In the increasingly competitive China-EU rail freight space, Estonia’s EVR Cargo has secured contracts with Sweden’s IKEA to use a new China-Estonia route to service IKEA’s customers in Scandinavia. The train, which is scheduled to arrive later this month, provides a more cost-effective manner of getting Chinese manufactured products to European markets than sea and three times faster.
The train arrives at Paldiski, a sea port in North-West Estonia on the Baltic Coast, and from there by ship to the Swedish port of Kapellskär. EVR Cargo CEO Raul Toomsalu stated in Estonia’s Daily Newspaper Eesti Päevaleht that “While transporting by container from China to Europe previously cost approximately $600, then by now it has reached $1,500 dollars. The cost for a container is nearly the same as transporting by rail, only that instead of 45 days, the journey lasts 10 to 12 days.”
The first direct freight rail service from China to Finland is expected to reach the Finnish rail terminal of Kouvola around the 10th November, as direct services commence between Xi’an and the Kouvola hub. In what will become a west-east weekly service, the route re-establishes Xi’an as a major rail centre along the Belt and Road, and reintroduces Kouvola as an international terminus to the east.
Xi’an, then known as Chang’An, was the ancient capital city of China and was the original terminus for the Silk Road back in the days of Marco Polo. The city still retains a large amount of Silk Road history. Kouvola meanwhile has been enjoying something of a resurgence of late as Finnish policy has been to develop what used to be a major thoroughfare between Russia and Finland during the Russian Imperial era with its rail services originally commencing in 1870. Today, despite Russian sanctions, Kouvola remains a major rail hub in Finland with hour long express links directly to Helsinki and the capitals sea port facilities.
By Melissa Cyrill
China is steadily laying the groundwork for its ambitious ‘One Belt, One Road’ (OBOR) program. Given that it is an expansive regional infrastructure and connectivity initiative, the dismantling of trade barriers throughout the OBOR region is important. China realizes this, and has been actively pursuing free trade agreements (FTAs) with all key stakeholders.
OBOR is now labeled the Belt and Road Initiative (BRI) to reflect the fact that it will connect Asia, Europe, and Africa along five maritime and land routes. This includes two South Asian economic corridors: Bangladesh-China-India-Myanmar (BCIM) and China-Pakistan (CPEC).
As a result, China is actively seeking to improve its trade relations with South Asia. Deeper connectivity, once achieved under the BRI, will boost the development and commercial aspirations of South Asia’s lagging economies, and open up new markets for China. However, China has yet to convince India; the latter is against the China-Pakistan Economic Corridor due to geopolitical concerns.
The China-Pakistan Economic Corridor (CPEC) is a major transportation link between far western Xinjiang Province in China and the port of Gwadar in south-western Pakistan. It has been part of the bilateral agenda for both countries for a number of years now, and is considered by China to be a key element of its Belt & Road Initiative. Much of the analysis of CPEC has seen it as primarily a means for China to gain access to an Indian Ocean port at Gwadar, but recent plans reveal that the CPEC agreement also includes an agreement for China to lease thousands of acres of agricultural land, and to install a full system of monitoring and surveillance in cities from Peshawar to Karachi, with 24-hour video recordings on roads and busy marketplaces for law and order purposes.
CPEC’s main objector, however, is Delhi, who contests that part of the corridor runs through disputed territory belonging to India, and not Pakistan. This continues to be a main factor of disunity in China-India relations. The two sides also continue to share two further major border area disputes.