The Sary-Tash Logistics Center Near the Chinese Border: Up to $100 Million in Investment Planned

On Sept. 10, 2026, Kyrgyzstan's National Investment Agency and the local company Textile Trans signed a memorandum on establishing the Sary-Tash international transport and logistics center. The project envisions attracting up to $100 million in investment.

Why the location matters

The village of Sary-Tash is located in the Alay Valley of the Osh region in the country's south. It lies roughly 70 kilometers from the Irkeshtam crossing on the Chinese border and sits on the Osh–Sary-Tash–Irkeshtam highway.

This point has historically been a junction of trade routes running through the Pamirs and the Alay. In present conditions, it sits at the start of one of the main overland routes into Central Asia from China.

What the project includes

• Warehouse and transshipment facilities
• A customs services complex
• A digital cargo tracking system
• A textile manufacturing cluster

In terms of routing, the center is intended to handle cargo on the China–Kyrgyzstan–Uzbekistan–Afghanistan corridor. The possibility of later access to Pakistani ports is also under consideration.

The link to the Pakistan route

Eight days before the memorandum was signed, on Sept. 2, Kyrgyzstan and Pakistan signed a transit trade agreement in Bishkek. That document is aimed at expanding Kyrgyzstan's access to the ports of Karachi, Bin Qasim and Gwadar.

Together, the two documents express a single logic: Kyrgyzstan has no access to the sea and is therefore seeking to expand transit options in the southern direction.

Other projects on the China route

Several transport projects involving China have been advanced in the region in recent years. The largest is the China–Kyrgyzstan–Uzbekistan railway, with official agreements on its construction signed in 2024. The Sary-Tash center is oriented toward road freight flows and is a separate initiative from the railway project.

The economic backdrop

Kyrgyzstan's economy grew 11.1 percent in the first seven months of 2026. Growth was driven mainly by increased investment volumes and domestic consumer demand. At the same time, annual inflation remains above 11 percent.

Textiles are one of Kyrgyzstan's main export-oriented industries. The inclusion of a textile cluster in the project points to an aim of combining flows of raw materials and finished goods at a single logistics hub.

What has not yet been determined

The signed document has the status of a memorandum — that is, it records intentions but does not establish financing commitments. The composition of investors, construction stages and commissioning timelines have not been announced.

The Irkeshtam crossing

Irkeshtam is one of the two main road crossing points between Kyrgyzstan and China's Xinjiang Uyghur Autonomous Region (the other being Torugart). It sits at an elevation of more than 3,000 meters, and weather conditions significantly affect traffic in winter.

Work has been carried out in recent years to increase the crossing's capacity, but queues recur periodically as cargo volumes grow. The logistics center is aimed at smoothing the flow by consolidating and redistributing cargo at precisely this point.

The China–Kyrgyzstan–Uzbekistan railway

The largest transport project in the region is the China–Kyrgyzstan–Uzbekistan railway. It was discussed for many years, and official agreements were signed in 2024. The project envisions creating an alternative route from China through Central Asia to the Middle East and Europe.

The Sary-Tash center is oriented toward road transport and is a separate initiative from the railway project. In practice the two projects may complement each other: rail for large-volume cargo, road transport for smaller consignments and the “last mile.”

The textile cluster

The inclusion of a textile manufacturing cluster in the project is noteworthy. Kyrgyzstan's textile industry has become export-oriented over the past decade; its main markets are Russia and Kazakhstan.

The industry's weak point is that most raw materials and fabrics are imported. Establishing a manufacturing cluster near the Chinese border may be aimed at reducing import logistics costs.

The Alay Valley

Sary-Tash lies in the Alay Valley at the foot of the Pamir mountains. The area is engaged mainly in livestock herding and has a low population density. Building a large logistics facility in such an area also raises questions of infrastructure — power supply, water, communications and housing.

At the same time, the valley has historically been a crossroads of trade routes: the Pamir Highway and the Irkeshtam route intersect here.

Regional competition

Competition among logistics hubs is intensifying in Central Asia. Kazakhstan is expanding terminals on the Khorgos and Aktau routes, Uzbekistan is developing a trade center in Termez on the Afghan route, and Turkmenistan has modernized its Caspian port.

Each project's success will depend largely on a single measure: whether cargo flows actually shift to that route or existing routes are retained.

The project's financial side

The memorandum specifies attracting up to $100 million in investment. This is a large project by Kyrgyz standards, but small relative to the region's biggest transport initiatives: the new railway project on the Kazakhstan–Uzbekistan route, for example, has been announced at $545 million.

As a type of document, a memorandum creates no financial obligation. The next stage typically involves preparing a feasibility study, followed by the signing of an investment agreement.

The Afghan route

The project description sets out cargo flows along the China–Kyrgyzstan–Uzbekistan–Afghanistan corridor. Transit through Afghanistan has shown growth in trade statistics in recent years: trade turnover between Uzbekistan and Afghanistan reached $915.8 million in the first months of 2026.

At the same time, the reliability of this route remains dependent on the security situation. CSTO documents identify armed groups on Afghan territory as the main danger to the region's southern borders.

The digital tracking system

The project includes a digital cargo tracking system. In international practice, such systems combine electronic seals, GPS tracking and the electronic exchange of customs documents.

The countries participating in the Trans-Caspian route likewise identified the digitalization of transport processes as the main thrust of their 2026 work plan.

The structure of Kyrgyzstan's foreign trade

Imports significantly exceed exports in Kyrgyzstan's foreign trade. Consumer goods, fuel and machinery account for a large share of imports; gold, agricultural products and textiles lead in exports.

Re-exports also hold an important place in the country's economy: goods brought in from China are shipped on to neighboring countries. Membership in the Eurasian Economic Union changed the customs terms for this flow.

The logistics center could make it possible to formalize this re-export flow and add value to it — sorting, packaging, warehousing services.

The project's practical effectiveness will depend on the throughput capacity of the Irkeshtam crossing, the reliability of mountain roads in winter and the coordination of customs procedures with neighboring countries.