“Silk Road” Links to “Bright Road”, Boosts China-kazakhstan Cooperation in Broad Fields
“The fund for the Silk Road now h a s now a c c u m u l a t e d t o USD 40 billion, of which USD 2 billion is specifically reserved for Kazakhstan,” said Dmitriy Tkachenko, executive director of the Kazakhstan’s National Export and Investment Agency— Kaznex Invest, during an investor road show presentation in China. According to him, a list of projects on production capacity cooperation with high priorities has been made, covering a broad sectors, in particular focusing on chemical engineering, mining and metallurgy.
During the Hangzhou G20 Summit, China and Kazakhstan made out a cooperation programe to better align the Silk Road Economic Belt initiatve with Kazakhstan’s new economic policy of the “Bright Road”, and in order to encourage both countires to explore new potentials through production capacity and investment cooperation, so as to further promote the all-around cooperation in economy and trade, energy, culture, security and so on.
“Kazakhstan connects Asia and Europe, and has the strength to build up an important bridge between Europe and China, as the Silk Road was a good example,” said a Kazakhstan Parliament member, Ashimbayev. China and Kazakhstan prepare a list of production capacity
In 2014, the Kazakhstan Investment and Development Ministry and the China National Development and Reform Commission reached an agreement on production capacity cooperation. Under the agreement, the two governments would identify the priority of and develop roadmaps for the cooperation projects on production capacity.
According to Dmitriy Tkachenko, enlisted projects can enjoy favorable policies in Kazakhstan and get financed from Chinese development agencies and the Silk Road Fund. In addition, the business people involved in the project, as well as consultants serve the project, will receive convenience in visa.
Kazakhstan connects Europe and Asia, and has unique geographical advantages and rich resources, including the largest tungsten reserves in the world, the second largest titanium reserves and the fourth largest aluminum reserves. According to the World Bank’s report, the rank for Kazakhstan’s investment environment has increased to 35th from 41st. worldwide. However, the overall technological development there is unbalanced. In Kazakhstan, heavy industry and resources related industries are the main pollars, and now the government is focused on processing and technological industries.
“We welcome investors with technology, and provide them with preferential policies,” said an official from Kaznex Invest, “For example, if the investment amount is greater than USD 12 million, the project will be free of corporate income tax for 10 years, property tax for 8 years.”
To attract foreign technology, Kazakhstan is visa-free for 34 countries, and has set up 10 sepcial economic zones for different industries in various regions, to boost development of certain industreis. Enterprises that invests in Kazakhstan can choose among these special economic zones based on their business scopes.
“In addition to the special economic zones, Kazakhstan has established state industrial parks operated by local governments, which attracts investors and foreign companies by preferential policies,” the officer said. At present, Kazakhstan’s government is vigorously developing and supporting the Astana New City Special Economic Zone, which specializes in light
industry, automotive, aviation, chemical, railway construction and so on, and where 33 projects are operating. Both sides focus on cooperation in agriculture
Leaders of China and Kazakhstan focus on cooperation in agriculture, and are exploring further potential in this area. Since China and Kazakhstan began cooperation in production capacity in 2014, they have approved 51 projects including 2-3 agricultural projects, including oil products, meat processing and wheat production, and the cooperative tomato sauce project between Kazakhstan and COFCO Tunhe.
“Agriculture is an industry that is rapidly growing in Kazakhstan and of great importance, as Kazakhstan is planning to make agriculture a new economic growth point,” said Gulmira Issayeva, vice minister of the Ministry of Agriculture of Kazakhstan. The government of Kazakhstan has developed a long-term plan for foreign investment, in particular focusing on agriculture, meaning enterprises investing in agriculture in Kazakhstan will get benefits including material resources, including equipment, land, and buildings.
“We are willing to help investors implement the projects they want in Kazakhstan,” Issayeva said, “There is no need to worry about the raw materials, since there are abundant natural resources and raw materials in Kazakhstan, as well as convenient transportation, logistics and warehousing, and supportive policies.”
Issayeva also expressed the wish that enterprises can bring new technology into Kazakhstan, and turn raw materials into food products for the international market by applying these new technologies.
At present, the Kazakhstan Ministry of Agriculture is discussing with the Export and Investment Agency on further expanding the scale of foreign investment, especially those from China. “If Chinese companies have mature technology that can be applied in Kazakhstan without any localization, we will provide all necessaries to implement and adopt the technology, including adjust our standards or adapt to China’s standards.” Issayeva said.
According to statistics from the United Nations, by 2050 the demand for agricultural products around the world will increase by 70%. North Kazakhstan State, a traditional agricultural state, has a grain output of 5 million tons per year, of which 1.5 million tons grains and 150,000 tonnes of flour are exported. However, due to weak local food processing capacity, the majority of the unprocessed raw materials are directly transported to other areas.
According to an off icial from North Kazakhstan State, in 2015, the state government strengthened the support to investment projects, namley for 50% of subsidy for projects that succeds in first breeding, and up to 10% subsidy of loan rate for machinery manufacturing projects. China-europe Express promotes China Kazakhstan cooperation in transportation
Recently, the first train for new ChinaEurope Express service left Xinzhu Station in Xi’an of China, heading to Moscow of Russia, via Astana, the capital of Kazakhstan. It is reported by Kazakhstan international news agency that the new China-europe Express service takes about 11 days to complete a trip of 7,423 kilometers, which is 30 plus days shorter than the same journey by sea.
As an important project for the alignment of Kazakhstan “Bright Road” new economic plan and China’s “Belt and Road” initiatve, China-europe Express Trains has become an integral part of the international railway transport cooperation between China and Kazakhstan. In the first half of 2016, 438 trains runs between Europe and China via Kazakhstan, an increase of 142%.
Recently, CRRC Corporation Limited ( CRRC) and Kazakhstan National Railway (KNR) signed a memorandum of understanding in Beijing, to promote cooperation in railway traffic equipment. According to this MOU, both sides will extensively explore the potential for CRRC’S participation in the development of rail traffic market in Kazakhstan.
According to an official from KNR, now there are 15 provinces and cities in China cooperating with Kazakhstan in logistics. Trains regularly run between China and Europe, and travel a distance of 11,000 kilometers in about 1415 days, delivering 800,000 containers per year.
As to the alignment of “Silk Road Economic Belt” and Kazakhstan’s “Bright Road”, Anashkin said, since then 16 railway and logistics projects and 5 logistics and infrastructure projects have been implemented, some of which have been completed.
“Now we have our own terminal station in Lianyungang. Lianyungang is one of our distribution centers, and the starting point for trains heading to Central Asia via Kazakhstan,” said he. And he disclosed that KNR would further deepen the cooperation with China, especially with Lianyungang, including cooperation in infrastructure, and cargo transportation by train between China and Europe via Kazakhstan.
The fund for the Silk Road now has now accumulated to USD 40 billion, of which USD 2 billion is specifically reserved for Kazakhstan.