Real Estate & Construction

High Hopes

Khorgos Dry Port

Kazakhstan wants to be among the 30-most competitive economies in the world by 2050 and is well on its way, with projects like the Khorgos Dry Port that the government hopes will boost the economy and investments in less than three years.

A rich resource base, an efficient transport system, and a geographical location as a midpoint between Asia and Europe provide Kazakhstan with key assets for growing its economy. Its proximity to growing economies in Central and South Asia make it all the more lucrative for investors.

Looking to take advantage of these assets, the government along with Kazakhstan Railways has started to build a new dry port on the Kazakh-Chinese border in the Khorgos free-trade zone. The dry port, expected to be completed in 2018, will span 580ha and have a capacity for some 200,000 containers. It is anticipated to be a key transit hub between the east and west and will cost close to $220 million.

Both the dry port and the free-trade zone in which it is located are among efforts by the Kazakh government to attract and increase investment and economic development. Its plans to bring the country to be among the 30 most competitive economies by 2050 have spurred projects such as the dry port, also known as the Khorgos Gateway. China’s interest in increasing investment in the country and reinvigorating the Silk Road have also prompted the government to work to grow the economy. Last month, China’s Jiangsu province signed an agreement to invest $600 million over the next five years in the free-trade zone, known as the Khorgos Special Economic Zone.

Recently, President Nursultan Nazarbayev stated that the Kazakh-Chinese strategic partnership, which the two countries agreed to in a meeting in May 2015, has entered a new phase. It is necessary to “further develop cross-border transportation infrastructure to create favorable conditions for Chinese cargos to transit through the Kazakh railway network,” the president said. The neighbors want to boost bilateral trade to $40 billion per year by improving cooperation and building infrastructure, as well as increasing Kazakh exports of construction materials and agriculture.

Trade between China and former Soviet Central Asian states rose from $1.8 billion in 2000 to $50 billion in 2013. As such, China has recently surpassed Russia as the largest trading partner among these countries. With its increasing influence, the importance of attracting China with projects like the Khorgos Special Economic Zone and the Khorgos Dry Port is obvious. These projects will accelerate trade flow and the economic prospects for both countries. With billions expected in investment, the free-trade zone spans two countries, with 185ha in southeastern Kazakhstan and 343ha in China. Visiting traders are already able to stay visa-free for 30 days, and potential investors no need top ay any taxes and customs.

Companies are constantly looking to reduce time spent on transporting goods. Considering sea travel to Europe takes a month, whereas rail passing through Kazakhstan takes less than half, Kazakhstan is in an excellent geographic position: between China, the world’s largest industrial producer, and Europe, the largest consumer market. As Khorgos becomes a hub for regional and international trade, Kazakhstan will surely benefit.

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