CHINA DECISIVELY BACKS AZERBAIJAN’S EFFORTS FOR MAINTENANCE OF TERRITORIAL INTEGRITY – CHINESE AMB

TREND Information, Azerbaijan
March 30 2006

Interview of Trend with the Extraordinary and Plenipotentiary
Ambassador of China to Azerbaijan, Chan Khaichzhou.

Question: In what spheres would China desire to strengthen the
relationships with Azerbaijan? Are there any changes in the priorities
of cooperation since the moment of opening of the Japanese embassy
in Baku?

Answer: The friendship between China and Azerbaijan has deep roots
dating to ancient time and the Great Silk Route testifies for the
traditional friendship of the two nations. China attaches great
importance to the development of the bilateral relationships with
Azerbaijan. China is one of the first countries which recognized the
independence and sovereignty of Azerbaijan, established diplomatic
relationships with Baku. Since the establishment of the diplomatic
relationships with Azerbaijan in 1992, China has been putting
every effort for the extension of comprehensive relationships and
cooperation on the base of principles of equality, mutual benefits
and mutual respect.

In 1994 Azerbaijani President Heydar Aliyev for the first time paid
an official visit to China. During the visit the two countries signed
a joint statement on bases of friendly relationships between China
and Azerbaijan, as well as over 30 important documents, which laid
firm foundation for the development of bilateral relationships. Over
the past 10 years the Chinese-Azerbaijani relationships have been
deepened. China and Azerbaijan mutually back each other’s sovereignty
and territorial integrity, respect the ways of development their
peoples chose in compliance with their specifics and also support close
consultations and cooperation on important issues in the international
arena. We are friendly partners which can trust in each other.

At present identical realities are being observed in China and
Azerbaijan. Both countries are undergoing the transition period and
face with serious challenges of economic globalization. Both countries
have a heavy task on search of ways of development and achievement
of socio-economic progress and prosperity. Continuous deepening of
relationships and exchange of experience in different spheres meet
both countries’ interests.

As you know in March 2005 Azerbaijani President Ilham Aliyev paid an
official visit to China. He held vary important meetings and talks
with the chairman of the People’s Republic of China, Khu Tzintao.

During the visit both sides signed 13 documents on cooperation in
the sphere of politics, economy, science and engineering, trade,
culture, sports, tourism, etc., which made comprehensive the further
bilateral relationships and gave impetus to continuous cooperation
between China and Azerbaijan. At present the embassies and other
administrations of the two countries do all possible for cooperation,
which constantly deepens the traditional friendship and cooperation
of the two countries.

China pursues independent peaceful foreign policy, policy on
development of friendship and cooperation with all countries on the
base of principles of mutual respect, mutual benefits and mutual
equality. The Chinese-Azerbaijani relationships are also firmly based
on this immutable base

Question: What is China’s position in the issue of resolution of the
Armenian-Azerbaijani conflict over Nagorno-Karabakh?

Answer: Mutual respect and support to the sovereignty and
territorial integrity of each other is the political basis for the
Chinese-Azerbaijani bonds. China decisively supports Azerbaijan’s
efforts directed at maintenance of its sovereignty and territorial
integrity. China approaches with understating Azerbaijan’s concerns in
connection with the Nagorno-Karabakh conflict and sincerely believes
that Azerbaijan and Armenia would be able to resolve the conflict
based on the UN Charter and Principles, as well as UN Security Council
resolutions, and it will finally bring happiness and prosperity to
the people of Azerbaijan, as well as the nations of the region..

As a UN Security Council permanent member, China is ready jointly
with the world community to make a constructive contribution to the
conflict resolution process.

Question: What spheres of Azerbaijani economy are more attractive for
Chinese investors? Are the telecommunications and automobile-building
sectors among them?

Answer: Azerbaijan is an attractive and new market for Chinese
investors. Over the past few years there has been observed boom
in economic growth both in China and Azerbaijan. It opens broad
opportunities for mutually profitable cooperation. The Chinese
government approves and encourages active foreign cooperation of
the national enterprises with the foreign companies. Thanks to this
policy the Chinese businessmen come to Azerbaijan to seek opportunities
for cooperation.

At present the China-Azerbaijan cooperation stepped to a stage of
ordinary commercial relationships, while the amount and scale of
interaction are expanded in the sphere of new technologies, energy,
communications, and service. For instance, Chinese company HUA
WEI presented advanced and economical variants of resolutions in
the project of reconstruction and modification of fixed telephone
networks for Baktelecom and for the first time built Hi-Tec and
premium quality NGN (next generation network) in Baku. The company
introduced new style of thinking in the communitarians and received
approval and recognition by the Azerbaijani counterparts. Over the
last year the volume of consumption of the company’s products in the
Azerbaijani market made up $20m.

Another example is that on 7 March 2006 the South Chinese Air Company
opened its permanent passenger flights Urumchi-Baku, will inevitably
promote closer exchange of experience between China and Azerbaijan.

In 2005 the amount of goods turnover between the two countries made
up $258m, of 40.4% more as compared to 2005. I am sure that further
deepening of mutual understating between the entrepreneurs of the two
countries will reveal new contacts for cooperation and format of mutual
relationships will be further interruptedly expanded and updated.

Question: What is the amount of investing by the Chinese companies
in Azerbaijani company and what are the forecasts for 2006?

Answer: In compliance with the Chinese statistics, the total amount
of capital investing by the Chinese companies in Azerbaijan is $300m.

Chinese enterprises expand their activities on the base of mutual
profits and greatly contribute in the development of the Azerbaijani
economy. Starting from 2002 a daughter company of Chinese Oil and Gas
Corporation in Azerbaijan SNPC started investing in the exploitation
of the onshore oil and gas fields. Azerbaijan’s incomes only from
one facility of ‘K & K’ field comprise $125m. Besides, the company
attracted 900 Azerbaijani citizens to its operations in this country.

The company also spent $460,000 in charity purposes.

I know that capital investing in the amount of $300m is not so big
figure and does not suit the economic development and potential of
cooperation between the countries. As far as I know, the Azerbaijani
government now is planning to establish special economic zone and is
ready to carry out cooperation in the fields of agriculture, science,
engineering, transport, and construction infrastructure.

There is a tendency of progressive growth of economy in Azerbaijan and
I am sure that it attracts more and more investors, including those
from China. I guess they could do more for the economic development
of Azerbaijan.

Question: At present Chinese companies are actively involved in oil
production in Azerbaijan. Are the Chinese investors still interested
in the development of new oil and gas fields in Azerbaijan?

Answer: At present China produces approximately 200 million tons
of crude a year. However, this volume is insufficient for rapid
development of the country’s economy. Azerbaijan possesses rich
oil and gas reserves. The energy cooperation between China and
Azerbaijan meets both countries’ interests, which is the positive
aspect for maintenance of bilateral cooperation. At present big and
influential oil and companies of China, as SNPC and SINOPEC, which
possess high-technological level set up business in Azerbaijan.

To speak frankly, the volume of cooperation is not sufficient for
the time being. China is keen on expansion of cooperation and its
further deepening. We hope very much to see the cooperation in the
energy sector to be in speedy progress.