Experts on challenges and opportunities of Islamic finance and fintech industry in post-pandemic era
Astana Finance Days conference is taking place online from June 29 to July 3, the central topic of discussion is the development of markets in a changing world and the impact of the pandemic on the global economy.
Astana Finance Days conference is taking place online from June 29 to July 3, the central topic of discussion is the development of markets in a changing world and the impact of the pandemic on the global economy. Kazakh and foreign experts are discussing how the economic situation is changing, how it affects our lives and what technologies can soon become an integral part of a world that "will no longer be the same." In particular, attention is paid to such areas as the global economy, financial technology, capital markets, AIFC law, Islamic finance, as well as the development of human capital.
What is Islamic finance and how is it developing in Central Asia and the world? What are the prospects for this area in Kazakhstan?
Astana International Financial Center is the first platform in the region that provides businesses with systemic access to a rapidly growing and promising investment segment — Islamic finance. The largest sector of Islamic finance is Islamic banking, in addition, insurance (takaful) and the Islamic capital market are actively developing.
Kazakhstan plans to develop the Islamic finance industry in order to create alternative sources of financing, both for state and municipal projects, as well as for private ones. For this, the country and the AIFC have created all the necessary infrastructure and regulatory legal framework in line with best international practices and standards.
The AIFC Islamic financial services industry includes participants from Islamic banks, asset management companies, investment funds, takaful and retacafule companies, other Islamic financial organizations, as well as leading international Islamic finance institutions.
Astana International Financial Center is establishing a dialogue with various market players, we see this as a positive sign," said Mehdi Benslimane, global expansion strategist at Wahed Invest.
An important aspect is the infrastructure. According to Ivan Kamenski, co-founder of Tayyab Digital Islamic Bank, infrastructure means special digital platforms and the use of reliable financial solutions.
It is necessary to be able to open an account in digital format and conduct business through it. We are also talking about the use of mobile applications — these are payments and money transfers without the need for a presence in the bank's office. Such solutions already exist in Kazakhstan and other countries of Central Asia," said Ivan Kamenski.
In addition, it is necessary to digitize the financial instruments that the business could receive online. To do this, specialized ecosystems or marketplaces to offer customers a wide range of services must be created.
President and CEO of the International Center for Education in Islamic Finance, Professor Dato’ Dr. Mohd Azmi Omar noted that microenterprises and small and medium-sized businesses have been hit hard by the coronavirus pandemic, primarily due to quarantine measures.
Micro-enterprises, small and medium-sized businesses have been hit very hard by the pandemic. First of all, due to quarantine, and even after the softening of the measures, the rules of self-isolation are still preserved, which makes it difficult for companies to return to the market," said Dr. Mohd Azmi Omar.
The pandemic, according to him, also significantly affected the welfare of citizens. As an example, the speaker cited Malaysia statistics on citizens' savings.
According to these data, representatives of the self-employed group can live in quarantine on their savings for only a month. Beyond these limits, they need state assistance, said Dr. Mohd Azmi Omar.
As for private sector workers, they can live no more than two months on their savings, after which they will start having financial difficulties. They will fall below the poverty line, and there will be a regression in the economy," the expert said.
On the other hand, the quarantine regime gave impetus to the development of digital payments. According to a recent Mastercard study, many payment card users have begun to buy online more. At the same time, the share of payments in Malaysia increased more than in other countries of the region due to the growth of purchases on Internet sites and the use of contactless credit cards. In general, according to Dr. Mohd Azmi Omar, the volume of cash payments in the country decreased by 64%.
How will pandemic affect Islamic finance sector?
Global Expansion Strategist of Wahed Invest Mehdi Benslimane believes that the current economic crisis, which is observed against the backdrop of the coronavirus pandemic, has become an alarming bell for the global economy. Therefore, market participants should look closely at the methods of making money. At the same time, companies operating in the Islamic finance sector may come out of the crisis with good results.
This crisis is a call for us to change our methods of investment work. They should become more sustainable, with emphasis on environmental aspects," said the speaker.
After the crisis, says Mehdi Benslimane, Islamic finance companies will have a "good position in terms of investment and financing." And in the end, the current crisis may launch the next stage in the development of Islamic financial institutions.
As for Kazakhstan, for the development of Islamic finance, it is necessary to improve legislation and promote financial literacy in order to succeed in the development of Islamic finance in its market. This can be helped by the Astana International Financial Center, which supports the emergence of new financial instruments in the country and the region as a whole.
The AIFC was founded in the capital of Kazakhstan, and since its inception, Kazakhstan has the opportunity to develop special technologies and special financing methods, in particular, Islamic. Now we have digital financing tools for our clients," said Ivan Kamenski.
Mehdi Benslimane added that Kazakhstan has "great scope" in terms of promoting investments.
But besides spreading infrastructure, it’s important to spread financial literacy. We need to educate investors on how to invest and how to use affordable tools to the advantage," said Mehdi Benslimane.
Development of fintech in Kazakhstan and the world
Coronavirus has made significant adjustments to the plans of companies around the world. The measures that the governments of the countries introduced led to a partial or complete shutdown of the companies. Against this background, new opportunities have appeared in companies in the financial technology sector.
Thus, according to the report of Tech Nation and Dealroom, fintech showed stability during the coronary crisis, and in 2020, technology companies in London accounted for 39% of all venture investments. Another study by the consulting company deVere Group reports that Europeans are 72% more likely to use fintech applications against the backdrop of a pandemic.
The situation is similar in Kazakhstan and in Central Asia. So, in Kazakhstan, due to the temporary closure of bank branches and other credit organizations, financial institutions began to develop their digital services. For example, against the background of quarantine, the service of remote opening of card accounts first appeared. By the end of April, more than 1 million people opened card accounts online, and about 700 thousand received cards with home delivery.
The trend for the development of fintech and the emergence of new services that can be obtained without visiting banks will continue to develop, experts say.
About half of the population of Central Asian countries is still not covered by financial services, but the development of Internet networks can correct this situation. For example, in 2019, the average penetration rate of the World Wide Web in Central Asia was estimated at 49%, and this already allows banks to develop their digital services. This is especially true for Kazakhstan with a penetration of 79% and Kyrgyzstan with Uzbekistan, where the figure is in the region of 50%.
Mobile banking will help financial institutions to offer their services to residents of remote and rural areas, where there are no branches and departments. Thanks to good rates of mobile Internet access — more than 60% on average in Central Asia — this is a very realistic scenario.
It is important to further develop legislation and create conditions for the emergence of new fintech solutions in the field of Islamic finance, said the President and CEO of the International Center for Education in the Field of Islamic Finance, Professor Dato’ Dr. Mohd Azmi Omar.
We need to create conditions so that all enterprises operating in Islamic finance can go digital. AIFC can help this," said the speaker.
In his opinion, fintech companies can offer the market p2p solutions, that is, financing between participants in the same system, crowdfunding. This money can be used to finance SMEs. And thanks to flexible legislation that would help companies in the sector develop, Kazakhstan could become a center for the spread of Islamic financial services throughout Central Asia.
But besides spreading infrastructure, it’s important to spread financial literacy. We need to educate investors on how to invest and how to use affordable tools to the advantage," said Mehdi Benslimane.
Venture Capital Ecosystem in CIS
Representatives of leading venture capital funds, associations and investors from Kazakhstan, Central Asia and Russia discussed the impact of the COVID-19 pandemic on the venture capital market and the prospects for its further growth.
In Kazakhstan, the startup market is still at an early stage of development. Acceleration programs are operating, such as AIFC Fintech hub, Astana hub and TechGarden. AIFC may provide additional incentives for market growth.
The AIFC jurisdiction is only in its infancy, but the principles that are laid down in it are advanced for the CIS. Perhaps this is the best design in the CIS," said Alexey Girin, co-founder and general partner of Starta Ventures.
For startups, the markets of the CIS countries are small. For example, in Russia there are more than 120 million online users, and therefore the largest local companies, for example, Mail.ru, Yandex, Ozon and Wildberries work in the retail segment.
To become a corporate player, you need to enter the global market. For example, every startup in Israel is global, because there is no local market and you need to go to the USA, Great Britain, China to grow your business," said Viktor Orlovsky, general partner of FortRoss Ventures.
A similar situation is taking place in Ukraine. Investor Murat Abdrakhmanov noted that local companies are focused on the foreign market. As a result, there are three unicorn companies: People.ai, Gitlab, and Grammarly.
In Uzbekistan, the areas of fintech, marketplaces, as well as medical tech are actively developing. The volume of venture capital in the country is less than $10 million, investors are local "angels" and foreign funds. In this regard, Dilshod Zufarov, Director General of Uzbekistan Venture Capital Association, proposed the creation of the Central Asian Investment Club to unite all investors and funds of the region.
During the current crisis, technology companies have strengthened their advantages, their assessments by investors have increased. Astana International Financial Center offers companies a complete and multifunctional legal platform for attracting, implementing and protecting investments.
EdTech Kazakhstan Forum of Educational Technologies
The second Kazakhstani forum of educational technologies EdTech was held in digital format at the Online Astana Finance Days 2020. The central theme of this year was the digitalization of education around the world amid lessons from social distancing.
The pandemic and social distancing have become an incentive for the educational technology industry — there is an accelerated digital transformation of the education system around the world. Schools, universities and professional certifications are rapidly becoming online, and the new digital reality in this area no longer seems like a distant future.
Experts discussed pressing issues of finding and attracting highly qualified IT-specialists to education; the lessons the industry has learned from social distancing and the digital transformation of education; the role of human capital in the digital economy and the place of education in the Fourth Industrial Revolution.
The Deputy CEO of AIFC Administration Yernur Rysmagambetov believes that 2020 will be remembered for a long time, and contemporaries will retell cases of digital transformation, giving an example when entire industries and countries came together to solve one single problem — finding the right solutions to maintain social distance for EdTech account.
That's why we brought together the best experts who are able to propose solutions and create an international collaboration in the most environmentally friendly sphere of the economy — in education," he said.
Deputy Chair of the Board of JSC National Infocommunication Holding Zerde Pavel Koktyshev noted that the education sector is undergoing tremendous changes. Flexible and effective approaches to learning are becoming more accessible, innovative techniques forming the new educational industry are emerging.
It is nice to see examples of successful implementation of Kazakhstani projects and initiatives that confirm the effective use of innovative technologies. And now is the time to discuss these changes and industry innovations with experts from different ecosystems in order to come to a common understanding of what changes in education are needed at this stage," he said.
What happens to society and economy in changing world?
According to the latest forecast of the International Monetary Fund, in 2020 the world economy will fall immediately by 4.9%, although with a subsequent increase of 5.4%. However, much still depends on the successes of mankind in the fight against the pandemic, and if it does not decline until the end of 2020, then the recession may continue in 2021. In such circumstances, it will become more difficult for business to attract investments to support the developments: investors become will more cautious, many of them will withdraw capital from emerging markets. Financial platforms — international financial centers that help develop the market by offering access to financing in different formats, can help. In 2018, Kazakhstan launched its own Astana International Financial Center to support the diversification of the economy.
The representative of Ozara Services Paul Pullinger emphasized that the pandemic had forced the business to change plans and put efforts in a different direction. In particular, to financial support for agriculture.
We were able to provide such support. We have GDP growth, despite the pandemic. Although the forecasts were somewhat pessimistic. In addition, we provide diversification and significant investment. Kazakhstan is now seeking to localize some of its industries, including transport and industry. Instead of importing various cars and trucks. We also pay particular attention to the transport sector and agricultural machinery. We think we have a good future and a strong economy. For investors in Kazakhstan, a favorable climate, there are good opportunities for development," he said.
Syed Mujtaba Husain, founding partner of Emirates Legal, the founder of Emirates Legal Limited, regulated by the AIFC, noted that the pandemic triggered a reboot and stopped development in some countries. The developed world has returned to the level of the developing world.
This means that if there is a chance for the AIFC to grow, then this chance has come now. If we talk about Kazakhstan, then there are 4 main sectors of the economy. These are trade (17.3% of GDP), mining (16% of GDP), oil and gas (13.3% of GDP). AIFC is an investment gateway for Kazakhstan in Central Asia," he said.
The Astana International Financial Center was created on the initiative of the First President of the Republic of Kazakhstan Nursultan Nazarbayev. The constitutional law on the establishment of the AIFC was signed Dec. 7, 2015. AIFC's goal is to form a leading center for financial services at the international level. The AIFC aims to assist in attracting investment in the country's economy, create an attractive environment for investing in financial services, develop the securities market of the Republic of Kazakhstan and ensure its integration with international capital markets. www.aifc.kz
Fintech Hub AIFC is the interface between global startups, entrepreneurs, corporations, investors, leading industry experts and specialists. The development of fintech at the AIFC includes programs to support startups, corporate innovations, the venture capital market, specially developed rules and a regulator that allow testing products and solutions in the field of fintech. http://www.fintech.aifc.kz/
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Roman Sklyar, First Deputy Prime Minister of Kazakhstan, meets with Anton Alikhanov, Minister of Industry and Trade of Russia
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First Deputy Prime Minister Roman Sklyar held a meeting with Minister of Industry and Trade of the Russian Federation Anton Alikhanov, primeminister.kz reports.
The parties considered topical issues of bilateral cooperation and the implementation of industrial cooperation projects.
Today the total portfolio of bilateral initiatives exceeds $52 billion and includes 168 projects. Over 90 of them have already been successfully implemented, the rest are in the process of implementation.
The parties also discussed a number of other issues in the sphere of industrial development and further mutually beneficial co-operation.
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1.2 thousand passenger cars planned to be purchased by year-end 2029 in Kazakhstan
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Minister of Transport of Kazakhstan Marat Karabayev at the Government session reported on the work being done to develop the railway industry and increase the transit potential of the Republic, primeminister.kz reports.
He noted that Kazakhstan is forming a network of effective transit transcontinental routes. On the territory of the country are 5 major international railway corridors that connect Chinese markets with Europe and Central Asia. Over the past 10 years, the volume of container transit along these corridors has grown almost 5 times. The volume of cargo traffic for 10 months increased by 3.5% to 263,400 thousand tonnes. Domestic traffic grew by 10.8%. The volume of transit freight traffic remained at the level of last year and amounted to 22.4 million tonnes. At the same time, container transit increased by 7.5%.
In order to further develop the industry, the Concept for the Development of the Railway Industry until 2029 was adopted. Within the framework of this document it is planned to work in the following 5 directions: renewal of rolling stock; development of junction points; development of mainline railway networks; improvement of tariff policy; development of passenger traffic.
The Minister added that work is now actively underway to increase the capacity of the TMTM and North-South transit corridors.
Due to the changes in the world of traditional logistics routes, the importance of the North-South corridor is growing day by day. The throughput capacity of the corridor is 10 million tonnes per year. The volume of cargo actually transported this year was 1.8 million tonnes. Given the potential of the corridor, it is planned to increase its capacity to 20 million tonnes," Marat Karabayev said.
For this purpose, as the Minister noted, in July this year the Road Map on synchronous development of the corridor with Iran, Turkmenistan and Russia was signed. In order to attract cargo traffic along this corridor Kazakhstan has provided special tariff discounts of 50% for transit transportations. In addition, work is underway to create a single logistics operator on the eastern route "North-South" similar to the United Transport and Logistics Company (UTLC).
It was noted that in the first 10 months of this year the volume of transportations along the TMTM corridor increased by 68% and amounted to 3.8 million tonnes.
The Minister also said that currently the total number of locomotive fleet is about 1.8 thousand units. The level of wear and tear is 61 per cent.
In order to provide rolling stock and reduce the level of wear of the fleet, 185 locomotives have been purchased this year. Next year it is planned to purchase 187 units, in the next three years it is expected to supply another 257 locomotives. This will completely eliminate their deficit," Marat Karabayev assured.
According to the Ministry of Transport, the total fleet of freight wagons is 139,000 cars. More than 300 private operators work in the market. Of these, Kazakhstan Temir Joly accounts for 38,000 wagons, which are involved in socially important transportations, i.e. in the energy sector of the country and the transport of coal supplied to the population.
Until 2026, the national operator additionally plans to supply 3 thousand gondola cars, of which 800 units have already been put into operation this year.
Special attention is paid to the passenger car fleet. Last year 118 new wagons were purchased, this year - 143 units. Next year it is planned to purchase 226 carriages. By 2029 it is planned to purchase about 1.2 thousand units of passenger cars. This will make it possible to increase the passenger car fleet to over 3 thousand units and reduce the level of wear and tear to 38%. To fulfil these tasks, it is proposed to create a united leasing company with the possibility of providing passenger cars of domestic manufacturers for lease with subsequent purchase," Marat Karabayev reported.
According to the Ministry, today there are 27 railway border points with five neighbouring countries. Of these, Dostyk, Altynkol and Saryagash stations in the directions of China and Central Asia fully use their capacity. To increase their capacity, work is underway to build additional tracks and parks, expand inspection points and terminal facilities. These measures will increase the throughput capacity of Dostyk and Altynkol stations by 2 times.
In addition, in order to further develop the transport and transit potential of the country, work is underway on the construction of 4 railway projects with a total length of 1,300 kilometres. Construction of the second tracks of the Dostyk-Moyinty railway section and the Almaty bypass line continues, and construction of the Darbaza-Maktaaral and Bakhty-Ayagoz railway lines has begun.
Implementation of these projects will increase the throughput capacity of Dostyk station up to 35 million tonnes and reduce the time of cargo transportation through Almaty station, unload Saryagash station, increase the throughput capacity up to 20 million tonnes in the direction of Central Asia and China.
In addition to the implementation of infrastructure projects, work is underway to develop the mainline railway network. By 2029, it is planned to repair 11,000 kilometres of railway sections, of which 2,800 kilometres have been repaired to date. It is also planned to build about 5,000 km of new and second tracks, to introduce autoblocking on 2,600 km, and to modernise 184 stations.
The tariff policy will be further improved for the timely implementation of projects aimed at the development of railway infrastructure. The interests of domestic producers will be fully taken into account.
The head of the Transport Ministry also said that 17.6 million passengers were transported in the first 10 months of 2024, which is 6 per cent more than in the same period last year. It is planned to transport 21 million passengers by the end of this year.
In order to create favourable conditions for transporting the population, modernisation of railway stations is required. Out of 59 main railway stations, 54 stations are in need of repair. To date, the stations in Kyzylorda, Shymkent, Pavlodar and Turkestan have been overhauled. For the rest of the stations the relevant technical documents are being developed, sources and mechanisms of financing are being worked out.
In general, the implementation of these measures will make it possible to increase exports by rail transport to 130 million tonnes by 2029, transit traffic to 45 million tonnes. Exports and imports by road transport are expected to grow by 2 times, transit by 6 times," Marat Karabayev summarised.
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Islamic Development Bank to invest $1.15bn in Kazakhstan's water sector
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The parties signed the relevant agreement at the UN Climate Change Conference (COP29) held in Baku. Deputy Prime Minister and Minister of National Economy Nurlan Baybazarov noted that this is the largest project financed by the Islamic Bank in history, primeminister.kz reports.
In addition, the Islamic Development Bank (IDB) will allocate a grant of $3.5 million for the development of the water sector of Kazakhstan.
The IDB will also participate in the implementation of the project ‘Development of Climate Resilient Water Resources’ developed by the Ministry of Water Resources and Irrigation. Earlier the parties signed the Protocol of negotiations on the first phase of the project.
The first stage of the financed project envisages construction of 4 new and reconstruction of 4 existing reservoirs, reconstruction and overhaul of 115 canals, including the Astana reservoir recharge project. Construction works will take place in Akmola, Almaty, Zhambyl, Kyzylorda, Turkestan, West Kazakhstan regions, Zhetisu region and Astana city.
In addition, the project envisages technical cooperation between IDB and the Ministry in the study of water and river basin problems by the Kazakh Research Institute of Water Management, as well as evaluation of the implementation of early response systems for the Information and Analytical Centre for Water Resources.
This includes plans to technically equip the Republican State Enterprise Kazvodkhoz and build an automation centre to improve water management.
The Head of State has repeatedly emphasised the importance of attracting investment in the water sector. We are facing the task of modernising and adapting water infrastructure to the ongoing climatic changes. Financing by such a reputable institution as the Islamic Development Bank demonstrates the high confidence in our country, the investment policy and the ongoing socio-economic reforms," Nurlan Baibazarov noted.
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Olzhas Bektenov: Business needs to feel confident and able to expand and invest in tomorrow
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Prime Minister Olzhas Bektenov took part in the forum of small and medium-sized businesses, where the issues of current development of entrepreneurship were raised, measures taken to improve state support for domestic producers were noted, as well as ideas for further improvement of the business climate in the country were voiced, primeminister.kz reports.
More than 450 SME representatives from all regions of Kazakhstan took part in the forum. Attention was paid to the development of micro, small and medium-sized enterprises, increasing the share of in-country value, simplification of administrative procedures through digitalisation of services, implementation of investment projects, expansion of export potential of TNA, etc.
Olzhas Bektenov noted that within the framework of implementation of the tasks set by the Head of State in the Address "Fair Kazakhstan: law and order, economic growth, public optimism", the Government carries out comprehensive work to increase business activity and create favourable conditions for doing business.
Thus, in accordance with the introduced principle of regulation ‘from scratch’, since last year more than 10 thousand requirements preventing businesses from developing have been cancelled. Financial assistance measures are being implemented to support priority sectors of small and medium-sized enterprises. Within the framework of subsidies and partial guaranteeing on loans from second-tier banks, the coverage has increased 5 times since 2019 to over 150 thousand projects. At the same time, the amount of subsidies paid to them increased 8 times.
Overall, as a result of the comprehensive measures taken, the share of SMEs in the country's economy has increased to 37 per cent. More than 4 million people are currently employed in business. Over the past six months, SMEs produced 34 trillion tenge worth of products, an increase of about 20% compared to the same period last year.
The President has clearly stated that opening the way for domestic businesses and investors is one of the priority tasks of the Government and all state bodies. Our goal is to create an economy in which business will feel confident and will have the opportunity to realise their ideas, expand and invest in the future. For this purpose, it is important that every entrepreneur can count on open and prompt interaction with government agencies. In the context of global challenges and rapid technological progress, it is necessary not only to develop mechanisms to support entrepreneurs, but also to actively diversify the economy. And here the role of business is paramount," Olzhas Bektenov emphasised.
The effectiveness of support measures on the part of the state was noted on the example of agro-industrial complex. This year concessional lending for spring field and harvesting works has been increased 2.5 times and totalled 580 billion tenge, which allowed to obtain high yields for all types of crops. Prime Minister noted the prospects of achieving similar indicators in the SME sector. In this case, state support should be accompanied by counter obligations of business in the form of providing the domestic market with high-quality and inexpensive products, deep processing, creation of permanent jobs and gradual enlargement with a view to export.
A serious potential for the development of an SME belt around large businesses has been identified. Large enterprises should actively enter into long-term contracts with local companies. This will become an obligatory condition for receiving state support. Relevant instructions have been given to all development institutions.
This year, the Government has taken a number of decisions in terms of priority support for domestic producers. Today, the list of goods purchased by the state procurement in priority order from Kazakhstani commodity producers has been expanded 3 times to 4.5 thousand types. The amount of concluded contracts increased by 31% and amounted to 167 billion tenge. Changes have also been introduced in procurement procedures by large customers (Samruk-Kazyna Fund, subsoil users): this year more than 100 long-term contracts for the amount of 470 billion tenge and more than 260 off-take contracts for 134 billion tenge have been concluded with domestic commodity producers, which is 14 times more than in the same period last year.
Within the framework of the Year of Working Professions announced by the President, special attention is paid to the development of human capital, integration of science and production. Olzhas Bektenov urged businesses to focus on improving human resources, providing an effective base for student internships and employment of graduates through job quotas.
During the forum, the chairman of the Presidium of the Atameken NCE Raimbek Batalov reported on the development of the ecosystem of small and medium-sized businesses in the Republic of Kazakhstan. Social entrepreneur Zhanagul Zhaparova told about participation in the project "One Village - One Product", aimed at the development of the village through the production of the whole chain from raw materials to finished product. The heads of Kazelectromash LLP Vitaly Raspopin and Kubley LLP Zaure Berekesheva shared their experience in mastering high conversion and development of meat processing through the cluster approach.
On the margins of the forum Prime Minister got acquainted with the line of domestic products. Of particular importance for the economy are the projects implemented by Kazakh entrepreneurs throughout the production chain. On the example of the textile industry the Head of the Government was presented a number of enterprises, which are engaged in growing cotton, production of yarns and fabrics, as well as production of finished products, which are in demand both in the country and abroad. In this context Olzhas Bektenov emphasised the importance of the new approach to support projects according to the principle of creating clusters based on the direction of the region. Together with the business community were discussed issues, the solution of which will give an additional impetus to the development of SMEs. The Prime Minister gave a number of instructions to relevant ministries and organisations.
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Olzhas Bektenov meets leading Chinese companies in Shanghai: $2.5bn agreements signed
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Prime Minister of the Republic of Kazakhstan Olzhas Bektenov as part of a working visit to the People's Republic of China took part in the Kazakh-Chinese investment roundtable with business representatives. In the city of Shanghai will hold talks with the Premier of the State Council of the PRC Li Qiang, scheduled to participate in the VII China International Import Exhibition, primeminister.kz reports.
The main purpose of the working visit is to implement the agreements reached between the President of Kazakhstan Kassym-Jomart Tokayev and the President of the People's Republic of China Xi Jinping on doubling the volume of bilateral trade turnover from the historical record of last year at the level of $41 billion.
The round table was attended by representatives of companies that are leaders in metallurgy, energy, machine building and automotive industry, carbon chemistry, agribusiness, pharmaceuticals and others. The Kazakhstan delegation was represented by the heads of relevant ministries and large domestic enterprises.
Prospects for the development of joint projects in priority sectors of the economy were considered. The participants of the meeting noted that trade and economic partnership between Kazakhstan and China is on the rise. Today about 5 thousand joint ventures are successfully operating in Kazakhstan.
Among the major joint Kazakh-Chinese projects are the construction of a plant for the production of soda ash together with Camc Engineering, the Sastobe chemical complex with Tianjin Cement Industry Design and Research Institute and a plant for the production of explosives with Yunnan Industrial Explosive Group. The construction of the CHANGAN, HAVAL, CHERY automobile production plant with a 90,000-unit capacity based on small-unit assembly is nearing completion. An Investment Agreement for the production of Geely, Exeed, KAIYI passenger cars for $150 million with the creation of 1,000 jobs has also been signed. The projects make it possible to create technological enterprises capable of producing high-quality domestic products. These indicators, according to the business communities of the two countries, confirm the sustainability and productivity of bilateral partnership.
The head of the Government of the Republic of Kazakhstan noted that joint work in this direction continues, and the existing potential of trade relations demonstrates the prospects for further diversification of trade turnover and expansion of investment cooperation.
Today the cooperation between our countries is developing on an upward path. In accordance with the task set at the highest level, we intend to double our mutual trade indicators in the near future. Kazakhstan and China have huge potential for the realisation of joint investment projects. Together we can open new horizons for interaction and increase the effectiveness of cooperation. To this end, we should actively work to expand transit opportunities, strengthen industrial cooperation and build ties between our business communities. The Government of Kazakhstan is ready to expand partnerships and build strong bridges between our nations. We will provide support to investors, creating favourable conditions for business and contributing to the success of each project. I am convinced that thanks to our joint efforts, new investment initiatives will give a powerful impetus to the development of the real sector of the economy, its diversification and improvement of the quality of life of our citizens," Olzhas Bektenov said.
Prime Minister stressed that an important priority for the country is the development of industry and urged Chinese companies to closer partnership with the Kazakhstani business community.
In turn, during the dialogue, representatives of leading Chinese companies showed interest in Kazakhstan as a reliable partner for the implementation of strategic projects.
Executive member of the Board of Directors of China Huadian Corporation Zu Bin in his speech reported on the expansion of cooperation with Kazakhstan in the field of energy, including emissions reduction; acting CEO of CHN Energy Investment Yan Guochun informed about plans to launch the first coal-chemical complex in Kazakhstan; Chairman of the Board of Directors of Beijing Jianlong Heavy Industry Group Zhang Zhixiang about the development of cooperation in the steel industry; Chairman of the Board of Directors of Zijin Mining Group Chen Jinghe reported on plans for the implementation of projects in the region of Kazakhstan.
Vice President of CP Pharmeceutical Group Xie Lei on investment in the creation of a cluster in the field of medicine; General Director of Beiqi Foton Motor Wu Xibin on localisation of production in the automotive industry in the Republic of Korea; Chairman of the Board of Directors of ACRE Engineering Consulting Company Yang Zhuni informed on cooperation in the field of technology transfer; General Director of Sinotruk International Zhao Hua informed on plans to localise production of high-quality automotive trucks in the Republic of Korea.
Chairman of the Board of Directors of Darwin Biotech Co., Ltd. Chen Jianheui shared his intentions to expand cooperation with Kazakh partners in the field of crop production; Chairman of the Board of Fujian Hengwang Investment (metallurgy) Zeng Zhaojiang reported on plans to implement an industrial project in Zhambyl region.
During the visit to the office of SenseTime, the Kazakh delegation was presented with new solutions and equipment used in smart and safe city projects.
As a result of the meeting, 8 commercial agreements totalling $2.5bn were signed.
- Agreement on cooperation between Samruk-Kazyna Invest LLP, QAZAQGAZ AIMAQ JSC and Goldcard Smart Group Co., Ltd. in the field of implementation of smart systems for the amount of $8 million. The project involves small-node assembly of gas meters on the territory of FEZ PIT ‘Alatau’ in Almaty from components supplied by GoldCard, taking into account the localisation of components;
- Agreement between Qarmet JSC and Zhengzhou Coal Mining Machinery Group in the field of production of equipment for coal industry on purchase of mechanised complexes for mines of the coal department of Qarmet JSC for the amount of $70 mln;
- Memorandum of Understanding on establishing the framework for investment cooperation between the Ministry of National Economy of the Republic of Kazakhstan, China State Investment Fund Silk Road Fund Co.Ltd. and Kazakhstan Investment Development Fund (KIDF) Management Company Ltd. for the amount of $552 million;
- Agreement between Qarmet JSC and Xinxing Ductile Iron Pipes Co., LTD on construction of a plant for production of high-strength cast iron pipes with spheroidal graphite with a capacity of 200 thousand tonnes per year in the Republic of Kazakhstan for the amount of $161 million. The products are intended for projects on construction, modernisation, reconstruction, expansion and renovation of facilities of the housing and communal system of the Republic of Kazakhstan;
- Agreement between Qarmet JSC and China Metallurgical Group Corporation to establish long-term and comprehensive cooperation in the mining and metallurgical industries for the amount of $1 billion;
- Agreement between Qarmet JSC and ACRE Coking & Refractory Engineering Consulting Corporation on implementation of the strategic project on modernisation of coke-chemical production and development of coal chemistry for the amount of $649 mln;
- Agreement between Qarmet JSC and Nanjing Fiberglass Research & Design on construction of a factory for production of mineral insulation from blast furnace slag in Temirtau for the amount of $30 million, with a capacity of 100 thousand tonnes of finished products per year and creation of 200 new jobs;
- A package of agreements between Saran Machinery LLP and Sinotruk International on cooperation in distribution and assembly of KDs, technology licensing and use of trademarks for the amount of $70 million. Among them is a Memorandum on the implementation of a project in Saran for the production of cargo and special-purpose machinery, under which it is planned to create about 1,000 new jobs in the future.
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