Where the U.S. can compete with China in Central Asia
Central Asia’s growing importance to global supply chains is opening new areas of strategic competition.
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- China holds a strong advantage in Central Asia’s mature resource sectors
- Critical minerals offer openings for U.S. engagement
- Washington’s long-term influence will depend on consistency
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The accelerating search for resilient supply chains, critical minerals and new transportation corridors has renewed international attention on Central Asia. Long viewed in the West primarily through the prism of Russian influence, counterterrorism and regional security, Central Asia is increasingly recognized for its abundant energy resources, critical and industrial minerals, as well as its strategic position linking Europe, East Asia and the Middle East.
Russia’s full-scale invasion of Ukraine, intensifying United States-China strategic competition and growing concerns over economic security, industrial competitiveness and technological resilience have further reinforced Central Asia’s geoeconomic importance.
Chinese and American models of geoeconomic statecraft
China and the U.S. compete within Central Asia’s strategic-resource ecosystems from markedly different starting points. Over more than two decades, Beijing has steadily integrated infrastructure, industrial investment, logistics, financing and long-term commercial relationships into increasingly established strategic resource ecosystems across the region.
Washington, by contrast, has only recently accelerated its engagement and remains in the relatively early stages of building the institutional, financial and commercial foundations needed to support integrated strategic resource development. These differences reflect not only the maturity of each country’s regional engagement but also fundamentally different conceptions of geoeconomic statecraft.
Growing concerns over supply chain resilience, critical minerals, advanced manufacturing and strategic competition with China have reshaped U.S. geoeconomic strategy. Economic security has become increasingly linked to industrial capacity, technological leadership and secure supply chains, prompting Washington to play a more active role in supporting commercially sustainable strategic-resource sectors.
China’s approach is rooted in long-term industrial planning and whole-of-state coordination. It integrates extraction, processing, infrastructure, logistics and market access into coordinated production systems that connect overseas resource development with domestic industrial upgrading, technological leadership and long-term economic security. This model has been reinforced through successive Five-Year Plans and industrial strategies promoting technological self-reliance, advanced manufacturing and artificial intelligence.
Rather than replicating China’s vertically integrated model, the U.S. seeks to diversify supply chains and create commercially viable alternatives to strategic dependencies. It mobilizes development finance, private capital, technological capabilities and strategic partnerships through a network of U.S. public institutions, development banks and private investors.
Institutions like the U.S. International Development Finance Corporation, the Export-Import Bank of the U.S. (EXIM) and the U.S. Trade and Development Agency, working alongside the World Bank Group, the European Bank for Reconstruction and Development and private investors, reduce investment risk, mobilize capital and support industrial development.
Bilateral strategic partnerships, the C5+1 platform, critical minerals partnerships, economic dialogues and transport corridor initiatives complement this architecture by advancing cooperation across investment, technology, energy, infrastructure and security. Although these institutions have become increasingly coherent, implementation remains structured around bilateral initiatives, project-specific financing and institutional partnerships rather than holistic regional frameworks.
The proposed $1.1 billion tungsten project in Kazakhstan exemplifies this approach. With potential EXIM financing of up to $900 million, the project would integrate mineral development, domestic processing, public finance and long-term commercial partnerships within a single investment umbrella. Rather than securing access to individual resources alone, the project demonstrates how U.S. engagement seeks to develop commercially viable initiatives that integrate extraction, processing, financing and industrial cooperation.
The evolution of the U.S. geoeconomic toolkit, however, has outpaced the broader policy framework supporting it. Trade relations with Kazakhstan, Uzbekistan, Tajikistan, Turkmenistan and Azerbaijan remain subject to annual presidential waivers under the Jackson-Vanik amendment. Although successive administrations have sought to deepen strategic and economic engagement with the region, and the secretary of state has recently called on Congress to repeal these provisions for the Central Asian states, American lawmakers have yet to align the legislative framework with evolving strategic priorities.
The Cold War legacy of Jackson-Vanik
The Jackson-Vanik amendment was adopted in 1974 to restrict U.S. trade with non-market economies that limited emigration, particularly targeting the Soviet Union’s restrictions on Jewish emigration. Its original purpose has long since disappeared, but it still formally applies to Kazakhstan, Uzbekistan, Tajikistan and Turkmenistan. These countries can trade with the U.S. under normal terms through presidential determinations or waivers, but unlike Kyrgyzstan, which was removed from Jackson-Vanik in 2000, they have not received permanent normal trade relations. Bipartisan legislation to change this remains before Congress.
The challenge, however, extends well beyond trade policy. Unlike China’s state-led model, the U.S. approach depends not only on mobilizing capital but also on creating the institutional conditions that enable private investment to operate. Predictable regulatory frameworks, rule of law, transparency, compliance standards and capable public institutions are integral to this model because they shape commercial risk and investment decisions.
For decades, these enabling conditions were strengthened through U.S. development assistance, particularly USAID’s governance, rule-of-law and institutional reform programs. As Washington restructures this development architecture, it will need new mechanisms to sustain these institutional foundations. Otherwise, the U.S. risks expanding its financial toolkit without investing in the governance ecosystems that make commercially viable private investment possible.
Competitive dynamics across sectors
Competitive dynamics across Central Asia are shaped less by resource endowments than by the degree of industrial integration, processing capacity, infrastructure connectivity, financing structures, technological capabilities, institutional development and commercial relationships. Together with the strategic choices of Central Asian governments, these characteristics determine where competing geoeconomic models retain meaningful opportunities to shape long-term development.
Opportunities in Central Asian strategic sectors
Competitive pictureChina has a strong head start in processing, infrastructure, financing and demand, but much of Central Asia’s downstream capacity is still undeveloped.
Main opportunitiesRefining, processing, power supply, transport, technology partnerships, offtake agreements and downstream investment
Competitive pictureNo single actor dominates. China is important, but so are the EU, Turkiye, the U.S., financial institutions and Central Asian states.
Main opportunitiesTransport, logistics, digital infrastructure, industrial development and trade links
Competitive pictureExisting grids, standards and regulation create inertia, but rising demand and the energy transition create new openings.
Main opportunitiesAdvanced transmission, digital grids, regulatory reform, energy security and climate finance
Competitive pictureLong-established technologies and commercial relationships make wholesale realignment difficult.
Main opportunitiesSelected parts of the nuclear fuel cycle, including conversion, enrichment, fuel fabrication, transport and contracts
Competitive picturePipelines, long-term financing and supply agreements have created strong path dependence, especially around the Central Asia-China Gas Pipeline.
Main opportunitiesLimited room for a rival system; competition is mainly over how the existing structure develops
Decades of investment created path dependencies, economies of scale and network effects that make strategic realignment today increasingly difficult. By contrast, sectors that are still developing have access to competing geoeconomic models that can influence future patterns of industrial organization, commercial integration and strategic alignment.
The region’s main strategic-resource sectors fall at different points along this spectrum. Competition remains open in newer sectors, influence is shared in others, while mature sectors are much harder to break into after decades of investment, infrastructure development and established commercial ties.
Critical minerals
The critical minerals sector is most open to new influences, although China is starting from a much stronger position. Central Asia has substantial reserves of copper, chromium, manganese, titanium, tungsten, antimony, beryllium, gallium, rare earth elements and potentially lithium. But competition is increasingly about more than access to the deposits themselves. It is about who processes and refines the minerals, builds the transport links and ultimately connects them to strategically important industries.
China enters this competition with a substantial structural advantage derived from its processing capacity, industrial coordination, infrastructure, financing and long-term commercial demand. The principal opportunity for the U.S. and its partners is that much of Central Asia’s downstream processing and advanced manufacturing capacity has yet to be developed. Decisions made today on refining capacity, electricity supply, transport infrastructure, technology partnerships, long-term offtake agreements, and downstream industrial investment will determine whether future production is integrated primarily into China-centered value chains or more diversified ones.
Middle Corridor
The Middle Corridor illustrates the same logic at the regional level. Rather than functioning solely as a transport route, it is evolving into a broader regional economic architecture encompassing logistics, ports, digital infrastructure, energy networks, industrial investment, trade facilitation and regulatory coordination. Kazakhstan provides much of the corridor’s eastern freight capacity and mineral potential, Azerbaijan serves as its principal Caspian logistics hub, and Turkiye connects the route to European markets. New initiatives such as the Trans-Caspian International Transport Route Investment Partnership seek to strengthen regional connectivity while complementing existing transport networks. The corridor’s strategic significance lies not in replacing established Russian or Chinese routes but in expanding commercially and politically viable alternatives that enhance regional connectivity, supply-chain resilience and strategic autonomy.
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Unlike the region’s natural gas industry, which is already deeply established, or critical minerals, which are still developing, business in the Middle Corridor remains open to influence from several actors. China plays an important role, but so do the European Union, Turkiye, the U.S., international financial institutions and the Central Asian states. With no single player dominating, the corridor remains an important arena for competition over future trade links, industrial development and economic diversification.
Uranium
Kazakhstan, the world’s largest uranium producer, occupies a position of enduring strategic importance for China, the U.S. and Europe. Yet decades of investment, specialized technologies and the structure of the global nuclear fuel cycle have produced a highly integrated ecosystem with deeply entrenched commercial and technological relationships. Competition therefore focuses on selected segments of the nuclear fuel cycle – including conversion, enrichment, fuel fabrication, transport routes and long-term commercial agreements – rather than reshaping the sector itself.
Electricity
Existing infrastructure, technical standards and regulatory frameworks constrain rapid transformation, while industrial electrification, digitalization, rising electricity demand and the energy transition create new opportunities for investment and strategic partnerships.
Chinese firms retain significant advantages in equipment manufacturing, project delivery and infrastructure finance, whereas Western actors remain competitive in advanced transmission technologies, digital grids, regulatory reform, energy security and climate finance. Rather than producing exclusive dominance, this combination has created a competitive landscape in which influence is distributed across different segments according to distinct comparative advantages.
Natural gas
Long-distance pipelines, long-term supply agreements and integrated export networks have created path dependencies that are costly to reverse. The Central Asia-China Gas Pipeline shows how infrastructure, long-term financing, contracts and established commercial ties can lock in a strategic relationship. In mature sectors like this, competition is less about building an alternative system and more about influencing how the existing one develops.
Scenarios
Most likely: Sustained strategic competition across differentiated ecosystems
The most likely scenario is not strategic dominance by either China or the U.S., but the continued coexistence of competing geoeconomic models across different strategic-resource ecosystems. China is likely to preserve its advantages in sectors where decades of investment have created deeply embedded infrastructure, industrial integration and commercial relationships, reinforced by the geographic proximity of Central Asian resources to China’s extensive processing and manufacturing ecosystem.
Central Asian governments are likely to fortify this pattern through continued multi-vector foreign policies. Rather than aligning exclusively with any major power, they will continue to diversify external partnerships by combining finance, technology, infrastructure and market access from multiple actors to maximize strategic autonomy. Competition will therefore remain differentiated across sectors rather than producing exclusive geoeconomic spheres of influence.
Under this scenario, competition remains significant but manageable. Competitive relevance will depend increasingly on long-term policy consistency, sustained institutional engagement and the capacity to participate in long-term sectoral development rather than on competition for individual projects or resource deposits alone.
Less likely: Eroding U.S. competitive relevance
Under this scenario, the U.S. fails to translate strategic intent into sustained implementation. Although successive administrations continue to recognize Central Asia’s strategic importance, policy continuity weakens, competing global priorities divert attention and engagement remains fragmented rather than systemic. Cooperation with allies, international financial institutions and the private sector continues but lacks the scale, coordination and long-term consistency required to establish a durable presence.
This erosion would occur despite Kazakhstan and Uzbekistan’s continued interest in preserving meaningful U.S. engagement as part of their multi-vector foreign policies. Diversification requires credible partners capable of sustaining long-term investment, infrastructure and technological cooperation. If the U.S. cannot provide that consistency, Central Asian governments will increasingly deepen cooperation with those best positioned to support integrated industrial development.
The U.S. would remain an important diplomatic, technological and economic partner, but no longer a consequential participant in shaping the region’s integrated strategic-resource ecosystems. Its engagement would persist in selected sectors and individual projects even as its broader competitive relevance continued to erode.
Least likely: Geopolitical polarization overrides geoeconomic competition
The most disruptive, though least likely, scenario is one in which broader geopolitical polarization overtakes geoeconomic competition across Central Asia’s strategic-resource ecosystems. Competition would no longer turn primarily on the relative strengths of competing geoeconomic models. Instead, access to markets, technology, finance and infrastructure would increasingly depend on geopolitical alignment within a more fragmented international system.
This scenario remains unlikely because the principal external actors all benefit from regional stability, albeit for different reasons. China relies on stability to sustain long-term economic integration and secure strategic supply chains. Russia’s regional influence has diminished following the war in Ukraine, and its capacity to restore its former regional dominance remains constrained. Even so, Moscow continues to regard Central Asia as a core strategic interest and has little incentive to encourage conditions that would further expand the military, political and economic influence of other external powers in the region.
The U.S. lacks the regional presence to impose bloc politics unilaterally, while Europe, Turkiye and the Gulf states all benefit from diversified partnerships, resilient supply chains and open economic engagement. Together, these overlapping interests create strong incentives to preserve regional stability despite intensifying global competition.
If this scenario materialized, it would most likely be driven not by developments within Central Asia but by a major deterioration in the broader international security environment. A severe crisis in the Indo-Pacific region, escalating U.S.-China confrontation, expanding sanctions regimes, technological decoupling or wider fragmentation of the international economic system could fundamentally alter the logic of regional engagement. Commercial and industrial relationships would increasingly become instruments of national security policy, subordinating economic competitiveness to geopolitical alignment, economic security and coercive statecraft.
Central Asian governments would seek to avoid exclusive alignment. Their ability to sustain this strategy, however, would come under growing pressure as access to technology, finance, infrastructure and markets became increasingly conditioned on geopolitical alignment. Competition would shift from the relative attractiveness of competing geoeconomic models to competition over strategically important infrastructure, transport corridors, technology standards, supply chains and critical-resource networks. Export controls, investment screening, sanctions, technology restrictions and competing regulatory frameworks would increasingly shape the development of Central Asia’s strategic resources.
The result would be a steady narrowing of Central Asia’s strategic autonomy as fragmentation of the international economic system reduces the scope for diversified cooperation.
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