How Azerbaijan’s stability became vital for China

Robert Inlakesh, The Cradle, April 26, 2023 —

China has a significant economic stake in Azerbaijan’s stability today. When the Ukraine war interrupted Beijing’s land route to Europe, Baku and its neighborhood became a vital alternative path, but adversaries may seek to disrupt that.

Since the start of the war in Ukraine, Beijing’s northern trade route to Europe has been severely curtailed, making the “Middle Corridor” route that runs through the south Caucasus the natural alternative for China-EU trade. However, possible conflict in Azerbaijan could sabotage the key route to China’s geo-economic portfolio.

The Middle Corridor, otherwise known as the Trans-Caspian International Transport Route (TITR), was envisaged to become the fastest trade corridor between Central Asia and Europe. Its route travels through China, Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, and into Turkiye, and significant investment has been directed towards Azerbaijan to develop the infrastructure necessary to play its role.

The Azerbaijan-China relationship dates back 31 years, with economic ties having rapidly expanded since the initiation of Beijing’s ambitious, multi-trillion-dollar Belt and Road Initiative (BRI) back in 2013, which Azerbaijan was one of the first countries to support. China long sought to diversify its geo-economic partnerships, particularly in Asia-Europe trade routes, placing Azerbaijan in the center of the most viable route of today, the Middle Corridor.

Shared strategies and stability

By 2034, the plan is for the route to transport 3 million passengers and 17 million tons of cargo annually. The Baku-Tbilisi-Kars Railway is one of the various infrastructural projects being expanded to meet this goal.

Moreover, Baku-Beijing bilateral trade turnover grew from $760 million in 2014 to $2.2 billion in 2019. In 2021, China became Azerbaijan’s 4th largest trading partner, cementing its position as Beijing’s key trade partner in the South Caucasus region.

Since the start of the year, the Chinese and Azerbaijani business sectors have discussed cooperation on investment in energy, infrastructure, and construction industries. On the diplomatic front, Azerbaijan’s President Ilham Aliyev met in March with China’s Special Representative on European Affairs, Wu Hongbo, to further discuss cooperation.

Back in 2016, Bai Lianlei, of the China Institute of International Studies (CIIS), set forth the argument that “China and Azerbaijan share similar development strategies”:

“They both place a high value on interconnectedness, and have outward facing foreign and trade policies. Azerbaijan is balancing its relations with the west and the east. China … is shifting from a focus on maritime opening to comprehensive land-sea openness. These parallel evolving strategies create historic opportunities for bilateral cooperation.”

Lianlei emphasized that Baku and Beijing are natural partners, with the relationship resting on the pillar of stability and Azerbaijan’s power-balancing act between east and west.

Is Azerbaijan a stable partner for China?

Late last year, the Shanghai Institutes for International Studies (SIIS) hosted the Tenth Meeting of the CICA Think Tank Forum. Scholars from 15 countries were invited, including Azerbaijan, to discuss viable pathways to ensure both food and energy security in Asia, especially during the new era of an emerging multipolar order.

As part of its BRI strategy, Beijing is investing big in the Middle Corridor and is developing infrastructure not only in Azerbaijan but also in neighboring Kazakhstan, where there has been a heavy emphasis on rail links this year.

The northern EU-China land route through Russia has been severely curtailed during the Ukraine war, and has become costly due to western pressure on Moscow, leaving the Middle Corridor as China’s only truly viable land route to Europe for the time being.

Beijing hopes to replace its maritime corridor with a more efficient, albeit more expensive, land transportation option. Despite Azerbaijan’s aspirations to become a Eurasian energy hub, its grandiose ambitions do not come without a cost, one of which is its goal of pleasing its two key regional allies, Israel and Turkiye.

Baku’s ties with Israel

Azerbaijan’s relationship with Israel has become increasingly public in recent years, especially since its 2020 Second Nagorno-Karabakh War with Armenia. In 2009, Wikileaks released cables of President Aliyev aptly describing ties with Tel Aviv as being “an iceberg; nine-tenths of it is below the surface.”

This controversial relationship, which appears to be primarily based upon arms sales to Baku in exchange for energy supplies to Tel Aviv – Israel has supplied almost 70 percent of Azerbaijan’s weapons arsenal, according to Haaretz – has had major regional repercussions. Israeli-Azerbaijan military and intelligence collaboration on offensive activities against neighboring Iran has emerged as a significant issue in the past year, with no resolution in sight.

As far back as 2012, Foreign Policy magazine quoted US officials as saying that Israel had gained access to bases from which they may launch attacks on the Islamic Republic. The most urgent concern for Tehran today, however, remains Baku’s potential to back northern Iranian separatist groups and increased Israeli intel penetration into Iran.

While the possibility for an all-out military confrontation between Iran and Azerbaijan exists, there are several factors that also limit its likelihood. First, a war could severely curtail Israel’s access to cheap oil. Tel Aviv currently imports at least 40 percent of its energy needs from Azerbaijani supplies ever since western sanctions against Moscow complicated its access to Russian oil.

Threat of pan-Turkism

Second, Israeli efforts to nudge Azerbaijan into a military conflict with Iran would antagonize Tukriye, as this would disrupt its ambition of becoming containerized freight hub through its participation in the Middle Corridor.

There are also indications that China remains wary of Ankara’s ability to stir pan-Turkic tensions in the South Caucasus and beyond, something that could jeopardize regional stability. Turkish President Recep Tayyip Erdogan has been accused of aggressively promoting pan-Turkic expansionism in recent years, which Beijing views with great concern due to its ongoing problems with the East Turkistan Islamic Party in its Xinjiang province.

Prior to 1990, there was little to no reference in Chinese academic journals on the issue of pan-Turkism. However, between 1991 and 2014, some 1,332 academic articles were published in China on the topic.

While a separatist movement seeking to unite ethnic Turks could pose a risk to a number of countries in the region, militant pan-Turkism currently appears to be restricted to smaller terrorist groups. Azerbaijan, whose majority Shia population is comprised of around 90 percent Turkic speakers, has not made any moves towards pushing for a Turkic empire.

Strategic importance of South Caucasus

All of these questions of potential security risks would not be complete without noting Baku’s conflict with Yerevan, where cross-border fire continues sporadically between the two sides. In February, Azerbaijan was even ordered by the International Court of Justice to allow free movement in Nagorno-Karabakh, after it refused to open the Lachin corridor – the only land route for Armenian access to the area.

Azerbaijan’s strategic position as part of Russia’s trade route to India also raises concern that there may be attempts to sabotage the cordial relationships that Baku has with all sides in the ongoing “New Cold War.”

In addition, the US Biden administration’s launch of its own Partnership for Global Infrastructure and Investment (PGII) project as a counter to China’s BRI may also lead to US efforts to sabotage the Middle Corridor.

In Kazakhstan, there have been accusations of US involvement in stoking a color revolution as recently as January 2022. In a country that is more susceptible to conflict, some argue that it would serve Washington’s interests to see turmoil in Baku as well.

This potential for external interference in Azerbaijan’s internal affairs only adds to the concerns surrounding the country’s stability.

Stability is a critical pillar of the China-Azerbaijan relationship, and any disruption to this could have significant implications for both countries, economically and diplomatically. In the current geopolitical landscape, it will remain essential for Beijing to monitor the situation in Azerbaijan and its neighborhood closely.

Given China’s globally-lauded role in brokering reconciliation between Iran and Saudi Arabia in March, Beijing may be increasingly motivated to help resolve other pervasive regional conflicts, especially those that interrupt its strategic BRI project.