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ALMATY (TCA) — China’s investments in Russia, Kazakhstan and Belarus doubled over five years, with Kazakhstan being the top recipient of Chinese investment which increased by US $12 billion to more than $22 billion, according to a report prepared by Eurasian Development Bank’s (EDB) Centre for Integration Studies.  

China’s accumulated direct foreign investment (FDI) in Russia, Kazakhstan and Belarus — which comprise the Customs Union and Eurasian Economic Union to take effect from January 1, 2015 — increased from US $11.02 billion to $24.67 billion in 2009-2013. Kazakhstan accounts for 91.5% ($22.57 billion) of all Chinese investment in these countries, said the report Monitoring of Direct Investment by Russia, Belarus, Kazakhstan and Ukraine in Eurasia 2014 (MDI Eurasia) prepared by Eurasian Development Bank’s (EDB) Centre for Integration Studies. The report is based on the analysis of a large database on investment transactions, which has been developed by Eurasian Development Bank and the Russian Academy of Sciences’ Institute of World Economy and International Relations since 2013.

The report says that China has the most impressive FDI dynamics in Eurasian Economic Union’s countries, which reflects the rapid expansion of Chinese trans-national corporations (TNCs) in recent years.

While six years ago Chinese investment was comparable to that made by India in Kazakhstan, Russia and Belarus, now India lags behind China. However the report emphasizes that this became possible only because of the extensive presence of Chinese TNCs in Kazakhstan.

According to the report, Chinese FDI in Kazakhstan is an important part of China’s economic expansion in Central Asia, including the implementation of its concept of the New Silk Road Economic Belt. At present, however, the main investment projects by Chinese TNCs are in the fuel sector, primarily oil and gas production.

In Russia and Belarus, where in the preceding years cooperation with China was primarily based on lending, the absolute amount of accumulated Chinese FDI is eleven times less than in Kazakhstan. However, as the Centre for Integration Studies points out, the sector structure of Chinese FDI is more diverse and includes, in addition to large investment in the fuel sector, investment in glass and automobile production in Russia and in electric engineering, car parts manufacture and the hotel business in Belarus.

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