“Silk Road” Links to “Bright Road”, Boosts China-kaza­khstan Co­op­er­a­tion in Broad Fields

China's Foreign Trade (English) - - Special Report - By Liu Xin­wei

“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.

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