Inefficient border crossings, corrupt immigration officers, racial profiling and harassment, and nothing but cheap Chinese junk — so this is the future of commerce on the New Silk Road?
“That’s just a place where old Kazakh ladies go to buy things from China to take back to the city and sell for a small profit,” a friend in Almaty spoke of the Horgos (Khorgos) Free Trade Zone with a scoff. But as I walked through a metal detector that spanned a narrow opening in a high steel gates and made my way into what amounted to a security cage, the Horgos FTZ didn’t seem to be a place that any old women should make a habit of going to.
I was crossing into the duty free zone from the Chinese side, and was in line with perhaps one hundred mostly Chinese vendors and shoppers waiting to pass through the immigration check, which consisted of passing through a security screening and a second metal detector. Armed guards and video surveillance cameras watched us intently throughout. While we would only be crossing into an extra-territorial area that’s shared between China and Kazakhstan rather than over a proper international border, security was still incredibly tight — far tighter than almost any formal border I’ve ever crossed over the past 16 years of travel.
I would be singled out of the crowd for additional passport checks and questioning no less than three times before I would actually get inside the Hogos FTZ. Whether this profiling was because I have a beard, and may resemble a Muslim “extremist” to touchy Chinese security forces, because I was a Westerner going to a place that my brethren rarely go, or for some other reason I will never know, but one thing was for certain: the security apparatus here was running on all cylinders.
Once inside, I found myself walking through an outdoor corridor that was lined with eight foot high fences armed with multiple rings of barbed wire. I looked up at a towering security building with dark tinted windows that ominously loomed over everything, and realized that this place was like shopping in a prison. Trade may be free here but that’s about it.
The Horgos Free Trade Zone opened in 2012, and is a five and a half square kilometers jointly administered area straddling the China/ Kazakh border. It is surrounded by the broader Horgos Special Economic Zone and the new city of Horgos on the Chinese side, which is currently being built up to be a major urban center. On the Kazakh side there is virtually nothing but grasslands and mountains until you get to Almaty over 300 kilometers away. The Chinese have already dumped US$3.25 billion into their side of Horgos as it becomes the predominant land port on the New Silk Road — a growing network of trade routes, pipelines, and logistics zones that will span across Asia to Europe.
When it was first announced, the Horgos FTZ was heralded as a benchmark initiative of international cooperation and inter-cultural sharing. “The importance of Khorgos to Kazakhstan should not be understated . . . [it] will spur economic growth across the whole of Eurasia,” rang an article in the Astana Times. Horgos, China’s first trans-national FTZ, was intended to be a place where Kazakhs could come and revel in Chinese cuisine, entertainment, and culture and the Chinese could experience a little of Kazakhstan. There was to be hotels, amusements, and restaurants for visitors from both sides, who can stay in the zone for up to 30 days without any immigration hang ups. But this grand vision has yet to transpire into reality.
On the Chinese side is five multistory flea market-like shopping outlets which sell Chinese made clothing, upholstery, tires, furs, electronics, luggage, and other consumer goods of the cheap, mass-manufactured variety. While there were signs advertising the presence of Chanel, Calvin Klein, Clinique, Prada, and Gucci in front of these markets, none of these luxury brands actually graced the free trade zone — at least not in a form that wasn’t an abject knock-off. Instead, what was there was the cheapest, most run of the mill samples of what could only be called Chinese junk.
Like many of China’s other free trade zones, the products that are available “duty free” are a far cry from what the trend setting middle and upper classes are hungry to buy, and the consumer bases they attract are those looking to get cheap white brand goods a little cheaper — mostly with the intent of reselling for modest profits. China seems to want their free trade zones and tax revenue from luxury goods too, so what’s on offer in these much touted FTZs is little that’s going to disrupt the ebbs and flows of international commerce — unless cases of sausages or hubcaps become particularly in vogue.
On the Kazakh side the scene was even grimmer. There was a dilapidated strip of long abandoned shops, a lonely, derelict yurt, and a burning pile of garbage. Besides a billboard that ironically showed the zone as a booming metropolis, that was it.
There was nothing on the Kazakh side of the FTZ and there was little reason for there to be. The consumers coming here, who are mainly from Kazakhstan and other Central Asian countries, and are looking to buy the Chinese made products that their countries have come to rely on. The Chinese themselves generally have very little interest in any consumer goods that Kazakhstan produces, duty free or not. So the cooperative dynamics of the Horgos FTZ are thus clear: China makes and sells, Kazakhstan buys.
There is little to enjoy about this place — yet, anyway. This sounds like a subjective assemblage of words, but, as it can be stated with reasonable certainty that getting beaten or mugged are undesirable experiences, and the same can probably be said for the Horgos FTZ. The only thing that people seem interested in doing here is buying cheap stuff cheaper and getting out as fast as possible. There is one direct bus to the Horgos that leaves nightly from Almaty. It arrives in the morning, visitors make it through customs by 10AM, shop until 3:30PM, then get right back on the bus to go home. Nobody doddles. Coming to Horgos is a job, not something that’s done for fun.
Compounding this is the fact that border crossings here are tedious at best, frightening and costly at worst. The Kazakh side of the border is incredibly corrupt, intimidating, and inefficient; the Chinese side is overly obsessed with security to the point of harassment, as I found. For small traders to move merchandise from one side to the other means paying bribes, getting the shake down down, and being otherwise hassled.
“Usually you just give the guy at immigration some money and they let you through,” a Kazakh guy warned.
“Sometimes Chinese traders have to bribe Kazakh customs officers. Otherwise they won’t let their goods pass,” a cross-border Chinese trader told the China Daily. “Asking for bribes is pretty common in Kazakhstan. Sometimes, Chinese are fined for no reason.”
This is a far cry from the way things are supposed to be: “The center enjoys unique policies to boost the free mobility of the personnel, goods and capital,” an official for the FTZ recently stated.
As of now, the retail area of the Horgos FTZ appears to be suspended in a state of stale half measures — little more than a beacon for old Kazakh women looking to make a little pin money, as I was told. While there are talks of luxury accommodation, the working class traders actually frequenting this place are those staying with me at the cheap and run down $15 per night Heaven on Earth hotel. To put it simply, the attraction for a wide swath of the money laden jet set simply isn’t there; nothing about Horgos is trendy, state of the art, or even up to date for that matter. It a word, it is all generic. And nobody but cash-strapped grassroots traders are going to travel out to this remote fringe of Xinjiang for the generic.
“What did you think of Horgos?” a guy I met on a bus while leaving the zone asked.
I didn’t know how to answer that question without causing offense. I hesitated, looking for words.
“Yes, I know,” he cut me short with a slight laugh showing that he understood.
Although I must admit that China has the power to change the fortunes of places remarkably quickly and taking a one visit snapshot of any place in the country is ill methodology for making a projection of how they will develop in the future. As of now there are plans to build a luxury hotel and an exhibition center which should be open by 2017. Kazakh officials are promising that they’re going to start building malls and hotels too — along with finishing the upgrade of the road to Almaty, which is currently in a state of advanced disrepair. China just recently finished building a highway to Horgos, and it wasn’t until 2012 that the cross-border rail line was up and running. By next year the highway from China’s east coast to St. Petersburg, which passes through Horgos, should be completed. So while there is little indication of this now, the potential for Horgos and its FTZ to become the international commercial center it’s meant to be is there. As the New Silk Road grows so too will Horgos.
Grow into what is the question.