Hor­gos: New Star on the Silk Road

China Today (English) - - CON­TENTS - By staff re­porter DANG XIAOFEI

An en­trepôt in transna­tional trade and ex­changes for mil­len­nia, the city is re­viv­i­fy­ing with the in­cep­tion of the Silk Road Eco­nomic Belt.

HOR­GOS is a fron­tier city 670 km from Urumqi, cap­i­tal of Xinjiang Uygur Au­ton­o­mous Re­gion. For over 130 years it has served as a land port on the bor­der with Kaza­khstan. Its his­tory as an en­trep t in transna­tional trade and ex­changes dates back two mil­len­nia, how­ever.

Oc­cu­py­ing a piv­otal spot along the north­ern route of the Old Silk Road, Hor­gos was a junc­tion for the in­ter­course of Eastern and Western civ­i­liza­tions. To­day this sta­tus is re­viv­i­fy­ing with the ini­ti­a­tion of the Silk Road Eco­nomic Belt, which po­si­tions Hor­gos as the por­tal for China’s fur­ther openingup to its neigh­bors to the west.

Door to the West

The port of Hor­gos serves a re­gion of 1,000 km in ra­dius, one with the high­est pop­u­la­tion den­sity in Cen­tral Asia. Since the open­ing in 2011 of the Hor­gos Chi­naKaza­khstan Bor­der Co­op­er­a­tion Cen­ter, it has at­tracted ever more buzz due to the pref­er­en­tial tax poli­cies it of­fers.

The Belt and Road Ini­tia­tive has fur­ther ac­cel­er­ated its growth. Last Septem­ber Hor­gos was up­graded from a port to a city, the youngest along the Silk Road Eco­nomic Belt. “Spe­cial” rules have also been is­sued al­low­ing Chi­nese and Kazakh pass­port hold­ers to visit the Bor­der Co­op­er­a­tion Cen­ter for shop­ping and sight­see­ing with­out re­stric­tion. Their num­ber now ex­ceeds 10,000 per day.

Cus­toms data show that 22.91 mil­lion tons of im­ports and ex­ports tran­sited through Hor­gos in 2014, with an ag­gre­gate value of US $14.9 bil­lion.

The ex­press­way link­ing Hor­gos with Lianyun­gang City in Jiangsu Prov­ince 4,400 km away is com­pleted. The first elec­tric rail­way – the China-Kaza­khstan Rail­way – is also in op­er­a­tion, as is the China- Cen­tral Asia nat­u­ral gas pipe­line, while Yin­ing Air­port is ex­pand­ing in line with its fu­ture op­er­a­tions as a port. These fa­cil­i­ties will en­able Hor­gos to be­come a key node of in­ter­na­tional trans­port and the land port with the largest cargo vol­ume in North­west China. Its po­si­tion in China’s open­ing- up to its western neigh­bors is there­fore un­par­al­leled.

Ac­cord­ing to Guo Jian­bin, deputy di­rec­tor of the Work Com­mit­tee of the Hor­gos Eco­nomic De­vel­op­ment Area, Hor­gos is a mere four hours drive from Kaza­khstan’s cap­i­tal of Almaty, which lies 378 km away, while Rot­ter­dam is a 15-day jour­ney by train. Ship­ments from China’s eastern prov­inces to­wards the Dutch city or other ma­jor ports in Europe can cut their jour­ney by 5,000 km by land via Hor­gos.

“Last year Hor­gos passed three ma­jor eval­u­a­tions by the state, for its qual­i­fi­ca­tion as a grain im­port port, and a com­plete car im­port port, as well as for the zone ad­junc­tive to the Chi­nese part of the Bor­der Co­op­er­a­tion Cen­ter. These suc­cess­ful eval­u­a­tions have laid a solid foun­da­tion for the fu­ture long-term de­vel­op­ment of Hor­gos,” Guo said.

First FTZ Strad­dling a Bor­der

The China-Kaza­khstan Bor­der Co­op­er­a­tion Cen­ter is China’s first cross-bor­der free trade zone with its neigh­bors, and a pi­lot pro­gram for re­gional co­op­er­a­tion un­der the frame­work of the Shang­hai Co­op­er­a­tion Or­ga­ni­za­tion. It en­com­passes

man­u­fac­tur­ing, pro­cess­ing, com­modi­ties trans­fer, fi­nan­cial ser­vices, and tourism, among other func­tions and ac­tiv­i­ties.

Span­ning Chi­nese and Kazakh ter­ri­tory, the cen­ter is 5.6 sq km in to­tal, with 3.43 sq km in China and 1.85 sq km in Kaza­khstan. Op­er­a­tions started in April 2012. The move­ments of per­son­nel, ve­hi­cles and goods are un­re­stricted on its premises, and stores within and vis­i­tors to the cen­ter are en­ti­tled to pref­er­en­tial poli­cies in­clud­ing those on tax­a­tion.

“Con­struc­tion in the Chi­nese sec­tor of the Co­op­er­a­tion Cen­ter is un­der­way, and its bonded zone will soon come into ser­vice,” Guo re­vealed. “On the Kazakh side more fa­cil­i­ties in­clud­ing a trade cen­ter will be in­au­gu­rated within the year.”

“The Co­op­er­a­tion Cen­ter is open 16 hours a day and 365 days a year,” said Hai Sha, an of­fi­cial with Hor­gos Cus­toms. “A Chi­nese tourist here can buy at the most RMB 8,000 worth of duty-free com­modi­ties per day, and is al­lowed to take €1,500 of duty-free pur­chases into Kaza­khstan.” This pol­icy is a big draw for peo­ple on both sides of the bor­der.

With just the swipe of an ID card, both Chi­nese and Kazakh cit­i­zens may en­ter the Co­op­er­a­tion Cen­ter from their re­spec­tive coun­tries. Kaza­khs wish­ing to go fur­ther and em­bark on an ex­cur­sion away from the cen­ter and out into China can ap­ply for a visa on ar­rival, for stays of one day, five days or three months.

Abun­dant Op­por­tu­ni­ties

By the time the Co­op­er­a­tion Cen­ter opens its doors at 10 am (dawn comes much later in Xinjiang than in eastern cities) many have al­ready queued up at its gate on the Chi­nese side. They in­clude both busi­ness­peo­ple and shop­pers.

Mer­chants from China’s neigh­bor­ing coun­tries are ubiq­ui­tous through­out the cen­ter. They gather here in quest of all sorts of com­modi­ties, rang­ing from elec­tronic de­vices, to tires and tex­tiles. Ap­parel and other tex­tile prod­ucts from Jiangsu and Zhe­jiang prov­inces are sought af­ter in Cen­tral Asian coun­tries, which im­port up to 80 per­cent of their light in­dus­trial prod­ucts, a big share of them from China. “The huge de­mand for cot­ton prod­ucts like socks, tow­els and gloves in Cen­tral Asia presents great op­por­tu­ni­ties for Chi­nese busi­nesses,” said Pan Jun­qing, head of the trade and com­merce au­thor­ity of Ili Pre­fec­ture.

The Zhongke In­ter­na­tional Trade Tower, one of the many ed­i­fices on the Chi­nese side of the cen­ter, re­ceives roughly 2,000 Kazakh cus­tomers per day. “In win­ter they buy down coats, hats and socks in bulk. The cen­ter is a whole­sale em­po­rium for them,” said Shi Yu, a Zhongke man­ager.

Liu Lin­jun from Hu­nan Prov­ince, among the first ten­ants of Zhongke, runs a hand­bag and suit­case store in the cen­ter. Liu came to Xinjiang 12 years ago, and ini­tially op­er­ated in the re­gional cap­i­tal Urumqi. As busi­ness was static there, how­ever, he moved to Hor­gos on the ad­vice of friends. “Monthly turnover is around RMB 30,000- 40,000. The peak sea­son is sum­mer,” Liu said. Fa­vorites among his Kazakh cus­tomers are bags and cases with dis­tinct Xinjiang fea­tures.

Kong Lingquan, 45, runs a tex­tile shop in the build­ing. In the busiest days prior to the May 1 La­bor Day hol­i­day he can scarcely find time to eat lunch. “Trans­ac­tions in a sin­gle day can eas­ily ex­ceed RMB 10,000,” he said. But he also stresses that bor­der trade is highly ex­posed to the im­pacts of shifts in ei­ther pol­icy or in­di­vid­ual na­tions’ eco­nomic cir­cum­stances. “The de­pre­ci­a­tion of the Kazakh Tenge in the se­cond half of last year had a neg­a­tive im­pact on our busi­nesses here,” Kong said.

Guo Jian­bin, deputy di­rec­tor of the Work Com­mit­tee of the Hor­gos Eco­nomic De­vel­op­ment Area.

The Yiwu In­ter­na­tional Trade Tower at the China-Kaza­khstan Bor­der Co­op­er­a­tion Cen­ter.

A store at the cen­ter sell­ing wine from Ge­or­gia.

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