Azerbaijan, Baku, Feb. 5 / Trend E. Ostapenko /
Taking into account the priority of the oil and gas sector both for Kazakhstan and China, energy cooperation will be the main topic on the agenda of the forthcoming visit of President Nursultan Nazarbayev to China, analyst Sergei Popov told Trend.
The Kazakh president's visit to China is scheduled for Feb. 21.
During the visit, Nazarbayev met with President Hu Jintao, premier of the State Council Wen Jiabao, Chairman of the Standing Committee
of the National. People's Congress Wu Bangguo and representatives of business circles. It is planned to sign the interstate and intergovernmental agreements and contracts with private companies.
Kazakhstan is interested primarily in the sale of its resources to the foreign market. It provides a rapid influx of foreign currency earnings to the economy. China, as the "world factory", needs resources, including oil, gas, metals, Popov, the head of the Ural Information and Analytic Center of the Russian Institute of Strategic Research, said.
For example, Kazakhstan, in it's the most important conceptual document (the state program for accelerated industrial-innovative development up to 2014) set the task of expanding potential of existing capacity of the pipeline "Kazakhstan-China" up to 20 million tons a year, Popov said.
Astana studies the question of processing of Kazakh oil at Chinese refineries through tolling scheme to eliminate the deficit of oil products on the domestic market.
Tolling system is the processing of foreign raw materials with further export of the finished products.
The credits, allocated to Astana by Beijing, are mainly focused to implement the projects on production and transportation of resources. The Chinese-Kazakh cooperation is determined by this tendency, Popov said.
"I think that it will be preserved in the medium term prospect. Therefore, I think that hydrocarbons will remain the main theme in the current agenda [during Nazarbayev's visit to Beijing]. New possible loans of the Chinese side will focus on the interests of China in resources sectors of Kazakh economy," he said.
Samruk-Kazyna real estate fund plans to draw investments to Kazakhstan's economy worth about $ 3 billion this year. Two-billion-credit is planned to be received from the state institutions of China within the long-term financial cooperation between China and Kazakhstan. The corresponding program was developed by the two governments in 2009.
China is one of major investors for Kazakhstan, Popov said. However, there are just two snags.
First, China intends to finance specific projects, having significance for it, in the primary industries, he said. Second, China does not intend to invest directly in the economy. The country intends to allocate credits, which Kazakhstan will have to return.
"Nevertheless, it is convenient for both China and Kazakhstan," Popov, studying the political and economic processes in Central Asia, said.
This method of investments is profitable for China. It needs resources and has excess liquidity, he said. Kazakhstan has advantage because the Chinese loans are usually cheaper than the Western ones. It is necessary for Astana to develop resource industries because this is the basis of the Kazakh economy. Plus, there is a sale market.
Chinese investment projects in Kazakhstan include, for example, the construction of the second branch of the pipeline "Kazakhstan-China" on the site "Kenkiyak-Kumkol" and gas pipeline Kazakhstan-China, Popov said.
The construction project of the gas pipeline "Kazakhstan-China" is a part of the construction project of the gas pipeline "Central Asia". It is a specialized system for transporting natural gas from Turkmenistan to China through Uzbekistan and Kazakhstan.
Filling the pipeline "Kazakhstan-China" with gas was launched in November 2009. The second branch of the gas pipeline was commissioned in summer 2010. It is planned to complete the laying of the third pipe by 2012. Its capacity must reach 25 billion cubic meters of gas annually.
According to the preliminary estimates, the construction project of the third branch of gas pipeline will require investments worth over $ 1 billion. Laying the pipe will be financed at the expense of the Chinese loan.
The cooperation with China is not limited to oil and gas sector. Astana makes efforts to draw Chinese investments in non-oil sector, particularly in high-speed railway Astana-Almaty, joint production of electric-technical products, Popov said.
On the whole, the spectrum of the Chinese-Kazakh relations is quite wide. It includes transport projects - the reconstruction of roads along the route "Western Europe - Western China"; humanitarian projects - training of Kazakh students in China; trade.
"China is interested in restoring trade turnover, which reduced from $17.5 billion in 2008 up to $14 billion in 2009 amid the global financial crisis, taking into account that about 70 percent of the total trade volume between China and Central Asian region fall to Kazakhstan, " Popov said.
China and Kazakhstan actively cooperate in the field of uranium development.
It is planned to sign the contract for the long-term supplies of natural uranium during Nazarbayev's visit to Beijing, Samruk-Kazyna board chairman Kairat Kelimbetov said earlier.
Kazakhstan, along with China, has unique reserves of rare natural resources: uranium, zinc, chromium, gold, copper, molybdenum and iron.
China has an ambitious nuclear program, he said. Kazakhstan will participate there by supplying natural uranium. The parties also agreed on supplying certified fuel pellets. The different stages of preparing nuclear fuel will be developed in the future. The Chinese side expressed its firm intention to acquire these components.