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Silk Road revival

The One Belt One Road Initiative appeared back in 2013, when the current leader of China People’s Republic (PRC) Xi Jinping decided to revive the transport corridor, which was formerly called the Silk Road. This project was supposed to link Asian countries with China and Western Europe, where most of the goods produced in the Asia-Pacific region are exported. However, over time, the initiative affected many logistics and investment projects.

One of the priority goals of creating the One Belt One Road logistics corridor is the development of the western regions of China, which historically remained less involved in economic growth of the republic. Therefore, the “Belt and Road” is laid through twelve western provinces and autonomous regions of China, which account for 72% of its territory and 84% of the length of the country’s borders. Through the construction of transport corridors from Asia to Europe through the western regions of China, the problem of the uneven regional development of China will be solved.

Of course, the implementation of the One Belt One Road Initiative will be facilitated by the largest Chinese companies and corporations. Additionally, it is planned to attract local specialists for the implementation of the project. This will create new jobs and direct an oversupply of production capacity for the implementation of the logistics corridor in other countries.

For example, China has already entered into an agreement to relocate its steel and cement enterprises with 20 countries, through the territory of which the “One Belt Oned Road” will pass. Partnership in the One Belt One Road project will allow Russia as one of the largest electricity exporters to expand its markets. Due to the fact that along the entire route of the transport the corridor is home to energy consuming countries (including China and India), Russia will be able to strengthen its position in the world market.

If we talk about the external goals pursued by the Chinese authorities in the implementation of the project, then this is, first of all, the growth of trade due to the development of transport and infrastructure, optimization processes of international communication, organization of cultural exchange between countries.

Given that the One Belt One Road will pass through the territory of 70 countries, where 63% of the world  population live and 40% of the world gross domestic product is realized, China? through realization of the largest infrastructure project in history? will have access to new markets.

Russia, in turn, being a partner of the project, will be able to accelerate the development of the Far Eastern region, in particular, to complete the construction of the Primorye-1 and “Primorye-2” transport corridors. This will allow by 2024 to double trade between the Russian Federation and China – up to $200 bln.

This year the growth of exported and imported goods between Russia and China is observed. For example, in 2021 it reached a record high of $146.88 billion, an increase of 35.8% compared to 2020.

In case of solving existing problems, such as poor quality of transport services and inefficiency of logistical decisions due to inconsistency of the actions of the parties, trade volume may increase now, by at least 10-15% this year. For this it is planned to launch construction of logistics infrastructure such as transport and logistics hub in the port of Heihe, on the border of Russia with China. This will increase throughput of the Far East and in general increase the pace of development of the Eurasian region.

In addition, the development of the Arctic will accelerate, as part of the “Sea Silk Road of the 21st Century,” participating in the logistics corridor, will pass through the territory over which Russia has  monopoly control. China, for its part, will provide funding for the creation of the Arctic transport corridor and trade.

Italy is the first G-7 country to agree to participate in the project, expects to modernize, at the expense of Chinese investments and specialists, its worn out transport infrastructure, which has already become a national problem. within the framework of the One Belt One Road project Portugal will build a new container port. And Helsinki can build railway tunnel to Tallinn, which can become optimal way of delivering goods to Eastern Europe from Asia. Thus, China’s direct investment in the construction and reconstruction of transport infrastructure in other countries participating in the One Belt One Road project in 2021 exceeded $130 billion. At the same time, the volume of trade between the republic and the partner states has also increased – up to 9.2 trillion rubles, which suggests that One Belt One Road is not only the major logistics project of the present, but also economically profitable for all countries-participants.

By Alexey Tuzov, Independent expert in the transport industry

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