Weekly News Roundup: Dispatches from the Silk Road Economic Belt

19th Party Congress: Overseas assets held by China SOEs exceed S$1.2t

The value of overseas assets held by China's centrally owned enterprises has exceeded 6 trillion yuan (S$1.2 trillion), with investments in more than 185 countries and regions, the state assets regulator said on Wednesday (Oct 18).China's state-owned enterprises (SOEs) are spearheading investment in infrastructure projects overseas along the ancient Silk Road land and sea trade routes, part of Beijing's signature Belt and Road Initiative.Firms owned by the central government have co-built 1,676 projects with countries along the Belt and Road, the state assets regulator said in a handout ahead of a news conference on the sidelines of the 19th Party Congress in Beijing. (Reuters)

China's CNPC imports first gas from Kazakhstan ahead of winter

Kazakhstan has started supplying gas to China via the Central-Asia China gas pipeline system for the first time, state-owned China National Petroleum Corp (CNPC) said on Monday.Commercial gas volumes were sent across the Kazakh-Chinese border on Oct. 13, CNPC said on its website, part of a deal under which Kazakhstan has agreed to send 5 billion cubic meters of gas to China over one year. (Reuters)

Erik Prince Weighing Senate Bid While Tackling Xinjiang Security Challenge

Erik Prince, the former chief of the controversial private security firm Blackwater, is evidently mulling a run for a US Senate seat. At the same time, he is working with China’s government to provide security services in the restive western region of Xinjiang. The boundary between private business and governments has been eroding since the 1970s. Prince’s path clearly represents this process. While potentially wanting to shake up the political status quo in Washington, Prince also is supporting Beijing’s aim of establishing itself as a global economic and political power, and changing Eurasia’s geopolitical balance. (Eurasianet)

Gansu villages benefit from poverty alleviation policies since 18th CPC Congress

Over the past five years, poverty alleviation work has been a major focus of the Communist Party of China (CPC). In 2016, a total of 12.4 million rural people have been lifted out of poverty, and the central government has also promised to do the same for more than 10 million every year. China's experiences in fighting poverty can also be applied worldwide. One prime example is the introduction of industries into rural areas as a means of creating jobs and increasing household income. Global Times

700 China-Europe freight trains to depart Xinjiang in 2017

The year's 500th China-Europe freight train departed Thursday from NW China's Urumqi. 200 more expected. By October, more than 5,000 cargo train trips have been made between Chinese and European cities since the start of the direct rail freight services six years ago, according to China Railway Corporation.(Xinhua)

Attack on workers at key Pakistan port for Chinese project; 26 hurt
Unidentified men threw a grenade into a laborers' hostel in the Pakistani port of Gwadar wounding 26 of them, police said on Friday, in an attack likely to raise concern about security for the Pakistani section of China's "Belt and Road" initiative.There was no claim of responsibility for the attack, one of three on Thursday in the gas-rich southwestern province of Baluchistan, a key section of the plan
for energy and transport links connecting western China with the Middle East and Europe. (reuters)

Stop CPEC now: Baloch leaders to China

On the day the supreme body of the Communist Party of China met for its 19th Congress in Beijing, the Baloch leadership in exile issued a strong warning to China to stop the China Pakistan Economic Corridor (CPECBSE -4.45 %) or face on the ground consequences. (economictimes)

China Speeds Up Work On $2 Billion Project That India Has Objected To 

China plans to complete a $2 billion hydropower project in Pakistan-Occupied Kashmir ahead of schedule, according to state-run media in Beijing.The Karot Hydropower Project is being built on the river Jhelum. Construction began last year. It will be owned by a Chinese firm for 30 years, after which it will be handed over to the Pakistan government.India has consistently opposed China's funding of projects in Pakistan-Occupied Kashmir on the grounds that it violates India's territorial sovereignty. (ndtv)

Construction of Moscow-Kazan high-speed railway may be conducted in several stages: Russian Railways
Russian Railways said the China-backed plan to build a 770-kilometer high-speed railway between the Russian cities of Moscow and Kazan may proceed section by section over the weekend. Last week, Russian media reports suggested that Russia might opt to build only one section of the Moscow-Kazan high-speed railway first, from Moscow to Vladimir, a city 200 kilometers east of the Russian capital.Under the current plan, the construction of the Moscow-Vladimir section is proposed to take place under a concession scheme from 2018 to 2023, said Russian Railways, the Russian company behind the project, over the weekend in an e-mail sent to the Global Times. (Global Times)

CENTRAL ASIA 

Four nations meet to resume stalled Afghan peace talks in Oman

Afghanistan, China, Pakistan and the United States met in Oman on 16 October to try to find ways of reviving peace talks with Afghan Taliban militants, two officials in Pakistan’s foreign ministry said. But it was not clear if any Afghan Taliban had joined the talks, which have so far failed to restart a tentative process that collapsed in 2015. Reuters

EIB, Uzbekistan sign co-op agreement

The European Investment Bank (EIB) and Uzbekistan have signed a framework agreement in Washington.The EIB will now be able to support public and private sector projects in such areas as public infrastructure, energy and energy efficiency and small business development, podrobno.uz reported. Uzbekistan is the fourth state in Central Asia cooperating with the EIB. Similar agreements have already been signed with Kazakhstan, Kyrgyzstan and Tajikistan. These signatures were followed by financing in the amount of more than 700 million euros. (Azernews)

Observers see 'significant and numerous' problems at Kyrgyzstan vote
European observers said on Monday there were “numerous and significant procedural problems” during the count in Kyrgyzstan’s presidential vote, but praised the orderly transfer of power in the volatile ex-Soviet state. (Reuters)

Tajikistan announces official register of gay citizens

Authoritarian Tajikistan announced on Tuesday (Oct 17) it had drawn up a register of 367 allegedly gay citizens, suggesting they would be required to undergo testing to avoid "the spread of sexually-transmitted diseases". Details of the move was unveiled in Zakonnost, a newspaper published by Tajikistan's state prosecutor which said the official list of "gay and lesbian" citizens was compiled following research into the LGBT community. (AFP)

Warming Uzbek-Iranian Relations Worth Watching

A recent meeting of officials from Uzbekistan and Iran was a curious event. Central Asia has seen a reshuffling of relations over the past couple years, and improved relations between Tashkent and Tehran is one of the more intriguing developments.Uzbek Foreign Minister Abdulaziz Kamilov led the Uzbek delegation that also included Foreign Trade Minister Elyor Ganiev and Uzbekneftegaz chief Alisher Sultanov. During their October 16-18 visit, members of the Uzbek delegation met with Iranian President Hassan Rohani, Foreign Minister Javad Zarif, and Oil Minister Bijan Zanganeh. (rferl)

As Tillerson heads to Pakistan, Islamabad wary of deepening U.S.-India ties

As U.S. Secretary of State Rex Tillerson heads to Pakistan on Tuesday to pressure Islamabad to act over militants targeting Afghanistan from its soil, anxious Pakistanis may be equally interested in dissuading Washington’s deepening ties with India. (Reuters)

How an Overlooked Provincial Capital Became a Silk Road Hub

Over the centuries, Zhengzhou has never been reached by the Silk Road, the network of trade routes formally established during the Han Dynasty of China (206 BCE–220 CE) that linked the regions of the ancient world in commerce. But that’s about to change, now that a new Silk Road is taking shape under the leadership of Xi Jinping with the aim to connect Asia with Europe along a land corridor interlinked by rail, roads, industrial parks, and smart cities. Situated at the transitional zone between the North China Plain to the east and the Song Mountains and Xionger Mountains to the west, Zhengzhou is the capital of Henan Province, just 40 minutes away from Luoyang by train. But unlike the more attractive Luoyang, Zhengzhou is mostly overlooked by tourists and, so far, well-known primarily for a 1990s-era blood scandal and its dirty air. Today, it is time to — literally — clean up Zhengzhou’s image, as Beijing wants to make it a major center of the Silk Road Economic Belt (SREB), the land-based component that together with the oceanic Maritime Silk Road forms One Belt, One Road.

Since 2014, state media has been sparing no effort to depict Zhengzhou as a primary transportation hub for central China, a feature that the city inherited from the past, thanks to its geographical location. Back in 1903, the Beijing-Hankou Railway arrived at Zhengzhou, and in 1909 the first stage of the Longhai Railway gave the city an east-west link to Kaifeng and Luoyang. Later the railway was extended westward to Xi’an, as well as to western Shaanxi, and eastward to the coast at Lianyungang (Jiangsu province), making Zhengzhou a major rail junction and a regional center for cotton, grain, peanuts, and other agricultural produce. To date, Lianyungang port remains the major marine port and cross-border transportation passage in the areas along the Lianyungang-Lanzhou railway and the Lanzhou-Xinjiang railway and the Central Asian countries at large, and in the future it will give full play to the regional advantages as the intersection of One Belt and One Road and the eastern terminal of new the Eurasian Land Bridge, the rail transport route for moving freight and passengers overland between Pacific seaports in the Russian Far East and China and seaports in Europe. By extension, Zhengzhou will obviously benefit, too.

As the geopolitical intelligence platform Stratfor points out:

"China’s Central Plains region is an ideal location for an inland economic zone. Spanning several provinces along the lower reaches of the Yellow River and the North China Plain, it is flat, easily traversable, fertile and well connected to most of China’s major coastal economic hubs. The region boasts an enormous and relatively young population, which means it has both a large labor force and sizable potential consumer base".

As early as July 2012, Greater Zhengzhou was named as one of the 13 emerging megacities or megalopolises in China in a report by the Economist Intelligence Unit. Last year the city ranked as the 19th most competitive urban center in the Asian country, according to the Chinese Academy of Social Sciences. Now the capital of Henan is preparing itself to become a key link in connecting China to Central Asia and Europe.

Since the launch of the Belt and Road Initiative, a total of at least 3,557 freight trains have run so far with services reaching 27 Chinese cities and 28 cities in 11 countries in Europe. Last year, 1,702 freight trains made the voyage to Europe, more than double the 2015 figure. As noted by Wade Shepard, author of Ghost Cities of China, Zhengzhou was among the earliest players to get involved. It started a regular rail route in July 2013 which crosses the 10,000 km to Hamburg, Germany in just two weeks. Thanks to the surging volume, in 2016 the frequency has improved to three westbound trains a week.

According to estimates by the state-owned Zhengzhou Hub Development and Construction Company (ZIH), the Zhengzhou-Europe route amounts for 30 percent of the total volume of the entire China-Europe rail network, with cargo consisting of high-value-added products such as electronics, automobile parts, and industrial robotics.

In the first quarter of the year, the local branch of the Europe-China Railway Express handled 5,102 containers and 32,800 tons of goods with a value of $314 million, increases on an annual basis, respectively, of 60 percent, 86 percent, and 80 percent, Zhengzhou Customs reported. While ZIH forecasts that the number of freight trains travelling between Zhengzhou and Hamburg would double by the end of 2017, the city has already started running two more westbound routes: one heading to Brest and Minsk in Belarus, before travelling to Moscow and St. Petersburg in Russia, and the other directed to Alashankou at the border from where it is bound for Almaty, Kazakhstan’s commercial capital.

Besides rail transports, Zhengzhou is also served by the Western Europe-Western China highway, which will stretch 8,445 km from the Yellow Sea coast of China to the Baltic Sea at St. Petersburg when fully completed before the end of the year.

But the city’s ambitions along the New Silk Road do not stop here. In October 2010 the municipal government approved the construction of the Zhengzhou Airport Economy Zone (ZAEZ) around Zhengzhou International Airport (CGO) — one of China’s fastest growing, about an hour’s flight from Beijing and Shanghai. Three years later, the central government nearly doubled the ZAEZ’s size and began creating an international air logistics hub at CGO. Today, the Zhengzhou Airport Economy Zone is a complete urban economic area five times the size of Manhattan, encompassing eight industrial parks, with businesses ranging from regional and international logistics to electronics and e-commerce. Learning from the successful free trade areas in Shanghai and Shenzhen, it ended up ranking second in value of trade among China’s 48 free trade zones — growth led mainly by Foxconn, the contract manufacturer for Apple, which in Zhengzhou operates the world’s biggest iPhone factory.

Although Zhengzhou still lags behind other central and western cities, such as Chongqing — now accounting for about 80 percent of rail shipping between China and Europe on a value basis — there is no doubt that the city is ready to take the lead of northern China. In fact, while for a long time Henan has been considered a rural backwater by the rest of the country, Zhengzhou has definitely become a key city of China’s “Go West” policy, which is focused on building up underdeveloped western and central regions and encouraging foreign investments. As Shu Qing, vice governor of Henan, recently told China Daily, Zhengzhou “undertakes the mission to build a modern multimodal traffic and logistics network linking up the north and south and connecting the east and west, as well as a modern comprehensive transportation hub serving the Belt and Road Initiative.” No matter whether the market wants it or not, China’s economic center of gravity is definitely moving West.

(Pubblicato su The Diplomat)