China’s interest in Kazakhstan

 

China-Kazakhstan

Chinese policy toward Kazakhstan has been mainly on the development of Xinjian Uygur Autonomous Region through inter-regional cooperation, roads, and railway construction; and second, obtaining access to Kazakhstan’s resources (oil, gas and uranium) and the reliable transit of Turkmen gas to China. In addition, Beijing seeks to expand the presence of Chinese goods in Kazakhstan’s markets, bind Astana economically with financial aid and credits, deepen cultural ties, and influence the new elite generation with soft power activities.At this stage, economic collaboration between China and Kazakhstan is backed by Beijing’s efforts in oil and gas field development, as well as in constructing or renovating the pipeline network to meet China’s demand for resources. China clearly hopes to be a permanent actor in rich pre-Caspian oil projects and to boost its stake in the Kazakhstan oil and gas industry from the current 22-24 percent. The volume of Kazakhstan oil being pumped through the Kazakhstan-China pipeline is meanwhile on the rise.

Chinese companies in Kazakhstan

China’s national strategy of replacing coal with gas is driving it to diversify its gas supply routes. As a consequence, Turkmen gas is being transported through Kazakhstan on its way to China, which will benefit from less air pollution and a reduced burden on its transportation networks. (Currently, coal haulage occupies 50 percent of China’s  railway capacity. However, China is not focusing on oil-gas negotiations alone; it has its eyes on other sectors of the Kazakhstani economy. For instance, China is an important end market for uranium. This has prompted talks between Kazatomprom, CNNC and CGNPC, which have agreed to export 24.2 tons of uranium to China by 2020 from mining joint ventures. Kazakh officials have also agreed to sell China fuel pellets produced by Ulba metallurgical plant. This has given China the resources it needs for its national program of nuclear power development from 2005-2020, which aims to increase the installed nuclear capacity to 42 GW. Moreover, as part of China’s conception of 2011-2015 energy security plan, CNNC was scheduled to invest more than 500 billion yuan ($78 billion) in constructing nuclear plants, taking nuclear power to 5 percent of Chinese energy demand. This efforts have made the Chinese nuclear sector the most dynamic in the world, and a vast market for uranium.

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