China's debt power in Central Asia

China's influence in Central Asia is growing – not through military bases, but through loans. As the countries in the region increasingly move into Beijing's economic orbit, China is presenting itself as a key source of capital for infrastructure and development. The World Bank's International Debt Report (IDR) from December 2025 emphasizes that high debt carries risks, but at the same time can enable long-term growth – provided the funds are used productively. This is precisely where Beijing comes in.

Through the Export-Import Bank of China and New Silk Road projects, the country has become the most important bilateral creditor to several Central Asian states. Unlike short-term budget support, the loans are mainly used for specific infrastructure projects: highways, rail corridors, power plants, pipelines. They close gaps that have hampered trade and industrial development since the collapse of the Soviet Union – and bind the region more closely to Chinese supply chains.

In Kyrgyzstan and Tajikistan, Chinese-financed projects have improved transport links and reduced electricity shortages. At the same time, new economic dependencies are emerging. Landlocked countries are becoming more integrated into Eurasian trade axes – with China as the central hub.

Kyrgyzstan and Tajikistan: High debt, high dependence

At the end of 2025, Kyrgyzstan's foreign debt amounted to around 55 to 60 percent of gross domestic product. A significant portion of this is owed to the Chinese Exim Bank. Debt servicing already consumes up to one-fifth of government revenue. Since many liabilities are denominated in foreign currency, currency devaluations further increase the repayment burden.

Tajikistan is similarly exposed. Its foreign debt is just under 50 percent of GDP, more than half of which is owed to China. Added to this is a US$500 million eurobond issued in 2017 to finance the Rogun hydroelectric power plant. With the maturity date approaching in the early 2030s, refinancing pressure is growing. Already, around one-fifth of government revenue is being spent on debt servicing.

Uzbekistan and Kazakhstan: Diversified, but not independent

Uzbekistan has significantly expanded its government-guaranteed foreign debt since 2017. Although its creditor base is broader than in Kyrgyzstan or Tajikistan, Chinese banks also play a key role here, particularly in energy, chemical, and transport projects. With the expiry of grace periods, repayment payments are rising noticeably.

Kazakhstan is in a comparatively stable fiscal position. Public foreign debt is less than 25 percent of GDP. However, state-owned enterprises have significant external liabilities, including to Chinese lenders. In the event of economic turmoil, these risks could be transferred to the state.

Turkmenistan, on the other hand, remains a special case. Reliable data is scarce. However, it is known that Chinese loans have significantly financed the gas infrastructure. Since China is also the most important buyer of Turkmen gas, this creates a double economic dependency – as a lender and as a market.

Across the region, debt is growing faster than economic output and government revenues. A rising share of household income is being spent on debt servicing – at the expense of social spending, education, and climate adaptation. Beijing's involvement has undeniably created infrastructure. But with every loan, financial interdependence deepens.

Whether this relationship will bring long-term stability or create new vulnerabilities remains to be seen. For countries such as Kyrgyzstan and Tajikistan, China is no longer just a development partner, but a central pillar of state financing. Experiences from Sri Lanka and Laos urge caution: infrastructure projects can bring growth – but also political and economic dependence.

This article was produced in cooperation with our partner bne intelliNews.