China's Debt Influence in Central Asia
China’s influence in Central Asia is growing—not through military bases, but through loans. As the countries in the region increasingly move into Beijing’s economic orbit, China is positioning itself as a key source of funding for infrastructure and development. The World Bank’s International Debt Report (IDR) from December 2025 emphasizes that high debt carries risks but can also enable long-term growth—provided the funds are used productively. This is precisely where Beijing comes in.
Through the Export-Import Bank of China and New Silk Road projects, the country has risen to become the most important bilateral creditor for several Central Asian states. Unlike short-term budget aid, these loans are primarily directed toward specific infrastructure projects: highways, railway corridors, power plants, and pipelines. They fill gaps that have hindered trade and industrial development since the collapse of the Soviet Union—and tie the region more closely to Chinese supply chains.
In Kyrgyzstan and Tajikistan, Chinese-financed projects have improved transportation links and reduced power shortages. At the same time, new economic dependencies are emerging. Landlocked countries are becoming more integrated into Eurasian trade corridors—with China as the central hub.
Kyrgyzstan and Tajikistan: High Debt, High Dependency
Kyrgyzstan’s external debt amounted to approximately 55 to 60 percent of gross domestic product at the end of 2025. A significant portion of this is owed to the Chinese Exim Bank. Debt service already consumes up to one-fifth of government revenue. Since many liabilities are denominated in foreign currency, currency devaluations further increase the repayment burden.
Tajikistan faces a similar situation. Its external debt stands at just under 50 percent of GDP, with more than half of that owed to China. Added to this is a $500 million Eurobond issued in 2017 to finance the Rogun hydroelectric power plant. As the maturity date approaches in the early 2030s, refinancing pressure is mounting. Already, around one-fifth of government revenue goes toward debt service.
Uzbekistan and Kazakhstan: Diversified, but not independent
Uzbekistan has significantly expanded its government-guaranteed external debt since 2017. While the creditor base is broader than in Kyrgyzstan or Tajikistan, Chinese banks also play a key role here—particularly in energy, chemical, and transportation projects. As grace periods expire, principal payments are rising noticeably.
Kazakhstan is in a comparatively stable fiscal position. Public external debt stands at less than 25 percent of GDP. However, state-owned enterprises have substantial external liabilities, including to Chinese lenders. In the event of economic turmoil, these risks could be transferred to the state.
Turkmenistan, on the other hand, remains a special case. Reliable data is scarce. It is known, however, that Chinese loans have played a major role in financing the gas infrastructure. Since China is also the most important buyer of Turkmen gas, this creates a dual economic dependency—as a lender and as a market.
Across the entire region, debt is growing faster than economic output and government revenue. An increasing share of the budget is going toward debt service—at the expense of social spending, education, or climate adaptation. Beijing’s involvement has undeniably created infrastructure. But with every loan, financial interdependence deepens.
Whether this relationship will bring long-term stability or create new vulnerabilities remains to be seen. For countries like Kyrgyzstan and Tajikistan, China is no longer merely a development partner but a central pillar of state financing. Experiences from Sri Lanka and Laos urge caution: infrastructure projects can bring growth—but also political and economic dependence.
This article was produced in cooperation with our partner bne intelliNews
