China goes west, to Kazakhstan’s benefit

Author: Bakhytzhan Kurmanov, ANU

It is no coincidence that Chinese President Xi Jinping’s first visit to Kazakhstan accorded with the start of commercial output from the Kashagan field, arguably the biggest oil and gas field in Kazakhstan and the Central Asian region. At the Palace of Independence in Astana, President Xi and Kazakhstan’s President Nursultan Nazarbayev, who has ruled Kazakhstan since independence, signed 22 trade and commercial deals valued at US$30 billion, including a $5 billion deal that gave China National Petroleum Corporation (CNPC) a stake of 8.4 per cent in the Kashagan project. At the same time both leaders officially opened the first phase of the Kazakhstan–China natural gas pipeline. Later, in an address at Nazarbayev University, Xi emphasised that China did not seek regional domination in accordance with its principle of non-interference. Xi called for a ‘new silk road’ that would uncover the transit, trade and economic potential of inland Central Asia.

Xi represents the third generation of Chinese leaders with whom Nazarbayev has dealt. The Kazakh leader has always managed to avoid trouble and promote bilateral ties with his increasingly powerful eastern neighbour. In the 1990s Kazakhstan secured and legitimised its border with China. In 2009, amidst the global financial crisis, the Kazakh government received around $10 billion in loans to rescue local banks and financial institutions. Today, Kazakhstan has recovered from the crisis and its economy is forecast to grow between 6 and 7.1 per cent per annum in 2014–18, mainly due to the Kashagan project.

Aside from ensuring economic growth, the Kazakh government has three major reasons to increase ties with China.

First, Kazakhstan aspires to counterbalance its dependence on Russia by cooperating with China. The Kazakhs joined the Customs Union (CU) in 2010 with Russia and Belarus. Russian President Vladimir Putin wants to create a Eurasian Union and enlarge the CU. But the CU has brought mixed results to the Kazakh economy. Some Kazakhs view the CU negatively amid fears it allows Russia to encroach on Kazakh sovereignty. Nevertheless, Nazarbayev clearly plans to continue with his multi-vector foreign policy, the major goal of which is to maintain good relations with Russia, China, the United States and the European Union. The increase in bilateral economic cooperation with China demonstrates that Kazakh sovereignty remains intact.

Second, Central Asian countries are trembling ahead of the year 2014, when NATO forces will leave Afghanistan. The withdrawal could lead to increased instability and sectarian conflicts as well as the growth of the drug trafficking industry and the influence of Islamic radicals. Kazakhstan experienced an outburst of Islamic terrorism in 2011 and China has always considered Uighur rebels to be Islamic extremists. It is in both countries’ national interest to deal with the alleged threat of Islamic extremism and separatism.

Finally, Kazakhstan’s growing cooperation with China aligns well with its economic objectives. Landlocked Kazakhstan’s major goal is to increase its transit potential by finishing the road project between western Europe and western China. The recent completion of a natural gas pipeline means Kazakhstan can avoid relying too much on Russian or Uzbek gas networks. Moreover, in the run up to Astana Expo 2017 the government expects growing numbers of visitors and tourists to come to Kazakhstan, including many from China. Although recent instability in emerging economies has not affected the Kazakh financial market, the Kazakh leadership might want to secure Chinese financial assistance in case of a new economic crisis.

Yet there is a general fear of China’s influence among Kazakh intellectuals and the public. Ordinary Kazakhs are afraid of Chinese economic expansion and emigration, and of conflicts over trans-border rivers. When in July the Committee of Tourism of Kazakhstan hinted that it might establish a visa-free regime for Chinese citizens, interest groups planned anti-Chinese demonstrations and were supported by the Kazakh public. In August, the committee denied any plans to abolish visas for Chinese citizens, claiming that it would merely simplify the visa regime for organised tourist groups from China in 2017.

In his speech at the Nazarbayev University, Xi announced a 10-year plan to provide 30,000 scholarships for students from Central Asia to study at Chinese universities. This news was ridiculed on Kazakh social networks as a Chinese plan to train the obedient future elite. These reactions indicate the Kazakh public’s wary attitude to growing cooperation with China.

But the government is going ahead regardless. Kazakhstan’s sale of a stake in the lucrative Kashagan project to CNPC clearly signals the country’s intention to improve bilateral ties with China.

Bakhytzhan Kurmanov is a postgraduate student at the Australian National University. He previously worked at the Ministry of Education and Science of Kazakhstan.

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