Uzbek commodity exchange opens branch in Shanghai

The Uzbek Republican Commodity Exchange, or UzEx, the biggest trading platform in Central Asia, has opened a branch in Shanghai, which is set to promote trade between the two countries, said insiders.

The branch, located in the National Exhibition and Convention Center, the venue for the annual China International Import Expo, was launched on Tuesday. It has 10 trading seats and will provide spot transaction to domestic buyers for commodities traded at UzEx, including metals, crude oil products, cotton and construction materials.

Farokhidin Ibragimov, chairman of the board of UzEx, said that the opening of the branch will facilitate mutual access for entrepreneurs and producers to the commodity markets of the two countries according to market mechanisms.

"Shanghai is one of the biggest centers for commodity exchange, and we hope our platform can further strengthen the economic ties between China's coastal cities and Uzbekistan," Ibragimov said at the opening ceremony.

Nabikhon Samatov, director for development of UzEx, said the opening of the branch will soon be followed by a Chinese website of the trading platform, which now has Uzbek, Russian and English language versions. "We are working on a Chinese version," he said.

This is the second branch of UzEx in China. It opened its first branch in Kuitun in the Xinjiang Uygur autonomous region in 2010.

Both branches are operating in partnership with the Xinjiang Asia-Europe International Materials Trading Center, which, besides online auctions, also provides services such as cross-border enquiry, financing and logistics.

Zhang Hongping, chair of the board of the center, said Xinjiang has an important role in China's Silk Road Economic Belt while the Yangtze River Delta is also an important base for the country's 21st Century Maritime Silk Road, and therefore the new branch can serve as a linkage for the Belt and Road Initiative.

An Zhixin, deputy general manager of the center, said UzEx's first trading branch in Kuitun has seen annual trading volume reach around 100 million yuan ($14.7 million) worth of goods in recent years.

The majority of Chinese companies which have demand for raw materials from Central Asia are based in the eastern coastal cities, and the goods that are exported to Central Asia are mainly manufactured in the Yangtze River Delta, and "this is the reason why we have to come to Shanghai", said An.

He said although cotton traded at UzEx's Kuitun branch has a much lower price, it's hard for him to convince buyers, such as big textile manufacturers in Zhejiang province, to come to its office in Xinjiang.

"Although they can commission us to make the transaction, the 3,000-kilometer distance is still a barrier for us to approach potential clients," An added.

Liu Fuxue, deputy director-general of the China International Import Bureau, said the establishment of UzEx's Shanghai branch will bring conveniences to the cooperation between Chinese companies and their counterparts in Central Asia.

"We warmly welcome UzEx to set up their branch in NECC Shanghai, and I believe it will contribute a lot to the second China International Import Expo," said Liu.

Saidkamol Agzamkhodjaev, Uzbek consul-general in Shanghai, also attended the ceremony. He said the China-Uzbekistan trade volume reached $5.7 billion in 2018, and Uzbekistan has declared 2019 as its Year of Active Investments and Social Development.

"Cooperation between Uzbekistan and China has wide prospects, and the opening of UzEx's Shanghai branch is one of the many examples of the development of our comprehensive strategic partnership," Agzamkhodjaev said.