No threat of Chinese expansion: Kazakhstan’s Ministry of Industry and New Technology

Kazakhstan’s Ministry of Industry and New Technology is sure that the nation is not facing the threat of Chinese expansion. May 26 Almaty hosted a round-table discussion focused on foreign investments into Kazakhstan, including on China’s presence in the Kazakhstan’s economy. “A number of speakers voiced their opinions on the so-called Chinese expansion. According to them, the share of Chinese investors is gradually decreasing even in those sectors where China has gained substantial presence”, the Ministry said in the press-release issued following the round-table discussion. Early this week Vice Minister of Agriculture Saktash Khasenov stated that Kazakhstan should consider allocating agriculture land plots to foreigners to strengthen its own food security. He stressed that “it is not only the Chinese who are interested, but also Customs Union member states – Russia and Belarus”. He is confident that allocation of land plots will bring about more agricultural produce and more jobs. Following his remarks, Kazakhstan’s people started voicing their discontent on web-based forums, while Azat opposition party initiated a public rally in an effort “to stop sales of Kazakhstan’s national wealth”. Organizers of the public rally are concerned that “Chinese entities control over ¼ Kazakhstan’s oil production output, whereas external debt of Kazakhstan makes up nearly $120 billion”. According to the Ministry of Industry, speculations about Chinese expansion in Kazakhstan are not grounded. In 2010 direct investments from China made up $5 billion, 3.9% of all the foreign investments to Kazakhstan. “The share of FDI from China is not dominating over the overall FDI”, the press-release reads. According to the Ministry, the share of Chinese companies in oil production in 2010 stood at 22.5%. Starting from 2014, their share in production of oil and condensed gas will be decreasing, reaching 19.3% by 2015 and 8.9% by 2020. “As far as loans are concerned, Kazakhstan is not a priority for China in terms of extraction-related investments. China is injecting greater amounts to Latin America, Africa, Australia and Russia”, the Ministry emphasizes. When it comes to land plots, “the applicable legislation of Kazakhstan only allows foreigners to rent agricultural lands on a lease contract up to 10 years. The contract duration with Kazakhstan’s citizens and legal entities may be 59 years maximum”. Besides, apart from the 24.2 million hectares of arable lands currently in use, there is virtually no unoccupied land available for agriculture purposes. Reserve lands of 399 000 hectares belong to desert and semi-desert areas and call for substantial melioration efforts. “Therefore the rumors of possible lease of agricultural lands to China for 99 years are far from the being the truth (…)”, the press-release reads.