Second day of President Tokayev's visit to China brings business and investment partnerships to the table
Trade and investment cooperation was pivotal to President Tokayev's visit to China
The Kazakh-Chinese investor roundtable, a key event during the visit, aimed to attract Chinese investment into Kazakhstan and foster joint ventures between Kazakh and Chinese businesses.
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The roundtable brought together top executives of big Chinese corporations and organizations, including CITIC Group, China National Petroleum Corporation, the Asian Infrastructure Investment Bank, China General Technology Group, Xuzhou Construction Machinery Group, as well as business leaders, and investors from both countries, providing a platform for discussing investment opportunities, exchanging ideas, and exploring potential collaborations.
In the opening remarks to the forum, Tokayev stressed the dynamic development of trade and economic relations between Kazakhstan and China despite global economic turmoil. According to him, the volume of bilateral trade reached a record $31 billion last year. During his meeting with Chinese leader Xi Jinping, Tokayev suggested bringing the trade to $40 billion by 2030.
«China is one of the five largest investors in Kazakhstan's economy. The total volume of investments exceeds $23 billion,«said Tokayev at the roundtable.
«In general, I can confidently say that my state visit to China was a success. The agreements reached will give a strong impetus to closer cooperation between the two countries. Kazakhstan is interested in further strengthening multilateral ties with China. We will make every effort to achieve this goal,» he said.
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The demand for Chinese goods in Kazakhstan is also increasing. According to the Kazakh Ministry of Trade and Integration, the volume of imports grew by 33.5 percent and amounted to $11 billion. The growth trend continues this year, as in January-March 2023, trade turnover between Kazakhstan and China amounted to $5.9 billion, which is 28.1% higher than during the same period last year - $4.6 billion.
Oil and gas sector
The oil and gas industry has substantially fuelled the growth in the bilateral ties over the years. To increase oil exports, Tokayev spoke about plans to expand the Kazakhstan-China oil pipeline, increase the capacity of the existing oil pipelines, such as Atyrau-Kenkiyak and Kenkiyak-Kumkol, increase the production capacity of the Shymkent oil refinery from six to 12 million tons per year.
«We have been successfully working together with CNPC (China National Petroleum Corporation) in this sector for a long time. We see increasing the gas processing capacity and expanding the gas transportation system as a priority. In this context, it is extremely important to launch the second line of the Beineu-Bozoi-Shymkent gas pipeline. In addition, we are interested in the construction of a gas processing plant at the Kashagan field with an annual capacity of 4 billion cubic meters,» said the President.
On May 18, CITIC Construction signed five commercial documents with Kazakh partners for joint implementation of projects in the energy and petrochemical industries worth more than $1.6 billion, Zhu Hexin, chairman of CITIC Group, told Tokayev during their meeting today.
Tokayev invited Chinese companies to explore renewable energy opportunities, the industrial sector
Tokayev said that Kazakhstan has set a goal to achieve carbon neutrality by 2060 and to increase the share of renewable energy to 15 percent by 2030.
«The state provides comprehensive support for investment in the industry. In particular, we guarantee the purchase of electricity at an auction rate for up to 20 years. This rate is set annually, taking into account inflation and currency exchange rate changes. We invite our Chinese colleagues to consider the investment opportunities of this direction,» said Tokayev.
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State Power Investment Corporation is a Chinese company actively investing in Kazakhstan renewables. The company plans to build a large-scale wind power plant with a capacity of 1 gigawatt in Zhambyl region. The company’s chairman Qian Zhimin told Tokayev about the company’s readiness to launch the production of equipment for wind farms in Kazakhstan.
With industrial cooperation being a priority, the President welcomed the implementation of a joint project between KAZ Minerals and China Nonferrous Mining Corporation to build a copper smelter. Its launch will make it possible to reduce Kazakhstan's raw material exports and process the entire volume of copper concentrate produced domestically.
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«Kazakhstan has created a favourable environment for the development of the processing sector. In particular, the law on industrial policy was adopted. Preferential prices for aluminium, copper and zinc for domestic enterprises have been established. Moreover, there are plans to regulate the export of these metals in order to fully meet the needs of the domestic market,«said the head of state.
The demand for rare-earth metals, which Kazakhstan has in abundance, is steadily growing in the world.
«Considering that China is the largest producer of electric cars, cooperation in lithium mining is promising. In recent years, the popularity of Chinese cars has grown significantly in Kazakhstan. Brands such as Chery, Jac, Exeed, and Haval are already among the top-selling cars. Our cooperation in this area is reaching a qualitatively new level. Small-knot assembly of Chinese cars is being launched in Kazakhstan,» said Tokayev.
Transport and logistics
During the event, Kassym-Jomart Tokayev drew investors' attention to the possibility of China's access to major markets in Western Eurasia through the territory of Kazakhstan. He stressed that Kazakhstan is one of the main partners in China's Belt and Road initiative, which was launched in Kazakhstan 10 years ago.
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«Undoubtedly, this way of transportation is very beneficial. We attach great importance to the construction of Kazakhstan's logistics center in the dry port of Xian, which will become the main hub for sending direct container trains to Central Asia, Europe, Türkiye and Iran. We also plan to launch the Ayagoz-Bakhty railway connection in the direction of China. A major overhaul of the Dostyk-Moiynty section is planned, which will make it possible to transport up to 20 million tons of freight annually in this direction in the future,» he said.
The development of the Trans-Caspian International Transport Route is important for the intensification of transit between Europe and Asia, the shortest route from China to Europe.
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As part of his visit, Tokayev participated in the ceremony of launching the construction of Kazakhstan's logistics center in the dry port of Xian. He emphasized Kazakhstan has invested $35 billion over the past 15 years in transport and logistics.
«We have created a Kazakh-Chinese logistics center in the port of Lianyungang. We opened new railroad routes. The Khorgos - Eastern Gate dry port began to work. A modern infrastructure has been created on the Caspian Sea,» he added.
He commended the transit volumes between Kazakhstan and China, saying last year, 23 million tons of cargo were transported between the two countries by rail. Transit freight in the first quarter of 2023 increased by 35 percent to more than seven million tons.
«Additional infrastructure is required for further development of transportation. This is why, together with our Chinese colleagues, we decided to build a logistics hub in the dry port of Xian. This hub connects the Shaanxi region with Kazakhstan and Central Asia. Then it will open the way to Europe, Türkiye, and Iran,» said Tokayev.
Starting in 2024, electronics and computer components, cars and car components, textiles, clothes, shoes and accessories, food and agricultural products, construction products and building materials, as well as ores, metals and chemical products, will begin to be transported through the dry port.
Growing e-commerce sector
E-commerce offers additional opportunities for the growth of mutual trade. E-commerce has grown worldwide following the coronavirus-related restrictions and lockdowns. Tokayev advised the roundtable participants to look into large Chinese marketplaces.
«Given the prospects of increasing mutual trade, Kazakhstan is actively working to create new customs warehouses. In this regard, we offer all partners to place their goods in our warehouses for logistical convenience. This will make it possible to reduce the time of delivery of goods to consumers from Central Asian countries to China and back,» the President noted.
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As part of his visit, Tokayev took part in the opening of the Kazakh pavilion on JD.com, also known as Jingdong, one of China's largest and most prominent e-commerce platforms. Established in 1998 by Richard Liu Qiangdong, JD.com has grown to become a leading online retail giant, offering a wide range of products and services to Chinese consumers.
The platform has more than 400 million users. In 2022, JD.com's net revenue reached 1 trillion yuan ($142.1 billion). At present, the platform has national pavilions of more than 40 countries.
«Today, the e-commerce market has reached $3.5 trillion, and this figure is increasing every year. China plays an important role in the development of international online trade. Today, Kazakhstan's national pavilion will open on the world's largest electronic platform. This step will boost interaction between the two countries,» said Tokayev during the opening ceremony.
Promising areas with untapped potential
At the roundtable, Tokayev highlighted the significant potential of the agricultural sector.
Kazakhstan intends to increase grain exports to China to 1 million tons per year, announced Kazakh Minister of Agriculture Yerbol Karashukeyev at a meeting in Beijing on May 11 with the leading agricultural companies of China COFCO and CITIC Group, which were invited to supply grain through domestic companies with significant reserves of grain in Kazakhstan and that can provide the necessary volume and quality of grain for export.
There are terminals in the border cities of Alashankou and Khorgos with the capacity to receive up to 10,000 tons of grain cargo per day.
According to Tokayev, over the past five years, the export of oilseeds from Kazakhstan to China has grown 3.5 times, and vegetable oil - 2 times.
People-to-people ties and visa-free regime
Tokayev is optimistic about the facilitation of people-to-people exchanges.
«Kazakhstan may become one of the attractive tourist destinations for Chinese citizens. An intergovernmental agreement on visa-free travel for up to 30 days has been signed. Undoubtedly, this step will open up good opportunities to attract a large number of tourists from China,» he said.
The open skies regime operates in 13 cities in Kazakhstan. The open skies regime refers to a liberalized policy framework that allows international airlines to operate flights to and from multiple cities within the country without restrictions. It aims to promote air travel, facilitate tourism, boost economic activity, and enhance connectivity between Kazakhstan and other countries.
«Citizens of 80 countries do not need a visa to visit Kazakhstan,» said Tokayev.