- Direct trade with Xinjiang: Given its geographical proximity and established trade infrastructure, Xinjiang serves as a key hub for direct trade. In addition, many of Kazakhstan and Kyrgyz Republic’s businesspeople have relatives in Xinjiang who assist in sourcing Chinese commodities and coordinate the smooth transfer of goods. These companies frequently engage in cross-border transactions with Xinjiang-based suppliers and distributors, leveraging cultural, regional and economical possibilities. Kazakhstani citizens can also travel visa-free to the PRC for 30 days, so they visit Xinjiang anytime to find suppliers, contacts, etc.
- Direct trade with southern PRC regions: Some companies extend their trade networks to southern PRC, particularly Guangdong and Zhejiang provinces, which are known for manufacturing hubs and export-oriented industries. They also do business in Guangzhou and Shanghai. This strategy allows access to a broader range of products, factories, and competitive pricing, though it often requires more logistical coordination and higher transportation costs.
- Orders from Chinese marketplaces: Electronic commerce platforms have become increasingly popular among Central Asian SMEs. These marketplaces enable businesses to source goods directly from Chinese manufacturers and wholesalers, often at lower costs. However, this strategy requires familiarity with digital tools, knowledge of the Chinese language, and reliable payment and logistics solutions.
- Repurchase from local companies: Some businesses opt to source Chinese goods indirectly by purchasing from local intermediaries or distributors, who have already imported products from the PRC at a low price and in large quantities. Small shops that sell clothes, footwear, fabrics, and other items purchase commodities from local warehouses. This reduces the complexity of cross-border trade but may result in higher costs due to added margins.
- Utilization of the Khorgos Free Economic Zone (FEZ): The Khorgos FEZ, located on the Kazakhstan–PRC border, serves as a critical trade and logistics hub. SMEs use the economic zone to streamline customs procedures, reduce tariffs, and facilitate the storage and re-export of goods. SMEs purchase commodities at a cheaper price and re-sell on the local market and/or trade centers. This strategy is advantageous for businesses looking to minimize costs and enhance efficiency in cross-border trade.
The adoption of these strategies depends on the company’s size, industry, and access to resources. Larger firms with greater financial and logistical capabilities are more likely to diversify their approaches to maximize their competitive advantage by combining direct trade with factories and e-commerce. In contrast, smaller SMEs may focus on one or two strategies due to resource constraints, often relying on intermediaries or localized trade networks. This strategic diversity highlights the adaptability of Central Asian businesses in navigating the complexities of trade with the PRC.
