2025 was the year Central Asia’s external economic map genuinely shifted — not only in the headline numbers, but also in how the region relates to its two biggest outside partners.
For the first time, China became the largest trading partner of Central Asia as a region. Trade in goods between China and the five Central Asian countries reached USD 106.3 billion, crossing the USD 100 billion mark for the first time and growing by 12% year-on-year. Chinese exports to the region reached USD 71.2 billion, while imports from Central Asia reached USD 35.1 billion. Growth was supported not only by traditional resource trade, but also by mechanical and electrical products, high-tech goods, cross-border e-commerce, warehousing, logistics and payment cooperation.
Europe’s position remains equally important, but in a different way. The European Union remains the region’s largest accumulated foreign investor by a wide margin. According to the Council of the European Union, the EU has provided over 40% of foreign direct investment in Central Asia over the past decade, with total investment exceeding EUR 100 billion. In 2022, the EU accounted for 42% of FDI in Central Asia, compared with China’s 3.7%.
Placed side by side, these figures may look like a simple comparison: China leads in trade, while Europe leads in investment. But that reading would be too narrow. China and Europe should not be assessed through the same lens. China’s influence is visible in trade flows, supply chains, project implementation and the growing number of Chinese companies operating in the region. Europe’s influence is reflected in accumulated capital, institutional finance, regulatory standards and long-term strategic projects.
For companies operating in Central Asia, this difference matters more than the headline figures. There is not one investment logic at work in the region. There are several models running in parallel.
China’s presence in Central Asia cannot be reduced to foreign direct investment figures alone. It is built through trade volume, supply-chain links, participation in infrastructure projects, equipment supply, industrial localization, e-commerce and digital services. This is why formal FDI data may underestimate the real presence of Chinese business on the ground.
A Chinese company may enter the region as an investor, supplier, EPC contractor, technology partner, logistics operator or local manufacturer. Each of these roles represents a different type of commercial relationship and requires a different legal structure.
Europe’s presence looks different. It is more strongly anchored in accumulated FDI, institutional finance and development-bank projects, supported by regulatory frameworks and standards-based cooperation. European involvement is especially visible in transport, critical raw materials, water resources, energy, urban infrastructure, digital connectivity and the green transition.
The contrast is therefore not “China builds, Europe invests.” That would be too simple. A more accurate distinction is that China often brings scale, speed and supply-chain capacity, while Europe brings long-term capital, financing discipline and regulatory credibility. Increasingly, these two forms of influence appear in the same commercial space, rather than in separate spheres.
The Middle Corridor is the clearest example. It is not just a transport route, but a commercial space where Chinese, European and Central Asian interests overlap. The World Bank describes it as a multimodal rail and maritime route connecting Chinese and European markets through Central Asia and the Caucasus. According to the World Bank, with the right combination of investments and efficiency measures, the Middle Corridor could triple freight volumes and halve transport time by 2030.
For China, the corridor supports westward trade and supply-chain diversification. For Europe, it provides alternative connectivity with Asia and greater resilience. For Central Asian countries, the opportunities lie between these two directions: railways, ports, warehouses, customs services, logistics technologies and industrial zones.
A similar logic can be seen in critical raw materials. The EU has signed a strategic partnership with Kazakhstan on sustainable raw materials, batteries and renewable hydrogen value chains. China, meanwhile, remains highly competitive in mineral processing, batteries, solar panels, electric vehicles and industrial equipment.
Future projects may therefore involve European demand and standards, Chinese processing capacity or equipment, and Central Asian licenses, land and state participation at the same time. This is where the region becomes more complex, but also more commercially interesting.
The legal issues depend on how a party enters a project, not only on where that party comes from.
On the Chinese side, the first question is what role the company is playing. An EPC contractor or equipment supplier has one risk profile, while an investor, joint-venture partner or local manufacturer has another. In the first case, the key issues are technical specifications, acceptance standards, payment terms, liability for delays, warranties and control over operations after completion. In the second case, the focus shifts to shareholder rights, land use, licenses, tax incentives, profit repatriation, employment matters and protection of technology and know-how once they are placed within a local structure.
This distinction matters because construction work, supply contracts and foreign direct investment are not the same thing. If they are treated as one category, documentation may become too thin and risks may be allocated incorrectly.
On the European side, projects often do require more substantial upfront documentation, but not because Central Asian FDI rules are necessarily stricter for European investors. That is a common misunderstanding. The real reasons usually come from two directions.
The first is the lender. Projects financed or co-financed by the EBRD, EIB or another development bank usually involve procurement rules, ownership-transparency requirements, disbursement conditions and reporting obligations that go beyond basic local corporate procedures.
The second is the European regulatory environment itself. Sanctions screening, ESG expectations and supply-chain due diligence may apply to a European company because of its own regulatory exposure, regardless of where the project is located.
Therefore, the documentation burden is not automatic for every European project. It depends on the financing structure, the parties involved and the compliance standards attached to the transaction. However, where these requirements do apply, the upfront work may pay off later — especially when the project needs financing, refinancing or integration into a broader international capital structure.
Sanctions compliance has now become an important layer for both models. The European Commission has clearly stated that deeper EU-Central Asia trade relations should develop in parallel with preventing sanctions circumvention. It has also issued due diligence guidance for EU operators dealing with third countries, including checks on business partners, transaction chains and goods.
The practical starting point is simple: companies should identify the real nature of the project before choosing the legal structure.
A trade contract, EPC agreement, joint venture, lender-backed infrastructure project and equity investment all carry different risks. They also require different documents, approvals and contractual protections. Problems often begin when these formats are treated as interchangeable.
In China-linked projects, companies should first understand what exactly the Chinese counterparty is: an investor, equipment supplier, contractor, technology partner or company entering the market through a local subsidiary. This will determine how the contract should regulate payment, liability, quality control, taxation, local permits and operational responsibility.
In Europe-linked projects, it is important to identify which source of additional documentation is present in the transaction. Local corporate and licensing documents may be required in any case, but ownership disclosure, sanctions screening, ESG materials, procurement documentation and lender-facing documents become especially important when a development bank, public procurement process or EU-regulated company is part of the structure.
Mixed projects require the most careful preparation. If European capital, Chinese contractors and Central Asian state-owned companies are involved in the same transaction, the parties should map the movement of money, goods, obligations and control from the beginning, rather than after the contracts have already been signed.
This is not only about preventing disputes. A good structure is what allows a project to move from negotiation to real implementation.
Central Asia is not choosing between Europe and China. It is using both directions, but for different purposes.
China is becoming the region’s most immediate partner in trade, supply chains and project implementation. Europe remains the deeper source of accumulated capital, institutional finance and regulatory credibility.
For foreign companies, the opportunity lies in understanding how these two directions interact, rather than choosing one side over the other. The projects that prove sustainable will not be those that follow a purely Chinese or purely European model. They will be the projects structured carefully enough to combine speed, financing, local compliance and long-term legal protection.
Council of the European Union, EU-Central Asia trade infographic
https://www.consilium.europa.eu/en/infographics/eu-central-asia-trade/
State Council of China / Xinhua, “China-Central Asia economic, trade cooperation achieves remarkable progress in 2025,” 18 January 2026
https://english.www.gov.cn/archive/statistics/202601/18/content_WS696c9e63c6d00ca5f9a08a1d.html
European Commission, DG Trade and Economic Security, “EU trade relations with Central Asia”
https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/central-asia_en
World Bank, “The Middle Trade and Transport Corridor: Policies and Investments to Triple Freight Volumes and Halve Travel Time by 2030,” November 2023
https://www.worldbank.org/en/region/eca/publication/middle-trade-and-transport-corridor
European Commission, “Strategic Partnership between the European Union and Kazakhstan on sustainable raw materials, batteries and renewable hydrogen value chains,” 8 November 2022
https://single-market-economy.ec.europa.eu/news/strategic-partnership-between-european-union-and-kazakhstan-sustainable-raw-materials-batteries-and-2022-11-08_en
European Commission, DG FISMA, “Guidance on due diligence,” 19 February 2024
https://finance.ec.europa.eu/publications/guidance-due-diligence_en
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