WORLD RAPPROCHEMENT

Azerbaijan in the post-oil era of its political and economic development is placing great hopes on the development of regional ties and the advantages of its geographic location at the juncture of Asia and Europe. 

In recent years the government in Baku has made significant steps toward strengthening its ties with countries of the Asian Pacific region, receiving observer status at the Shanghai Cooperation Organization (SCO) and acting as a co-founder of the Asian Infrastructure Investment Bank (AIIB), as well as showing interest in China's new initiative, the Silk Road Economic Belt. 

It is becoming clear what new horizons for cooperation are opening up to Azerbaijan after Azerbaijani president Ilham Aliyev's state visit to China on December 8 through 11, at the invitation of Xi Jinping, president of China. 

During the visit president Ilham Aliyev met with the governor of Shaanxi province Lou Qinjian and learned of that region's economic possibilities. The main meetings, however, were held in Beijing, with speaker of parliament Zhang Dejiang, premier of the Chinese state council Li Keqiang and, of course, with Chinese president Xi Jinping.

The centrepiece of these high-level talks were issues of political and economic cooperation between Azerbai-jan and China. At all meetings special emphasis was given to China's support for Azerbaijan's territorial integrity and Azerbaijan's support for the principle of One China. 

For Azerbaijan it is very important that China, one of the world's leading powers and a permanent member of the UN Security Council, takes a just position regarding Azerbaijan's territorial integrity in the context of the Armenian-Azerbaijani conflict over Nagornyy Karabakh . 

As we all know, the activity of the OSCE Minsk Group, which has been regulating the Karabakh conflict for twenty years now, has produced no real results. Lately Baku has expressed particular dissatisfaction that the co-chairs of the OSCE Minsk Group have done practically nothing, limiting their action to visits to the region, after which follow empty declarations about the need to keep the ceasefire. Azerbaijan, on the other hand, looks for new opportunities for a peaceful resolution to the conflict, and within this context Beijing's position, including as it does a UN veto vote, could be a great help.

The position of the Chinese and Azerbaijani administrations was ref-lected in a declaration on the further development and strengthening of friendly relations and cooperation, signed by Aliyev and Xi Jinping. The declaration reiterated the countries' support for the territorial integrity of both countries. 

One more important topic in the talks was economic cooperation as part of China's Silk Road Economic Belt initiative and Azerbaijan's participation in the Shanghai Cooperation Organization and the AIIB. It is worth noting that the potential trade volume between Azerbaijan and China is on a low level. In 2014 China occupied only thirteenth place in a ranking of Azerbaijan's main external trade partners, with a volume of 760 million dollars, which comprised only 2.45 per cent of the Azerbaijan's total external trade. At the meetings president Ilham Aliyev emphasized that Azerbaijan has a favourable geographical location and possesses the infrastructural capacity for the transit of Chinese goods to Turkey - and from there, to Europe. A route through Azerbaijan is the shortest path on the East-West corridor. 

During bilateral talks with Aliyev, Chinese president Xi Jinping stressed that Azerbaijan and China have enormous prospects for increased cooperation in the energy, IT, and financial sectors, among others. He praised Azerbaijan's participation in AIIB, Silk Road Economic Belt, and SCO projects. Pointing out that Azerbaijan is located in the centre of Eurasia, Xi Jinping said that the country has great potential in international transport and logistics and could play an important role in transit between China and Europe. The Azerbaijani president on his part stressed the successful work of Chinese companies in the energy sector and called on China to increase its investments in IT and take advantage of the opportunities offered by technoparks.

Bilateral agreements signed during the visit should help increase cooperation. In total China and Azerbaijan signed ten agreements, include a declaration by the heads of state. These agreements, along with cooperation in education, extradition, and alternative energy, cover promising directions. These include the creation of the Silk Road Economic Belt, perspectives for the economic and transport sectors, and air and rail networks. The legal basis for closer ties and cooperation between Azerbaijan and China was boosted by new agreements.

During his visit to China the president of Azerbaijan also visited two leading Chinese companies which show the potential for cooperation between the two countries. President Aliyev took a tour of the Shaanxi auto factory in the city of Xi'an, which in cooperation with the German automaker MAN produces Sachman trucks, so popular in Azerbaijan in recent years, as well Eurostar Bus vehicles. These vehicles have been sold in more than ninety of the world's countries. 

The Azerbaijani leader also spent some time at the exhibition hall of Huawei, one of the world's leading IT companies. The company's products include equipment for wireless, core, and transport networks, network instruments, optics, routers, network switches, applications, software, terminals, etc.

The experience of China and Chinese companies could help Azerbaijan make breakthroughs in the non-petroleum sectors of its economy. The active investment of Chinese companies supported by the state, especially in Silk Road Economic Belt countries, should lead to significant investments in Azerbaijan. If until now this was limited by an insufficient legal basis, then the agreements and high-level declarations signed during president Aliyev's visit to China will encourage Chinese companies to participate in Azerbaijan's multi-sector technoparks. 

Azerbaijan is also taking advantage of China's economic abilities. In particular, in mid-2014 the State Oil Fund of Azerbaijan began to invest in the yuan after receiving permission to invest up to three billion yuan. Subsequent developments have proven the State Oil Fund's policy correct, since the yuan was recently included in the IMF's basket of reserve currencies, receiving a share of 11 per cent. Its share exceeds that of the pound sterling and the yen and is surpassed only by that of the dollar and euro. 

Overall the Chinese economy plays a very important role in overall trends in the world economy. It is not for nothing that experts recognize China's potential for growth when they model its influence on economic indices such as oil, metal, and gold prices. 

The creation of projects such as the Silk Road Economic Belt, the Asian Infrastructure Investment Bank, and others will strengthen China's influence on the world economy even more. In joining several Chinese ventures, Azerbaijan has picked up on trends in regional development at the right time.

STRAIGHT FROM THE SOURCE 

"For many years China and Azerbaijan have been developing bilateral relations in a spirit of equal rights, mutual benefit, and mutual respect, resolutely supporting one another in issues of vital interest and great concern. Mutual political trust is constantly increasing, while multifaceted cooperation consistently deepens. Together with you, Mister President, I am ready to enhance working relations in order to preserve the consistently dynamic development of bilateral relations."

Ji Xinping, president of the People's Republic of China

"We want to foster relations, develop political dialogue, and continue to actively work together within international organizations and develop economic ties. We in Azerbaijan appreciate your initiative to create the Silk Road Economic Belt." 

Ilham Aliyev, president of Azerbaijan