Xing Guangcheng The Director of the Institute of Russian, East European & Central Asian Studies of Chinese Academy of Social Sciences

Kazakhstan is the biggest neighboring country to China in the Central Asia, the trade volume of China-Kazakhstan occupies nearly 70% of the total trade volume of China and Central Asian Five Countries. Recent more than 10 years since Kazakhstan was independent, the relationship between China and Kazakhstan got continuously development, the mutual trustful strategy partnership has been found.
In 2002, the《Treaty of Good-Neighborhood and Friendly Cooperation between the People's Republic of China and the Republic of Kazakhstan》signed by both countries presidents together, is the document with important historic and realistic meaning, it will guide the future development of the relationship of China-Kazakhstan. The China-Kazakhstan strategy partnership relation is in conformity to the fundamental interest of the two countries and its people, opens up the more broad future for deepen the cooperation of China-Kazakhstan in all kinds of field. The shape up of the China-Kazakhstan relation makes the firm foundation, creates good condition and antecedent.

I. The Fundamental Principle and Development History of the Economic & Trade Cooperation Between China and Kazakhstan

(I). The Nation Leaders of China and Kazakhstan Pay Attention to the Economic & Trade Cooperation of the Two Countries
The economic & trade cooperation is the important promoting factor for China to develop the relationship with the Central Asian Countries. China Government definitely puts forward the basic policy aims to develop the economic & trade cooperation with the Central Asia Area. On Apr 26th, 1994, Mr. Li Peng, the former China Premier, brought forward Six Opinions for the economic & trade cooperation between China and Central Asian Countries, at that time interview with the Kazakhstan personnel of economic, trade and enterprises in the Business Affairs Center of Alma-ata City in Kazakhstan:
First, persist in the principle of equality and mutual benefit, handle affairs be according to the economic law. The Chinese side considers, both parties should each make up what the other lacks, reciprocity, basically makes balance between imports and exports, the trade conductions should be normalization.
Second, with multi-forms of cooperation, Transform to trade with payment in convertible currency instead of barter, therefore, the bank settle accounts should be perfected, China agrees the Central Asian Five Countries to develop the economic cooperation with the provinces and cities in China.

Third, practically, make full uses of local resources, fully consider about the market demand, make full uses of local resources and raw materials, make the product with competitive power, give the big enterprises with good credit and strength full play to its function.
Fourth, successively to improve the traffic and transportation condition, to construct the new Silk-Road, to enlarge the economic and trade cooperation, both parties should be in a common effort to benefit the people in their countries by the Eurasia transcontinental railway.

Fifth, China provides a few economic aids to the Central Asian Countries is a kind of friendship express.
Sixth, develop multi-side cooperation, promote collaborative development, opening to the outside world of China includes facing the Central Asian Countries, China will keep and hold on the economic and trade cooperation with the Central Asian Countries, and willing to see the economic and trade cooperation and the friendly intercourse between Central Asian Countries and other countries in the world. In Central Asian Area, China will not buck for political sphere of influence and the economical sphere of influence①.

The above mentioned six opinions are the basic principle of the economic and trade cooperation development of China and Central Asian Countries also puts forward the clear policy specifications.
In days to come, all previous interlocutions the nation leaders of China and Kazakhstan paid great attention to the economic and trade cooperation, which materialized in the declaration, communiqué and agreements.

For example, on Jan 11th, 2006, in the joint communiqué in Astana by China and Kazakhstan, China will keep on support the Kazakhstan side adopted active measure to carry out the strategy of Kazakhstan industry development and improve the economic competition. Both parties had a good opinion of the achievements of the economic and trade cooperation, encourage the further trade enlargement and mutual investment, the key point is to strengthen the cooperation at the fields of economic & trade, energy sources, traffic, telecommunication, finance and so on.
Both parties shall keep on exerting the complementation advantage, to improve the environment of trade and investment, as soon as possible to start the Korgas International Border Cooperation Center, actively make a study of China-Kazakhstan natural gas pipeline construction and other projects. In 2003, stressed in joint statement of China and Kazakhstan, to strengthen the bilateral economic and trade cooperation is with very important meaning to promote the relation of the two countries, decided to hammer at good tendency of consolidating and reinforcing the economic and trade cooperation of both countries, meanwhile, according to local law and the regulation of the international treaty participated by both parties, creates the necessary conditions for enlarging the above mentioned cooperation.

Both sides ingeminate: make full use of the economic and trade cooperation committee mechanism of China and Kazakhstan governments, combine each advantage, excavate the potentiality, optimize the trade structure, on the basis of equality and mutual benefit, enlarge the cooperation in the fields of energy sources, traffic, science and technology, information, finance, spaceflight, aviation and so on. Both parties will continuously strengthen the cooperation in international and regional economic and financing organization.
On Mar 14th, 2003, the very important document Joint Statement on Strengthening and Deepening Friendly Relations Further between China and Kazakhstan confirmed several important principles and directions for mutual cooperation in the economic and trade field:

First, furthest make use of the advantage of geographic and complementarily of the economy, insist on the principle of equality and mutual benefit, according to both parties conditions and possibilities, successively realize the transition to the international normalizing the economic relation, give priority to the cooperation in the fields of energy sources, metallurgy, petrochemical industry, multiple fertilizer production, traffic, textile and so on;

Second, enhance the cooperation grade and quality, according to the requirements and possibilities, increasing the proportion of the important project, of it includes actively research and discuss the possibility of laying the petroleum pipe line from Kazakhstan to Pacific Ocean coast of China by way of both countries’ territory;

Third, exactly carry out the signed mutual courage and investment protection agreements by both countries governments, according to the international economic and trade relation practices, improve each domestic investment environment, enhancing both countries business communities enthusiasm in the mutual investment field;

Fourth, adopt effectiveness measure, earnestly carry out the signed bilateral economic, trade and financial treaty and agreement, and working on to perfect and strengthen the bilateral relationship treaties law foundation;
Fifth, in order to encourage and support the enterprise and company as the main body of economic and trade relation of two countries, especially the big enterprises and big companies with good credit and reputation, on the basis of equality and mutual benefit, to further enlarge and develop multi-form economic and trade cooperation;

Sixth, adopt the powerful measures, to ensure the transport of both travelers and goods smoothly without any impediment;

Seventh, encourage the association and cooperation in the field of both countries banks;

Eighth, actively develop the China and Kazakhstan economic and trade, science and technology cooperation committee’s work, make it full play the function of coordination and promotion the economic association for both countries;

Ninth, more actively develop the economic and trade cooperation between the districts of both countries, especially between the border districts.

Statistics of the Volume of Trade of China and Kazakhstan in 1992~2006 (Unit: 100 million USD)

Year 1992 1993 1994 1995 1996 1997 1998 1999
Volume of Trade of China and Kazakhstan 3.68 4.35 3.36 3.91 4.60 5.27 6.36 11.39
China Export 2.27 1.72 1.39 0.75 0.95 0.95 2.05 4.94
China Import 1.41 2.63 1.97 3.16 3.65 4.32 4.31 6.44
Fluctuate of the compare between the corresponding period of the same year and the last year of the volume of the trade of China and Kazakhstan (%) — 18.0 -22.7 28.6 17.6 14.6 20.5 79.2
Year 2000 2001 2002 2003 2004 2005 2006
Volume of Trade of China and Kazakhstan 15.57 12.8 19.50 32.90 45.00 68.10 83.50
China Export 5.99 3.27 6.00 15.70 22.10 39.00 47.50
China Import 9.58 9.60 13.50 17.20 22.90 29.10 36.00
（%）
Fluctuate of the compare between the corresponding period of the same year and the last year of the volume of the trade of China and Kazakhstan (%) 36.7 -17.3 51.7 68.1 36.6 51.4 22.8

Data sources: Xu Tongkai, editor in chief:《The New Business Chance on the Silk-Road – Central Asia Economic and Trade Investment Guide》，China Customs Press, Edition 2007, Page 29.

(II). The Trade Development Situation of China-Kazakhstan

There is a development process of economic and trade cooperation of China-Kazakhstan, recent years, the China-Kazakhstan trade all along kept a stable increasing good situation, the volume of trade of both countries in successive years increased with a ratio of above 30%, in 2005, with the rapid development the volume of trade reached 6.81 billion USD, the growth of the compare between the corresponding period of the same year and the last year of the volume of the trade was 51.4%，in advance realized the target of 5 billion USD volume of trade brought forward by the both countries leaders previously.
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In 2006, both countries volume of trade was 8.35 billion USD, the growth of the compare between the corresponding period of the same year and the last year of the volume of the trade was 22.8%, created the top level of the history. The target of 10 billion USD volume of trade brought forward by the Presidents of both countries is hopeful to realize in advance. So far, Kazakhstan is the second biggest trade partners only after Russia in the Commonwealth of Independent States and the biggest economic and trade cooperation partner in the Central Asian Area, both countries trade is betterment step by step, the proportion of the electromechanical and high-tech products is raised, the electromechanical products is main power of the fast increase of bilateral trade.

II. Adopted Measures for Strengthen the Economic Cooperation by China and Kazakhstan

(I). Korgas International Border Cooperation Center is the Recency Attempt of the Economic Cooperation of China and Kazakhstan

In Jun, 2003, Mr. Nazarbaev, the Kazakhstan President, companied with Mr. Hu Jintao, the visiting Chairman of the P.R.China, put forward the suggestion to establish the border free-tread area in the Korgas border area between China and Kazakhstan. On Nov 24th, 2004, President Nazarbaev visited the Ili Prefecture of Xinjiang through the Korgas Port, during this period, the governments signed《Framework Agreement on Establish the Korgas International Border Cooperation Center between the People's Republic of China and the Republic of Kazakhstan》and《Agreement on Administration of the Korgas International Border Cooperation Center between the People's Republic of China and the Republic of Kazakhstan》．
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On Jul 4th, 2005, contacted in Astana, Chairman Hu Jintao and President Nazarbaev stressed both sides would quicken the construction of the Korgas International Border Cooperation Center and put it into use as soon as possible. On Jun 14th, 2006, Chairman Hu Jintao interviewed President Nazarbaev expressed, “altogether well do the starting stage work of the construction of the Korgas International Border Cooperation Center between the People's Republic of China and the Republic of Kazakhstan”.
In order to carry out the contact result of both countries leader, Xinjiang Uygur Autonomous Region and its related departments actively started to work. In 2006, the Cooperation Center broke earth.

The Korgas International Border Cooperation Center between the People's Republic of China and the Republic of Kazakhstan, set up in the both sides of the border on region of national boundaries line of China and Kazakhstan, is the important experiment yard and new created point of the economic and trade cooperation of China and Kazakhstan, such kind of cooperation type “1 district bestraddle 2 countries”, is a beneficial tentative of China to research the new type economic and trade cooperation with the periphery countries, is the demonstration district of economic and trade cooperation of China and Kazakhstan in the Framework of Shanghai Cooperation Organization. The Korgas International Border Cooperation Center between the People's Republic of China and the Republic of Kazakhstan, would be constructed as a comprehensive international economic interflow zone integrated with investment at liberty, freedom of trade, freedom of personnel in and out, highly opened, to be the important commodity distrusting center, commercial and trade market, tourism and sight seeing city in the western border of China.
(II). Greatly Improve the Traffic Condition

In order to solve the problem of Eurasia continental-bridge transportation, in 1994, China Government began to construct the Lan-Xin alternate railway lines, improve the annual goods pass through ability of this railway from 20 million ton to 50 million ton. In order to solve the traffic transportation problems, the China government and Kazakhstan government did a lot with many agreements signed, these agreements continuously promoted the development of the traffic transportation between the two countries.

In Feb, 1997, on leave in China, President Nazarbaev brought up suggestion, to enlarge the goods pass through ability of the NEACB-Allah mountain pass railway, even construct one railway line again; and wished China agree to open the second aviation line for Kazakhstan, so as to make Kazakhstan can establish direct route to Japan, Korea and Indonesia .

In Nov., 1999, during President Nazarbaev visited China, both Presidents of the two countries stressed, “Both parties are cognizant of the two countries with the geographic adjacent superiority, pay highly attention to the wide cooperation in the field of international traffic transportation, are willing to revive the ancient Milk Way in a common effort.” ②

In 2003, the joint statement of China and Kazakhstan considered, the cooperation of traffic transportation field and economic and trade are the important component part of the relation between the two countries, both sides would enhance the work efficiency of the Sub-committee of Traffic and Port of the Economic and Trade Cooperation Committee Between the Governments of China and Kazakhstan, would on the basis of equality and mutual benefit to develop the cooperation of transit transport between the two countries and including the north channel of Pan-Asia railway, continuously enhance the goods pass through ability of Allah mountain pass- NEACB port, coordinate the costumes work of the two countries.

(III). Excavation of the Complementarity of the Economic Cooperation
The commodities import and export for China with Central Asian Countries is with some certain characteristics. The commodities that the Central Asian Countries provide to China mainly are raw materials, including the mineral products, chemical products, cotton, and chemical fertilizer and so on, the goods export to Central Asian Five Countries from China are goods for everyday consumption, foods, and household electrical appliances and so on . The commodity composition reflects that there is great complementarity exist between China and Kazakhstan.

(IV). Strengthen the Port Construction, Create the Good Material Conditions for Economic Cooperation

After the USSR was disintegration, some ports between China and Kazakhstan were opened successively, i.e. Korgas, Bakhtu, Allah Mountain Pass, Dulat and Jeminay, which were convenient to the two countries trade in a way. Some ports set up the markets trading zone and economic development zone, which takes important role for business invitation and trade form diversification, at the same time of open ports China government also speeds up the ports construction, the conditions of a batch of ports including office, transportation, communication, storage and so on rapidly improved, among them the Korgas port, Allah mountain pass etc. had already been the all weather ports with complete infrastructure, meanwhile can open to the 3rd country.

The Kazakhstan side also asked Japan for a loan of 74 million USD, for the infrastructural construction of NEACB port so as to increase its goods pass through ability. Before 2000, improved the railway infrastructural construction between NEACB and Aktogay, make the annual goods pass through volume reach 10 million ton. Even more Kazakhstan prepare to greatly develop the container transport and packaging transportation, meanwhile improve the communication condition, the programmed control telephones were set at the port which can telephone the world over.
(V). China Open Banking Business at Alma-ata

In order to solve the settlement of the consignor, Bank of China and ICBC set up branch at Alma-ata, Bank of China rarely set branch in Commonwealth of Independent States, only set branch in a few of countries such as in Russia and in Kazakhstan etc., it is obvious that China government pays great attention to develop the relation with Kazakhstan.

(VI). Establish Bilateral Economic Cooperation Committee

In Feb, 1992, Mr. Sergey Terechshenko, the Premier of Kazakhstan, during the period of visiting China, both sides signed the agreement on establish The Economic, Trade, Science and Technology Cooperation Committee of China and Kazakhstan Governments, till 2000, 5 session of meeting held, proof by facts, this committee took the very important role to push the economic and trade cooperation of China and Kazakhstan.

In Nov, 1999, China and Kazakhstan governments confirmed the committee’s function in the Joint Statement on Continuously Strengthening the All-round Cooperation in 21 Century between The People’s Republic of China and The Republic of Kazakhstan stressed “It should be further strengthen the function of The Economic, Trade, Science and Technology Cooperation Committee of China and Kazakhstan Governments”.

On Sep 12th, 2001, in the joint communiqué China and Kazakhstan Governments agreed, both countries were with broad prospects for economic and trade cooperation, it was necessary to take the actual and effective measure to carry out the concluded agreements, to make both countries volume of trade to reach more higher level, meanwhile further strengthen the coordination function of The Economic and Trade Cooperation Committee, The Science and Technology Cooperation Committee of the Two Governments.
(VII).China Invested in Kazakhstan to Set up Factories

The economic and technology cooperation developed rapidly after China and Kazakhstan established diplomatic relations, the cooperation type main is to set up the joint adventure, contract work and resources development, in Kazakhstan the joint adventure set there are China and Kazakhstan Joint Venture Thermo-Flask Factory invested and set by Xinjiang Thermo-Flask Corporation, the tailor shop that jointed by China Sichuan Tiange Light Industry (Group) Co., Ltd. and the Alma-ata Gagarin Sewing Association, the Pen-make Factory set by China Beijing Pen-make Factory near Alma-ata, the Color Printing Center set by Ili Picture Company in Kazakhstan Jangbur Prefecture, as well as the restaurant, shop and so on.

It is 500 thousand USD of the total investment to the joint venture set up in Kazakhstan by China Tiange Light Industry (Group) Co., Ltd., the Kazakhstan party occupies 65%, the China party occupies 35%, the Kazakhstan party provides the factory building and sewing equipments, China party provides the “Tiange” trademark and raw material, the general manager assumed by Kazakhstan party, the annual production capacity includes 80 thousand pcs feather garment and 200 thousand pcs wind-rain coat, with good economic benefit after put into production. The China and Kazakhstan Joint Venture Pen-made Factory mainly produces various kinds of paintbrush, the Beijing Pen-make Factory provides technology and equipment, the Kazakhstan party provides factory building and workers, after put into production, it can basically satisfy the requirements of paintbrush of Kazakhstan party, and can export to the neighborhood countries①. So far, there are more than 100 China joint venture enterprises and sole-investor enterprises in Kazakhstan. About 6 billion USD of the aid and investment from China realized in Kazakhstan by various forms.
(VIII). China Government Provides Donation and Loan to Kazakhstan Government

These measures of China government increases the friendship between China and Kazakhstan etc., it is a kind of economic support for Kazakhstan to overcome the economic crisis.

(IX). Pay Attention to Perfect the Construction of Law and Legislation, Make Both Sides Economic and Trade Cooperation with Reliable Judicial Guarantee

On Sep 12th, 2001, indicated on the joint communiqué by China and Kazakhstan governments, it will take the effective measures to protect the lawful rights and interests of partner’s enterprises and merchants, meanwhile create good conditions for partner’s enterprises and personnel to undertake the normal trade, investment and business operations.
(X). China Government Hopes Kazakhstan etc. Actively Take Part in the Development and Construction in Western Region of China

China carries out the strategy of developing the western region of China, it will bring about new chance for the economic and trade cooperation between China and Kazakhstan, China welcomes Kazakhstan actively take part in the infrastructure construction including highway, railway, airport, natural gas truck pipeline, electric network, communication etc. in western region of China, China encourages Chinese enterprises to Central Asian Countries and Russia to invest, to set factory, to develop deepen process trade, or to cooperative develop resources. Most economic and trade intercourse of China and Kazakhstan takes Xinjiang as base, along with the quicken step of the industrial restructuring in Xinjiang, the scope and layer of the economic and trade cooperation of Xinjiang and Kazakhstan also takes place corresponding changes, the further processed product of Xinjiang are more and more, the cooperation type develops from finished products cooperation to industrial cooperation, in order to develop the industrial cooperation of China and Kazakhstan, the key point cooperation fields should be selected and carried out according to different stage and districts, it should give full play to its special area function for the China-Kazakhstan Korgas International Border Cooperation Center, Urumqi High and New Technology Industrial Development Zone, Shihezi Economic Technical Development Zone etc., make the economic and trade cooperation of China and Kazakhstan step on a new phase.

Of course, there are some problems still existed in economic and trade cooperation between China and Kazakhstan. For example, barter trade still hasn’t change to trade with payment in convertible currency completely; the scale of economic and trade cooperation of both parties is not very large; the investment projects of China in Kazakhstan are not many; the Chinese commodity quality should be further enhanced; the investment environment in Kazakhstan should be urgently improved; the related laws and regulations in Kazakhstan is imperfection which obstructs Chinese enterprises to enter into Kazakhstan market. These problems should be endeavored to solve by China and Kazakhstan.

III. China and Kazakhstan Energy Source Cooperation

Energy source is the important topic for discussion to develop the economic and trade relation of China and Kazakhstan.

Energy source for China is a strategy problem in the large, China lacks of petroleum resource, in turn the high speed development of economy more stimulates the requirements of energy source. In 1993, the first shortage of domestic petroleum supply appeared which can not meet the domestic requirements, since then China had to be the petroleum net importer. Till 2010, the gap between supply and requirements of petroleum in China would reach above 100 million ton; and the natural gas shortage would be above 30 billion m3①. It should do China’s endeavor to exploit the domestic oil and gas resource, besides China should look for energy source base abroad. The Middle East and Russia is China’s strategy partner of energy resource, but we should see, the Central Asia is another important base for china to energy source. China needs energy source, while Kazakhstan and other Central Asian Countries have energy source, thus it provides complementary condition for energy source cooperation between China and Kazakhstan etc. It is proper to establish the key point of the energy supply base in Kazakhstan for China, China develops the petroleum in Kazakhstan is benefit to the economic development of Xinjiang, it can be together make research and plan for the development of petroleum resource in Xinjiang and Kazakhstan. It is with great potential, good prospect, and many positive aspects for Kazakhstan to cooperate with China on energy source.Mr. Nazarbev, the President of Kazakhstan, expressed for many times, wish to cooperate with China on oil extraction, the other leaders of Kazakhstan also lay stress upon that both countries should develop cooperation on petrochemical, if so, it would make Kazakhstan to open an more gate to the world, since China is the bridge and link for Kazakhstan to enter into Asia and Pacific Ocean.

Of course, Kazakhstan can export petroleum resource through Iran, but here there are many negative factors, first, Kazakhstan would encounter the obstruct from Turkmenistan consciously or unconsciously; second, Kazakhstan would be restricted by U.S and other western countries; third, Kazakhstan is as the Eurasia petroleum big power, it should establish the complex energy source output channel. And its key point direction for petroleum output includes Iran, Turkey, Russia and China.

In this connection China Government adopted actively action, in the end of 90th, 20 century, China government signed 9.5 billion USD petroleum exploration agreements with Kazakhstan, China party developed the petroleum exploration in Akjiubinsk oil field and Ujin oil field in Kazakhstan. On Jun 4th, 1997, Mr. Wu Yaowen, the vice president of CNPC, with Mr. Ujanbov, the director of the Privatize Department of the Finance Ministry of Kazakhstan, signed the contract on China party buy 60% share of stock of Akjiubinsk Oil and Gas Company of Kazakhstan, on Oct 18th of the same year, Mr. Zhou Yongkang, the general manager of CNPC, interviewed Mr. Yesimov, the first vice Premier of Kazakhstan passing through Beijing, interchanged opinions on carry out the China-Kazakhstan Petroleum Cooperation Agreement.
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From Sep 24th, 1997 to Sep 25th, 1997, Mr. Zhou Yongkang, the general manager of CNPC, with Mr. Duyixenov, the minister of Energy Source and Mineral Resources Ministry of Kazakhstan., signed the General Agreement on Oil Field Development and Pipeline Construction Project between CNPC and the Energy Source and Mineral Resources Ministry of Kazakhstan.In Nov, 1999, stressed in Joint Statement on Continuously Strengthening the All-round Cooperation in 21 Century between The People’s Republic of China and The Republic of Kazakhstan: “Both countries cooperation in the energy source field is with important strategy meaning. In order full to play the great potential of mutual benefit cooperation in energy source field, both sides would be common to take measures, press forward to finish the demonstration work of economic and technology of China-Kazakhstan petroleum pipeline project, so as to further strengthen both countries cooperation in petroleum field.”① In 2003, expressed in the joint statement of China and Kazakhstan, the China-Kazakhstan cooperation in energy source field is with strategy meaning, both parties shall strengthen the cooperation in petroleum and natural gas field, take effective measures to ensure the existing cooperation project to be carried out smoothly, and shall continuously take research work of the feasibility on the construction of natural gas pipeline from Kazakhstan to China, meanwhile, the Kazakhstan party supports China party to take part in the exploration and development of continental shelf oil field of the Caspian Sea of Kazakhstan.

In recent years, the China Corporation purchased Bibuzach, “KAM”, “ADM” etc. 4 oil fields and 2 exploration projects, in 2005, by 4.18 billion USD purchased the Kazakhstan “PK” Company with a large scale. On Dec 31st, 2006, China Citic Group declared by 1.91 billion USD successfully purchased Nations Energy Co. registered in Canada and its all oil and gas assets in Kazakhstan.②

No doubt petroleum development is important, but the construction of oil and gas pipeline is a highlight problem, Kazakhstan is an inland country, bumper of petroleum, but how to transport it out is a realistic difficult problem. In the past, Kazakhstan transported petroleum through Russia, but now, after independent Kazakhstan wish get the omni-directional petroleum output channel, on strategy, Kazakhstan for a certainty cooperated with China, to construct the eastward petroleum pipeline, China tries hard to be an important eastward channel for petroleum transportation from Kazakhstan.

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From long-range to see, China prepared to establish an oil gas aisle in the Central Asia Area, through it, not only China can get the required energy source, but also can output Japan etc. the oil and gas resource from Kazakhstan etc. China develops the oil fields in Kazakhstan, besides, promises to construct 3000 km pipeline from Kazakhstan to Xinjiang Allah Mountain Pass, on Dec 15th, 2005, the Section from Atasu to Allah Mountain Pass of the crude oil pipeline of China-Kazakhstan completed as scheduled, which emblematized the China-Kazakhstan energy source cooperation entered a new developmental stage.

China-Kazakhstan encourages and promotes both countries energy source enterprises continuously deepen cooperation, more than that, China shall separately carry out the petroleum development and the pipeline construction, China large-scale corporation entirely can compete to construct the southward pipeline and westward pipeline in the Central Asia Area, engineering construction is the effective ways for China’s development of Kazakhstan energy source, China oil and gas technology is with a very high level, entirely can compete in Central Asia Area, moreover, the Central Asia Area is a large market for oil and gas engineering contract and oil and gas equipment export, China paid attention to the long-term strategy question at the time of development of oil and gas resource of Kazakhstan.

On the aspect of oil pipeline construction, after constructed 450km oil pipeline from Kenjiyak to Atlau in 2003, the 962km China-Kazakhstan oil pipeline from Atasu to Allah Mountain Pass was finished in 2005, this is the first bestraddle territory oil pipeline for China, the pipeline was joint venture investment by China and Kazakhstan both parties, each party owned the stock of 50%.

In 2005, the CNPC in exclusive investment constructed 150km pipeline from Zanarur oil field to the Buhala – Ular international gas transmission pipeline, which makes the natural gas produced in this oil field through this Russian pipeline into international market. China in no hurry to evolve the fiercely competition with the western petroleum company, since there is western petroleum company as the reference, Kazakhstan can see the potential and superiority that cooperated with China’s petroleum company.