3.2 New level of Kazakhstan-Chinese Cooperation

It seems that the Kazakhstan-Chinese investment cooperation comes to the new level. Until the recent times the majority of investment projects of the companies of the People's Republic of China in Kazakhstan were connected with a the energy sector – oil production and natural gas, and also construction of the main pipelines. Now cooperation will continue in non-oil sector. The turning point is December negotiations of heads of governments Karim Massimov and Li Ketsyan in Astana, when the package of agreements for the total amount of $14 billion was signed. It is supposed to implement, in particular, joint projects in spheres of energy, industry, transport, agriculture, oil and gas.

The sum of $14 billion looks very impressively if to consider that the total amount of the saved-up direct investments of China in Kazakhstan for the end 2013 made $22,57 billion. This figure is given in the report of the center of integration researches of Eurasian Development Bank "Monitoring of direct investments of Russia, Belarus, Kazakhstan and Ukraine in the countries of Eurasia – 2014". In the document it is noted that "the Chinese direct INVESTMENTS to Kazakhstan are an important element of economic expansion … in Central Asia, including practical realization of idea of an economic belt "New Silk way". Now, however, the main investment projects of the Chinese multinational corporations are connected with the energy sector, first of all oil production and natural gas, but not with development of infrastructure". According to the recent agreements between two countries, now the branch structure of capital investments of Heavenly Empire will significantly extend.

The fact that Kazakhstan supported the program for transfer of capacities to the territory of Kazakhstan offered the People's Republic of China also says about a new stage of investment cooperation . As Masimov noted, "it is about relocation of facilities of non-oil sector, about tens of enterprises and billions of dollars of investments". During negotiationsLi Ketsyan's explained that China is ready to open plants on production of glass, cement and processing of agricultural products in the territory of Kazakhstan.

The experts surveyed by Forbes Kazakhstan consider that deepening of interaction of two countries has to be mutually beneficial. "Cooperation with the neighbor (especially when he not is only "world factory", but also pays partnership) at reasonable approach will beneficial for us. As it is about non-oil branches of economy – for us it super-actual as reindustrialization is on the first place of our agenda. Other question that all contracts have to respond, firstly, to the national interests, and secondly, to be open. These conditions are especially important, as it concerns carrying out of the Chinese enterprises to the territory of Kazakhstan . Because, we shouldn't forget that one of problems of the modernization which is carried out by the People's Republic of China is fight for ecology and reduction of harmful emissions. It wouldn't be desirable that ecologically unsafe productions appeared in our territory", – the doctor of political sciences Konstantin Syroyezhkin notes.

According to the director of "Bayterek development",Emil Milushev, signing and effective realization of "a historical package" of agreements with China will give a powerful spur to development of non-oil sectors of economy, such as transport and logistic, production of construction materials, processing of production of agriculture. "The raw model which played a big role in formation of independent Kazakhstan sputtered out. Implementation of arrangements with China has to become help to the government in its efforts to reduce raw dependence, and also to prepare infrastructure of economy for post-crisis development", – he says.

The priority direction of partnership – transport and logistic. It corresponds as to the new economic policy of the President of Kazakhstan"Nurly zhol" , and the idea of "An economic belt of a new Silk way" which is put forward by the Chinese President Xi Tszinpin. By the way, during December meeting between the Ministry of national economy of RK and the State committee on development and reforms of China, the memorandum of understanding on advance of creation of an above-mentioned economic belt is concluded. As it was explained , "the purpose is development and strengthening of interregional interrelations and contacts, assistance and deepening of the economic activity connected with transport, trade, tourism, investments and other spheres of cooperation".

The document signed during the second meeting of the Kazakhstan-Chinese business council became one of cooperation steps in the sphere of transport. This agreement between JSC KTZ Express and JSC Port Lianyungang Group is on strengthening and improvement of international transport through the New Euroasian continental transport corridor. "Within the created joint venture … work on construction of the logistic terminal in the port of Lianyungang is carried out. Implementation of this project assumes INVESTMENTS with a total amount of $99,3 million, the share of the Kazakhstan party makes 6 billion 126 million 666 thousand tenges", – informed Forbes Kazakhstan in JSC Samruk-Kazyna.

One more "transport" document is signed between JSC "Kazakhstan temir zholy" Oil Company and "Chinese Railroads corporation". "The agreement provides development of freight transportation between Kazakhstan and China, and also railway transport corridors China – Kazakhstan – Europe, China – Kazakhstan – the countries of Central Asia and in the opposite directions. Besides, development of boundary railway transitions Dostyk – Alashankou and Altynkol – Horgos, and also railway infrastructure on approaches to them, electronic data exchange, improvement of technology of container transportations, increase of number of container trains, deepening of cooperation of the logistic companies, improvement of quality and working conditions of staff of both parties is planned", – reported in JSC Samruk-Kazyna.

As Milushev thinks that partnership with China in the field of transport is very attractive: "By calculations of experts, the trade turnover of the People's Republic of China and the EU has to grow to $800 billion in 2020. Now it makes about $500 billion. The share of our country in this commodity turnover is very unimportant. It is planned that modernization of transport and logistic knot will increase it to 8%. Why will it be favourable to transport goods through Kazakhstan? Of course, sea transportation considerably beats land at cost., almost twice, but key competitive advantage of the last is the considerable saving of time. For example, today freight from China to Europe by sea goes 45-60 days, through Kazakhstan – 20–23. Modernization of transport infrastructure will reduce time of land delivery till 16–18 days. And in business the speed of delivery plays very important role".

Development of large investment projects has to be promoted by the Agreement on expansion and deepening of mutually beneficial cooperation in the sphere of nuclear between JSC NAC Kazatomprom and Chinese General Nuclear and Power Corporation (CGNPC). Creation of Joint Ventures for Production of Ready Nuclear Fuel for Nuclear Energy Plants , the Heatallocating Assemblies (TVS), and Development of the Operating Uranium Field Is Provided. The First one Will Be Located in Ust-Kamenogorsk, on the basis of JSC Ulbinsky Steel Works.As for the Second, Now the Parties Conduct Negotiations on a Field Choice, – comment in JSC NAC Kazatomprom. The exact volume of investment into the project on release of TVS will be determined after development of the study. Investments in development of the operating field it won't be required. Projects will be implemented at the expense of own means of JSC NAC Kazatomprom and CGNPC, and also borrowed money.

"Kazatomprom"is the leading producer of uranium. For China, considering its plans for construction of APEC, fuel foils will be necessary for development. If the enterprise is created, we will sell not a semi-finished product, but a final product", – Syroyezhkin notes.

Other document signed following the results of a meeting of business council is the memorandum between JSC Samruk-Energo and the Chinese international corporation of water management and energy on cooperation in development of the Shelek region and transfer of a drain of the river of Kensu in the Bestyubinsky reservoir. As explained in JSC Samruk-Kazyna, the purpose is development of partnership and attraction of investments into electro-energy branch of Kazakhstan. Thus the special attention is paid to implementation of projects on electricity supply of the southern region of the country. An estimated cost of the project – $1750,8 million.

Besides, the agreement between JSC Samruk-Kazyna and the State electronetwork corporation of China (State Grid) on strategic cooperation is concluded. It assumes cooperation in the sphere of creation of electric communications between two countries, provides construction of electronetwork infrastructure, investigation and development of new energy resources.

Also the fuel complex isn't disregarded: the agreement on enlargement of technical cooperation is signed between JSC KazMunaiGas Oil Company and the Chinese national oil company with the purpose of increase of oil recovery of the field Kumkol Youzhnyi.

Rural "distances"

Investment projects in agriculture, plans made by the Ministry of Agriculture of RK together with JSC "NUH Kazagro", is sent to the Ministry of investments and development and JSC Kaznex Invest. In particular, as told in Ministry of Agriculture, it contains projects on milk processing, creation of dairy and commodity farms, construction of a meat-processing complex.

Prospects of cooperation with the Chinese state corporation CITIC are considered. So, in November, 2014 the project on creation of 12 thousand heads of KRS in the Karaganda region was presented to her representatives. In addition, landowners of Zhambyl and Almaty areas are interested in joint projects with China in plant growing. Now the akimat of Zhambyl area prepares the offer on development of a vegetable cluster and construction of hothouse complexes. In the Almaty region it is supposed to start mini-plant on production of sugar.

For today Kazakhstan unconditionally is in the lead in respect of attraction of the Chinese FDI among the countries of the Eurasian economic union. The total amount of the saved-up FDI in Kazakhstan, Russia and Belarus following the results of 2013 made $24,67 billion, and 91% from them fell on our country. Proceeding from the bilateral agreements signed in December, dynamics of capital investments from China will only grow, and their branch structure will become more various.

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