Links Across Asia | What’s Up China

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On September 25, 2017, the first train of China-Singapore rail-sea intermodal transport departs from Chongqing, marking the beginning of regular operation of the CCI Southern Transport Corridor.

With the Chinese New Year just around the corner, shoppers at supermarkets in Thailand felt a strong festive atmosphere complemented by a variety of specialties produced in China’s western region available on shelves including dried jujubes from Xinjiang, wolfberries from Ningxia and Lao Gan Ma (literally “old godmother” in Chinese) chili sauce from Guizhou. At the same time, products from Southeast Asian countries such as durians from Thailand, dried vegetables from Vietnam and white coffee from Malaysia were found on dinner tables in many homes in China’s far northwestern region of Xinjiang.

In contrast to the past when Chinese coastal cities spearheaded economic and trade relations with ASEAN countries, the formation of the New International Land-Sea Trade Corridor (ILSTC) has now enabled goods from different parts of western China to be transported to Chongqing, which serves as a logistics hub, before traveling further to the Indo-China Peninsula via multimodal transport. Statistics show that last year, two-way tourist visits between Chongqing and ASEAN countries reached 1.66 million and 7,400 tons of cargo went through
Chongqing. Onions, apples and medicinal herbs grown in northwestern China are increasingly sought-after in Southeast Asian markets.

 

Expanded Passage
The air is still chilly in February in Chongqing, but Chongqing Logistics City in Shapingba District is already filled with hustle and bustle. Not only is it the starting point of the crossborder combined transport passage based on China-Europe freight trains, but also a vital hub for the ILSTC. Since the opening of the ILSTC, this locale has witnessed departures of
growing numbers of rail-sea freight trains headed for a broader range of destinations, evidencing seamless connection of the Silk Road Economic Belt and the 21st-Century Maritime Silk Road.
Considered a “newborn,” the ILSTC passes through numerous provincial regions and features cross-industry coordination and cooperation. Are the western Chinese provinces along the  ILSTC prepared for heavy involvement in its construction to better embrace the world?

Consider the performance of Chongqing Logistics City. Its participation in the ILSTC construction can be traced back to 2015, when China and Singapore signed a framework agreement on China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity (CCI), the third government-to-government cooperation project between the two countries. Subsequently, Chongqing Logistics City launched new efforts to explore more possibilities for ChinaSingapore cooperation.

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 A traffic officer conducts a security check on container trucks at a rail port in Chongqing.

After rounds of discussions between the Logistics City and Singaporean partners, plans to build a ChongqingSingapore demonstration project on strategic connectivity took shape and received enthusiastic support from Guangxi Zhuang Autonomous Region. On June 30, 2016, Chongqing Logistics City, Singapore-based PSA International Pte Ltd and Guangxi’s Beibu Gulf Port Group established a three-party joint working group in Nanning, capital of Guangxi, to construct the Chongqing Rails-Beibu Gulf-Singapore Port Demonstration Project on Strategic Connectivity. This is how the first landsea trade route traversing western China came to happen.

Capitalizing on various transportation options including railways, highways and water and air
routes, the land-sea trade corridor stretches southward from Chongqing to Guizhou and Guangxi and links to Singapore and major logistics hubs of ASEAN by Beibu Gulf ports and
borders in Guangxi. To the north, it connects to the Lanzhou-Chongqing Railway to reach logistics hubs of northwestern China, from which China-Europe freight trains transport cargo to Central Asia, South Asian and Europe. Its construction is conducive to accelerating the formation of China’s comprehensive opening-up structure radiating in all directions.

Later, as the trade route gradually took shape, many other provincial regions became interested in its construction. Following the Framework Agreement on Jointly Constructing the CCI Southern Transport Corridor signed by Chongqing, Guangxi, Guizhou andGansu on August 31, 2017, eight western provincial regions, namely Chongqing, Guangxi, Guizhou, Gansu, Qinghai, Xinjiang, Yunnan and Ningxia, signed a framework agreement on January 7, 2019 to cooperate on building a new international land-sea trade corridor.

Thanks to active promotion by the western provinces, the land-sea trade corridor vision has evolved from regional to the national level. On November 12, 2018, the CCI Southern Transport Corridor was officially renamed the New International Land-Sea Trade Corridor, with a China-Singapore Memorandum of Understanding (MoU) signed in the presence of Singaporean Prime Minister Lee Hsien Loong and Chinese Premier Li Keqiang. The renaming suggests an expanded trade and logistics thoroughfare that is expected to better drive cooperation among countries along the Belt and Road.

An updated version of the previous CCI Southern Transport Corridor, the ILSTC will continuously grow stronger as the western Chinese provinces make joint efforts to accelerate its construction while opening wider to the outside world.

 

Infrastructure Building
Yibin, a Sichuanese city nicknamed the “First City along the Yangtze River,” occupies a significant geographical location at the center of an X with the major cities Chengdu, Guiyang, Chongqing and Kunming at the four points. The launch of the ILSTC has brought the city an unprecedented tidal wave of transport network construction: Four high-speed railways are under construction, seven expressways are under research and construction, a new airport will be completed soon and the capacity of Yibin Port, Sichuan’s largest inland water hub, is being expanded. All these developments will form a sound multi-dimensional transport system that covers the junction of Sichuan, Yunnan, Guizhou and Chongqing.

Weak infrastructure remained a bottleneck for further development of Sichuan. Seizing the opportunities brought by ILSTC construction, Sichuan has launched the above-mentioned projects to improve its infrastructure. Other regions including Chongqing, Guizhou and Guangxi are also taking measures to shore up transportation deficiencies to cater to the development needs of the ILSTC.

As an important hub along the ILSTC, Chongqing has focused on accelerating construction of the Chongqing Railway Hub East Ring Line, the Chongqing Airport branch line, the Logistics City Expressway and Chongqing-Xi’an High Speed Railway, further facilitating international railway passage for China-Europe freight trains and improving transport capacity and efficiency in connecting the city to the Silk Road Economic Belt.

Since 2018, according to the Guangxi Beibu Gulf Economic Zone’s planning and construction administration office, Guangxi has worked to solve the ILSTC infrastructure bottleneck through supportive plans to propel construction of 52 infrastructure projects including a container terminal at the east station of Qinzhou Port. In addition, it plans to build a 400,000-ton dock in Fangchenggang City as part of Beibu Gulf infrastructure improvement and deepen cooperation with China Ocean Shipping (Group) Company (COSCO) in port construction and operation as well as opening oceanic shipping routes from Beibu Gulf to offer rail-sea freight service originating from western China.

 

Challenges
By the end of 2018, rail-sea freight trains had made 805 trips along the international trade corridor, 55 international freight trains had traveled between Chongqing and Hanoi, and 661 highway freight trucks had provided cross-border transportation services between Chongqing and ASEAN countries. A total of 155 ports in 71 countries and regions including Singapore have benefited from the ILSTC.

Meanwhile, however, bottlenecks preventing the ILSTC from further growth have emerged. In terms of infrastructure, for instance, container shortages and undesirable port handling capacity remain to be improved. In terms of service, management systems, insurance, legal and other supporting services are far from perfect. In terms of the market, insufficient supply of goods and new market exploration require attention. These challenges are forcing provinces involved in the ILSTC to deepen reform and expand coordination.

“Viewed from the big-picture perspective, the new trade corridor is still at its nascent stage, although all of China’s western provincial regions have already responded with action,” remarked Li Muyuan, vice chairman and secretary-general of the Combined Transport Branch of China Transportation Association. “Despite great support from local governments, the market has not been tapped enough.” Furthermore, China’s western region has traditionally suffered from insufficient resources and an underdeveloped export economy. In this context, efforts should be made to enhance port service capacities through infrastructure improvement while fostering new markets to allow more companies to participate, Li added.

“Governments should take measures to create a more favorable business climate for companies to flourish,” Li admonished. “They should also provide greater support to rail transport to enable rail-sea freight routes to expand available sources of goods.”

 

Copyedited by Tian Yuerong

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