Since 2018, China has become Kyrgyzstan’s primary economic and investment partner, while sponsoring crucial transport and infrastructure projects through the Belt and Road Initiative (BRI). Linking Kyrgyzstan with China through roads, rail, border crossings, and logistical hubs features prominently in the National Development Program of the Kyrgyz Republic until 2030.
A looming uncertainty is the extent to which being key node of the BRI will actually develop the regions of Kyrgyzstan through which this infrastructure is to be routed.
The pursuit of “connectivity” – a buzzword of Eurasian development planning – compels countries to overlook the risks of becoming a transit territory in which only specific places and communities benefit. Too often opportunities concentrate within capital cities or designated special economic zones, and thereby render the rest of the country peripheral. Analysis of the distribution of Chinese investment in Kyrgyzstan sheds light on this very issue.
By the end of 2024, China had directly invested $286.5 million in Kyrgyzstan, with the largest share ($128.4 million) – almost 45 percent – going to the Chui region and about 12 percent ($35.3 million) to the capital, Bishkek. Of Kyrgyzstan’s other six regions, Jalal-Abad (with $48.3 million) and Batken (with $42 million) also benefit, while the other four regions receive very little. Naryn region, for example, despite hosting the Torugart border crossing, received only $4.2 million in Chinese investment. The Issyk-Kul region offers a similar scenario; the newly opened Bedel border crossing received only $1.1 million in 2024. For the Osh region (not including Osh city, which is a distinct economic unit within the Kyrgyzstani administrative system), where the Irkeshtam border crossing operates, Chinese companies provided $24.8 million in direct investment.
It stands to reason that the Kyrgyz regions directly bordering China – Issyk-Kul, Naryn, and Osh – should benefit from infrastructure and connectivity across their respective territories. Enhancing socio-economic well-being of these populations would seem necessary to offset negative aspects of invasive infrastructure construction.
What is clear, however, is that hard infrastructural development occurring in Kyrgyzstan concentrates within the most developed regions, such as Chui, which surrounds the capital, Bishkek. This risks perpetuating, if not enhancing, the marginality in other parts of the country.
The National Statistical Committee of the Kyrgyz Republic reported that, as of 2024, there were 931 Chinese enterprises in Kyrgyzstan, with 706 of these principally reliant on Chinese capital. Politicians contend that this understates the true figure. For instance, Deputy Chairman of the Cabinet of Ministers Bakyt Torobaev reported in July 2025 that over 3,000 Chinese companies with Chinese capital are currently registered in Kyrgyzstan. The contradictory and confusing publicly available data on these enterprises, regional localization, and tax contributions make it impossible to accurately and comprehensively map their geographic footprint.
What follows, nevertheless, suggests spatial concentration of major projects in the real sector of the economy that are financed through Chinese loans and investments within the Chui region and the capital Bishkek. “Real sector” refers to the part of a country’s economy that is concerned with the production, purchase, and flow of goods and services. This is contrasted with the “financial sector,” which deals purely in transactions of money and financial assets.
Among the largest and most famous projects in the real sector is the Zhongda refinery, managed by China Petrol Company Zhongda, which is located is in Kara-Balta, Chui region. In 2024, Kyrgyz authorities signed an investment agreement on the overhaul and modernization of the refinery for $167.95 million. Another huge venture is a plant to produce Chinese cars in the Chui region, which has a first stage investment volume of $115 million, with a design capacity for more than 80,000 cars per year, including for export. Located again close to Bishkek, a waste incineration plant (involving investments of roughly $95 million) has been launched recently to produce electricity. And the trade and logistics city “Manas” will be built in the Chui region, with the support of a Chinese company that will carry out the construction plans to invest $482 million dollars in the first phase of the project.
Such long-term, capital-intensive projects in Bishkek and the Chui region should contribute to the development of the real economy, including industrial production, processing, manufacturing, and logistics. They not only stimulate employment but also promote local value chains and Gross Regional Product (GRP) growth and thereby play a role in localized poverty reduction.
While investing in areas likely to see rapid returns is logical, it is important to follow through on plans for productive engagement in border and mountainous regions, too. And although China’s investments are heavily weighted toward Chui and Bishkek, as noted above, there are significant projects underway in border regions – albeit of a different character.
Examples of such plans include the China-Kyrgyzstan-Uzbekistan (CKU) railway. This yet to be constructed route through the Torugart Pass is the impetus for constructing a Central Asian trade and logistics hub – the “MTLC At-Bashy” complex in Naryn. The hub is envisioned to be the fourth largest in the region after Khorgos (on the Kazakhstan-China border), Dordoy (Kyrgyzstan), and Abu-Sakhiy (Uzbekistan) with commissioning planned for the end of 2027.
For the Osh region, it is important to highlight the agreement for the construction of a 7-kilometer coal conveyor belt by a Chinese company. This conveyor will link the coal deposits of the Chong-Alai district directly to the Irkeshtam border crossing on the Kyrgyz-Chinese frontier. An additional 157-kilometer conveyor line connecting coal deposits with a logistics center is also in the planning stages. Approved by the Cabinet of Ministers in April 2024, this project is supported by an investment agreement between the Kyrgyz Ministry of Energy and the Chinese company Xinjiang Dacheng Yuanlong Technology Co., LTD. In addition, the Chinese company Kunlun is constructing a modern residential complex, covering 54 hectares, on the outskirts of Osh. The project includes 520 houses, a school, a kindergarten, and primary healthcare facilities.
In the Issyk-Kul region, planners envision the construction of an international highway routed through Barskoon-Uchturfan-Aksu. These plans join discussions for a potential railway line connecting Aksu-Bedel-Balykchy, which would strengthen the overall configuration of Central Asia’s international railway corridor. Furthermore, in July 2025, a law was passed establishing the special financial-investment zone – provisionally named “Tamchy,” which would offer international arbitration under English law. This zone is intended to attract direct investment and provide legal guarantees for international – particularly Chinese investors. An additional project involves the Chinese Academy of Engineering building laboratories in Issyk-Kul for quarantine and quality control of agricultural products. This constitutes a major step toward integrating Kyrgyzstan’s agricultural sector into the Chinese market and reducing export barriers. Other projects center on development of the mining industry, with joint processing of products from the titanomagnetite mine at the Kyzyl-Ompol deposit.
The China-Kyrgyzstan cross-border regions are envisioned to fulfill specific roles in a broader axial development strategy. Naryn has the potential to transform into a logistics and transport hub, with warehouses and railway infrastructure as core elements of axial development. Osh is focused on social infrastructure and cross-border trade, promoting a logistical axis through Irkeshtam. Issyk-Kul aims to become a financial and legal center, emphasizing investment incentives and support for agricultural exports through Bedel. These projects reflect the national strategy to develop transit and trade corridors with China, where infrastructure, logistics, and legal guarantees lay the groundwork for the economic integration of border regions.
While this looks good on paper, one may question the viability of such grand plans. Major projects in border areas – where present – are often tied to the extractive sector (e.g., mining and resource export) or yet-to be-built transit infrastructure (such as roads and railways). These do not currently, nor are they likely, to generate sufficient added value or sustainable business opportunities for the local populations. Outside of powerlines, Chinese-backed initiatives in these areas offer little that will build productive capacity or embed sustainable employment opportunities in the border regions. This could simply reflect the early stage of Kyrgyzstan’s axial development strategy – or it could represent a systemic flaw that will perpetuate peripherality.
Kyrgyzstan’s regions bordering China exhibit persistently high poverty rates, despite China’s official narrative promoting development. This spatial asymmetry in investment allocation, particularly in Kyrgyzstan’s real sector, suggests a certain structural regional inequality. While Bishkek and the Chui region benefit from major capital inflows, border regions such as Naryn, Osh, and Issyk-Kul face ongoing marginality. Projects like railway construction and road infrastructure toward the Torugart, Irkeshtam, and Bedel passes could incorporate local populations (although data on how many locals will be involved in construction work is unavailable), but for how long? Once constructed, will such axes of connectivity benefit the territories through which they pass?
Ultimately it is essential that Kyrgyzstan’s government consider not only the volume, but also the location and long-term impacts of Chinese investments. Key indicators such as credit conditions, the creation of sustainable jobs, and the integration of local small and medium enterprises (SMEs) determine whether such projects generate meaningful, lasting benefits for frontier regions. The developmental impact of Chinese engagement in Kyrgyzstan’s borderlands may hinge less on infrastructure itself, and more on the degree to which it supports locally embedded, value-adding economic activity. Thus, the spatial disparity in the allocation of Chinese investment – particularly in the real sector – emerges as a key factor in reinforcing the structural vulnerability of Kyrgyzstan’s peripheral regions.
In sum, while the Torugart, Irkeshtam, and (to a lesser extent) Bedel passes and roads are being improved in regard to the physical infrastructure necessary for axial development, their current utilization reflects asymmetric dynamics more characteristic of “transit corridors” than of fully realized development axes. According to the theories of axial development, such corridors require functional complementarity and economic reciprocity between nodes – that is, what is built in these border regions must fit in with the local economic environment and enable meaningful and sustainable connection within Kyrgyzstan, not just through it. This is occurring in Kyrgyzstan’s central regions, such as Bishkek and the Chui Valley, where Chinese-backed investments have fostered localized industrial clusters and logistics hubs. While these represent the early contours of genuine development axes, border regions remain dominated by extractive or “ low value-added” projects, with limited efforts to cultivate endogenous growth poles or integrate local economies into regional value chains.
Image credit: Photo by Anna Kushakova on Unsplash. This article was originally published in The Diplomat.
Nargiza Muratalieva
Nargiza Muratalieva holds a Ph.D. in political science and is a part-time associate professor in the International and Comparative Politics Department at the American University of Central Asia (AUCA). She has extensive experience working in think tanks and her research is focused on Central Asia's international relations and its regional cooperation.
Alexander Diener
Alexander Diener is a professor of geography at the University of Kansas. He works at the intersection of political, social, and economic geography with a specialty in border studies.