The Limits of China’s “Silk Road” to Europe

The Diplomat (Japan)

13 January 2017

Wu Shang-su

The latest rail link between Beijing and London joins 38 lines already connecting about 30 cities in China and Europe. The expansion of rail links reflects several motivations on China’s part. First, China is actively promoting industrialization in China’s poorer inland provinces, both to balance development and to avoid rising costs in the coastal areas, thus keeping Chinese products competitive in the global market. In contrast to coastal locations, however, sea transport is more expensive and time-consuming for exporting goods produced in inland China. Thus, rail links across the Eurasian continent become a reasonable means of connecting with European markets. Those rail links also serve as part of the “One Belt, One Road (OBOR)” initiative to form economic corridors in Central Asia or even to East Europe.

Economic development in the Eurasian continent’s landlocked states in the continent has fallen behind, thanks to their lack of ocean access as well as the lingering impact of political barriers put up in the Soviet era. To accelerate their economic growth, railways would be the most efficient means to strengthen their trade with the rest of the world. Based on those states’ limited financial capacity, prices are a crucial factor in their ability to invest in rail transport, and the China Railway Rolling Stock Corp (CRRC) is seen as an affordable source, evidenced in the CRRC’s rapidly expanding business in East European and Central Asian states. In other words, the rail links also create demand for Chinese rail industry.

Although the OBOR initiative has a maritime component as well, China’s sea lines of communication (SLOCs) are vulnerable to external threats until the People’s Liberation Army Navy (PLAN) is able to provide sea control — a condition that may not be realized in the near future. In the meantime, railways provide an alternative route for trade. Despite the lower capacity and higher costs of rail lines in comparison with sea transport, several technological advances, such as more powerful locomotives, central traffic controls, and auto signalling systems, have improved the efficiency of rail transport. With increased, more efficient rail links to Europe, Beijing’s economic vulnerability to a naval blockade during wartime or a crisis would decrease.

… Wu Shang-su is a research fellow in the Military Studies Programme of the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University.

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