Surrounded by mountains, Kyrgyzstan has many factories, workshops, and machines running continuously. The road network continues to extend, and a number of industrial projects have taken root. The local real economy is welcoming the development vitality brought by foreign investment injection. Relying on its location in the core of Central Asia and the continuous optimization of the domestic business environment, more and more overseas capital is flowing into this inland land, and the pattern of foreign investment sources has also undergone significant changes. The National Statistical Committee of Kyrgyzstan has released an investment related report, which fully presents the latest overview of foreign direct investment in the country and reflects the actual achievements of regional economic and trade exchanges under the framework of joint construction and cooperation.

New changes have emerged in the pattern of foreign investment sources

According to the report statistics, Kyrgyzstan absorbed foreign direct investment of 1.31 billion US dollars in the current period, a year-on-year increase of 27.3%. Chinese investment accounts for 47.5% of the country's total FDI, ranking first among all investment source countries. Russia accounts for 13.9%, ranking second, Kazakhstan accounts for 9.3%, Türkiye accounts for 9.1%, and the Netherlands accounts for 5.4%. Five countries together account for more than 85% of the country's total FDI. The above statistics are based on the total inflow of FDI and only include domestic investment inflows, without deducting the outflow of funds.

The structure of foreign investment sources in the country is undergoing significant adjustments, with the overall FDI scale of the CIS countries decreasing by 25.2%, mainly due to the contraction of investment from Russia, Azerbaijan, and Uzbekistan. Among them, the decline in Russian investment is prominent, with the investment amount dropping from the previous 279.3 million US dollars to about 182 million US dollars, a decrease of 35%. In contrast, investment from China has maintained a strong upward trend, becoming the core driving force behind the overall increase in foreign investment in the country. The fluctuation of funds from traditional investment partners has also prompted Kyrgyzstan to actively promote diversification of investment sources and broaden channels for external capital introduction.

Clear characteristics of industry regional orientation

From an industry perspective, the manufacturing industry has become the sector that attracts the most foreign investment, with a total absorption of 618.8 million US dollars, accounting for 47.2% of the total FDI. The mining industry followed closely behind, attracting 246.3 million US dollars, accounting for 18.8%. Compared to past data, investment in manufacturing has increased by 1.8 times, investment in mining has more than doubled, and investment in finance and insurance has decreased by 21.3%. The rapid expansion of foreign investment in manufacturing and mining industries can help Kyrgyzstan enhance its local processing and manufacturing capabilities, accelerate the development and utilization of domestic resources, and fill the gaps in industrial development. The decline in investment in the financial and insurance sectors is also worthy of attention from all parties.

At the regional level, foreign investment shows a highly concentrated characteristic, with about 86% of foreign investment concentrated in various enterprises in Bishkek, Jalalabad Oblast, and Naryn Oblast. Capital clustering in core economic regions can accelerate industrial agglomeration in key areas, but it also reflects that the attractiveness of some remote areas in China to foreign investment still needs to be improved. Relying on foreign investment landing, some livelihood industry projects in the local area are steadily advancing, and energy, environmental protection, processing and manufacturing projects are bringing employment opportunities to the local area, truly benefiting the lives of ordinary people.

There are still multiple variables for subsequent growth

The positive development trend of foreign investment continues, with Kyrgyzstan achieving FDI inflows of 386.7 million US dollars in the first quarter, an increase of 34% compared to the same period last year. As a Central Asian gateway country connecting markets such as China, Russia, and Kazakhstan, Kyrgyzstan continues to improve its investment conditions. Foreign investment continues to pour into multiple fields of manufacturing, mining, and financial services. Practical cooperation between China and Kyrgyzstan continues to deepen in the process of industrial project implementation. Keywords: Kyrgyzstan, foreign direct investment, China Kyrgyzstan industrial cooperation

The long-term stable inflow of external capital is not only dependent on the willingness of external capital, but also subject to multiple practical constraints. On the one hand, the economic situation of major global investment sources will directly affect the ability to export capital, and on the other hand, the pace of reforms related to the domestic business environment in Kyrgyzstan is an internal key factor determining the attractiveness of foreign investment. In order to stabilize the growth momentum of foreign investment in the future, the country needs to continuously optimize institutional conditions, balance capital allocation in various industries and regions, further unleash its geographical and resource advantages, and seize the development opportunities brought by regional cooperation.Editor/Huang jiali