On the Predicament of the Integration of Eurasian Transportation and its Breaking-through

Institute of Comprehensive Transportation of National Development and Reform Commission

P. R. China

Wenhua WU

Dear Chairman, Ladies and Gentlemen:

  Ever since the great geographic discovery, the global communication between people has expanded, which results in the increasingly tight connection of economics and cultures worldwide. In the marine economy dominated world pattern of the modern times, the five Central Asian countries (Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan and Turkmenistan), Mongolia, the three outer Caucasus countries (Georgia, Armenia, Azerbaijan) as well as western China, which are all inland counties or regions along the ancient silk road, share a common geographic constrain: being landlocked and far away from the main developed economic entities, which is the most embarrassed problem for these regions’ integration into the world market. In the contexts of the multi-polarization of global geographic politics and the reconstitution of the regionalization of world economy, to comprehensively promote the strategy of the Silk Road Economic Belt based on the integration of transportation infrastructure will bring about an unprecedented opportunity for the development and prosperity of the inland regions of Eurasia.

  I. The inland region of Eurasia is in the collapse area of the Eurasian economy

  Since the middle of last century, the market economic system dominated by Western Europe and the United States was competing with the planned economic system of the former Soviet Union, Eastern Europe and China etc., which constitutes the basic geographic structure of the global politics and economics. With the economic development of Japan, Korea and Taiwan China, as well as the collapse of the former Soviet Union, especially with China’s transforming from planned economy to market economy, the world economy has entered a new stage of integration, which is characterized with the marketed way of resource allocation. Now, in the Eurasian economic zone, East Asia and EU are becoming economic areas as outstanding as the north America, while the middle of the Eurasian continent is obviously left behind.

  In 2013, the GDP of China, Japan, Korea, Taiwan China and Hongkong China reached to 16.2 trillion US dollars, which is about the same level with EU’s. The GDP of the five Central Asian countries is 338.8 billion US dollars, of which Kazakhstan took up two thirds; the GDP of the three outer Caucasus countries was 100.2 billion US dollars, of which Azerbaijan took up three fourths; the GDP of Mongolia was only 11.5 billion dollars. Nowadays China has become the second biggest economic entity in the world, the largest importer and exporter of merchandise goods and a major producer of industrial goods. Nevertheless, in 2013 the trade amount of import and export between China and its five Central Asian neighbors was only 50.3 billion dollars, taking up 1.2% of China’s total foreign trade; the amount between China and the three outer Caucasus countries was only 2.2 billion dollars. In the two decades of the independence of the five Central Asian countries and the three outer Caucasus countries, due to the collapse of the old industrial division system and the complicated ethical and border conflicts, they are all faced with the problems of restructuring the industrial system and transforming market division. Among them, the resource-rich countries, such as Kazakhstan, Turkmenistan and Azerbaijan, developed faster because they supply energy to China and European countries, but they still have not got rid of the relatively single structure of relying on energy resources and primary agricultural and live stock products as a whole. Compared to the fast developing East Asian economy and European economy, the middle of Eurasian continent overall becomes a collapse area of Eurasian economic zone.

  II. The transportation constrain is the origin of the backwardness of Central Asia

  Although the backwardness of Central Asia is affected by many factors such as history, geographic politics, ethics, geographic location and resources endowment, the transportation condition is certainly one of the major factors. Because the central Eurasian market can obviously complement the East Asian market and the European market, the transportation of this area are directed eastwards to East Asia through western China, directed westwards to Europe through Russia and Ukraine, meanwhile it is as the transit passageway for the transportation of the new Euro-Asia continental bridge. But, the distance from this area to the two ends of the new Euro-Asia continental bridge are both around 5,000 kilometers, and the existing Eurasian transportation is basically relied on railroads, which is confronted with a series of problems, such as the behindhand railway infrastructure; non-uniform railway gauge; too long transit time because of the deficiency of facilities and the transfer capacity of border ports; too high transit cost due to the unbalance between the freight flows of the opposite directions; so many passing by countries that the regulation levels are different and it’s hard to coordinate; there are trade and transportation limitations in some countries, which constrain the traffic volume, etc.

  Now, the major export products of this area are oil and gas. In 2012, there were 37.10 million tons of goods imported from all border ports of Xinjiang (China), including 10.22 million tons of oil imported through the port pipelines of Alataw pass, 15.83 million tons of gas imported through the port pipelines of Horgos, which two kinds consist of 70% of the total importation; 11.05 million tons of goods were transported by railways and highways, primarily by the Alataw pass railway. Meanwhile, the exportation out to central Asian countries via border ports of Xinjiang was only 4.15 million tons, two thirds of which were exported via the ports of Alataw pass and Horgos. The volume of transportation goods other than oil and gas included the passing-by goods of Europe and East Asia, transported by railways, while the goods for the local area are not many. The cause for the above situations is basically the backwardness of transportation infrastructure, such as the connection of railway and highway is not good, which constrains the facilitation of trade and logistics. Of course, fundamentally, this area is far away from major economic center, and the economic development fell behind; the industrial scale is limited; the level of openness is low; it is hard to form large scale local need for transportation while the underdevelopment of transportation restricts the economic and social development of the area in turn.

  III. The Silk Road Economic Belt is to build the bridge for the common development of Eurasian continent

  The middle of Eurasia is located in the heart of Eurasia, east to Asia-Pacific region, west to Euro-Atlantic region, south to the greater Arab Middle East, north to vast Russia. Its strategic status is extremely significant. The steadiness of this area is crucial to the steadiness of Eurasia and even the world. Since the collapse of the former Soviet Union, this area has become the focus of the game between great powers in geopolitical politics. At the end of last century, China, Russia and the Central Asian countries initiated the Shanghai Cooperation Organization (SCO) together, on the basis of mutual trust, mutual benefits, equality, negotiation and respect for diversity of civilization. The number of the members of SCO is now increasing, forming an effective mechanism of mutual-benefit and anti-terrorism cooperation. At the beginning of this century, the USA firstly proposed the “New Silk Road” plan, maintaining to break through the north-south passage from Afghanistan to Central Asia, promoting the cooperation and the free trade between South Asia and Central Asia. In 2012, Russia, together with Kazakhstan and Balerus, raised the idea of “Eurasian Economic Union”, aiming to integrate the former Commonwealth of Independent States by customs union and economic integration. The above ideas or plans are not overall plans about the development of the central Eurasian area from the perspective of viewing Eurasia as a whole. In September and October of 2013, Chinese President Xi Jinping posed the strategic concept of “Silk Road Economic Belt” and the 21st century “Maritime Silk Road”, proposing the ideas of equality and mutual benefit, integrational development, and co-prosperity, tightening the economic ties among Asian, European and African countries, forming an economic entity of Europe, Asia and Africa which will benefit the 4 billion people. Silk Road Economic Belt and the 21st century Maritime Silk Road are China’s significant measures of all-round opening and development in the new era, which are initiated with the construction of transportation network, prompting the development of investment, industry and trade between the countries along the silk roads, realizing the close economic cooperation and exchange between the countries, to form the steady economic partnership and co-prosperity of Eurasian continent. As an opening and inclusiveness strategy, Silk Road Economic Belt, from a loftier and more farsighted perspective, covers the basic contents and requirements and of the New Silk Road and Eurasian Economic Union. It will become the bridge for the common development of Eurasia continent.

  IIII. Promoting the co-prosperity of Eurasia by interconnection of transportation

  The integration of Eurasian transportation is the fundamental way out from the developmental predicament of the Central Asian countries.

  First of all, the transportation infrastructure should be interconnected, to build the northern, central and southern international transportation passageways.

  The northern passageway starts from Chinese Bohai gulf area, passing through Mongolia, which is northwards to Ulan-Ude of Russia, and going through Siberian railway, which can reach westwards to Baltic, Belarus, Poland, and Germany etc.. In fact, this passageway does not involve most countries and regions of Central Asia.

  The middle passageway starts from Chinese coastal ports, following the Long-Hai railway and Lanzhou-Xinjiang railway, going out of China through the Alatwa pass and Horgos border ports, westwards passing by Kazakhstan, Russia and Ukraine, to Eastern Europe and France etc.; meanwhile, passing by Beijing-Baotou-Lanzhou railway, Linhe-Kumul railway (under construction), Kumul-Karamay-Timbuktu railway which is going to be constructed, going into Kazakhstan, connecting with Ayaguz (Kazakhstan), or going along the Kumul- Altay railway northwards to Russia, westwards to Jeminay border port then to Kazakhstan, becoming one part of the northern passageway and middle passageway. Now, the high speed railway from Lanzhou to Urumqi has been constructed and put into use, which to a great extent reduces the transportation stress of existing Lanzhou-Xinjiang railway and guarantees sufficient transportation capacity. The middle passageway is meaningful for strengthening the transportation connection of northern Xinjiang (China), eastern Kazakhstan, Novosibirsk (Russia) and western Mongolia. Except from the interconnection of railways, the western lines of the gas pipelines between Russia and China and the highways connection of all border ports will also be the parts of the transportation cooperation.

  The southern passageway now is passing by Long-Hai railway, Lanzhou-Xinjiang railway, going to Alma-Ata (Kazakhstan) via Alataw pass or Horgos, then westwards to Tashkent (Uzbekistan), passing by Turkmenistan and the Caspian Sea, connecting the three outer Caucasus countries, and passing by the Black Sea, reaching to South Europe; or from Turkmenistan west-southwards to Iran and Turkey, and connect the Middle East and North Africa. China is planning to construct Chengdu-Golmud-Ruoqiang-Korla railway and Ruoqiang-Khotan-Kashgar railway, going westwards into Kyrgyzstan passing by Kashgar, then to Tashkent (Uzbekistan), forming a southern passageway connecting the Middle East and the outer Caucasus. It can reach to Arabian Sea by Kashgar, passing Khunjerab pass into Pakistan and connect the Middle East and North Africa. In future, it will set Kashgar as a hub and go westwards and southwards, to form the major routes of the southern passageway. The southern passageway connects China and most countries and areas of Central Asia, Middle East, Outer Caucasus, South Asia, effecting South Europe and North Africa. It will greatly promote the development of the countries alongside and the western China. The future key points of the construction of the transportation infrastructure of this passageway is China-Pakistan railway and China-Kyrghyzstan-Uzbekistan railway outside of China, apart from the Chengdu- Golmud -Ruoqiang-Khotan-Kashgar railway within China, strengthening the highway connection between major border ports, optimizing the gas and oil pipelines’ distribution.

  Secondly, the technical level of the international transportation passageways should be enhanced comprehensively.

Among the three passageways, the northern one is basically straightway and the route is comparatively clear; the middle one is lying there but being blocked and selective, and the layout should be optimized; the southern passageway is the most complex one, with most transit countries and the major railways has not been connected. Regarding to the technical conditions, the railway network of the central Eurasia is not maintained well, transfer capacity and facilities are poor, which need to be enhanced comprehensively. Some of the projects of the routes are located in desserts and plateaus of western China, Central Asia and Southern Asia, of which the geographic and meteorological conditions are complicated. It is difficult to design, construct, manage, operate and maintain them, which will be a major technical challenge. China is constructing transportation infrastructure on a large scale in recent ten years, and has made comprehensive progress in the transportation engineering technical level regarding to the design and construction of railways, highways and pipelines. It has made innovative breakthroughs in the area of railway technical equipment, which will provide strong technical support for the construction and maintenance of the passageways in future. As to funds concerned, the Asia Infrastructure Investment Bank (AIIB) will be a platform to make financial support.

  In future, the construction of the international passageways should first of all break through the railway connecting line of the middle passageway and the southern passageway, building the interconnected Eurasian railway network, such as China-Pakistan railway, China-Kyrghyzstan-Uzbekistan railway, Timbuktu-Ayaguz railway etc.; then enhance the maintenance and guarantee capacity by technologically renewal and innovation of the existing railways and port yards; then at the same time research and verify the feasibility of high speed railways among some central cities, such as the high speed railway among Urumqi, Alma-Ata and Astana .

  Thirdly, the coordination and cooperation of trade and transit transportation should be enhanced.

The construction of Silk Road Economic Belt is based on international transportation passageways. The aim of the construction is to prompt the facilitation of the trade and logistics of the countries along the passageways, and to overall enhance their economic and industrial competitive powers and push them onto the fast track of Eurasian economic development, enjoying the fruits of modern civilization. Because of the huge differences of resource endowment, geography, economical systems and the preconditions for development, combined with complicated geographical politics, history, ethnics and religions, there are various degrees of protectionism on trade, investment, tax and labor transfer, which is not beneficial to the development and prosperity of the common market of this area. Meanwhile, there are some unreasonable limitations or self-interested policies about the transit transportation and border control measures in some countries including China, which inevitably affects the efficiency of international passageways. In the future, the developed countries should take more development responsibility and make more interest concession, on the premise of fully respect and take care of the developing countries’ situations as well as their appeals for actual and core interests. Nations should resolve disputes by bilateral and multilateral consultations, to realize mutual benefits and “win-win” situation.

  Eurasia with common wealth and prosperity is the cornerstone of the steadiness of the world, as well as the fortune of world peace and human civilization!

  Thank you!