China and Kazakhstan: Inevitability of Beijing’s Growing Influence

 

For centuries, China was a major source of wealth for the nomadic peoples of Central Asia: the relationship between the steppe and one of the most developed settled civilizations had been full of both bloody confrontations and prosperous trade. This history has imprinted itself on Central Asians, and Kazakhs in particular, who share a long border with China and who hold mixed feelings about the expanding Chinese influence in their country, ranging from open sinophobia to an acceptance of its inevitability. 

Former Chinese leader Hu Jintao and Kazakhstani President Nursultan Nazarbayev (Source: Xinhua)

The news that China is likely to secure the Texas-based oil company ConocoPhillips’ share in Kashagan, Kazakhstan’s largest oil project (see EDM, July 9), was not sensational but still raised eyebrows. The Chinese offer of $5 billion had outbid India’s intention to participate in the project. India’s involvement in developing Kashagan would have complemented Kazakhstan’s multi-vector foreign relations and economic policy, exposing its domestic oil market beyond just Western oil companies (which still dominate the scene), in addition to Russia and China. Yet, by acquiring ConocoPhillips’ stake in Kashagan, Chinese holdings in the Kazakhstani oil market are likely set to increase significantly.  

urrently, China accounts for 12 percent of Kazakhstan’s oil exports, while the European Union takes up some 72 percent (http://www.platts.com/latest-news/oil/moscow/kazakhstan-to-buy-conocophillips-84-share-in-26069211). It is difficult to judge the exact share China holds in the oil market due to unclear ownership estimates—China had been acquiring most of its stakes in Kazakhstan’s oil projects in partnership with the Kazakhstani state oil company KazMunaiGas Exploration Production, in which China Investment Corporation holds an 11-percent share (http://www.kmgep.kz/eng/investor_relations/shareholder_structure/).  

Source: http://www.jamestown.org

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