Belt and Road Benefits the Global Economy
China and Kazakhstan have developed a solid partnership in energy, infrastructure, agriculture and advanced technologies
Alexander Machkevitch
Alexander Machkevitch is co-founder,shareholder and chairman of the board of directors, Eurasian Resources Group (ERG).He is member of the Foreign Investors’Council under the president of the Republic of Kazakhstan, member of the National Olympic Committee of the Republic of Kazakhstan and president of the Equestrian Federation of the Republic of Kazakhstan.
Over the past 40 years of reform and opening-up, I have witnessed China moving from a position of “catching up” to “taking the lead” in the world economy. The country has set an example of how to successfully overcome poverty and achieve rapid economic growth.
According to official statistics, the GDP per capita in China grew from $156 in 1978 to $8,827 in 2017. This directly reflects the transformation of the country’s status. China is now the world’s second-biggest economy, the largest merchandise trader and the country with the most significant foreign exchange reserves.China has been continuously opening up to the rest of the world,which is demonstrated by the Belt and Road Initiative (BRI). China has helped to play a significant role in the economic development of other countries while also developing itself.
Talking about the contribution China has made to Asia, it ensured the stable and speedy development of the regional economy following the two economic downturns of 1997 and 2008.During this time, the Chinese economy grew at 7 percent annually and maintained a stable currency exchange rate.
Another important contribution worth mentioning is that China has created a number of collaboration efforts between countries in Asia including dialogue platforms such as the Boao Forum for Asia, the Shanghai Cooperation Organization and the Belt and Road Forum for International Cooperation. These have significantly contributed to building a community of common interests in Asia, strengthening high-level exchanges with enterprises, experts and scholars on economic, social, environmental,and other issues. Chinese President Xi Jinping has said: “China’s development is closely connected with Asia’s destiny. Asian countries have broad prospects for cooperation and a promising future for development.” In recent years, many Asian countries have taken advantage of China’s reform and opening-up to deepen cooperation and exchanges in industry and commerce,finance, science and technology, transportation and culture of which the most relevant is the Belt and Road Initiative. As an important milestone of China’s reform program, the initiative has created opportunities for strengthening economies along the Belt and Road routes. The opportunities for cooperation that the initiative presents have effectively promoted the efficient allocation of resources, and have injected new vitality to the economic development of Asian countries in particular.
In this context, cooperation between China and Kazakhstan has deepened. The two countries have developed a solid partnership on energy, infrastructure, agriculture, and advanced technologies, which has hugely improved their economic development.
China is the second largest trade partner of Kazakhstan. As a corporation with the government of Kazakhstan as its main shareholder, and embracing many strategic assets in the country, Eurasian Resources Group (ERG) also benefits from China’s reform and opening-up as well. ERG has already actively engaged with Chinese partners, and we believe that as this reform and opening-up continues, there is certainly more scope for cooperation.
The benefits of the BRI can be seen firsthand. In transport connectivity, the Yiwu-London railway spanning from China all the way to Europe has brought great convenience for countries along the route, such as Russia, Kazakhstan and Tajikistan, and boosted their economic growth, rapidly increasing the volume of exports. In particular, for Kazakhstan, a landlocked country,the launch of the rail route from China to Europe gives it a “seaport” leading to the Pacific Ocean, and therefore a key transport hub on the Eurasian continent. The railway brings many opportunities for Kazakhstan enterprises that want to export their products. The integration of China’s BRI with Kazakhstan’s Bright Road economic policy will provide a strong impetus for Kazakhstan’s economic development.
When it comes to energy and natural resources, the China-Russia gas pipeline, a major energy artery that will transport natural gas from Russia to China is set to transform the region. The pipeline, which is a multinational project, will strengthen energy cooperation and deepen the comprehensive strategic partnership between the two countries. It is also the biggest cooperation project between China and Russia since the BRI. For Russia, the project not only opens up a new market for natural gas exports,but also brings more opportunities to the development of eastern Siberia.(https://www.daowen.com)
Both personally and on behalf of ERG, I am excited to see that China is embracing its role as a global leader and driving Asian economic development. I think its role as the engine of this project can be classified into three areas.
First, providing cooperation opportunities. As an Asian country in a globalized world, China’s economy is closely connected to others, in particular, Asia. China understands that the best way for it to grow is by supporting other countries’ industrial development, pursuing trade agreements and facilitating sustainable productivity growth. China recognizes the steps that all parties need to take together to create a more peaceful and prosperous world. Therefore, the main thrust of its reform is a strategy that will benefit everyone.
Second, demonstrating leadership in the Asian region. China has supported and advocated many channels for dialogue for Asian countries and has played a key role in facilitating discussions.Moreover, it has established many platforms to provide support to Asian countries, such as the Asian Infrastructure Investment Bank. As the world’s second-largest economy with a positive attitude to productive partnerships, China can certainly influence other Asian countries for everyone’s benefit.
Third, being a role model for reform. For the past 40 years, we have seen tremendous changes in China due to an ambitious program of reform. There is no doubt that some Asian countries will look to China as an example. In my view, this can only lead to a more prosperous Asia.
As a diversified natural resources group, ERG recognizes that China is a key market for many of its products such as ferrochrome and cobalt, and so we pay great attention to demand for strategic materials from this country. We have been implementing several joint projects with our Chinese partners for a number of years. Among them, our flagship development that will open new horizons of strategic and profit growth for the group — the Metalkol Roan Tailings Reclamation project, or Metalkol RTR.
Metalkol RTR is a successful example of multi-dimensional collaboration between ERG and Chinese partners in developing copper and cobalt in the Democratic Republic of the Congo.The cooperation includes EPC, financing, strategic supply and offtake agreements. It sets a benchmark for cooperation under the auspices of the Belt and Road Initiative.
China Nonferrous Metal Industry’s Foreign Engineering and Construction Co. Ltd. is working with ERG as an EPC contractor to bring the Metalkol RTR project to the production stage.Metalkol RTR is a comprehensive hydro-metallurgical facility with a target capacity of 70 ktpa of copper and 14 ktpa of cobalt in Phase I, which will then be expanded to around 120 ktpa of copper and 24 ktpa of cobalt. At full capacity, ERG is well positioned to become the largest supplier of cobalt to China and provide material for over 3 million electric vehicles per annum. Along with the rapid development of EVs in China, the demand for cobalt will be huge and we are confident in helping China utilize these fundamental opportunities. Copper and cobalt are two strategic metals for the development of key sectors such as batteries and super alloys (cobalt), construction and electronics (copper).
The Metalkol RTR project is not the only joint initiative we are working on with our Chinese partners. For example, the Kazakhstan Aluminum Smelter, the only producer of aluminum in Kazakhstan, was built jointly with China and was one of its largest foreign investments anywhere in the world.
We applaud China for its reform program and the tremendous efforts President Xi has made in opening up the country. In light of some recent moves to protectionism, we celebrate the commitment made to economic globalization.
From ERG’s perspective, we welcome an open economic environment, which involves a variety of enterprises. In the first 40 years of reform, China made significant changes domestically, and in the coming decades, China will make changes to the world. We look forward to seeing China take the lead in the global economy and believe that effective collaboration and sustainable development should be the focus. For example, China is pioneering EV development, driving forward strict environmental protection management and creating opportunities to lead the way in manufacturing new technology.
Undoubtedly, the BRI has a very important role to play in supporting China’s economic transition. The country has already made progress in optimizing its value chains as it advances to more downstream production. The Chinese economy is continuing its integration with world markets and is shaping the future of the global economy through the investments that are transforming infrastructure projects and supply chains across Eurasia, Africa and Latin America.
With our already extensive experience in collaborating with China, we anticipate further overseas investment and EPC project plans and look forward to working together with Chinese companies in overseas resource development. We are able to leverage our valuable assets and years of experience in Kazakhstan, Africa and Brazil, and with Chinese partners bringing a wealth of knowledge and experience in the mining industry and technical expertise, we see great opportunities ahead.