There are plans to link Chongqing to Rotterdam via an intercontinental rail line by 2012. The link has been in development for some time on both the European and Chinese sides and, when completed, has the potential to connect China not only with Europe but also Central Asian and the Middle Eastern states, all of which had developed into prosperous export markets prior to the recent trade slowdown.Note this is not the first connection of its kind. Indeed, it has been going on since early in the last century. The reason why the Peninsula Hotel in Hong Kong was built in that slightly odd position at the tip of Kowloon was because it was near the rail station. And passengers who had traveled from Europe by rail were a main source of customers.
And in 1993, the European Union launched the Transport Corridor Europe Caucasus Asia (TRACECA) program in a bid to link Europe to Central Asian republics (Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan and Turkmenistan) and three Caucasian republics (Georgia, Azerbaijan and Armenia).
China’s huge investment in rail transport, particularly in Xinjiang, will dovetail with these European plans.
Last year, the government spent RMB330 billion ($48 billion) on railway investment, and has plans to nearly double that figure in 2009 by spending RMB600 billion ($88billion). Of that total, $17.6 billion will be spent on railway development in Xinjiang alone and will complement recent projects, funded by the World Bank and Asian Development Bank, aimed at improving transport networks in the region.
The development of a rail link has at least the potential to shift the axis of China’s external trade away from Eastern ports. The current unrest in Urumqi, the capital of Xinjiang, may affect plans for it to become a logistics hub to handle increased trade flows and a key stop on the Chongqing to Rotterdam rail route.
JLM Pacific Epoch reports that, although it has been under development for some time and a rail link to Europe is planned for 2012, the problem will be volume.
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