Posted: May 1, 2016 |  AUTHOR: KEN FOX | CONTACT ME

 

It is China’s time to show its global influence by building railroads, roads and seaports. China’s President Xi Jinping has set out to create “the Silk Road Economic Belt,” which focuses on better connecting China’s economy with the rest of Asia, Africa, the Middle East and Europe. The plan calls for roads, railways and seaports reflecting a modern version of the Silk Road. Another part of this vision looks to the South China Sea, the South Pacific and Indian Oceans and is known as the 21st Century Maritime Silk Road

(to be discussed in a future blog).

China has already shown its expertise in building long length railways, such as the elevated Beijing to Lhasa, Tibet route, which is 3,757 kms long. Other plans include building train routes as follows:

1. A high speed train route is being built between Moscow to Beijing. When finished this route will be 7,000 kms or about 4,340 miles long.

2. The world’s longest rail tunnel, 126 kms from Pingtan Island, Fujian Province, China to Taipei, Taiwan

3. The world’s longest railway line, an 8,078 mile cargo route between the Chinese city of Yiwu, Zhejing Province (East coast of China) and Madrid,       Spain.

4. A proposed 230 mile (370 km) long, high speed train route between Las Vegas, Nevada and Los Angeles, California, USA.

5. A 1,125 mile long bullet train from Kashgar, the western most city in China, in Xinjiang Province (shown as Kashi on the map below) through Pakistan to its Arabian Seaport of Gwadar.

6. A 3,300 mile, high speed railroad from Acu, Brazil, near Rio de Janeiro, crossing the Amazon rainforest and the Andes Mountains, and ending on the coast of Peru. The proposed cost is $10 billion.

7. China made agreements with the African Union to help build railroads and airports to link all 54 African countries. Some African specifics include:

  • a. $13 billion, 875 mile long coastal railroad in Nigeria
  • b. $3.8 billion 500 mile long railroad connecting Nairobi and Mombasa     in Kenya
  • c. $4 billion, 460 mile railroad linking Addis Ababa, Ethiopia and Djibouti
  • d. $5.6 billion, 850 mile railroad network in Chad
  • Plans also include the China Railway Rolling Stock Corporation (CRRC) to build a $60 million new railcar manufacturing facility in Springfield, MA, USA. This would provide an estimated 284 new railcars needed for the Boston Transit Orange and Red Lines.

*Multiple route options are being discussed

Map References

China Province Map

Map Showing Railroad Route from Yiwu, China to Madrid, Spain

The proposed train routes are usually built using a joint venture between a local country   company and a state owned Chinese railroad company. For example, Russia has contracted with the China Railway High Speed (Company) (CRH), a subsidiary of the state-controlled China Railway (CR) working in a joint venture with a local Russian firm,Uralvagonzavod. The Los Angeles to Las Vegas railroad link would use a joint venture with a U.S. firm, XpressWest with China Railway International USA, a consortium led by China Railway (CR).

The train routes above would utilize different train types, some using bullet trains but others using more traditional engine driven trains, and some designed for freight trains.

a. The first China to Madrid cargo train consisted of 82 container cars carrying Christmas gifts, trinkets and decorations, stationary and craft products and arrived in mid December 2015. It carried olive oil and Spanish made goods for the 16,156 mile return trip. 

China to Madrid Train

b. Chinese bullet trains will be introduced on some of these new routes.

c. Rendering of XpressWest Train on route from Los Angeles to Las Vegas, USA

Commentary

Bullet trains were originally introduced in Japan. They can reach speeds of about 200 miles per hour. Companies in Canada, France and Spain also manufacture these trains. High speed trains cannot only decrease travel times but also offer economic benefits. These include improving accessibility, where train stations may reside in city centers, increasing land values along its route and reducing auto traffic.

The Chinese government will continue to propose and develop impressive infrastructure projects. One example is the current building of the 31 mile long road, bridge and tunnel connection between Hong Kong and Macau.** It has been more challenging than first thought, and the completion date has been delayed until 2017. Other recent proposals to Mexico and Indonesia have been initially accepted but placed on hold due to budgetary or political reasons.

China’s goals are multifold, one to better compete with the leading global high speed rail manufacturers, and second to influence the world in unique ways. Building railroads, roads and seaports reminds the world of their presence, influence and business building opportunities.

**See prior “China’s Pearl River Delta Going Global” blog published June 1, 2012.

Resources:

  1. China is Building The Most Extensive Global Commercially-military Empire in History, by Steve Levine, Quartz, June 9, 2015.
  2. China’s Port in Pakistan is No Safe Harbor, Saeed Shar, Wall Street Journal, April 11, 2016.
  3. China’s Plans to Build World’s Longest Rail Tunnel-from Pingtan to Taipei-is Part of Xi JinPing’s Long Term Strategy on Taiwan, Minnie Chan, South China Morning Post, March 7, 2016.
  4. Russia is Building a Train That Will Zip from Moscow to Beijing in Just 48 Hours, Stafano Pozzebon, Business Insider, January 3, 3015.
  5. China in Africa: Empire of the Sums, The Economist, August 2, 2014.
  6. A High-Speed Rail from LA to Las Vegas? China says it’s Partnering with U.S. to Build, Julie Makinen and Dan Weikel, Los Angeles Times, September 17, 2015.
  7. China to Spain Cargo Train: Successful First 16,156-Mile Round Trip on World’s Longest Railway Brings Promise of Increased Trade, The Independent, Alistar Dawber, February 24, 2015.
  8. China ‘Smart Trains” Ready to Challenge Global Companies in Modernizing Rail System, Manny Salvacion, yibada.com, March 12, 2016. 
  9. High Speed Rail is Popping Up All Over the World. Here’s Why it’s a Good Thing, Edward Meng, City Metric, August 3, 2015.
  10. China Lays Out Path to Silk Road, Wall Street Journal, March 28, 2015.
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©2017, The Global Galaxy blog is produced by The Soundings Group, LLC, Charleston, South Carolina, USA, www.thesoundingsgroup.com. The company is an international business consulting firm, specializing in new market assessments, market entry strategies and marketing guidance. The scope of Global Galaxy is to cover timely international trends, issues and business building ideas. Its purpose is to educate, inform and stimulate thinking for business opportunity analyses.

 

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