In mid-June 2009, the Tajik government signed four new deals with China aimed at considerably boosting Beijing’s investment in the cash-strapped country. Under the new deals signed amidst the global economic recession, Chinese companies will invest more than a billion dollars over the next two years to build power stations, power transmission grids and roads in Tajikistan. The investment package includes US$650 million for the construction of a hydroelectric power station on the Khingob River in eastern Tajikistan, and US$400 million for the construction of a coal-fired power plant in Dushanbe. In addition, the Tajik government has secured US$61 million of Beijing’s investment for the construction of two major electric power transmission lines and US$51 million for the rehabilitation of an important road from Dushanbe to Dangara in Tajikistan’s south. Analysts say that Dushanbe is also close to securing Chinese investment for the construction of a new cement plant in southern Tajikistan.

The deals raise Beijing’s already significant presence in Tajikistan. China has become a key investor in the country, funding major infrastructure projects and investing in key sectors. In 2008, Tajikistan received a US$172 million loan from a US$900 million preferential export credit line given by China to the Shanghai Cooperation Organization (SCO) member states. Bilateral trade between China and Tajikistan is expected to rise from US$524 million in 2007 to US$1.5 billion in December 2009. Chinese companies have slowly sidelined competitors from Russia, Turkey, Iran and other countries, effectively monopolizing the Tajik market’s supply of goods ranging from toys and clothes to personal computers and heavy trucks. Beijing has also increasingly strengthened its military-to-military ties with Dushanbe and security cooperation through the Shanghai Cooperation Organization (SCO).

Experts say that the newly signed deals fit with a broader pattern of rising Chinese investment in Central Asia, as China seeks to use its massive cash reserves to secure key strategic advantages for years to come. Tajik political analyst Abdugani Mamadazimov suggests that Beijing’s enormous foreign currency reserves enable China to gain superior economic and strategic positions in the region at a time when other great powers have little means to do anything about it. According to the scholar, Beijing uses the opportunity presented by the global financial crisis to maximize its power and influence in Tajikistan vis-à-vis other great powers, particularly Russia.

The global economic downturn has strongly affected Tajikistan through declining remittances and falling prices for its key exports, cotton and aluminum. In spring, the country’s resources were strained further by multiple floods and mud flows which displaced over 15,000 people and greatly damaged agricultural land across the country. The economic difficulties have by tradition led the Tajik elites to look towards Russia for assistance. As it became increasingly evident that Moscow was not prepared to offer much-needed economic assistance, Beijing moved in, using its large dollar stockpiles to raise China’s presence in Tajikistan and secure stability along its volatile western border. Tajik political expert Rahmon Ulmasov, quoted by the Khuroson radio on March 19, suggested that Chinese aid at the time of economic recession will have a long-term psychological effect. “The Chinese are investing in Tajikistan in the most difficult period for the country,” says the scholar. “Tajiks will long remember this help.”

Another Tajik analyst, Holmamad Samiev, believes that the Tajik elites particularly welcome Chinese loans because they come without a political conditionality attached to them. According to him, western governments and international financial institutions closely link aid to the country’s human rights and good governance record. Russia’s aid is also conditional upon political favors and unquestionable support for Moscow’s security agenda in the region. Chinese aid, according to Holmamad Samiev, is free of a political conditionality.

Tajik experts suggest that the growth of China’s economic and commercial influence in Tajikistan is followed by a rising popular interest in Chinese culture and language. The three largest universities and a growing number of language centers in the country offer Chinese lessons. Beijing is also building a large pool of local Chinese-speaking professionals by giving them scholarships to study the language in China. The Tajik elites are also increasingly looking towards China for a model of achieving economic development without an accompanying political liberalization.

Beijing’s growing power and influence in Tajikistan is likely to confront increasing resistance from Moscow which is quickly losing ground in what long used to be its stronghold. Much will now depend on what Russian leaders choose to do to counter China’s pursuit of dominance in Tajikistan. Unless Moscow recognizes the rising importance of economics and long-term effort in securing influence in Tajikistan, Beijing is likely to emerge victorious in this competition.