Sino - Kazakhstan Energy Cooperation: Problems And Implications

Currently Central Asian region has become the center of new energy trade, forming a connection between East and West. With less mutual trade agreements between China and Europe being signed, it becomes an important market for both regions. Nuclear energy and cooperation between countries plays a crucial role in building of multilateral resource trade mechanisms. Oil and gas being important components of energy trade within the region, nuclear cooperation and trade between China and Kazakhstan add new meaning to this trade, making it a corridor for energy trade in much broader sense.Economic reasons and security concerns made China take the choice of developing its nuclear energy sector. Kazakhstan’s rich uranium resources, together with the significant increase of its extraction, production volumes and trade profits combine well with the country’s geographical position, assisting the development of China-Kazakhstan’s uranium trade. Although the nuclear accident at Fukushima, Japan had caused some slowing down on the world nuclear industry, however except from several countries the industry itself was not blocked in it’s development. Uranium is more a resource of strategic importance rather than a short-term value asset.Rapid economy growth and industrialization of agricultural sector show a strong and growing demand for energy resources in China. At the same time according to the data of National Development and Reform Commission, China’s dependence on imported oil exceeds55%and is expected to reach75%by2050. This context explains why China is developing it’s energy cooperation and economic ties with Kazakhstan and other Central Asian republics as a part of energy sources diversification strategy. Oil and gas are the most researched and traceable areas of energy trade, however interest towards cooperation in nuclear energy has grown significantly.China is one of major investors to Kazakhstan’s economy, total investment volume exceeding9,3billion dollars, cooperation between two countries helps to accelerate the development of Kazakhstan’s southern regions as well as energy sector infrastructure. Although large part of this investment is concentrated within oil and gas sector, deeper involvement is possible in areas including alternative energy resources such as solar energy.