Opportunities and Challenges of China's Economic Ties with Kazakhstan: Looking Back to Look Forward

Abstract

This paper examines contemporary Chinese-Kazakhstani political economic ties from the perspective of trade. In particular, it traces the evolution of this relationship before and after the critical juncture of 2013, when the Silk Road Economic Belt was announced in Astana, ushering the era of the Belt and Road Initiative. This paper advances three arguments. First and foremost, Kazakhstan has avoided developing a dependency on the Chinese economy. Its trade autonomy has been maintained before and after the Belt and Road Initiative was launched in 2013, as Kazakhstan benefited from the development of markets alternative to China. Secondly, trade between Kazakhstan and China was mostly focused on natural resources during the immediate pre-BRI years, but it has gradually shifted to a more balanced mix, encompassing intermediate goods, raw materials, and consumer goods. Thirdly, such diversification is the product of an increasingly sophisticated, complex value chain interconnecting Kazakhstan and the rest of the world, including but not limited to China. The growing complexity of these production networks, while certainly beneficial to Chinese firms, has also contributed to Kazakhstan's multi-vector geopolitical strategy. In this environment, Kazakhstan demonstrates the capability to weather the ongoing deceleration of China's economy, as the Central Asian country pursues the diversification of its own economy and external economic ties. Show more