Build B & R Initiative Together to Further Promote Cooperation Between China and Tajikistan

By Lily Wang

This year marks the 30th anniversary of the establishment of diplomatic relations between China and Tajikistan. The investment and trade cooperation between both countries have achieved fruitful results. Tajikistan is the first country in the world that signed the MOU of “Building Silk Road Economic Belt”. Both countries have been working together to build a high-quality Belt and Road and co-development community with rich content.

On March 11， the China-Tajikistan Trade and Investment Cooperation Forum was held both online and offline. Khurshadai Kogil， deputy chairman of Tajikistan National Investment and State-owned Asset Management Commission， Tajikistan ambassador to China Zohir Sayidzoda， responsible person of Foreign Capital Department of National Reform and Development Commission， CODA （China Overseas Development Association） chairman He Zhenwei， delegates from Ministry of Industry and New Technology of Tajikistan， Ministry of Health and Social Security of Tajikistan， Tajikistan government tax commission， Tajikistan Investment Corporation shared their opinions at the forum.

Both sides establish development community

Economic and trade cooperation is an important driving force for the development of bilateral relations between China and Tajikistan. Over the past 30 years， the volume of bilateral trade has increased more than 500 times. China has become Tajikistan’s third-largest trading partner and the largest source of investment. Facing the impact from the Covid-19 pandemic， China and Tajikistan have been supporting each other amid difficulties. They have effectively overcome the adverse effects of the pandemic on bilateral economic and trade cooperation， and achieved trade growth in 2021. From January. to November， 2021， the bilateral trade volume reached USD 1.14 billion， a year-on-year increase of 1.51%.

Tajikistan Ambassador to China Zohir Sayidzoda said that Tajikistan is one of the first countries that signed the MOU of “Building Silk Road Economic Belt” with China. In the past 30 years， both countries have been working together to build development community.“Both countries shall follow the requirements of bilateral leaders to work more closely in green energy， digital economy and e-commerce. They shall also work to build the belt and road， further enhance the bilateral friendship and promote new development of bilateral relations，” said Zohir Sayidzoda.

Khurshadai Kogil， Deputy Chairman of Tajikistan National Investment and State-owned Asset Management Commission， said in his speech that this year marks the 30th anniversary since the establishment of diplomatic relations between China and Tajikistan. Bilateral relations have been growing fast， and the scale and scope of investment have been continuously improved. A number of excellent Chinese enterprises have invested in Tajikistan. “In order to better promote investment and trade cooperation between the two countries to a new level， as the government department in charge of investment， the Tajikistan Investment and State-owned Assets Management Commission is willing to play an active role in formulating more preferential policies and measures for greater achievements in bilateral investment.”

Offer more support to Chinese investment

The responsible person of Tajikistan Investment Corporation said at a promotion meeting that Tajikistan’s geographical location is very important as it is the heart of Central Asia. It has many investment and cooperation opportunities in mining， industry， energy， water conservancy， tourism， agriculture and infrastructure. Tajikistan also regards the digital economy as an important direction for future development. It has established five free economic zones where preferential policies are adopted to strengthen economic development， and Chinese enterprises are welcomed to settle in these economic zones. Tajikistan has made great progress in improving its business environment in recent years， as it has formulated many laws and regulations， and joined many bilateral and multilateral investment agreements to attract foreign investment. Also， Tajikistan has offered preferential e-visa policies， and the investment cooperation could choose franchising and PPP models.

Yar Babayev Malric， Representative from the Ministry of Industry and New Technology of Tajikistan， said that light industry is very important for Tajikistan’s development. The focus of industry development is processing long-staple cotton. Cotton is an important crop in Tajikistan， which is the third-largest cotton producing country in Central Asia. Xinjiang Zhongtai New Silk Road Agricultural Investment Company has invested to build a modern agricultural system supported by cotton growing， production and processing， textile and clothing in Tajikistan. This has set a good example in local industry development. “Tajikistan regards 2002-2026 as the years of industrial development. We wish to attract more Chinese businesses to invest in clothing， textile， shoes and hats and other light industries.”

Sarim Abdurajizov， representative of the Ministry of Health and Social Security of Tajikistan， said that Tajikistan needs to import a large quantity of drugs， and the major work of the heath department of Tajikistan is to attract foreign investors to set up pharmaceutical companies. At present Tajikistan has more than 500 pharmaceutical companies. In order to attract more foreign pharmaceutical businesses， Tajikistan has revised its tax policies， such as exemption from import tariff and value-added tax for the import of pharmaceutical equipment， raw materials and technology. When drugs are sold in Tajikistan， they are exempted from valueadded tax. This is a good fit because Tajikistan is a mountainous country and produces many medical materials， but it needs technology and production capacities from China to process these materials.

Sobil Vagilov， Representative of the Tax Commission of the government of Tajikistan， said that there are seven main types of taxes in Tajikistan. Favorable tax policies cover valueadded tax， profit tax， social tax and natural resource tax， and listed innovative technology enterprises can be exempt from value-added tax. Now， the overall tax rate has been reduced to 15%， and this tax rate will be even lower depending on circumstances. Pharmaceutical enterprises can enjoy exemption from customs duties and value-added tax， and profit tax has dropped from 23% to 13%. Based on the amount of foreign investment， the preferential tax is also different. “Tajikistan will monitor the taxation. The government will sign agreements with companies based on the tax declaration， to avoid tax inspection on companies.”

In fact， many Chinese companies have started businesses in Tajikistan. In 2006， China Road and Bridge Engineering Co.， Ltd. （CRBC） entered Tajikistan’s road infrastructure market and has built more than 600 kilometers of roads and 16 kilometers of tunnels in Tajikistan. About 70% of highway construction and reconstruction projects after Tajikistan’s independence have been undertaken by China Road and bridge.

The Vahdat-Yavan railway is the first project of CRCC （China Railway Construction Corporation Limited） in Tajikistan. It is also the first railway built by Chinese companies in Central Asia. The railway has 48.65 miles long and total investment of USD 72 million. The project adopts EPC model and the period of project is 28 months. The project started construction on May 15， 2015 and was completed after 15 months.

CODA Chairman He Zhenwei said that when Chinese President Xi Jinping met Tajikistan president Emomali Rahmon who came to attend the opening ceremony of Beijing Winter Olympics on February 5， President Xi Jinping said Tajikistan is a true friend of China，“It is hoped that the relevant departments of the Tajikistan government will offer more policy support to the investment and trade businesses of Chinese enterprises in Tajikistan.”