Kazakh opposition calls for halt to China expansion

Sat May 28, 2011 10:57am BST

* Several hundred activists gather in Almaty

* Opposition fears Chinese resource and land grab

By Robin Paxton

ALMATY, May 28 (Reuters) - Opposition activists in Kazakhstan called on the government on Saturday to stop Chinese investment in the country's natural resources, saying Beijing could be preparing a land grab in Central Asia. Several hundred people gathered in Almaty, the country's largest city, for an officially sanctioned rally against Chinese expansion into Kazakhstan, a vast former Soviet republic holding 3 percent of the world's recoverable oil reserves.

"Chinese relations to resource exploitation have imperialist undertones," said Vladimir Kozlov, leader of the unregistered Alga! opposition party.

China's growing clout in Kazakhstan and other former Soviet republics in Central Asia is underpinned by billions of dollars of investment in the region's oil, gas and metals reserves, including a $10 billion "loan-for-oil" deal agreed in 2009.

Beijing's foray across its 1,530 km (960 mile) border with Kazakhstan represents a challenge to Russia, which sees the country as part of its sphere of influence, as well as to European hopes that it can be a major new supplier of energy.

Opposition leaders, who addressed the crowd in a small park in the outer suburbs of Almaty, said Chinese loans were being used by the billionaire shareholders of oil and mining companies to further their own ambitions.

"The Chinese have only one aim -- to take our land," said Aliam Turdiyeva, 42, who described herself a social activist. "The Chinese are not to blame. It's our corruptible officials."

Activists waved red and white banners bearing slogans such as: 'The fate of our land is the fate of our people'.

LAND GRAB?

The government denies that China could grab land. Kazakh law permits foreigners to lease land for agricultural use for a maximum period of 10 years but forbids them from owning land.

Kazakhstan, a mainly Muslim country of 16.4 million people, has attracted more than $120 billion in foreign investment since gaining independence in 1991.

Official data show Chinese investment in Kazakhstan had reached $5 billion by the end of last year, slightly less than 4 percent of the country's total foreign direct investment. Chinese companies control 22.5 percent of Kazakhstan's oil output, though the government forecasts this will decline to 19.3 percent in 2015 and 8.9 percent by 2020.

China's Foreign Ministry, referring to its plans in Central Asia, has previously said it has "no plans to garrison its people in foreign lands". [ID:nLDE72E1LH]

Pensioner Semyon Badyanov, 75, said foreign investment had degraded Kazakhstan's industrial base. The engine factory where he once worked has long since closed down, he said.

"Our natural resources are in the hands of foreign companies. How much of the profits that they generate remain in the hands of the people?" he said.

Kozlov said he was concerned about the long-term effects of Kazakhstan's indebtedness to China.

"We see the potential for a situation whereby one day, when it comes to repaying nearly $20 billion to China, we will have no money and no oil -- because the oil is no longer ours," he said.

"We will start giving away our territory. We have lots of it and we have a common border, so the map could be redrawn to give away a couple of thousands hectares here and there." (editing by Elizabeth Piper)

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