Kazakhstan and the New Silk Road.
By admin November 21, 2014


With the Russians gone and an abundance of oil money, Kazakhstan has big dreams. To help achieve China’s multibillion-dollar plans for a ‘New Silk Road, they plan to build a dry port and rail yard at Khorgos in the desert on its eastern border with China.

This move comes after China’s manufacturers are increasingly moving in land, making the transportation of their goods and products to Europe more complicated. It is estimated that the journey back to the Chinese coast and transportation by sea to western markets takes around 60 days, whereas a backdoor route from Chongqing to Germany through Kazakhstan will take around 14 days. KTZ, the Kazak state-run railway vows to make that 10 days with $44 billion worth of investment over the next 5 years.

Within the first year of opening the Khorgos link in 2012, there was an 80% increase in the amount of 40-foot containers going from China to Europe via Kazakhstan and it is estimated that by 2020 there will be $3.5 billion in annual revenue. Even though most containers will still travel by sea since it is considerably cheaper, the gap is narrowing as empty carriages returning to China are now loaded with high end luxury goods and products from Europe. The new silk road is also aimed as an alternative to the US controlled sea lanes and transportation, and on the 8th November Mr Xi pledged $40 billion to ‘’break the connectivity bottleneck in Asia’’.

Nevertheless the success of this new Silk Road depends on Russia, China’s competitor for Central Asian influence. In 2011 Kazakhstan formed a custom union called the Eurasian Union with Russia and Belarus. Recent tensions with Russia and the West have also brought concerns as Europeans find it unsettling relying on Russia for their goods, since for example, Russia threatened to block Western food products passing through Belarus and Kazakhstan in October after the implementation of Western sanctions against Russia.

Kazakhstan’s commitment to these new infrastructure projects could be shattered by dropping oil prices which has led to amendments of the state budget and a downward revision of the 2014 growth targets. Yet for its part China has built banks, guesthouses and shopping centres on its side.

For more Information please visit:$163bn-fund-to-construct-new-silk-road

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