CPR surveyed Chinese investors from August to October 2023 in Chinese on popular online platforms WenJuan.com and WeChat about their perceptions of the investment environment in Uzbekistan, as the country has undertaken significant economic and social reforms to enhance growth and attract FDI. The survey involved 48 investors who were already engaged with Uzbekistan.
Key reforms in Uzbekistan include liberalizing the foreign currency market and establishing special economic zones with tax incentives for investors. The government has modernized legislation to streamline interactions between investors and the state, reduce the tax burden, and initiate the privatization of major state-owned enterprises.
Chinese Investment Trends
From 2017 to 2022, Chinese investors have shown consistent interest in Uzbekistan, injecting approximately $11bn across various sectors. Notable areas of investment include agriculture, construction, water management, electricity, textiles, mechanical engineering, and transport. Presently, 2,141 enterprises operate with Chinese investments, with prominent companies like Huawei, ZTE, and Sinotruk leading the way.
Survey Insights: Investor Perceptions
A survey conducted by the Center for Progressive Reforms sheds light on Chinese investors' perspectives on Uzbekistan's investment climate. Investors are primarily drawn to Uzbekistan's abundant natural resources, socio-economic reforms, political stability, and geographical proximity to China. Investment sectors predominantly favored by Chinese investors include construction, manufacturing, agriculture, ICT, tourism, and energy.
Challenges and Recommendations
Despite the favorable investment climate, Chinese investors face several obstacles in Uzbekistan. These include underdeveloped infrastructure, cultural adaptation challenges, limited government support, workforce qualifications, and language barriers. To improve the investment climate and attract more foreign investment, recommendations include enhancing language accessibility, conducting regular investor surveys, and promoting environmental sustainability.
Environmental Sustainability
While environmental concerns may not be a priority for Chinese investors, proactive measures should be taken to ensure environmental sustainability. This could involve implementing stricter regulations, promoting renewable energy, and encouraging sustainable business practices.
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