China has become an increasingly important economic partner for Uzbekistan, with growing investment in manufacturing, energy and infrastructure. But how significant is Chinese investment, and what does it tell us about Uzbekistan’s changing economic relationships?
In his article, Foreign Direct Investment in Uzbekistan: The Chinese Dimension, published in Silk Road: A Journal of Eurasian Development, Professor Richard Pomfret (University of Adelaide) examines the evolution of foreign direct investment (FDI) in Uzbekistan, placing China’s expanding role within the wider Central Asian context.
The paper offers a more nuanced picture than is often presented in discussions of China’s growing economic influence in the region.
Uzbekistan’s changing investment landscape
For much of the period following independence in 1991, Uzbekistan attracted relatively little foreign investment compared with neighbouring Kazakhstan and Turkmenistan. Despite its large population and economic potential, concerns about property rights, regulatory uncertainty and the business environment discouraged many international investors.
This began to change following the transition to President Shavkat Mirziyoyev in 2016. Currency liberalisation, regulatory reforms and efforts to improve the investment climate helped make Uzbekistan a more attractive destination for foreign capital.
Chinese investors have responded to these developments. Drawing on evidence from several sources, Pomfret documents a substantial increase in Chinese investment, particularly since 2019.
Beyond energy and infrastructure
One of the article’s interesting findings is the changing composition of Chinese investment.
While China’s early economic involvement in Central Asia was heavily concentrated in oil, gas and major infrastructure projects, investment in Uzbekistan has become increasingly diversified.
Manufacturing has emerged as a particularly important destination, including textiles, cement, ceramics and automotive production. Chinese involvement in electricity generation and renewable energy projects has also expanded.
According to the Uzbek statistics examined in the paper, combined Chinese investment and loans increased from approximately $210 million in 2016 to $3.9 billion in 2023, with manufacturing accounting for around $2.5 billion of the 2023 total.
This suggests a relationship increasingly extending beyond natural resources towards industrial production and the development of Uzbekistan’s manufacturing capacity.
How much Chinese investment is there really?
An important contribution of the research is its careful treatment of the available statistics.
Figures for Chinese investment frequently combine foreign direct investment, government lending, project finance and announced investment commitments. Yet these represent different forms of economic engagement, with different implications for ownership, financial obligations and economic influence.
Pomfret demonstrates that estimates vary considerably depending on the data source and definitions employed. This makes it difficult to establish precisely how much Chinese FDI has entered Uzbekistan.
Nevertheless, the available evidence consistently points towards a substantial expansion in economic engagement following Uzbekistan’s reforms.
Rethinking the debate about Chinese influence
The article also contributes to wider debates about China’s Belt and Road Initiative and concerns over debt dependency.
Comparing experiences across Central Asia, Pomfret argues that difficulties associated with some Chinese-financed projects are better understood in terms of inadequate project appraisal and lending practices than as evidence of a deliberate strategy to create debt dependence.
China’s subsequent reforms to its international lending institutions are consistent with this interpretation.
For Uzbekistan, the evidence suggests that concerns about excessive dependence on Chinese investment may be overstated. Although Chinese investment has expanded rapidly, its scale remains relatively modest in the context of China’s global outward investment, while Uzbekistan continues to attract capital from a range of international partners.
Looking ahead
The research raises important questions about the next stage of Uzbekistan’s economic development.
The expansion of foreign investment since 2016 is significant, but attracting investment is only one part of the challenge. The longer-term benefits will depend on whether investment supports productivity growth, employment, technological development and stronger connections to international markets.
The article also serves as a reminder of the importance of distinguishing investment announcements from actual financial flows, and foreign lending from direct investment, when assessing the economic implications of China’s growing engagement with Central Asia.
Read the full article:
Richard Pomfret (2026), Foreign Direct Investment in Uzbekistan: The Chinese Dimension, Silk Road: A Journal of Eurasian Development, 5(1).