Economic cooperation of Kazakhstan with Asian countries

-Центральная-Азия

Asian countries, for a number of objective reasons, occupy one of the leading places among Kazakhstan’s economic partners geographically in the key areas of foreign economic cooperation. At the same time, in terms of foreign trade, these countries have a leading position – in 2020, Asian countries (excluding CIS countries) had the maximum share of 36.7% in Kazakhstan’s foreign trade, which exceeds the share of European and CIS countries.

The role of Asian states is not only high in the trade and investment spheres of Kazakhstan’s international economic cooperation; their share is significant in virtually all areas of foreign economic interaction, amounting (by the end of 2020) to 14% to 43% (Figure 1).

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Figure 1. Indicators for Kazakhstan’s economic cooperation with Asian countries in selected areas at the end of 2020. [1]

According to the above data, the main areas of economic cooperation between Kazakhstan and the countries of the region are foreign trade in goods and investment cooperation. Foreign trade, as the main type of economic interrelationship, is the most indicative of trends in cooperation. An analysis of trade flows over the last decades not only shows a very significant increase, which increased 16.5 times between 1995 and 2020 (from USD 1,919 mln to USD 31,707 mln). These dynamics, shown in Figure 2, also reflect the faster growth of Kazakhstan’s foreign trade with Asian countries (excluding CIS countries) compared to the volume of foreign trade as a whole, as shown by the progressive increase in the share of Asian countries in its total volume over the last twenty years.

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Figure 2. Dynamics of Kazakhstan’s trade volume with Asian countries and its share in the total volume of foreign trade. [2]

Kazakhstan’s foreign trade between 1995 and 2020 increased 9.5 times, and its trade with Asian countries increased 16.5 times; Kazakhstan’s exports as a whole increased 9.1 times, and to Asian countries increased 17.7 times; Kazakhstan’s imports increased 10.2 times, and its imports from Asia increased 15.3 times.

Kazakhstan’s key Asian foreign trade partners with a share of more than 2% are shown in Figure 3. In terms of annual trade volume, the PRC is Kazakhstan’s key trading partner, leading by a significant margin compared to other leading Asian counterparts. South Korea, Turkey, Uzbekistan and India are also among the leaders in trade with Kazakhstan in 2020.

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Figure 3. Volume and share of trade of Kazakhstan’s main trading partners from Asia in 2020.[3]

In total, eight countries with a share of more than 2% account for 90.5% of trade with Asia, suggesting that these countries represent virtually all of Kazakhstan’s external trade to the east.

The other main area of Kazakhstan’s external economic cooperation with the continent’s states is investment, mainly in terms of attracting foreign investment into the country. The role of a country as a source of foreign investment is best reflected by its stock of foreign investment, as this indicator demonstrates the role of the respective countries in the development of the recipient country’s economy. In terms of accumulated investment of all types from Asia at the beginning of 2021, China is also the leader, accounting for the majority of it. In addition to the PRC, Japan and Hong Kong are notable foreign investors from the Asian continent. In total, there are seven countries with a share of more than 2% of total accumulated investment from Asia (Figure 4). The cumulative volume of accumulated investment in Kazakhstan from these seven countries is 94.2%.

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Figure 4. Volume and share of accumulated foreign investment of all types in Kazakhstan from leading Asian partner countries as of January 01, 2021[4]

 Thus, cooperation between leading Asian countries and Kazakhstan is comprehensive, covering the main areas of economic interaction and playing an ever-increasing role in the country’s development.

[1] Calculated and compiled from the data from the following sources: Main indicators of foreign trade of the Republic of Kazakhstan for January-December 2020. Statistics of foreign and mutual trade. Agency for Strategic Planning and Reforms of the Republic of Kazakhstan, Bureau of National Statistics URL: https://stat.gov.kz/official/industry/31/statistic/6 (access date: 7/12/2021); Gross direct investment inflows into Kazakhstan from foreign direct investors. Direct investments according to the directional principle. URL: https://nationalbank.kz/ru/news/pryamye-investicii-po-napravleniyu-vlozheniya (access date: 8/14/2021); International trade in services of the Republic of Kazakhstan. Balance of Payments. National Bank of Kazakhstan. URL: https://nationalbank.kz/ru/news/platezhnyy-balans-vn-sektora (access date: 8/14/2021); Personal transfers (gratuitous remittances from individuals). Balance of Payments. National Bank of Kazakhstan. URL: https://nationalbank.kz/ru/news/platezhnyy-balans-vn-sektora (access date: 8/14/2021); Statistical bulletin as of July 1, 2021. Ministry of Finance of the Republic of Kazakhstan. URL: https://www.gov.kz/memleket/entities/minfin/documents/details/198093?lang=ru (access date: 8/14/2021).

[2] Calculated and compiled from the data from the following sources: Main indicators of foreign trade of the Republic of Kazakhstan for January-December 2015. Agency for Strategic Planning and Reforms of the Republic of Kazakhstan, Bureau of National Statistics URL: https://stat.gov.kz/official/industry/31/statistic/6 (access date: 8/16/2021); Main indicators of foreign trade of the Republic of Kazakhstan for January-December 2020. Agency for Strategic Planning and Reforms of the Republic of Kazakhstan, Bureau of National Statistics URL: https://stat.gov.kz/official/industry/31/statistic/6 (access date: 8/16/2021); Kazakhstan za gody nezavisimosti [Kazakhstan during the years of independence]. Information and analysis collection. Prepared by the Agency of the Republic of Kazakhstan on Statistics. Ed. by B.T. Sultanov. Almaty, 2006 – 380 p.; Vneshneekonomicheskaya deyatelnost Respubliki Kazakhstan [Foreign economic activity of the Republic of Kazakhstan]. Statistical collection / Ed. By Zh.A. Kulekeyeva/. Almaty, 1999 – 388 p.; Vneshnyaya torgovlya i sovmestnoe predprinimatelstvo Respubliki Kazakhstan [Foreign trade and joint venture of the Republic of Kazakhstan]. Statistical collection. / Ed. by B.K. Tortayeva / Almaty, 2004 – 226 p.

[3] Calculated and compiled from the data from the following sources: Main indicators of foreign trade of the Republic of Kazakhstan for January-December 2020. Agency for Strategic Planning and Reforms of the Republic of Kazakhstan, Bureau of National Statistics URL: https://stat.gov.kz/official/industry/31/statistic/6 (access date: 8/16/2021).

[4] Calculated and compiled from the data from the following source: International investment position of Kazakhstan as of January 01, 2021. National Bank of Kazakhstan. URL: https://nationalbank.kz/ru/news/mezhdunarodnaya-investicionnaya-poziciya (access date: 8/17/2021).

Vyacheslav Dodonov, Сhief Research Fellow KAZISS under the President of the RK

Extracts from the report “Economic cooperation of Kazakhstan with the countries of the East: the main partners in key areas” at the International scientific and practical conference “Kazakhstan and the Eastern world: past, present and future”, dedicated to the 30th anniversary of the Independence of the Republic of Kazakhstan and the 25th anniversary of the Institute of Oriental Studies them. R.B. Suleimenov. November 25, 2021, Almaty, Institute of Oriental Studies of the SC MES RK

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