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Li signs agreements worth $14b to rebuild ancient route

China secured deals worth more than $14 billion to enhance connectivity with Kazakhstan, Central Asia's largest economy, in what is another step forward in efforts to revive the ancient transcontinental Silk Road.

The deals signed on Sunday cover nuclear energy, electricity, water resources and infrastructure construction - agreements in line with efforts to move their cooperation beyond oil and gas development.

Although details on the upcoming projects have not been revealed, Xinhua News Agency said the countries will upgrade a joint venture logistics base and enhance connectivity with highways, railways, ports, air routes, and oil and gas pipelines.

An investment fund of about $500 million was set up to finance the projects, and the nations agreed to expand their currency swap deal - now at $1 billion - to reduce the costs of trade.

China has also promised to open more fields to Kazakh investors, the first time that it has done so with a Eurasian country.

Sunday's deals are among the largest that Premier Li Keqiang has signed during his trips to neighboring countries, which "illustrates the deep and broad engagement of China and Kazakhstan", said the premier, who arrived in Astana on Sunday to kick off a two-day visit, the first leg of a three nation trip.

Li met with Kazakh Prime Minister Karim Masimov and addressed a meeting of China and Kazakh business leaders. He will attend the 13th prime ministers' meeting of the Shanghai Cooperation Organization in Astana on Monday.

"Our cooperation will not only focus on the energy sector, but also in other fields such as equipment manufacturing, agriculture and deep processing of resources," Li said.

While meeting with Kazakh President Nursultan Nazarbayev, Li encouraged Kazakh enterprises to use Chinese equipment, saying Beijing is willing to work with Astana in the construction of steel factories, power plants and railways to deal with the challenges brought by the global economic situation.

Ruan Zongze, vice president of the China Institute of International Studies, said that China's advantages in transportation upgrading and industrial restructuring fit well into Kazakhstan's needs, as earlier this month Kazakhstan announced a multibillion dollar stimulus package for the economy to boost investment in infrastructure.

Plunging oil prices and the impact of the Ukraine crisis on surrounding economies have compelled many global institutions, including the International Monetary Fund and the World Bank, to lower their growth forecasts for Kazakhstan this year.

China is Kazakhstan's second largest trade partner and largest export market. Bilateral trade reached $28.5 billion in 2013, up 11 percent year-on-year with an expectation of it exceeding $40 billion in 2015.

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