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Transport Strategy of China for Eurasia

After the dissolution of the USSR, China has been developing its transport and energy strategy for the Eurasian region. The process intensified in the early 2000s when the relations of China with its Central Asian counterparts were finally institutionalized and the geopolitical competition in the region aggravated after the US military bases were deployed on the territory of Eurasia to provide for the NATO troops in Afghanistan.

When the fifth generation of the Chinese lead ers came to power headed by Chairman Xi Jinping, the strategic policy of Beijing in regards to transport and energy issues entered its new stage. The initiative of the Silk Road Economic Belt signified the shift to a more systemic approach that

focused primarily on transportation and logistics. I presume that China’s main goals in this respect are the following:

  • to build the modern infrastructure to transport the energy resources from Eurasia to China;
  • to build the transport corridor to export Chinese goods to the European markets;
  • to build the land transport route conncted with Iran that is one of the major partner of China in terms of the energy cooperation in order to diversify the energy supply routes;
  • to consolidate its positions in Eurasia;
  • to diversify the land transport routes to Europe.

It is very important to understand the external and internal reasons why China is willing to invest so much into the infrastructure of Eurasia:

  • to create the belt of friendly nations along its borders;
  • to solve the problem of economic development of the Xinjiang Uyghur Autonomous Region (XUAR) that is lagging behind the mainland and specially the costal provinces of China. The economic and social underdevelopment of XUAR is considered as encouraging extremism and terrorism in the region;
  • to win the geopolitical competition and prevent the other major powers from pursuing anti-China policies;
  • to ensure uninterrupted energy supply given increasing destabilization in the Asia-Pacific.

Given the factors above, it would be sensible to argue that geopolitical considerations are the main reason for intensified economic policies of

China. Beijing is obviously interested in yield from its investments. Yet, the question arises about the extend of its interest. Here are a number of cases.

According to Chinese experts, the containers have been loaded to be delivered from Jiangsu Province. Interestingly, the shipping by sea costs about $4,000 while the cost of the land transportation may reach $10,000. The losses of $5,000 are covered by central government. The only possible conclusion that can be made here is that China’s interest in the transportation across Eurasia is so high that it is even willing to subsidize. The estimated cost reduction after the comprehensive program of modernization of the land transport infrastructure is $1.5-2,000. It is still more expensive than the sea routes. Therefore, the question about the feasibility of the land transportation remains.

Thus, projects on the transportation of energy resources are of particular importance as they the only option for the land routes to achieve profitability. The routes for energy supply are vital for China because of instability in the Malay Strait, tensions with Japan and Taiwan, geopolitical rivalry of the United States and instability in the straits of the Middle East. For example, the current situation in Yemen jeopardizes the safety of the Bab el-Mandeb Strait.

Then again, from China’s point of view, the land routs may become the real competition to the maritime routes only if they reach Iran. Without Iran, these routes may only help to meet the demand in the western provinces of China. This is already something given the situation in Xinjiang. Therefore, there are a number of projects of particular importance within the New Silk Road. Some of them are discussed below

The High-speed Railway Moscow-Beijing is being negotiated. The estimated time is only two days. The route is to pass through Kazakhstan and to link a number of cities. For example, the travel from Astana to Almaty will take 3.5-4 hours and it will take less than a day to travel from Almaty to Moscow. The Chinese party has almost bult the Beijing-Urumqi railway. It is interesting that the Chinese have agreed to invest the Russian segment stretching from Moscow to Kazan, the constructing of which was suspended due to the financial problems.

The Kazakhstan segment of the railway shall connect Almaty with Astana. The construction of the independent branch was shelved after it had been considered extremely costly and unprofit able by JSC Kazakhstan Temir Zholy since the passenger traffic between the two cities is not intensive enough. The international framework, however, have resumed the interests in the project that, if successful, will enable passengers to get from Almaty to Moscow and to Beijing by train in less than a day and to Astana and Urumqi just in few hours.

The Transcontinental Corridor Western Europe–Western China is vitally important for the landlocked Kazakhstan. Moreover, there is a need for building the branch in some regions, particularly to Uralsk. That would solve many transportation issues in West Kazakhstan. Most importantly, it would mean the access to Samara agglomeration.

The railway have been launched from Chongqing in Southwest China to the Alashankou station in Xinjiang then through the territory of Kazakhstan, Russia, Belarus, and Poland to terminate in the German city of Duisburg. The total travel time is estimated at about 16 days, which suggests that this route is more competitive compared to the historically known Chinese Eastern Railway (CER) as it is 1,000 km shorter.

The Railway Beijing–London shall begin in Beijing, run through China to Khorgos then via the newly constructed Zhetygen branch in Kazakhstan to the Zhezkazgan-Beineu*, which is under construction, and from there to the port of Aktau. The Chinese segment has already been built and the Kazakhstan segment is to be completed in the nearest future due to the special attention to the project paid by Kazakhstan's leadership.

The next branch shall connect Baku to Tbilisi and then to the Turkish city of Kars. However, the troubles in August 2008 interrupted the realization of the project. In addition, the Georgian press and some parts of elite are openly against the new road that is beneficial first and foremost

for Azerbaijan because it enables them to bypass Armenia. At the same time, the Georgian government, being interested in the project, provides its territory and has borrowed a very large sum to ensure its successful realization.

Next, the railway goes through Turkey mostly due to China’s investment amounting to $30 billion. The high-speed railway will connect the western and the eastern ends of Turkey. The agreement was reached during the visit of Prime Minister Erdogan to China. The launch of the railway is scheduled in 2023. The entire travel though Turkey will take eight hours instead of the current month. The Marmaray railway tunnel provides the access to the European railway network.

The Railroad China-Kyrgyzstan–Uzbekistan will connect the Chinese railways with Uzbekistan and beyond through Afghanistan. Then one branch shall to go Iran and the Middle East. The other shall be joined with the Turkey-Europe railway network mentioned earlier.

Apart from the Beijin-London Railway, the Beineu is an important point for numerous prospective routes.

Xi Jinping, being in Tashkent and Bishkek, reminded of the long history of the railways projects that have not been realized. Despite the years of negotiations, the willingness of the Chinese side remains. The planned route will reduce the time of transportation considerably. Importantly, the gauge will meet the European standard of 1,435 mm, as China insisted, while the common standard in Central Asia since the Soviet times is1,520 mm.

The project, however, is facing some obstacles. Last year, President Atambayev made a statement that Kyrgyzstan did not consider the railway to be in the interest of his country in economic terms as it was only beneficial for China and Uzbekistan. President Atambayev sent a clear signal to China. As the major issue for the project was its funding, Kyrgyzstan considerered foreign loans including those from the Chinese Eximbank. However, Kyrgyzstan’s substantial external debt and the cost of the Kyrgyz section that exceeds $ 2 billion may encourage China to build the railway in exchange for a mineral deposit in Kyrguzstan. The reaction of the public to the speculation about the future deal in Kyrgyzstan was very negative. The government was quick to deny any allegations.

The political tensions of Uzbekistan and Kyrgyzstan impact the prospects of the Chinese- Kyrgyz-Uzbek railway. It took years to agree about the exact route of the railway. Tashkent insisted on the Irkeshtam crossing point on the Sino-Kyrgyz border. The choice was made in favor of the Torugart on the border between China and Kyrgyzstan. The estimated length of the railway line is about 268 kilometers. It will connect the Chinese city of Kashgar with Toru- gart, the Fergana Valley, Uzgen and Kara-Suu in Osh region to terminate in Andijan.

Tashkent is interested in Kashgar-Andijan route as the Uz-Daewoo auto plant, located in Andijan, receives about 80% of the components for from South Korea.

The Railroad China-Kyrgyzstan-Tajikistan- Afghanistan Iran was proposed by Dushanbe to overcome its isolation and the issues arising from the difficult relations and frequent transport and energy disputes with Uzbekistan. Iran was interested in the project and willing to invest in the Kyrgyz section of the railway. The TransAfghan railway, to which China could join, may be also included into the network.

On March 20, 2013, in Ashgabat, Presidents Berdimuhamedov, Rakhmon and Karzai signed the memorandum of understanding between Turkmenistan, Afghanistan and Tajikistan on the construction of the Trans-Afghan Railway. However, the difficult military and political situation

in Afghanistan makes the success of transport projects across Afghanistan and Pakistan quite questionable.

The project of Silk Road proposed by China was responded quite enthusiastically in the Caspian Region. For example, Kazakhstan signed the agreement with the authorities of the city of Lianyungang in Jiangsu Province of East China on construction of the Kazakhstan terminal to access the markets in Japan, South Korea and Southeast Asian. Therefore, Astana considers the project to be of strategic importance within the comprehensive mearures that are being taken to realize the transport potential of the country.

The Transport and Logistics Hub is another important element of the New Silk Road for Kazakhstan. The project is implemented by the JSC “NC” Kazakhstan Temir Zholy in Western Kazakhstan with the ultimate goal being to expand the seaport of Aktau and build a logistics center in Aktobe to make them the western gate to Kazakhstan from the Caspian Region and Europe. Iran and China have expressed interest in establishing a regional transport corridor that would link the commercial and industrial area of the Anzali port in Iran to Aktau in Kazakhstan and to the Chinese Xinjiang.

Finally, the Railroad China-Kazakhstan- Turkmenistan-Iran is being constructed to connect China with the Persian Gulf through Kazakhstan. The Turkmen-Iran segment is due in 2014.

China’s comprehensive transport strategy in Eurasia is successfully pursued via bilateral and multilateral formats, for example the Shanghai Cooperation Organization. The SCO adopted the agreement stipulating for creation of the favorable conditions for international road transport. Additionally, the transport ministers of SCO members, meeting on November 15, 2013 in Tashkent, agreed to pay special attention to development of transport infrastructure, in particular, the implementation of the railway projects.

To conclude, successful implementation of the transport strategy of China in the post-Soviet space will make the impact of geopolitical scale on the entire Eurasian continent. Development of new routes will change significantly the economic structure of the region and the continent beyond. On the one hand, it will create a new system of economic relations between Asia and Europe, in which the Eurasian region could take the key role of a transcontinental bridge. On the other hand, the regional balance may change as well and that would increase the competition among the major global powers for the influence in the region.

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