From xenophobia to sinophilia: is Kazakhstan waiting for Chinese expansion

Is the Red Dragon coming?

The number of companies from China has increased dramatically in Kazakhstan: as of September 1, 4,674 legal entities and branches with owners from China were registered, which is 150 units more than it was on August 1. The monthly increase was the strongest since at least the beginning of 2022.

During all this time, the number of registered organizations fell only once at the end of the month - in November 2023. In 2024, the growth is only accelerating. However, of all registered organizations, only two thirds (3,062 units) are currently active. On the other hand, the number of operating companies with Chinese roots increased by 122 companies in a month, according to the Bureau of National Statistics.

No other partner country shows such a result anywhere near in August, and the total number of operating companies decreased by 221 units over the month. In many ways, the dynamics was determined by the indicators of the Russian Federation – minus 138 operating companies for the month. The number of registered organizations with roots from the Russian Federation, by the way, also fell: minus 31 pcs.

At the same time, every fourth dollar that we gave for goods from abroad still went to China.

Since the introduction of the mutual visa-free regime between the Republic of Kazakhstan and the People's Republic of China in November 2023, tourist flows from both countries have increased. Since that moment, 12 times more guests have come to our country from China, according to some sources - 15 times more. In 2023, the number of tourists from China to Kazakhstan reached 367 thousand people. At the same time, 311 thousand Kazakhstanis visited China, which is twice as much as in 2022.

In the first six months of 2024, almost 70 thousand Chinese guests arrived in Kazakhstan, this is the second position after the Russians (186.1 thousand people). Tourists from India are in third place (53.7 thousand).

There are currently 44 flights per week on the Kazakhstan-China route.

"China does not need us, but it needs us"

Chinese speech is constantly heard on the streets, in shopping malls, and restaurants. Are we threatened by Chinese expansion, the emergence of chinatowns, communities from China? Today we are dealing with the Chinese issue in Kazakhstan with experts.

Director of the Center for Political Studies Aidar Amrebayev is familiar with the statistics and notes that the number of Kazakhstanis who visited China after the introduction of the visa-free regime is more than 50 thousand Chinese who came to us as guests.

"Kazakhstan holds a high position in the WTO visa openness ranking with an index of 68.66. 46% of tourists came to us without a visa, 45% with an electronic visa, 9% with a traditional one. China has a visa openness index of 0.64%. 99% of tourists wishing to visit China must have a visa. We are among the 1% who visit this country without a visa.

The Chinese tourism industry is focused more on the domestic market. If you have been to China, you have seen numerous Chinese tourists looking at the terracotta army in Xi'an, exploring the forbidden city in Beijing and other domestic cultural sites.

The vast majority of tourists traveling to China are Chinese themselves," says the researcher.

In Kazakhstan, domestic tourism is not developed in comparison with China and is more often associated with economic orientation or travel in connection with family holidays. Our people spend money mainly on feasts, aces and toys.

"We need to rethink our priorities somehow. The sphere needs structural and infrastructural changes. One tourist from abroad leaves an average of $1-1.5 thousand dollars per person in Kazakhstan. For example, Kashgar alone in Xinjiang is visited by over 5 million tourists a year. The Chinese have organized the sphere of leisure, holidays and domestic tourism very well and receive huge revenues from it.

This is a very promising industry in Kazakhstan, if you deal with it. But in our country it is still funded on a residual basis, the level of comfort, safety, and service is lame, which do not satisfy not only foreign tourists, but also Kazakhstanis themselves. Take a Medeo - everything is at a fairly low level compared to the tourism infrastructure in other countries, the same China, Western countries or even neighboring Uzbekistan," says Aidar Amrebayev.

Regarding Chinese speech, which is increasingly heard by our citizens in public places, he remarks: "The language of the Celestial Empire is unusual to our ear and is especially noticeable. But if we consider the tourist flow of Kazakhstan as a whole, then there are significantly more Russians in it than Chinese. But for some reason we are not talking about Russophobia, about the fact that Russian towns can form.

Aidar Amrebayev - Director of the Center for Political Studies

"Sinophobia is a mythology, a technology for manipulating public consciousness, like Americanophobia, for example. We need to operate with real figures and think about how to increase the budget by visiting our country by foreigners, how to become interesting to others, and not to escalate fears. Moreover, the visa-free regime does not give the right to employment or obtain a residence permit - we are talking only about a short-term 30-day visit as a tourist," the expert emphasizes.

The second point is that the vast majority of Chinese citizens do not have passports.

"In China, the possibilities of obtaining a foreign passport are limited, the Chinese government regulates this process, as the USSR once did through OVIR. So to think that the borders have been opened and an uncontrolled crowd has poured in is a mistaken opinion. Foreigners still need to try to get them here. They come here not because we consciously create comfortable conditions for them, but because we have natural beauty. We have to take advantage of this!

In fact, the opening of borders works for the economy, increases the civilization of the consciousness of our population. Previously, they might have been afraid of their eastern neighbor because of the "iron curtain of the USSR", not knowing the country, culture, language, and its economic possibilities. But now the situation is completely different. And the Chinese will not rush to our open gates - the standard of living in China is higher than ours," the source notes.

Mostly residents of the border regions of China come to Kazakhstan, and not the more successful southern Shanghai and Hong Kong, he states.

"It is cheaper for border residents to come here in terms of the same vacation. In Xinjiang, the price tag, for example, is biting even for Chinese citizens, but in Shymkent they are quite OK… In general, the situation is changing, and we need to work on ourselves, and not be afraid of the arrival of some external forces. Now Kazakhstanis have begun to travel to China more often, we are beginning to understand the growing potential of China, where there are good business opportunities, we see an influx of Chinese electric vehicles, for example," says the head of the Center for Policy Studies.

A holy place is never empty

Aidar Amrebayev calls the tendency of Chinese citizens to gather in communities and stay apart a Chinese cultural tradition, an anthropological trait.

"This is their communal consciousness – to look for their own kind, to spend time together, to have lunch, to walk and so on. I can say the same about Almaty residents: when I studied in Moscow, we Kazakhstanis also hung out among our own. This is our Asian peculiarity. Americans, for example, don't care - they can travel alone.

It is another matter if such communities are ideological in nature, for example, criminal gangs, religious communities or other microsociety, recognizable even by external signs. Everything is not so clear here. But don't mix everything up and think that hanging out together, loud-talking Chinese are dangerous. They are just different," says the political scientist.

Talking about Chinese expansion, like any other, is more a question for ourselves, the expert is sure.

"As far as we allow this expansion, we do not develop our own niches and leave them to others. If we do not work well in the field of industrial development, the niche becomes interesting for foreigners. If we work well in the field of trade, then there is no place for external forces.

Take a look at the barbershop chain in many shopping malls - Turkish citizens have opened barbershops, although Kazakhstanis may well take this path. But what is, is. Or the sphere of selling vegetables-fruits, dried fruits – we gave it to Tajiks and Uzbeks, despite the fact that our southern population can compete in the market with similar products," Amrebayev reasonably notes.

Regarding the possible increase in the Chinese presence in our country, he predicts rather an outflow of Chinese business against the background of negative trends.

"I have talked with Chinese entrepreneurs, representatives of business associations - they demonstrate dissatisfaction and wariness in bilateral relations. They note a high level of corruption. The LRT project is a testament to that. Medium and large businesses from China often think about leaving Kazakhstan and moving to the nearest countries with a more attractive investment climate, where there is less corruption and bureaucracy, for example, to Uzbekistan.

I have already mentioned the communal consciousness in China. And when one businessman from China experienced the pressure of a corrupt bureaucratic system, tomorrow hundreds of his colleagues will find out about it and think a thousand times whether to invest in Kazakhstan. Information is transmitted instantly via social networks. One has only to slip or the presumptuous akim begins to "milk" the Chinese, this immediately becomes the subject of discussion. This is how we lose new investments," says Amrebayev.

In addition, many Kazakhstanis conduct unfair business with China, often they just "throw" and this spoils the overall background of relations, he says.

"In the current geopolitical situation, we need to take advantage of the proximity with China. Russia is a grey area today, there are problems with secondary sanctions, and businesses need to think about which markets provide opportunities and which carry risks. I am not a businessman, but I would recommend taking a closer look at business with China, while working openly, honestly and being guided by the laws.

Now it is the second decade of the Chinese Belt and Road initiative, the political climate of relations between the countries is excellent, it is no coincidence that Chinese President Xi Jinping says that China will insist on "honest projects." The time of "political investments" has passed, unsubstantiated support for projects alone will not help - you need to offer effective ideas, be a collected businessman, ready for competition," says the political scientist.

He cites the example of the new city of Alatau, for which Kazakhstan has high hopes.

"I was in the akimat of Almaty region and saw numerous groups of Chinese businessmen who are interested in this topic. In a new city, you need to build everything - from construction, services, IT, service. And the Chinese do it much faster, cheaper and better. Nowhere in the world are there such infrastructure projects that China is implementing today. Yes, it is impossible to deny the Western quality, but now the West is also looking closely at China. Look at the intensity of Western leaders' visits to China. Why don't we do this, sitting on potential money and just being afraid? .." - the political scientist wonders.

When you come from abroad to Almaty, the lack of changes is depressing. Of course, there is progress, but it is very slow. We are not able to compete in real mode with advanced countries, and something needs to be done about it.

You can't sit on old stereotypes like "ken baytak zherimiz", "we won't give anything to anyone" and all that. In fact, we have a huge unattended space that we do not develop and give it to someone according to some gray schemes. We need to think hard: what will happen to our country in the end, the political scientist believes.

Dynamics of perception

Ruslan Izimov, sinologist, founder of the Synopsis Center for the Study of China and Central Asia, notes: before the pandemic, the level of perception of China in Kazakhstan was stable.

"Everything related to Chinese projects, facilities, and investments was perceived negatively by most of the population. The protests and anti-government demonstrations had an anti-Chinese orientation.

During the pandemic, investment activity and, in general, the activities of Chinese companies in the Republic of Kazakhstan and in the world decreased, a number of projects were frozen, respectively, we did not observe any manifestations - neither negative nor positive.

In the post-pandemic period, the perception of China in Kazakhstan, as shown by surveys of domestic and foreign sociological institutes, has improved," the sinologist states.

This was influenced by many factors: the key one is the state propaganda, which puts on the agenda messages that China is our key partner, investor and all–weather friend, as President Tokayev says.

"Another significant factor, in my opinion, is the war in Ukraine, the changed rhetoric of the Russian authorities, which Kazakhstan is facing. A tougher line of Russia's foreign policy has increased the fears of Kazakhstanis towards their northern neighbor, and statements by Russian deputies about donated lands have arrived.

Against this background, China began to earn those missing points. And for the first time since the Independence of Kazakhstan, Xi Jinping declared support for the sovereignty and territorial integrity of the Republic of Kazakhstan. This has had an effect – the Kazakh public has become more supportive of China and sees more opportunities for this neighborhood," says Izimov.

Regarding the likelihood of chinatowns appearing in our open spaces, he reminds us that this is one of the old themes.

Ruslan Izimov is a Sinologist, founder of the Synopsis Center for the Study of China and Central Asia

"With the abolition of the visa regime, conversations about closed communities are intensifying, but this is a simplified view of the issue. There is not a single area of compact residence of the Chinese community in any country of Central Asia. There are no classic chinatowns in Russia either, although the scale of interaction and tourist exchanges there is much higher than ours.

In general, the appearance of chinatowns cannot be ruled out, but it is unlikely in the coming years. And this will not be related only to visa-free travel. Our region is not included in the list of attractive places for Chinese to move, who are more willing to move to Western countries, Southeast Asia, South Korea, Japan," the sinologist emphasizes.

Why do Chinese people go abroad? If you get an education, then the United States and Europe are the undisputed leaders here. If they want to earn money, they choose the same countries. In terms of entrepreneurial activity, the Chinese definitely do not consider Central Asia and Kazakhstan - our standard of living is much lower than in China. Doing business here is not very profitable, the sinologist continues.

"I would like to focus on another aspect - bezviz opened the way, first of all, to entrepreneurs, accelerating the increase in trade with China. And this is a blessing, especially when our other neighbor is under sanctions, it becomes harder to trade with the Russian Federation and the risk of falling under secondary sanctions increases," Ruslan Izimov continues.

The second group after entrepreneurs are tourists. While the world is trying to attract the inhabitants of the Celestial Empire, as solvent, numerous customers, it would not hurt us - in this context - to adjust our approaches to tourism.

"We need to create a tourist infrastructure, we could become the center of ecotourism in Eurasia by applying an integrated approach of "government and business". And Kazakhstanis need to develop a more friendly attitude towards tourists. Let me remind you that we are ranked 52nd out of 119 countries in the global tourism development index," the expert says.

Soft power, hard hand

In general, he believes that there is no Chinese expansion in the classical sense, but there is a loud information noise.

"Artificially created by China's competitors, the United States. But even if we admit that expansion is underway, what are we doing to stop it? We're just repeating the same thing.

Let me also remind you that China is not a leader in investments in our country, since the beginning of the implementation of the Belt and Road, there has even been a decrease in deposits. There are many constraints in this regard.

In addition, our research shows that China's soft power tools are not very effective. For more than 30 years of our Independence, China has invested a lot in public diplomacy, but we do not see that the Chinese trend has become widespread, so that all Kazakhstanis start speaking Chinese, or Chinese culture has become popular. There is a certain increase in the share of Kazakhstanis studying in China (according to data for June 2024, more than 3 thousand), but there is still a certain civilizational barrier, and so far it has not been possible to overcome it," the Sinologist shares his thoughts.

Another thing is that the perception of China at the level of decision makers is changing - and quite rapidly.

"Soft power works for decision-makers: for those in power,
for heads of departments of the People's Republic of China, it is a positive player against whom filters and limiters do not work, you can work with it in different areas. We need to consider China (as well as other powers) as a possible partner in the field of metal processing, renewable energy.

So far, I see that soft power works to a certain extent for the top, but for the general public these tools remain not very significant," admits Ruslan Izimov.

He makes reference to the statement of the leaders of the two countries that the second golden thirtieth anniversary has come for our states.

"At the highest level, it is recognized that our relations are exemplary, we have no unresolved conflicts, and there is even better ahead.

International tension, the freezing of logistics chains that went through the territory of the Russian Federation, actualizes new country projects related to access to the world ocean through the territory of China, the Caspian Sea, India, Pakistan, Iran," the sinologist notes.

China plays a key role in all projects, and it is clear why we, as a region, strive to deepen projects with China.

"Since May 2023, the 5+1 format has been launched: Central Asia and China, the first summit was held in Xi'an, and in 2025 there will be a second summit in Astana. This mechanism is actively developing, the Chinese side is trying to intensify and institutionalize the format, and it is possible to create financial mechanisms.

Everything that could not be done within the framework of the SCO, which has turned into an amorphous Eurasian ten, Beijing is now doing in the 5+1 format for more effective interaction with Central Asian countries," the expert believes.

According to him, in the medium term, we can talk about security issues, the protection of Chinese investments and the interests of Chinese citizens in the region.

Economics above phobias

Director of the TALAP Center for Applied Research Askar Kysykov, in turn, notes: in the period 2005-2023, the Netherlands remained the largest investor in Kazakhstan among the countries, which consistently held leading positions from year to year, with a total investment of $130.9 billion. Russia is also a significant investor, especially in recent years, taking second place with a total investment of $28.9 billion. Switzerland ranks third with investments of $27.1 billion.

Askar Kysykov - Director of the TALAP Center for Applied Research

"China has secured the fourth place in terms of gross inflow of direct investments to Kazakhstan for the period with a total investment of $23.1 billion. In 2023, China was also in fourth place with an investment of $1.7 billion.
In the coming years, I predict an increase in investments due to the implementation of a number of major projects: the expansion of the Shymkent refinery, copper smelting and bitumen, automobile plants, and the production of polypropylene. China traditionally invests in uranium mining, and projects in the oil industry in the west of the country are working," the economist notes.

Trade with China is growing rapidly, reaching $40 billion.
A certain part goes for re-export to the Russian Federation, of course, there are risks here, although the customs authorities talk about flow control.

"But we see a serious increase in imports, mainly of technological goods, in other countries of the region. We do not have such consumption. Transit through China is also growing - cargo traffic is increasing, and the issue of bottlenecks in the Republic of Kazakhstan will be raised here.

As for the growth of the flow of tourists from China, these are small figures in absolute terms. We studied the experience of tourism development in the XUAR, which was previously a depressed region. In 2023, more than 260 million tourists visited the region. Our country has 10 million guests. We are losing out to the same SUAR in terms of transport infrastructure - there are more than 20 airports here, it is popular to drive cars.

If we manage to lure at least 1-2% of the XUAR from the stream, this will be a good growth for our tourism industry," the source continues.

By the end of the year, TALAP will present the fourth China book, an analyst on the perception of China in Kazakhstan. According to the results of last year's survey, 74% of respondents believed that attitudes towards China had improved in recent years. This is almost 5 times more than the number of those who reported deterioration (15%).

79% of respondents were in favor of developing relations with China. The perception of China by Kazakhstanis takes place within the framework of the "risks and opportunities" matrix. The attitude towards tourism is indicative: if a trip to China is perceived rather as an opportunity, then coming from there is a risk.

"From 70 to 85% of people in Kazakhstan know about China's major projects. Positive and neutral assessments prevail. The denial of their necessity does not exceed 15%.

The integral index of China's perception in Kazakhstan is changing from north to south. The maximum values of the index are observed in the north of the country, and the minimum values are in the south.

In general, surveys have shown the presence of fears at the level of land sales to the Chinese, dirty inefficient industries, labor migration and interethnic marriages," says Askar Kysykov.

The results of the sociological research of the TALAP center - ChinaBook 2023

In the new questionnaire of Kazakhstanis on the perception of China, which will be presented in December, there will also be a question about the NPP - who would they like to see as a contractor.

"They get more, they pollute the environment"

It should be noted that two years ago, researchers from the PaperLab Foundation, with the support of the Open Society Foundation, presented the results of the project "Deciphering the perception of the Chinese presence in Kazakhstan: managerial, social and environmental dimensions".

The authors analyzed the phobias of the local population, the policies of Chinese companies operating in Kazakhstan, and the strategies of local authorities to interact with society and business using the example of three enterprises. These are the Tayynsha-Mai oil processing plant in the North Kazakhstan region, the Boguta Zhetisu Wolframs tungsten ore processing and enrichment plant in the Almaty region and the Zhanatass wind power plant in the Zhambyl region.

Experts recalled that more than 10 years ago, the country's authorities presented a pool of 50 projects from Chinese investors. And so they decided to find out how some of them are implemented and affect the lives of local communities.

"Sinologists, describing the perception of China and its presence in Kazakhstan, often refer to the formula "sinophilia at the top, and sinophobia in society." In the upper echelons of government, the attitude towards Chinese partners is positive, and public opinion measurements indicate an increase in hostility towards China among local residents.

Thus, a survey by the Central Asian Barometer (CAB) showed that since 2017, the attitude towards China among Kazakhstanis has noticeably deteriorated. Over a five–year period, the share of those who speak negatively about China has doubled, from 10% to 20%, and the share of those who have an extremely negative attitude towards Kazakhstan's neighbor has more than 4 times, from 6% to 25%," the analysts pointed out.

Public resistance is also growing towards China's implementation of energy infrastructure projects in the country. The researchers noted that the sinophobia factor is taken into account at all levels when making decisions about Chinese investment projects and further during their implementation, which is not the case, for example, with European or American companies.

Residents of the areas where Chinese projects operate are confident that the Chinese would not have put such production at home – "so we get a deliberately dirty harmful project." In addition, they claimed illegal land distribution by local officials. Residents of the village also complained about the lack of basic utilities: water, roads and heat. The villagers are also convinced that Chinese workers get a lot of money for the same work that the locals do.

"Faced with the inefficient work of local akimats, residents are waiting for the solution of issues from a foreign investor. Even if it is not included in the area of social and corporate responsibility of the incoming companies. Requests turn into demands, and if they are not fulfilled, the investor becomes bad," the analysts emphasized.

According to experts, investors themselves are ready to engage in dialogue and help with issues of social well-being of locations. At the same time, they do not work directly with local communities – only through akimats.
Based on the results of the work, the authors of the study recommended that officials and Chinese companies improve communication channels with local communities, publish data on activities and products, environmental impact, personnel, and the percentage of local content.