Uzbekistan Leads Central Asia in Rapid Chinese FDI Growth

Uzbekistan Emerges as Key Destination for Chinese Capital

Uzbekistan is rapidly strengthening its position as a pivotal destination for Chinese foreign direct investment (FDI) within Central Asia, demonstrating the region's most significant growth in Chinese capital inflows. This trend underscores deepening economic ties and Uzbekistan's increasing attractiveness to international investors.

Significant Surge in Investment Figures

The scale of Chinese investment in Uzbekistan has seen a remarkable increase. By the first half of 2025, the total accumulated Chinese FDI in Central Asian countries reached $35.9 billion, up from $19.6 billion in 2016. Uzbekistan's FDI growth over the past decade alone has reached $10.4 billion. Between January and September 2025, China accounted for 39.9% of foreign investments and loans utilized in Uzbekistan, totaling $24.9 billion, making it the leading foreign investor. During President Shavkat Mirziyoyev's visit to China in January 2024, investments reached $25 billion. Furthermore, Uzbekistan anticipates receiving over $10 billion in Chinese investment in 2025.

Drivers of Growth and Strategic Alignment

Several factors contribute to Uzbekistan's appeal to Chinese investors. Since President Shavkat Mirziyoyev took office in 2016, the country has implemented significant market liberalization and economic reforms, fostering an increasingly investor-friendly environment. Uzbekistan's strategic location in Central Asia provides access to a market of over 300 million people and facilitates tariff-free exports to European countries through programs like the Generalized Scheme of Preferences Plus. The nation's active participation in China's Belt and Road Initiative (BRI) has also been a crucial catalyst, aligning with Uzbekistan's 'New Uzbekistan' development strategy to enhance connectivity and economic integration.

Diversified Sectoral Engagement

Chinese capital is flowing into a wide array of sectors within the Uzbek economy, reflecting a shift from traditional extractive industries towards manufacturing and energy. Key areas of investment include:

• Renewable Energy: Chinese companies have committed to over 5,000 megawatts (MW) of new solar and wind capacity since 2023, including a $1.2 billion wind power project by Sany Renewable Energy in Karakalpakstan.
• Infrastructure and Industrial Parks: A notable $2.8 billion investment by Chinese companies is underway to construct the largest modern special economic zone in Central Asia on the outskirts of Tashkent. This project is projected to create over 50,000 jobs and generate an annual output of $5 billion.
• Manufacturing: This includes sectors like auto production, with a joint venture for assembling hybrid cars by BYD, and textiles.
• Other Key Sectors: Oil and gas, chemicals, construction, pharmaceuticals, agriculture, tourism, finance, and logistics also receive substantial Chinese investment.

As of February 2025, 3,467 Chinese firms were actively operating in Uzbekistan, marking an increase of over 1,000 from the previous year.

Strengthening Bilateral Ties and Economic Impact

The burgeoning investment landscape is a testament to the robust bilateral relationship between China and Uzbekistan, which was upgraded to an 'all-weather comprehensive strategic partnership' in 2024. China remains Uzbekistan's largest trading partner, with bilateral trade reaching $14.033 billion in 2023, representing a 44.9% year-on-year growth. The joint investment portfolio between the two nations now exceeds $60 billion. This influx of Chinese FDI is crucial for Uzbekistan's economic modernization, diversification, and job creation, positioning the country as a dynamic economic force in Central Asia.