Kazakhstan, a strategic country in the heart of the Silk Road

Kazakhstan, a strategic country in the heart of the Silk Road

Through the One Belt One Road project, rail networks and freight trains linking Europe and China via Kazakhstan are the keystone dedicated to help building the biggest economic market in the world. In this development context, the Shanghai Cooperation Organization (SCO) which gather five countries in Central Asia (Russia, Tajikistan, Kirghizstan, Uzbekistan and Kazakhstan) set up the goal of implementing a favorable environment for commercial trades.

Indeed, Kazakhstan, which is already a regional power, insuring more than 75% of GDP of the area, wants to be in the heart of Silk Road’s initiatives. This large country of 17 million inhabitants, politically stable, is filled with hydrocarbons. Its subsoil contains oil, uranium, titanium…It is without a doubt the wealth of the country that enabled it to become, in 2015, member of the WTO, to improve its business climate and to sign a reinforce partnership with European Union. (Business France). From a regional point of view, Kazakhstan is part of the Economic Eurasian Community and take part into the consortium created with Azerbaijan and Georgia to facilitate the transit of Chinese merchandises in Europe. This is why the Economic Eurasian Community and Customs Union of Belorussia, Kazakhstan and Russia focused on barriers’ elimination to trade and on setting up development programs. Wishing to diversify its economy in order to be less dependent to oil, Kazakhstan wants to position itself as a Silk Road’s turntable.

According to Arman KUZHANOV, general manager of the CMA CGM Log office in Kazakhstan, the country is clearly aware of its advantageous geographical location at the crossroad of the West and the East. European Union being the first trade partner of Kazakhstan, the Silk Road is going to bring new horizons to the Europe/Kazakhstan relations, this is why the country is investing more and more in new roads and new borders points.

Kazakhstan has indeed, a central position at the heart of the Silk Road, its contribution in terms of infrastructures is important. By 2020, 5 600 kilometers of rails will be modernized. The country wishes to develop its global connectivity and this is through the Khorgos hub that Kazakhstan is going to play its role of Silk Road’s crossroads. (Sébastien Peyrouse, Chinese Perspectives) The country is going to become an unavoidable step for companies that want to deliver their cargo in Central Asia.

Indeed, according the World Bank, Khorgos is about to become a key nod of international transit development. For freight forwarders, Kazakhstan is becoming a strategical location. Indeed, as Coastal China is gradually becoming richer, factories are moving inland and railway transport will soon take as less as 10 days between China and Duisburg in Germany. New technologies development such as driverless cars/trucks/trains will enable to operate vehicles 24/24 and to enhance competitiveness of rail transportation. (Kazakhstan Embassy) Currently, cargo traffic between China and Europe is equal to 600 billon of dollars and Kazakhstan hopes to be able to grab a tenth of this traffic through its central position of alternative hub. (Reuters)

CMA CGM Log already positioned in Kazakhstan through its Almaty office is also present in Khorgos. In order to answer the needs of companies to be closer to their customers, the industrial zone of Khorgos has a container depot where cargos from all over China can be stocked and then sent to their destination. This storage enables to improve efficiency and to control the entire supply chain. The advanced hub of Khorgos thanks to its advantages allows to attract more and more global carriers, this carriers have then the opportunity to consolidate or divide shipments along the way in order to maintain stocks close to Europe at low costs.