【By Observer Net, Ruan Jiaqi】

President Tokayev of Kazakhstan is working to reshape the economy of this Central Asian country with the largest oil production, aiming to modernize the country with a population of 20 million through improving the business environment.

According to U.S. media Bloomberg, on the 23rd, Deputy Prime Minister and Minister of National Economy Zhumangalin told the media that thanks to cooperation with China, the country is actively promoting economic transformation, striving to reduce its dependence on oil.

Zhumangalin told the U.S. media that China has replaced Russia as the largest trading partner of Kazakhstan. Moreover, with Kazakhstan's plan to build new railways and create a transportation corridor connecting the east and west of the country, the transport of goods from China is expected to continue to increase significantly.

He further revealed that the railway transport volume via the Caspian International Transport Route, which bypasses Russia from China, will increase from the current 4.5 million tons to 7-10 million tons in the coming years. Zhumangalin said that this will enable Kazakhstan to transform from an "inland country" to a "land-linked country."

The Caspian International Transport Route is also called the "Middle Corridor," connecting China, Kazakhstan, Azerbaijan, etc., and through the Black Sea to Europe, it is an important international logistics channel. The "Middle Corridor" uses a combination of railway, road, and sea transport, becoming the shortest multimodal trade route connecting China and Europe, greatly shortening the time for land and maritime transport between China and Europe. The development of this route has significant strategic importance for Kazakhstan, helping to consolidate its position as a hub in the Eurasian continent and achieve trade path diversification against the backdrop of global supply chain adjustments.

According to reports by Kazakhstani media, in July this year, China and Kazakhstan signed a strategic agreement focusing on developing the Caspian International Transport Route. Both sides agreed to deepen cooperation in areas such as railway transportation, logistics, process digitization, and infrastructure development. The report stated that the signing of the agreement marked a new stage in the partnership between the two countries in the field of transportation.

Deputy Prime Minister Zhumangalin, Eurasian Economic Union official website

According to Bloomberg, in addition to deepening cooperation with China, Kazakhstan also plans to invest hundreds of billions of dollars to support economic growth. Zhumangalin said that the government has formulated an infrastructure plan to invest 80 billion USD by 2029. About half of the funds will be used for energy, and the rest will be specifically invested in transportation, digital development, and water supply projects.

Additionally, the State Investment Company under the Kazakhstani central bank will receive 1 billion USD from the oil fund for the first time, to invest in high-tech projects within Kazakhstan through private equity and other mechanisms.

Zhumangalin introduced that Kazakhstan plans to inject 10 billion tenge (approximately 1.307 billion yuan) annually into the Baiterek National Holding Company, which controls the country's development bank, before 2028, increasing its annual borrowing capacity to 70 billion tenge (914.9 billion yuan). He said, "Our goal is to build a strong development institution that can rival top international institutions."

In the field of digital infrastructure, Kazakhstan has allocated 1.7 billion USD for related construction. At the same time, the planned Alatau Smart City, a center for the cryptocurrency industry, is also being prepared.

Kazakhstani government estimates that by 2029, this city project will create more than 21,000 jobs. In early September, during the eighth meeting of the China-Kazakhstan Businessmen Committee held in China, President Tokayev revealed that a Chinese construction company will participate in the construction of the project.

Kazakhstan's ambitious plan in the automotive industry also reflects the influence of China. Zhumangalin specifically mentioned that a factory in the country currently produces multiple Chinese brand cars, with a maximum annual output of 90,000 units; another factory of the South Korean Kia Group is expected to have an annual capacity of 70,000 units.

Although oil will continue to play an important role in Kazakhstan's fiscal revenue, S&P Global Ratings pointed out last month that Kazakhstan's economic growth will continue to rely on increased oil production in the coming years. However, according to Zhumangalin, oil is no longer the "only pillar" driving the country's economy. "Manufacturing will become the core driver of our economic growth," he said.

"By next year, our economic development will finally no longer be constrained by oil, this shift is reasonable and necessary," he said, "Oil will still generate considerable income, but its impact on economic growth will no longer be significant."

The Kazakhstani Ministry of Economy estimates that this year, the country's GDP will grow by 6%, and the nominal GDP size will exceed 300 billion USD for the first time. However, Zhumangalin said that his personal goal is to increase this year's economic growth rate to 6.5%, and he holds a "cautiously optimistic" attitude toward maintaining a growth rate of over 5% for the next three years.

According to news from Kazakh International News Agency in August, the latest data released by the International Monetary Fund (IMF) showed that, at current prices, Kazakhstan's per capita GDP this year will rank first among the former Soviet states. In 2025, Kazakhstan's per capita GDP will reach 14,770 USD, exceeding Russia's 14,260 USD and Turkmenistan's 13,340 USD.

Kazakh media pointed out that for Kazakhstan, this ranking is not only an important economic achievement, but also marks an accelerated pace of development and a further consolidation of regional status. IMF data shows that Kazakhstan has surpassed Russia, considered the leader of the post-Soviet economy, and Turkmenistan, rich in energy resources.

The report analyzed that the rapid growth of Kazakhstan's economy is due to multiple factors: Kazakhstan has abundant reserves of oil, natural gas, uranium, and other mineral resources, and energy and mineral exports remain the main driver of the economy; at the same time, Kazakhstan has been continuously promoting reforms of the business environment in recent years, attracting more foreign investment, and accelerating the pace of infrastructure construction, and investments in transportation, logistics, and technology have played an important role.

Additionally, Kazakhstan is located at the strategic junction of Europe and Asia, with a natural advantage in the regional and global economic structure. Actively participating in the "Belt and Road" initiative, as well as practical cooperation with partners such as Russia, China, and the European Union, has further enhanced its economic potential.

Although Kazakhstan is currently in a period of rapid growth, it is not without economic concerns. However, analysts believe that the country will still maintain a relatively good economic outlook. In mid-July, the IMF predicted that Kazakhstan's economic growth rate this year will be 5%, and 4.3% in 2026.

This article is an exclusive article by Observer Net. Reproduction without permission is prohibited.

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