Why Khorgos is a Timely Investment

Kazakhstan has set itself the ambitious target of becoming one of the world’s 30 most competitive economies by 2050. Boosting trade with Kazakhstan’s partners is essential to meeting that goal. One such partner is China. In challenging economic times, strengthening economic links between our two countries offers enormous opportunities for both of us.

Trade between China and the five post-Soviet Central Asian states has soared from $1.8 billion in 2000 to $50 billion in 2013. The country has surpassed Russia to become Central Asia’s single largest trading partner. This is why the Khorgos Special Economic Zone (SEZ), the Khorgos Dry Port and the Khorgos International Cross-Border Cooperation Centre on the border with China – as well as the wider initiatives, including Kazakhstan’s massive Nurly Zhol infrastructure development programme and China’s One Belt, One Road programme – are so vital to securing Kazakhstan’s position in the global economy.

The One Belt, One Road concept has enjoyed enthusiastic support since first announced by President Xi Jinping on a visit to Kazakhstan in 2013. The initiative will see significant new investment to open trade routes across land and sea, and will strengthen the strategic partnership between China and Kazakhstan.

The Khorgos SEZ is Kazakhstan’s gateway to China’s vast market. It will accelerate trade flows and economic prospects. With billions expected in investment, the free trade zone spans 185 hectares in southeastern Kazakhstan and a further 343 hectares in China. It will include a state of the art international business centre, freight terminals, an airport, a tourism centre, and sports facilities. Visiting traders are already able to stay visa-free for 30 days, and potential investors are exempt from all taxes and customs.

Khorgos projects are among several projects that make up the One Belt, One Road initiative, and are arguably among the most important. Landlocked countries have historically been overlooked in the pursuit of maritime trade. But as companies increasingly opt for shorter journeys from China to Europe – 14 days by train compared with a month by sea – Kazakhstan finds itself in an enviable geographical position. Sandwiched between China, the world’s largest industrial producer, and Europe, the largest consumer market, Kazakhstan will profit as Khorgos becomes a hub for regional and international trade. To view Khorgos as a gateway to the East is simplistic: it is also vital part of our nation’s position in facing all markets towards the west.

The benefits of Khorgos to Kazakhstan and the rest of Central Asia have been felt already. The promise of tens of billions of dollars in investment will reshape the former Soviet economies. It will help shield the region from falling commodity prices and the recession in big neighbouring economies. Trade by train is booming, with the number of containers travelling this way between China and Kazakhstan increasing 18 times between 2011 and 2014. Kazakhstan is on track to capture 6 percent of the trade between China and Europe by 2020. Favourable trading conditions continue to attract businesses to the region. Leading global companies like Hewlett Packard, Toyota and DHL are all opening distribution centres.

There will always be those quick to criticise bold and ambitious economic plans. But there should be no doubt that Khorgos, and indeed the One Belt, One Road initiative and the Nurly Zhol programme, are essential to realising Kazakhstan’s goal of becoming a top economy by 2050.