The economic importance of the new pipeline route which enables the export of Kazakh oil to insatiable Chinese markets is hard to overestimate. Kazakhstan would be happy to induce Russia to export its oil to China via Kazakhstan. But Russian bureaucrats from the “Transneft” state monopoly seem to be deterred by an unsettled tariff policy. Most likely, at the initial stage the new pipeline will be used only by CNPC and the Canadian PetroKazakkhstan Inc., operating on the Kumkol fields.

The signing of the pipeline agreement was timed to coincide with the official visit of the President of Kazakhstan Nursultan Nazarbayev with Chairman Hu Tsintao. Both leaders lavished many words on the significance of nine agreements reached on various areas of economic relations. Addressing the Kazakh-Sino business Forum in Urumchi, heavily populated by ethnic Uyghurs and Kazakhs, President Nazarbayev pledged that Kazakhstan would support the rapidly developing western parts of China, and particularly the Xinjiang-Uigur autonomous region, a trouble spot near the Kazakh border, where ethnic rebellions against Chinese rulers took place in recent past. The sides are set to push up the trade volume from $3 billion to $5 billion in coming years.

Despite seemingly bright prospects, relations between China and Kazakhstan remain strained in many areas. Growing numbers of Kazakhs are alarmed at the expanding business activities of 40 or so Chinese companies nestled in Kazakhstan, the largest of them being the “CNPC-Aktobemunaygaz” company. The Aktobe region, where the company is located, is in spite of its oil reserves one of the poorest and most burdensome regions in the country for the Government. Chinese business executives, as constantly reported in the press, largely employ Chinese specialists brought in from China, ignoring their commitment to train and hire local workforce.

Even those few who are employed by the Chinese complain that they receive only half of the salary paid to Chinese workers. For residents of Aktobe region, oil fields are the only sources of income to support their precarious existence. To justify the miserable payment, the company owners say that Kazakh workers are not qualified enough to perform a high-paid job. Apart from financial constraints, Kazakhs in Chinese companies are placed under pressure. In a letter to the “Ana tili” (“Mother tongue”) paper a group of local workers from “CNPC-Aktobemunaygaz” lamented that their bosses tried to make Kazakhs sing Chinese national anthem.

What is regarded as a total disrespect for local traditions and ethics provokes parliamentary debates. On the insistence of parliament members, the CNPC-Aktobemunaygaz had to send home nearly 40% of Chinese specialists and replace them by trained local workers. Additionally, the company promised to open job training courses for Kazakh specialists and to raise their salary. Although the workers won the first major battle, alarming signs are still there. According to the National Statistical Board, slightly more than 3,500 Chinese permanently reside in Kazakhstan. Analysts say that this figure is by far inaccurate. Their estimations indicate that in 2003 alone, 20,242 Chinese citizens were registered with the Interior Ministry. It is everyone’s guess how many Chinese nationals entered the country illegally and settled for residence.

Kazakhstan is thought to be a paradise for visitors from overpopulated China. They invent the most intricate excuses to obtain Kazakh citizenship, and stay in the country for permanent residence, including marrying Kazakh girls. Market places of East Kazakhstan region and Almaty are teeming with Chinese traders. Many fear that the land privatization process may encourage Chinese influx. The prominent writer and parliament member Sherkhan Murtaza says: “If the land is to be privatized by foreigners we will see a stream of invaders flowing in. And they will come not from America, not from European countries, but from the East, from the land of the dragons. Once they get in, they will never get out. They will stay here at any cost, even if they have to marry a dying old woman”.

The popular mistrust towards Chinese migrants is inflamed by inconsistent government policy. In the summer of 1998, Kazakhstan ceded the 500 kilometer long border stretch to China to settle peacefully territorial disputes in Almaty and East Kazakhstan border areas, which was seen as weakness of the leadership. Critics believe that caving in to Chinese demands government sells out national interests, exposing the demographic situation of the country. It seems, it has taken too long for the government to wake up to the political potency of creeping migration from China to Kazakhstan.