Business • 07 September, 2018

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

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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’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.

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