In Kazakhstan, the number of companies from China has sharply increased: as of September 1, 4,674 legal entities and branches with owners from the Middle Kingdom have been registered, which is 150 more than on August 1. The monthly growth has become the strongest at least since the beginning of 2022. During this time, the number of registered organizations has only decreased once at the end of November 2023. In 2024, the growth is only accelerating. However, of all registered organizations, only two-thirds (3,062) are currently operational. On the other hand, the number of active companies with Chinese roots increased by 122 companies over the month, according to the Bureau of National Statistics. No other partner country showed such results in August, while the total number of active companies decreased by 221 units over the month. Much of the dynamics is attributed to the indicators from the Russian Federation – a decrease of 138 active companies over the month. The number of registered organizations with roots from the Russian Federation has also fallen: down by 31 units. At the same time, every fourth dollar we spent on foreign goods still went to the PRC. Since the introduction of the mutual visa-free regime between the Republic of Kazakhstan and the PRC in November 2023, tourist flows from both countries have increased. Since then, 12, and according to some data, 15 times more guests have arrived from China to our country. In 2023, the number of tourists from China to Kazakhstan reached 367,000 people. At the same time, 311,000 Kazakhstanis visited China, which is twice the figure of 2022. In the first half of 2024, nearly 70,000 Chinese guests arrived in Kazakhstan, ranking second after Russians (186,100 people). Tourists from India are in third place (53,700). Currently, there are 44 flights per week on the Kazakhstan-China route.
“We do not need China, but it needs us”
On the streets, in shopping malls, and restaurants, Chinese speech is constantly heard. Does Chinese expansion threaten us, the emergence of Chinatowns, communities from the Middle Kingdom? Today, we discuss the Chinese question in Kazakhstan with experts. The director of the Center for Political Research, Aydar Amrebaev, is familiar with the statistics and notes that the number of Kazakhstanis who visited the PRC after the introduction of the visa-free regime is greater than the 50,000 Chinese who came to us as guests.
“In the WTO ranking on visa openness, Kazakhstan occupies a high position with an index of 68.66. 46% of tourists came to us without a visa, 45% with an electronic visa, and 9% with a traditional visa. China has a visa openness index of 0.64%. 99% of tourists wishing to visit the PRC must have a visa. We are among the 1% visiting this country without a visa. The Chinese tourism industry is more oriented towards the domestic market. If you have been to the PRC, you have seen numerous Chinese tourists gazing at the Terracotta Army in Xi'an, exploring the Forbidden City in Beijing, and other cultural sites within the country. The overwhelming majority of tourists traveling in China are Chinese themselves,” says the researcher.
In Kazakhstan, domestic tourism is not as developed compared to China and is often associated with eco-tourism or travel related to family celebrations - tois. Our people mainly spend money on feasts, asy, and tois.
“We need to somehow rethink our priorities. The sector needs structural and infrastructural changes. One foreign tourist leaves an average of $1,000 to $1,500 in Kazakhstan per person. For example, Kashgar in Xinjiang is visited by over 5 million tourists a year. The Chinese have very well organized the leisure, holiday, and domestic tourism sectors and are reaping huge profits from it. This is a very promising industry in Kazakhstan if we engage in it. But it is still funded on a residual basis, and the level of comfort, safety, and service is lacking, which does not satisfy not only foreign tourists but also Kazakhstanis themselves. Drive to Medeo - everything is at a rather low level compared to the tourism infrastructure in other countries, such as China, Western countries, or even neighboring Uzbekistan,” says Aydar Amrebaev.
Regarding the Chinese speech that our citizens increasingly hear in public places, he notes: “The language of the Middle Kingdom is unfamiliar to our ears and is particularly noticeable. But if we consider the tourist flow from Kazakhstan as a whole, there are significantly more Russians in it than Chinese. But for some reason, we do not talk about Russophobia, about the possibility of Russian towns forming.
Aydar Amrebaev - Director of the Center for Political Research
“Sinophobia is a mythology, a technology for manipulating public consciousness, just like Americanophobia, for example. We need to operate with real numbers and think about how to increase the budget through foreign visitors to our country, how to become interesting to others, rather than escalating fears. Moreover, the visa-free regime does not grant the right to employment or residence permits - it only concerns short-term 30-day visits as tourists,” emphasizes the expert.
The second point is that the overwhelming majority of Chinese citizens do not have passports.
“In China, the opportunities to obtain a passport are limited; the Chinese government regulates this process, just as the USSR did through OVIR at one time. So thinking that we opened the borders and an uncontrolled crowd rushed to us is a mistaken opinion. Foreigners still need to be attracted here. They come here not because we consciously create comfortable conditions for them, but because we have natural beauties. We must take advantage of this! In fact, the opening of borders works for the economy, increasing the civilized consciousness of our population. Previously, perhaps, we feared our eastern neighbor due to the 'iron curtain of the USSR,' not knowing the country, its culture, language, and economic opportunities. But now the situation is completely different. And the Chinese will not rush to our open gates - the standard of living in China is higher than ours,” notes the interlocutor.
Mainly, residents of the border regions of China come to Kazakhstan, not the more successful southern Shanghai and Hong Kong, he states.
“For border residents, it is cheaper to come here for the same rest. In Xinjiang, for example, prices are biting even for Chinese citizens, while in Shymbulak, they are quite okay for them... Overall, the situation is changing, and we need to work on ourselves, rather than fear the arrival of some external forces. Now Kazakhstanis are traveling to China more often; we are beginning to understand the growing potential of China, where there are good business opportunities, and we see an influx of Chinese electric vehicles, for example,” says the head of the Center for Political Research.
A holy place is never empty
The tendency of Chinese citizens to gather in communities and remain isolated is called by Aydar Amrebaev a Chinese cultural tradition, an anthropological trait.
“This is their communal consciousness - to seek out like-minded people, to spend time together, to have lunch, to walk, and so on. I can say the same about Almaty residents: when I studied in Moscow, we, Kazakhstanis, also hung out among ourselves. This is our Asian peculiarity. Americans, for example, do not care - they can travel alone. The situation is different if such communities have an ideological character, for example, criminal groups, religious communities, or other micro-communities recognizable even by external signs. Here, everything is not so straightforward. But we should not mix everything together and think that the Chinese who hang out together and speak loudly are dangerous. They are just different,” says the political scientist.
Discussions about Chinese, as well as any other, expansion are more a question for ourselves, the expert believes.
“To what extent do we allow this expansion, not mastering our own niches and leaving them to others? If we poorly work in the field of industrial development, the niche becomes interesting for foreigners. If we work well in trade, there is no place for external forces. Look at the network of hairdressers in many shopping centers - Turkish citizens have opened barbershops, although this niche could very well be occupied by Kazakhstanis. But it is what it is. Or the sphere of selling vegetables and fruits, dried fruits - we have given it to Tajiks and Uzbeks, despite the fact that our southern population can compete in the market with similar products,” Amrebaev reasonably notes.
Regarding the possible increase of Chinese presence in our country, he predicts rather an outflow of Chinese business against the backdrop of negative trends.
“I spoke with Chinese entrepreneurs, representatives of business associations - they demonstrate dissatisfaction and caution in bilateral relations. They note a high level of corruption. The LRT project is a testament to that. Medium and large businesses from the PRC often consider leaving Kazakhstan and moving to nearby countries with a more attractive investment climate, where there is less corruption and bureaucracy, for example, Uzbekistan. I have already mentioned the communal consciousness in China. And when one businessman from the Middle Kingdom experienced pressure from the corrupt bureaucratic system, tomorrow hundreds of his colleagues will learn about it and think a thousand times about whether to invest in Kazakhstan. Information spreads instantly through social networks. If a mayor slips up or starts to 'milk' the Chinese, it immediately becomes a topic of discussion. Thus, we lose new investments,” says Amrebaev.
In addition, many Kazakhstanis engage in unscrupulous business with the Middle Kingdom, often they simply 'throw' and this spoils the overall atmosphere of relations, he recounts.
“In the current geopolitical situation, we need to take advantage of our proximity to the PRC. Russia today is a gray zone, there are problems with secondary sanctions, and businesses need to think about which markets offer opportunities and which carry risks. I am not a businessman, but I would recommend looking into business with the PRC, while working openly, honestly, and in accordance with the laws. The second decade of the Chinese initiative 'Belt and Road' is underway, the political climate of relations between the countries is excellent; it is no coincidence that the Chairman of the PRC, Xi Jinping, speaks of insisting on 'fair projects.' The time of 'political investments' has passed; mere verbal support for projects will not help - effective ideas need to be proposed, and one must be a focused businessman ready for competition,” says the political scientist.
He cites the new city of Alatau, which Kazakhstan has high hopes for, as an example.
“I was at the akimat of Almaty region and saw numerous groups of Chinese businessmen interested in this topic. In the new city, everything needs to be built - from construction, services, IT, to service. And the Chinese do this significantly faster, cheaper, and better. There are no such infrastructure projects being implemented today anywhere in the world as China is doing. Yes, we cannot deny Western quality, but now the West is also looking closely at China. Look at the intensity of visits by Western leaders to the PRC. Why are we not doing this, sitting on potential money and just being afraid? ..” - the political scientist wonders.
Arriving from abroad in Almaty is disheartening due to the lack of changes. There are certainly some shifts, but they are very slow. We are unable to compete in real-time with advanced countries, and something needs to be done about this. We cannot rely on old stereotypes - like 'our vast land' or 'we will not give anything to anyone' and all that. In reality, we have a huge unclaimed space that we are not developing and are giving away to someone under some gray schemes. We need to think seriously: what will ultimately happen to our country, the political scientist believes.
Dynamics of perception
Sinologist, founder of the Center for the Study of China and Central Asia 'Synopsis' Ruslan Izimov notes: before the pandemic, the level of perception of China in Kazakhstan was stable.
“Everything related to Chinese projects, objects, investments was mostly perceived negatively by the population. Protests and anti-government demonstrations had an anti-Chinese orientation. During the pandemic, investment activity and the overall activity of Chinese companies in Kazakhstan and worldwide decreased, several projects were frozen, and accordingly, we did not observe any manifestations - neither negative nor positive. In the post-pandemic period, the perception of China in Kazakhstan, as shown by surveys from domestic and foreign sociological institutes, has improved,” states the sinologist.
Many factors influenced this: the key one being state propaganda, which brings to the forefront messages that China is our key partner, investor, and all-weather friend, as President Tokayev of Kazakhstan says.
“Another significant factor, in my opinion, is the war in Ukraine, the changed rhetoric of the Russian authorities that Kazakhstan faces. A tougher line in Russia's foreign policy has heightened Kazakhstanis' fears regarding the northern neighbor, and statements by Russian deputies about gifted lands have surfaced. Against this backdrop, China has begun to earn those very missing points. And for the first time, Xi Jinping has stated support for the sovereignty and territorial integrity of Kazakhstan since the beginning of Kazakhstan's independence. This had an effect - the Kazakh public has become more favorable towards China and sees more opportunities in this neighborhood,” says Izimov.
Regarding the likelihood of Chinatowns appearing in our spaces, he reminds that this is one of the old themes.
Ruslan Izimov - sinologist, founder of the Center for the Study of China and Central Asia 'Synopsis'
“With the abolition of the visa regime, discussions about closed communities are intensifying, but this is a simplified view of the issue. In no Central Asian country is there a single area of compact residence of the Chinese community. There are no classic Chinatowns in the Russian Federation either, although the scale of interaction and tourist exchanges there is much higher than ours. In general, the emergence of Chinatowns cannot be ruled out, but it is unlikely to happen in the coming years. And this will not be solely related to the visa-free regime. Our region is not on the list of attractive places for Chinese to move to; they prefer to relocate to Western countries, Southeast Asia, South Korea, and Japan,” emphasizes the sinologist.
Why do Chinese go abroad? If it is for education, the clear leaders are the USA and Europe. If it is for work, they choose those same countries. In terms of entrepreneurial activity, Chinese do not consider Central Asia and Kazakhstan at all - the standard of living here is much lower than in China. Doing business here is not very profitable, continues the sinologist.
“I would like to emphasize another aspect - the visa-free regime opened the way primarily for entrepreneurs, accelerating the increase in trade volumes with China. And this is a benefit, especially when our other neighbor is under sanctions, making it increasingly difficult to trade with the Russian Federation and increasing the risk of falling under secondary sanctions,” continues Ruslan Izimov.
The second group after entrepreneurs is tourists. While the world is trying to attract residents of the Middle Kingdom as solvent, numerous clients, we - in this context - would do well to adjust our approaches to tourism.
“We need to create a tourist infrastructure; we could become the center of eco-tourism in Eurasia by applying a comprehensive approach of 'state and business.' And Kazakhstanis need to develop a more friendly attitude towards tourists. I remind you, in the global tourism development index, we rank 52nd out of 119 countries,” says the expert.
Soft power, hard hand
Overall, he believes that there is no classic Chinese expansion, but rather a loud informational noise.
“Artificially created by competitors of the PRC - the USA. But even if we acknowledge that there is an expansion, what are we doing to stop it? We just keep repeating the same thing. I also remind you that China is not the leader in investments in our country; since the beginning of the 'Belt and Road' initiative, there has even been a decrease in investment volumes. There are many restraining factors in this regard. Moreover, our studies show that China's soft power tools are not very effective. Over more than 30 years of our independence, the PRC has invested a lot in public diplomacy, but we do not see that the Chinese direction has gained mass character, that all Kazakhstanis have started speaking Chinese, or that Chinese culture has become popular. There is a certain growth in the share of Kazakhstanis studying in China (as of June 2024, more than 3,000), but there still remains a certain civilizational barrier, and so far, it has not been overcome,” shares the thoughts of the sinologist.
On the other hand, the perception of China at the level of decision-makers is changing - and quite rapidly.
“Soft power works for decision-makers: for the powerful, for the heads of departments of the PRC - a positive player, with whom filters and restrictions do not apply, and it is possible to work in various fields. We need to consider China (as well as other powers) as a potential partner in the field of metal processing, renewable energy. So far, I see that soft power works to a certain extent for the elite, while for the general public these tools remain not very significant,” - admits Ruslan Izimov.
He refers to the statement of the leaders of the two countries that a second golden thirty-year period has begun for our states.
“At the highest level, it is recognized that we have exemplary relations, we have no unresolved conflicts, and ahead - even better. International tension, the freezing of logistics chains that went through the territory of the Russian Federation, actualizes new country projects related to access to the world ocean through the territory of the PRC, the Caspian Sea, India, Pakistan, and Iran,” notes the sinologist.
In all projects, China plays a key role, and it is clear why we, as a region, strive to deepen projects with the Middle Kingdom.
“Since May 2023, the '5+1' format has been launched: Central Asia and China, the first summit was held in Xi'an, and the second summit will be in Astana in 2025. This mechanism is actively developing; the Chinese side is trying to intensify and institutionalize the format, possibly creating financial mechanisms. Everything that could not be done within the framework of the SCO, which has turned into an amorphous Eurasian ten, Beijing is now doing in the '5+1' format for more effective interaction with Central Asian countries,” the expert believes.
In his assessment, in the medium term, the issues of security, protection of Chinese investments, and the interests of Chinese citizens in the region may arise.
Economics above phobias
The director of the Center for Applied Research 'TALAP', Askar Kysykov, notes that from 2005 to 2023, the largest investor in Kazakhstan among countries remained the Netherlands, which consistently held leading positions year after year, with a total investment amount of $130.9 billion. Russia is also a significant investor, especially in recent years, taking second place with a total investment volume of $28.9 billion. Switzerland ranks third with investments of $27.1 billion.
Askar Kysykov - Director of the Center for Applied Research 'TALAP'
“China has secured fourth place in gross inflow of direct investments in Kazakhstan over the period with a total investment amount of $23.1 billion. In 2023, China also ranked fourth with an investment amount of $1.7 billion. In the coming years, I predict an increase in investments due to the implementation of several large projects: the expansion of the Shymkent oil refinery, copper smelting and bitumen plants, automotive factories, and polypropylene production. The PRC traditionally invests in uranium extraction, and projects in the oil sector are operating in the western part of the country,” notes the economist.
Trade with China is growing at a high pace, reaching $40 billion. A certain part goes to re-export to the Russian Federation; here, of course, there are risks, although customs authorities speak of controlling the flows.
“But we see a serious increase in imports, mainly of technological goods, and from other countries in the region. We do not have such consumption. Transit through China is also increasing - cargo flow is rising, and here the issue of bottlenecks in Kazakhstan will arise. As for the increase in the flow of tourists from the PRC, in absolute terms, these are small figures. We studied the experience of tourism development in the Xinjiang Uygur Autonomous Region, which was previously a depressed region. In 2023, the region was visited by more than 260 million tourists. Our country received 10 million guests. We are losing to the same Xinjiang in terms of transport infrastructure - there are more than 20 airports located there, and it is popular to travel by car. If we can attract even 1-2% from the flow of Xinjiang, it will be a good growth for our tourism industry,” continues the interlocutor.
By the end of the year, 'TALAP' will present the fourth China book - an analysis of the perception of China in Kazakhstan. According to last year's research, 74% of respondents believed that the attitude towards China has improved in recent years. This is almost 5 times more than the number of those who said it has worsened (15%). 79% of respondents supported the development of relations with China. The perception of Kazakhstanis towards China occurs within the framework of the matrix 'risks and opportunities'. It is indicative of the attitude towards tourism: while a trip to China is perceived more as an opportunity, a visit from there is seen as a risk.
“About 70 to 85% know about major Chinese projects in Kazakhstan. Positive and neutral assessments prevail. The denial of their necessity does not exceed 15%. The integral index of perception of China in Kazakhstan changes from north to south. The maximum values of the index are observed in the northern part of the country, while the minimum values are in the south. Overall, surveys showed the presence of fears regarding the sale of land to the Chinese, dirty ineffective productions, labor migration, and interethnic marriages,” says Askar Kysykov.
Results of the sociological research of the 'TALAP' center - ChinaBook 2023
In the new questionnaire for Kazakhstanis regarding the perception of China, which will be presented in December, there will also be a question about nuclear power plants - whom they would like to see as a contractor.
“They receive more, pollute the ecology”
It should be noted that two years ago, researchers from the 'PaperLab' foundation, with the support of the 'Open Society' foundation, presented the results of the project “Decoding the perception of Chinese presence in Kazakhstan: managerial, social, and ecological dimensions”. The authors analyzed the phobias of the local population, the policies of Chinese companies operating in Kazakhstan, and the strategies of local authorities for interacting with society and business based on three enterprises. These include the 'Tainysha-Mai' oil processing plant in the North Kazakhstan region, the Boguty tungsten ore processing and enrichment plant 'Zhetiycy Wolfram' in the Almaty region, and the Zhanatas wind power station in the Zhambyl region. Experts reminded that more than 10 years ago, the country's authorities presented a pool of 50 projects from Chinese investors. And now they decided to find out how part of them is being implemented and how it affects the lives of local communities.
“Sinologists, describing the perception of China and its presence in Kazakhstan, often refer to the formula 'at the top - sinophilia, and in society - sinophobia.' In the upper echelons of power, the attitude towards Chinese partners is positive, while public opinion surveys indicate a growing hostility towards China among local residents. Thus, a survey by the Central Asian Barometer (CAB) showed that since 2017, the attitude towards China among Kazakhstanis has noticeably worsened. Over a five-year period, the share of those who speak negatively about the PRC has doubled, from 10% to 20%, while the share of those with an extremely negative attitude towards Kazakhstan's neighbor has increased more than fourfold, from 6% to 25%,” analysts pointed out.
Public resistance is also growing regarding China's implementation of energy infrastructure projects in the country. Researchers noted that the factor of sinophobia is taken into account at all levels when making decisions about Chinese investment projects and further during their implementation, which is not the case, for example, with European or American companies. Residents of areas where Chinese projects operate are convinced: the Chinese would not set up such production in their own country – "therefore, we are left with an inherently dirty harmful project." In addition, they reported illegal land distribution by local officials. The villagers also complained about the lack of basic utilities: water, roads, and heating. Furthermore, the villagers are convinced that Chinese workers receive bigger pay for the same work that local residents perform.
“Facing the ineffective work of local akimats, residents expect solutions to issues from foreign investors. Even if this does not fall within the area of social corporate responsibility of the companies that have come. Requests turn into demands, and if not fulfilled, the investor becomes bad,” analysts emphasized.
The investors themselves, according to experts, are willing to engage in dialogue and help with social welfare issues in the locations. However, they do not work directly with local communities - only through akimats. Based on the results of their work, the authors of the study recommended that officials and Chinese companies improve communication channels with local communities, publish data on their activities and products, impact on ecology, staffing, and the percentage of local content.