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A new line will bypass its best friend, Russia
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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 growing exports to Europe, the People’s Republic would rather not depend on its best friend.
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Map: The Economist
In December work officially began on a multi-billion-dollar railway through Kyrgyzstan and Uzbekistan that will link China more closely with 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 America). Crises from Ukraine to the Red Sea have dealt a blow to central components of China’s plans for better-connected global infrastructure and are forcing China to reconfigure its trade routes. Whether it would help China in a future war with America over, say, Taiwan, is more doubtful.
Talk of building the new line began nearly 30 years ago. But resolve to get it done firmed up only after Russia invaded Ukraine in February 2022. Before that, China’s main rail links with Europe ran north through Russia, often via Kazakhstan. The war made that route difficult: European shippers, concerned 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.
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Freight companies began to avoid routes through Russia. They started diverting 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 that of Kyrgyzstan and Uzbekistan would offer another, even shorter Middle Corridor route to Europe. In June 2024 the Chinese government reached agreement with the two countries on how to proceed with the 520km line.
The Chinese are not cold-shouldering Russian leaders. They see Russia as a key component of their global infrastructure-building Belt and Road Initiative. This was 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 China’s 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, but that 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 made China all the more determined to diversify. “The Houthi attacks showed China that maritime routes are still risky,” says Yunis Sharifli of the China Global South Project, a research outfit. Trains could never replace ships, one of which can carry hundreds of times more containers than a train.Despite the Houthis, sending most goods by sea remains most cost-effective: some vessels have avoided the risk of missile- or drone-strikes by going around the Cape of Good Hope (though it takes a couple of weeks longer). Even so, China wants to hedge.
It will take several years to build the line through Kyrgyzstan and Uzbekistan. (Kyrgyzstan says China is providing a loan of $2.35bn.) In the meantime, China and other countries—not including Russia—have been working on other improvements to the Middle Corridor.
Though the Middle Corridor offers a shorter link between China and Europe than the northern route via Russia, it takes longer to traverse. Several more borders must be crossed; so must the Caspian Sea and, optionally, the Black Sea, where containers need to be loaded onto ships. Since Russia’s invasion of Ukraine, China has begun to push for the route to be upgraded.
The topic featured prominently at the first China-Central Asia summit, held in May 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 China’s 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, as well as 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 about $75bn in 2021, before falling 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 to carry the freight across. The route could avoid the sea by passing through Iran, but that would entail political risks similar to passage through Russia.
Though Turkey offers a relatively secure route, its infrastructure needs a lot of work to sustain large volumes of freight traffic. The country has been arranging finance for a new railway over the Bosporus, and Turkish officials say they would welcome Chinese involvement.
Ties have been strained by Turkey’s welcoming of tens of thousands of Uyghur refugees from China’s western region of Xinjiang. But China, seeing Turkey as a gateway to European markets, appears eager not to let those differences get in the way.
Despite its misgivings about China’s industrial policies and growing political assertiveness, the EU is also keen for rail links with Central Asia and China to be improved. It says the corridor through Turkey matches the goals of its own infrastructure-building scheme, known as Global Gateway.
The European Commission’s president, Ursula von der Leyen, attended the first EU summit with Central Asian leaders in Uzbekistan on April 3rd and 4th. Ways to develop the trans-Caspian route featured prominently in her talks, including the possibility of billions of dollars of European investment. Trains have more to carry from China to Europe than the other way around. Eastbound containers are sometimes empty. But the EU is determined to bypass Russia and, not least, has eyes on Central Asia’s raw materials, including rare earths and uranium.
Europe and China may agree on the need to bypass 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. ■
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Источник: www.economist.com