By Yang Yaoyuan, Li Yuanzheng
The New International Land-Sea Trade Corridor (ILSTC) is an important piece of the third intergovernmental cooperation project between China and Singapore: China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity (CCI). How has the new international trade corridor evolved? What changes have accompanied its evolution? What does it mean for the bigger picture?
Starting with the Southern Transport Corridor
The evolution of the ILSTC has undergone three phases:
The first phase lasted from 1992 to February 2017 and involved exploration and preparations for the Southern Transport Corridor. As early as 1992, the Chinese government had already launched construction of a southwest marine transport corridor with an aim to strengthen connectivity between western China and South and Southeast Asia and accelerate the opening-up of its western regions. Prior to the inception of the Belt and Road Initiative in 2013, the southwest transport corridor focused on connectivity through
highroads covering Chongqing, Guizhou and Guangxi’s Beibu Gulf and construction of a port cluster in the Beibu Gulf. This laid the groundwork for the eventual construction of the Southern Transport Corridor.
On November 7, 2015, the Chinese and Singaporean governments signed a framework agreement on CCI, officially launching the third intergovernmental cooperation project between the two countries, with Chongqing as the project’s operational headquarters. Eyeing the promotion of “modern connectivity and a modern service economy,” the project aligns with the Belt and Road Initiative and the Western Development Strategy of China and prioritizes the four sectors of financial services, aviation, transport & logistics, and information & communications technology, with the purpose of forging a cooperation network that accelerates the development of China’s western regions. According to the agreement, China and Singapore established a three-level cooperation mechanism comprised of a vice premier-level joint coordination council, a ministeriallevel joint working committee, and a local government-level joint implementation committee.
The second phase lasted from February to November 2017, when the concept of the Southern Transport Corridor was introduced and commenced in earnest. In February 2017, the initiative of the Southern Transport Corridor was officially introduced at the first meeting of CCI Joint Coordination Council.
At the state level, leaders of both China and Singapore have attached great importance to the initiative to build the Southern Transport Corridor. On September 20, 2017, when he met with visiting Singaporean Prime Minister Lee Hsien Loong, Chinese President Xi Jinping exhorted the two sides to accelerate implementation of the CCI to inspire other countries to participate in construction of a new international land-sea trade corridor at the regional level. In April 2018 during a meeting with Prime Minister Lee Hsien Loong, President Xi again called for jointly building the Southern Transport Corridor and gradually forging a regional cooperation mechanism supported by relevant departments and commissions of the central governments and involving local governments. At the time, highranking government officials from ASEAN countries such as Vietnam, Laos, Cambodia and Thailand showed positive attitudes about building the Southern Transport Corridor, accelerating construction of the China-Indochina Peninsula Economic Corridor and advancing connectivity between China and ASEAN.
The third phase started in November 2018 when the Southern Transport Corridor was officially renamed the New International Land-Sea Trade Corridor. Alongside the accelerated construction of Southern Transport Corridor, central and western Chinese provinces such as Gansu, Qinghai and Henan, as well as Southeast Asian countries such as Vietnam, Laos and Thailand, consecutively joined the initiative, further expanding coverage of the corridor. In the early days of the Southern Transport Corridor, it was mainly driven by Chinese provinces, and cargo was transported from north to south. With the rapid expansion of the corridor, commodities from Southeast Asia began to flood into China. As a result, the volume of cargo flowing from south to north grew with each passing day. In January 2018, the first batch of cargo from Singapore was transported northbound, marking the Southern Transport Corridor starting to function as a northward trade corridor. This change rendered the term “Southern Transport Corridor” inadequate in terms of illustrating the deepened cooperation between China and ASEAN—“New International Land-Sea Trade Corridor” is a better term to refer to this trade corridor.
In mid-September 2018, Singaporean President Halimah Yacob and Prime Minister Lee Hsien Loong each met with Chinese Vice Premier Han Zheng during his visit to Singapore. The two sides both called for building a new land-sea trade corridor for China-Singapore connectivity to align with the Belt and Road Initiative, evidencing that both countries realized the strategic importance of connecting the landsea trade corridor to the Belt and Road Initiative. On November 13, 2018, Chinese Premier Li Keqiang and Singaporean Prime Minister Lee Hsien Loong signed a memorandum of understanding on the New International Land-Sea Trade Corridor under the CCI. This marked that the Southern Transport Corridor was officially renamed the New International Land-Sea Trade Corridor.
New Name, New Look
After the renaming, the new landsea corridor welcomed changes in terms of participants, geographical coverage, cooperation modes, development direction and other aspects.
Participants are becoming more diverse. The former Southern Transport Corridor was a land-sea trade corridor jointly built by western Chinese provinces and Singapore under the framework of the CCI. In China, participants included only Chongqing Municipality, Guangxi Zhuang Autonomous Region, Guizhou Province and Gansu Province. The concept of the New International Land-Sea Trade Corridor considers not only the needs of western and central Chinese provinces to embrace a new round of opening-up but also the reality that the Belt and Road Initiative is proceeding smoothly in the Indochina Peninsula. Since its inception, substantive progress has been made in the implementation of the Belt and Road Initiative in Indochina countries. With deepening recognition of the importance of building more direct trade routes and closer trade relations, these countries are eager to participate in construction of the ILSTC more extensively.
Geographic coverage has been expanded. With the diversification of participating parties, the geographic coverage of the ILSTC has been expanded to cover all regions involved in the Belt and Road Initiative, and its scope will enlarge alongside the development of trade relations.
Cooperation modes are becoming diverse. Eyeing maintenance and solidification of trade relations, construction of the ILSTC is anchored in construction of transport infrastructure but has expanded to other realms such as economic cooperation zones. In the initial stage of the corridor, cargo mainly flowed from China to ASEAN countries including Singapore. In March 2018, Japanese and South Korean logistics and shipping companies began to operate along the Southern Transport Corridor, expanding shipping routes to Northeast Asia.
Development directions are becoming more integrated. More than just a southbound trade route, the ILSTC will facilitate Indochina countries’ opening-up to western China and integrate southbound and northbound cargo flows in the future. As China’s reform deepens, the corridor will align with the opening-up of central and eastern regions of China. For instance, some
logistics companies operating along the Southern Trade Corridor have signed agency contracts with regional shipping companies along the Yangtze River to achieve railway-waterway combined container transportation with cargo resources covering the entire Yangtze River Economic Belt, further expanding the opening-up of western China.
Implications
A central city in western China and an economic hub of the upper reaches of the Yangtze River, Chongqing is noted as an export-oriented manufacturing base, a modern manufacturing hub and a high-tech industrial base in inland China, a research result industrialization base, an ecological civilization demonstration area in the upper reaches of the Yangtze River, and a national pilot zone for urban-rural integrated reform. Singapore is a pivotal point for the implementation of the Belt and Road Initiative in Southeast Asia and an important window for Southeast Asian countries to integrate into the global value chain. Capitalizing on the roles Chongqing and Singapore play as two hubs is conducive to advancing “twowheel drive” in construction of the ILSTC.
The western transport artery refers to the railway-sea combined transport route linking Chongqing, Guiyang and Qinzhou to Singapore. The cross-border transport artery refers to an international railwayhighway combined transport route. Cross-border highways in planning include three routes: The eastern route extends from Chongqing to Guangxi’s Pingxiang and then Vietnam’s Hanoi. The central route starts from Chongqing’s Nanpeng, passes through Yunnan’s Mohan, Laos’ Vientiane, Thailand’s Bangkok, and Malaysia’s Kuala Lumpur, and eventually reaches Singapore. The western route extends from Chongqing to Myanmar’s Yangon via Yunnan’s Ruili. International railway transport refers to the initiative of linking southwestern China’s existing railway network to the Trans-Asian Railway jointly constructed by China and ASEAN countries via border ports such as Pingxiang and Mohan to form a southbound international railway network radiating from Chongqing and efficiently connecting to the Indochina Peninsula.
As a traditional geopolitical hub and international trade center, Singapore enjoys a favorable geographical location connecting the East and the West and places priority on sea transport. In an era of global connectivity, Singapore has gradually realized that building a trade corridor stretching north to the Eurasian Continent is conducive to solidifying its position as a global trade hub, which conforms to its overall national development strategy.
For historical reasons, developed and developing nations within ASEAN contrast sharply in terms of development level. Construction of the ILSTC will advance ChinaASEAN sub-regional cooperation. Unlike traditional direct cooperation, sub-regional cooperation features extensive communication between the two sides and requires support and collaboration from other countries, which can create a “spillover effect.” The “spillover” is demonstrated in not only participants and geographical coverage, but also cooperation modes and development direction. For this reason, the land-sea trade corridor represents a cutting-edge attempt at sub-regional cooperation to advance global connectivity.
The ILSTC conforms to the requirements of the changing world. Today’s world is a connected one. In this context, all countries need to further consolidate regional and international cooperation and enhance cooperation between major countries and small countries and between different regions while maintaining the sovereignty of every country. They need to explore better ways and methods to foster thirdparty cooperation and promote construction of a diversified cooperation landscape based on trade relations and facilitating connectivity in infrastructure, standards, management modes and other realms. The New International Land-Sea Trade Corridor is the ideal solution to meet the demands of this new type of international cooperation.
China Report ASEAN 