Passengers boarding trains for the long journey between Kazakhstan's capital, Astana, and its commercial hub, Almaty, can now nurse a comforting thought: in a few years travel times will be dramatically slashed – and it will be partly thanks to China.
A cooperation deal on a high-speed rail link between the two cities was among a bevy of agreements that Kazakhstan's president, Nursultan Nazarbayev, emerged with from a February 21-23 visit to his powerful neighbor. The trip saw the two countries cement a cozy political and economic relationship.
The deals, including a nuclear cooperation agreement and generous Chinese loans to develop Kazakhstani industrial facilities, illustrate how a partnership originally centered on Beijing's desire to vacuum up its neighbor’s energy resources is branching out – and proving to be a two-way street.
Chinese President Hu Jintao drove that point home as Nazarbayev wound up his visit. “China attaches great importance to ties with Kazakhstan and it is an unswerving policy of China to develop China-Kazakhstan strategic partnership of long-term stability, good-neighborly friendship and win-win cooperation,” he said in remarks quoted by the Chinese Foreign Ministry.
The high-speed rail link will revolutionize the way business is done in a country where many entrepreneurs, politicians, diplomats, and officials regularly travel once a week or more between the two cities that lie 1,200 kilometers apart by rail.
There is already a comfortable nightly fast train, the Talgo, linking the two cities in 12 hours – half the 24 hours that regular passenger trains take. With the new trains expected to run at speeds as high as 350 kilometers per hour, the high-speed link should slash journey times to under 4 hours and vigorously challenge air travel as the most convenient way of shuttling between the two cities. The high-speed trains are slated to start running in 2015.
“We built the capital, Astana, in 10 years,” Nazarbayev said on February 23 in remarks quoted by Kazinform news agency. “Why is it impossible for us to realize the same sort of cosmic project – a high-speed train between Almaty and Astana, with people able to get there in 3.5 hours?”
Nazarbayev was speaking in the city of Tianjin after testing out its high-speed rail link with Beijing. It made an impression: he described it as like “flying in an aircraft, only you are on the ground.”
China's specific role in the new rail venture has not been clarified, but its input is likely to include both investment and expertise from the country that built the world's highest railway, to Tibet.
Both countries will reap the benefits, with Kazakhstan improving its transport network and China gaining a faster rail route toward Europe. There is currently a single Kazakhstan-China rail crossing, at Dostyk-Alashankou nearly 900 kilometers by rail northeast of Almaty. A new one is to open this year further south at the Khorgos border crossing, which is 360 kilometers from Almaty and is also the site of grand plans to create a Chinese-Kazakh free trade zone.
The joint communiqué signed by the two presidents described those free trade plans as “one of the most important cooperation projects in the non-raw materials sectors of the two countries’ economies.” The document also emphasized the importance of boosting cooperation outside of the energy sector, dovetailing with Kazakhstan’s strategy to reduce its economic dependence on oil & gas exports.
Energy is still the cornerstone of cooperation, though: Nazarbayev described it as “the first point in our relationship” and pointed out that a fifth of Kazakhstan’s oil is produced by Chinese companies. During the talks, Hu made a point of urging Astana to safeguard the operations of China-Kazakhstan oil & gas pipelines and speed up joint energy projects.
The first oil pipeline linking Kazakhstan and China opened in 2005, and in 2009 a gas pipeline linking Central Asia with China, passing through Kazakhstan, was completed. A new pipeline is being built from Kazakhstan's energy-rich western region to link up with it. During the visit, state energy firm KazMunaiGaz reached an agreement with CNPC to jointly develop the Urikhtau gas field to supply that new route.
Astana also clinched two deals to supply China with 55,000 metric tons of uranium. Kazakhstan, which is the world’s largest uranium producer and has around 15 percent of global reserves, has the potential to meet 40 percent of the mushrooming needs of Chinese nuclear power stations, Nazarbayev said. Such levels could make nuclear cooperation potentially even more lucrative for Kazakhstan than China’s oil & gas investments.
The Kazakhstani president added that he hoped Astana and Beijing could reach an agreement to build a uranium processing and enrichment center in Kazakhstan, a facility designed to produce fuel rods for export to China. That would help Astana realize its dream of taking part in the full nuclear fuel cycle (it currently relies on cooperation with Russia in some stages).
Industry also benefited from the visit, with the Samruk-Kazyna sovereign wealth fund receiving a loan of $1.66 billion from the China Development Bank, part of which will go to the ENRC natural resources giant. It is getting a $1.5 billion loan to develop the Sokolovsko-Sarbayskoye ore-mining operation and $400 million to develop the chromium industry. The Kazakhmys copper company will receive unspecified funds to develop deposits and produce concentrates for export to China.
Under a $5 billion credit line earmarked for energy cooperation, China also agreed to a loan to enable the construction of a petrochemical plant in Kazakhstan. The Kazfosfat phosphate enterprise signed a cooperation agreement with SinoChem Group, and Kazatomprom signed one with the China Guangdong Nuclear Power Group.
Bilateral trade reached $20 billion last year, up 45 percent year on year, but Nazarbayev said during the trip that there was plenty of untapped potential.
Given the bounty reaped by Astana, there was bound to be a political quid pro quo. Nazarbayev made strong statement of support for China’s sometimes controversial ‘One China’ policy, describing Beijing’s course as something “we also firmly uphold.” That backing was reiterated in the joint statement, in which Astana “confirmed its support for the ‘One China’ policy and the position of the Government of China in relation to questions of Taiwan, Tibet and Xinjiang.”
Joanna Lillis is a freelance writer specializing in Central Asia.
Joanna Lillis is a journalist based in Almaty and author of Dark Shadows: Inside the Secret World of Kazakhstan.
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