Trade, investment, agriculture: Kazakhstan and China seek collaboration
Shandong ranks 2nd in terms of GDP and has a population of over 100 million people; it is one of the economic and industrial powerhouses of China.
Chair Kanat Beisek of the Legal Entities Association “Kazakhstan-China Association for Support of Trade” stressed that the complementarity of “Nurly Zhol” (Bright Path), the Kazakh infrastructure development program, and China’s One Belt, One Road initiative gives rise to a mutually beneficial relationship; it is of special importance to develop trade and economic relations between Kazakhstan and China, including Shandong.
Over many years Kazakhstan and Shandong have managed to establish a good and cordial relationship.
An upward trend is seen in investment cooperation, with Shandong Province having invested 370 million US dollars in Kazakhstan by May 2019.
According to Mr. Li Wen-Guang, the Deputy Chair of China’s Council for the promotion of international trade, Shandong’s industry moves with the times as state-of-the-art and unique green technologies are being utilized.
“The province has the advantage in the financial institutions area as well as cooperation activities. It seeks to promote production capacity projects and is key to China’s economic development,” Mr. Li stated.
The One Belt, One Road initiative and the Shanghai Cooperation Organization’s facilitation to a fruitful base for collaboration and trade promotion was outlined.
Kazakhstan’s International Commerce Chamber, a subsidiary of Atameken National Chamber of Entrepreneurs presents all Kazakh business organizations abroad, while aiming at export promotion and assisting foreign companies in the country. It also centers on enhancing the investment climate and conditions for doing business.
Atameken National Chamber of Entrepreneurs includes over 1 million entrepreneurs by now, they are individual entrepreneurs, legal entities.
China has been an important economic partner of Kazakhstan since the first years of independence, says Deputy Chair Nuraly Bukeikhanov of Kazakhstan’s International Commerce Chamber.
Since the first years of independence, the economic relation between the countries has been always expanding, including a strategic relationship focused on the whole region’s prosperity.
“It is noteworthy that Chinese Chairman Xi Jinping announced the idea of the economic belt Silk Road in Kazakhstan, allowing for greater cooperation among China and Central Asian countries,” he stated.
The new Silk Road will relaunch and provide the economic relation between Kazakhstan and China with new perspectives considering Kazakhstan’s geographical location at the heart of Eurasia.
Over the past 10 years, Kazakhstan has invested around 30 billion US dollars in infrastructure development, transport and logistics assets and competences. 2500 kilometers of transnational railroads and 12.5 thousand kilometers of road were modernised and put into operation; the western Europe-western China top-notch intercontinental highway passing China, Kazakhstan and Russia links Asia and Europe.
“For us, it is of great priority to promote market entry for Kazakh producers, especially for food producers,” he said.
Every year China imports food products for around 115 billion US dollars, which makes China the third largest importer of food products, where the share of Kazakh food products is only 1%.
“Today, the Kazakh government takes active efforts to enhance agricultural output,” Nuraly Bukeikhanov tells, emphasizing that it is foodstuffs that will be an economic driver in the long run.
The ever-growing increase in agricultural output in Kazakhstan, making the Chinese market seeking quality and safe food products attractive, was stressed.
The investment preferences and advantages in Kazakhstan were emphasized by KazakhInvest’s country manager Samat Almagambetov.
“We [KazakhInvest] welcome foreign investment as direct foreign investments of 300 billion US dollars have been attracted in Kazakhstan, indicating constant growth in investment attraction,” he underlined.
Kazakhstan’s investment potential and prospects for foreign investors were underlined, with a special focus on the reasons why Kazakhstan is an appealing country for investments, thus presenting great opportunities.
“So, first off, the location. Second, there are many investment projects. Third, the favorable and convenient investment climate. And last, there are a lot of investment preferences,” he told.
It takes 15 days to deliver any item from the west of China to Europe through Kazakhstan, he says.
Kazakhstan has 12 special economic zones and 22 industrial zones; their participants enjoying tax preferences are fully exempted from land tax, added-value tax, customs tax. On top of that, investors signatories to the necessary investment agreements could get benefits, including subsidies, the eased procedure of obtaining quotas for hiring foreign workers and in-kind grants in land.
“KazakhInvest is a state-owned enterprise, spearheaded by the Kazakh Prime Minister. Our organization is crucial for investors worldwide willing to invest in Kazakhstan and our mission is to support them in selecting a project and up to the project’s completion. We have representation offices in China, the United States, Great Britain, Germany, Holland, India, Singapore as well as in each region of Kazakhstan,” Samat Almagambetov said.
KazakhInvest also works with the Big Four to provide financing assistance, consultations for local businesspeople and foreign investors as well as offer better modalities for cooperation.
The Astana International Financial Center’s formation proves Kazakhstan pays great attention to its investment climate, and the area at large; while English Law enables the AIFC to sort out international cooperation disputes. Now, its membership includes over 200 enterprises such as the Shanghai Stock Exchange, CitiBank and the Infrastructure Development Bank, and so on.
In the wake of the frame agreement in the field of production capacity and investments signed between Kazakhstan and China in 2015, the Production Capacity Cooperation Committee was set up, often serving as a platform for dialogue. It came up with a list of projects aimed at Kazakh-Chinese cooperation. As of today, the list includes 55 joint projects with the total investment of 27.3 billion US dollars.
In late 2015 KazakhInvest and Silk Road Fund reached an agreement to found the Kazakhstan-China Fund to promote and cooperate in the production capacity area.
Kazakhstan lies between Europe and Asia, accessing markets of both continents. It is also a logistics and transport hub that by connecting many regions contributed to the One Belt, One Road initiative. It is nearly 70% of the total transit flow between Europe and Asia.
Author: Adlet Seilkhanov