Ties that bind Kazakhstan to China are starting to unravel

Posted: January 15, 2022 in Nikkei Asia Review
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It is a new year and there is a lot going on, something that I mean in every way. A lot of big projects landing this year, as well as various substantial papers. That on top of stuff in life in general means it is going to be very busy, and it seems as though posting material on here has already fallen foul of my scheduling! Am going to try to catch up slowly on myself, but have quite a few bits to do. Am also going to try to get back to posting my media comment highlights as well, but that is going to be an adventure for another day. First of all, a piece for the ever wonderful Nikkei Asian Review which ran back in early December before the current chaos in Kazakhstan. I have a lot more on those events which will come in due course, and of course all of this China-Central Asia writing is hopefully whetting your appetite for the forthcoming book, Sinostan: China’s Inadvertent Empire, which should be landing in April this year (and if you are so minded, can be pre-ordered here). A lot more on this to come as you can imagine.

Ties that bind Kazakhstan to China are starting to unravel

Frustrations with Beijing are becoming increasingly visible

Nursultan Nazarbayev, right, and Xi Jinping attend a news briefing after signing bilateral documents in Astana in September 2013: Kazakhstan’s view on its connections to China is not as rosy as they once were.   © Reuters

Raffaello Pantucci is a senior fellow at the S. Rajaratnam School of International Studies in Singapore and author of the forthcoming “Sinostan: China’s Inadvertent Empire (Oxford University Press, April 2022).”

When President Xi Jinping launched China’s flagship Belt and Road Initiative in 2013, he chose to do it in the Kazakhstan capital of Astana, where the concept of connectivity with China has been playing out for years.

Since then, Astana has changed its name to Nursultan, and Kazakhstan’s view on its connections to China is not as rosy as they were when the Silk Road Economic Belt was launched.

Among the countries that most warmly welcomed the Belt and Road Initiative, Kazakhstan had already been embracing Chinese investment for some time. A year after Xi’s speech, then-President Nursultan Nazarbayev inaugurated his own national vision Nurly Zhol, or Bright Path, which consciously sought to build on what was then called the Silk Road Economic Belt that President Xi had announced in Astana. Kazakhstan predicated its national development on China’s new foreign policy vision.

Yet, nearly a decade later, Kazakhstan is finding binding itself tightly to Beijing comes with as many problems as benefits.

Some of these issues are long-standing. In mid-November, Kazakh authorities reported that the water level in Lake Balkhash will fall to a critical point by 2040 unless something urgent is done, in particular at the consumer end of the river Ile in China. Kazakh authorities are developing plans, but most of them involve requiring China to curb its water consumption. Shrinking aquifers are not a new problem, but it has a growing urgency.

This is not the only waterway that Kazakhstan has problems with. Its shared rivers with Russia and Uzbekistan also suffer from similar problems, but the Chinese water consumption is causing the drying up of a critical lake.

But while too much Kazakh water is flowing into China, not enough Kazakh goods are. According to Kazakh data, between January and September 2021, food exports to China dropped 78%.

By March, a bottleneck of some 12,000 railcars had accumulated, and long queues of trucks were stopped at the border as stringent Chinese COVID-19 regulations prevented Kazakh products from getting in at the same rate as they were before.

Trains loaded with containers at the Altynkol railway station near the border with China in Kazakhstan, pictured on Oct. 26: stringent Chinese COVID-19 regulations prevented Kazakh products from getting in.   © Reuters

To the extreme irritation of Kazakh producers, transit traffic passing through Kazakhstan to and from China is facing no such delays. In fact, transit traffic has increased. This would seem to violate a key Belt and Road concept, which is supposed to be all about improving trade and connectivity among China’s neighbors first and foremost.

Another aspect of the Belt and Road idea that Central Asian nations have always liked is the idea that as manufacturing got priced out of China, production would move into their countries.

While Kazakhstan was never going to be that attractive for low-end manufacturers, the country did hope to reap some benefit from China’s economic boom, not just in terms of trade but helping its economy advance, and succeed in attracting some Chinese companies across the border.

Beijing’s decision to crack down on cryptocurrency mining has offered an unexpected opportunity for this transfer. Since China moved to shut down bitcoin mining in May, a substantial number of Chinese companies migrated to Kazakhstan, attracted by the country’s tech-friendly policies and cheap electricity.

However, these miners’ electricity consumption was too much for the Kazakh national grid to bear, forcing them to request more electricity from neighboring Russia that has created a new set of tensions with Moscow. This unexpected surge in demand for electricity is not the sort of technology transfer Kazakhstan was hoping for.

There is an element to which blaming all of these problems on the BRI is unfair. Geography can often be seen as the root issue. Similar issues are less relevant in more distant BRI countries. But at the same time, it does show the dangers of being overdependent on China, and how abrupt changes within China can have destabilizing consequences on countries that are heavily dependent. It also quite clearly undermines the win-win narrative often painted at the heart of BRI.

While Beijing continues to show a positive face with Kazakhstan, they have also let the country fall foul of the narratives stirred up during the pandemic. When Moscow started to spread stories that COVID-19 may have emerged from laboratories in Kazakhstan that the U.S. had supported after the dissolution of the Soviet Union, Beijing fanned the flames.

And when a series of articles emerged in the Chinese media suggesting Kazakhstan was, in fact, a historical part of China, leading to an uproar on Kazakh social media, the Chinese embassy in Nursultan did not apologize and instead blamed it all on the West.

All of this for the country where President Xi launched his keynote foreign policy initiative and which has eagerly embraced China as an economic, security and cultural partner.

In some ways, Kazakhstan had no choice, forced by geography to be bound to China. But it is slowly finding that the ties that BRI fosters are not necessarily ones that deliver as you expect.

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