Behind China’s intentions to enter the automobile market in Kazakhstan with new electric cars lies a grand strategy. Political scientist Dosym Satpaev explains the nuances of this geo-economic game:
More Than Just Cars
The news that the Chinese automaker BYD, one of Tesla’s main global competitors in electric car sales, is planning to expand its presence in the Kazakhstan market and other Central Asian countries points to China’s long-term strategy to strengthen its foothold in the region.
To increase sales of electric cars in Central Asia, it is not enough to offer competitively priced products. It’s crucial to establish the infrastructure required for using electric vehicles effectively. Currently, electric cars are not very popular in the region due to their high cost, lack of charging stations, inadequate repair services, unreliable power supply, and other factors.
However, the first to cultivate these fields may reap a bountiful harvest. It seems that Beijing understands this and is willing to invest in this endeavor.
Interestingly, it appears that Uzbekistan is a more critical partner for China in this sphere than Kazakhstan, where Chinese electric cars are only assembled and sold. Uzbekistan’s Ministry of Investments, Industry, and Trade recently signed an investment agreement with the Chinese automaker BYD to establish the production of electric and hybrid vehicles in the country.
If this project materializes, they aim to produce 50,000 vehicles annually in the first and second phases.
Furthermore, the Chinese company «Huawei Digital Power» is exploring the possibility of producing charging equipment for electric vehicles in Uzbekistan. Another Chinese corporation, «DongFeng Special Car Company,» is considering building an electric bus manufacturing plant in the country. Yet another Chinese company plans to establish battery and electric bus charging device production.
US Concerns About Competition
From a geo-economic perspective, this level of activity in the electric vehicle sector could further intensify the competition between China, the US, and the EU for the development and extraction of rare earth metals in the region. For instance, Kazakhstan, according to official data, may have between 50,000 to 100,000 tons of lithium. This makes the region an additional promising source of rare earth metal extraction for China.
Naturally, this worries the EU and the US since it is not just about raw materials for semiconductor or electric vehicle production but also concerns supply chain vulnerabilities for their defense industries. Additionally, the European Union, as experts note, is already heavily reliant on rare earth metal supplies from China via Russia, which is trying to establish itself as the world leader in reserves and mining, making it the most vulnerable link in the supply chain.
Kazakhstan’s Prospects
Therefore, Kazakhstan and other Central Asian countries are essential for the West due to their reserves of lithium and other rare earth metals. This explains the recent statement by the European Union about its readiness to assist Kazakhstan not only in the extraction of rare earth and other critical metals but also in their processing.
All of this suggests that Central Asian countries have an excellent opportunity to leverage this competition in their favor primarily by focusing on their own interests in modernizing their economies through the development of new innovative industries, rather than becoming mere sources of raw materials for the West and China. The question remains whether the countries in the region can effectively utilize these «windows of opportunity» or consign themselves to being technological peripheries.»
