Special Edition
President Nazarbayev Visits China,
Two Countries Sign Major Trade Pacts
President Nursultan Nazarbayev of Kazakhstan paid a state visit to China this week, as the two countries concluded major pacts bringing their trade and economic cooperation up to a new level.
Following the negotiations between President
Nazarbayev and President Hu Jintao of China in Beijing
on May 17, a number of intergovernmental agreements
were signed calling for the joint construction of a major
oil pipeline from Atasu, Kazakhstan to Alashankou, China;
the development of multifaceted cooperation in oil and gas;
trade and economic cooperation and cooperation in railway
transportation. To promote trade, the two countries
created the first intergovernmental Committee on
Cooperation and a Council of Entrepreneurs.
Also, as part of the visit, a Kazakhstan engineering
company and its Chinese partner established a joint
venture, KazNurTel, a vehicle for large investment in
Kazakhstan’s telecommunications sector. A privately
owned Kazakhstan food company, Raimbek, opened
a new $20-million plant in the Xingjian region to
produce soft drinks and juices, becoming the first
Kazakhstan-owned production facility in China.
President Nazarbayev, speaking in Urumchi, the administrative center of Xingjian province in northwestern China bordering Kazakhstan, on May 19, said “the visit was successful and very beneficial both for our side and for strengthening friendship and trust with our great eastern neighbor who demonstrates enormous economic growth.”
The President noted that “the Chinese leaders confirmed in full all the agreements reached during the 12 years of our independence with former President Jiang Zemin. In his speech at the Kazakhstan’s Parliament, Jiang Zemin once said, whatever happens in the world, relations between Kazakhstan and China will always be good and friendly. This is very important to us.”
He noted the importance of having concrete projects in the areas of trade and investment cooperation to fill these relations with substance, adding that “no vows of friendship and loyalty can materialize unless there are concrete, pragmatic, projects.”
According to President Nazarbayev, one such program is “the largest project to construct [Atasu-Alashankou] oil pipeline to China which many thought was a myth.” In fact, “an agreement was signed confirming that the construction will begin in August and the pipeline will be completed by the end of 2005. The 990-kilometer pipeline’s cost is estimated at US$1 billion. The Kazakhstan side will be the general director of the pipeline – the joint venture is being created with 50-50 participation.”
The President stressed “this means a new route for future Kazakhstan oil; means diversification and multiple directions that I have been talking about. Neither the West, nor Russia need be concerned about it. Even more so because Russian oil can use this pipeline and the future gas pipeline, for we have agreed to build a parallel gas pipeline to China. This bodes well for us and for all of our neighbors.”
As reported, the pipeline’s initial throughput capacity will be 10 million tons of oil annually with a planned expansion to 20 million tons at a later stage. The pipeline will be a component of the major Western Kazakhstan-Western China pipeline, the construction of which was envisioned by the agreements of 1997. Last March, the first segment was commissioned. The China National Petroleum Corp. operates several fields in Western Kazakhstan and has a stake in Aktobemunaigas company, producing 10 percent of Kazakhstan’s 1 million barrels a day output, which is expected to triple by 2015.
The commissioning of this pipeline will lead to a significant expansion in bilateral trade, which has already been booming for the past several years.
In 2003, China-Kazakhstan trade totaled US$3.3 billion, while in 2000 it was only US$1.5 billion. In the first quarter of 2004, the trade grew to $1.16 billion, an 87.7% increase over the same period last year. Kazakhstan’s export staples to China are steel and oil products, wheat and meat. China sells Kazakhstan food stuffs, textiles, as well as locomotives to sustain growing expansion of railway transportation throughout Kazakhstan.
In fact, one of the agreements reached after the visit provides for the construction, at some point in the future, of a narrow-gauge railway from China to the Caspian Sea and on to Europe through Iran. “This is a very interesting project which is supported by the Chinese leadership,” President Nazarbayev said. Speaking at the investment conference in Urumchi, he stressed clear benefits from such a project, which he called the Great Silk Rail Road.
Following the negotiations in Beijing, President Nazarbayev and President Hu issued a joint declaration confirming their aspiration to further strengthen ties and noting similarities of approach in settling pressing international problems. The Chinese leader supported initiatives of the President of Kazakhstan such as the convening of the Conference on Interaction and Confidence-Building Measures in Asia and the Congress of Leaders of World and Traditional Religions.
Apart from President Hu, President Nazarbayev also met Chairman of the Permanent Committee of the All-China Congress of People’s Representatives U Bango, Prime Minister Wen Jiabao and former President and current Chairman of the Central Military Council Jiang Zemin. President Nazarbayev also met with Zhang Deguang, executive secretary of the Shanghai Cooperation Organization (SCO) with whom he discussed issues of regional cooperation within this body.
Kazakhstan and China share a 1,700-kilometer border. In the mid-1990s, the two nations settled all contentious border issues which were inherited from the Soviet Union. This led to a mutual troop withdrawal from the border and strengthening of confidence between the two countries. This in turn helped initiate the Shanghai process in 1996, which led to the appearance of SCO in 2001 with Kazakhstan, China, Kyrgyzstan, Russia, Tajikistan and Uzbekistan as its members.
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News Bulletin of the Embassy of the Republic of Kazakhstan to the USA and Canada
(Compiled from own sources and agency reports)
Contact person: Roman Vassilenko
1401 16th Street NW, Washington DC 20036
Tel.: (202) 232- 5488 ext. 104, Fax: (202) 232- 5845
