China and Kazakhstan: The SCO Summit and Implications on Future Endeavours

On the morning of July 4, 2024, the 24th meeting of the Council of Heads of State of the Shanghai Cooperation Organisation (SCO) transpired at the Palace of Independence in Astana, the capital of Kazakhstan. The meeting was chaired by Kazakh President Kassym-Jomart Tokayev and attended by Chinese President Xi Jinping and Russian President Vladimir Putin. Other country representatives in attendance included Belarus, Kyrgyzstan, Pakistan, Tajikistan, Uzbekistan, Iran, and India.

President Tokayev inaugurated the meeting and underscored three strategic priorities in his speech: the fortification of mutual trust and cooperation in the field of security, the expansion of trade and economic relations, and the importance of enhancing transportation connectivity. The third goal has already been heavily contributed to, as reflected in the billions of dollars that Beijing had invested as part of its Belt and Road foreign policy initiative to upgrade Kazakhstan’s infrastructure, particularly railways, in order to increase trade routes to China’s trading partner, Europe.

Xi emphasised the importance of the SCO’s role in maintaining global security, addressing Cold War mentality threats, promoting comprehensive and cooperative security, and fostering sustainable development. He called for mutual benefit, technological innovation, and stable supply chains to drive regional economic growth. He urged the SCO to strengthen unity, resist external interference, and support each other’s development.

The attending leaders recognised the SCO’s constructive role in regional peace and security and expressed readiness to enhance cooperation in trade, transport, energy, finance, agriculture, the digital economy, scientific innovation, education, culture, tourism, and youth exchanges. They called for respecting countries’ security concerns, resolving disputes peacefully, opposing unilateral sanctions, and enhancing cooperation against terrorism, separatism, extremism, drug trafficking, and transnational organised crime. Belarus was also officially accepted as a full member.

This visit marked China's continued efforts to solidify its influence in the region through various initiatives, including the Belt and Road Initiative (BRI) and the promotion of green technology and sustainable development. In Kazakhstan’s wealthiest city, Almaty, there has been a trend of new car dealerships with Chinese electric vehicle brands, the popularity of which is still rapidly growing due to their low prices and fancy features. China’s previous efforts with Kazakhstan in creating ports, such as the container hub in Aktau and the Khorgos Gateway, to make transportation of cargo containers by trains easier, should also be noted.

Central Asia is recognised as the core of the SCO, which elevates the significance of the region and its constituent countries in the organisation’s activities and development. UN Secretary-General Antonio Guterres participated in both the previous and current Astana SCO summits. This recognition enhances the geopolitical importance of Central Asia, potentially attracting more foreign investment due to its increased stability and strategic relevance. Chinese companies have already found new opportunities in sectors like infrastructure, energy, and trade and have become one of the largest investors in the country. The involvement of the UN Secretary-General at the SCO summits only further highlighted Kazakhstan’s significant role in international diplomacy and multilateral organisations. This acknowledgement can boost investor confidence in Kazakhstan as a stable and proactive player in global affairs, potentially attracting more foreign direct investment.

The SCO’s unifying factor at present is a general desire to see a reduction of Western global influence. The inclusion of observer states, dialogue partners, and international organisations in the SCO framework (as part of the new SCO Plus format) broadens the scope for international collaboration and partnership, which could lead to new business ventures and joint projects across multiple countries. Increased cultural and people-to-people exchanges can boost the tourism and hospitality sectors, creating more business opportunities in these fields.

In 2022, non-cash transactions in Kazakhstan had reached $227 billion, marking a 42% increase, heavily impacted by the development and expansion of Kaspi, Kazakhstan’s first online lending and mobile banking service. Kazakhstan has rapidly digitised its public services, now ranking 28th on the UN e-Government Development Index, in which connecting to China’s Digital Silk Road played no small part. It included trans-Caspian fibre-optic main routes passing through the country, and this connection has tremendous potential for developing data storage and processing centres in Kazakhstan.

The Kazakh Ministry of Digital Development, Innovation, and Aerospace Industry has signed several documents on the sidelines of the SCO summit with Chinese partners. The agreement is centred around technical and economic cooperation. Kazakhstan will receive a $13.7 million grant from China to invest in and develop the space industry. The projects are still being discussed. The focus would be the development of computational astronomy and modelling, the improvement of scientific and technical infrastructure, and organising training and internships at production sites in China. Another agreement centres around cooperation in creating and operating the International Lunar Research Station (ILRS), where Kazakh specialists will be trained and will gain experience in using high technologies for deep space exploration. This could attract further investments in research and development, potentially leading to sustained investments and joint ventures in high-tech industries.

Recently, Kazakhstan and China have also made an effort to cooperate in technical and vocational education. Over 500,000 students are enrolled in Kazakh colleges, and these students will now have the opportunity to obtain a double-diploma qualification in partnership with Chinese universities. Additionally, the two nations will establish exchange programmes and various projects aimed at the innovative advancement of colleges. China is also set to offer around 1,000 grants for Chinese language teachers to SCO member states over the next three years, along with 3,000 slots for summer camps focused on Chinese language competitions. The Kazakh Minister of Science and Higher Education announced that special departments for Chinese language instruction will be created in leading state universities in Kazakhstan, and Chinese will be recommended as a second language. The increase in cultural and educational ties can further encourage FDI from Chinese firms.

However, despite increased collaborative efforts, there is a lot of anti-Chinese sentiment in Kazakhstan (primarily due to China’s detention of many Muslim groups, including Kazakhs and Uyghurs, in their detention camps in Xinjiang). Because of this, those outside of politics or business elites especially mistrust the country.

Despite this, Chinese foreign investment in Kazakhstan only continues to increase, and the SCO summit only helped Kazakhstan further advance its agenda to reach a new international level.