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Kazakhstan looks for investments, attracts Chinese FDI

Chinese companies are exploring investment opportunities in Kazakhstan. Their area of interest include: cotton production, raw material processing, clothing production, and logistics.

Kazakhstan and China have a border connected by mountains and rivers. In Kazakhstan, about 2,50,000 tons of cotton are collected annually. About a third of this is processed and the remaining goes as raw materials for export.

Seeking to attract more foreign investment from its prime position in China’s huge Belt and Road trade project, Kazakhstan has launched a new financial hub. The Astana International Financial Centre (AIFC), a self-styled mid-shore special economic zone, hopes to attract players ranging from Chinese state funds to Swiss private banks by offering tax breaks, easy entry and a Common Law court.

The move is part of Kazakhstan’s ambition to become a Luxembourg-style intermediary between larger nations and a gateway for foreign investment across Central Asia. Modeled on the Dubai International Financial Centre, AIFC wants to host all sorts of market players: family offices, private banks, brokers, asset managers, Islamic finance institutions and fintech companies.

Unlike DIFC, though, AIFC will not require that its members maintain a physical presence in the windswept Kazakh capital. It will also charge much lower fees than the established hubs and offer 50-year tax breaks.