Free Essay

Essay

In: Business and Management

Submitted By legolego
Words 5863
Pages 24
China and Eurasia Forum Quarterly, Volume 7, No. 1 (2009) p. 47-59
© Central Asia-Caucasus Institute & Silk Road Studies Program
ISSN: 1653-4212

China-Central Asia Trade Relations:
Economic and Social Patterns
Sadykzhan Ibraimov*

ABSTRACT
The aim of this article is to study China’s economic presence in Central Asia and its main involvements in raw materials, transport routes, opening of markets and free economic zones, and small and medium-scale projects. It must be noted that over the years from 1992 to 2007, the highest trading volumes were between China and Kazakhstan, which represented from 80 to 86 percent of all Chinese-Central
Asian trade. This growing economic cooperation has a social impact on the development of a Central Asian business diaspora based in Xinjiang. China also demonstrates its capacity to use local corruption schemes and internal Central
Asian weaknesses in its own interests: From the earliest years of independence, smuggling with China, especially the export of metals and the import of consumer goods, has proved to be a very profitable venture for Central Asian high-level officials. Keywords • China-Central Asia Trade • Xinjiang • Business Diaspora • Shuttle
Trade • Corruption

Introduction
The main difficulty in the study of economic relationships between
China and Central Asia is the lack of reliable or complete information.
Many reasons can explain this fact. The Central Asian states, first of all, do not publish information on cross-country trade. On this issue they follow the Soviet tradition and prefer not to strengthen the role of China to a public opinion which could be adverse. The Chinese authorities, for their part, do not try to heavily advertise their activities in the region and are quite comfortable with a lack of transparency in economic relations.
The next reason results from the fact that nearly the entire trading system of China with the Central Asian republics is based on corruption and criminal schemes involving high ranking political and economic elites. Objective publicity on this issue could openly reveal the flaws in cross-trading mechanisms and paint a real picture of the existing political

*

Sadykzhan Ibraimov is an Independent Researcher based in Kazakhstan.

48

Sadykzhan Ibraimov

order in Central Asia. This article is therefore built both on the information available to the public and on some confidential information.

Sino-Central Asian Trade Relations
One should first look at official figures on China’s economic presence in
Central Asia. From independence until 1998, trade turnover between
Central Asia and China was quite limited, around 350 to 700 million dollars each year. The volume started growing after the 1998 financial and economic crisis. During the period of 2000-2003, trade between China and
Central Asia more than tripled, increasing from 1 to 3.3 billion dollars.
From 2004 to 2007, this trend of trade growth became more sustainable: turnover increased by 3.7 times (270 percent), or from 4.3 to 16 billion dollars.1 Throughout the 1990s, China had a very modest position in the
Central Asian states’ foreign trade. However in the period 2000-2007, annual Sino-Central Asian trade turnover grew very rapidly, increasing on average more than 15 times compared with the 1990s. At the end of
2007, China’s share of Central Asian trade reached about 14 percent, while the region constituted 0.7 percent of China’s foreign trade. In 2007, trade between China and Kazakhstan amounted to 12,385 million dollars; breaking down to 1,608 million dollars between China and Uzbekistan,
984 million dollars between Kyrgyzstan and China; 684 million dollars between Tajikistan and China; and 377 million dollars between
Turkmenistan and China.2
Since the first years of independence, Central Asia has quickly turned into a raw materials base for China. The first phase consisted of the export of commodities: scrap metal, non-ferrous products containing rare metals, plastic waste, etc. Local businessmen quickly discovered how to work in the border regions, especially Xinjiang where mini mills and factories to process the incoming raw materials were built. After privatization virtually all major Central Asian factories and enterprises were subject to reconstitution through the bribery and subornation of local officials, and equipment and raw materials were exported to China.
Analysis of Sino-Central Asian trade therefore reflects the growth of
China as a supplier of finished products and of Central Asian countries role as suppliers of raw materials. At the end of 2007, the share of raw materials in Central Asian exports to China amounted to 91 percent; breaking down to energy at more than 68 percent, ferrous and nonferrous metals at about 6 percent, and raw textile materials at about 2 percent. At the end of 2007, the share of manufactured goods in China’s exports to
1

Vladimir Paramonov, Aleksei Strokov, Oleg Stolpovskii, Rossiia i Kitai v Tsentral’noi
Azii: politika, ekonomika, bezopasnost’ [Russia and China in Central Asia: Politics, Economy,
Security] (Bishkek, 2008), p. 155.
2
Ibid., p. 157.

THE CHINA AND EURASIA FORUM QUARTERLY • Volume 7, No. 1

China-Central Asia Trade Relations: Economic and Social Patterns

49

Central Asia amounted to 86 percent of all Chinese exports, with machinery and equipment at about 52 percent, food and consumer goods at more than 32 percent, and chemical products at about 2 percent.3
For a better understanding of the topic, one should review the main transport routes connecting Central Asian republics to China. The main flow of goods from China to Central Asia passes through Kazakhstan.
This is due to objective reasons such as convenient geographical conditions allowing transport and communication corridors to function year-round, and the development of a rail link between China and
Kazakhstan, connecting the latter with the other republics of Central
Asia and Russia. The second means of entrance of China into Central
Asia is through Kyrgyzstan. One route connects Kashgar with the northern part of Kyrgyzstan via Naryn, while another way links China, through Sary Tash, with the south of the country, then to the Fergana
Valley and Uzbekistan. The third entrance passes through the GornoBadakhshan region (GBAO) to central areas of Tajikistan and beyond.
However the road through GBAO is difficult to navigate due to its natural environment and is practically impassable during the winter. The rapid creation and development of specific Chinese firms focusing on consumer needs in Central Asia should also be analyzed because they have responded to market changes in the region. More internationalized markets selling Chinese goods and services appeared in the 1990s. In order to accelerate the development of trade, China intentionally arranges flights and routes for entrepreneurs and businessmen, for instance between Bishkek and Torugart, Osh and Irkeshtam, Urumqi and Khorgos, and Urumqi and Bakhty.
At present several major markets and free economic zones have opened especially for trade between China and Central Asia. One of the major markets is Dordoi, near Bishkek. Low taxes and customs duties in
Kyrgyzstan, and its location on the border with Kazakhstan have turned
Dordoi into a popular market not only in the Kyrgyz Republic, but also in neighboring Kazakhstan. Each day thousands of buyers of retail and wholesale goods from Kyrgyzstan, Kazakhstan, and the other Central
Asian republics come to Dordoi to purchase imported Chinese goods, often marked as “made in Poland” or “made in Turkey.” In the south of
Kyrgyzstan, not far from the Uzbek border, the Karasuu bazaar is the largest market in all Central Asia, exporting Chinese goods to
Uzbekistan, Tajikistan, and beyond. In Tajikistan several major Chinese and joint markets also operate, such as Amindzhan, Shahrahe Abreshim
(the Silk Road), Bunyad-Shengong, Mostafa Artush, and Shanghai. In
Kazakhstan, a network of wholesale markets supplies Chinese goods not

3

Ibid., p. 159.

THE CHINA AND EURASIA FORUM QUARTERLY • February 2009

50

Sadykzhan Ibraimov

only to the Central Asian republics, but also to bordering regions of
Russia.
In the Chinese Chuguchak suburb, located a few kilometers from the
Kazakhstani customs post of Maikapchagay, and at the Khorgos post, free economic zones operate within the framework of a treaty signed by the foreign affairs ministries of Kazakhstan and China, effective since March
2006. According to the document residents of Kazakhstan can purchase goods from Chinese manufacturers on the territory of Chuguchak without visa but within one day. Permission for “free” transportation through the customs posts of the two countries is granted to goods weighing no more than 50 kilograms and worth no more than 1,000 U.S. dollars. Kazakhstani entrepreneurs are also allowed to carry goods for domestic trade in China. In the future the Kazakhstani authorities intend to build warehouses, hotels, and other related infrastructure near these free trade zones. They also plan to rebuild roads going from UstKamenogorsk, via Zaysan, to Maikapchagay, in order to ensure that inhabitants of the Altai region of the Russian Federation also use these trade corridors.
China has also proposed small-scale projects for the construction of mini mills and factories to replace old ones in Central Asia. For example, in the Osh region, two mini-factories for the production of bricks were built. Chinese-produced flour mills work in all the central and regional areas of Kyrgyzstan, Uzbekistan, and Kazakhstan. Such firms were opened with the help of migrants from China, who were supported through financial and technical assistance from the Chinese government.
These small businesses are meant to satisfy only domestic needs, and should in no case rise to the regional or international levels. Specialists in
China always keep an eye on them to ensure that this type of product is produced according to the needs of only the Central Asian market. At this point in Kazakhstan, Chinese trains are launched, with components and technical support to them being provided by the Chinese side.
The next phase is the construction of strategically important roads in
Central Asia. In Kyrgyzstan the Chinese took over the construction of the 400 km Irkeshtam-Osh road. China is in charge of 60 km of the already constructed Osh-Uzgen road and has also built more than 100 km of the Madaniyat-Shamaldysay-Tashkumyr-Razan road to the Krupsai hydroelectric station. At first construction firms hired local workers, but by August 2006, replaced them with Chinese migrants. The related
Chinese strategic objectives include the construction of large cementasbestos sheeting production at the Kyzylkiisk plant in order to compete with the already existing Kuvasai cement-asbestos sheeting plant in
Uzbekistan, which is located 40 kilometers from the border with
Kyrgyzstan.

THE CHINA AND EURASIA FORUM QUARTERLY • Volume 7, No. 1

China-Central Asia Trade Relations: Economic and Social Patterns

51

As for Tajikistan, China is its main investor in the domestic transport and communications industries. By investing funds and ensuring construction of power lines, providing roads and railway with equipment, and moving material and human resources, China pursues several important geopolitical and geo-economic objectives. If Tajikistan seeks to participate in the Karakorum highway, China intends to redirect the transportation and communication flows in a north-south direction through its territory. China’s presence at strategic Tajik sites will also allow Beijing to control the domestic transport and electricity infrastructures. China has additionally opened a new alternative land route to the Fergana Valley, Afghanistan, Iran, and South Asia. And finally China has given itself a rare opportunity to obtain minerals and metals extraction in the GBAO: fluorites in Agadzhan and Duncheldyk, tin and tungsten in Buguchi-Dzhilga, boron in Akarhar, monocytes (an alloys additives) in Baygumbez, and tantalum and niobium in Kuristik.
In addition China has reconstructed a part of the DushanbeKhodjent-Chanak highway connecting the center of the country with the north and allowing for year-round vehicular traffic. It built the Shar-Shar road tunnel, which facilitates and reduces significantly the time it takes to transport people and goods between the center, the Kuliab area, and the
GBAO. In 2004, China built a road through the Kulma pass at the
Sarykolsk ridge, connecting the territory of Xinjiang and GBAO. Since the summer of 2007, China started construction on roads from its border to Dushanbe, through the southern outskirts of GBAO and Khatlon region, and further from the capital to the Fergana Valley and the border with Uzbekistan. The Asian Development Bank has grant money to build the road from Dushanbe to Kyrgyzstan via Rasht and Dzhirgital.
The China Theban Electric Apparatus Stock (CTEAS) is also constructing high-voltage transmission lines from Tursunzade to
Khojent, and to Lolazor-Khatlon from Dangary to Kuliab. The construction of 500 kW power transmission lines is also in the works.
These north-south projects will be crucial in electricity distribution in the
Central Asian region, which will not only permit the connection of all regions in Tajikistan to a single power grid, but also the export of electricity to Kyrgyzstan and Afghanistan.
Thus China has turned Kyrgyzstan and Tajikistan into economically dependent areas, and bases to expand its capabilities in other states, such as Uzbekistan and Kazakhstan. China has moved closer to the region’s energetic centers—the Krupsai, Tashkumyr, Toktogul, Nurek, Rogun and
Sktudin hydro-power stations—as it intends to develop the water capabilities of Kyrgyzstan, Tajikistan, and Uzbekistan. In the next ten to fifteen years, China will be in great need of drinking water. Beijing is therefore interested in the water-energy potential of Central Asia and started implementing a program of development in the Fergana Valley in
THE CHINA AND EURASIA FORUM QUARTERLY • February 2009

52

Sadykzhan Ibraimov

Kyzylkiisk, Osh, Jalalabat, Kochkorata, and Andijan. The Chinese authorities are indeed convinced that by mastering the Fergana Valley region and its hydropower, they will effectively influence the policy of the Central Asian states.

The China-Kazakhstan Trade Axis
China is today a major trading partner for Central Asian countries. Over the years from 1992 to 2007, the highest trading volumes were between
China and Kazakhstan, which represented from 80 to 86 percent of all
Chinese-Central Asian trade.4 China joined the four leaders in the list of economic partners of Kazakhstan several years ago and even started confidently replacing other players in this group, such as Russia. China’s share in the foreign trade of Kazakhstan from 1996 to 2004 almost doubled, from 4.8 to 8.3 percent, in terms of value. Kazakhstan is the second largest partner of China among CIS states (Russia is first), its portion being about 70 percent of the total trade of China and the five
Central Asian republics. Given the exponential growth of trade between the two countries, the existing plans to increase the turnover by 15 billion dollars, from the current amount of 13.9 billion dollars, by 2015 seem quite modest.5 The situation determines that the total foreign trade of
Kazakhstan is barely 70 billion dollars, and that Kazakhstan’s trade growth with China is one of the highest.
Since 2005, both sides have decided to pursue a bilateral strategic rapprochement. The legal framework of this process was included in the
Declaration on Strategic Partnership signed by the presidents of
Kazakhstan and China in July 2005. Since then, the process of convergence has been quite consistent, and the two states have taken important steps toward it. In the Joint Declaration signed at the end of the visit, the two countries expressed willingness for the “continuous deepening of bilateral relations and enhancing coordination and cooperation in solving international problems based on the principle of friendship from generation to generation, good-neighborliness, mutual trust, and close cooperation.”6 According to President Nursultan
Nazarbaev, the strengthening of relations with China is one of the main strategic priorities of Kazakhstan’s foreign policy.7 Hu Jintao, in turn,
4

Ibid., p. 159.
The amount of 13.9 billion dollars, representing the volume of Sino-Kazakhstan trade turnover in 2007, was mentioned by the Chinese side at a joint business forum carried out during the visit of Karim Masimov.
6
As President Nazarbaev stated in January 2008, during his visit to China.
7
“President Kazakhstana vstretilsia so spetsposlannikom glavy KNR” [The president of
Kazakhstan met with the special envoy of the head of the PRC], Kazakhstan segodnia,
January 8, 2008,
(September 12, 2008).
5

THE CHINA AND EURASIA FORUM QUARTERLY • Volume 7, No. 1

China-Central Asia Trade Relations: Economic and Social Patterns

53

confirms that China should pay special attention to the development of relations with Kazakhstan and considers the strengthening and deepening of the Sino-Kazakhstan strategic partnership as a priority in his foreign policy.8 All of this diplomatic rhetoric would not deserve so much attention if it was not supported by essential prerequisites, confirming that the turnaround in relations results not only from political will and geopolitical environment.
During a meeting with the Kazakhstani Prime Minister Karim
Masimov on April 11, 2008, Hu Jintao explained that “the potential for bilateral business cooperation is enormous, the parties should seize opportunities, based on sincerity and mutual profit to implement agreements.” The Kazakhstani Prime Minister responded that
Kazakhstan intends to strengthen bilateral cooperation with China in the investment, finance, energy, agriculture, and infrastructure construction sectors in order to facilitate the joint development of both countries’ economies. Kazakhstan is more subjected to and thus focused on specific economic problems. Nevertheless considering the interests of the parties,
Kazakhstan and China should be satisfied with the results of the visit.
It seems that Astana has no other choice than the PRC if one considers its geo-economic characteristics, the great potential of China’s economy, and the weaknesses of Kazakhstan’s other neighbors. Factors that have emerged in the course of bilateral relations also play a role, such as the successful cooperation of Kazakhstan and China in the infrastructure sector. In early 2006, an Atasu-Alashankou oil pipeline was launched, allowing for the annual transport of up to 20 million tons of oil from Kazakhstan’s Caspian coast to the western, and thus eastern, provinces of China. This Kazakhstani-Chinese project, despite its difficult history, has become the main success in the interaction between the two countries and could be the key to their large-scale energy cooperation. As Astana receives practical benefits from the pipelines, it is easier for Kazakhstan to decide on similar new projects, such as the implementation of the Sino-Central Asian gas pipeline.
Considering the transit potential of Kazakhstan and the new opportunities for Chinese trade with Europe, the transportation and communication projects are also important for the development of
Kazakhstani-Chinese cooperation. It is a well-known fact that one of the
Chinese railways’ weaknesses is their low participation in the transportation of foreign trade goods, a situation that could be changed through cooperation with Kazakhstan. Meanwhile the situation regarding railway service both in the Chinese and Kazakhstani territories is far from ideal, and much remains to be done in order to turn Kazakhstan
8

Hu Jintao’s Declaration during a meeting with the speaker of the Kazakh Parliament,
Kassym-Zhomart Tokayev, which took place in China on January 24, 2008.

THE CHINA AND EURASIA FORUM QUARTERLY • February 2009

54

Sadykzhan Ibraimov

into a transcontinental bridge between Asia and Europe. To date the current railway line going through Dostyk-Alashankou primarily carries goods for Chinese trade with Central Asian states.9 Out of 101 existing cross-border passenger and cargo routes between Xinjiang and its eight neighboring countries, more than sixty connect it to Kazakhstan. In addition to the existing highways between China and Kazakhstan, four new direct road routes for freight transport have opened at the end of
2008: Urumqi-Khorgos-Karaganda, Urumqi-Maikapchagay-Karaganda,
Urumqi-Baketu-Karaganda and Urumqi-Dostyk/Alashankou-Karaganda.
Three direct passenger routes will also be open on the same lines, except that of Khorgos.
Kazakhstan and China also initiated a new form of trade cooperation by developing the unique Khorgos Sino-Kazakhstani international center for cross-border cooperation, viewed by both sides as the second largest project of their strategic cooperation, after the pipeline. Situated 670 kilometers from Urumqi and 378 kilometers from Almaty, Khorgos is the largest road checkpoint in this region and the Chinese checkpoint closest to the countries of Central Asia, West Asia, and Europe. Khorgos therefore has the opportunity to become the main gateway to western
China, with a current annual transit capacity of 3 million people and 2 million tons of cargo.
It is thus clear that China has achieved a significant advantage over any potential competitors and created an important infrastructure base, which in a few years will probably be more modern and more powerful than that of Kazakhstan and Russia. It seems that even the intensification of Kazakhstani foreign cooperation with Russia or the
West will no more change this trend of increased interaction and convergence with China, as it will always be one step ahead of other interested parties. Another advantage in Beijing’s favor is its ability to satisfy requests for the economic development of Kazakhstan. Focusing on the differentiation of its economy and the redirection of commodityoriented manufacturing, as well as the realization of innovation and industrial development programs, Astana has faced foreign investors’ reluctance to help its domestic manufacturing industry. In this regard
China has proved more flexible and far-sighted, a situation that is well received by Kazakhstani leaders as a means to promote long-term plans.

The Central Asian Economic Niche in Xinjiang
According to Chinese customs statistics, the volume of foreign trade between Xinjiang and Kazakhstan reached record levels in 2008. This is
9

Igor’ P. Azovskii, “Vneshnetorgovye perevozki zheleznykh dorog Kitaia: segodnia i zavtra” [Foreign Trade Railway Transit of China: Today and Tomorrow], (September 12, 2008).

THE CHINA AND EURASIA FORUM QUARTERLY • Volume 7, No. 1

China-Central Asia Trade Relations: Economic and Social Patterns

55

mainly due to the growth of the total external trade of the Xinjiang
Uygur Autonomous Region (SUAR), which in the first quarter of 2008, ranked first in the country.10 The Chinese authorities are now using their growing economic relations with Central Asia to develop Xinjiang, an underdeveloped region of the country. Beijing’s “open door policy” has contributed to the inflow not only of foreign capital, but also of human resources into the country. Comparing the costs of border crossing and living in China to the possible business income, many consider it cheaper to live in China and earn in Kazakhstan. In cities such as Beijing,
Guangzhou, Urumqi, and Yining, entire neighborhoods have appeared in which immigrants from Central Asia live. Such choice is motivated by geographical centers for the wholesale trade of Chinese products. Yet the favorite city is Urumqi, where many people can speak Russian or
Kazakh, making easier the lives of those who chose to stay in China.11
In Xinjiang and especially in Urumqi, many Central Asian nationals have found their social niche. Some of them are current or former
“shuttle traders” and have long experiences in such missions. Some of them open travel agencies to help the new generation of commercial tourism. Others called kubovshchiki deal with cargo transit. They control the price lists of Chinese consumer goods, have complete information on the tax and customs policies of Kazakhstan and China, closely monitor staff changes at customs, and handle the timely delivery of goods to
Kazakhstani businessmen traveling in Urumqi or other Chinese cities.
They thus work as unofficial regulators of cross-country trade and as key elements of the customs business and of corruption. Another area developed by Central Asians in China is the restaurant business, as
“Muslim food” is quite developed in all of China tanks to the Hui minority. In addition, some Central Asian citizens are engaged in the agriculture, mining, and processing industries, and try to take advantage of the “Far West” development of project opportunities.12 According to this program, foreign nationals are allowed to invest in any type of industry from water management to power engineering or the chemical and mining industries. Foreign investment companies are exempted from local income taxes for ten years. Those involved in agriculture and extractive industries, except in oil and gas, are exempt from taxes for five

10

The foreign trade turnover volume of Xinjiang has increased up to 90.4 percent during the first quarter 2008, in comparison with the corresponding period of the last year, having amounted to 3.45 billion dollars.
11
Sof’ia Ushurova, “Zhit’ po nebesami” [To live under the skies], (September 12, 2008).
12
“Xinjiang Strategy of Economic Development”, Investment Directory on Xinjiang, China
(Urumqi: Press-secretariat of the representation of People of Xinjiang, 2004), p. 191.

THE CHINA AND EURASIA FORUM QUARTERLY • February 2009

56

Sadykzhan Ibraimov

years. They do not pay taxes on their real estate and transportation costs, including maritime transport, for the five first years of business.13

Corruption as the Reality of Sino-Central Asian Trade
However Chinese success in attracting investment from Central Asia is linked more with China’s understanding of the specifics of economic life in post-Soviet countries, and their use of local corruption schemes and internal weaknesses in its own interests. It should be noted that the
Chinese government provided various sized grants for Central Asia at low interest rates or even free of charge. Chinese grants were mainly used for the construction of mini-markets or roads connecting remote regions with central cities, thus contributing to the development of trade routes for Chinese goods. But the lion’s share of these grants went into the pockets of local officials.
Sometimes the legal decisions taken by the government left the door open to corruption. For instance the Kazakhstan Ministry of Transport and Communication issues each year an order to reduce the load on the axles of trucks by almost one quarter (3 to 4 tons). But no one would drive a half-loaded truck from abroad through the whole country, at a significant economic loss. Entrepreneurs are therefore forced to pay bribes to all those working in the customs posts in order to increase the load. Without preferential treatment one can also transport across the border only 10 tons of goods; any entrepreneur carrying more must register them under an assumed name. Otherwise the goods will automatically be considered smuggled. In order to avoid this situation, entrepreneurs are ready to bribe the custom officers. While the goods travel over the country toward the destination, each traffic police patrol car will determine the existence of accompanying documents, permits, certificates, and correspondence of the load to type and weight. After checking and often receiving “fees,” the patrol transmits information about the truck to the next post, so entrepreneurs must pay bribes all along the road. Kazakhstan regulations and laws are justified to protect the interests of the country, although they in fact adversely affect the rights of private firms. These laws apparently make Kazakhstani citizens become bribers and beneficiaries. Therefore it is impossible to work legally, as the whole system is corrupted.
The first option for Chinese or Kazakhstani businessmen going to
Kazakhstan is to declare less than what they have and let Kazakhstani customs officers take the “fee.” The second one is to register products under another category, requiring a minimal fee, and to pay customs so that the trucks’ contents are not checked. Activities of carrier companies are also apparently subject to legal regulation. Ideally they propose
13

“The Policy of Investment Attraction”, Ibid., p. 207.

THE CHINA AND EURASIA FORUM QUARTERLY • Volume 7, No. 1

China-Central Asia Trade Relations: Economic and Social Patterns

57

service for the delivery of a consignment from the initial location to the destination, including the border crossing. In reality these companies tend to draw attention when they pass through customs. By law the owner of the goods must submit documents for the customs declaration, but he might not have them because Chinese vendors, working under preferential tax treatment, often do not issue invoices for their purchases.
Therefore intermediaries take over the delivery of someone else’s goods via illegal schemes. They do not conclude contracts with load owners on the supply of goods and do not give the addresses of registered companies in Kazakhstan or China, so that the owners can protect themselves if the load is seized due to contraband. If the carrier cannot reach agreement with the customs, consignees become hostages of the situation and the goods are considered smuggled. Entrepreneurs then start looking for officials willing to clear the goods in exchange for bribes. In the worstcase scenario, the carrier disappears, throwing away the product, and the owner cannot find it. Thus officials do not want to introduce a system of contractual relations between shuttle-traders and carriers in order to legalize the relationship, because confiscated products benefit highranking custom officers.
The Chinese side has a grudge against Kazakhstan because of the level of transit and trade corruption. According to Chinese businessmen anyone crossing the border, even if he is a mid-level official or influential figure, is forced to give a bribe three times. The first, about 50 dollars, goes to customs, even when passing without the goods, so that personal belongings do not get confiscated. The next, about 20 dollars, goes to border guards and then varying amounts to policemen. These “tariffs” are applied even if the Chinese citizen has all required documents. For a few years some Central Asian states, including Kazakhstan, have declared their intention to fight corruption, which has provoked a reverse reaction. As a consequence the customs points at the KazakhstaniChinese border partially stopped taking bribes, but the price of illegal taxes increased almost fourfold. Businessmen are now forced to address their requests to the central customs office and ministry officials, which are in the regional centers or the capital, and charge more expensive
“fees.” Because of this situation, most medium-sized Chinese businesses have shifted to corruption methods of trade with Kazakhstan. In 2007 and
2008, according to some Chinese businessmen, corruption became intolerable, with Chinese businesses losing a lot of money due to
Kazakhstani corruption.
In the growing competition between Kazakhstan and Kyrgyzstan for the transit of Chinese goods, many small Central Asian entrepreneurs now prefer to deliver Chinese goods across Kyrgyzstan. Goods are sent in transit to Kyrgyzstan, where they clear customs and then return to
Kazakhstan. It thus seems to be advantageous to go an extra 500
THE CHINA AND EURASIA FORUM QUARTERLY • February 2009

58

Sadykzhan Ibraimov

kilometers than to clear customs in Kazakhstan, even if the corruption situation works with similar schemes in Kyrgyzstan. Bishkek uses the mistakes of Kazakhstani officials in its favor. If the fee increases in
Kazakhstan, Kyrgyzstan reduces or removes it completely. That is why the Kyrgyz market of Dordoi now provides a quarter of revenue for the neighboring country’s budget. When the tax committee of the
Kazakhstan Ministry of Finance decided to introduce changes in the workings of markets, Kazakhstani businessmen settled in Dordoi. Now up to 60 percent of Almaty wholesalers work there, and the transit of loads and passengers in Khorgos partially fell. According to local unofficial sources, one cubic meter of cleared load on the Urumqi-Almaty route accounts for 280 dollars, but on the Khorgos-Bishkek-Almaty route, it does not exceed 160 dollars.
For all these reasons information on trade between China and
Kazakhstan differs. The Chinese side honestly registers the volume of products leaving the country, while Kazakhstani customs officials record the volume of officially passed goods. In 2006, Finance Minister Natalia
Korzhova mentioned a difference in trade of about 3 billion dollars a year.
An inter-governmental commission thus visited China to standardize
Chinese and Kazakhstani statistics under the personal request of the vicePrime Ministers of both countries.14 However, the situation has not changed. In 2007, according to Chinese data, Kazakhstan brought in
Chinese goods in the amount of 9 billion dollars, while Kazakhstan’s data mentions 1.5 billion dollars. In short, the difference vanished in
Kazakhstani officials’ pockets.
Trade with China is actually built on two schemes, called red in
Russian when conducted through state authorities, and black when conducted through underground and criminal schemes. However either option still relies on influential figures in power. For instance at the
Kazakhstani customs post in Dostyk, smuggling processes were monitored by the so-called brothers Karimov, known by another name as the Rybachinsk group, and in Khorgos by the “four brothers.” The
Krykbaev group controlled the transit of Chinese goods over the KyrgyzKazakhstan border. In 2007, Marat Adbuali, and Ergali and Kayrat
Krykbaev were sentenced respectively to 25 and 18 years in prison for an array of criminal activities. Incidentally one of the Krykbaev brothers was once a deputy of the presidential Nur-Otan party. In Uzbekistan two famous criminals, Gafur Rakhimov and Salim Abduvaliev, manage illegal trade. In Tajikistan control over all Chinese business and trade is in the hands of Hassan Saidullaev, the president of the “Ismaili Somoni
14

“Minfin nameren ustranit’ raskhozhdeniia v statistike Kitaia i Kazakhstana po vzaimnoi torgovle” [The Ministry of Finance wants to eliminate differences in Chinese and Kazakh trade turnover statistics], November 2006, (September 12, 2008).

THE CHINA AND EURASIA FORUM QUARTERLY • Volume 7, No. 1

China-Central Asia Trade Relations: Economic and Social Patterns

59

21st Century” holding company and relative of President Rakhmon. In
Kyrgyzstan, the dominant group is that of Kolbaev Kamchibek, but
Kydyraliev Sanzharbek, a former member of the Kyrgyz parliament, controls the south part of the republic. Earlier criminal affairs were monitored by the deputy Bayaman Erkinbaev, and by Ryspek
Akmatbaev, who ran for parliament but was killed before acceding to this position. All these Central Asian criminal groups work closely with each other, thus creating a transnational criminal network. Moreover they often have very close relations with political authorities, as some relatives of the presidential families are personally engaged in business with China. For instance, in Kyrgyzstan, the spouse of the ex-president, Mairam Akaeva, processed the export of scrap metal. In the south of Kyrgyzstan, the export of raw materials, mainly colored metals, was monitored by the late criminal authority Bayaman Ereinbaev, whose business was intercepted by other groups. In Uzbekistan, part of trade with China seems to under the control of the eldest daughter of Islam Karimov,
Gulnara Karimova, with the help of her aunt Tamara in the Fergana region. All kinds of raw materials from Uzbekistan are freely exported to
China via Kyrgyzstan. In Kazakhstan, the main actors of this process also surround the president.

Conclusion
One can infinitely draw nuances and give examples on trade ties and schemes between China and Central Asia. However this economic relationship is still at an early stage of development and for this reason, there is some randomness in commercial processes and relationships.
This can be partly explained by the reality of corruption in Central Asia and the high level of interaction between business and politics. From the earliest years of independence, smuggling with China, especially the export of metals and the import of consumer goods, has proved to be a very profitable venture for high-level officials. This now makes it difficult for the implementation of effective customs legislation. Yet this is the condition for the average Chinese firms, which even with in-depth knowledge of the situation, agreed to enter a Central Asian market denounced as too corrupt and too risky.

THE CHINA AND EURASIA FORUM QUARTERLY • February 2009

Similar Documents

Premium Essay

Essay

...1 Overview of How to Write an Essay Writing essays is a major element of your education at the university level. Effective writing gives you the ability to express your ideas, theories, arguments, and projects clearly. The skills you acquire at the university level through writing essays will be aimed at practical business applications that you will be able to use in the workplace. The following information provides a succinct overview of the elements you need to know to begin writing an essay. It will help you on your writing journey. Types of Essays Narrative A narrative essay is a story told by a narrator. Generally, a narrative discusses the personal experience of the author (the first person point of view), but it can also be written about things that happen to others (third person point of view). A narrative typically involves characters, a setting, specific and vivid details, and a series of events that can include current incidents, flashbacks, or dialogue. Cause and Effect A cause and effect essay explores why events, actions, or conditions occur (cause) and examines the results of those events, actions, or conditions (effect). For example, a cause could be purchasing a new expensive home. The effect might be fewer family vacations, more time spent on upkeep, or less time with family because of extra work hours to pay for the home. Comparison and Contrast A comparison and contrast essay shows the relationship between two or more elements. The items can be compared...

Words: 6215 - Pages: 25

Premium Essay

Essay

...How to determine custom essay editing company that is legitimate This is the company you will find great editors to provide you with custom essay editing service. Students whose first language is not English may find speaking and writing in English as a difficult task for them. Most of these students are international students who have enrolled in various universities in America and in the UK. The main teaching language is English, American and Standard English respectively. It is essential for students to master well the language of instruction because it is a medium through which they are required to write their assignments and speak in classroom. Competence and fluency in English language will help students to read and understand the teaching material provided to them. It is important therefore for students to ask for support from custom essay editing services which deal with the tips of writing good essays among other academic papers and also to write for them assignment essays. Our writing and editing services is created both for students and professionals. We deal with both the non academic and academic editing and writing services to fulfill your needs. At our custom essay editing, you will find editors who are qualified in linguistics and English language. We are ready to provide you the custom essay editing service at any time of the day or night because we operate as a 24/7 service. Our custom essay editing service comprises of creative thinkers, skillful......

Words: 574 - Pages: 3

Premium Essay

Essay

...An essay is usually a short piece of writing. It is often written from an author's personal point of view. Essays can be literary criticism, political manifestos, learned arguments, observations of daily life, recollections, and reflections of the author. The definition of an essay is vague, overlapping with those of an article and a short story. Almost all modern essays are written in prose, but works in verse have been dubbed essays (e.g. Alexander Pope's An Essay on Criticism and An Essay on Man). While brevity usually defines an essay, voluminous works like John Locke's An Essay Concerning Human Understanding and Thomas Malthus's An Essay on the Principle of Population provide counterexamples. It is very difficult to define the genre into which essays fall. Aldous Huxley, a leading essayist, gives guidance on the subject: Like the novel, the essay is a literary Abstract This article will examine the reasons why it is important both linguistically and psychologically to build a vocabulary quickly when learning a foreign language. The article asserts that very little can be achieved or learned in a foreign language with a small vocabulary and that by building a sizable vocabulary quite quickly one can soon be able to function adequately. You may also wish to look at http://www.jalt-publications.org/tlt/files/95/feb/meara.html   Introduction   It is obvious that in order to learn a foreign language one needs to learn many many words. But how many?......

Words: 332 - Pages: 2

Premium Essay

Essay

...There are some teachers who are going to require you to write a 250 word essay. Actually, it is a very short essay for that matter but for some students, it may also be a burden to have a word limit in writing. Let us take a look at the scenarios that you need to understand to compose a well developed essay. For some students, it may be limiting to have a word factor quota in writing an article. There are some individuals who can tell more out of a topic and that having 250 words will not suffice to tell everything in their minds. That is why you need to have the skills in budgeting the words that you have to write without sacrificing the ideas that you have to deliver. There are different essay types that you also need to consider so having a word limit cannot simply be an easy task. Still for some students, a 250 word essay may mean too much because there are also some people who do not want to waste their time writing. No matter what the essay structure may be, these types of people are not really eager to translate their thoughts to written form so they think 250 words simply equates to too much work. Anyway, you need to understand that having this kind of limit will eventually benefit the students as they improve their discipline, being responsible and being resourceful individuals. We can offer you to buy essays from us so you do not have to worry about the number of words in writing. Let our writers make your life easier...

Words: 273 - Pages: 2

Premium Essay

Essay

...This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay. This is my essay.......

Words: 401 - Pages: 2

Premium Essay

Essay

...Essay Writer can provide students with the exact answers to their essay assignments through our free essay section as well as our custom essay writing services. All of Essay Writer’s free essays are uploaded to our site by some college and university students in the UK to serve as informative guides and comparative templates to help you finish your own essay writing tasks with greater ease and clarity. These sample essays are readily downloadable and very easily accessible; just simply select a subject area or topic from our list of available subjects. You can then go through our list of available essay titles under that subject. Welcome to Essay Writer’s free essays section! You can now access our very extensive collection of free essays. These essays are all original and previously not made available to anyone, and are excellently written and submitted by some well meaning college students who wish to share their knowledge to help you do better in writing your own essays. Below is the list of the subject areas we cover in our free essays section. Simply select the subject that corresponds to your need. You will then be shown a list of all the essay titles available for that specific subject. Essay Writer regularly updates its free essay database. Keep checking back for additional subjects or topics. You may also bookmark our Free Essays page to make it easier to check back on the availability of our free essays. To bookmark this page, simply click on the......

Words: 314 - Pages: 2

Free Essay

Essay

...I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real essay I’m sorry this is not a real...

Words: 256 - Pages: 2

Premium Essay

Essay

...Process and Procedure Essay Samples are Helpful Guides in Writing Saturday, June 20th, 2009 Process and Procedure Essay Samples will Assist You in Understanding this Essay Format First of all let’s find out what essay is called process and procedure essay. It is an essay which sometimes called “how to” essay for it guides in certain activities or gives instructions as how to do some job (procedure) or complete a certain task. When you feel difficulty with this essay type, you can find process and procedure essay samples which can give you useful tips into creating an essay which will be have high rating. Process and procedure essay outlining certain procedures or directions to perform certain activity is an important task if one needs to learn how to compile clear instructions to serve the needs of professionals in different fields. These can be helpful for engineers, teachers, doctors and even housewives when it concerns cook books which are also some kind of instructive writing. Procedure essay writing is a useful skills for managerial personnel as they need to organize people and direct them toward certain activities. Process and procedure essay samples can be found online in abundance. Through these essay examples one can get some notion about procedure writing and take some notes how to complete a good piece of process essay. One may note that procedure can include descriptions, warnings and recommendations to the procedures described. To provide guidelines......

Words: 539 - Pages: 3

Premium Essay

Essays

...HOW TO READ ESSAYS YOU MUST ANALYZE 1. Take a pencil in your hand. 2. Read the essay over once, quickly, looking for the main idea, for what the essay is about in general, and for what the author seems to be saying. Don't get bogged down in details. (If you come to an unfamiliar word, circle it but go on reading). 3. Check the meaning of unfamiliar words. If they seem to be key words, i.e., if the author uses them more than once, scribble a brief definition at the bottom of the page or at the end of the essay. 4. Now re-read more slowly and carefully, this time making a conscious attempt to begin to isolate the single most important generalization the author makes: his thesis. Follow his line of thought; try to get some sense of structure. The thesis determines the structure, so the structure, once you begin to sense it, can lead you to the thesis. What is the main point the author is making: Where is it? Remember, examples or "for instances" are not main points. The thesis is the generalization the author is attempting to prove valid. Your job, then is to ask yourself, "What is the author trying to prove"? Another way of identifying the thesis is to ask yourself, "What is the unifying principle of this essay"? or "What idea does everything in this essay talk about"? or "Under what single main statement could all the subdivisions fit"? If the author has stated his thesis fully and clearly and all in one place, your job is easier. The thesis is apt to be......

Words: 971 - Pages: 4

Premium Essay

Essay

...to write A Level Sociology Essay Assessment With reference to the present AEB syllabus, there are three main skills being assessed in your essays. 1. Knowledge and Understanding (9 marks) 2. Interpretation and Application (9 marks) 3. Evaluation (9 marks) What Does This Mean? What this means is that for writing an essay is that the content (studies, names of researcher, dates, figures, concepts, although important need to be organised coherently, applied to a variety of social situations and interpreted, and expressed in a critical fashion. You must be aware of the skills being highlighted in the question in order to use the appropriate skills in your essays. You should also practice writing essays regularly and develop a technique which addresses the skills required so that you can actually answer the question set. I hope that this handout should allow you to achieve this. Stage One Many students are too quick into diving into an answer. They have focused on certain key terms and ‘assumed’ what the essay requires from a quick look at the question. Instead, the question should be read a number of times. Task One With the title provided. Analyze the question by underlining the key features in the essay title Double underline the skills being assessed, e.g., describe and explain Identify any terms or concepts contained in the question. These terms will need to be defined, i.e. concepts such as interactionists. Essay questions will also......

Words: 1452 - Pages: 6

Premium Essay

Essay

...tutorial x 13 weeks)     Level: Foundation/Matriculation     Lecturers: Ms Fazidah Abdul Jamil., Mdm Goh Wan Chen, Ms Saratha Thevi Ramasamy, Ms Norzaireen Shamsul Kamar Synopsis: This course is designed for students who require the necessary skills for tertiary studies. Some basic grammatical concepts are taught and students are to apply them in their writing. Writing will focus on the development of coherent paragraphs. Reading skills will cover such strategies as scanning, skimming, main ideas, contextual clues and inferences. Learning Outcomes: Upon completion of this subject, student will be able to: 1. write summaries as well as process, comparison-contrast and cause-effect essays 2. apply basic grammatical concepts in writing 3. answer questions based on academic texts 4. give oral presentations Textbook: 1. Daise, D., Norloff, C., and Carne, P., (2011). Q: Skills for Success 4 : Reading and Writing Oxford University Press, UK 2. Paterson, K, and Wedge, R., (2013). Oxford Grammar for EAP. Oxford University Press, UK Recommended References: Cambridge International Dictionary of English (1997), Cambridge University Press, UK Mode of Assessment: [1] Class participation 5% [2] Quiz 1 15% [3] Quiz 2 10% [4] Oral Presentation 10% [5] Mid-Term Examination 20% [6] Final Examination 40% Syllabus – FDENG001 |Week |UNIT |Topics ......

Words: 469 - Pages: 2

Premium Essay

Essay

...Define Your Thesis For essays that are part of an Early Years Care & Education Degree, it is important to clearly define a thesis statement within the first paragraph of the essay. Even if you are given a topic to write, such as the importance of preschool classes in low-income neighborhoods, you need to develop a strong thesis in your own words. Here is an example: "Preschool classes in low-income neighborhoods are a crucial step in helping all children enter elementary school at the same educational level, regardless of the income of the family." Once you have defined a clear thesis, you can proceed to the rest of your essay. However, without a clear thesis, your essay will not hold up. Use Examples The majority of your essay should be a careful and clear argument that supports your thesis statement. Do research and cite as many examples as possible to prove your point. For an essay about the merits of all-day educational opportunities for preschool-aged children, check trustworthy sources such as the National Association for the Education of Young Children and national PTA. Provide each point in a strong and complete paragraph. Each paragraph should have a main statement, supporting information and a conclusion. Tie In Conclusion After you have made your argument, state your conclusion in a clear and concise manner. Whether you have proven that the teacher ratio in a preschool setting should be lower than 4 to 1 or made a case for more national funding for the......

Words: 281 - Pages: 2

Premium Essay

Essay

...from these events? How have they affected your personality or how you deal with situations now? Remember the focus of the essay is on the contrasting impacts of these events in your life. These events do not have to be major events, they could be minor in nature but their impact on you could be great and long lasting. Undertake the task of pre writing for this topic. Select your two events. Describe them in point form. Consider their diverse impacts on your life. By the end of this class you should have completed your pre writing and make sure you get your sheet signed by me. You have the week to work on your first draft. Those of you who would like to show me the first draft are free to submit it to me online and I shall hand them back to you online. I will tell you whether you are on the right track, however this is optional and you will not be penalized if you do not show me your first draft. You need to give me Draft 1 by Tuesday, Feb 26. This will be an online submission under Assignments on ilearn. I will correct it and give it back to you by Sunday March 3, and then you will work on changing the draft according to my corrections and bring it to class on Tuesday, March 5 when we will have a peer review session. So after our class today you need to upload your first drafts of the essay in a week, by Feb 26 in an area marked out as Essay 1 under Assignments on Ilearn. You need to exchange your second drafts with two of your classmates on Tuesday,......

Words: 547 - Pages: 3

Free Essay

Essay

...Carmen Hollow Mr. Beurskens College English Critique Essay: The Morals of the Prince May 3, 2011 The Grey Area between Good and Evil: A Critique of “The Morals of the Prince” by Niccolo Machiavelli Introduction We’ve all made a promise that we couldn’t keep and we have all felt bad about breaking those promises. Whether it was a promise to our parents, our children or a co-worker, we don’t feel good about it, but sometimes it can’t be helped. Usually if we couldn’t keep a promise it was for a good reason and not a selfish one. To the person that we made the promise to, we may be viewed as uncaring or unreliable, but to ourselves we know that we had to make a decision that could hurt someone but at the same time our decision could help that same person or persons. Making a promise and not being able to keep it for one reason or another, is one of the few topics that Machiavelli writes of in his essay “The Morals of the Prince”. He also tells why he believes a prince should be feared rather than loved, and why a prince should be stingy and not generous. He wants us to know how a “perfect” prince should act and behave so that the prince will be viewed upon as a great prince. Summary Machiavelli writes about how he believes a prince should act and behave to be considered a successful prince, one that is loved and feared, liberal and stingy, one that knows when to keep his word and when to break it. In his essay, Machiavelli writes “a prince who wants to keep......

Words: 1138 - Pages: 5

Free Essay

Essay

...my essay.. Here is my essay.. Here is my essay..Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay..Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay..Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay..Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay..Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay..Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay..Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay..Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay..Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay..Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay..Here is my essay.. Here is my essay.. Here is my essay.. Here is my essay..Here is my essay.. Here is my essay.. Here is my essay.. Here is my......

Words: 397 - Pages: 2