Shanghai architecture: How Kazakhstan is offering China a new industrial system

For the past two decades, China’s primary interests in Kazakhstan have been oil, metals, uranium, and transit routes. In Shanghai, however, these separate areas of cooperation were brought together into what is, to date, the most comprehensive framework for a shared industrial system—from raw material extraction to computing infrastructure. Bringing together previously fragmented sectors into a coherent strategic package and elevating it to the level of a head-of-state agenda is, in itself, a significant achievement: such a proposal reflects a top-down strategy that has been carefully developed. Astana presented itself as an infrastructure platform for the new economy. This represents a fundamentally different level of positioning, and this shift, rather than the total value of the contracts signed, defines the significance of the visit.

The framework Kazakhstan presented is internally coherent. Critical minerals feed battery manufacturing. Batteries power electric vehicles and energy storage systems. The energy sector supports data centers. Data centers provide the computing capacity required for artificial intelligence. Logistics corridors connect these products to global markets. Each component reinforces the others.

What lies behind the $15 billion

At the conclusion of the investment roundtable, the two sides signed more than 70 agreements and memorandums worth over $15 billion, covering AI, digital infrastructure, transport, industry, energy, and critical minerals. Publicly, the Akorda released 17 documents that were exchanged at the presidential table, while the full list of more than 70 agreements has yet to be disclosed.

This discrepancy is worth noting. Euronews and publications that cited its reporting estimated the package at around €11.4 billion (approximately $12.5 billion at the mid-July exchange rate), while the Akorda announced a package worth more than $15 billion—a difference of nearly 20%. The gap is likely due to differences in the documents included, currency conversion, or the timing of publication, as the full list of more than 70 agreements has not yet been made public. What we are looking at is a portfolio of agreements at varying stages of maturity.

The headline figure typically encompasses documents of different legal and commercial weight: investment agreements, commercial contracts, memorandums of understanding, framework agreements, licensing arrangements, and plans for joint feasibility work. A long path separates the signing of a memorandum from the commissioning of a fully operational factory, involving financing, site selection, regulatory approvals, construction, and the ramp-up to full production capacity. A more accurate formulation, therefore, is that Kazakhstan has assembled a portfolio of China-backed projects with a declared value of more than $15 billion. Their real economic impact will become visible later, in the statistics on realized investment between 2027 and 2029.

The broader backdrop, however, is solid. According to figures cited by President Tokayev during his meeting with Xi Jinping, bilateral trade reached a record $49 billion last year, cumulative Chinese investment in Kazakhstan has exceeded $30 billion, and more than 8,500 companies with Chinese capital are now operating in the country. Tokayev described the current phase as a new “golden thirty years” in bilateral relations, while the two sides also signed a trade and economic cooperation program extending through 2030.

The first pillar: from ore to batteries

The most substantive business meeting of the visit was held with CATL, the global leader in EV battery manufacturing. The company confirmed its readiness to build a battery manufacturing plant in Kazakhstan, which could become the first facility of its scale in Central Asia. International media identified this project as the flagship initiative of the entire package. Tokayev proposed developing a fully integrated value chain, from raw material processing to the production of finished battery products.

This commitment, however, should be assessed with appropriate caution. For CATL, establishing manufacturing facilities abroad is not a new venture: the company already operates plants in Germany and Hungary, making Kazakhstan another step in its global expansion strategy. For Kazakhstan, by contrast, this would be the region's first battery manufacturing facility of this scale, creating a clear asymmetry of interests that will be important to bear in mind during negotiations over localization.

This is where the distinction between two industrial models becomes critical. A “battery plant” can mean anything from assembling battery modules using imported cells to manufacturing the cells themselves, producing cathode and anode materials, and carrying out the chemical processing of critical minerals. The economic value of these different stages varies dramatically. Under an assembly model, Kazakhstan gains jobs and tax revenues, but the higher value-added activities and technological expertise remain with the supplier. A fully integrated production chain, including mineral processing, advanced materials manufacturing, and engineering capabilities, anchors the industry within the country, whereas assembly alone leaves Kazakhstan with little more than a production site.

This is precisely why the specific terms of the project matter more than the agreement itself: the plant’s production capacity, the size of the investment, the share of locally sourced components, the origin of raw materials, the depth of processing, and whether Kazakhstan will develop its own engineering workforce. None of these details has yet been disclosed publicly; for now, the discussion remains at the level of intent and consideration. The answers to these questions will determine whether the CATL project becomes Kazakhstan’s gateway into the global battery industry or merely another assembly line reliant on imported components.

The second pillar: energy as the critical bottleneck

Kazakhstan is already developing its computing infrastructure, albeit across multiple technological platforms simultaneously. The Data Center Valley project near Ekibastuz is being developed primarily with the U.S.-based Firebird, supported by NVIDIA, with the first 125 MW phase scheduled for completion in 2027. Chinese investors and operators are joining this ecosystem through separate agreements. This configuration already illustrates an important feature of Kazakhstan’s approach: in building critical infrastructure, the country is working with multiple technology partners at once, reducing dependence on any single supplier.

Yet all of these data center projects share the same fundamental constraint: energy. Data centers, metallurgy, battery manufacturing, and electric vehicle production all require reliable power generation and a resilient grid.

Astana has already outlined part of its response. During talks with China Communications Construction Company, the two sides agreed to jointly develop a 600 MW pumped-storage hydropower plant in the Kargaly Valley. A pumped-storage facility helps balance the power system by smoothing fluctuations in demand and supply, but it does not create new primary generation capacity. Instead, it redistributes electricity that has already been produced. Without the timely expansion of new generation sources, including thermal power plants, renewable energy, and potentially nuclear power, the projects currently being announced will eventually find themselves competing for the same pool of electricity.

A system with feedback loops

The Shanghai projects are connected not only by the logic of the value chain but also by shared structural constraints. A CATL battery plant requires processed raw materials. Raw material processing requires energy. Energy depends on transmission networks. Power grids increasingly rely on digital management systems. Data centers require AI accelerators and efficient international logistics. Every new project increases the demands placed on the next.

This leads to a less obvious conclusion. In the past, Kazakhstan’s projects were most often constrained by a lack of financing. Today, the limiting factor is increasingly infrastructure, including power generation, electricity grids, communications networks, and access to advanced equipment. The result is a paradox: the more successfully these new projects move forward, the more they begin to place demands on one another. Investor interest is already substantial; the real question is whether the country’s physical infrastructure will be able to support it.

The third pillar: digital transit instead of simply a transit route

Transport remains a central pillar of the agenda. According to President Tokayev, 13 international transport corridors pass through Kazakhstan, around 85% of rail freight traffic between China and Europe transits the country, and more than $35 billion has been invested in transport infrastructure over the past 15 years. The new element is the Smart Cargo platform, a unified digital gateway integrating customs procedures, logistics, and real-time cargo tracking. The concept is pragmatic: Kazakhstan is shifting from selling its geography to selling the quality of how that geography is managed.

Geography cannot be changed. The quality of digital governance can become, and is increasingly becoming, the key competitive advantage of modern transport corridors. Competition for these routes is intensifying. The Middle Corridor competes with both the northern route through Russia and the southern route via Turkey, and seamless digital logistics could become the multiplier that gives it a decisive edge. That advantage, however, will materialize only if data and documentation are interoperable across all participants in the Middle Corridor, from the ports on the Caspian Sea to its European endpoints.

The fourth pillar: a diplomatic bet on global AI governance

According to Xinhua, on July 16, 29 countries, including Kazakhstan, signed an agreement establishing the World AI Cooperation Organization (WAICO) and became its founding members. The organization is intended to function as an intergovernmental body headquartered in Shanghai, and the signing ceremony was attended by the UN Secretary-General.

The following day, July 17, at the opening of WAIC, Tokayev proposed holding the organization's inaugural meeting in Astana and establishing its Central Asia regional office there. He also proposed declaring 2027 the Year of Kazakhstan–China Joint AI Initiatives and opening the Asia-Pacific Digital Solutions Centre under the United Nations Economic and Social Commission for Asia and the Pacific (UN ESCAP) in Almaty.

For Kazakhstan, this is one of the most realistic strategies for participating in the global AI agenda. The country cannot compete with the United States or China in developing frontier AI models or manufacturing advanced semiconductors. Becoming a platform where rules are coordinated, solutions are tested, and talent is trained, however, is an achievable objective.

An important nuance is that diplomatic status is meaningful only when it rests on genuine domestic capabilities. Hosting the regional office of an international organization provides a platform, but real influence over standards depends on having the computing infrastructure and research ecosystem to support it, both of which Kazakhstan has yet to build.

The strategy is deliberate. Rather than claiming a role beyond its current capabilities, Kazakhstan has secured a position it can realistically occupy, and it has done so before anyone else in the region, becoming a founding member before those opportunities are claimed by others.

Some elements of technological localization are already reflected in the signed memorandums. Kazakhstan and the Chinese automaker BYD intend to explore the development of a voice interface supporting the Kazakh language for the company’s in-vehicle infotainment systems, as well as cooperation in power electronics and semiconductors. This has the potential to move the partnership beyond vehicle assembly alone. However, the depth of localization remains undefined. It has not yet been publicly disclosed where these technologies will be developed, who will own the resulting intellectual property, or whether Kazakhstan will establish its own engineering team as part of the project.

Why China is acting now

For China, this model is equally logical. Against the backdrop of slowing domestic demand, Chinese companies are increasingly expanding overseas not only by exporting finished products but also by exporting manufacturing capacity, digital platforms, and technological standards. Kazakhstan is emerging as one of the first places where this model can be implemented in a comprehensive way, combining proximity to markets, abundant natural resources, and transit access to Europe.

Where the line between success and failure lies

Nearly every opportunity presented in Shanghai has a dual character. Cheap electricity can become the foundation of a computing-driven economy or remain merely an inexpensive resource powering foreign-owned data centers. Critical minerals can underpin a sophisticated processing industry or simply increase exports of raw materials. Automotive localization can evolve into a genuine industrial sector or remain limited to screwdriver assembly. Chinese digital platforms can accelerate modernization while simultaneously deepening dependence on a single technology provider. This is a particularly sensitive issue when it comes to government data and critical infrastructure, where diversification serves as an essential safeguard.

This defines the agenda for the next phase, one that begins after the presidential visit. For industrial projects, the focus should shift to measurable commitments: the share of locally sourced components, the creation of engineering jobs, the establishment of research and development (R&D) units, and export targets. For data centers and cloud infrastructure, the priorities are keeping sensitive data within the country, ensuring independent audits, and maintaining interoperability across solutions from different vendors. For critical minerals, the objective is to move beyond extraction alone. For transport, success will depend on securing a stable cargo base rather than relying solely on the projected capacity of new terminals.

Kazakhstan’s bargaining position in these negotiations will depend directly on its ability to convert its natural resources and geographic advantages into concrete contractual terms.

Measuring success

To ensure that the Shanghai portfolio does not fade into the background of future investment forums, its progress should be assessed against five sets of indicators over the coming year: how much capital has actually been invested; how many projects have entered construction and reached completion; what share of value is created within Kazakhstan; whether research centers and technology transfer have materialized; and what proportion of output is ultimately exported.

The number of agreements signed is only an intermediate outcome. The true significance of the Shanghai visit will be measured by its impact on the structure of Kazakhstan’s economy. The country has declared its intention to move beyond being a supplier of raw materials and become an integral participant in global manufacturing value chains. Whether that ambition is realized will ultimately be judged by a single metric: how much of the newly created value is generated within Kazakhstan.

The ambition itself is telling. Seeking to enter the Chinese economy as a full-fledged participant in industrial value chains reflects a level of strategic maturity. If, by the end of the decade, Kazakhstan’s exports extend beyond raw materials to include batteries, computing services, engineering solutions, and products of advanced processing, the Shanghai visit may well be regarded as one of the starting points of the country’s new wave of industrialization.

Earlier, Qazinform News Agency reported that TRKLab captured key moments of Tokayev's Shanghai visit.