Seven key projects that will define China’s One Belt, One Road initiative

The Yiwu to Madrid Rail Route

This new rail route opened a few years ago amid great excitement, transporting Chinese goods from the trading entrepôt of Yiwu in Eastern China to the Spanish capital in the far West of Europe. The route takes two weeks, much quicker than the equivalent by sea and it was also a tangible sign that a new Chinese inspired Silk Road era had dawned.

Unfortunately the reality was a little more complex, while the rail route is twice the speed of container vessel, it is also twice as expensive, so only really suitable for goods which need to be dispatched rapidly. Many Spanish exporters complained that their bottles of olive oil were cracking in the extremes of cold the train experienced as it travelled through Central Asia where such extremes are the norm. The train also has to travel through Kazakhstan, Russia and Belarus all countries with potentially unstable politics that could derail the smooth running of the train by creating onerous bureaucratic delays.

Karot Hydropower Plant

China has deep experience of building and developing dams and hydropower projects and since completing the Three Gorges Dam seven years ago the Chinese government has been encouraging its firms to use this experience overseas. So it is no surprise to learn that Three Gorges Corporation will lead the construction of the Pakistani dam. The USD 1.64 billion project is a big test for Islamabad as its successful completion will ramp up power production in the energy starved country. China’s Silk Road Fund and the World Bank will take an equity stake in the project while the China Development Bank and Export Import Bank will provide loan finance. If the project goes wrong, major questions will be asked of the Sino-Pakistan alliance.

Central Asian Gas Pipeline

China needs cleaner forms of fuel to reduce the appalling pollution faced by its city dwellers. Although it has made major strides in promoting renewable energy technology there is a long way to go before it can meet its massive power needs through the likes of wind and solar. In the meantime gas is a much less polluting fuel than coal so building a pipeline from a politically isolated but gas rich Turkmenistan across Uzbekistan, Tajikistan and Kyrgyzstan makes sense. For the pipeline to be a success China needs to ensure that the countries in question remain stable so the flow of gas is not interrupted. How China will react to any threats to its pipeline and energy security will be a test of to what extent it will go beyond its borders to protect its national interests.

Khorgos, Western China

This cargo rail hub in the far West of China provides the point where trains have to make gauge changes to adapt to Kazakh (formerly Soviet/Russian) rail tracks (fearing invasion the Tsars adopted a different rail gauge to the rest of Europe and China). The gauge change holds the trains up for an hour, sometimes longer, but this has helped transform an otherwise sleepy town into an increasingly important logistics hub in the fast growing trans-continental overland trade route. The growth of container traffic in remote Khorgos should be an important bellwether for the future state of the New Silk Road

The Urumqi – Tehran Rail Route 

Last year thanks to extensive track laying and repairs a new freight train route from Western China to Tehran was initiated. This was a major achievement in its own right, but now the Chinese are considering an even bolder step. A proposed high speed rail line from Urumqi in Western China to Teheran via Almaty, Bishkek and Tashkent would transform relations between the two countries as well as the Central Asian states in between– where most train tracks point towards Moscow for historical reasons. The rail route would also help shift Central Asia and Iran towards Beijing’s political orbit.

Rebuilding the Karakorum Highway

The Karakoram Highway connects Pakistan with Western China, the route is the highest paved road in the world and it winds its way through the Khunjerab Pass at a height of over 4,500 metres. The original construction project completed in the late 1970s cost over 1000 lives due to the dangerous conditions experienced this remote and treacherous part of the world.

Now the Chinese are lending Pakistan serious amounts of money to rebuild and expand the highway, it forms a key part of a plan to connect the fast growing port of Gwadar in Pakistan with China. The scheme will improve roads across the length of Pakistan and allow freight to come from Europe and the Middle East into China bypassing the Straits of Malacca and South China Sea. One problem with this new land route might be security, provinces of Pakistan like Baluchistan and the regions bordering Afghanistan are prone to separatist and militant violence, which could mean expensive security operations for the Pakistani army.

In the longer term in order to ensure a seamless and rapid route from China to Pakistan a rail route has been mooted as a long term solution. This is currently still in the planning stage, but if feasible could start construction as early as 2018.

The Southern Silk Road

The Bangladesh, China, India and Myanmar (BCIM) economic corridor runs from Kunming in Southern China then west into Central Myanmar before winding into the isolated Indian region of Manipur (which makes up part of a land peninsula at the far east of India), the road continues into Bangladesh before going back into India – ending in the great Eastern city of Kolkata. This 3000 km route is not yet an amazing journey, but the four countries have been working together in an effort to improve the quality of the road to enable more commercial traffic. Once the road has been upgraded, thoughts might turn to a rail link which would really boost intra-country trade.



Categories: China Goes Global, Geo-Economics, Silk Road

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