Modern Silk Road links China, Kazakhstan

Updated: 2011-12-09 08:31

By Cui Jia and Zhao Shengnan (China Daily)

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 Modern Silk Road links China, Kazakhstan

Clockwise from top:

People try to squeeze themselves and all their trading goods onto a long-distance bus for a short ride. They are traveling from Horgos port, in China's Xinjiang Uygur autonomous region, to the customs checkpoint in Kazakhstan just 10 minutes away. A couple take wedding pictures at the 28 Panfilov Heroes Memorial Park in Almaty. No one leaves the United Asia market empty handed. It is the largest wholesale and retail market in Almaty, and it specializes in products from China. Business is buzzing at Lin Zhenpeng's stationery stall. Azhar Orazgaliev, 86, wears the medals of her World War II years in the Red Army and lives in a house provided by CNPC-AMG and the local government. She is retired from AMG. Passengers while away time at Almaty International Airport. Photos by Jiang Dong / China Daily

Modern Silk Road links China, Kazakhstan

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Border trade thrives but visa problems, customs rules are hitting small vendors very hard, Cui Jia and Zhao Shengnan report from Xinjiang and Kazakhstan.

Turson Yeermanhan rushed to the customs office as soon as it opened in a cold winter morning in Horgos, the Xinjiang Uygur autonomous region.

Behind him he dragged a trolley loaded with large cardboard boxes filled with baby clothes, toys, vegetables and Christmas decorations.

The 25-year-old is among hundreds of small traders who live on the border between China and Kazakhstan.

Economic relations between the two countries have the advantage of more than proximity. There is mutual benefit in the flow of oil and natural gas from west to east, and of goods from east to west.

The Kazakhstanis "cannot live without us. Almost everything they use comes from China", Turson said.

He is a member of China's Kazak ethnic group, most of whom live in the Xinjiang Uygur autonomous region, which shares a border with Kazakhstan. "We (China Kazaks) have natural advantages, including culture and the languages of doing business with the Kazakhs."

Horgos, in Xinjiang's Ili Kazak autonomous prefecture, once echoed with camel bells as an important passage in Silk Road trade routes. Now, 100 to 300 vehicles carry products - textiles, fruit, daily necessities, mechanical equipment and appliances - to Kazakhstan through the port, the main entry point for imports from China.

In the first six months this year, more than 310,000 people passed through customs and immigration. The volume of imports and exports reached 4.82 million tons, almost triple the total a year earlier.

Turson has been in the business for more than six years and, like many dealers who frequently cross the border, he is well known to both Chinese and Kazakhstani customs officers. That has made his job much easier, he said.

"Sometimes Chinese traders have to bribe Kazakh customs officers. Otherwise they won't let their goods pass," he said. "Asking for bribes is pretty common in Kazakhstan. Sometimes, Chinese are fined for no reason."

As a case in point, Kazakhstani authorities arrested the head of customs at Horgos on April 28. He was suspected of tariff evasion, taking bribes and corruption.

10 jam-packed minutes

Kazakhstan has an abundance of oil and minerals, but with the Soviet Union's breakdown in the early 1990s, it found itself in great need of everyday articles and agricultural goods. That spurred demand for trade with neighboring China, which is equally thirsty for natural resources to fuel its rapid growth.

"Kazakhstan authorities ordered customs to stop operations at Horgos after 2003's SARS epidemic to prevent its people getting infected by people and goods from China," said Yang Jihong, director of Horgos Special Developing Zone Working Committee's information office.

"But they then had no choice but to resume the service after just eight days. The retail price of agricultural products and daily-use products went through the roof."

"The trade between China and Kazakhstan is certainly booming, and there was even a point when China customs couldn't keep up with it," Turson recalled. "In 2007, it took months at customs to declare the summer clothes I was selling. When I finally went through all the procedures, it was winter."

In April, the entry-exit administration office extended its work from eight hours a day to 12 but still cannot meet the flood of travelers, said the office's chief, Ning Xin.

At Horgos, traders with their goods squeeze into every inch of space on the long-distance coach from Urumqi, capital of Xinjiang, to Almaty, former capital of Kazakhstan, so they can ride from one checkpoint to the other. In such close quarters, Turson struggled to turn his head to speak.

"I have a van and a business partner waiting to transport me and the goods to Almaty as soon as I pass Kazakhstan customs," he said. "To be honest, the 10-minute drive between the two customs checks is the part that gives me the most headaches."

As the bus left the white-fenced Chinese territory for the blue-fenced Kazakhstan side, Turson said that he greatly hopes China and Kazakhstan will resurrect the shuttle buses that used to run between the two checkpoints. Service was suspended in 2008 for undisclosed reasons.

Better quality

The theme from Journey to the West, a classic Chinese TV series, suddenly echoed through United Asia market, the largest wholesale and retail market in Almaty on a snowy weekday morning. It was actually a ring tone from the mobile phone a local resident was planning to buy.

Like every single item in the market, the mobile phone was made in China.

Almaty is the first and most important stop for goods passing through the Horgos port 376 km away. The city, the country's largest with 1.3 million people, sits in Kazakhstan's southeast corner and has always been the trading hub for China and Kazakhstan.

It was the capital until 1998, when the Kazakhstan moved the seat of government northwest to Astana because of Almaty's susceptibility to earthquakes and its proximity to the Chinese border.

Lin Zhenpeng, 36, who is from East China's Fujian province, has been selling stationery at the United Asia market since 2003. He said Kazakhstanis have become more demanding as their living standard has improved since the country gained independence 20 years ago.

"Now I have to stock more good-quality products rather than cheaper stuff with low quality," he said while discussing orders with local clients in fluent Kazakh and Russian.

It's not easy

Lin's business is good but it's getting tougher.

Customs now requires that shipping containers hold only one type of product to be declared. Containers with mixed goods are turned away.

"It's a nightmare for small traders like me, because if I can't find other people selling the products to fill the container, I simply can't do any business."

Lin said Chinese businessmen sometimes are targeted by local gangs demanding protection payments, but visa problems have become the most troublesome issue.

"Kazakhstan began to tighten its control over issuing work visas around 2006 to protect jobs for citizens, and they are harder and harder to get nowadays," Lin said. "As a result, many Chinese dealers have left the country. They had no choice."

Kazakhstan also tightened visa requirements for Chinese truck drivers at the beginning of 2011, financial news portal reported in late August. Later, China abolished multiple-entry visas for Kazakhstani truck drivers, reducing the flow of goods between China and Kazakhstan, Aliya Seylgazina, a marketing director for a Kazakh freight forwarding company, was quoted as saying.

Dozens of trucks were stuck at the Horgos border crossing because of drivers' visa problems, and in some areas of Kazakhstan, prices of Chinese goods rose by as much as 20 percent from June levels.

According to the latest immigration rule, Chinese enterprises in Kazakhstan are required to employ 10 local workers for every Chinese staff member.

Bigger market

Despite such problems, the future for Horgos is promising.

Belarus, Kazakhstan and Russia formed the Customs Union in January 2010, in the process making Horgos the gateway to a market of more than 170 million people.

Under terms of the union, customs borders among the three member countries were removed. The countries share tariffs proportionally, but also raised them, so some traders quit using Horgos as their entry point.

China Customs said the number of vehicles passing through the port last year dropped 23 percent from a year earlier - but the value of goods soared. The year's import-export total set a record of 3 trillion yuan ($471 billion), 69 percent more than in 2009.

Modern Silk Road links China, Kazakhstan

(China Daily 12/09/2011 page1)