China accounts for more than 20 per cent of Kazakhstan’s foreign trade and in the past 24 months the two nations signed $73.5 billion in agreements to implement investment projects. Astana’s Ambassador in Beijing Shakhrat Nuryshev spoke about current priority aspects of Kazakh-Chinese cooperation.
The development of an all-round strategic partnership with China is one of the most important priorities of Kazakhstan’s foreign policy. That is not merely a document’s provision, but a historical and political fact.
The cooperation between our countries has deep roots and today its development is exceptionally active in all directions. The nearly 1,700 kilometres of common border do not separate our nations, but bring them closer together.
Over the past 23 years, we have managed to create an exemplary model of interstate relations in the region developed in the spirit of neighbourliness and mutual understanding.
In this regard, Kazakhstan-China relations are deepening thanks to active political dialogue on the highest levels. The dynamics of mutual visits of heads of states and their contacts during multilateral events are a testament to a well-adjusted dialogue concerning a wide array of bilateral and multilateral issues.
President Xi Jinping’s official visit to Kazakhstan on May 7 was the first by a head of state after President Nursultan Nazarbayev’s convincing victory in the April 26 election.
The new stage of Kazakhstan-China relations shall be marked by projects in all fields. This includes projects within the framework of Nurly Zhol, the new economic policy initiated by Nazarbayev, and Xi’s initiative, One Belt, One Road, which complement one another and will unite strategic projects aimed at the development of regional cooperation – the Silk Road Economic Belt and the 21st Century Maritime Silk Road.
Significant progress has been made during the last years in the fields of political, economic, investment and cultural-humanitarian cooperation. Interaction within regional platforms such as the Conference on Interaction and Confidence-Building Measures in Asia (CICA) and the Shanghai Cooperation Organisation (SCO) facilitates an effective and timely response to rising challenges and threats to the modern world.
This year, the schedule for bilateral contacts is promising to be even more intense, including visits on the highest levels and inter-parliamentary and interparty cooperation.
How would you evaluate the cooperation between Kazakhstan and China in the field of investments and economy?
Over the past few years, China has been Kazakhstan’s major foreign trade partner. Conversely, Kazakhstan is China’s major trade partner in Central Asia and second largest partner in Eastern Europe and CIS countries, preceded only by Russia.
Our countries interact most actively in such fields as trade, energy, infrastructural construction, transport and agriculture. Simultaneously, certain steps are taken to diversify the current structure of trade and increase the export volume of finished commodities.
Situated in the heart of the Eurasian continent, Kazakhstan connects the markets of China, Europe, Russia and the CIS countries and facilitates transport routes into the European Union (EU) states, Central Asia and the Persian Gulf.
Additionally, in 2014 the total amount of railway cargo turn-over was 14.8 million tonnes; the Kazakh share was 8.44 million tonnes, the Chinese share, 6.42 million tonnes.
Cargo transit through Kazakhstan utilising the new container trains travelling from China to Europe provides important advantages such as delivery speed and security of exporting merchandise to European and CIS markets and diversification of export and import routes, as well as the development of new incentives to foreign trade ties between the countries.
Work began this year on the Kazakhstan-China logistics terminal in the port of Lianyungang (Jiangsu Province); as a result, exporting Kazakh goods to Japan, South Korea and Southeast Asian countries will be possible. The joint venture will perform international multimodal transportation, loading-unloading operations, consulting and freight-forwarding services. Approximately 250 TEU containers should be processed in the terminal in 2015.
In addition, construction of the Western Europe-Western China international highway will decrease the time needed for transportation of goods from China to Europe by 3.5 times compared to transportation by sea. This will help create new work places and create profit from freight-forwarding and logistics services.
Our countries are similar in their desire to put economy on innovative tracks. The testament to this is the development of new industrial and high-tech branches and integration of science and technology with the country’s socio-economic development, as well as the creation of conditions for production of high-tech products and services.
Quite a lot has been achieved during the past years of Kazakhstan-China relations. At the same time, there is a need to broaden and strengthen the partnership in the industrial-innovative field and diversify the trade and investment opportunities structure of our countries. In accordance with the requirements of our head of state, we must develop such important fields as alternative and renewable energy, coal chemistry, biotechnologies, nanotechnologies, agriculture, machinery, medicine, pharmaceuticals, chemical industry, etc.
There has been a lot of discussion recently concerning cooperation in the field of production assets. Could you elaborate on that and the kind of work in this direction?
During the official visit of the PRC Premier of the State Council Li Keqiang to Kazakhstan in December 2014, the two sides reached an agreement on developing cooperation in industrialisation and investments.
As a result, it is anticipated our country will be able to launch production of competitive products in order to sell them in Kazakhstan, China and third-party markets, including the Eurasian Economic Union (EAEU).
The main purpose of cooperation is the creation of high-tech and innovative production in Kazakhstan. It is not about moving outdated production assets from China. In the end, it will provide a new impulse to bilateral economic relations and guide them to a higher level of partnership.
As a result of four months of intensive work, experts of the two countries have selected 48 investment projects with a total sum of $25 billion and a memorandum of understanding (MoU) on cooperation in the field of industrialisation and investments was signed between the countries.
The selected projects fit the list of priority fields in Kazakhstan’s State Programme on Industrial and Innovative Development for 2015-2019 and include such fields as machinery, mining complex, petro-chemistry, chemical utilisation of natural gas, production of oil and gas equipment, light industry, energy and construction of infrastructure.
A substantial promotion of investment cooperation between Kazakhstan and China has been observed in the last year. What are the priorities for the future?
Over the past few years, China has been one of the three major foreign investors in Kazakhstan. According to our statistics, by December 31, 2014 Kazakhstan’s economy attracted $18.65 billion in Chinese investments; $4.08 billion of which was identified as direct foreign investments.
Alternatively, the sum of Kazakhstan’s investments in PRC amounted to $3.06 billion; $188.7 million of that amount is direct foreign investments. China’s investments mostly target industrial and infrastructure projects. The projects that are so important for our economy are underway, such as a gas chemical complex for production of aromatic hydrocarbon, deep oil processing complex within the Atyrau oil processing plant and modernisation of Shymkent’s oil processing plant. In the framework of One Belt, One Road, the Asian Infrastructure Investment Bank (AIIB) and Silk Road Fund are being founded in China, which will possess a substantial amount of financial resources to implement promising projects abroad. Conversely, we have an objective on industrialisation and modernisation of our country’s economy. We need to effectively and profitably utilise the investment potential of China in order to develop and diversify Kazakhstan’s economy.
A green corridor to ensure the accelerated transit and customs clearance of agricultural products was recently set up at the Kazakhstan-China border crossing checkpoints. Is there the possibility it will have a negative influence by decreasing production volume of similar products in Kazakhstan?
In December 2013, a green corridor pilot project was launched at the Bakhty-Pokitu checkpoint to facilitate accelerated transit and customs clearance of agricultural products between our countries. The reason for choosing this particular checkpoint was its geographic location, as well as a necessity to provide certain regions of Kazakhstan and Russia with agricultural products.
Before launching this project, research was conducted on PRC enterprises’ conditions of production, storage, transportation and marketing of agricultural products. The positive results of the monitoring have allowed the border checkpoint to continue functioning in the prescribed direction on a permanent basis. The green corridor is not a channel for uncontrolled transit of products, despite how some are trying to make it look. Quite the opposite; thanks to the interaction of customs and quarantine authorities of the two countries, a double control is being conducted. This is due to joint efforts which helped lower the level of violations of customs legislation, as well as create conditions for fast-track transit (no longer than 70 minutes) of perishable products.
In addition, the green corridor stimulates the export of Kazakh agricultural products to PRC. Moreover, even though the amounts of such goods (honey, fish, etc.) are not very great now, I hope in the long perspective Kazakhstan has the potential to increase the amount of agricultural products exported to China.