On January 2, 1992, China and Kazakhstan formally established diplomatic relations. Trade between the two countries shifted from border trade conducted through the Soviet system and small-scale exchanges between border residents to bulk trade under a newly signed economic and trade agreement.
Private trade was also permitted. Hauling goods from the Northeast to sell to the Russians for big money, something many people had envied, now became possible through Khorgos and Alashankou too.
Liu Gaolou called Li Long and said, "People are coming in cars or carrying bags of all sizes. Every day, lots of people at the border crossing start taking things over there.
"Before, nothing grew over there. Once you crossed the Khorgos River, it was practically barren land.
"Now, with so many people hauling goods over from our side, lots of people drive over from Panfilov to collect them right at the crossing. They barter, and little markets have even formed. Then our people bring what they've traded for back through customs and, after inspection and quarantine, take it home to sell."
At this point, people still followed the tradition of exchanges between border residents, with barter accounting for much of the trade. Many on both sides also shared a language, and they could conclude deals with a few gestures. The wool, metals, and specialties of the former Soviet regions they brought back all sold well here.
The shoes, clothes, food, and light industrial products carried over from this side, including secondhand appliances, were also very popular.
Some people could even carry over a bag of canned food and return with two sheepskin overcoats.
Everyone thought it was a good deal. Everyone felt they had made a profit.
Of course, private bulk trade generally still had to be conducted in the cities over there. Most people coming