As Central Asia is drawn more and more into China’s orbit, Beijing is emerging not as a source of strain but as a critical stabilising factor in the region. As was highlighted in the World Bank’s International Debt Report (IDR) published in December 2025, concentrated borrowing can heighten risk if funds are poorly deployed. At the same time, however, the IDR also underlines the long-realised reality that debt can underpin long-term growth when channelled into productive infrastructure. China to this end has positioned itself as the principal provider of that capital across much of Central Asia.

Through the Export-Import Bank of China and financing linked to the Belt and Road Initiative, Beijing has become the leading bilateral creditor to several governments in the region. Rather than short-term budget support though, Chinese lending has largely focused on tangible assets such as highways linking remote regions, modernised rail corridors where limited rail infrastructure previously existed and upgraded power plants linked to cross-border pipelines. These projects address both chronic infrastructure gaps that have constrained trade, energy security and industrial expansion since independence, and China’s ability to see the potential long-term benefits to Beijing large-scale investment will eventually bring.

In countries such as Kyrgyzstan and Tajikistan, Chinese-backed projects have improved transport connectivity and reduced electricity shortages while at the same time laying the groundwork for broader private-sector activity. By aligning such infrastructure development with regional trade corridors, Beijing has also helped integrate landlocked economies more closely into existing and developing Eurasian supply chains.

Crucially China’s approach in Central Asia differs from that of Russia, whose historic influence in the region has focussed on security ties, remittances from distant outposts and the energy trade. While those links remain important, Moscow’s continued ability to provide such large-scale development finance is now very limited, especially with a war to fund and sanctions to counter. Beijing, by contrast, has continued to deploy capital and technical expertise at scale.

Because of this, as refinancing pressures build across emerging markets, across Asia, China’s role as a long-term creditor to its western neighbours gives it both responsibility and influence. For Central Asia meanwhile, the partnership offers access to funding that might otherwise be scarce, in addition to infrastructure development programmes that support growth and prosperity. If managed prudently - by both sides - this deepening financial relationship will in time serve as a platform for greater economic resilience, albeit at a cost that will only be felt in the coming years, and even decades for Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.

Kyrgyzstan: exposure to a single creditor

Kyrgyzstan’s external public debt at the end of 2025 stood at roughly 55-60% of GDP according to The Diplomat. A substantial portion of this is owed to China’s Exim Bank, making Beijing by far its largest bilateral lender. As such, debt service already absorbs about 18-22% of government revenues, a level that narrows fiscal space for wider social spending and infrastructure. Subsequently, with much of the debt denominated in foreign currency, any depreciation of the local currency, the ‘som’ raises repayment costs in local terms, increasing sensitivity to both global interest rates and China’s refinancing terms.

The concentration risk for Bishkek is therefore acute. Unlike multilateral lending, Chinese loans are often tied to specific infrastructure projects in Kyrgyzstan, thereby reinforcing Beijing’s economic footprint in transport, energy and construction.

Default on these debts could see Kyrgyzstan infrastructure go the way of Hambantota Port in Sri Lanka and the Laotian grid system sooner rather than later – both facilities now largely under Chinese control after Beijing’s “debt‑trap diplomacy” came into play.

Tajikistan: majority owed to China

Tajikistan is a nation even more exposed with external public debt close to 50% of GDP, but more than half owed to China, The Diplomat says. In addition to bilateral loans, Dushanbe issued a $500mn Eurobond in 2017. According to the World Bank, the 10‑year sovereign bond was priced at a 7.125 % coupon rate and marked Tajikistan’s first international bond issuance to finance the Rogun hydropower project, but in the process introducing commercial refinancing risk in the early 2030s. Debt service already consumes about 20% of fiscal revenues and is expected to rise.

China’s financing has in this manner underpinned roads, power infrastructure and mining projects across the country. Yet the concentration leaves Tajikistan vulnerable to currency swings and to shifts in Beijing’s own geopolitcal priorities. As a result, in relative terms, Tajikistan now ranks among the most China-dependent economies in the former Soviet space.

Uzbekistan: diversified, but still China central

Across Tajikistan’s western border, Uzbekistan’s own publicly guaranteed external debt has climbed from about 8% of GDP in 2017 to roughly 36-40% the same report adds. Tashkent has borrowed widely from multilateral institutions and tapped international bond markets, but China, as with other Central Asian states, remains a key bilateral partner. This is most evident in the energy, chemicals and transportation sectors. However, while Uzbekistan’s creditor base is to a degree, more diversified than its neighbours’, Chinese banks and state-backed firms are deeply embedded in strategic sectors which only reinforces Beijing’s structural influence.

As grace periods expire later this decade, amortisation payments will come into play with repayments rising sharply - something rarely reported on. How Uzbekistan responds when this happens will be closely watched in the Chinese capital.

Kazakhstan, Turkmenistan: opaque but indirect exposure

Also highlighted by The Diplomat is Kazakhstan’s public external debt. While in a much better state and remaining below 25% of GDP as Astana retains considerable access to international capital markets, large state-owned enterprises carry significant external liabilities, including to Chinese lenders, particularly in oil, gas and transport. These contingent liabilities could in time migrate onto the sovereign balance sheet in a downturn if not effectively managed.

Then there is Turkmenistan which for now presents the most difficult to read case regarding Chinese influence in either political or financial circles. Official data are limited, but substantial borrowing is understood to have financed gas infrastructure and pipelines linked to China as the country’s principal buyer of gas. For this reason, repayment capacity is closely tied to hydrocarbon exports to the all-important Chinese market, and this increases economic dependence even if official debt figures remain hard to source.

Across the region though, debt service is rising faster than GDP and government revenues, and a larger share of budgets is being directed towards repayment to China. This is then seeing trade-offs intensify between servicing Chinese loans and funding healthcare, education and climate adaptation.

Consequently, while Beijing’s role has unquestionably delivered tangible infrastructure gains, there is a growing reliance on a single creditor – China – which in turn heightens refinancing, governance and geopolitical risks. For Kyrgyzstan and Tajikistan in particular, China is no longer a development partner but the central pillar of external financing and likely future financial policy decisions. How and if Kazakhstan, Turkmenistan and Uzbekistan avoid falling into the same long-term Chinese debt-diplomacy traps being set is to be seen.

But for nations so closely intertwined with China’s balance sheet, the end result is rarely as pleasant as is first promised – just ask Sri Lanka and Laos.