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Home Belt and Road NOT EXACTLY THE SILK ROAD, OR THE COVID-19 FACTOR IN INTERSTATE TRADE

NOT EXACTLY THE SILK ROAD, OR THE COVID-19 FACTOR IN INTERSTATE TRADE

28.03.2021

Since June 2020, much attention has been paid to the acute issue of traffic congestion on the border of Kazakhstan and China in the information space.
Indeed, since last year, a large number of cars and railway vehicles with cargo have accumulated on the Kazakh-Chinese border, which are moving very slowly to the delivery points in the PRC.
And, of course, this situation attracts increased media interest and not only. At the same time, an incorrect understanding of the essence and causes of the situation is very often traced.

So, for several months, a lot has been written about the alleged “Minister of MIIR B. Atamkulov does not perform his work with the Ministry of Transport of the People’s Republic of China” (for example, https://t.me/Uzynqulaq/1142), or the fact that “the country’s Foreign Ministry and its head M. Tleuberdi are not finalizing with Chinese partners.”
For example, this is evidenced by such statements as “…we asked the Ambassador of Kazakhstan to the PRC and the Ministry of Foreign Affairs of the Republic of Kazakhstan to assist in resolving the issue or give us a document indicating the exact dates of the ban from the PRC, so that entrepreneurs could appeal with paper in communicating with partners and not receive fines. But we have not received any official documents… ” (https://inbusiness.kz/…/put-na-kitaj-poltora-mesyaca…).
In general, many different conjectures, conspiracy theories and unsubstantiated versions are still circulating in the media, social networks and telegram channels. One of these recent versions is https://t.me/gbazhkenova/1705, which says that ” The Chinese are punishing Kazakhstan for something, or rather, they react harshly to some actions. Which ones? Dear Sinologists are afraid to speak.”).

In fact, there is only one question here – where is critical thinking?

To begin with, for example, why does no one raise the question that the regulator of export operations in its functionality is the Ministry of Trade and Integration of the Republic of Kazakhstan, which should, in theory, work out the interaction of supplies across the Kazakh-Chinese border.

The MIT regulation states that it is “a state body of the Republic of Kazakhstan that carries out the formation and implementation of state policy in the field of 1) development and regulation of foreign trade activities, international trade and economic relations, including regulation of international economic integration, etc.” (https://www.gov.kz/memleket/entities/mti/about?lang=ru).
After all, cars and trains carry goods to the People’s Republic of China as part of trade deals – so it is mainly up to the Ministry of Transport of the Republic of Kazakhstan and the Ministry of Commerce of the People’s Republic of China to solve the issue. What does MIIR have to do with B. Atamkulov or the Foreign Ministry with M. Tleuberdi?

But the question is not even in this, but in the real reason for the quarantine restrictions that have arisen on the Kazakh-Chinese border.

First. The restrictions are imposed by China. At the same time, there are no political or economic problems between Kazakhstan and China that could hypothetically cause the introduction of restrictions on the border. This is a response to various conjectures and conspiracy theories that Beijing is allegedly politicizing trade. For several years now, China has been holding an import EXPO in Shanghai, stimulating imports to its market from outside – in this case, what is the point for Beijing to limit trade flows along its own “One Belt, One Road” initiative, in which Kazakhstan plays a special role.

Second. The introduction of the current restrictions on the Kazakh-Chinese border is associated only with the potential risk of importing the virus to China from outside. Today, for China, the probability of a new epidemic outweighs all the temporary economic costs. This is understandable in principle-for a country with a population of 1.4 billion. A person with such a rapidly spreading virus as COVID-19 is a strategic risk with unpredictable consequences. Therefore, measures to prevent this scenario are non-standard.

The third. As a result, this is why the policy of relations with the outside world and border issues are now largely determined by the office of the Chief sanitary Doctor of the People’s Republic of China and, in particular, the sanitary authorities of the XUAR – a border region that acts as a gateway for China to Eurasia. In this regard, the current issue of cargo transportation to China and congestion on the border of our countries cannot and should not be solved by either the Ministry of Foreign Affairs, the Ministry of Foreign Affairs or the MIT.
In reality, trade is controlled by the epidemiological situation, which is still unstable outside the PRC (this has also been reported by the media https://kursiv.kz/…/skoplenie-mashin-na-granice…). And this issue will be resolved by itself-with a decrease in the coronavirus pandemic.

What are the restrictive measures and the introduction of a strict quarantine of China based on?

First of all, on the already recorded facts of the detection of the virus on the packaging of frozen products (https://www.dw.com/…/zhivye-chasticy…/a-55313983). In general, all imported products have been tested for coronavirus in China since June 2020, after an unexpected local outbreak of the epidemic in the country’s capital.
Since August last year, reports about the facts of infected products imported from foreign countries have periodically appeared in the media (https://www.vesti.ru/article/2441718), and in January-February 2021, news feeds again reported the detection of COVID-19 pathogens on imported products (https://www.rbc.ru/rbcfreenews/601ae1b49a7947c3d8cf37cc).
This was also reported by the domestic media https://tengrinews.kz/…/koronavirus-obnarujili-na…/).
In general, today quarantine and sanitary safety have a direct impact on trade relations with the PRC (https://www.reuters.com/…/chinas-irritated-trade…&).

At the same time, objectively, China itself suffers from strict quarantine restrictions at the borders, since vehicles and trains with loaded wagons also accumulate on the Chinese side. This is reported by specialized information resources dealing with the transport industry.

So, in connection with the introduction of China’s strict measures and epidemiological control at border crossings Dostyk-Alashankou and Altynkol-Khorgos now were up to 7 000 loaded cars on the Kazakh side (up to about 16 000) and up to 6,000 on the Chinese side (https://index1520.com/…/dogovorennosti-dostignutye…/).
In this regard, the Ministry of transport of the PRC is also in an uncomfortable position due to the forced transport limitations at the borders. Chinese customers who are waiting for the fulfillment of contractual obligations and their goods stuck at the border are also suffering.

In addition, there is another dimension to this question.

According to media reports, mostly traces of the COVID-19 virus are found on food packages. And for a very densely populated PRC, food import is a very important issue, because the billion-strong population needs uninterrupted and rhythmic food supplies.
For example, according to Euromonitor, the Chinese food market is estimated at $ 1 trillion, today China ranks first in the world in terms of the volume of the food retail market. By 2024, according to forecasts, the Chinese food market will amount to about $ 1.8 trillion. That is, the PRC is interested in buying even more, and not restricting trade.

In this regard, it makes no practical sense for China to politicize trade relations with foreign countries. Moreover, since last year, President Xi Jinping has announced the development of a new economic model in China, called “double circulation” (the domestic economy is the mainstay, and the domestic and international economies complement each other). Trade plays an important role in the implementation of this model.

As well as Kazakhstan’s relevant state bodies, there is no point in delaying the solution of the issue of congestion at the borders.
Moreover, the relevant intergovernmental consultations with the PRC are conducted regularly (July 2020 https://liter.kz/64892-2/, December 2020 https://informburo.kz/…/kazakhstan-vedyot-peregovory-s…). And here China always goes to meet Kazakhstan – last summer, in order to assess the complexity of the situation, Deputy Minister of Commerce of the People’s Republic of China Yu Jianhua personally visited the Kazakh-Chinese border.

In general, according to reports, since March this year, the traffic situation on the border of the Republic of Kazakhstan and the People’s Republic of China has been gradually improving (https://kapital.kz/…/kak-reshayet-sya-situatsiya-s…). In addition, two more checkpoints on the border with China will be opened for cargo carriers in the first half of the year (https://informburo.kz/…/eshhyo-dva-punkta-propuska-na…).
But apparently not everyone who is interested in this topic is aware of this. Against this background, any speculation in the media or versions in the telegram channels regarding the alleged shortcomings of our MIIR, MFA or MIT are either ignorance of the real situation, or, in fact, deliberate information stuffing (now the question is who benefits from it?).

China Studies Centre,

Nur-Sultan, 2020

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