October 8, 2019

Anti-China Protests in Kazakhstan: Signaling the Slowdown of the Belt and Road Initiative?

By Anastasia Temerko

Over the last month, Khazakstan saw a series of protests against Chinese influence spark in several cities. All over the country, from Nur Sultan to Almaty, passing by Shymkent, Aktobe, and Karaganda, Kazakhs gathered on the street calling for the abatement of the country’s dependence on China.

The protests began with hundreds of people gathering in Zhanaozen to demonstrate against the construction of Chinese factories. As part of the agreements between the two countries, China plans to build 55 factories in Kazakhstan, totaling US$27billion. These investments exacerbate the public fears of increased corruption and reliance on Chinese FDI, coupled with the already high unemployment in the city. Although Zhanaozen is known for oil production, the protestors claim that Chinese factories mainly hire Chinese workers, thus leaving the Kazakhs unemployed.

The protests stem from the 2016 land reform plans, which allowed for Kazakh land to be sold or leased at auctions, as well as rented in concessions lasting 25 years. The fear of further Chinese expansion paved the way to widespread protests, eventually forcing the government to suspend the reform. Ever since, Kazakh nationalist and anti-Chinese sentiment is common among the country’s general public.

Chinese Influence in Kazakhstan

Through the Belt and Road Initiative, China sponsors large infrastructure projects like rail networks and roads that aim at improving connectivity between China, Central Asia, and Europe. In Tajikistan and Kyrgyzstan, Chinese foreign investments amount to 51 percent and 38.3 percent respectively. Additionally, there are reports that 40 percent of the Kyrgyz external debt is owed to China (Timofeeva, 2018). Although it is difficult to establish an accurate amount of Turkmen debt to China due to the lack of open financial statistics, it is safe to say that it remains equally significant. There are reports that Turkmenistan is repaying its debt to Beijing by selling natural gas below market price. Economic ties between the two countries have consequently accelerated in the past few years: out of a total of 35.2 bcm, Turkmenistan now exports 33.3 bcm to China (BP Statistical Review of World Energy, 2019). 

Nonetheless, despite this ongoing trend, economic analysis appears to disprove Kazakhstan’s financial dependence on Beijing. While it is true that in 2018 15.7 percent of Kazakhstan’s total trade was with China, Kazakhstan’s largest trade partner remains the EU, which imports over half of its exports (The Ministry of Foreign Affairs Republic of Kazakhstan, 2019). Likewise, it is well known that Kazakhstan’s economy is dependent on oil and gas export. According to Deloitte’s Business Outlook in Kazakhstan Report, oil and petrochemical products comprise 70 percent of the country’s total exports. However, the export of oil to China amounts to only around 10 percent. Moreover, out of a total of 47.9 billion cubic meters bcm of gas imported by China, only 5.4 bcm come from Khazakstan, meaning that Beijing remains only a minor energy partner for the Kazakh gas industry (BP Statistical Review of World Energy, 2019).

Similarly, according to Kazakhstan’s National Bank, in 2018, the largest foreign direct investment came from the Netherlands, with over US$7 billion pumped into the Kazakh economy, whereas China’s direct investment totals US$1.5 billion.

The Netherlands also remains Kazakhstan’s biggest foreign creditor; Kazakhstan’s external debt to the Netherlands is over US$47 billion. External debt to China and Russia, on the other hand, is around US$11 billion and US$9.3 billion respectively. According to these statistics, China does not appear to hold ant major economic sway over Kazakhstan, despite its ongoing efforts to expand Belt and Road investment in the country.

Central Asian countries can benefit from Chinese investments as long as it allows them to diversify their economies. The current economic crisis in Turkmenistan is partly a result of over-reliance on Chinese investments and high dependence on natural gas export. Currently, Kazakhstan is dependent on Chinese investment to a much lesser extent than other Central Asian countries, and the recent protests are a somewhat result of nationalist sentiment. However, as Beijing’s influence is growing in the region, Kazakhstan may find its dependence on China growing in the future.

In this Section

About the Author

SIMILAR POSTS

Nyjah Tauheed

Introduction Myanmar’s political and economic instability has made it one of the highest-risk countries in  Asia. Since the 2021 military coup, the country has faced a severe economic downturn,  international…

Read more

Robbie Duff

Introduction Since leaving the European Union (EU) in 2020, the United Kingdom (UK), has sought to redefine its place in the global order. Five years on since the pivotal Brexit…

Read more

Nathaniel Ellis

The Space Domain The exploration of the space domain represents a pivotal frontier for humanity, comparable to when people first became able to travel the seas and reach previously undiscovered…

Read more