Friday, July 11, 2014

Window on Eurasia: Chinese Covertly Penetrating Kyrgyzstan Economy via Kyrgyz Front Companies

Paul Goble

            Staunton, July 11 – Eight out of ten firms involved in the mining sector in Kyrgyzstan are in fact Chinese enterprises even though they have Kyrgyz names and in nominal positions of authority, according to Kanat Ermatov, director of Kyrgyzstan’s agency for geology and minimal resources.

           On the one hand, this is part of the rapidly expanding Chinese role in the economies of Kyrgyzstan and other Central Asian countries. But on the other, it reflects both local hostility to such Chinese penetration and an effort by Beijing to operate below the radar screen of the local populations and governments.

Ermatov told a Bishkek roundtable yesterday that if one looks at firms in gold mining and other forms of mineral prospecting, one finds that “behind the back of the Kyrgyz” owner are Chinese in 80 percent of the cases. The Kyrgyz “signs the papers and bears responsibility,” but the Chinese have control ( 

One Kyrgyz company official called for a ban on this practice, an appeal that was supported by Kyrgyzstan’s economics minister Adilet Akmataliyev. But Ermatov said he was opposed because such a ban would almost certainly prove “ineffective,” a suggestion that the Chinese would just find another workaround.

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