Between Brussels and Beijing: Central Asia and the Contest Over Rules, Routes, and Resources

On 3 April, 2025, European Council President António Costa and Commission President Ursula von der Leyen landed in Samarkand for the first summit the European Union had ever held with Central Asia’s five heads of state – a diplomatic milestone three decades in the making. Twenty-six days later, Chinese construction crews began boring through the Fergana Mountains, breaking ground on three tunnels for the China–Kyrgyzstan–Uzbekistan railway, a project agreed by a 1997 trilateral memorandum and stalled until December 2024 by route, financing, and gauge disputes. The EU was still drafting its strategic partnership declaration; Beijing was already pouring concrete.

The gap reflects a consistent pattern across multiple metrics. By the close of 2025, China–Central Asia bilateral trade, imports and exports combined, exceeded 100 billion USD for the first time, reaching 106.3 billion USD. Chinese Belt and Road investment in the region surged 375 per cent over the previous year, to 28.3 billion USD – overwhelmingly driven by private firms in aluminum and copper, spanning both extraction and processing. And in an unprecedented diplomatic calendar, all four external powers – the EU, China, Russia, and the United States – held separate leader-level summits with the Central Asian five (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) within a single year. The region was no longer peripheral. It had become, as one East Asia Forum year-end review put it, a set of states moving ‘not in the orbit of someone’s influence, but at the centre of its own system of coordinates.’

Three dimensions of EU and Chinese engagement now collide in Central Asia: the structural asymmetry between their investment and infrastructure approaches; the strategic competition for critical minerals; and the emerging regulatory divide created by the EU’s Carbon Border Adjustment Mechanism (CBAM), which prices carbon-intensive imports

at the EU border and threatens to reshape what Central Asian resources are worth – and to whom. The question is whether Brussels and Beijing’s competing frameworks can coexist in a region that needs both resources and connectivity, or whether external competition will force Central Asian states into a choice they have so far managed to defer.

Capital, Concrete, and Credibility

The EU arrived in Samarkand with a 12 billion EUR Global Gateway package: 6.4 billion EUR for environmental and hydropower projects, 3 billion EUR for the Trans-Caspian Transport Corridor, 2.5 billion EUR for critical raw materials, and 100 million EUR for satellite connectivity. Behind the headline figure stood a sophisticated institutional architecture – European Bank for Reconstruction and Development (EBRD) lending, European Investment Bank (EIB) financing, European Fund for Sustainable Development Plus (EFSD+) guarantees, and blended finance instruments – spread across dozens of individual projects requiring separate approvals, feasibility studies, and co-financing agreements.

Brussels’ ambition was impressive; its implementation record has been less convincing. By late 2025, Commissioner Jozef Síkela acknowledged that roughly one quarter of the earlier 10 billion EUR transport pledge had materialised into actual projects. The Center for Global Development noted the persistent absence of detail on how Global Gateway funds would be distributed. Against a combined 22 billion EUR in pledges across the 2024 and 2025 announcements, the EBRD’s verified project commitments in Central Asia amounted to roughly 4.5–5 billion EUR – a gap wide enough to constitute a credibility problem. The EIB, the EU’s own bank, had no regional representation in Central Asia until it opened its first regional office in Tashkent in early 2026.

China’s approach has been markedly different. Where the EU offered blended finance across fragmented project pipelines, Chinese firms arrived with what might be called bundled packages – vertically integrated deals that wrapped extraction, processing, fabrication, and captive power generation into a single framework agreement. The plainest example came on 18 February 2025, when East Hope Group, a Shanghai-based private conglomerate, signed a 12 billion USD framework agreement with Kazakhstan for an integrated aluminium complex covering bauxite mining, alumina refining, smelting, fabrication, and a 4.5 GW coal-fired power plant – one day after the company’s first high-level meeting with Kazakh officials.

This was not an outlier. China Nonferrous Metal Mining signed a 1.5 billion USD copper smelter deal in mid-2024; Xinfa Group was in discussions over a 15 billion USD industrial park in Pavlodar by early 2026. The Griffith University Belt and Road Initiative (BRI) tracker recorded 28.3 billion USD in Chinese investment across the region in 2025, driven by private firms rather than state-owned enterprises – a structural shift in how Chinese capital entered Central Asia. In Kazakhstan alone, more than 4,100 legal entities with Chinese participation were registered by mid-2025, 3.5 times the 2019 figure.

The clearest illustration of the speed gap is also the most instructive. The EBRD’s first-ever direct equity investment in Central Asia’s critical minerals sector – a roughly 3.3 million USD stake in Sarytogan Graphite, an Australian-listed exploration company with a graphite deposit in central Kazakhstan – came, by Sarytogan’s own account, after 18 months of due diligence, with a definitive feasibility study not expected until mid-2026. East Hope’s 12 billion USD framework agreement was signed one day after a ministerial meeting. The comparison is somewhat asymmetric, deployed capital versus a framework agreement that may take years to execute – but in a region where governments weigh intent against delivery, the optics carry weight.

Differentiation, rather than competition or complementarity, fits best here. The EU’s distinct value lies[1][2] in conditionality, green standards, and rules-based connectivity – a niche that does not require matching Chinese speed or scale. Central Asian leaders appear less patient with this distinction. Kazakhstan’s Ambassador to the EU, Roman Vassilenko, used a Brussels forum in late 2025 to call on the EU to ‘move faster and focus on practical implementations.’ The point is not that the EU model is wrong. It is that in a region where four powers are competing for attention in a single calendar year, slowness becomes its own message – and the message Central Asian governments receive is that Brussels can wait.

The Race for Processing

Kazakhstan produces 19 of the EU’s 34 critical raw materials (CRM), which served as the basis for the EU-Kazakhstan Strategic Partnership signed at the 27th Conference of the Parties (COP27). Kazakhstan is the world’s leading uranium producer, the world’s third-largest chromite producer, home to one of only three full-cycle beryllium producers, and holder of the world’s second-largest manganese ore reserves. In April 2025, Astana announced the discovery of a rare earth deposit at Kuirektykol with forecasted reserves of 935,400 tonnes of rare earth oxides – enough, if verified, to make Kazakhstan the world’s third-largest holder. Commissioner Síkela has claimed that over 40 per cent of Europe’s strategic mineral supply ‘could come from Central Asia.’ Commercial extraction at Kuirektykol remains years away.

The EU arrived at Samarkand with a 2.5 billion EUR commitment to CRM and a Joint Declaration of Intent endorsed by all five Central Asian heads of state. What this has produced so far is more modest. Identifiable EU institutional spending on critical minerals in the region amounts to approximately 16–20 million EUR: the Sarytogan Graphite equity stake, two small technical programmes (SECURE CRM and GROW CRM, 3 million EUR each), and a 7.5 million EUR geological data modernisation initiative – less than 1 per cent of the headline figure. Only one Strategic Project under the EU’s Critical Raw Materials Act has been designated in Central Asia – the same Sarytogan graphite explorer, still at feasibility stage. 

On the other side of the ledger, China imported 70 per cent of all critical raw materials extracted from Central Asia in 2024. Chinese companies manage roughly 25 CRM projects in the region. EU-linked projects number approximately five.

The numbers fail to capture the structural problem. Even where the EU secures mining agreements, the midstream processing capacity to convert ore into usable refined materials sits overwhelmingly in China. Europe faces a ‘full-chain dependency’ – reliant on China not only for raw materials but for the intermediate processing steps, without which downstream manufacturing cannot function. In Central Asia, this dependency is nearly total: 100 per cent of Kazakhstan’s rare earth exports went to China in both 2023 and 2024. 78 per cent of Tajikistan’s antimony (a mineral China restricted for export in September 2024) goes to Chinese processors, with firms like Tibet Huayu Mining holding major stakes in Tajik joint ventures. Central Asia still lacks meaningful rare-earth separation and refining capacity, and Brussels finds itself trapped in an unenviable cycle – lack of supply obstructs processing investment, which in turn reduces the impetus to secure supply.

Astan’s recent decision on nuclear power illustrates where this logic leads. In June 2025, Kazakhstan selected Rosatom for its first nuclear power plant, two reactors, estimated at 14–15 billion USD, and the China National Nuclear Corporation (CNNC) for the second and third. Électricité de France (EDF) remained on the shortlist to the end but ultimately lost out. Financing drove the outcome: CNNC offered state-backed loans and turnkey packages, while EDF carried the reputational burden of Flamanville – 12 years overdue, its budget quadrupled.

Financing the infrastructure captures the value chain – and when that infrastructure runs on carbon-intensive fuel in a jurisdiction with an average explicit carbon price of 0.41 EUR per tonne, the question of who sets the regulatory terms takes on a different kind of urgency.

When Regulation Becomes Strategy

CBAM entered its definitive phase on 1 January, 2026. Importers of steel, aluminium, cement, fertilisers, electricity, and hydrogen must now purchase CBAM certificates calibrated to the embedded emissions of their products. Free EU Emissions Trading System (ETS) allowances phase out from 97.5 per cent in 2026 to zero by 2034, but, critically, all emissions above the EU benchmark are fully charged from day one. At EU ETS prices of approximately 67–80 EUR per tonne in early 2026, the average unweighted carbon price in Central Asia at 0.08 EUR per tonne means virtually no CBAM deduction applies. The differential is roughly 73 EUR per tonne. Carbon-intensive Central Asian goods enter the EU carrying nearly the whole of it as cost.

Return to Kazakhstan’s East Hope aluminium complex. The project, which explicitly targets EU, Central Asian, and Chinese export markets, is powered by a 4.5 GW coal-fired plant. Coal-powered aluminium smelting produces roughly 16–20 tonnes of CO₂ per tonne of aluminium. CBAM does not yet price that full footprint; it currently exempts the electricity emissions that make coal-powered smelting carbon-intensive, so today's charge is modest. But the exposure is built into the design: were that exemption to close, a live question under the EU's own review, a mature rate above 100 EUR per tonne would add well over 1,000 EUR to each tonne of EU-bound metal, against a Chinese smelter margin near 600 EUR through 2025. A charge of that size does not trim the EU-bound tonne; it erases the margin and pushes the sale into the red. A coal-fired smelter is a multi-decade asset, and the capital underwriting it discounts the regulatory trajectory, not the spot rule. A plant whose EU-bound economics depend on an exemption the issuer has flagged for review is exposed in a way Kazakh exports to China simply are not.

Serbia offers a proof of concept for where this leads. HBIS Group, a Chinese steelmaker, acquired Serbia’s failing Smederevo plant in 2016 for 46 million EUR, ramped production to roughly two million tonnes, and pays 8,000 EUR annually in ecological taxes. Serbia now accounts for 15 per cent of all CBAM-related imports to the EU. Belgrade responded by introducing a 4 EUR per tonne carbon tax in January 2026 – a fraction of the EU's price, but aimed at recapturing revenue rather than relieving producers: because CBAM credits carbon already paid at origin, every euro it levies is one subtracted from the EU bill rather than paid to Brussels. 

The deeper tension is structural. Kazakhstan demonstrates how Central Asia at large is caught between two regulatory gravitational fields. Aligning with the EU – raising its carbon price, reforming an emissions trading system that has been suspended since 2022, and distributing all allowances free – would preserve market access for 389 million USD in CBAM-covered exports but risks deterring the 27 billion USD in Chinese carbon-intensive investment flowing into the country, investment that depends on the low-regulation environment. Foregoing reform keeps Chinese capital flowing but pushes EU-bound exports into escalating costs.

The rational calculus for Central Asian governments may be to accept CBAM costs on the EU-bound slice while maintaining the regulatory permissiveness that attracts Chinese capital for everything else. The regulatory divide not only determines what Central Asia produces. It shapes the transport infrastructure through which those products reach the world.

One Corridor, Two Agendas

The Trans-Caspian corridor is one of the few infrastructure projects that both Brussels and Beijing actively want built – though for fundamentally opposing strategic reasons. The EU sees it as a de-risking route away from Russian transit and a supply line for Central Asian minerals; China sees it as BRI expansion. Cargo volumes surged sevenfold from 2021 to 2024, reaching 4.5 million tonnes. But the containerised segment, the fastest-growing portion, is 63 per cent Chinese transit cargo. The EU is financing a corridor that, in its current form, primarily serves Chinese trade flows.

The EU committed 3 billion EUR for transport at Samarkand. But the corridor’s most consequential recent development came from Beijing, not Brussels. The China–Kyrgyzstan–Uzbekistan (CKU) railway has been formally institutionalised as the corridor’s ‘southern branch,’ with a pilot freight run from Kashgar to Azerbaijan completed in October 2025. China’s China Communications Construction Company (CCCC) was also selected to build the corridor’s critical western terminus at Anaklia in Georgia – though the contract remains unsigned after 21 months. Even at the level of connectivity – where the EU pledges funding and negotiates conditions, Chinese firms pour concrete and lay track. 

The corridor also carries CBAM-covered products – ferrochrome, aluminium, steel, fertilisers. As CBAM raises the landed cost of carbon-intensive Central Asian goods in Europe, the commercial logic of routing westward weakens relative to eastward routes towards China, which imposes no carbon surcharge. No published study has modelled this directional impact, but the inference is straightforward: the EU is simultaneously building the highway and toll-gating the trucks. Over time, a corridor designed to connect Central Asia to European markets may increasingly function as a feeder route towards Chinese ones.

Central Asian governments understand this dynamic. They extracted a 12 billion EUR EU package at Samarkand while simultaneously deepening infrastructure integration with Beijing through the CKU and a Treaty of Friendship. The region’s leverage comes from the fact that both Brussels and Beijing need Central Asian cooperation; for minerals, for transit, for market access – and neither can offer what the other provides. 

Between Brussels and Beijing

The EU and China are not competing on the same terms in Central Asia – not in investment speed, not in mineral processing, not in regulatory frameworks. China's advantages are concrete and immediate: capital at scale, integrated supply chains, and no conditions. The EU's offerings are structural and conditional: market access, institutional standards, a carbon border mechanism that works only if regional partners value what Brussels could offer more than what Beijing provides without asking.

Brussels' barrier to competitiveness in Central Asia is not any single policy gap – it is how each one compounds the others. Investment pledges lack implementation speed. Mineral partnerships lack the processing infrastructure, and without it, ore flows to China regardless of what Europe commits to at summits. Paradoxically, CBAM may redirect trade away from the very corridor the EU is financing westward. These are not three separate shortcomings. They are one strategic contradiction; an individually sound toolkit that is, ultimately, collectively misaligned – each instrument undercutting the conditions the others require.

Multi-vector diplomacy works only so long as multiple vectors exist. If 2.5 billion EUR in mineral pledges yields 16–20 million EUR in spending, if the corridor Brussels finances increasingly carries Chinese cargo while CBAM toll-gates the trucks, Central Asian governments will orient toward partners who deliver.

The views expressed in this article belong to the author(s) alone and do not necessarily reflect those of European Guanxi.

ABOUT THE AUTHOR

Alexei Hoffman holds a Master of Asian Studies from Georgetown University’s Walsh School of Foreign Service, with concentrations in International Political Economy and Transnational Issues, and a J.D. from Georgia State University College of Law. A first-generation American of Russian and Kazakh descent with fluency in Russian and Mandarin, his research examines infrastructure, resource governance, and security constraints across Eurasia.

This article was edited by Rory O’Conner and Mateusz Tokarz.

Featured Image: European Council President Antonio Costa meets with Tajikistan President Emomali Rahmon on the sidelines of the EU-Central Asia Summit on April 4, 2025 / First EU-Central Asia summit / European Union, 1998 – 2026 via Wikimedia Commons