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Notwithstanding the strong economic linkages between Kazakhstan and China, the bilateral relationship is apparently facing serious challenges, which could negatively impact Chinese enterprises.
Chinese investment and implementation of key projects are already facing delays and Kazakhstan has seen several Chinese pull-outs in the recent past, according to Geopolitica.info. The report said popular opposition to Chinese investments has fomented several political protests since 2016, and continues to fester in many others. Kazakhstan established a Comprehensive Strategic Partnership with China in 2019. China is one of Kazakhstan's leading trade and investment partners. In 2021, total bilateral trade reached $22.94 billion. Additionally, by the end of 2019 China had accumulated investments worth $29.43 billion in Kazakhstan, advanced loans of more than $50 billion, cornered contracts for various projects totaling about $37.6 billion and the number of Chinese enterprises registered and operating in Kazakhstan exceeded 1000, the report said. But despite these economic linkages, the serious challenges in the bilateral relationship could negatively impact Chinese enterprises in Kazakhstan. The report said it has often been perceived by the local populace that Chinese companies were encouraging corruption. The Chinese embassy in Kazakhstan has reportedly issued a security risk alert to Chinese companies advising them to closely monitor the developing situation. The unrest may impact on Chinese businesses and on the gas pipelines running between the two countries. The report said in the first week of April, over 100 workers building a road in Kazakhstan's southern Zhambyl region downed their tools. The workers were reportedly dissatisfied with working conditions and salaries offered by the Chinese subcontractor, China Xinxing Construction & Development Co. Their earnings were between $130 and $260 per month for 10-hour workdays. The Chinese company even failed to provide them appropriate clothes for work, according to Geopolitica.info. The report said worker unrest has been rippling across Kazakhstan in recent months and this latest strike is likely to cause a reappraisal by Chinese investors. Chinese investment and implementation of key projects are already facing delays. Since the outbreak of Covid-19, the energy, chemical and infrastructure projects undertaken by Chinese enterprises in Kazakhstan have been hit hard by shortage of workers and logistics constraints. In 2016 alone, the two countries struck deals for over 50 joint projects, with Kazakhstan promoting itself as the "joining ends" of the BRI. However, only a few have come to fruition till date. In Kazakhstan's 14 provincial administrations, 24 out of 542 projects had been completed and most projects are at various stages of completion involving Chinese investors, according to Geopolitica.info. The report said Kazakhstan has seen several Chinese pull-outs in the recent past. In the Aktobe regional administration, in Kazakhstan's oil-rich west, a Chinese firm backed out of a $35-million project to produce carbon black. Likewise, in 2020 Chinese firms withdrew from a $1.4 billion fertilizer production project in the same region. Further, China Triumph International, a subsidiary of China National Building Material (CNBM), is alleged to have embezzled over $3 million in a float glass factory in Kyzylorda. Beijing may not find Kazakhstan to be the entirely secure and predictable neighbour that it was, the report said. (ANI)
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