Via The Economist, a look at China’s reconfiguration of its rail links to secure exports to Europe:
China says its ties with Russia involve “back-to-back, shoulder-to-shoulder” co-operation. Yet when it comes to concerns about security for its massive exports to Europe, the People’s Republic would rather not depend on its best friend.
In December work officially began on a multi-billion-dollar railway through Kyrgyzstan and Uzbekistan that will link China more closely to Europe, bypassing Russia (see map). The connection could become all the more important for China should President Trump’s escalating trade war squeeze its markets in America; China already sells more to the eu than to the United States. Crises from Ukraine to the Red Sea have dealt a blow to central parts of China’s plans for better-connected global infrastructure and are forcing it to reconfigure its trade routes. Whether the railway would help in a war with America over, say, Taiwan is more doubtful.
Talk of building the new line began 30 years ago. But its determination to get it done firmed up only after Russia invaded Ukraine in 2022. Before that, China’s main rail links with Europe ran through Russia, often via Kazakhstan. The war made that route tricky: European shippers, worried about safety and rising insurance costs, began to avoid it. Sanctions battered Russia’s ability to maintain lines through its territory, adding to journey times.
Freight companies, seeking to avoid routes through Russia, diverted them towards Kazakhstan’s ports on the Caspian Sea, on the “trans-Caspian” or southern route, also known as the “Middle Corridor”. Linking China’s train network with those of Kyrgyzstan and Uzbekistan would offer another, even shorter Middle Corridor route to Europe. In June China reached agreements with them on how to proceed with the 520km line.
The Chinese are not cold-shouldering Russia. They see it as a key component of their global infrastructure-building Belt and Road Initiative, launched by Xi Jinping in 2013, a year after he became China’s leader. One motive was to boost rail links with Central Asia and Russia for security reasons: they could supply energy and raw materials in the event of war with America. Now China’s enthusiasm for the Middle Corridor is driven by trade: exports fuel growth, which has been faltering.
Chart: The Economist
Routes through Russia remain vital arteries for Chinese goods, including machinery for Russian weapons manufacturers. Since the invasion of Ukraine, rail-borne trade between China and Europe has faltered, even as trade between China and Russia has soared (See chart 1). But alternative rail connections with Europe offer faster access to the continent’s markets for time-sensitive goods, a chance to boost Chinese influence in countries along the way, and more resilient potential supply lines.
Since late 2023, attacks by Houthi militants on shipping in the Red Sea, a vital conduit for Chinese trade with Europe, have increased China’s desire to diversify. “The Houthi attacks showed China that maritime routes are still risky,” says Yunis Sharifli of the China Global South Project, an independent research outfit. Trains could never replace ships, one of which can carry many times more containers. Sending most goods by sea remains much cheaper: some vessels have avoided the risk of missile or drone strikes by going around the Cape of Good Hope. Even so, China wants to hedge.
It will take several years to build the new line. (Kyrgyzstan says China is providing a loan of $2.35bn.) In the meantime, China and other countries—but not Russia—have been working on other improvements to the Middle Corridor.
Though it offers a shorter link between China and Europe, it takes longer. More borders must be crossed. So must the Caspian Sea, where containers must be loaded onto ships, and optionally the Black Sea. Since the war in Ukraine, China has pushed for the route to be upgraded.
The topic featured prominently at the first China-Central Asia summit, held in 2023 in the Chinese city of Xi’an. “The Middle Corridor is no longer merely a supplementary option but is gradually becoming a major transportation channel,” wrote two scholars from Lanzhou University in a journal published last year by the China Institutes of Contemporary International Relations, an arm of the Ministry of State Security. They say its “strategic position” has grown “conspicuously” since 2022.
The Middle Corridor is still “35% more expensive”, says Korcan Tugrul, managing director in Istanbul of Rhenus, a German logistics firm. But it is picking up more of the China-Europe traffic. Port improvements on the Caspian, upgrades on the route between Azerbaijan and Turkey and quicker customs procedures have helped to cut journey times from 38-53 days to 18-23 days, say the Chinese scholars. That is still longer than the Russian route (less than 14 days, if all goes smoothly), but much more competitive than before. The journey by sea takes about a month.
Chart: The Economist
Between 2021 and 2024 the annual volume of international freight sent along the Caspian route more than doubled to 55,000 twenty-foot-equivalent units (TEUs), the standard measure of container size (see chart 2). That is only about as much as two or three ultra-large container ships can carry. But the value of rail-borne China-Europe trade by all routes is large. It grew from $8bn in 2016 to $57bn in 2023, according to Chinese data. Total China-EU trade was worth €518bn ($568bn) last year.
Bottlenecks remain. One is at the Caspian, where there is a shortage of ships. The route could avoid that sea by passing through Iran, but that would entail political risks like those in Russia. Though Turkey offers a relatively secure route, its infrastructure needs a lot of work to sustain high volumes of freight traffic. It is arranging finance for a new railway across the Bosporus. Turkish officials say they would welcome Chinese involvement in it. Turkey’s ties with China have been strained by its welcoming many thousands of Uyghurs from China’s Xinjiang region. But China, seeing it as a gateway to European markets, is keen not to let that get in the way.
The EU is also keen for rail links with Central Asia and China to improve, despite its misgivings about China’s industrial policies and growing political assertiveness. It says the corridor through Turkey matches the goals of its own infrastructure-building scheme, Global Gateway.
The European Commission’s president, Ursula von der Leyen, attended the first EU summit with Central Asian leaders in Uzbekistan on April 4th. Ways to develop the trans-Caspian route featured prominently in her talks, including the possibility of billions of dollars of European investment. The EU also wants to bypass Russia and has eyes on Central Asia’s raw materials, including rare earths and uranium.
Europe and China may agree on the need to circumvent Russia, but they disagree on much else. For Europe, Russia is an existential threat; for China it remains an ally. For all their tensions with America, Europeans are likely to abide by an American effort to blockade China, should war in Asia break out. Meanwhile, China’s most essential supplies—oil and gas from Russia and Central Asia—are now better secured. That helps to explain why, ahead of a visit by Mr Xi to Moscow in May, China’s foreign minister, Wang Yi, this month called Russia and China “forever friends and never enemies”. The freight may be diverted but the political relationship remains firmly on track.
This entry was posted on Sunday, April 20th, 2025 at 7:22 am and is filed under China, Kazakhstan, Russia. You can follow any responses to this entry through the RSS 2.0 feed.
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