Last week, a New Railway route connecting China with Europe has been inaugurated while the number of freight trains between Zhengzhou and EU has almost doubled in the first half of this year. How is this so important for the BRI and the Eurasia Region?
China and Europe are finally connected. Every day, freight trains leave the Middle Kingdom to reach Europe and the other way round in what is now called the New Silk Road.
Just last week, Chengdu transport authorities announced the launch of a new railway route connecting the Sichuan province to Budapest in Hungary while the Chongqing municipality is witnessing an impressive growth of the number of freight train trips to EU in the last six months.
But Chengdu and Chongqing are just two of the first Chinese cities linked to Europe through the China-Europe rail routes, whose rail service is considered a significant part of the Belt & Road Initiative (BRI). A massive infrastructure project expected to boost trade between the two continents.
The growth of the relationship between the Dragon and the Old Continent is, indeed, confirmed by the number of cargo trains moving between the two sides. Zhengzhou Customs, a transportation hub in the province of Henan, recently declared the number of freight trains between Zhengzhou in central China and Europe has almost doubled in the first half of this year.
Data from the Zhengzhou Customs, in particular, talk about the supervision of 539 China-Europe freight trains in the first six months, an increase of 90.5% compared the previous year. These trains carried 230,000 tons of goods worth $1.57 billion.
According to Yuxinou Logistics Co Ltd., instead, freight trains between Chongqing municipality in Southwest China and the EU reached a total of 3,827 trips since the first departure. Among them, 812 trips occurred in the first half of 2019 only, up 86.7% year-on-year.
These data say that since January, 301 trains left the Middle Kingdom while 511 were return trips, transporting goods of all kinds such as auto parts, coffee beans, and daily necessities.
“The Belt & Road Initiative is considered the largest infrastructure and investment project in history. It currently involves about 70 countries and around 65% of the world’s population.”
The China-Europe freight train service was launched in 2011 as a significant part of the Belt & Road Initiative proposed by Beijing, and since then, it has grown rapidly.
Zhengzhou, which launched the first such service in July 2013, has become an international transport hub with regular freight train services in over 100 cities in Europe and Central Asia. Over time, preferential tax policies have been adopted to facilitate the service and the city of Zhengzhou also launched a new rail service for cross-border e-commerce in February, which led to the transportation of products worth over $4 million in June.
In 2017, the China Railway Corporation, Beijing’s national rail network operator officially inaugurated a new direct freight train connecting the PRC with the UK. The train travels from Yiwu in Zhejiang Province to the eastern suburbs of London via Kazakhstan, Russia, Belarus, Poland, Germany, Belgium and France.
The new railway line allows trains to travel almost 12,000 km in 17 days, beating deadlines and budgets on both sides. Thanks to this service, the United Kingdom thus became the eighth country to be reached by the service linking China and Europe, and London became the fifteenth city.
Since last year, a new important route is now connecting the People’s Republic with the Wallonia region in Belgium, a country which is not only considered a special gateway to the European market, but that actually represents a real partner for what concerns the development of the BRI.
Indeed, Belgium was the first Western country to provide China with interest-free loans and also the first country to establish an industrial cooperation fund with the PRC. As a result, today, the country is China’s sixth-largest trading partner in the EU, whose bilateral trade volume once exceeded $30 billion.
Therefore, in October 2018, on the occasion of the celebration of the 30th anniversary of the twinning between the Walloon Region and Henan Province, a new cargo train route linking the Belgian city of Liège to Zhengzhou was launched.
The China-Europe freight train for cross-border e-commerce departed from Zhengzhou – the capital of Central China’s Henan Province – on March 2, 2019. As the first of its kind to be used at a regular frequency in Belgium, its inauguration marked a new phase in the development of the relationship between the two provinces. A relationship that has been enhanced by cooperation agreements signed by Wallonia Export-Investment Agency (AWEX) and the Henan Province in support of the “One Belt, One Road” project.
“After 30 years of twinning with this great central province and seeing the evolution of the flow of goods between our two regions, I am delighted to welcome Vice Governor HE on this day and to launch, together, an initiative that will write one of the most beautiful pages of the story between Wallonia and China, from the heart of Europe until the heart of China,” praised Pierre-Yves Jeholet, Vice-President of the Walloon Government.”
The rail freight connection is just one of the many initiatives launched in the area to connect the European country with the Middle Kingdom and it is complementary to the air link between Zhengzhou and Liège airport, which today represents Belgium’s largest air freight hub and Europe’s 8th-largest cargo airport. For its part, the Walloon government has invested a lot in building infrastructures fully dedicated to trading and with a strong customs department.
Therefore, many companies already choose Liège Airport to enter the EU market over other destinations.
Nevertheless, the Zhengzhou-Liège line is not the last freight train route launched in the EU within the BRI project. Last Friday, a new express train connecting China and Europe linked Chengdu and Budapest for the first time, as announced by Chengdu transport authorities.
The freight train, which carries over 30,000 packages for a total value of almost $70.8 million, is expected to take 15 days to arrive in Budapest from the capital of the Southwestern Chinese province of Sichuan.
It is the first connection of its kind linking the two cities. The new itinerary will favor the export of products made in Sichuan to European countries and will boost local foreign trade thanks to its efficiency and lower operating costs.
Thanks to these new railway routes, connecting the PRC with 50 cities in 15 European countries, trade between the two regions has been growing dynamically in the past decade. China is the largest trading nation in the world and one of Europe’s most important trade partners.
Beijing is the European top partner for EU imports, and after the United States, it is the second-largest partner for exports. Commercial exchanges have exceeded $600 billion a year and are expected to reach $1 trillion in 2020.
The occasion is the Belt & Road Initiative, the Chinese massive project to build a mutual global market in the Eurasia region. The idea is to connect Chinese and international markets developing collaboration between the PRC and at least 70 other countries located in an area that accounts for one-third of the world’s GDP.
“Rail transport has become more competitive in speed and cost so much so that new freight train routes between China and Europe are expected to change trade patterns soon, challenging airlines and shipping companies”
For Europe, it represents a sort of “renaissance” of the railways. The first route was inaugurated in 2008 when the first train from Xiangtan in central China arrived in Hamburg, Germany, in 17 days. But since then, technology and speed have improved massively.
Although when the British built the first railway in China in the mid-nineteenth century, the emperor found it “exceedingly special” but useless, today the railways have become the recurring point of China’s trade agreements with other countries.
Today, freight train routes cover more than 11,000 km between China, Kazakhstan, Belarus, Poland, and Germany, unveiling the new face of the Dragon.
The face of a country that is trying to shake off the image of a backward, polluted, and supplier of cheap labour country to be credited instead as a fundamental player in the world economy, re-launching the ancient concept of Eurasia.