April 21, 2011 / 2:20 PM / 7 years ago

Uzbekistan says signs China deals worth $5 bln

* Chinese banks to lend $1.5 bln - Uzbek state media

* Deal signed on gas pipeline spur

* China to invest in fertilisers, tyres, telecoms

ALMATY, April 21 (Reuters) - Uzbekistan and China signed investment deals worth more than $5 billion and agreed to expand natural gas supplies during a visit by President Islam Karimov to Beijing this week, Uzbek state media reported on Thursday. Leading Chinese banks agreed to open credit lines worth $1.5 billion to four Uzbek banks to help implement various investment projects in Central Asia’s most populous republic, the UzA state news agency reported, without naming the banks involved.

The two countries also agreed to construct the Uzbek spur of the Central Asia-China natural gas pipeline, which will allow Uzbekistan to supply an extra 25 billion cubic metres annually to China, the agency reported on its website, www.uza.uz.

It gave no additional details about the gas pipeline deal.

The spur will connect to the Central Asia-China pipeline, which began pumping gas from neighbouring Turkmenistan in late 2009 and snakes nearly 2,000 km (1,250 miles) through Uzbekistan and Kazakhstan to reach China’s northwestern Xinjiang region.

China, which shares a 2,800-km (1,740-mile) border with Central Asia, has invested billions of dollars in recent years to carve out a substantial share of the former Soviet region’s vast reserves of oil, gas and industrial metals.

Its diplomatic influence in the region is also growing, particularly as authoritarian Central Asian leaders use China’s wealth and hunger for resources as a counterweight to Western and Russian influence.

Karimov, Uzbekistan’s 73-year-old president, has ruled his republic of 28 million people since Soviet times, brooking no dissent to his rule. Rights groups and foreign journalists are routinely denied accreditation to work in the country.

Uzbekistan supplies a range of raw materials to China, including natural gas, uranium concentrate, precious and rare earth metals, cotton fibre and fertilisers, the UzA agency said in a report on Karimov’s visit on April 19-20.

Bilateral trade between China and Uzbekistan had more than quadrupled in the last five years, it reported, without revealing exact figures.

The report also made reference to a bilateral currency swap, first announced on Apr. 19 by China’s central bank. The People’s Bank of China said the 700 million yuan deal was aimed at boosting trade between the two countries. [ID:nB9E7EN02P]

In addition to gaining access to Uzbek raw materials, China also agreed to invest in several industrial projects in the Central Asian state, UzA reported.

These projects include the expansion of a potash fertiliser plant in the city of Dekhkanabad, production of tyres for cars and farm vehicles and joint investment projects with Chinese telecommunications firms Huawei Technologies [HWT.UL] and ZTE Corp (0763.HK) (000063.SZ). (Reporting by Robin Paxton; Editing by Toby Chopra )

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