How Kazakhstan becomes a friendship champion with China
Despite the fall in commodity turnover and investment, Kazakhstan’s relations with China are experiencing a rapid rise. Astana becomes a pioneer in many Chinese projects in Central Asia: from the promotion of the Silk Road Economic Belt to the transfer of Chinese industries
Probably nowhere in the former Soviet Union, China has achieved so much this year as in Kazakhstan. The Chinese have emerged from the raw zone of comfort in a kind of development zone, including almost all segments of the Kazakh economy. This breakthrough is explained not only by a subtle calculation of Beijing strategists or the talents of Kazakhstan’s negotiators, but also by the objective coincidence of the economic interests of the two countries.
At first glance, things in the economic cooperation of Kazakhstan and China are not particularly impressive. The trade turnover between the two countries in 2014 amounted to $ 17,2 billion - a fall of almost a quarter over the previous year, 2013. This year we can expect the same low numbers. But these trends have a simple explanation. The reduction in commodity turnover in dollar terms is due to the collapse in commodity prices and the devaluation of the tenge.
However, it is precisely the economic difficulties that make Astana and Beijing more actively move towards each other. This is especially true for Kazakhstan. A few jumps in the devaluation of the national currency, depreciating the tenge by 30%, the start of layoffs and cuts, and most importantly - a decline in budget revenues due to falling oil prices, forced even President Nazarbayev to announce an unprecedented crisis.
Accordingly, this forces Astana to seek the widest possible access for its goods to the Chinese market and as large as possible investments from China. There are no other external drivers for the growth of Kazakhstan’s economy: Russia is in an economic crisis, and the West has no interest in Central Asia, especially against the background of low commodity prices.
However, China is also extremely interested in relations with Kazakhstan, which is also experiencing a slowdown in the economy (GDP growth is expected to be at the level of 7% instead of 10,5% on average in 2000 – 2010 years). Chinese interest in Kazakhstan is primarily associated with the promotion of the Silk Road Economic Belt project, and secondly with the creation of the Eurasian Economic Union. If at least some of the projects that are being discussed by the two states will be implemented, then China’s position not only in the Kazakh economy, but also in other areas of the country's life will be strengthened many times over.
In recent years, Kazakhstan has become one of the most important areas in China’s foreign policy. Here you can start with constant reminders that it was in Astana in September 2013 that Xi Jinping presented the idea of the Silk Road Economic Belt and end with an exclusively honorable reception, which Nazarbayev rendered during his visit to China in September of this year. Of all the world leaders who arrived in China on Victory Day, only the president of Kazakhstan was given the opportunity to present the trip as a state visit. The participation of Kazakhstani soldiers in the Chinese parade, an honorable place in the group photo, emphasis and signed contracts gave reason to say that Kazakhstan is becoming an increasingly important partner for China.
This year, Nazarbayev and Sy have already held four meetings. During the September visit, in addition to several dozen documents worth nearly $ 25 billion, a Joint Declaration on a new stage of comprehensive strategic cooperation was signed, where countries formalized the correlation of the Chinese Silk Road strategy and the Kazakhstan infrastructure development program Nurly Zhol (“Bright Way” ). The latter was accepted by Astana as one of the anti-crisis measures and, for the most part, was originally planned as a potential segment of the Chinese Silk Road.
In addition to plans for China’s participation in upgrading Kazakhstan’s transport infrastructure (for example, China’s free construction projects on the Great Almaty Ring Road, the road to the border with China to Alashankou station, and a large-scale public transport optimization project in Astana), we should mention the Kazakhstan’s terminal in Lianyungang port (连云港), which only following the results of 2015 of the year, will transport 250 thousands of containers from the countries of the Asia-Pacific through Kazakhstan to Europe. By 2020, the transit volume is planned to double.
China is ready to invest in the creation of a wide variety of industries in Kazakhstan: from electric power industry to oilseeds processing, from oil and gas equipment to automobiles. In total this year more than forty projects are defined. Chinese Ambassador to Kazakhstan, Zhang Hanhui (张汉晖), said that given the positive developments in 2015, the amount of signed contracts will exceed $ 50 billion. In general, over the past two years, the amount of signed agreements will be approximately $ 70 billion.
As for the Chinese reaction to the creation of the Eurasian Economic Union, here China and Kazakhstan are also carrying out their bilateral work. Of the recent achievements, we can mention the work on the harmonization of national quality standards between the two countries, which will help remove some trade barriers. In addition, in November, China lifted a number of restrictions on imports of agricultural products in Kazakhstan, which Astana has been seeking for a long time. Also simplified procedure for obtaining visas for business trips.
Another new aspect of cooperation between the two countries is the plans to transfer some Chinese industries to Kazakhstan. Back in 2014, Chinese Premier Li Keqiang said that China is ready to open glass, cement and agricultural processing plants in Kazakhstan. Later, Kazakh Prime Minister Karim Masimov explained that "it is a question of transferring the capacity of the non-primary sector." Today, Kazakhstan is viewed by China as a kind of testing ground for the transfer of Chinese industries to the Silk Road countries.
Astana, of course, will not be a pioneer, since China is already actively transferring its production, for example, to Africa. However, for the post-Soviet space this is a pilot project. President Nazarbayev received official assurances that portable production will be environmentally friendly, and Kazakhstan's interests are respected.
If the processes launched this year are successfully implemented, Kazakhstan will become the most important segment of the Silk Road, one of the largest projects in China in recent years. The question is how other regional and world powers will perceive it.
Probably nowhere in the former Soviet Union, China has achieved so much this year as in Kazakhstan. The Chinese have emerged from the raw zone of comfort in a kind of development zone, including almost all segments of the Kazakh economy. This breakthrough is explained not only by a subtle calculation of Beijing strategists or the talents of Kazakhstan’s negotiators, but also by the objective coincidence of the economic interests of the two countries.
At first glance, things in the economic cooperation of Kazakhstan and China are not particularly impressive. The trade turnover between the two countries in 2014 amounted to $ 17,2 billion - a fall of almost a quarter over the previous year, 2013. This year we can expect the same low numbers. But these trends have a simple explanation. The reduction in commodity turnover in dollar terms is due to the collapse in commodity prices and the devaluation of the tenge.
However, it is precisely the economic difficulties that make Astana and Beijing more actively move towards each other. This is especially true for Kazakhstan. A few jumps in the devaluation of the national currency, depreciating the tenge by 30%, the start of layoffs and cuts, and most importantly - a decline in budget revenues due to falling oil prices, forced even President Nazarbayev to announce an unprecedented crisis.
Accordingly, this forces Astana to seek the widest possible access for its goods to the Chinese market and as large as possible investments from China. There are no other external drivers for the growth of Kazakhstan’s economy: Russia is in an economic crisis, and the West has no interest in Central Asia, especially against the background of low commodity prices.
However, China is also extremely interested in relations with Kazakhstan, which is also experiencing a slowdown in the economy (GDP growth is expected to be at the level of 7% instead of 10,5% on average in 2000 – 2010 years). Chinese interest in Kazakhstan is primarily associated with the promotion of the Silk Road Economic Belt project, and secondly with the creation of the Eurasian Economic Union. If at least some of the projects that are being discussed by the two states will be implemented, then China’s position not only in the Kazakh economy, but also in other areas of the country's life will be strengthened many times over.
In recent years, Kazakhstan has become one of the most important areas in China’s foreign policy. Here you can start with constant reminders that it was in Astana in September 2013 that Xi Jinping presented the idea of the Silk Road Economic Belt and end with an exclusively honorable reception, which Nazarbayev rendered during his visit to China in September of this year. Of all the world leaders who arrived in China on Victory Day, only the president of Kazakhstan was given the opportunity to present the trip as a state visit. The participation of Kazakhstani soldiers in the Chinese parade, an honorable place in the group photo, emphasis and signed contracts gave reason to say that Kazakhstan is becoming an increasingly important partner for China.
This year, Nazarbayev and Sy have already held four meetings. During the September visit, in addition to several dozen documents worth nearly $ 25 billion, a Joint Declaration on a new stage of comprehensive strategic cooperation was signed, where countries formalized the correlation of the Chinese Silk Road strategy and the Kazakhstan infrastructure development program Nurly Zhol (“Bright Way” ). The latter was accepted by Astana as one of the anti-crisis measures and, for the most part, was originally planned as a potential segment of the Chinese Silk Road.
In addition to plans for China’s participation in upgrading Kazakhstan’s transport infrastructure (for example, China’s free construction projects on the Great Almaty Ring Road, the road to the border with China to Alashankou station, and a large-scale public transport optimization project in Astana), we should mention the Kazakhstan’s terminal in Lianyungang port (连云港), which only following the results of 2015 of the year, will transport 250 thousands of containers from the countries of the Asia-Pacific through Kazakhstan to Europe. By 2020, the transit volume is planned to double.
China is ready to invest in the creation of a wide variety of industries in Kazakhstan: from electric power industry to oilseeds processing, from oil and gas equipment to automobiles. In total this year more than forty projects are defined. Chinese Ambassador to Kazakhstan, Zhang Hanhui (张汉晖), said that given the positive developments in 2015, the amount of signed contracts will exceed $ 50 billion. In general, over the past two years, the amount of signed agreements will be approximately $ 70 billion.
As for the Chinese reaction to the creation of the Eurasian Economic Union, here China and Kazakhstan are also carrying out their bilateral work. Of the recent achievements, we can mention the work on the harmonization of national quality standards between the two countries, which will help remove some trade barriers. In addition, in November, China lifted a number of restrictions on imports of agricultural products in Kazakhstan, which Astana has been seeking for a long time. Also simplified procedure for obtaining visas for business trips.
Another new aspect of cooperation between the two countries is the plans to transfer some Chinese industries to Kazakhstan. Back in 2014, Chinese Premier Li Keqiang said that China is ready to open glass, cement and agricultural processing plants in Kazakhstan. Later, Kazakh Prime Minister Karim Masimov explained that "it is a question of transferring the capacity of the non-primary sector." Today, Kazakhstan is viewed by China as a kind of testing ground for the transfer of Chinese industries to the Silk Road countries.
Astana, of course, will not be a pioneer, since China is already actively transferring its production, for example, to Africa. However, for the post-Soviet space this is a pilot project. President Nazarbayev received official assurances that portable production will be environmentally friendly, and Kazakhstan's interests are respected.
If the processes launched this year are successfully implemented, Kazakhstan will become the most important segment of the Silk Road, one of the largest projects in China in recent years. The question is how other regional and world powers will perceive it.
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