Zhenis Kembayev. Problems of Post-Communism. Volume 67, Issue 3. May/June 2020.
Introduction
This article examines different stages of the development of China-Kazakhstan cooperation and identifies major factors that have facilitated the advancement of close links between them. It explains China’s role in Kazakhstan’s multi-vectored foreign policy and demonstrates major milestones in the expansion of bilateral political and economic ties. It also addresses the current developments of China-Kazakhstan cooperation, particularly as related to the implementation of the Silk Road Economic Belt (SREB) initiative. In conclusion, the article argues that the China-Kazakhstan cooperation may promote the implementation of the SREB initiative, while also contributing to the consolidation of authoritarian regimes in the wider region.
In September 2013, in Astana, Chinese president Xi Jinping put forward a concept foreseeing the establishment of a “Silk Road Economic Belt” (SREB) (Xi; MFA China), the main component of an ambitious Chinese development strategy known as “One Belt and One Road” (OBOR) (Fallon). The SREB/OBOR initiative aims to revive the ancient Silk Road and clearly reflects China’s ambition to play a prominent global role in the new millennium. By some measures already the world’s largest economy (World Bank) as well as the largest exporter (WTO), China is actively changing its role in international affairs “from being a bystander to an active participant and rule-maker” (Zhu, 225).
It is not incidental that the SREB was proposed by Xi in Kazakhstan, a country that shares a long land border (over 1,780 km) with China and offers the shortest route from China to Europe. Sitting at the crossroads of Eurasia, Kazakhstan is vast in size (being the largest landlocked country in the world), possesses substantial natural resource endowments, and pragmatically seeks to maximize the benefits of its geographical position by diversifying its export infrastructure and becoming a transit country. Along with the geographical location and the economic rationales, an important factor facilitating China-Kazakhstan cooperation is Astana’s strong commitment to a multi-vectored foreign policy with the purpose of maintaining international security in the country’s neighborhood (MFA Kazakhstan). Being in the process of consolidation of its national statehood and giving top-priority importance to internal political stability (Kembayev, 298), Kazakhstan is vitally interested in peaceful and mutually beneficial relations with all the world’s countries and alliances, and in particular with its neighbors (Akorda). Consequently, Kazakhstan has throughout its independent existence aspired to friendly relations with China and both countries have gradually developed extensive political and economic ties.
The China-Kazakhstan relationship represents a case where there was much complementarity concerning the two countries’ economies, the geopolitics of the states as such, and the political interests of the government leaders. Understandably, the high level of complementarity facilitated the relatively easy establishment of cooperation across a large number of areas. However, despite the strong mutual interests of the leaderships of both countries in intensifying bilateral links, it may be noted in passing that China-Kazakhstan cooperation will not achieve the same importance as did the ancient Silk Road in connecting the East and the West, because governmental authoritarianism will forestall democratization and good governance. Instead, it is likely that cooperation will lead to the further consolidation of authoritarian regimes.
Given this general situation, the article aims at distinguishing and examining different stages of the development of China-Kazakhstan cooperation and at identifying major factors that have facilitated the advancement of close links between the two countries. The article is organized as follows. The first section looks into the initial stage of China-Kazakhstan rapprochement characterized by settling boundary disputes, establishing a foundation for political and economic cooperation, and exploring the possibility of building a New Silk Road. The second section deals with the establishment of a China-Kazakhstan strategic partnership and its major characteristics. The third section addresses the current developments and problems of China-Kazakhstan cooperation, in particular as related to implementing the SREB/OBOR initiative and launching regional integration processes along the New Silk Road. The article’s key conclusions are contained in its last segment.
From Settling Border Disputes to Building “Frontiers of Eternal Peace and Friendship”
The Chinese leadership, having watched the collapse of the communist system in the Soviet Union with dismay, moved gingerly in the wake of the dissolution of its northern neighbor, especially because the newly emerging republics in Central Asia shared borders and ethnic traditions with Xinjiang, a huge autonomous region in China’s northwestern corner. In opening up contacts with those republics, China sought to prevent its new neighbors from becoming bases for Uighur separatism in Xinjiang and from recognizing Taiwan. As early as January 3, 1992, the Kazakh leadership took a firm stand against the “East Turkestan” movement and expressed its full support of the “One China” principle. On that same day, China and Kazakhstan established diplomatic relations.
The initial top priority of both countries became resolving the boundary disputes that they had inherited from the former USSR and thus ensuring security of their borders, of which 944 sq. km. were in contention (Blank, 97). Defending those borders—which, following the Sino-Soviet border clashes of 1969, involved the stationing of large numbers of military personnel there—was a heavy financial burden both for the USSR and for China (Lanteigne, 119). That burden became absolutely unaffordable for the newly independent Kazakhstan, which experienced a severe economic crisis due to the process of fundamental transformation and was vitally interested in mending fences with China. At the same time, China was willing to support the independence of Kazakhstan and to increase its influence in the region, which essentially became an “instant buffer zone between Russian and Chinese regional interests” (Lanteigne, 168). As a result, already in February 1992, China and Kazakhstan proclaimed their willingness to pursue the following objectives: (a) to find “a mutually acceptable, fair and rational solution to boundary disputes”; and (b) to explore “the benefits of geographical proximity and economic complementarity.”
As to the first objective, the resolution of boundary disputes, China and Kazakhstan became active supporters of mutual rapprochement in the framework of the so-called “One plus Four Formula,” referring to China and the four post-Soviet countries (along with Kazakhstan, also Kyrgyzstan, Russia, and Tajikistan) that share the former Sino-Soviet border. Of the four, Kazakhstan was the first country to conclude a border agreement with China, in April 1994, which settled most of the China-Kazakhstan boundary issues. The remaining disputes were completely resolved in July 1998, when the Chinese president, Jiang Zemin, and his Kazakh counterpart, Nursultan Nazarbayev, agreed to split the contested border areas. By establishing a model for resolution of border disputes for the other countries along the former Sino-Soviet border, China and Kazakhstan contributed significantly to the transformation, in June 2001, of the “One plus Four” into the Shanghai Cooperation Organization (SCO), an international organization that has become “an important instrument for China to establish its presence and influence in the region” (Zhao, 164). Notably, many of the major provisions and principles currently underlying the SCO had found earlier expression in a series of bilateral China-Kazakhstan declarations. Thus, on October 18, 1993, China and Kazakhstan proclaimed that they would not participate in any alliance or conclude any agreement with a third country directed against each other. Subsequently, they asserted their commitment to prevent and struggle against separatism (on September 11, 1995), terrorism (on July 5, 1996), and religious extremism (on November 23, 1999) on their territories, which together became known later in the SCO framework as “three evils” and are considered major threats to national security in all SCO members (Aris).
With respect to the second objective, exploring the benefits of geographical proximity and economic complementarity, it is worth noting that Kazakhstan has vast hydrocarbon and mineral resources, while the rapidly growing Chinese economy became a net petroleum importer in 1993 (Liu, 26). Yet during the immediate post-Soviet period, Kazakhstan was wary of its giant eastern neighbor, while China feared an increase in cross-border interaction among the Turkic peoples as the emergence of the Central Asian states motivated the Uighur population in Xinjiang to pursue a similar independence (Sheives, 208). Therefore, the initial concern for China and Kazakhstan consisted only of gradually achieving economic openness mostly in trade of consumer goods, of which Kazakhstan experienced a shortage due to the collapse of traditional economic links within the former Soviet Union. It is very telling that the first agreement concluded between the parties in February 1992 was on granting a Chinese state loan to Kazakhstan for the supply of consumer goods from China. It was only later, when both countries had begun to settle border and security issues successfully, that they started to contemplate how to expand their economic cooperation, primarily in the areas of energy and transportation.
In April 1994, during the visit of Chinese prime minister Li Peng to Almaty that was marked by the signing of the “historic” China-Kazakhstan border agreement, that the Chinese premier referred to increasing trade, improving transport communications, and thus building the “New Silk Road” as one of the main priorities of economic cooperation between China and Kazakhstan (Sun, 50). Kazakhstan welcomed the Chinese initiative, desiring to enhance its connectivity to world markets and to strengthen its economic independence by loosening its tight links with Russia, at that time its principal trading partner, accounting for half of Kazakhstan’s trade (WITS 1995), in particular because of the lack of any significant transport routes elsewhere. As the first important step toward creating the New Silk Road, in September 1995 China and Kazakhstan agreed to use the Lianyungang seaport to load or unload goods transported from or to Kazakhstan. Only one year later, the two countries set a target of $1bn for bilateral trade by the year 2000 (Burles, 12).
China-Kazakhstan economic cooperation was also significantly facilitated by China’s increasing reliance on energy imports. In May 1997, Li Peng said China had no choice but to engage in “vigorous” cooperation with foreign governments for acquiring energy assets abroad and increasing energy imports, in order to meet the demands of economic development (Burles, 23). A month later, China undertook the first steps into Kazakhstan’s oil and gas sector with the China National Petroleum Corporation (CNPC) outbidding American competitors and purchasing a 60 percent stake in Kazakhstan’s AktobeMunaiGas company for $4.3bn, at the time China’s biggest investment abroad (Walker and Corzine, 9). In this context, it is worth noting that Kazakhstan, as an integral part of its multi-vectored foreign policy, has developed a wide-ranging relationship with the United States, which had secured access of its companies to Caspian energy development projects already in the early 1990s and played an important role in strengthening Kazakhstan’s newly acquired sovereignty (Carlson, 55). Although Washington had lobbied strongly on behalf of the American oil groups to expand their assets in the Caspian Basin (Corzine), Nazarbayev opted for China in large part because of Beijing’s explicit commitment to build an eastern pipeline and thus to lessen Kazakhstan’s economic dependence on Russia. In fact, in September 1997, the first Kazakh-Chinese oil deal was followed by a larger basket of agreements worth $9.5bn, including an arrangement to construct a pipeline from western Kazakhstan to China.
Pending the pipeline’s construction, Kazakh oil started to be delivered to China by rail, and by 1997 Kazakhstan had emerged as a supplier of crude oil to its eastern neighbor (Kalyuzhnova and Lee, 208), with the mutual trade exceeding by far the initial target and reaching $1.5bn in 2000 (Xing, 121-22). Yet although China became one of Kazakhstan’s three major trading partners, with 5.8 percent of Kazakhstan’s total trade, its share was significantly less than the still significant Russian trade (29.9%) and the increasing trade with the European Union (EU) (21.8%) (Kazstat). Kazakhstan’s relations with Russia were maintained by Astana’s participation in Moscow-led regional integration schemes. In return, those schemes allowed Kazakhstan, among other things, to increase its oil supplies to the EU, even though Kazakh exports were subject to transit quotas allocated by the Russian government (Naumkin, 51).
Nevertheless, on November 23, 1999, in a joint China-Kazakhstan declaration on strengthening cooperation in the twenty-first century, Jiang and Nazarbayev proclaimed the intention of their countries to further facilitate economic cooperation by strengthening mutual trust and developing the New Silk Road. For that purpose, on December 23, 2002, China and Kazakhstan concluded a Treaty on Good-Neighborliness, Friendship, and Cooperation, which aimed at transforming their mutual borders into “frontiers of eternal peace and friendship” by: (a) intensifying their political and security cooperation; (b) enhancing economic ties; and (c) promoting social and cultural links.
With respect to political and security cooperation, both countries underscored their willingness to refrain from any actions that might threaten the security of the other party. Indeed, Kazakhstan played an important role in China’s efforts to escape from its strategic encirclement by Washington, which considered Beijing to be a potential strategic competitor and deployed a chain of military bases in regions surrounding China (Wu and Chen, 1061). In particular, U.S. military expansion into Central Asia after September 11, 2001, brought significant concerns to the Chinese government, which harbored suspicions that the United States had a dual political agenda in the region—to fight against terrorism but also to contain China and Russia (Starobin et al). Of particular note is that, since the mid-1990s, Washington had grown increasingly concerned about undemocratic developments in Kazakhstan (Legvold, 92), while the authoritarian Kazakh leadership, much like its Chinese counterpart (Chen), was becoming increasingly worried about the U.S. tendency toward democracy enforcement and the promotion of “color revolutions” (Polese and Ó Beacháin). Thus, while being a member of the Euro-Atlantic Partnership Council and cooperating with NATO through the country’s Individual Partnership Action Plan (Vinnikov, 76), Kazakhstan agreed at the same time to strengthen security cooperation with China both bilaterally and within the SCO, in particular with the purpose of fighting the “three evils,” which were defined by the parties very broadly and gave them wide leeway to suppress extremists and political opponents alike and thus prevent any attempts to change the existing political systems (Aris, 467).
As for enhancing economic cooperation, China and Kazakhstan agreed to guarantee the legal rights of each other’s citizens and companies on their respective territories. In fact, already in June 1998, CNPC and KazTransOil, the national oil transporter in Kazakhstan, agreed to conduct a feasibility study of the construction of a 3,000-km oil pipeline linking the Kazakh oilfields with Xinjiang (KazTransOil). For Beijing, constructing the pipeline addressed two major issues: (a) reducing China’s energy dependency on the Middle East and overcoming the “Malacca dilemma” (Stegen, 195); and (b) providing positive spillover effects to Xinjiang, in particular by promoting social stability and thus curbing separatist movements and reinforcing Xinjiang’s links with the country’s economy (Álvarez, 66). For Astana, the pipeline to China, along with bringing economic benefits, was the cornerstone of a strategy to decrease its dependence on Moscow, given that almost all of Kazakhstan’s energy exports had been transported to world markets via Russia (Cohen, 14). Although the fall of world oil prices and early worries about insufficient Kazakh oil reserves delayed construction of the pipeline (Smirnov, 76), the situation changed following two major events, namely the discovery of Kashagan, the world’s largest oil find in recent decades, in 2000 (Huirong and Hongwei, 178), and the attacks of September 11, 2001, and the subsequent Iraq campaign, with the United States increasing its military presence in and around the Malacca Strait and the Middle East (Lee, 271). These developments moved China to strengthen its foothold in the energy sector of Kazakhstan, and in early 2002, CNPC and KazMunaiGaz (KMG), the Kazakh state oil corporation, began working on the first (western) section of the China-Kazakhstan oil pipeline (Atyrau-Kenkiyak), which was completed in March 2003 (Liao, 43).
In building “frontiers of eternal peace and friendship,” China and Kazakhstan also attached great importance to promoting links in the fields of culture, education, science, tourism, and sports as well as to solving transboundary environmental problems, with the purpose of making the concept of eternal friendship widely accepted by the two peoples. In doing so, the parties aimed in particular at changing Kazakhstan’s public opinion toward China, which is largely characterized by centuries-long entrenched mistrust and suspicion. The historical dimension of Chinese foreign policy, most notably China’s westward expansion during the Tang and Qing dynasties, was significantly reinforced by the legacy of Soviet propaganda (Laruelle and Peyrouse, 180-81), which had created a negative image of China as attempting to continue expansion and seeking to establish hegemony in the region (Zhao, 173). As to modern problems, a constant source of anxiety and tension in Kazakhstan has been environmental threats related in particular to nuclear tests in the Lop Nor desert in China, approximately 1,000 km from the Kazakh frontier (Melet, 235-36), and water security, as Xinjiang’s economic modernization resulted in reduction in the water flows of more than twenty cross-border rivers, which impact on almost the half of Kazakhstan’s population (Stone). In this regard, of great importance for China-Kazakhstan rapprochement was China’s decision to issue a formal moratorium on nuclear testing in July 1996. Another significant contribution to promoting friendly relations between the two countries was made in September 2001, when China and Kazakhstan agreed to rationally use and protect transboundary rivers and to create a joint commission to discuss contentious issues (Ho, 145).
Establishing A Strategic Partnership
As Jiang began to relinquish his top positions in China’s power hierarchy to Hu Jintao at the end of 2002, Nazarbayev said that his country should learn from the Chinese experience of the succession of generations in power and expressed his satisfaction with the new Chinese leadership’s willingness to expand cooperation (Interfax-Kazakhstan). In June 2003, during Hu’s visit to Astana, a Five-Year (2003-2008) Cooperation Program was adopted that foresaw, among other things, the commencement of a feasibility study on construction of a natural gas pipeline from Kazakhstan and other Central Asian countries to China (the Central Asia-China gas pipeline) and the promotion of mutual trade and investment in the non-energy sphere, which in particular reflected Kazakhstan’s desire to overcome an overreliance on oil and mineral resources and to diversify its economy (Konkakov and Kubayeva, 7). Additional steps toward boosting economic links were taken during the return visit of Nazarbayev to Beijing in May 2004, when China and Kazakhstan agreed to provide each other most-favored-nation treatment in the mutual trade of goods and to explore the possibility of constructing a Trans-Kazakhstan railway from the Kazakh-Chinese border to the Caspian Sea port of Aktau. As an integral part of the envisioned railway, in September 2004, China and Kazakhstan agreed to establish the “Khorgos Cooperation Center,” a dry port on the China-Kazakh border that is seen as a strategic hub for Chinese cargo exports to Europe and an important component of the New Silk Road.
In December 2005, CNPC and KMG completed the second (eastern) section (Atasu-Alashankou) of the China-Kazakhstan oil pipeline, which became operational in May 2006 supplying oil directly to Xinjiang with an initial annual capacity of 10 million tons (Mtoe). Concerns about whether there was enough oil to fill the pipeline (Barbasov, 110) were to a substantial extent removed by the acquisition of additional energy assets by CNPC, the most notable of which was the purchase of the heretofore Canadian-run PetroKazakhstan company in August 2005 for $4.18bn, at that time the largest foreign purchase ever made by a Chinese company (Pala). This deal was significantly facilitated by Hu’s visit to Astana in July 2005, when both countries declared that their relationship had moved from reciprocal political support and economic cooperation to “strategic partnership.”
Even though Beijing had never clearly defined this term, establishing a strategic partnership “implied something important, cooperative, and long term in nature … [and] became China’s foreign policy objective with any country or group of countries possessing significant clout in world and regional affairs” (Wang, 38). Launching a strategic partnership with Kazakhstan was also fully in line with China’s foreign policy concept formulated in 2003, which reflected China’s rapidly increasing national strength and its efforts at developing friendly relations with neighboring countries and preventing their becoming anxious about Beijing’s growing power, in particular by providing them more economic aid and enabling them to benefit from China’s growth (Zhao, 158-59). Moreover, by emphasizing concepts such as inviolability of state sovereignty and different development paths, strategic partnership became “a leading diplomatic tool for Beijing in defense of its political system,” as the diffusion of markets and democracy worldwide made the Chinese model of the “socialist market economy” a rare exception (Zhongping and Jing, 13).
Nazarbayev enthusiastically welcomed strategic partnership with China, which may be explained in particular by the fact that “China’s economic success achieved with tight social and political control makes her an interesting model for leaders previously belonging to the Soviet apparatus” (Melet, 235). In fact, initially conceived as “socialism with Chinese characteristics,” the China model has come to mean “‘capitalism with Chinese characteristics,” a market economy with political hegemony maintained by the one-party regime (Kennedy, 473). Also, Astana is pleased with Beijing’s doctrine of “win-win” relations, which is proclaimed to be “not limited to harvesting immediate economic gains or securing resource supplies, but instead aims to build the foundation for stable, fruitful, and long-term relationships in all dimensions, covering economy, security, people, and international image … [with] the latter [dimensions being] more important than the former, which require [in many cases] giving up certain economic gains” (Qian, 124).
Furthermore, in contrast to a relationship with the West, which is perceived as “disrespectful of sovereignty” (Kurlantzick), strategic partnership with China compares favorably for the Kazakhstan leadership, as it is based on respect for “specific features of the political structures” of both countries, non-intervention in domestic affairs, and the commitment to multipolarity in global affairs as a guarantee of consolidating the political status quo and preventing “color revolutions.” In fact, with both countries being characterized as authoritarian political regimes (EIU) and sharing similar values (Kembayev, 40-41), China and Kazakhstan are vitally interested to support each other in preserving their political systems. In this context, of particular note is that, following the Zhanaozen massacre in Kazakhstan in December 2011, which raised deep concerns in the European Union and the United States (EU, DOS), the Chinese Foreign Ministry made a statement strongly supporting Astana’s efforts to maintain stability in the country, opposing any intervention in the internal affairs of Kazakhstan, and calling for joint opposition to “modern challenges to the security and stability” such as the Arab Spring (Savel’eva).
For the purpose of asserting their respective regimes’ safety and legitimacy, both countries urgently require not only safeguarding regional security but also ensuring economic growth. Revealingly, during Nazarbayev’s visit to Beijing in December 2006, China and Kazakhstan adopted a Cooperation Strategy for the Twenty-First Century, calling for boosting bilateral trade to $15bn by 2015 (Xinhua). Although both countries pledged to expand trade in products with high added value and to diversify the structure of commodities, the substantial increase in trade was largely expected from building the third (middle) section of the China-Kazakhstan oil pipeline and the Central Asia-China gas pipeline, the construction of which was ultimately agreed in August 2007. The oil pipeline’s third section (Kenkiyak-Kumkol) was completed in October 2009, connecting it to the Kumkol-Atasu section that already existed in Soviet times, and thus doubling the pipeline’s potential capacity to 20Mtoe (KazTransOil). Moreover, in December 2009, the Central Asia-China gas pipeline (Line A), including its Kazakh section running across southern Kazakhstan from Uzbekistan to western China, was put in operation. In October 2010, a parallel Line B started transporting gas to China, allowing the pipeline to reach a delivery capacity of 30bcm (CNPC).
The China-Kazakhstan strategic partnership also showed its worth in the aftermath of the 2008 financial crisis, when Beijing provided Astana with a loan worth $10bn, as the sharp fall of oil and commodity prices seriously aggravated the economic situation in Kazakhstan (Reuters). Astana was also able to benefit from the increased presence of Chinese companies, which made (mostly under loans-for-oil arrangements) a number of additional acquisitions in Kazakhstan’s energy sector (Jiang and Sinton, 22, 39). As a result, in 2011, either wholly or partly Chinese-owned companies produced 26Mtoe in Kazakhstan, representing around one-third of the country’s total oil production (Kalyuzhnova and Lee, 210).
Yet, even though Hu and Nazarbayev announced that bilateral relations were a priority in the respective foreign policies of their countries (Xinhua), Kazakhstan still unambiguously privileged regional integration groupings led by Russia. This was manifested by Kazakhstan’s active support for the establishment of the Eurasian Economic Community (EurAsEC) in 2000 and the Collective Security Treaty Organization in 2002. Notably, the creation of these groupings almost coincided with the foundation of the SCO and reflects in particular the political willingness of a number of post-Soviet countries to unite in view of China’s growing influence and to act jointly regarding security and economic issues in relation to China (Kembayev, 168). Although Kazakhstan and other Central Asian countries welcome the economic benefits of cooperation with China, they also, like Russia, fear the political repercussions of China’s growing economic weight. Even as China has been rapidly displacing Russia as the leading trading partner of Kazakhstan and other Central Asian countries, Moscow may retain its leading position in the region.
Furthermore, despite the proclamation made by the leaders of China and Kazakhstan that both countries aimed to substantially consolidate the friendship between their peoples (Xinhua), the narrative of a threatening China still strongly persists in the collective Kazakh psyche and is even dramatized by a widespread fear of potential large-scale Chinese migration due to intensifying economic interdependence (Clarke, 161; Sadovskaya). Thus, Nazarbayev’s proposal to consider allocating one million hectares of Kazakh land for the cultivation of agricultural products by Chinese companies prompted two days of demonstrations in December 2009, a highly unusual move in a country where political dissent hardly exists (Pannier). Furthermore, in April 2016, large numbers of people protested over proposed land reforms allowing foreigners to rent agricultural land in Kazakhstan for 25 years, due to their fears that Chinese investors would buy out their land (Abdurasulov). Another major concern of Kazakhstan’s people is the lack of transparency regarding the development of China-Kazakhstan relations. In particular, the conclusion of border agreements in the 1990s and purported lease agreements allowing Chinese farmers possession of Kazakh land were surrounded by controversy and marked by claims from the opposition that Kazakhstan’s leadership was not guided by national interests. Indeed, even though in the late 1990s Kazakhstan’s government celebrated the fact that it came away from border-delimitation negotiations with China with 56.9 percent of the disputed territory, critics pointed out that the remaining 43.1percent had been Kazakhstan’s land until the new deal with China (Pannier). The unwillingness and inability of Kazakhstan’s government to effectively address such concerns give rise to speculation that “the high corruption component of Kazakh-Chinese relations cannot be denied” (Syroezhkin, 114) and that Kazakhstan’s political elite “has been bought by Chinese interests and constitutes a kind of ultimate China lobby” (Clarke, 164).
Nevertheless, China-Kazakhstan bilateral trade continued to grow faster than expected and exceeded $21bn in 2011 (WITS). Desiring to reach a new level, in June 2011, China and Kazakhstan proclaimed the establishment of a “comprehensive strategic partnership” with the purpose of strengthening bilateral cooperation “in a bid to realize common development and prosperity” and doubling bilateral trade up to $40bn by 2015 (Kazinform). Simultaneously, the national banks of both countries reached an agreement on a currency swap in the amount of $1bn, in order to facilitate mutual (in particular non-energy) trade by making settlements in their national legal tenders (Gorst). Also, in July 2011, the Chongqing-Duisburg railway, starting from the Chinese megacity of Chongqing, entering Kazakhstan, and continuing through Russia, Belarus, and Poland before ending in Germany, was put into operation (Gu). In June 2012, during the next visit of Nazarbayev to Beijing, Hu said that “the Kazakh president is an old friend of the Chinese people, who has made prominent contributions to the relationship between China and Kazakhstan” (Xinhua).
Pursuing Regional Integration Along the Silk Road?
As China’s new leader, Xi Jinping, took power in 2012, the Chinese economy faced two major problems—overcapacity and excessive foreign exchange reserve (Wang, 457). It is primarily for solving these problems that Xi launched the SREB/OBOR initiative as a tool for conducting a new neighborhood policy, with the purpose of “making [neighboring states] … more friendly politically and more close economically” (Xi). Given the positive dynamics of the development of China-Kazakhstan cooperation and the willingness of both countries to provide assistance to each other, it was logical that Xi would decide to announce China’s new strategy in Kazakhstan. Revealingly, at the summit in Astana in September 2013, Xi described China-Kazakhstan ties as “an example of neighborliness and mutually beneficial cooperation,” while Nazarbayev concurred that “mutual support of each other’s core interests and issues of major concern is the essence of the China-Kazakhstan comprehensive strategic partnership” (Xinhua).
Yet the China-Kazakhstan partnership is still overwhelmingly based on large-scale, state-to-state-type cooperation giving a high profile to state-driven, macro-level projects mostly related to energy and transport and featuring only a small share of micro-level trade and people-to-people cooperation, which may to a large extent be explained by negative stereotypes of China that are prevalent in Kazakhstan. Determined to dispel the myth of the Chinese threat of dominance, China actively pursues a soft-power strategy, which refers to China’s ability to influence “by persuasion rather than coercion” and is carried out not only by diplomacy and the gravitational pull of the nation’s economic strength but also by cultural activities abroad (Kurlantzick). Indeed, facilitating people-to-people exchanges and spreading knowledge about China is an important part of a Chinese strategy aimed at acceptance of the presence and importance of China by Kazakhstan’s population. It is very telling that Xi’s speech inaugurating the SREB was titled “Promote People-to-People Friendship and Create a Better Future” (Xi) and emphasized the role of young people, who were to become the driving force of China-Kazakhstan friendship (Xi). In this regard it is worth noting that China actively supports student exchanges by providing scholarships to Kazakhstani students. While in 2003, there were only eight graduates of Chinese universities in Kazakhstan (Kazinform), in 2016 over 12,000 Kazakhstani students studied in China (Today.kz). Additionally, in 2009, the first Confucius Institute was launched in Kazakhstan to promote Chinese language and culture, and at present there are five of them in the country. Of particular note for improving China’s image was Xi’s assurance that Beijing would use the transboundary rivers in a way that would not bring any harm to Kazakhstan’s economy (Tengrinews).
During Xi’s visit, China and Kazakhstan signed deals worth $30bn, including the acquisition of an 8.4 percent stake in the Kashagan oil field in the Caspian Sea, which increased China’s share in Kazakhstan’s oil production to 22 percent (Perlez). Also, leaders of both countries solemnly opened a branch route (Line C) of the Central Asia-China pipeline (Perlez), which was put in operation in May 2014, delivering gas from the northwest of Kazakhstan to the south and linking it to Lines A and B, thus increasing the pipeline’s total capacity to 55bcm per year (Xinhua). Furthermore, on September 7, 2013, the two countries adopted a Program of Development of Trade and Economic Cooperation until 2020 (Tengrinews), which foresaw further work on a China-Europe transport corridor as a multi-modal, high-speed transportation system that will tie together the European, Asia-Pacific, and South Asian economic regions, essentially turning Kazakhstan into the logistical heart of Eurasia (Shepard). As a part of this corridor, in August 2014, an east-west Trans-Kazakhstan railway line started to operate (Nurshayeva; Tengrinews).
It is exactly for the purpose of constructing China-Europe transport networks that in November 2014, in a completely different economic situation, characterized by rapidly falling energy prices, Nazarbayev proclaimed Kazakhstan’s new economic strategy, “Nurly Zhol” (“the Bright Road” in Kazakh) (Akorda). Adopted as preventive measures needed to help steer Kazakhstan’s economy toward sustainable growth in the context of modern challenges, the strategy reflected Kazakhstan’s ambition to transform into a transcontinental economic bridge and, according to the Kazakh leader, constituted an integral part of the SREB initiative (Nazarbayev). It implied massive state investment in transport and logistics infrastructure over the next several years, with about $10bn coming from the Kazakhstan National Fund and the same amount planned to be borrowed from international development institutions (Akorda), in particular the Asian Infrastructure Investment Bank set up by China to promote the SREB (Zhumabayeva). Moreover, in September 2016, Beijing and Astana decided to launch 51 business projects in Kazakhstan by transferring Chinese production capacities worth $26bn, mostly related to large-scale heavy industries (Forbes Kazakhstan). This move shows not only Kazakhstan’s aspiration for diversifying its economy but also China’s desire to export its industrial overcapacity to the countries involved in building the new Silk Road (Fulco).
Yet the volume of China-Kazakhstan trade so far has never exceeded the maximum level of $24bn achieved in 2012, when China became for the first and so far only time the top trading partner of Kazakhstan with 17.5 percent of Kazakhstan’s trade (WITS). Despite efforts to diversify mutual trade, the bulk of Kazakhstan’s export remained comprised of energy and raw materials (Kursiv), while the country’s imports (as seen below) come mostly from the EU and Russia. Accordingly, low energy prices since mid-2014 have significantly reduced the amount of bilateral trade, decreasing China’s share in Kazakhstan’s trade in the subsequent years, especially if compared to the EU as a single economy, which concluded an Enhanced Partnership and Cooperation Agreement with Kazakhstan on December 21, 2015 (Kembayev), and was responsible for 39.2 percent of Kazakhstan’s trade in 2016 (European Commission). China was also surpassed by Russia, whose share increased from 10.5 percent in 2010 to 20.5 percent in 2016 (WITS, WITS). This rapid growth may be explained by the establishment of a customs union in the framework of the EurAsEC in 2010 and the transformation of the EurAsEC to the Eurasian Economic Union (EAEU) effectively from January 2015.
Kazakhstan is vitally interested in maintaining stable and productive relations with Russia, among other reasons because such relations allow Astana to develop trade links with the EU, the major destination of Kazakhstan’s energy exports. Kazakhstan actively supported the creation of the EAEU, the major objective of which is the formation of a Eurasian Common Market guaranteeing the free movement of goods, capital, services, and people across the territory of all its members. In particular, Astana hopes that, once in full operation, the Eurasian Common Market will enable Kazakhstan to enter into contracts with European consumers directly, enjoying unrestricted free transit through Russian territory. Furthermore, although Kazakhstan’s current oil output is 87Mtoe (Reuters), most of the oil exported through the China-Kazakhstan pipeline, 10Mtoe out of 12.3Mtoe, with a plan to increase to 18Mtoe (Reuters; Serikov), is of Russian origin, which is delivered by a Soviet-era pipeline linking West Siberian fields with Turkmenistan, and in central Kazakhstan hooks into the line to China. In return, Kazakhstan uses Russia’s pipeline network to supply its energy to Europe with lower transit costs. Pursuing pragmatic economic integration with Russia, Astana is, however, considerably concerned about Moscow’s foreign policy of recent years (in particular, the events in Ukraine) and its future geopolitical intentions, as “given … Russia’s potential ethnic and historical claims on Kazakhstan’s territory, it is clear that any substantive state-level threat to the country would most likely come from this direction” (Ambrosio and Lange, 555).
Being very cautious about any possible assertion of an exclusive sphere of influence on its territory, Kazakhstan is strongly committed to pursuing a multi-vectored foreign policy with the purpose of preventing any potential threats to its independence. Along with maintaining positive and cooperative relationships (despite criticism of Kazakhstan’s poor human rights record) with the United States and the European Union, Kazakhstan plays an important role in the Turkic Council and the Organization of Islamic Cooperation. Yet due to a number of important factors such as Kazakhstan’s landlocked position, its physical remoteness from the European Union and the United States, and its leadership’s fears of color revolutions (Silitski) and Islamic fundamentalism (Lipovsky), a special role in Kazakhstan’s multi-vectored foreign policy is played, along with Russia, by another of Kazakhstan’s immediate neighbors, namely China. This is largely due to the fact that China does not consider Kazakhstan (and the entirety of Central Asia) as Russia’s exclusive domain, challenges Russia’s leading role in the region, and actively supports nation-building processes in Kazakhstan. Indeed, while China recognizes “Russia’s traditional strategic influence in the region and values its special role in maintain stability there, it does not approve of Russia seeing Central Asia as its ‘back yard'” (Xing, 111). Thus the China-Kazakhstan relationship serves as a major potential hedge against Russian power and influence (Ambrosio and Lange, 556), and the importance of China is clearly understood by the Kazakhstan’s leadership. At the same time, however, Kazakhstan’s alliance with Russia serves as a main counterbalance against growing Chinese influence and the establishment of the EAEU is viewed “as a necessary step to shield Kazakhstan from China’s presence in the region” (Roberts, 11).
Balancing between Russia and China (and also the West and the Turkic/Islamic world), Kazakhstan endeavors to achieve their functional complementarity in line with its own security and economic interests, to maintain international peace in the wider region, and to serve as a bridge between Europe and Asia. Therefore, while playing an important role in the EAEU, Kazakhstan also enthusiastically supports the SREB/OBOR initiative, which, in the opinion of Nazarbayev, may “advantageously link the platforms of the SCO, the EAEU and the EU into a single regional prosperity area,” or in other words “a single economic space of Greater Eurasia” (Orazgaliyeva). In line with this vision, in June 2017, Kazakhstan also vowed to integrate the SREB and the “Nurly Zhol” and to push China-Kazakhstan bilateral ties to a higher level, which was fully welcomed by China (Xinhua).
Achieving a higher level implies in particular reaching China’s long-desired goal, namely the launch of free trade between SCO members, which agreed to aspire for “gradually achieving free flow of goods, capital, services and technologies” (Article 3 of the SCO Charter). Although until recently post-Soviet SCO members have been skeptical about the removal of trade barriers, considering this a distant objective and putting it off for the indefinite future (Kembayev, 47), a number of factors such as Russia’s confrontation with the West and the ongoing transformation of the Chinese economy’s growth model from one driven by exports toward one driven by domestic consumption, have drastically changed the situation. Additional game-changers have been the creation of the EAEU and China’s willingness to deal not only bilaterally with individual Eurasian countries but also with their alliance (Kembayev, 698). Revealingly, it was in Astana that Xi called on the Eurasian integration grouping to give the “green light” to regional integration along the Silk Road, with the purpose of removing trade barriers and promoting unimpeded trade (Xi). Consequently, in June 2016, the EAEU agreed to start negotiations with China on a free trade agreement (TCA) and in October 2017 it was reported that they were expecting one to be finalized in the near future (TASS).
Conclusion
The development of China-Kazakhstan cooperation clearly reflects the ongoing rise of China and the modern Chinese foreign policy, which aims “not to dominate in a negative way, but rather to influence the states to the degree that they would, voluntarily or by necessity, view China as the main actor in the region” (Swanström, 584). China proclaims that it does not seek “to dominate regional affairs or establish any sphere of influence” (Xi) and that the rapprochement between Beijing and Astana will not undermine Kazakhstan’s state sovereignty. Rather, China enunciates that it aims to foster the interests of its rapidly expanding power along with the interests of its neighboring countries by creating a “community of shared interest and mutual benefit,” with the view of implementing the SREB/OBOR project and launching the processes of regional integration along the New Silk Road (Xi).
In advancing the SREB/OBOR initiative, China seeks not only to ensure free trade and transit but also to export its development model—a politically stable, state-directed, and capitalist authoritarian system (Ambrosio, 393)—to other countries, in particular its neighbors (Casarini, 98). China’s ambition finds full support in Kazakhstan, which has established a highly centralized political system concentrating political power in a single person for the purpose of the country’s political consolidation and economic modernization (Kembayev, 322-23). Accordingly, China and Kazakhstan are fully committed to closely cooperate in political, security, and economic areas. In political and security matters, both countries share a similar outlook on global politics and challenges and consider the maintenance of domestic political stability and international security in the wider region as the priority and the foundation of their cooperation. To this end, they have committed themselves to refrain from any actions that may threaten the security of the other, and to find a common ground in addressing threats to their respective regime stability, with the purpose of consolidating of the existing authoritarian status quo. Attaching great importance to the principles of respect for sovereignty and non-interference in internal affairs, the China-Kazakhstan partnership is devoid of any commitment to democracy and human rights. In the economic realm, due to the complementarity of their interests, China and Kazakhstan have forged extensive ties and are committed to strengthening their partnership with the purpose of building the New Silk Road, and thus facilitating economic growth and legitimizing the existing political regimes.
Despite Kazakhstan’s support of the China model and aspiration to become a transcontinental economic bridge, the SREB/OBOR initiative is supported by the Kazakh leadership not on a bilateral basis (due to the large difference between two countries in terms of population size and political influence and the widespread anti-Chinese sentiment among Kazakhstan’s population) but in the framework of the EAEU. It is precisely Kazakhstan’s desire to transform into the logistical heart of Eurasia, connecting the East and the West, that is (along with the need to counterbalance the growing Chinese influence) one of the major reasons why Astana maintains privileged relations with Moscow and has actively contributed to the establishment of the EAEU. Therefore, Kazakhstan, maintaining equilibrium between China and Russia, advocates rapprochement between the EAEU and China (and the SCO) with the purpose of avoiding any clash between them and embarking on a free trade agreement.
China-Kazakhstan cooperation may secure regional peace and security and promote economic growth. At the same time, China’s influence and support for the existing political regime in Kazakhstan will also clearly undermine and forestall democratization and good governance in Kazakhstan. Therefore, it remains doubtful that China and Kazakhstan will actually build a twenty-first-century Silk Road that would, in the spirit of the time, enhance people’s participation, promote rule of law and transparency, and increase accountability of governmental institutions in the interests of the people of both countries. Rather, China-Kazakhstan cooperation will consolidate the authoritarian status quo and the SREB/OBOR strategy will not achieve the same importance as the ancient Silk Road in effectively connecting the East and the West, as it is manifestly different from the Western security and economic cooperation/integration models and poses a challenging alternative to them.