Sanctions against the Kremlin are transforming trade in Central Asia. The deputy prime minister of Kazakhstan said that China will soon become the main trading partner, displacing Russia from the market, writes Bloomberg.
Serik Zhumangaryn, Kazakhstan's deputy prime minister and minister of trade and integration, said that by 2030, his country's trade with China will eclipse Kazakhstan's trade with the 27-nation European Union, and it will be several years before China catches up in this is the main thing. partner - Russia.
Last year, Kazakhstan's trade with China increased by about a third and approached 24 billion US dollars. It still trails trade with Russia, which added just over 6% in 2022, by about $2 billion, according to Kazakhstan's Bureau of National Statistics.
But even though Kazakhstan has said it abides by the restrictions imposed as a punishment for the war, it opposes the US-led sanctions campaign, the newspaper writes. It is clear that trade with Russia is increasing after the attack on Ukraine in February 2022, Bloomberg notes.
"We are not in the perimeter of sanctions and we do not support them, especially against our main trading partners. But we adhere to these sanctions and will adhere to them. And this is purely an economic policy," Zhumangarin said.
Although total trade with Russia rose 10% last quarter from a year earlier, Zhumangarin said the ripple effects of the sanctions forced Kazakhstan to adjust by re-exporting more goods, ramping up local production and closely monitoring the movement of goods.
"All groups of sanctioned goods are under monitoring," Jumangarin said.
As trade opportunities with Russia narrow, Kazakhstan looks east, China and across the Caspian to Iran, and has been to the Persian Gulf region, India and other countries.
"The Chinese direction is a priority," Zhumangarin said.
At a meeting with Chinese President Xi Jinping last month - during the first in-person summit of Central Asian leaders in China - Kazakh President Kasim-Jomart Tokayev set a goal of nearly doubling trade with China to $40 billion by 2030. According to Zhumangarin, Chinese companies have already started assembling cars in Kazakhstan, and other car brands like Chery are expected to join them soon.
Meanwhile, Kazakhstan has started supplying grain to China and is currently negotiating to export meat there. In addition to the two existing railway terminals that connect Kazakhstan to China, it is building another one and plans to build a fourth, Zhumangarin said.
China has also taken an interest in the trade corridor that runs through Kazakhstan from Southeast Asia to Georgia in the Caucasus, creating a bridgehead for access to European countries. According to Zhumangarin, the trans-Caspian transport route could accept some goods diverted from Russia, as well as provide additional trade traffic.
"We are studying the possibilities of Kazakhstan as a transport and logistics hub, and not only for Russia or Belarus. There are more attractive markets. Southeast Asia has a huge amount of goods that need to be transported to Europe," said Zhumangarin.
According to Zhumangarin, now that Russia is no longer a destination for some Kazakhstani goods, the country is working on diversifying supplies by supplying railways to China and is negotiating to begin supplies to Europe.
"If Kazakhstan falls under sanctions, it may simply not withstand the pressure. Kazakhstan will not be a territory through which sanctions can be circumvented," Zhumangarin said.