The Influence of Chinese FDI on the Growth of Kazakhstan’s Energy Sector

Abstract

Since gaining independence, the government of Kazakhstan has regarded the development of the energy industry as a key strategic measure to attract foreign investment. As a result, the energy sector has become the primary direction for inbound foreign capital. In recent years, the volume of foreign direct investment (FDI) in Kazakhstan has continued to grow, making energy one of the most attractive sectors for foreign financing. Undoubtedly, this process significantly impacts the Kazakh economy, promoting sustainable development of the oil and energy industries, while also encouraging the enhancement of other production sectors within the national economic structure. Currently, under the Belt and Road Initiative, China is considered one of the most important foreign investors in Kazakhstan. Therefore, examining Chinese direct investment in the Kazakh economy is of particular relevance. This article first clarifies the concepts of the energy industry and FDI, as well as the theoretical foundations of industrial development and foreign direct investment. Then, it analyzes the current state of Kazakhstan’s energy industry and the specifics of Chinese direct investment in this sector. Analysis of the current situation will help policymakers at the state level develop further measures to promote the development of this industry. Moreover, highlighting the scale of Chinese FDI in the energy sector may serve as an incentive for potential Chinese investors to invest in Kazakhstan’s energy complex.