Discrepancies in Kyrgyzstan-China trade data point to role Bishkek plays for Kremlin

By bne IntelliNews May 18, 2024

Trade turnover between Kyrgyzstan and China in the first quarter of 2024 totalled $4.82bn, but just $22mn of that was made up of Kyrgyz exports, according to figures compiled by China’s General Customs Administration.

Curiously, official data on the bilateral trade from Kyrgyzstan was starkly different. The Kyrgyz National Statistics Committee reported 1Q24 turnover with China—which is by far Kyrgyzstan’s number one trade partner—as totalling $1.63bn, with Kyrgyz exports standing at $18.8mn. 

There may be some shyness when it comes to Kyrgyzstan detailing the extent of Chinese exports arriving in the country, given that Kyrgyzstan has become an important third country to Moscow in terms of accessing exports that are subject to sanctions. It is widely thought that much of what Kyrgyzstan receives from China is re-exported to Russia, with many “dual-use” items required by the Kremlin’s war machine as regards the conflict with Ukraine. Kyrgyzstan must remain wary of getting hit by Western secondary sanctions when it comes to the specifics of what it is receiving from China for re-export to Russia.

In late April, Joseph Webster, a senior fellow at the Atlantic Council’s Global Energy Center, in an opinion piece for The Interpreter, wrote: “Kyrgyzstan’s trade figures defy economic logic, suggesting that a vast amount of its imports are bound for a third country – namely, Russia. Kyrgyzstan’s trans-shipment to Russia of dual-use goods, including ball bearings [used in tank production], vehicle spare parts, and other items, have had direct military implications for the invasion of Ukraine.”

He added: “Kyrgyzstan has recently announced that it will stop servicing Russia’s Mir payment system. While this step is constructive, Bishkek’s behaviour throughout the conflict has been disappointing. The former Soviet republic of roughly 6 million people trades heavily with Russia, but corruption remains endemic, and elevated exports of potential dual-use goods to Russia persisted throughout 2023 even in the face of repeated warnings from the West.

“It remains to be seen if Bishkek will follow through on its recently announced measures limiting trade with Russia. Any backsliding from Bishkek could lead to unprecedented consequences for the Kyrgyz financial system and economy, given the West’s commitment to the freedom and sovereignty of Ukraine.”

Webster also noted: “Kyrgyzstan’s role as a cut out for China-to-Russia trade has also provided indirect economic and political assistance to the Kremlin. For instance, vehicle imports restrain inflation and interest rates while enabling Russian consumers to access the newest car models. Kyrgyzstan’s re-exports of vehicles to Russia limits economic pain, reducing the probability of an elite and popular backlash to [Russian leader Vladimir] Putin.”

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