In the early years of its independence, Azerbaijan’s foreign policy was predominantly Western-oriented, leaving its relations with Asia, especially China, in the background. Although China was not a major focus for Azerbaijan at the time, recent years have seen a growth in cooperation between the two countries in various sectors, including social, cultural, economic, and strategic military partnerships. In particular, since the launch of China’s Belt and Road Initiative in 2013, economic ties between the two nations have entered a new phase. Under this framework, intergovernmental agreements were signed in 2015 and 2019, further solidifying commercial relations. Additionally, on August 20, 2024, Azerbaijan officially applied for membership in BRICS, an organization where China is a founding member. Azerbaijan also signed a joint declaration with China during the 2024 Shanghai Cooperation Organization (SCO) summit in Astana, establishing a strategic partnership. Furthermore, Azerbaijan has applied to upgrade its partnership status from dialogue partner to observer within the SCO, where it has held dialogue status for the past eight years.
In the context of developing mutual investment relations, the two countries have collaborated on various economic projects in non-oil sectors such as industry, agriculture, trade, tourism, ICT, transit, logistics, high technology, and machine building. According to recent statistics, 119 Chinese companies operate in Azerbaijan, with Beijing investing over 800 million USD. Conversely, Azerbaijan has invested 1.7 billion USD in China. Before the COVID-19 pandemic, former Minister of Economy Shahin Mustafayev, who co-chaired the Azerbaijan-China Intergovernmental Trade and Economic Cooperation Commission from 2016 to 2019, frequently made business trips to China to expand bilateral trade. To facilitate exports to China, Azerbaijan’s Trade Representative Office was established under its embassy in China in 2017, making China the second country, after Russia, where Azerbaijan opened such an office.
The volume and scope of investments between the two countries have also increased over the past decade. Azerbaijan’s State Oil Fund (SOFAZ), which invests in real estate markets worldwide, has taken a different approach in China, focusing on the country’s securities market. In 2014, SOFAZ entered China’s stock market, acquiring a license from the People’s Bank of China to invest 3 billion yuan (over 700 million AZN) as part of its diversification policy. Since 2015, SOFAZ has invested approximately 500 million USD in yuan-denominated bonds. Although a 2013 trip was organized by SOFAZ representatives to explore real estate investment opportunities in China, no property purchases have been made to date.
While Azerbaijan’s main exports to China consist of crude oil and petrochemical products, the export of food products has significantly increased in recent years. These include nearly 50 types of local food items, such as fruit juices, compotes, jams, alcoholic beverages, pickles, confectioneries, tea, wine varieties, and eggplant caviar. In addition, Azerbaijan has made efforts to establish a presence in China’s wine and spirits market. The country currently operates three Wine Houses in China, with locations in Shanghai and Urumqi. Notably, China was the first country where Azerbaijan opened a Wine House abroad. Since early 2019, Azerbaijani wines have been sold in the Chinese “BHG” supermarket chain.
Additionally, Azerbaijani food products have been made available in China’s “DIG” supermarket chain. With support from Azerbaijan’s Trade Representative Office in Beijing, Trade Houses were opened in Chengdu (2024), Xi’an (2019), Qingdao (2021), and Zhangjiajie (2021). These Trade Houses promote and distribute Azerbaijani food products under the “Made in Azerbaijan” brand to Chinese consumers. Apart from these centers, Azerbaijan also operates four trade departments in major Chinese cities, including Shanghai, Harbin, Jinan, and Wuhan, aimed at expanding economic and tourism connections with different regions of China.
It is worth noting that Azerbaijan’s first export mission to China took place in early 2019, organized by AZPROMO with the support of the Ministry of Economy. Sixteen Azerbaijani companies in the food, wine, and spirits industries participated in this mission, which visited Beijing, Shanghai, Hong Kong, Guangzhou, and Urumqi. Azerbaijani companies have also regularly participated in international exhibitions and forums in China, showcasing hundreds of local products.
In 2018, AZPROMO signed a Memorandum of Understanding with China’s “Greenland Zhongxuan” International Trade Company to foster economic and trade cooperation. This company has reached agreements with “Azersun Holding” and “Sharq Ulduzu” to export products worth 2 million USD and 1 million USD, respectively, to China. Additionally, AZPROMO and Shanghai Jizhi Investment Management signed a contract to lease a pavilion at the “Greenland Global” Trade Center in Shanghai. Furthermore, negotiations are ongoing to open another trade department in Jinan’s “G-Hub” trade center to promote and sell Azerbaijani products.
Despite the popularity of Iranian and Turkish carpets in China, Azerbaijani carpets are also gaining traction, with their availability in Beijing’s “SKP Mall.”
In conclusion, the opening of Azerbaijani Trade Houses in several of China’s major metropolises aims to increase trade turnover, strengthen cooperation in promising sectors, and attract foreign investment to Azerbaijan. Azerbaijan holds significant potential to increase food and agricultural exports to one of the world’s largest consumer markets—China. Additionally, by diverting a portion of agricultural exports currently directed to Russia toward China, Azerbaijan can reduce its reliance on its northern neighbor. Although geographically distant, advances in transportation technology and intercontinental transit-logistics networks have made the delivery of food products to China much more accessible. Furthermore, Azerbaijan and China continue to enhance cooperation in international transportation and logistics infrastructure, particularly by leveraging the potential of the Trans-Caspian International Transport Route, which has gained increased geoeconomic significance since the onset of the Russia-Ukraine war. This will likely strengthen commercial ties in the near and medium-term future.
Vusal Guliyev is the Head of the Shanghai Office at AZEGLOB Consulting Group, a Policy Expert at the Topchubashov Center, and an Associate Research Fellow at the China Studies Center at Khazar University. He is a graduate of Shanghai International Studies University.
