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China's COSCO to invest in Kazakhstan border project as part of Silk Road drive
May 14, 2017 / 12:08 PM / 7 months ago

China's COSCO to invest in Kazakhstan border project as part of Silk Road drive

BEIJING (Reuters) - China’s COSCO Shipping plans to invest in a special economic zone on Kazakhstan’s border with China as it looks to increase investment in countries involved in the new Silk Road, the company’s chairman said on Sunday.

A container ship of China Ocean Shipping Company (COSCO) crosses the Gulf of Suez towards the Red Sea before entering the Suez Canal, in El Ain El Sokhna in Suez, east of Cairo, Egypt April 24, 2017. REUTERS/Amr Abdallah Dalsh

Officially named the Belt and Road initiative, the Silk Road initiative unveiled in 2013 has been touted by China as a way to boost global development through expanded links between Asia, Africa, Europe and beyond, underpinned by billions of dollars in infrastructure investment.

COSCO Chairman Xu Lirong told Reuters on the sidelines of the Belt and Road forum in Beijing that the state-owned conglomerate will sign a deal on Monday with Kazakhstan’s national railway company to take a 24 percent stake in a dry port in the Khorgos Eastern Gates special economic zone (SEZ).

He declined to comment on the value of the investment but said that China’s Lianyungang port will also invest in the project, which borders China’s far western Xinjiang region.

“We will sign the contract tomorrow to participate in the Khorgos Eastern Gates SEZ ... This will be a transhipment hub for handling goods carried by rail from China to Europe,” he said.

The Khorgos Eastern Gate SEZ was established by the Kazakhstan government in 2011 to boost the country’s exports and covers 600 hectares area of land that houses a dry port, logistic and production zones, its website says.

It is also one of the central hubs for a railway network connecting China and Europe, on which trains currently shuttle goods from laptops to wine between 27 Chinese cities and 11 European cities including London and Duisburg.

Xu also said that the company planned to increase investment in countries involved in the Belt and Road initiative and that the company believes it has a duty to ensure smooth trade flows along the countries involved in the initiative.

“We will formulate a more detailed plan for the region’s transport network and will increase our investment in these areas,” he told reporters.

The Chinese shipping giant owns one of the world’s largest dry bulk and container shipping fleets as well as a network of ports including Greece’s Piraeus. In January it secured a 180 billion yuan ($26.1 billion) financing pledge from China Development Bank to support Belt and Road projects.

Xu was among top Chinese company executives attending the two-day forum, China’s largest diplomatic event for the year.

Reporting by Brenda Goh; Editing by David Goodman

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