Azerbaijan's state oil fund SOFAZ has taken a founding seat in a new investment body linking China and Southeast Asia, a move that underscores Baku's ambitions to become a financial as well as logistical bridge between Europe and Asia.
The China-ASEAN Joint Investment Council was launched this week at the China International Fair for Investment and Trade in Xiamen. SOFAZ is the only founding member from outside East and Southeast Asia, joining China Investment Corporation (CIC), Thailand's Government Pension Fund, Malaysia's Khazanah Nasional Berhad and pension fund KWAP, and the Indonesia Investment Authority (INA). Singapore's CGS International Securities will run the secretariat.
The council's creation comes at a moment of record economic integration. Trade between China and ASEAN broke the $1 trillion mark for the first time in 2025, reaching $1.05 trillion (€904 billion), a 7.4% increase year on year. Southeast Asia also attracted a record $243.9 billion (€210 billion) in foreign direct investment, up 9.7% and representing 15% of global inflows.
A strategic position on the Middle Corridor
Azerbaijan's inclusion reflects its geographic role as a gateway between Asia and Europe. The country sits on the Middle Corridor, the rail and sea route that crosses the Caspian Sea to carry freight between the two continents. The European Commission committed €10 billion in 2024 under its Global Gateway programme to develop this route, which is seen as a key alternative to traditional shipping lanes.
SOFAZ argues that capital can flow along the same corridor as cargo. By joining the council, the fund gains access to peer institutions, local market knowledge, and earlier insight into investment themes across a market of more than 2 billion people.
"Azerbaijan's position as a link between Europe and Asia is becoming increasingly important as physical connectivity deepens," a SOFAZ spokesperson said. "The council offers a place alongside institutions deploying capital at the Asian end of the line, and a wider set of partners for a long-term investor."
The fund's engagement with China is not new. SOFAZ entered the Chinese market in 2015, buying its first yuan-denominated assets on 1 July. In April 2025, during President Ilham Aliyev's state visit to China, the fund signed a memorandum of understanding with CIC. That agreement evolved into the Galaxy Orientis China-ASEAN Investment Program, established with CIC and INA in April this year.
The private equity vehicle closed its first round at approximately $520 million (€448 million) against a $1 billion target. It focuses on industrials, healthcare, consumer, business services, and technology, and is governed separately from the council.
SOFAZ, which manages Azerbaijan's oil and gas revenues, held $72.6 billion (€62.5 billion) in assets at the end of June. The fund's participation in the council is part of a broader strategy to diversify its portfolio and strengthen ties with Asian economies.
The move also carries geopolitical significance. As Europe seeks to balance its relationship with China, Azerbaijan is positioning itself as a neutral but indispensable partner in the region. The council's launch comes amid rising trade tensions between Brussels and Beijing, with MEPs pushing for stricter EU investment rules.
For Baku, the council is a chance to move beyond its traditional role as an energy exporter and become a hub for cross-regional investment. Whether that ambition translates into tangible deals will depend on the council's ability to channel capital along the Middle Corridor and into the fast-growing markets of Southeast Asia.
