China-Europe cargo trains can build links along regional markets, promote B&R

By Hu Weijia Source:Global Times Published: 2017/11/19 22:38:40

As more cargo trains link China and Europe, more efforts are needed to transform the transcontinental cargo trail into a new platform for Europe's commodities to reach the world along the modern Silk Road.

The China-Europe freight train service is a key component of China's Belt and Road initiative. Since January 1, more than 3,000 cargo trains have traveled between China and Europe, surpassing the combined number from 2011 to 2016 and marking a milestone in China's efforts to create a new trade route across Eurasia.

China has given high priority to increasing the number of these cargo trains and facilitating links by more European and Chinese cities to the network. This was a way to promote the successful operation of these trains in the first few years after they were launched in 2011. However, this year may be a turning point for these services, when operators may shift their focus to ensuring sustainable development of the new trade route.

While trains leaving China fill up fast, people have found it is not easy to get enough cargo on the return trips. Trade imbalances between China and European countries have a direct impact on the volume of freight as well as the profitability of the project.

In contrast to air and sea services, China-Europe cargo trains have unique advantages. They attract clients who need faster transport than sea shipping allows but who are price-sensitive, making trains an economical choice for exports of some European goods such as olive oil, wine and electronic components.

Trading, warehousing, logistics and consulting networks must be established to make cities along the rail lines into new logistics hubs of international trade. Better road connections are also needed between the railways and plantations and industrial parks.

China-Europe rail cargo services aren't important only to cities at the end of the lines. They also have an impact on countries and regions along the route such as Kazakhstan and Russia. Factoring in complex local political and economic environments in some countries and regions, China has to seek cooperation with local governments and also gain public support by bringing real benefits to the people. Building economic zones along rail lines is the best way to achieve that goal. China-Europe freight trains can be used as leverage to boost exports from those markets to China. When cargo volumes become large enough, freight costs can be reduced further because of the scale effect.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: EYE ON THE ECONOMY

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