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China-Kazakhstan Trade Hits Record High

  • Trade between Kazakhstan and China reaches record highs, fueled by Western sanctions against Russia and China's Belt and Road Initiative.
  • Border cities like Zharkent and Khorgos see booming trade activity, dominated by Chinese goods and investments.
  • Local residents express concerns about Chinese influence, fearing economic infiltration and cultural displacement.
Kazakhstan

"You and I are not just driving along any road, we are driving along the great Silk Road," Ertugan, the driver who is taking me east toward the border with China, says with pride. But today instead of camel caravans carrying silk and spices, the route rumbles with trucks hauling sneakers and bed linen.

As we near Zharkent, a city in Kazakhstan's southeastern Zhetysu region, we approach a car transporter that has been burned to a husk along with the Chinese electric vehicles it was hauling to market. According to Ertugan the fire was sparked either by a short circuit or a carelessly thrown cigarette. The driver was able to offload some cars as the blaze spread, but most of the electric vehicles were destroyed.

In Zharkent, I find the topic of Chinese cars to be a sensitive one for locals. Some are convinced that China, after flooding the local market with affordable cars, will use this to get a foothold inside Kazakhstan.

"They are moving slowly, but bit by bit they are taking over," Asylbek, a local man aged around 50, claimed. "Now they're bringing in a lot of their equipment: cars, electric cars, trucks. Do you know that if a Chinese car breaks down, they can't fix it here? If the engine dies, you won't be able to start it again, because in Kazakhstan we have neither the parts nor the specialists for repairs."

Asylbek used to drive cars from China to Kazakhstan, but when the border was closed during the pandemic he switched to raising cattle.

Once the market is saturated with Chinese vehicles, Asylbek said, "then they will open companies in the big cities to supply spare parts for Chinese cars. They will send their own workers to Kazakhstan to repair those cars. And that's it, the Chinese have already infiltrated. Little by little, you'll see a lot of Chinese here."

The same thing, Asylbek is convinced, is happening in the industrial sector. "The Chinese are building factories and installing their equipment there which Kazakh specialists are unable to operate. Following the equipment, engineers come from China, and local residents, at best, get jobs in factories as truck drivers or laborers."

Chinese car brands are dominating sales lists in Kazakhstan. In 2023 seven of the 10 bestselling car brands in Kazakhstan were Chinese. Industry experts predict a further strengthening of Chinese car sales in the central Asian country in 2024.

Zharkent is home to more than 40,000 people, but it hardly feels like a city at all. Old vehicles bounce down rough roads, and on the outskirts cows and horses nibble on meager grass.

Most of the city's population are ethnic Kazakhs and Uyghur Muslims. People I speak to avoid the topic of China's infamous "re-education camps" across the border in China's western Xinjiang Province. Every time I attempt to enquire about the anti-Muslim repressions from Beijing locals either swiftly change the topic or refuse point blank to talk further.

Surrounding Zharkent lies swathes of agricultural land where corn is grown. A factory renders the crop into corn starch, syrup, and animal feed.

The city's main attraction is a wooden mosque built at the end of the 19th century by a Chinese architect who was commissioned by a local merchant. The landmark's distinctive curled eaves remind visitors of Zharkent's proximity to China.

Inside, workers tell me that they receive the occasional Western tourist but most are either Chinese on package tours through Central Asia or Kazakhs on their way to Khorgos, some 30 kilometers east of Zharkent.

In 2005, Kazakhstan and China set up a duty-free trade zone on the border at Khorgos. On the Chinese side, an entire city has sprung up since then with paved roads and shopping centers with boutiques selling clothes, shoes, household appliances, and textiles.

On the Kazakh side there is little to show for the nearly two decades of free trading. Several shops hold a meager selection of products, including sweets and honey, but this is not a surprise. Fancy shops are not a requirement for Kazakhstan's most valuable sales to China -- largely oil, gas, and precious metals.

Last year, trade turnover between Kazakhstan and China reached a record high of $31.5 billion. The figure is up sharply from $24 billion in 2022 and $18 billion in 2021. Many believe that spike in trade is a result of Western sanctions against Russia being subverted by countries friendly -- or at least willing to trade -- with Moscow. Kazakh authorities deny they are helping the Kremlin circumvent sanctions and call the booming trade with China "a long-term driver of sustainable progress."

Beijing has poured billions of dollars into its ambitious Belt and Road Initiative, which aims to increase Chinese influence through a host of infrastructure projects in Eurasia and beyond. Kazakhstan serves as a buckle in this belt largely due to its transport infrastructure. A railroad network makes it possible to deliver goods from China to Europe in just two weeks. In 2015, the Khorgos "dry port" was opened on the border with China, where cargo is processed and stored.

I had read the statistics, but I wanted to see Khorgos to find out how this large-scale international cooperation affects the lives of ordinary people.

Every morning Kuanysh starts up his old Volkswagen Golf and heads to the Zharkent bus station to join the other taxi drivers who transport people to the border with China. He once worked as a mechanic repairing heavy trucks. He hopes his taxi job is temporary and he can soon do something more stable. "You save every penny then the car breaks down and you have to spend everything on repairs," he complains.

On the road toward the border we pick up two passengers, Asemgul and Gulzhan. They're headed to Khorgos to earn some extra money exploiting a legal loophole of the border.

Kazakhstan nationals are permitted to export up to 31 kilograms of goods each month duty-free from Khorgos. But traders will pay people like Asemgul and Gulzhan to register the goods under their name as a way to skirt the restriction.

As we pass villages and neatly maintained Soviet-era bus stops, the women share with me the ins and outs of trading on the border.

"The Chinese don't speak Kazakh or Russian, so they hire one of our traders to handle the goods," Asemgul tells me.

But those non-Chinese traders then mark up the price by some 50 percent once it's in their hands.

"If I see something I like in Khorgos, I first ask the price. If the seller speaks Russian, Kazakh, or Uyghur, I move on; I know that it will be marked up," Asemgul says.

"But if a Chinese man has to show me the price on a piece of paper then you know you'll be able to get a good deal," she tells me as we drive. "Even if he says 1,000 tenge ($2.30), you can bargain down to 700 or even 500."

The shops are similar to any cheap city market. Shoes, clothes, and bed linen feature prominently. Some people come for fur coats, car parts, and tires. There is plenty of choice, but finding quality products is probably a lengthy process.

At the entrance to shopping centers people stand calling for intermediaries who can register their goods they hope to transport out of China. My travel companions Gulzhan and Asemgul immediately approach one of the men, negotiate a fee, and head to a building where boxes with other people's purchases are packed up waiting for transport.

As I browse one stand selling children's clothing, a Chinese saleswoman calls out in good Russian, "Mister come in, get what you need!"

The saleswoman tells me she has never made the short journey to Kazakhstan. "We're not tourists, we're traders," she says with a smile.

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Other than the Russian-speaking saleswoman, it's almost impossible to strike up a conversation here. Some merchants glance darkly at my camera. Eventually I stuff my camera into my backpack to avoid unnecessary attention.

One woman aged around 30 does speak. It turns out she lives over the border in Zharkent and commutes here to work. Skills of a successful seller, she says, are to be adept with numbers and have the charm of a seller. Language ability is also key. She won't tell me her salary, which is based partly on commission, saying only that it's "enough to live on."

On the border from China into Kazakhstan, trucks loaded with goods enter Kazakhstan in a constant flow, and on the railway trains snake up to the border in long queues. There are untold millions of dollars worth of goods entering each day from China, yet ordinary people, the taxi drivers and middlemen I have encountered, appear to get only pennies.

China has recently become Kazakhstan's largest trading partner, displacing Russia, and Beijing and Astana have big plans for the further development of Khorgos. Whether that development of trade will impact the lives of residents of Kazakhstan's border region here is a separate question. I asked economist Rasul Rysmambetov.

"Khorgos is a center of cross-border cooperation for the whole of Kazakhstan. It was not originally conceived in such a way as to develop the border area," the expert explains.

In March of this year, it was reported that the special economic zone shared by China and Kazakhstan may soon boast a major passenger and cargo airport. The new facility is planned to be operational by 2027.

"The disadvantage of border trade zones, including Khorgos, is that they tend to be created with the minimal participation of private initiative and with maximum participation from the state budget," Rysmambetov says. In general, the role of the state in trade centers of cross-border cooperation should be minimal, because not all private traders want to be partners with the state."

But he says, there is some potential that the cross-border trading may revive Kazakhstan's impoverished border areas. "Khorgos is located in an agricultural area, and if we were to come to an agreement with the Chinese on the export of agricultural goods, it's possible that local residents will be more actively involved in the economic relations between the two countries."

With my reporting trip completed I head west toward Almaty. After three hours on the road we enter the outskirts of the city, which begins with markets selling the same Chinese consumer goods I had seen back in the markets of Khorgos.

By RFE/RL 

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