
Summary of Phase 1 Features
Dominated by state-owned enterprises focusing on resource exploitation and infrastructure construction via government-to-government cooperation.
Large investment scale with long return cycles ranging from 10 to 30 years.
Closely aligned with national Belt and Road strategic deployment.
Main financing channels include China Development Bank and China Exim Bank.
Slow localization progress with most technical and managerial personnel dispatched from China.
Main risks lie in political policy shifts and exchange rate fluctuations.
Phase 2: Consumer Brands & Manufacturing Industries (Since 2013)
Following the launch of the Belt and Road Initiative in 2013, private enterprises focusing on trade, light industry, consumer electronics and auto parts began to enter Central Asia in batches.
1. Huawei: Builder of Central Asia’s Digital Infrastructure
A hidden market leader across the region, Huawei has built core communication networks for major local telecom operators in all five Central Asian states.
Core 4G & 5G network construction for major telecom firms in Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Turkmenistan.
In-depth participation in Ashgabat smart city projects in Turkmenistan.
Huawei employs over 3,000 staff in Central Asia with a local employee ratio above 70%. Despite impacts from US sanctions, its brand influence keeps rising in Russian-speaking regions. Huawei Cloud and data storage products are widely adopted in local government digital transformation.
2. ZTE: Core Competitor of Huawei
ZTE has established comprehensive business presence and gained advantages in smart metering and security monitoring fields.
Smart transportation systems in Kazakhstan.
Safe City projects in Uzbekistan.
Intelligent street lamp construction in Ashgabat, Turkmenistan.
3. BYD, Geely, Chery & Great Wall Motors: New Leaders of Central Asian Auto Market
Chinese automakers have achieved remarkable market breakthroughs in the past five years.
BYD: Joint venture plant built in Uzbekistan since 2023 with an annual designed capacity of 50,000 new energy vehicles, holding over 30% of Uzbekistan’s new energy vehicle market share in 2024; assembly projects launched in Kazakhstan.
Geely: Complete vehicle assembly cooperation in Kazakhstan; products enter Central Asia tariff-free via its Belarus joint venture factory, ranking second among Chinese auto brands in Kazakhstan’s new car sales in 2024.
Chery: Top-selling Chinese auto brand across the five Central Asian countries in 2024 with hot-selling Tiggo series models.
Great Wall Motors: Mature sales networks covering Kazakhstan, Uzbekistan and Kyrgyzstan with popular Haval SUVs.
JAC: One of the earliest Chinese auto brands entering Central Asia with long-operated production bases in Kazakhstan.
Overall Data: Chinese brands account for around 35% of total new car sales and over 70% of new energy vehicle sales in Central Asia. Young local consumers show far higher acceptance of Chinese electric vehicles than people in Europe and America.
4. Chinese Mobile Phone Brands: Dominating the Local Market
Central Asia ranks among the most successful overseas markets for Chinese smartphones.
Chinese brands take over 65% market share in Kazakhstan, nearly 70% in Uzbekistan, over 75% in Kyrgyzstan and more than 80% in Tajikistan.
Samsung remains the main rival while Apple only occupies a niche high-end market. Chinese brands win popularity with superior hardware configuration, comprehensive local language adaptation, sound offline sales channels and complete Russian-language after-sales services.
Xiaomi’s smart home products enjoy even higher sales volume than its mobile phones in Central Asia.
5. Home Appliance Enterprises: Localized Market Expansion
Haier ranks among the top three white home appliance brands in Kazakhstan.
Midea air conditioners are widely popular in Uzbekistan and Kazakhstan.
TCL TV products compete head-to-head with Samsung and LG in the local market.
Gree air conditioners are mainly supplied to hotels and shopping malls via engineering projects.
6. Textile Industrial Chain Relocation
Driven by Uzbekistan’s cotton industry reform, leading Chinese textile enterprises accelerate local layout.
Shandong Lutai Textile invested 500 million US dollars to build spinning and weaving production lines in Uzbekistan starting from 2018.
Weiqiao Textile built large-scale cotton textile factories locally.
Downstream apparel brands including Bosideng, Li-Ning and Anta steadily expand into Central Asian and South Asian markets.
Summary of Phase 2 Features
Led by private enterprises focusing on end-consumer markets.
Great progress made in localization with independent local sales, customer service and after-sales teams established.
Increasing attention paid to local brand building.
Mixed operational results; some enterprises withdrew due to cultural conflicts, legal disputes and labor management issues.
Phase 3: Digital Economy & Cross-border E-commerce (Since 2020)
Digital-native industries including cross-border e-commerce, digital payment, short video platforms and SaaS services have become emerging mainstream players in recent years.
1. Temu: Rising Star of Central Asian Cross-border E-commerce
After entering the Russian market in 2023, Temu rapidly expanded into Central Asia via transit trade through Kazakhstan and Kyrgyzstan.
Monthly active users in Kazakhstan exceeded 3 million in 2024.
Fast market share growth in Uzbekistan and Kyrgyzstan supported by overseas warehouse layout and improved logistics routes.
Gradual payment system interconnection with mainstream local payment platforms.
2. AliExpress: Time-honored Leading E-commerce Platform
As the earliest well-known Chinese e-commerce brand in Russian-speaking regions, AliExpress boasts stable user groups with annual GMV exceeding 1 billion US dollars in Central Asia in 2024, despite slowing growth impacted by emerging competitors.
3. Shein: Fast Fashion Giant Penetrating Local Markets
Shein is the preferred fast fashion brand among young female consumers in Kazakhstan and Uzbekistan, with its annual regional GMV surpassing 500 million US dollars in 2024.
4. TikTok: High-penetration Content Platform
Huge user base across Central Asia with high user activity, making it the core short video platform in Russian-speaking regions outside Russia.
TikTok Shop launched pilot operations in Kazakhstan in 2024 in cooperation with local e-commerce and logistics service providers.
5. WeChat & WeChat Pay: Essential Infrastructure for Chinese Enterprises
Widely used by overseas Chinese communities and Chinese-funded enterprise employees in Central Asia; gradually interconnected with mainstream local payment platforms to facilitate daily business communication and capital settlement.
6. Lark & ByteDance Cloud: Overseas Expansion of Enterprise SaaS Services
Lark is adopted by numerous Chinese-funded enterprises for internal office management; BytePlus provides cloud computing and big data technical services for local government and enterprises.
7. In-depth Cooperation with Local Platform Kaspi.kz
As Kazakhstan’s leading local internet enterprise, Kaspi.kz serves as a core partner for Chinese brands to land in Central Asia, supporting payment settlement, commodity sales and cross-border logistics services.
8. Crypto Industry Layout
After China tightened regulations on cryptocurrency mining in 2021, massive mining equipment and computing power shifted to Kazakhstan and Kyrgyzstan, leaving abundant data center resources that lay a foundation for future local AI industry development.
9. Chinese AI Enterprises Going Global
Translation services, open-source large language models, facial recognition solutions, intelligent voice technology and other AI products independently developed by Chinese tech firms are gaining wider application scenarios in Central Asia’s education, government affairs and smart city construction fields.
In-depth Analysis of Five Typical Cases
Case 1: BYD Local Production Base in Uzbekistan
Background: The local auto market was long dominated by Korean brands with insufficient supply of new energy vehicles. The Uzbek government actively introduced Chinese new energy vehicle manufacturers amid the global electric vehicle boom.
Development Process: Official cooperation agreements signed in 2023; mass production launched in the same year; multiple preferential tax policies granted by local authorities.
Significance: Central Asia’s first large-scale localized new energy vehicle production base sets an industry benchmark and accelerates the spillover of China’s complete automobile industrial chain.
Existing Challenges: Difficulties in localized supply chain matching, long employee training cycles and product adaptation to extreme local climatic conditions.
Case 2: Huawei Safe City Project in Tashkent, Uzbekistan
Background: Surging demands for public security and traffic management after Uzbekistan opened up comprehensively.
Achievements: Over 30,000 intelligent monitoring cameras and AI management systems deployed, effectively reducing traffic accident rates and urban crime rates, with mature business models replicated across multiple Central Asian cities.
Case 3: Temu’s Market Expansion in Kazakhstan
Core Advantages: Leveraging EAEU tariff preferences, optimizing Russian-language user experience and improving overseas warehouse distribution efficiency win wide recognition among local consumers.
Core Experience: Logistics, payment and after-sales service are the three core bottlenecks restricting cross-border e-commerce development, which must be solved via in-depth localization.
Case 4: Zhengzhou-Tashkent China-Europe Freight Train Route
Development Trend: Rapid growth in freight volume in recent years greatly shortening international transportation cycles; realizing two-way trade circulation of Chinese manufactured goods and Central Asian local specialty products.
Strategic Value: Turning Central Asia from a mere transit hub into an important destination for foreign trade, linking central and western China with South Asia and the Middle East more efficiently.
Case 5: Zijin Mining’s Gold Mine Investment in Tajikistan
Operational Experience: Long-term deep cooperation with local governments, sufficient investment in environmental protection and community construction, and independent improvement of supporting infrastructure are the keys to stable operation of overseas mineral investment projects.
Universal Experience & Lessons for Central Asia Market Expansion
Keys to Success
Adopt a long-term development mindset instead of pursuing quick profits.
Advance in-depth localization covering team building, customer service and localized marketing.
Master Russian language as an essential business communication tool.
Strictly abide by local laws and regulations in terms of customs declaration, labor management, taxation and anti-corruption rules.
Make rational use of differentiated advantages of different Central Asian countries to build diversified supply chain layouts.
Maintain neutrality and rationality amid regional geopolitical games to become the most reliable cooperation partner.
Common Pitfalls to Avoid
Excessively high operating costs caused by excessive personnel dispatching from China.
Ignoring local Islamic religious customs and traditional folk festivals.
Failure to properly handle public opinion crises triggered by environmental issues and employee welfare disputes.
Low enforcement efficiency of local commercial contracts leading to difficult dispute settlement.
Huge differences in foreign exchange control policies among countries bringing risks of capital repatriation difficulties.
Potential debt and political linkage risks of government-led cooperation projects.
Ten Practical Suggestions
Conduct in-depth research on the differences among the five Central Asian countries before market entry.
Select one core target country as a strategic bridgehead to radiate surrounding markets.
Clarify positioning: Kazakhstan for regional headquarters layout, Uzbekistan for consumer market development and Kyrgyzstan for flexible transit trade.
Hire local senior management talents proficient in Chinese, Russian and English.
Establish dedicated teams for government relations and public affairs maintenance.
Build independent brand operation matrices on mainstream local social media platforms.
Avoid rigid replication of Chinese business models and fully adapt to local consumption habits.
Strengthen internal compliance training, especially on anti-corruption regulations.
Establish comprehensive cooperation networks covering local chambers of commerce, financial institutions, logistics enterprises and legal service agencies.
Prepare for long-term profit cycles; enterprises that persist steadily will eventually seize market dividends.
Central Asia: An Underrated Neighboring Emerging Market
While Chinese enterprises face growing tariff barriers, political frictions and cultural conflicts in Southeast Asia, North America and Europe, Central Asia’s strategic value as China’s land neighbor, core Russian-speaking market and foundational Belt and Road market is being rediscovered.
With a total population of 80 million, Central Asia boasts tremendous radiating influence: it connects the 190-million population market of the Eurasian Economic Union, links South Asia with over 200 million people via the China-Kyrgyzstan-Uzbekistan Railway, and serves as a vital hub connecting the Caucasus, Turkey and Europe.
Central Asia is a brand-new blue ocean market for Chinese global enterprises. Early entrants including CNPC, Huawei and BYD have reaped substantial returns. In the next decade, Central Asia will complete the transformation from an energy and infrastructure-dominated region to a consumption and digital economy-driven market, presenting an irresistible historic opportunity for Chinese enterprises.
In the next chapter, we will focus on core industrial development trends in the next decade, explore development opportunities of the AI industry in Central Asia, overseas expansion paths of Chinese AI enterprises, and the potential influence of this 80-million-population market on the global AI industrial landscape.
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