Chinese firms look to expand trade, set up shop in Central Asian nation

More Chinese companies are seeing opportunities brought by the opening up of Uzbekistan to set up businesses in the Central Asian nation, making it easier to expand their trade in the region and to Europe.

"By setting up a factory in Uzbekistan, we reduced the cost of our products by about 50 percent compared with sending them from China by train," said Zhou Jiaqiang, who manages a ceramic tile factory 70 km from Tashkent, the Uzbek capital.

He said that as Uzbekistan's economy develops and people's livelihood improve, construction materials are in high demand.

Zhou is planning to add a production line this year to cope with the growing market in Uzbekistan. He also wants to sell to neighboring Kazakhstan, Kyrgyzstan and eventually to European countries.

Zhou's company is based in Pengsheng Industrial Park, which was established by a Chinese company and an Uzbek mining firm in 2009.

Besides ceramic tiles, Chinese factories at the industrial park produce mobile phones and leather products. They employ more than 1,100 people, 80 percent of them locals.

Wang Xinghe, manager of the park, said: "Uzbekistan started to attract foreign investment in 2009, especially for industrial businesses. We've been given many preferential policies, including cheap rent for land and tax exemption."

The park is linked to a railway, enabling products to be distributed in Uzbekistan and the region.

Wang said Uzbekistan is building its third special economic zone, which is targeting Chinese companies.

"Uzbekistan's stable social and political situation, large population and key geographical location are the main factors attracting Chinese businesses, but low productivity is a big problem," Wang said.

"Some equipment we shipped from China need to wait for days before entering the country, which could affect production."

Wang said Chinese businesses also benefit from frequent meetings between President Xi Jinping and his Uzbek counterpart Islam Karimov.

"The idea of the new Silk Road Economic Belt proposed by Xi has created a platform to discuss business opportunities both at high level and among local companies from China and Uzbekistan," he said.

cuijia@chinadaily.com.cn

(China Daily 06/10/2014 page7)