World Business

Kyrgyz violence hurting business

By Qin Jize (China Daily)
Updated: 2010-06-22 10:02

Chinese traders have seen their shops looted or burned in riots

Beijing - Violence in Kyrgyzstan has dealt a blow to the nation's trade with China, and international analysts say the crisis could pose a threat to northwestern China's security.

According to statistics from the Kyrgyzstan-Chinese United Chamber of Commerce, there are 35,000 Chinese traders scattered in the capital city of Bishkek, and in the battle-scarred cities of Jalalabad and Osh.

However, the clashes have stopped normal business as shops have been looted or burned.

"Their business have been seriously hurt by the clashes and need time to recover," Jin Yulong, commercial counselor of Chinese embassy in Kyrgyzstan, told reporters, noting most of the Chinese traders own small- or medium-sized enterprises in construction materials, food and light industry.

Migrants from China also work at construction sites, for example aid projects such as housing projects for low-income people, and the violence has also stopped those projects.

China is currently Kyrgyzstan's second largest trading partner and bilateral trade jumped to $9.3 billion in 2008, up from just a few hundred million dollars at the start of the decade.

The growing influx of Chinese products into Kyrgyzstan has been accompanied by a similar inflow of Chinese citizens. Over the past 15 years Kyrgyzstan's Chinese population has swelled from zero to around 100,000 in a country with a population of just over 5 million.

The unrest not only slows trade, but also gives separatism and terrorism a chance to breathe, analysts said.

"Some extremist forces and terrorist organizations are back in central Asia after the breakout of clashes in Kyrgyzstan and this has posed a great threat to China's security," said Ji Zhiye, a senior researcher with China Institute of Contemporary International Relations.

Beijing-based researcher Wen Yi told media that being China's close neighbor, as well as the first stop for the transportation of energy from Central Asia, Kyrgyzstan has important strategic significance for China.

"Instability in the country will have a negative impact on China's interactions with Central Asian nations," said Wen.

The Shanghai Cooperation Organization, which consists of China and Kyrgyzstan plus Russia, Kazakhstan, Tajikistan and Uzbekistan, expressed deep concern on Sunday over the situation in southern Kyrgyzstan.

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It appealed for an end to the rampant crime, chaos and lawlessness that is provoking confrontation between nationalities and ethnicities who live side by side in Kyrgyzstan.

The organization underlined the need to provide emergency humanitarian aid to the victims, including refugees, most of whom have been staying in Uzbekistan.

The United States, which operates a crucial air base at the northern town of Manas, is also stepping in to help stabilize the region, which borders Russia and China.

Analysts say Russia and the US have in recent years been competing for influence in Kyrgyzstan, which Moscow considers a sphere of influence.

Kyrgyzstan still remains heavily dependent on Russia for aid, energy and other key supplies, though Chinese products now account for much of Kyrgyzstan's non-energy imports.