A new piece for the latest issue of Caravan magazine, an excellent Indian publication that I would highly recommend. The piece is an evolution of a blogpost that we did for the China in Central Asia site a while ago, and of course part of the bigger project on the subject that Alex and myself are working on with Sue Anne helping us document it visually.
China’s first faltering steps towards building trade links with Uzbekistan
By RAFFAELLO PANTUCCI | 1 March 2013
Unfortunately for this group of businessmen, they had to take a circuitous route to get through this gate. Because of a lack of direct flights from Urumqi to Tashkent at the time, they had been forced to re-route rather inconveniently through Beijing—a five-hour flight south-east followed by a six-hour flight west. In retrospect, the businessmen’s long trip was emblematic of difficulties they later faced in Tashkent.
We ran into them the next evening at a market in a small park behind a statue of Amir Timur, the 14th-century Asian emperor, in the centre of Tashkent. In the cool evening, traders, painters and other craftsmen had gathered to ply their wares to tourists. Some of the Chinese businessmen were getting their portraits drawn, frustrating the Soviet-trained draftsmen by constantly shifting to smoke cigarettes.
One businessman was intrigued by stalls set up near the artists. A forthright man with a flattop haircut typical of many middle-aged Chinese traders who have little time for the niceties of fashion, he had come to Tashkent to sell his food products to local traders. He was a natural leader, with the robust confidence of someone from a tough frontier province, which made his fascination at the outdoor market with faux vintage Soviet cameras all the more odd. Turning them over in his hands, he remarked on how authentic they were; I couldn’t help but think they had been made, like so many things in this world, in China. Using broken English, gestures, and my assistance as a Chinese–English translator, he proudly bargained down the cost of two cameras to $15.
Two days later, at the expo, this gentleman and the other Chinese businessmen were the sellers, trying to win over Uzbek customers for their products. Sponsored by the Xinjiang government, the expo was part of the Chinese autonomous region’s strategy to develop its economic ties with Central Asia. The companies represented all had operations in Xinjiang, though quite a few were from other provinces in China, such as Guangdong. This was also part of the central government’s strategy: richer eastern provinces were to give financial and other aid to their poorer counterparts and participate in the strategy of turning Xinjiang into a Eurasian gateway.
The expo, held in an exhibition hall in the northwestern corner of Tashkent, was underwhelming—a smattering of stalls were arranged in the centre of a much larger, imposing space, giving visitors the impression of being in a hangar. Sellers displayed everything from high-end power generation machinery and cotton-picking machines to uniforms (with a focus on the oil industry and military outfits), Uighur clothing, spices, sauces, car engine parts and electronics. Some exhibitors had carefully considered where they were travelling to—at one of the clothing stalls a sign proudly boasted that they sold ‘Turky Style clothing’, the unfortunate typo belying an attempt to tap into the Turkish-Uzbek ethnic connection. Another stall had a Chinese woman dressed up in what was supposed to be traditional ethnic Uighur attire, wearing a hat with what looked like a feather duster attached to it, as she tried to sell pillows, rugs, slippers and other homemade wool products. Compounding the hall’s feeling of emptiness was the thin crowd.
At one of the few stalls that were attracting a crowd, a Guangdong merchant selling electronics told me that his company “had been asked to invest in Xinjiang by the Guangdong government”. Having attended the expo before, he had an obvious edge over others and had had the foresight to bring along a Uighur salesman from his Urumqi office. Given Uighur and Uzbek are mutually intelligible languages, both spoken by Turkic peoples, the Uighur salesman was able to talk to curious locals and pitch them products. He proudly announced that the products on offer were all made in Xinjiang by Uighur workers, and told visitors to disregard the Guangdong branding. As proof, he pointed to the picture on a computer tablet box: a Google Android figure donning a hat of a style common to both Uighurs and Uzbeks.
Most others vendors had failed to bring someone who could communicate with locals; instead, the men sat around waiting for proceedings to end. At a stand trying to woo Uzbek companies to buy plots inside a new mall outside Xinjiang’s Kashgar city, one of the men who had had his picture drawn the night before was sitting with two of his colleagues. Bored and with no business prospects, they fiddled with mobile phones and remarked on how they, too, had been encouraged to come to Tashkent by the Guangdong government. (Although the trip had government sponsorship, they resentfully noted, they had to pay a fee to join.) It was only upon arrival that they realised Uzbekistan was an underdeveloped and poor market that was unlikely to have many companies eager to set up operations in China. “The Uzbek market is too small and low-income compared to the vast opportunities we have in Xinjiang,” said Tan Chao, a manufacturer of uniforms.
Dealing in goods of a vastly different scale, those manning the machinery companies’ stalls were less surprised by the slow foot traffic. At one stand, Liu Zhao, a cheery representative from a Siemens subsidiary that builds power stations, showed off a large model of a power substation. It had cost them somewhere in the region of 10,000 RMB (Rs 84,000) to ship the ping-pong table-sized model to Tashkent, a fraction of the money the company would make if it sold one, but he did not seem very optimistic about securing a sale. While my Chinese failed me as he went through the technical specifics of the project, he smiled pleasantly as he told me that people in Uzbekistan didn’t need products like the ones his company was offering, because “these people are at a very different stage of development”.
Soon after lunch, a local school was dismissed and there was a sudden influx of Uzbek children into the hall. The stall that particularly appealed to them was the one run by a company that made cotton-picking machines, a subsidiary of Chinese state-owned military aviation firm AVIC, which was hoping to tap the Uzbek cotton market, one of the top five in the world. But even the recent news that Xinjiang had set a cotton producing record was not helping their sales with locals, who apparently preferred American equipment. This left the Chinese businessmen to fight off eager children drawn not out of some financial stake in cotton, but rather by a large toy automobile that the company had sent along. The harassed vendors shooed away the children as they eagerly tried to play with the car, which was roughly the size of a microwave oven. Neither vendor spoke any Russian or Uzbek, but they had learned enough to say something approximating “no sale” to the young and old Uzbeks who pestered them to buy the model.
In the mid-afternoon, Duan Weiming, one of the clothiers, made a modest sale of some Western suits and received a down payment of a few hundred thousand in Uzbek som. Striding around gleefully with huge bundles of cash, he proclaimed that, given its lack of value, he would have no choice but to blow it all while he was in Uzbekistan—the Uzbek som is officially worth 1,800 per US dollar, but unofficially trades at around 2,800. When asked what he planned to spend it on, he responded, “Dinner, drinks and karaoke.” By 4 pm that day, the group at the expo concluded that the day was basically a write-off and that it was time to go home. Rounding everyone up, they hopped on a tour bus and went back to their hotel, enervated by the prospect of sitting through another day in the empty auditorium.
A few days later, over lunch with an Uzbek businessman whose company had helped sponsor the expo, we got a sense of how successful the whole enterprise had been. “Not very, to be honest, but better than last time,” he said. “More Chinese are coming.” A former government employee, he had seen the economic possibilities of China’s booming, dynamic manufacturing capabilities and had chosen to end a flourishing civil service career at a young age to go into business, with a focus on China. Though at the forefront of Sino-Uzbek relations, he was not optimistic about Xinjiang as the gateway for Central Asia. The province made low quality products and traders were, in fact, simply agents from elsewhere in China, he told us. But he admitted that the greater problem was the difficult business environment in Uzbekistan in general. Awkward red tape, worthless currency conversions and a political environment that took very careful manoeuvering meant that it did not matter how many trade fairs were held. “You can take a horse to water,” he told us, “but you cannot make it drink.” And with that his phone rang, dragging him off to do more business with China.