Kazakh-Chinese cooperation under One Belt, One Road initiative discussed in Astana

September 7, 2018, the Kazakh-Chinese business forum dedicated to the five-year anniversary of the One Belt, One Road initiative took place. About 400 representatives of business communities of the two countries took part in the event. They discussed issues of cooperation and further interaction within the framework of the One Belt, One Road.

At the forum, specific directions of investment cooperation between Kazakhstan and China were considered, and a number of bilateral business meetings were held.

The President of Kazakhstan Nursultan Nazarbayev opened the forum, addressing the participants of the event with a video message.

"Cargoes from Europe to China via Kazakhstan are delivered in about 15 days. At the same time, shipping by sea would take from 4 to 6 weeks. Logistics and accompanying routes are being established. There is a joint program for cooperation in the field of industry and investment. It implements 51 Kazakhstan-Chinese investment projects for more than $27 billion. This is a sign of investor confidence and an evidence that Kazakhstan pays special attention to improving the investment climate. According to international experts, we are the best country in the region for doing business," the President of Kazakhstan said.

Nursultan Nazarbayev noted that Kazakhstan is a member of the WTO, an associated member of the OECD Investment Committee and has joined the declaration on international investment.

"There is the Foreign Investors’ Council under the President of Kazakhstan, where the Chinese company CNPC has an active role. It is an important strategic partner of Kazakhstan in the development of the oil and gas market. Kazakhstan is carrying out a large-scale campaign to privatize large state-owned enterprises. Major shares of the mining and metallurgy, oil and gas industry, energy, transport and communications, infrastructure and other sectors are put for sale. In addition to direct privatization, we are preparing cooperation on the principle of PPP," the President said.

On the principles of PPP there are a lot of projects implemented in the field of housing and communal services, health, construction, roads and railways, as well as in other sectors.

Nursultan Nazarbayev also mentioned the Astana International Financial Center, created on the basis of the Expo-2017infrastructure, as another promising area for mutually beneficial business.

"AIFC embodies the best models of financial centers in New York, Singapore, London, and Dubai. Independent Court — The International Arbitration Center, composed of international judges, guarantees transparency, fairness and protection of investors' rights and interests. Dear participants, the consistent growth of trade and investment demonstrates the successful nature of trade and economic cooperation between our countries. I am confident that this forum will contribute to its further development and will identify new prospects for strengthening the partnership of business circles of our states. I wish all fruitful work and new successes," Elbasy added.

The Chairman of the People's Republic of China Xi Jinping also addressed the participants of the forum through a video message, noting that the One Belt One Way initiative was born in China, but the opportunities and fruits given to the whole world.

"Five years ago, during my first visit to Kazakhstan, accompanied by President Nazarbayev at Nazarbayev University, I first voiced the initiative to build the economic belt of the Silk Road, which began to attract broad attention of the international community and enjoy a great positive response," Xi Jinping said.

According to him, over the past five years, trade between China and countries along the Silk Road has amounted to more than $5 trillion.

"More than 80 zones of trade economic cooperation with the participation of Chinese companies are established along the One Belt One Way. Over 200,000 jobs were created. In total, more than 100 countries and international organizations signed documents on cooperation with China. Political coordination among the countries participating in the One Belt One Way is constantly on the increase. Large-scale trade and economic projects are being intensively implemented, an infrastructure network is being formed," the PRC President said.

At the forum’s opening, Minister of Investment and Development of Kazakhstan Zhenis Kassymbek, Vice Minister of Commerce of China Zh. Hongbin, Ambassador Extraordinary and Plenipotentiary of China to Kazakhstan, Ch. Xiao, as well as the heads of national companies of the two states, foreign trade chambers and representatives of big business made speeches.

Minister for Investment and Development Zhenis Kassymbek noted in his report that Kazakhstan intends to significantly win as a geographical center of the land part of the New Silk Road, which creates new opportunities for trade and industry, as local enterprises can benefit from lower export and import.

"Experts estimate that the rapid revival of the Silk Road and large investments in infrastructure for the next decades foreshadow the revival of Kazakhstan as a shopping center in Central Asia. This is facilitated by the successful implementation of the Nurly Zhol State Program for Infrastructure Development, initiated in 2014 by the President Nursultan Abishevich Nazarbayev," said Kassymbek.

The minister also drew the attention of the participants to the results of work on the implementation of a number of major projects. So, for five years a number of large-scale infrastructure projects were commissioned: the port of Lianyungang; dry port of Khorgos on the border with China; Aktau port on the Caspian Sea; a new railway corridor Kazakhstan – Turkmenistan – Iran with a length of about 900 km, connecting the countries of Central Asia with the Persian Gulf and the port of Bandar Abbas in the south of Iran; the international transit corridor Western Europe – Western China, part of which passes through the territory of Kazakhstan. The measures taken allowed to deliver goods from China via Kazakhstan to Europe in about 15 days, while shipping by sea takes 2-2.5 times more.

Deputy Chairman of the Board of Kazakh Invest M. Birimzhan, in his turn, said that as a single negotiator on behalf of the Government of Kazakhstan, in the framework of work on targeting new investors from China, Kazakh Invest, supports new initiatives of Chinese investors. In Beijing, the general representation of the national company in China is based.

"A framework agreement was signed between the Silk Road Foundation and the National Company Kazakh Invest to establish the Kazakhstan-China Production Capacity Fund. The foundation was registered in Beijing in December 2016. The establishment of the Kazakhstan-China Fund with a capitalization of $2 billion will positively affect the development of investment activity in Kazakhstan. The participation of such a large fund in the implementation of investment projects in the country will also help strengthen economic relations between our countries," Birimzhan said, adding that within its competence Kazakh Invest is ready to provide all necessary assistance for the successful implementation of investment projects in Kazakhstan.

On the Chinese side, CITIC Group Deputy General Director, Chairman of the Board of CITIC Securities Zhang Yujun delivered a speech at the forum. According to him, over the five years of the One Belt One Way program, a deeper merger of the two countries' development has been achieved, and broad opportunities for cooperation between the two countries have been opened.

"For five years, under the direct care and strong support of the leaders of both countries, the cooperation of the two countries in various sectors, especially in the field of trade and economic development, has led to great success. CITIC Group actively participates and supports the One Belt, One Road construction and considers Kazakhstan as one of the most important participating countries in investing on the route. Cooperation with relevant industries in Kazakhstan was established," Yujun said.

According to him, since 2007, when the company together with Kazakhstani oil companies acquired the Karazhambas deposit, the investment activity of CITIC Group in Kazakhstan showed good dynamics.

"Our company together with Kazyna Capital created an investment fund CITIC Kazyna. This is the first fund created by the two countries. The total amount it makes, $800 million, focuses on the Kazakh-Chinese non-primary sphere. In 2013, the officially commissioned Aktau asphalt plant was personally awarded by Nursultan Nazarbayev with a certificate of the top 10 operating enterprises of Kazakhstan. In 2016 CITIC Group received general contracting activity of two national projects on the reconstruction of motorways in Kazakhstan. This will be an important corridor for the relationship between China, Kazakhstan and other countries," Yujun said.

At the same time, he added that in June 2018, at the fifth meeting of the Kazakh-Chinese Association of Entrepreneurs, Chinese and Kazakh entrepreneurs signed a memorandum of cooperation in three projects: deep processing of wheat, raising of cattle, base oils. Pragmatic and extensive cooperation between the CITIC Group and Kazakhstan fully demonstrates that China and Kazakhstan have strengths, mutual demand and complementarity.

"CITIC Group is very optimistic about its opportunities for investment in Kazakhstan. We attach great importance to good relations and cooperation, which were established by the partners in Kazakhstan. We will make every effort to promote existing joint projects to achieve the desired goals. Based on this, we will make full use of our advantages. We are sure that, under the leadership of the two heads of state and thanks to the joint efforts of the two governments, cooperation between China and Kazakhstan will undoubtedly lead to even greater success," the Deputy Director General of the CITIC Group summarized.

In turn, Deputy Director of CNPC China National Petroleum Corporation Qin Weizhong noted that cooperation between China and Kazakhstan for more than 20 years allowed to establish strong friendship and lay the foundation for further interaction in the field of oil and gas.

"We are confident that the Chinese-Kazakh oil and gas cooperation has broader prospects and spaces in accordance with the important consensus reached by the heads of the two countries. We will create a community that will openly and mutually advantageously contribute to the further development of cooperation between China and Kazakhstan in the field of oil and gas, as well as the development of the economies of the two countries," Weizhong said.

According to Qin Weizhong, CNPC is the predecessor and practitioner of the project One Belt One Way. In 1997, as a starting point, it became an equity participant of the Aktobe oil and gas plant. Over the past 20 years, with the support of the Heads of State of China and Kazakhstan, with the active support of the governments of both countries, Kazakh-Chinese cooperation continues to deepen and bring fruitful results.

"Many cooperation projects were noted by the leaders of the two countries as a model of mutual work between Kazakhstan and China. CNPC actively introduces advanced technologies and processes in Kazakhstan, assiduously promotes the level of development of oil fields. The annual crude oil production of the company's shareholders is about 20 million tons and CNPC has become an important partner in the production of oil and gas in Kazakhstan," CNPC deputy director said.

In addition, CNPC actively supports the modernization of Kazakhstan's industry. The project of modernization of the Shymkent Oil Refinery is carried out with the participation of Chinese investors. In Kazakhstan, the company paid more than $42 billion in taxes and fees and supported the social security project with $360 million, guaranteeing the work of more than 30,000 people. At the next stage, CNPC is ready to continue its cooperation in order to actively promote Kazakh-Chinese oil and gas cooperation to a deeper level.

Deputy Director of China COSCO Shipping Wang Yuhang noted that the relationship of strategic partnership between COSCO Shipping and KTZh NC is increasingly strengthening in the field of shipping, rail domestic resources, compatibility of containers and office space.

"COSCO Shipping actively participates and helps focus on large-scale growth, profitability, countercyclical and global four aspects, as well as scientific and technical support," Wang Yuhang said.

Deputy Chairman of the Board of the AIFC Exchange A. Turgulova, Representative of the State Development Bank of China in Astana L.Tao, Managing Director for Oil Transportation of JSC NC KazMunayGas N. Shmanov, Managing Director of the JSC Kazagro Holding A. Dzhuvashev, Vice President of the National Union of Beekeepers of Kazakhstan A. Dobrovolsky also took the floor during the forum.

Today China is one of the leaders in terms of bringing foreign direct investment in the Kazakh economy. Over the past 10 years, from the neighboring state, more than $15 billion has been invested in Kazakhstan projects. Chinese companies take an active part in the industrialization of Kazakhstan and the implementation of major investment projects. The foreign trade turnover between Kazakhstan and China in 2017 increased by more than 30% and amounted to $10.5 billion.

The national company Kazakh Invest was established on behalf of the Head of State on the basis of the National Agency for Export and Investment Kaznex Invest. According to the tasks, Kazakh Invest is called upon to act as a single negotiator with target transnational companies and large investors on behalf of the Government of the Republic of Kazakhstan.


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