Baku and Beijing strengthen strategic ties with focus on trade, infrastructure, and digital integration - Trade Treasury Payments

Azerbaijan and China are formalising a deeper strategic partnership through a shared commitment to infrastructure-led development, enhanced regional connectivity, and sustained trade growth. The bilateral relationship between the two Asian nations is rooted in a shared history of the Silk Road.

At the 3rd Shusha Global Media Forum in Khankendi, Azerbaijani President Ilham Aliyev described China-Azerbaijan relations as being anchored in mutual trust and multidimensional cooperation. The forum, which focused on media resilience in the age of AI, reaffirmed the political and economic alignment between Baku and Beijing.

Bilateral trade between China and Azerbaijan has accelerated since the 2015 signing of the Memorandum of Understanding on Joint Promotion of the Silk Road Economic Belt. Trade turnover rose  nearly six-fold from $561 million (USD) in 2015 to $3.74 billion in 2024, making China Azerbaijan’s largest source of imports and its fourth-largest overall trade partner.

In July 2024 both countries signed a Joint Declaration on the Establishment of a Strategic Partnership. Less than a year later, during President Aliyev’s April 2025 state visit to China, the partnership was upgraded to a Comprehensive Strategic Partnership, encompassing cooperation across political, economic, security, and cultural domains.

A central pillar of bilateral cooperation is the development of the Trans-Caspian International Transport Route (TITR), a transit corridor that will link China to Europe via Central Asia and the South Caucasus. In October 2023, Azerbaijan, Georgia, and Kazakhstan established a joint venture to streamline freight movement along this route. Establishing such a route is expected to reduce transit times and, more importantly, provide an alternative to the current overland transit pathways through Russia, which have become decreasingly tenable since Russia’s invasion of Ukraine in 2022. Azerbaijan has proposed expanding the “5+1” China-Central Asia dialogue to include itself as a sixth partner.

Adjacent to this, China has been an avid supporter of Azerbaijan’s accession into the WTO, which it first applied to join in 1997. 

Opening trade relations is already creating opportunities for Chinese firms, which are expanding their presence across Azerbaijan’s high-priority sectors. Huawei was an early entrant, and the tech giant’s operations have since been joined by others in telecommunications, infrastructure, and transport. BYD, one of China’s leading electric vehicle manufacturers, is set to launch electric bus production in Azerbaijan later this year and several Chinese firms are participating in renewable energy projects in the country, particularly in wind and solar. As of mid-2025, 298 Chinese-funded firms are active in Azerbaijan, with an additional 77 registered. 

Azerbaijan is also investing into China, having opened multiple trade houses within the Asian Giant to promote non-oil exports and diversify trade flows. To further deepen ties, the two countries have also introduced a reciprocal visa-free regime that is expected to facilitate business travel, educational exchanges, and tourism.