China’s Ambitious New ‘Port’: Landlocked Kazakhstan

China’s Ambitious New ‘Port’: Landlocked Kazakhstan


Creating a transport hub in one of the world’s most remote places has involved an expensive exercise in social engineering.

A new town, called Nurkent, has been built from scratch — with apartment blocks, a school, kindergarten and shops to serve the railway workers, crane operators, customs officials and other staff needed to keep the dry port running. Free housing is provided. The town currently has only around 1,200 residents, but there are plans to expand it for more than 100,000.

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Workers and their families celebrating a birthday in their company dorm in Nurkent.

Credit
Andrea Bruce for The New York Times

Zhaslan Khamzin, the chief executive of the company operating the dry port with help from DP World of Dubai, acknowledged that the place seemed inhospitable but, implausibly describing it as an “oasis,” insisted, “This is the future.”

The Chinese “are not fools,” he added. “Businessmen count their money. If they invest money here, they know that in five or 10 years they will get their money back with a profit.”

Kazakhstan’s border area with China was a sealed military zone during the Cold War, when the armies of China and the Soviet Union clashed briefly in 1969 along their shared frontier just north of Khorgos.

The biggest and richest country in the part of Central Asia formerly ruled from Moscow, Kazakhstan has tried since independence in 1991 to stay on good terms with Russia but has also steadily eroded Moscow’s once overwhelmingly dominant position in the region by expanding ties with China.

The dry port is just the latest step in deeper ties. Completion of an oil pipeline between Kazakhstan and China in 2009 broke an export pipeline monopoly previously held by Transneft, Russia’s state-owned pipeline company.

It was Kazakhstan’s president, Nursultan A. Nazarbayev, the country’s sole ruler since it broke from the imploding Soviet Union, who first proposed reviving old Silk Road trade routes.

The idea was later latched onto and expanded by China’s Communist Party leader, Mr. Xi, in a 2013 speech in Astana, the Kazakh capital, and figured prominently in the Chinese leader’s speech to an October party congress in Beijing that charted China’s future as a “great power.”

The shift toward China has roiled domestic politics in Central Asia by playing into deep anti-Chinese sentiments left by Soviet propaganda and fears of China that date back centuries.

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A morning meeting at the Khorgos Gateway, where the workers include crane operators and customs officials.

Credit
Andrea Bruce for The New York Times

Kazakh nationalists complain that their country, having gained independence from Moscow, now risks becoming a satellite of Beijing. “When the Chinese come, the apocalypse follows,” runs a Kazakh saying.

When the Kazakh government announced legislation last year to let foreigners rent land for long periods, protesters took to the streets to denounce what many saw as the start of a Chinese land grab. President Nazarbayev, in a rare retreat, suspended the plan.

But Chinese working here say there is little that will stall China’s march. “Whether by ship or by train, it doesn’t make any difference to us so long as things keep moving,” said Fan Guoming, the Chinese shipping company’s newly appointed representative in Khorgos.

Swaddled in a thick down jacket, he turned up in Khorgos in December as temperatures dropped to minus 10 degrees Celsius (about 14 degrees Fahrenheit) to check on his company’s investment.

It takes 45 to 50 days to send goods from Chinese factories to Europe by sea, but less than half that time by train through Central Asia. Transporting a shipping container overland costs around 10 times as much as by sea, but it is relatively speedy and still much cheaper than airfreight.

That makes overland transport an attractive option for manufacturers of high-value, Chinese-made goods like computers, which need to get to market quickly.

To prevent fragile electronics from being damaged by winter temperatures that can plunge to minus 40 (the same temperature in Celsius and Fahrenheit), some of the containers that pass through Khorgos are heated. In summer there is refrigeration to prevent food and wine, which make up the bulk of goods transported back into China, from rotting.

As with many grand projects involving Chinese state money, however, expansive long-term ambitions have tended to obscure short-term calculations of profit and loss.

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A school and shops serve the railway workers and others who live in Nurkent. Young residents complain about the tedium of living and working alongside a small number of people in an isolated settlement.

Credit
Andrea Bruce for The New York Times

“It is very hard to separate the hype from the reality,” said Theresa Fallon, a China expert in Brussels who has studied the “One Belt, One Road” program.

“It doesn’t make any economic sense to me,” she added.

China’s Communist Party-controlled propaganda apparatus has hailed the 18-day, 7,500-mile journey of a new freight service from Yiwu, a manufacturing center in eastern China, to London as a triumph for Mr. Xi.

The Chinese president has made development of trade routes like the “new Silk Road” the signature policy initiative of his leadership, which has often put politics rather than economics in the driving seat.

To keep the trains running and encourage manufacturers to build factories in less developed areas, local governments in western China and elsewhere offer hefty subsidies that cut the cost of transporting a container by train through Central Asia by 30 to 40 percent.

Jittery about Chinese ambitions but anxious about being left out, Russia has both helped and hindered the project. Russia clearly worries that China could ultimately try to cut it out of the transport business to Europe by building up a route through Kazakhstan across the Caspian Sea that bypasses it altogether.

President Vladimir V. Putin of Russia gave a big boost to what China calls the “Silk Road economic belt” by pushing to establish the Eurasian Economic Union, a Russian answer to the European Union. Starting in 2015, Mr. Putin’s union has allowed cargo trains and trucks from Kazakhstan to pass into Russia without laborious customs inspections.

At the same time, Russia put up a serious obstacle when, in retaliation for Western sanctions over its 2014 annexation of Crimea, Moscow banned the import to and even transit through Russia of many European goods, particularly food.

Mr. Khamzin said this problem, though initially serious, was now easing as Russia lifts transit restrictions on various European products, including wine and meat.



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