At the invitation of President Ilham Aliyev of Azerbaijan, Xi Jinping's special representative, member of the Standing Committee of the Political Bureau of the CPC Central Committee, and Vice Premier of the State Council Ding Xuexiang, visited Azerbaijan from [specific dates] to attend the World Leaders' Climate Action Summit and paid a visit to Azerbaijan at the invitation of Azerbaijan's Deputy Prime Minister Shahin Mustafayev.

China-Azerbaijan friendship has a long history, with the ancient Silk Road serving as a bridge for communication and exchange between the two peoples, creating a prosperous history of commerce. Since the establishment of diplomatic relations, the China-Azerbaijan relationship has remained steadfast through storms and challenges, consistently maintaining a healthy and stable development momentum. Especially in recent years, under the personal care and promotion of President Xi Jinping and President Ilham Aliyev, the bilateral relationship has developed steadily, cooperation under the Belt and Road Initiative has deepened, international collaboration has become more intensive, injecting strong momentum into the development of China-Azerbaijan economic and trade relations. The two countries have broad prospects for cooperation in areas such as oil and gas, infrastructure construction, industrial modernization, transportation and logistics, renewable energy, information and communication, agriculture, industrial park construction, high-tech industries, and tourism.

Economic Overview

Azerbaijan is located in the heart of Eurasia, an important country along the ancient Silk Road, and a transportation hub connecting Europe and Asia, boasting unique geographical advantages and a strategically significant position. In recent years, Azerbaijan has gradually shifted towards a diversified economic development model, strengthening the oil and gas sector while vigorously promoting the development of non-oil sectors such as cross-border transportation, renewable energy, processing and manufacturing, digital economy, agriculture, and tourism, achieving positive results.

China-Azerbaijan economic and trade cooperation has withstood the challenges posed by the COVID-19 pandemic and global instability in industrial and supply chains, maintaining a stable development momentum. According to statistics from the State Customs Committee of Azerbaijan, the bilateral trade volume between Azerbaijan and China reached $1.4 billion in the year, a year-on-year increase of 10.8%, with China maintaining its position as Azerbaijan's fourth-largest trading partner and third-largest import source. Entering the post-pandemic era, exchanges in various fields between the two countries have rapidly resumed, with multiple large-scale investment and contracting projects being successively launched and implemented. Meanwhile, the Azerbaijani government is vigorously promoting the construction of liberated areas, actively improving the investment business environment, and proactively increasing efforts to attract investment, creating new opportunities for Chinese enterprises to explore the Azerbaijani market.

Investment Attraction

Azerbaijan's investment appeal primarily stems from its abundant oil and gas resources, an increasingly improved investment environment, sustained growth in market demand, its geographical location connecting Europe and Asia, and its well-developed transportation infrastructure. In recent years, Azerbaijan has accelerated its pursuit of global digital and green development trends, emphasizing new energy development, digital transformation of government affairs, and digital empowerment of traditional industries. Currently, development in these areas is still in its infancy, offering certain investment value.

Azerbaijan views attracting foreign investment as a key driver for economic growth and adopts a proactive and pragmatic approach in international cooperation. Azerbaijan generally grants national treatment to foreign investors, with preferential policies mainly reflected in individual international investment cooperation projects, particularly in major energy projects, large-scale production projects, and long-term contracting/trust management projects. There are no special incentives for small and medium-sized foreign enterprises and individual investors. In recent years, the Azerbaijani government has consciously improved the development environment for small and medium-sized enterprises, formulated policies, and provided incentives to enhance the country's level of innovation and development. According to statistics from the Small and Medium Enterprises Development Agency of Azerbaijan, over the past four years, the number of small and medium-sized enterprises in the country has increased to . million, with a growth rate of %. Among them, the share of small and medium-sized enterprises in non-oil GDP has increased from .% to .%, and their share in non-oil exports has risen from .% to .%.

In the World Bank's annual "Doing Business" report, Azerbaijan ranks 66th, down 4 places compared to the previous year. In the World Intellectual Property Organization's "Global Innovation Index" for 2023, Azerbaijan ranks 70th out of 132 countries and regions, up 4 places from the previous year.