Kazakhstan is sensitive to the problems in China's economy
12% of Kazakhstani exports and 17% of Kazakhstani imports accounts on China in 2015
The Department of Summary Analysis of NCE RK gave a brief overview of the current state of the Kazakh-Chinese economic relations
According to the March report of the Asian Development Bank, in 2016 China's economic growth will be 6.5%, in 2017 - 6.3%. Among the reasons for the slowdown of the Chinese economy, ADB calls reduction of the working population, as well as structural changes in the model of economic growth due to consumption rather than exports and investment. ADB considers such structural transition of China as a biggest threat for the developing countries of Asia.
According to ADB forecasts, economic growth in Asia as a whole will be low - 5.7% in 2016 and 2017, compared to 5.9% in 2015. The decline in demand for industrial goods and the decline in commodity prices will lead to the reduction of surplus in the current account of Asian developing countries, up to 2.6% of regional GDP this year, compared to 2.9% in 2015 .
The Problems in the Chinese economy are sensitive to Kazakhstan. China is the second largest trade partner of Kazakhstan. 12% of Kazakhstani exports and 17% of Kazakhstani imports accounts on China in 2015. At the same time these shares reduced since 2014, for example, in 2011, the share of Kazakhstani exports to China reached 18.5%. In overall both exports and imports turnover declines in China within two consecutive years.
The trade turnover of Kazakhstan with China in 2008-2015.
Kazakhstan's trade structure with China has a low level of diversification. The structure of exported products to China is dominated by raw materials. However, the reduction of demand from China affected the export structure. The share of mineral products in the volume of exports to China significantly decreased in 2015 amounted to 45.8% compared to 64.8% a year earlier.
Imports from China are concentrated on machines, equipment, metallurgy, chemicals and light industry. Taken together, the share of these goods accounts for more than 60% of Chinese import to Kazakhstan. The decrease of Chinese imports in 2015 was affected by the reduction of textile imports more than half (42.8%), machinery and equipment (71%) and metals and products from them (84%).
Gross inflow of foreign direct investment (FDI) also reflects the degree of economic and trade cooperation. In recent years, FDI from China accounted for an average of 7-8% of total investments received by Kazakhstan. However, since 2013. the volume of FDI from China to Kazakhstan began to decline, moreover, for the first 9 months of 2015 it went down, resulting in losses of Kazakhstani companies.
(FDI include: the increase of equity, reinvested earnings / costs, increase of debt).
Sources: Statistics Committee of the MNERK, the Committee of customs control of MF RK, the report of ADB (March 2016).
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