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31 January 2020
Last week we took to the water to discover how China’s Belt & Road Initiative is transforming maritime trade. But that’s only part of the story.
In addition to upgrading port infrastructure and creating new continent-spanning trade agreements, China is investing in a vast multimodal network of roads and railways across Eurasia, intended to link Western China to Eastern Europe via a deluge of new infrastructure projects. Once completed, it will provide a cheaper alternative to air freight that shaves off considerable travel time compared to a maritime route.
Creating trade links to Europe
Much of the development is taking place on the route across Kazakhstan, where a 2,787-kilometre highway bisecting the entire country is being built or upgraded, taking vehicles from Khorgos in the east to the Russian border in the west. Once Russia completes its section of highway—progress has so far been relatively slow—this network will allow freight to travel between the Yellow Sea in the far east and St. Peterburgs in the west in as few as eleven days, as opposed to 30–50 days by sea and 15 days by rail.
A parallel rail route—known as the ‘Middle Corridor’—goes from Baku in Azerbaijan to Istanbul via Georgia, bypassing Russia entirely but requiring transport across the Caspian Sea from Kazakhstan. In November 2019, almost as a kind of proof-of-concept, the first Chinese freight train running from Xi’an to Istanbul made the journey to the European continent in just 12 days.
South Asia also sees the benefits
Europe isn’t China’s only goal. The China–PakistanEconomic Corridor is one of the largest and most ambitious of the Silk Road projects. Its aim is to rapidly upgrade Pakistan’s infrastructure in order to strengthen its economy and promote closer and more efficient trade links with China.
The corridor involves a significant renovation and expansion of Pakistan’s neglected transport infrastructure, constructing a vast network of roads and railways including a 1,100km motorway between Karachi and Lahore, the country’s two largest cities. It will also involve expanding Pakistan’s railway network to allow for faster rail travel, and eventually connecting it to China via its Southern Xinjiang Railway. In addition, China will invest in national energy infrastructure to alleviate Pakistan’s chronic energy shortages.
Pakistani officials predict it will add up to 2.3 million jobs to the national economy by 2030. In addition, reliable land access to the port of Gwadar will provide China with a significantly shorter maritime route to Europe and the Middle East—which is particularly important for its access to oil.
Strength in diversity
This diversity of routes is one of the strengths of the Belt & Road Initiative. These parallel networks of roads and railways considerably strengthens trade across Eurasia, and allows countries along the routes to avoid unfavourable trade regimes, sanctions and uncooperative partners, as well as potentially disruptive political upheaval and natural disaster. For instance, Russian sanctions against EU agricultural goods may mean European countries will prefer to use the southern route through Turkey to export their products to China.
As a result, the Belt & Road is one of the most exciting ongoing stories in the intermodal and shipping container industries. With significant consequences for global overland trade as well as the maritime sector, it is becoming vital to understand its implications.
Intermodal Asia 2020 will host a forum dedicated to the projects uniting trade between China, Asia and the world as part of the Belt & Road Initiative. Divided into two segments, part one will feature senior representatives from ports and terminals, while part two will provide a discussion on road and rail freight and the strategies helping countries across Asia and Africa develop their infrastructure.