In an exclusive interview with The Astana Times, Zhang Hanhui, Ambassador Extraordinary and Plenipotentiary of China to Kazakhstan, spoke about the current state of the bilateral cooperation and the future plans of the two countries to expand it, as well as the importance of the creation of the Eurasian Economic Union for the region and for China itself.
How would you describe the current state of bilateral relations between China and Kazakhstan in politics, economy and culture? How do you assess the level of today’s political dialogue between Astana and Beijing?
At present, bilateral relations between China and Kazakhstan have reached the highest point of development in their history. The two countries have been enjoying deep mutual understanding, trust and mutual support on major issues. Every year, the number of high level meetings is increasingly growing.
China and Kazakhstan are not simply neighbouring countries, we are fraternal countries. Our shared border with Kazakhstan is 1,780 kilometers. China considers Kazakhstan an important strategic partner, cooperation with which is one of our top foreign policy priorities. Our people have much in common, including a long history of relations, which goes back more than 2,000 years.
We share a common goal of maintaining peace and promoting the further economic development of the region. Both China and Kazakhstan are leading regional economies, sharing a common vision for the further strategic development of the entire region.
During his visit to Kazakhstan in 2013, President Xi Jinping of China first announced the initiative to build a Silk Road Economic Belt, which was a milestone event. Last year President Nursultan Nazarbayev announced the Nurly Zhol new economic policy. The two strategic programmes share similar goals and objectives, which reflects our common approach.
In addition, the number of mutual visits at all levels is increasing every year. More and more Chinese entrepreneurs come to Kazakhstan. They are determined to invest in the country and cooperate with the Kazakh people.
One of the main goals set by the Chinese government for the near future is to increase the overall trade turnover between Kazakhstan and China to $40 billion. Despite the fact we are experiencing difficult times and global economic crisis, we are getting closer to achieving this goal.
We believe the prospects for further development in economic and trade cooperation between the two countries are good. Today we have a range of major infrastructure projects, including railway and road transportation, air travel, oil and gas pipelines; we share a number of border checkpoints. All of these projects represent great potential for enhancing our bilateral cooperation.
One of the most important tasks for China and Kazakhstan is to maintain peace and stability in the region. Taking into account the evolving situation in Afghanistan, Iraq and Syria, we are acutely aware of the need to strengthen cooperation in the fight against terrorism. China and Kazakhstan are actively cooperating and establishing close contacts, having already achieved some positive results. We believe it is necessary to strengthen cooperation in this area and beyond. As for the fight against terrorism, Kazakhstan and China are not just partners – we are allies. China is willing and ready to assist and help at any time.
A stable and prosperous Kazakhstan is a vital national interest for China, so we fully support all the efforts of your country to protect its sovereignty, territorial integrity and to maintain peace and stability in the region.
How would you assess the current state and future prospects for the expansion of bilateral trade and economic cooperation between our two countries?
At the end of last year, Premier of China’s State Council Li Keqiang paid an official visit to Kazakhstan, during which he had a number of important meetings, including ones with President Nursultan Nazarbayev and Prime Minister Karim Massimov.
Following these meetings, the leaders of our countries reached an agreement on cooperation in a number of areas. The countries signed around 30 documents, reaching agreements worth a total of $14 billion. Li Keqiang himself noted it was a record-breaking deal for a single visit.
In order to implement the agreements, Kazakhstan’s Minister for Investment and Development Asset Issekeshev later visited China. In a meeting with his Chinese counterparts, Issekeshev reached a preliminary agreement to cooperate on 60 projects worth around $50-60 billion. The realisation of 22 of these projects will soon begin, in areas including mining and smelting, petrochemistry, machine building, the production of building materials, transport infrastructure and power sector. Thus, our practical cooperation is gaining momentum.
The Vice Chairman of the National Development and Reform Commission of China will soon head a delegation of 160 people, which will arrive in Kazakhstan on Jan. 28. Among the delegates are representatives of both public and private companies, as well as the banking sector and a number of financial institutions, including from Exim Bank, China Development Bank, and the Industrial and Commercial Bank of China.
We hope that new agreements will be reached during this visit and that specific projects can soon be taken forward. We are confident that the implementation of all these projects will help us reach our shared objectives and bring our cooperation to a new level.
In December 2014, during the visit of Premier of the State Council of China Li Keqiang, Kazakhstan and China agreed to carry out cash transactions in the national currencies of the two countries. Does that work at present? What are the advantages and disadvantages of such an approach?
The agreement is already being implemented. We have signed an agreement on currency swaps and an agreement on the free convertibility of currencies. In general, the Chinese yuan is considered the hard currency. Our monetary and fiscal policy is very stable, China has never pursued any selfish goals. We have always adhered to a progressive and stable policy in this area.
Countries that have established cooperation with China in the monetary sector have already seen positive results and tangible benefits. These include many nations in Southeast Asia, namely the member states of ASEAN, where the yuan is freely convertible. We have concluded a similar agreement with South Korea, Australia and many European countries, including Germany and Great Britain, which have a yuan trading center.
Of course, Kazakhstan and China are just embarking on work in this area. Today the conversion of currencies is carried out only for current operations. At the same time, there is a need to extend this approach to capital operations. We intend to provide loans and make investments in yuan.
Currently, the trade between our countries is carried out in dollars, but we believe that in the future there will be the possibility of making mutual payments in national currencies.
Thus, we can avoid the losses that occur as a result of fluctuations in foreign exchange rates. For example, some countries are trying to adjust their monetary policy. This has a negative impact on our economy, and if we could at least partially be able to carry out settlements in the national currency, it would allow us avoid possible losses.
In China, we also pursue a policy of maintaining our currency reserves. Therefore, we stick to the so-called policy of financial multipolarity, which permits the dollar, the euro and other currencies to circulate freely in China.
In the future, I think it is very important to build and strengthen cooperation with Kazakhstan in this area. This includes the coordination of monetary and exchange rate policies and further strengthening financial cooperation. In 2008, during the global financial crisis, China provided Kazakhstan with a loan worth $13 billion. And we are ready to provide such assistance and support at any time. The support we render to Kazakhstan will benefit our country as well.
In October 2014, during a round table “The geopolitical situation in Eurasia and the development of Kazakh-Chinese relations”, you said that the creation of the Eurasian Economic Union (EAEU) opens up new opportunities for Chinese enterprises and investors in Kazakhstan and can therefore be considered positively by your entrepreneurs. Could you tell us more about China’s point of view on the economic integration processes in Eurasia?
In fact, this kind of regional integration has been taking place since the independence of the former Soviet countries.
First, we believe that the creation and development of the Eurasian Economic Union opens up new opportunities for the stable development of not only the economies of member countries but also the entire region.
Second, we have pursued a policy of good neighbourly relations, friendship and cooperation with all countries of the former Soviet Union. Once EAEU countries come to a common position on any issue, having reached an agreement, it will be easier for us to come to a common understanding with them as well.
Third, this integration will benefit economic development and help maintain peace and stability in the region, which is of the utmost importance, as these factors are the underlying determinants of economic development and cooperation between our countries.
We believe that the creation and development of the EAEU is beneficial not only for the countries involved, but also for China. Therefore, the Chinese leadership and its government adhere to a clear and understandable position; we definitely support such a union.
The EAEU is an organisation of economic cooperation, which implies greater integration of the economies, infrastructure and in many other areas. This is not a geopolitical project. We believe that cooperation in this format will benefit all parties of the Eurasian Economic Union, provided that the integration process does not infringe upon the sovereignty and territorial integrity of its member states.