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Mike Carter, The Observer

China’s new ‘Silk Road’ could jeopardise Siberian trade route

By The Siberian Times reporter
11 November 2014

Fears for plan to stimulate Russian economy via major infrastructure links to Asia and Europe as Beijing announces rival scheme.

Putin has outlined a number of major proposals for growth, including a $47 billion modernisation of the Trans-Siberian Railway, an upgrade of the Baikal-Amur route and developing a northern sea route over the Arctic. Picture: RIA Motor

Plans to stimulate the economy through multi-billion-dollar infrastructure projects in Siberia could be jeopardised by China’s rival move to create a modern 21st century 'Silk Road'.

Russian president Vladimir Putin has outlined a number of major proposals for growth, including a $47 billion modernisation of the Trans-Siberian Railway, an upgrade of the Baikal-Amur route and developing a northern sea route over the Arctic.

Each would provide vital new economic links with Asia and beyond, with cargo traffic on the railways alone expected to grow by 56 million tonnes in 16 years. But the plans could already be under threat from China’s bid to build its own, similar, new infrastructure network to link its markets to three continents.

Officials in Beijing have announced a $16.3 billion fund to finance construction of the mega trading highway that would revive the centuries-old Silk Road route. Chinese president Xi Jinging wants an expansion of railways, roads, shipping routes and pipelines that give a fast connection across Asia to Europe.

In a recent interview in Bali Mr Putin said that 'many Asian countries are very interested' in developing the Russian model for the super trade corridor. But how this would be impacted by China’s intervention is unclear, with Chinese companies already being urged by Beijing to invest in the foreign countries and bid for contracts.

The original Silk Road was made up of a series of ancient routes that linked traders, merchants, pilgrims, soldiers and monks from China and India to the Mediterranean Sea. Extending 4,000 miles, it derives its name from the lucrative trade in Chinese silk that was carried along its route during the Han Dynasty in around 220 AD.

But it perhaps became more famous when the Venetian explorer Marco Polo became the first European to travel the route to China, writing about his tales in a book.

Travel across Silk Road

Travel along the Silk Road in modern times. Picture: Visitchina.ru

The 'New Silk Road' plan is also being described as a national strategy by government officials in Beijing, with a proposed economic cooperation bloc from China to the Mediterranean that revives the old trading route that helped develop early civilisations.

A special three-day event dedicated to the plan was held in Dongguan last week, with representatives from 25 overseas countries located along the proposed route in attendance.

Feng Yujun, a senior researcher at the China Institutes of Contemporary International Relations, said: 'Previously China focused on attracting foreign investment, but now the shift is being made – China is increasingly encouraging its capital to go abroad.'

Xiao Jianguo, from the Chinese Ministry of Foreign Affairs, said the expansion of a maritime route was pivotal to increasing exports. He added: 'The new leadership has attached great importance to the ocean and pinned their hopes of economic development on the sea.

'China is aiming to build a community of common interest, in which China and all its neighbouring countries work together for common development and prosperity.'

However, Russia has its own plans for using the sea to expand trade across neighbouring countries and into Asia and the west. Tests have been carried out on the feasibility of using the Northern Sea Route, traditionally open for just four months in the summer, all-year-round. It would slash three weeks off normal sailing times from Asia to Europe in the East Siberian Sea.

But the same route, across the top of the world and through the ice of the Arctic, is also being taken seriously by the Chinese. With a recession predicted by many, Russia is in need of an economic boost with the upgrade of the Baikal-Amur and Trans-Siberian rail lines viewed as pivotal.

Speaking in Bali in the summer, the Russian president invited business partners from the Asia-Pacific region to join the projects and develop the infrastructure. But any competition from China could be costly, and could prevent Russia becoming the major transport and trade gateway between Asia and Europe.

As much as $46.7 billion (1.6 trillion roubles) is expected to be channelled into the expansion of the rail routes by 2020, with the first stage alone likely to exceed $17 billion (580 billion roubles). There is also discussion between Moscow and Pyongyang about linking Russia to North Korea by train.

Comments (5)

I always said...watch China...for soon everything made in Russia will be "Made in China".

Doing business with China, you have to give & take, but did Putin give more away than he will take?

That is the BIG question?

Anyway, China, what a "Cheek"!
Jaker, Dundalk
25/06/2015 07:41
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There is already a rail connection from coastal China thru Kazakhstan and on to Berlin that can move containers in a little more than a week. But it is slowed by border crossings and especially by the need to load/unload to accomodate Russia's different rail gauge. Perhaps Russia could consider building a dual-gauge rail link? The only advantage of the land link over containerships is speed, and that advantage is being compromised.
Anon, USA
14/11/2014 10:31
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Trade between Europe and China is so huge, and increasing so much, that there is space for borth projects. In fact, it is better for Russia that the other Eurasian land-bridge project is developed because that would mean also developing ways to replace the maritime route through the Pacific so when Chinese and European corporations are used to the land-bridge instead of the water route, they will be more ready to use Russian railways and highways, which are more secure, and doesn´t need to pass through many different borders and rail systems. So, there will be synergies.4163
Enrique, Spain
12/11/2014 02:03
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Anyway, the Southern Silk Road has to pass through many different countries, and that increass costs.

Besides, the first to have the infraestructure ready for work will have an advantage, so the investment in Siberian infraestructure has started at the right point, before any other.

While the Siberian land-bridge (railway, superhighway etc) has been already under way for years, the Southern land-bridge has not even started...

All the routes are necessary so if one is cut in case of conflict, importers and exporters can use the alternative one. And, anyway, the single route through the Russian Federation should be cheaper as it doesn´t need to pass throgh different borders and rail systems. It is much more secure and simple.
Enrique, Spain
12/11/2014 01:49
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It seems to me that the goals & interests of the two countries are fundamentally aligned on this issue. China wants a Eurasian land-bridge, and is seeking to build one in the form of the New Silk Road. Russia has always wanted to take advantage of its geography as the land bridge that connects Europe & Asia. There is a lot of room for a win-win arrangement here.
typhoidX, USA
11/11/2014 16:55
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