Thursday, May 11, 2017

CHINA TO TRIPLE RAIL FREIGHT WITH EUROPE

May 12, 2017 8:00 am JST

China aims to triple rail freight with Europe by 2020

Link seen as foundation of Belt and Road economic expansion
SHUNSUKE TABETA, Nikkei staff writer

China is expanding rail freight to and from Europe to support more than just its IT industry.
CHONGQING, China -- China aims to nearly triple rail freight shipments to and from Europe by 2020, an international logistics executive here told The Nikkei, making the transport link a backbone of economic growth in the Belt and Road infrastructure initiative.
The National Development and Reform Commission, which steers economic policy, aims to run 5,000 freight trains between China and Europe in 2020, up from 1,800 in 2016.
Toward that goal, China must not only export more to Europe, but work toward economic development with the other countries along the Belt and Road routes, said Zhou Shulin, chairman of the supervisory board at major international shipper Yuxinou (Chongqing) Logistics. Zhou sees railroads as fundamental to that economic development.
Rail freight could bring building materials to Central Asian countries along the Belt and Road route where infrastructure construction is growing, such as Kazakhstan, Zhou suggested.
He added that cross-border e-commerce probably would drive demand for rail shipping as well, as economic growth in Belt and Road countries would let consumers there buy more goods from Chinese companies such as Alibaba Group Holding, raising exports.
China also aims to import more from Europe. There was almost no demand for such imports when the Chongqing railway opened in 2011, but recent years have brought more shipments by rail of European high-end cars and auto parts. Yuxinou is considering bringing in lumber from Russia and northern Europe as well, Zhou said.
He added that he would like to partner with Japanese companies for their cold-storage shipping technology, which could pave the way for importing salmon and other goods from northern Europe.
The railway between Chongqing and Duisburg, Germany, was opened as a major freight artery linking China and Europe. It was meant to export computers, printers and other information technology products, Zhou said. Around a third of the world's computers are made in Chongqing, and most are shipped to Duisburg by train for export to Europe and elsewhere. The railway came to support the growth of the IT industry in China's economy.
The railway became a broader export means for China, the "world's factory," beginning in 2013, when President Xi Jinping introduced the Belt and Road Initiative. It began supporting economic development for other inland areas, such as by shipping coffee beans from Yunnan Province. Shipments of machinery, garments and everyday goods grew, and in 2016, IT products made up only about half of gross shipping volumes.
Yuxinou Logistics was formed in Chongqing by a joint investment from rail operators and logistics companies in countries including China, Germany, Russia and Kazakhstan. It has worked to streamline customs procedures, mainly in China and Germany. It handles distribution by rail freight between Chongqing and Europe, and apparently accounts for about 80% of rail shipping between China and Europe on a value basis. 
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