China and Eurasia

Eurasia will remain an important region for China in securing an access to natural resources and produce political stability in the region as well as exporting its goods, originated from the northern-western regions of China. Facing further increased demand for natural resources, cash-rich Chinese companies will continue to acquire commodity assets by investing in energy and commodity projects in Eurasian countries for future guaranteed supply. Along with resource companies, Chinese sovereign wealth funds are likely to increase their exposure to the region by diversifying their portfolios in favor of natural resources on optimism that the world economy will recover sooner than later that will lead to rebound in prices. Eurasian countries will also maintain their interest in strengthening economic and political cooperation with China to sustain the balance of power amid rising competition for the region’s abundant natural resources by Western countries and Russia. In order to diversify export markets of natural resources, mainly oil and gas, and growing concerns around Russia-Ukraine and uncertainties along Russia-backed routes to European Union countries, the Eurasian countries are likely to intensify the construction of China-oriented oil and gas pipelines. China, in return to the Eurasian countries’ will to provide access to commodities, will continue to support these nations with low-interest rate loans through various channels, including the Shanghai Cooperation Organization, CAREC or bilateral arrangements.

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