Tag Archives: Silk Road

First ‘Silk Road’ train arrives in Tehran from China

Tehran (AFP) – The first train to connect China and Iran arrived in Tehran on Monday loaded with Chinese goods, reviving the ancient Silk Road, the Iranian railway company said.

The train, carrying 32 containers of commercial products from eastern Zhejiang province, took 14 days to make the 9,500-kilometre (5,900-mile) journey through Kazakstan and Turkmenistan.

“The arrival of this train in less than 14 days is unprecedented,” said the head of the Iranian railway company, Mohsen Pourseyed Aqayi.

“The revival of the Silk Road is crucial for the countries on its route,” he said at a ceremony at Tehran’s rail station attended by the ambassadors of China and Turkmenistan.

The journey was 30 days shorter than the sea voyage from Shanghai to the Iranian port of Bandar Abbas, according to Aqayi.

The railway will not stop in Tehran “as we are planning to extend the railway to Europe in future,” generating more income for Iran from passing trains, he added.

Read more » Yahoo News
See more » http://news.yahoo.com/first-silk-road-train-arrives-tehran-china-134703954.html

China’s Billion-Dollar Gateway To The Subcontinent: Pakistan May Be Opening A Door It Cannot Close

By Mahwish Chowdhary

Despite decades of mismanagement and a feeble socioeconomic infrastructure, one thing Pakistan benefits from is a strategic location—and China is taking notice.

More than 70% of China’s trade and energy imports travel through the Indian Ocean and the pirate-swarmed Strait of Malacca, both patrolled by the United States and Indian navies. But this possible chokepoint is a security issue for China, particularly in terms of oil (40% of its general consumption passes through the strait). Any sort of conflict could cut off the country’s energy supply, and ships would need to travel an extra 500 miles to avoid the strait, currently the fastest route from the Indian Ocean to the Pacific. China, aware of this vulnerability, is looking to Pakistan to provide a shorter and safer alternative.

The China-Pakistan Economic Corridor (CPEC), first proposed in 2013, is a massive project of rail links, special economic zones, dry ports and other infrastructure projects across Pakistan allowing for direct access to the Indian Ocean. It would connect Gwadar to Kashgar, a major trading hub in China, and abbreviate the current route to the Persian Gulf by more than 10,000 kilometers. Instead of 45 days, it would take China a mere 10 days to get its imports—all while avoiding any potentially contested channels near Taiwan, Vietnam, the Philippines, Indonesia and India, and eventually lowering shipping costs.

The CPEC would also provide China with an entry point to the Arabian Gulf, thus widening its geopolitical influence and possibly its military presence in the region. (Some Indian intellectuals suspect the Gwadar port will serve as a Chinese naval facility.) And it only comes at a cost of about $40 billion.

This isn’t the only investment China has planned in Pakistan. In fact, the money going to the country is double what Pakistan has received in foreign direct investment since 2008, and larger than any shape of assistance from the U.S. The list below (including CPEC) is just a snapshot of upcoming projects, likely funded by the Bank of China, the Export-Import Bank of China and the proposed Asian Infrastructure Development Bank:

  • $3.7 billion for a Karachi-Lahore-Peshawar rail line
  • $2.8 billion for developing four coal-fired stations with a capacity of 1,980 megawatts in Thar (Sindh)
  • $2.2 billion for two coal-mining blocks in Thar (Sindh)
  • $2 billion to build a natural gas pipeline between Gwadar and Nawabshah, then connecting to Iran
  • $2 billion to develop coal-fired generation plants at Port Qasim Karachi
  • $1.6 billion for a hydropower project in Karot
  • $1.2 billion for a solar power park in Bahawalpur
  • $930 million to link the Karakoram highway to Islamabad and Havelien
  • $260 million for a 100 megawatt wind farm in Jhimpir
  • $230 million to build the Gwadar International Airport

It is all part of China’s quest for influence throughout the continent via aid and investment. After decades of shying away from aggressive foreign policy moves, China now wants to play a much bigger regional role and is pushing plans for interconnected infrastructure networks to better link its economy with rest of Asia, the Middle East, Africa and Europe. Think of it as the new Silk Road.

Continue reading China’s Billion-Dollar Gateway To The Subcontinent: Pakistan May Be Opening A Door It Cannot Close

First Silk Road rail cargo enters Iran

The first cargo carried on the Silk Road railway has entered Iran from the Central Asian nation of Kazakhstan, local officials said.

The cargo, including 45 freight wagons, crossed the Incha-Burun border with Turkmenistan into Iran, local officials in the Golestan province said.

It followed the signing of a document for cooperation between Iranian and Kazakh railway officials, head of the Northeast Railway 2 Mohammad Reza Qorbani said.

In their joint session, the mode of cooperation between Iran, Turkmenistan and Kazakhstan and other countries for transit and rail transportation was discussed.

“At the session, existing infrastructures and potentials of the Islamic Republic of Iran Railways and neighboring countries, Iran’s development plans and active transit corridors passing through Iran were discussed,” Qorbani said.

They also decided to work on developing the Incha-Burun-Bandar Abbas line as the new Silk Road route, he said.

The railway linking Iran to Turkmenistan and Kazakhstan at a length of 926 kilometers was inaugurated last year.

Iran and Central Asian nations have stepped up work on establishing an integrated freight railway network to link Asia to the Persian Gulf, Europe and Africa.

It is part of an ambitious Chinese plan to revive the Silk Road which would require building of a network of roads, railways, ports and airports.

Continue reading First Silk Road rail cargo enters Iran

Russia, China agree to integrate Eurasian Union, Silk Road, sign deals

Russia and China have signed a number of energy, trade and finance deals on Friday aimed at strengthening economic ties. The two countries have multiple mutual projects which “achieved a unity of views on a wide range of issues.”

Russian President Vladimir Putin and Chinese leader Xi Jinping have signed a decree on cooperation in tying the development of the Eurasian Economic Union with the “Silk Road” economic project.

“The integration of the Eurasian Economic Union and Silk Road projects means reaching a new level of partnership and actually implies a common economic space on the continent,” Putin said after the meeting with his Chinese counterpart. President Xi Jinping arrived in Moscow on Friday for the 70th anniversary celebration of the defeat of Nazi Germany in World War II.

China will also invest $5.8 billion in the construction of the Moscow-Kazan High Speed Railway, the Russian President said. The railway is to be extended to China, connecting the two countries through Kazakhstan. It can become part of the route of the new Silk Road project, which is aimed at tying China with European and Middle Eastern markets. The total cost of the Moscow-Kazan high speed railroad project is $21.4 billion.

Russia’s largest gas producer Gazprom and China’s National Petroleum Corporation (CNPC) signed an agreement on the basic conditions of gas supplies from Russia to China through the Western route. The two companies decided to extend a strategic partnership agreement for five years, according to Gazprom’s CEO Aleksey Miller. The agreement provides for the construction of the first, second and third Altai pipelines.

Sberbank – Russia’s biggest lender – has signed a facility agreement with China’s Development Bank in the amount of $966 million. They also agreed on financing an industrial project by Sberbank to the tune of $256.4 million.

Read more » http://rt.com/business/256877-russia-china-deals-cooperation/#.VU02RKPqB40.facebook

CHINA’S STRATEGIC SHIFT TOWARD THE REGION OF THE FOUR SEAS: THE MIDDLE KINGDOM ARRIVES IN THE MIDDLE EAST

 

BY

Since the Arab Spring, China has been quietly asserting its influence and fortifying its foothold in the Middle East, while the United States pivots to the Asia Pacific after a decade of war.  It is aligning with states that have problematic relations with the West and are also geo-strategically placed on the littoral of the “Four Seas”–the Caspian Sea, Black Sea, Mediterranean Sea, and Arabian Sea/Persian Gulf. Paradoxically, the U.S. eastward pivot is matched by the resurgent Middle Kingdom’s westward pivot across its new Silk Road, and threatens to outflank the citadel of American geo-strategies in the region.

INTRODUCTION: CHINA’S STRATEGIC INTERESTS IN THE MIDDLE EAST

Energy Security

China’s interest in the Middle East is first and foremost energy-driven.[1] In 1993, when it became a net oil importer for the first time, Beijing embarked on a “go out” (zhouchuqu) policy to procure energy assets abroad to feed its growing economy.  The legitimacy of the Chinese Communist Party (CCP) rests on continued economic growth and delivering a rising standard of living for the Chinese population.  As a corollary, China is also concerned about security of energy supply lines and Sea Lines of Communication (SLOCS).  Because the United States is considered its main opponent in the international system, China is wary of U.S. naval dominance and the risk of choking China’s energy supply through the Malacca Straits should hostilities break out over Taiwan.  This is referred to as the “Malacca Dilemma,” where 80 percent of China’s oil imports traverse this chokepoint that is vulnerable to piracy and U.S. blockade.  Indeed, given increasing tension in the three flash points of the South China Sea, the Korean Peninsula and the Taiwan Straits, this concern is even more pressing for the Chinese leadership.

Market Access

The Middle East is also a strategic logistics and trade hub for China’s exports and market access in Europe and Africa. China understands the importance of having strong economic foundations for military power and sees that continued market access for their exports to fuel China’s economy would build up their war chest to further underwrite military modernization.[2]  The EU is currently China’s largest trading partner ahead of the United States.[3] Moreover, China also has vast interests on the African continent–both via infrastructure projects and long-term energy supply contracts.  More than 1 million Chinese are in Africa (up from about 100,000 in the early 2000s), with trade at $120 billion in 2011.[4] In 2009, China overtook the United States to become Africa’s number one trading partner.[5]  As such, the Middle East is a strategic region that connects Europe, Africa, and Asia markets.

Thus, given the Middle East’s location as a trade hub linking the three continents, a vital region for market access, and site of vast energy reserves to fuel China’s continued economic growth, the CCP deems the Middle East as a high priority on its foreign policy agenda. As the United States “pivots” towards Asia, China will naturally seek strategic depth in areas that were once dominated by the United States and its Western allies.  This is even more so in the aftermath of the Arab Spring.

Continue reading CHINA’S STRATEGIC SHIFT TOWARD THE REGION OF THE FOUR SEAS: THE MIDDLE KINGDOM ARRIVES IN THE MIDDLE EAST

China tables railway project linking to Pakistan

By Dawn.com

A research study regarding an international railway project linking Pakistan with China’s Xinjiang province through Azad Jammu and Kashmir has been commissioned by China, according to a Times of India and China Daily report.

The rail link funded primarily by China would connect Xinjiang’s western city Kashgar to the Gwadar deep sea port of Pakistan, said state-run China Daily while quoting the director of Xinjiang’s regional development and reform commission, Zhang Chunlin on the subject.

“The 1,800-km China-Pakistan railway is planned to also pass through Pakistan’s capital of Islamabad and Karachi,” Zhang had said at the two-day International Seminar on the Silk Road Economic Belt being held in Urumqi, Xinjiang’s capital.

Due to geo-strategic implications the project would be hard to proceed with, as it would be a requisite for the rail project to run through the Pamir Plateau and Karakoram Mountains. Although once completed it would emerge as one of the most strategically beneficial transportation infrastructures on the China-Pakistan economic corridor, opined Zhang.

“Although the cost of constructing the railway is expected to be high due to the hostile environment and complicated geographic conditions, the study of the project has already been started,” he added.

President Xi Jinping had also spoken in favour of rejuvenating conventional trade routes connecting China, Central Asia and Europe.

A multi-billion deal has already been signed to initiate work on an Economic Corridor linking Kashgar with the port city of Gwadar through AJK. It also implied revamping the already in place Karakoram road link despite the cynicism expressed by political analysts in China.

The project exhibits tremendous potential as it would enable China to run a port alongside Gulf of Oman which is deemed to be a hub for activities relating to oil tankers.

India however has objected to the project citing concerns that the said route would involve a disputed territory. Pakistan had given the operational key of the port city of Gwadar to Beijing back in 2013, a move deeply detested by India as it alleged it could provide a chance to China to monitor its port activities.

Courtesy: DAWN
http://www.dawn.com/news/1116104/china-tables-railway-project-linking-to-pakistan

Hauling New Treasure Along the Silk Road

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AZAMAT KULYENOV, a 26-year-old train driver, slid the black-knobbed throttle forward, and the 1,800-ton express freight train, nearly a half-mile long, began rolling west across the vast, deserted grasslands of eastern Kazakhstan, leaving the Chinese border behind.

Dispatchers in the Kazakh border town of Dostyk gave this train priority over all other traffic, including passenger trains. Specially trained guards rode on board. Later in the trip, as the train traveled across desolate Eurasian steppes, guards toting AK-47 military assault rifles boarded the locomotive to keep watch for bandits who might try to drive alongside and rob the train. Sometimes, the guards would even sit on top of the steel shipping containers.

The train roughly follows the fabled Silk Road, the ancient route linking China and Europe that was used to transport spices, gems and, of course, silks before falling into disuse six centuries ago. Now the overland route is being resurrected for a new precious cargo: several million laptop computers and accessories made each year in China and bound for customers in European cities like London, Paris, Berlin and Rome.

Hewlett-Packard, the Silicon Valley electronics company, has pioneered the revival of a route famous in the West since the Roman Empire. For the last two years, the company has shipped laptops and accessories to stores in Europe with increasing frequency aboard express trains that cross Central Asia at a clip of 50 miles an hour. Initially an experiment run in summer months, H.P. is now dispatching trains on the nearly 7,000-mile route at least once a week, and up to three times a week when demand warrants. H.P. plans to ship by rail throughout the coming winter, having taken elaborate measures to protect the cargo from temperatures that can drop to 40 degrees below zero.

Though the route still accounts for just a small fraction of manufacturers’ overall shipments from China to Europe, other companies are starting to follow H.P.’s example. Chinese authorities announced on Wednesday the first of six long freight trains this year from Zhengzhou, a manufacturing center in central China, to Hamburg, Germany, following much the same route across western China, Kazakhstan, Russia, Belarus and Poland as the H.P. trains. The authorities said they planned 50 trains on the route next year, hauling $1 billion worth of goods; the first train this month is carrying $1.5 million worth of tires, shoes and clothes, while the trains are to bring back German electronics, construction machinery, vehicles, auto parts and medical equipment.

DHL announced on June 20 that it had begun weekly express freight train service from Chengdu in western China across Kazakhstan and ultimately to Poland. Some of H.P.’s rivals in the electronics industry are in various stages of starting to use the route for exports from China, freight executives said.

The Silk Road was never a single route, but a web of paths taken by caravans of camels and horses that began around 120 B.C., when Xi’an in west-central China — best known for its terra cotta warriors — was China’s capital. The caravans started across the deserts of western China, traveled through the mountain ranges along China’s western borders with what are now Kazakhstan and Kyrgyzstan and then journeyed across the sparsely populated steppes of Central Asia to the Caspian Sea and beyond.

These routes flourished through the Dark Ages and the early medieval period in Europe. But as maritime navigation expanded in the 1300s and 1400s, and as China’s political center shifted east to Beijing, China’s economic activity also moved toward the coast.

Today, the economic geography is changing again. Labor costs in China’s eastern cities have surged in the last decade, so manufacturers are trying to reduce costs by moving production west to the nation’s interior. Trucking products from the new inland factories to coastal ports is costly and slow. High oil prices have made airfreight exorbitantly expensive and prompted the world’s container shipping lines to reduce sharply the speed of their vessels.

Slow steaming cuts oil consumption, but the resulting delays have infuriated shippers of high-value electronics goods like H.P’s. Such delays drive up their costs and make it harder to respond quickly to changes in consumer demand in distant markets.

Read more » The New York Times
http://www.nytimes.com/2013/07/21/business/global/hauling-new-treasure-along-the-silk-road.html?smid=fb-share&_r=0