China’s Dilemma over Land and Sea Routes

Last November, China’s railway authority, the state-owned China Railway Corporation (CRC), proposed a high-speed rail line for both passengers and cargo connecting Xinjiang, the country’s northwest region, to West Asia via Central Asia, for the first  time getting rid of  the incompatibility between the region’s wide-gauge track systems and China’s standard-gauge system, helping the  Eurasian Land Bridge make a great leap forward.

Such projects – which allegedly skip the other regional Big Brother Russia – are part of China’s One Belt, One Road (OBOR) initiative, namely the Silk Road Economic Belt and the 21st Century Maritime Silk Road, which aim to export domestic industrial overcapacity and boost connectivity between China and Central, Southwest and Southeast Asia and Europe. To support this infrastructure network, Beijing has launched the well-known US$40 billion Silk Road Fund and the US$100 billion Asia Infrastructure Investment Bank (AIIB), hailed with favor in the neighboring countries encompassed by the project.

Over-emphasis on rail development?

But China’s emphasis on connectivity as a key goal of the New Silk Road runs the risk of over-emphasising railway development as an end goal, since only a few high-value goods are cost-effective to transport by rail, warns a paper by the Royal United Services Institute for Defence and Security Studies.

In fact, Beijing is struggling to channel its exports through a more diversified network.

“China does not necessarily have to choose between a maritime and continental strategy. Indeed, all signs point to China pursuing a foreign policy that looks to achieve both maritime and continental interests,” Francis P. Sempa, author of Geopolitics: From the Cold War to the 21st Century, wrote early this year.

In his 1919 masterpiece, Democratic Ideals and Reality, the British geographer Halford Mackinder describes the “Heartland” (namely the northern-central core of the Eurasian landmass) as a base, inaccessible to sea powers, from which to extend geopolitical control in all directions. Mackinder warned that a land empire that controlled the Heartland could use its vast natural resources and central geographical position to dominate Eurasia.

Yet, so far it seems that what brings China into the “Heart of Asia” is merely the will to achieve independence from piracy-threatened maritime routes patrolled by Washington. And improving roadways and railways across Central Asia is just one option to realize this goal. To aid the effort to do so, Beijing, Astana, Baku, Tbilisi and Ankara have set up a consortium for cargo transport from China to Europe in the framework of the transnational project Silk Wind. According to Vestnik Kavkaza, the agreement assumes that Chinese goods would be delivered to the Kazakh port of Aktau by rail and then by ferry to Baku, then by rail to the Georgian ports, and by ferry to the Turkish and Ukrainian ports. If everything goes as planned, the Silk Wind would be the shortest route for the delivery of the international cargo from the western borders of China to the EU, with an estimated transit time of 12 days.

More Viable Arctic Maritime Passage

Thanks to global warming, Chinese shipping experts are considering routine navigation through Arctic waters as a shortcut to bypass the route (controlled by the US) that passes through the Malacca Strait and the Suez Canal. It would become the next “golden waterway” for trade between China and Europe, since the journey via the Bering Strait could shave as much as 15 days off the traditional route through the Suez Canal and Mediterranean Sea, said China Daily.

On Oct. 27, the Chinese cargo-shipping giant Cosco disclosed that it would start regularly scheduled vessel service through the Northern Sea Route at an future date, becoming the first shipping company considering the possibility of regularly scheduled container ship traffic. Cosco reportedly completed a 55-day trip between China and Europe (from Dalian to Rotterdam) through the Northern Sea Route last fall and did a similar trip in 2013. As Canadian Broadcasting Corporation explains, Russia’s Arctic route is attractive to shipping companies because the former Soviet Union built marine facilities such as ports during the Cold War and the country continues to invest in developing the shipping route.

In recent years China has done more or less the same, improving infrastructure and facilities at ports in Jilin Northeastern province with the purpose to open new export routes for its trade-starved economy.

But Northern Passage Years Away

However, analysts caution that it will be years before the Northern Passage, which is only passable for a few months, is commercially viable let alone a rival to the Suez Canal, which handled more than 17,000 ships in 2012. It means that, in spite of Beijing’s efforts to diversify its trade channels, it will probably continue to rely mainly on the maritime route passing along Southeast Asia’s coasts. Data don’t lie. As of November 2007, about 1 percent of the US$600 billion in goods shipped from Asia to Europe each year were delivered by inland transport routes.

Currently the land route has one one-hundredth of the capacity of goods from China to the EU than the sea route, said Vestnik Kavkaza. Even Russia receives most Chinese cargo by sea via Finland. At the same time, China’s major logistics investment is directed at the Myanmar corridor –almost 100 times more than it is ready to invest in the Silk Road Economic Belt.

Thus, for all the myriad ways China is attempting to get to the west, for the foreseeable future the world’s sea lanes through the Malacca Strait and across the South China Sea, will remain the most viable method to move global cargo.

(Pubblicato su Asia Sentinel)