Welcome to this week’s issue of China Briefing’s Belt & Road Initiative Weekly Investor Intelligence round up.
This week we take a good look at China-EU interconnectivity and developments both along the Northern Sea Passage and the Eurasian Land Route. The Northern Sea Passage, which runs across the Russian Arctic, will reduce China and Asian shipping times to Europe by 40-60 percent, representing huge savings and reduced pollution.
Russia has reacted to this by declaring the entire region a Duty-Free Zone, and this will spur changes in supply chains and distribution and result in manufacturing and import-export opportunities over the coming years.
While not widely discussed at present, the Belt & Road from China to Europe is shortly to become a key transport route.
China-Europe Rail Freight Doubles in 2020. These Are the 44 Key and Emerging European Freight Hubs to Watch
The number of China-Europe freight trains hit a record high of 1,247 in August this year, up 62 percent over 2019 figures, transporting 113,000 TEUs of goods, itself an increase of 66 percent over the year. New transport and distribution hubs are emerging. We examine where these are and the investment potential they offer.
The Northern Sea Passage Route is opening up the Arctic, meaning huge time and cost savings on China-EU shipping. A massive Arctic Free Trade Zone has been announced, offering significant tax and financial incentives, while free land use is available.
Tax incentives and faster delivery times are making Belt & Road Eurasian routes and manufacturing facilities increasingly viable.
Increasing bilateral trade ties between Russia and China – growing at half a billion dollars a month and set to double to US$200 billion by 2024 – are seeing a parallel interest growing in how this trade can best be serviced. Russia and China are often in the position of supplier and consumer, especially for energy, however that is now being joined by other manufacturing, IT, and new hi-tech industries on both sides. This is partially driven by China’s Belt & Road Initiative, partially by a need to divest from trade with the United States (Russia and China), and partially driven by ties between the EU and Russia.
Trade and logistics opportunities await entrepreneurs and businesses all along the Trans-Siberian routes – if you know where to look.
Infrastructure developments taking place in the Caspian region tend not to get much attention from Western media and business interests due to the on-off again relations between the West and Iran, Russia, and China. However, the Caspian Sea is becoming an alternative to the Suez option of shipping between Europe and Asia, and a great deal of activity is taking place.
If the US rejoins JCPOA, Anzali Port will boom as it provides FTZ access to the nearby capital city of Tehran. It is also connected via maritime links to Azerbaijan, Kazakhstan, Russia, and Turkmenistan, and is a crucial part of the International North South Transport Corridor to India.
While there has been some controversy over China’s financing and exporting of its construction SOEs to build projects on the EU’s borders, many are now in the final stages of completion. These include roads and highways within the sphere of influence of the European Union, either because they connect with various EU countries to the Union’s eastern and southern borders or because they are within the EU’s geo-political sphere and relatively nearby.
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