Belt and Road Initiative - The Times Of Central Asia

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Amid Sanctions, China’s Xinjiang Strengthens Ties with Central Asia

China’s Xinjiang region is deepening its engagement with Pakistan and Central Asia as part of efforts to counter Western sanctions and bolster its role in the Belt and Road Initiative (BRI). On November 26, officials from Xinjiang met with their counterparts from Kazakhstan’s Zhetysu region for the first meeting under a new cross-border coordination mechanism. The discussions focused on cross-border tourism, infrastructure, market regulation, quarantine measures, and joint crime prevention. The meeting culminated in the signing of a memorandum on cross-border tourism. The discussions took place near the port of Khorgos, a critical hub for the China Railway Express, which connects China with Europe. Khorgos is home to China’s first cross-border cooperation center, where residents of neighboring countries can engage in business and shop visa-free. The center allows duty-free purchases of up to 8,000 yuan ($1,104) per day. Xinjiang Governor Erkin Tunyoz stressed the importance of strengthening ties with Zhetysu in areas such as trade, tourism, security, and agriculture. This cooperation is becoming increasingly crucial for Beijing as Xinjiang grapples with sanctions from the United States and other Western countries over alleged human rights abuses—a claim that China denies. Sanctions include the U.S. Uyghur Forced Labor Prevention Act, which prohibits imports from Xinjiang suspected of being produced using forced labor. Similar measures have been implemented by Canada, the United Kingdom, and the European Union. In addition to its collaboration with Kazakhstan, China has established a dialogue mechanism with the five Central Asian countries—Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. Since 2020, foreign ministers from these nations have met annually to discuss logistics, trade, investment, agriculture, mining, and security. Li Lifan, a Central Asia scholar at the Shanghai Academy of Social Sciences, described Xinjiang as a “bridgehead” for the BRI. He highlighted the region’s rich natural resources and its role as a base for major industries, including automobile manufacturing. In 2023, trade between Xinjiang and Central Asian countries surged by 50%, reaching 283 billion yuan ($39 billion). Despite these successes, Li cautioned about future challenges. He noted uncertainties surrounding potential Western secondary sanctions, geopolitical tensions, and Russia's ongoing war in Ukraine. Additionally, U.S.-China relations remain fraught, with further unpredictability anticipated under the leadership of Donald Trump. “Full economic development may only be achievable once global tensions ease,” he said.

China Belt and Road Initiative Bilateral Relations International Cooperation negotiations international cargo International trade International Diplomacy

Kazakhstan and China to Double Trade, Increase Cargo Transportation

On November 4, Kazakhstan’s Prime Minister Olzhas Bektenov arrived in Shanghai and held talks with his Chinese counterpart China Li Qiang. They discussed strengthening trade, investment, transport and logistics cooperation, agriculture, energy, and tourism. Kazakhstan and China aim to double bilateral trade turnover from last year’s historic high of $41 billion. In January-September 2024, Kazakh-Chinese trade totaled $33 billion. Bektenov stressed that Kazakhstan is ready to increase exports to China of 180 high-value-added commodity items worth $1.6 billion. Bilateral agricultural trade increased by 5.8% from January to September 2024, reflecting China’s growing demand for Kazakhstani organic and environmentally-friendly agricultural products. The sides discussed expanding the export of Kazakh grain, crops, and livestock products. Regarding the transport and logistics sector, the Kazakh and Chinese prime ministers noted that over 80% of land cargo transportation from China to Europe today passes through Kazakhstan. Therefore, Kazakhstan is interested in deepening cooperation within China’s Belt and Road Initiative framework. Bektenov noted that this globally important project, together with the Trans-Caspian International Transport Route (the Middle Corridor), running through the territory of Kazakhstan, can unlock the potential of the North-South and East-West corridors. In January-September 2024, the traffic volume along the Middle Corridor exceeded the previous year's figures by 23% and amounted to 3.4 million tons. This figure is expected to increase to 10 million tons annually by 2030. Bektenov also attended the Kazakh-Chinese investment roundtable in Shanghai, which resulted in the signing of commercial agreements with Chinese companies totaling $2.5 billion, including on energy projects and localized automotive production. Addressing the forum, Bektenov said: "Kazakhstan and China have huge potential for implementing joint investment projects. Together, we can open new horizons for interaction and increase the effectiveness of cooperation. To this end, we should actively work to expand transit opportunities, strengthen industrial cooperation, and build ties between our business communities."

Trans-Caspian Trade Route Trans-Caspian International Transport Route multimodal transport corridor International Transit Belt and Road Initiative China

Kazakhstan and China to Build Container Hub in the Port of Aktau

Kazakhstan’s national railways company, Kazakhstan Temir Zholy (KTZ), has announced that KTZ Express (a subsidiary of KTZ), China’s Lianyungang Port, and Kazakhstan’s Aktau Sea Trade Port have signed the founding documents of a joint venture to construct a container hub in the port of Aktau. The documents were signed on September 20 in the Chinese city of Xi'an. The project has received support from the governments of Kazakhstan and China as part of China’s Belt and Road initiative. The project will strengthen Kazakhstan's position in the international logistics system. The planned container hub's location on the Trans-Caspian International Transport Route (TITR), or the Middle Corridor, will further increase the route's attractiveness and the volume of transit traffic. The Lianyungang Port is a longstanding partner of KTZ Express. Over the past ten years, they have implemented two joint projects: the Kazakh-Chinese terminal in the Port of Lianyungang and Khorgos Gateway, the largest dry port in Central Asia located on the Kazakh-Chinese border. Also on September 20, a container train departed along the TITR from Xi'an on the route Altynkol—Aktau (Kazakhstan)—Baku (Azerbaijan)—Poti (Georgia)—Burgas (Bulgaria)—Belgrade (Serbia)—Hamburg/Duisburg/Budapest. The heads of the railway administrations of China, Kazakhstan, Azerbaijan, and Georgia attended the departure ceremony. The train, consisting of 55 40-foot containers, was assembled at the Kazakh-Chinese Xi'an terminal. It will travel about 7,000 km to Baku in 8-11 days and then reach its final destination in Budapest in 25 days. The reduced delivery time was made possible by the cooperation of the railway and port administrations of the TITR member countries. The Kazakh-Chinese terminal in the dry port of Xi'an was opened in early 2024. Today, 30% of all container trains from China to Europe via Kazakhstan are formed in the dry port. According to KTZ, thanks to the terminal in Xi'an, cargo transit along the TITR increased 20-fold in the first eight months of this year compared to last year. The delivery time to Azerbaijan has been reduced to 11 days and to Georgia to 14 days.

International transport Transport cooperation Belt and Road Initiative

Kazakhstan and China Collaborate on Container Hub for Aktau Port

At the Kazakhstan-China roundtable held in Astana on July 2, several agreements were signed by Kazakhstan’s national railways company Kazakhstan Temir Zholy (KTZ) and Chinese partners to expand Kazakhstan-China cooperation within the Belt and Road Initiative. Kazakhstan Temir Zholy and Lianyungang Port Group agreed on joint investment in the construction of a container hub at the port of Aktau on Kazakhstan’s Caspian coast. The project aims to improve both the effectiveness of the port’s existing infrastructure and the processing of container cargoes shipped through Kazakhstan. KTZ Express (a subsidiary of KTZ), Xi'an Free Trade Port (China), and Slavtrans-Service JSC (Russia) agreed to create a unified digital corridor on the China-Kazakhstan-Russia route to provide a seamless system for processing customs clearance, electronic trade, and other functions. Once in place, it will significantly accelerate logistics, promote the development of electronic trade, simplify customs procedures, reduce trade barriers, increase the transparency and efficiency of supply chains. An agreement was also signed with China’s CRRC for the supply of 200 locomotives to Kazakhstan. Built with improved structural and traction parameters, the locomotives will be adapted to withstand Kazakhstan’s climate and to emit low levels of harmful substances into the atmosphere.

Transport and Logistics Belt and Road Initiative Caspian

Is the China–Kyrgyzstan–Uzbekistan Railway Project Losing Steam Again?

By Robert M. Cutler The China–Kyrgyzstan–Uzbekistan (CKU) railway was first proposed in 1997. There seemed finally to be a prospect for a start to the project after agreements at the Xi'an summit amongst China and the five Central Asian countries in May 2023. Construction on the 523-kilometre route was scheduled to begin several months after, but this has still not happened. Disagreements over the route and—still worse—over the funding risk relegating the project back to the drawing-boards where it has languished for over a quarter-century. After the initial agreement in 1997, it was these essentially unchanging disagreements over financing and the route within Kyrgyzstan that stalled negotiations, and over a final agreement of conditions for its construction in the early 2000s. These disagreements concern the geo-economic strategies of the respective parties, and they have not changed in over two decades. China favors a shorter route, while Kyrgyzstan pushes for a longer one to benefit its domestic infrastructure. Specifically, Kyrgyzstan wants to use the railway's construction to establish better connections between the northern and southern parts of the country, which are separated by a mountain range. Further difficulties in CKU implementation For Uzbekistan, a turning-point was its decision in 2017 to send railway experts to discuss the project with Kyrgyzstan. Then in 2019, Uzbekistan invited Turkey to co-finance the Kyrgyz section. The current cost of the whole project is estimated at $6 billion. A preliminary agreement has been reached on the division of this total, according to which each of the three parties will contribute 30 per cent (but at different stages of the project), with the source of the final 10 per cent including the cost of the feasibility study still to be determined. Despite this progress, public concerns in Kyrgyzstan over several critical practical issues remain unaddressed and continue to complicate a final agreement. These include the anticipated influx of Chinese workers, the professional development of local railway engineers, the allocation of investments for industrial projects along the railway corridor and the facilitation of increased exports of Kyrgyzstan's products to the Chinese market. These elements are essential for the long-term viability and success of the CKU railway initiative. Interestingly, these are very similar to the concerns of Kazakhstan that delayed the construction of the first (i.e., the Atasu–Alashankou) segment of the Kazakhstan–China oil export pipeline in the early 2000s. Moreover, China originally insisted on compensation from Bishkek for its contribution in the form of ownership of Kyrgyz mines, including the world’s second-largest iron-ore reserve at Zhetim Too, which Kyrgyz President Sadyr Japarov claims is worth at least $50 billion. It does not help matters that this site adjoins a large glacier, the water from which is crucial for irrigation of major Kyrgyz agricultural holdings. Other Uzbek initiatives for infrastructure connectivity On 1 November 2023, at a forum of the Shanghai Co-operation Organization (SCO) meeting in Tashkent, transportation officials from Uzbekistan, Kyrgyzstan and Russia signed a memorandum to establish a new Kyrgyzstan–Russia trade corridor through Turkmenistan (who, incidentally,...

Belt and Road Initiative Reforms

President of Kazakhstan Outlines Vision for Country’s Development

In an interview with the newspaper, Egemen Qazaqstan, President of Kazakhstan, Kassym-Jomart Tokayev spoke about political reforms in Kazakhstan, the country’s economic course, plans for the construction of a nuclear power plant, relations with China, and whether he will participate in the next presidential election. Tokayev said he believes that 2023 was full of significant events for Kazakhstan, including the completion of major political reforms, the establishment of the Constitutional Court, the holding of elections of deputies to the Mazhilis (parliament) and Maslikhats (local councils) at all levels according to new rules, and the first ever elections of akims (mayors) to districts and cities of regional significance. Kazakhstan has begun to build a fair and competitive economic system, Tokayev said, diversifying and demonopolizing the economy, updating infrastructure, supporting business, and attracting investment. In Tokayev’s words, Kazakhstan will continue with a constructive and balanced foreign policy; in 2024, the country will chair several authoritative international organizations: the Shanghai Cooperation Organization, the Collective Security Treaty Organization, the Conference on Interaction and Confidence Building Measures in Asia, the Organization of Turkic States, the International Fund for Saving the Aral Sea, and the Islamic Organization for Food Security. This year, Kazakhstan will also host the World Nomad Games. Asked about the country’s new economic course for a Fair and Just Kazakhstan and the goal of doubling the size of the economy to $450 billion by 2029, Tokayev said it is completely achievable. “According to analysts from the International Monetary Fund, by the end of 2023, GDP in Kazakhstan should be over $259 billion, which is 15% more than in 2022. This is the most significant nominal growth in Central Asia. Positive dynamics are also registered in GDP per capita. According to the IMF forecast, by 2028 this figure will increase by a third – up to $16,800.” The President explained his position vis-à-vis plans for the construction of a nuclear power plant, saying that he pays special attention to the issue given that Kazakhstan is the world’s largest uranium producer and generates its own nuclear fuel. “As many in Kazakhstan are critical of the construction of nuclear power plants given the tragic consequences of tests at the Semipalatinsk nuclear test site, I proposed submitting the issue to a national referendum,” Tokayev said. “Citizens must consider and discuss all the experts’ arguments in order to make a balanced, thoughtful decision during the free expression of their will. This will be the decision of the people.” Commenting on relations with China, the President said that today, relations between Kazakhstan and China are developing in the spirit of friendship, neighborliness, and strategic partnership. Kazakhstan firmly supports the Belt and Road Initiative, Tokayev stated, emphasizing the unprecedented growth of bilateral trade, which reached $24.3 billion from January-October 2023. China is also one of the largest investors in the Kazakhstan, with direct Chinese investment having reached $24 billion. The common border with China and favorable geographical position of Kazakhstan as a bridge between the East and West opens up broad prospects for...