FROM OUR CORRESPONDENTEURASIA
scale and scope. But it is worth reiterating its magnitude – Eurasia covers 70 percent of global population, 75 percent of energy resources and 70 percent of worldwide GDP. The overarching goal is to connect the
whole continent with a network of roads, railways and energy projects to massively boost trade –with all routes leading to China. At least USD50 billion will be spent on infrastructure investments across 65 countries, eventually adding USD2.5 trillion to China’s trade over the next decade. The USD100 billion-funded Asian
Infrastructure Investment Bank (AIIB) was launched in January 2015 to provide capital for OBOR projects. Complementing this financial might are geopolitical integration initiatives such as the Eurasian Economic Union (EEU) and the Shanghai Cooperation Organization (SCO).
Customs union Launched in 2015, the EEU is a Customs union of Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan. In October 2016, the EEU signed a free trade deal with Vietnam, while 40 other nations have expressed an interest in similar pacts. Complementing the EEU is the SCO, a
political and economic talking-shop for China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan, with soon-to-be- members India and Pakistan waiting to join. Both are increasingly viewed as
supranational organisations reflecting the ascendancy of the Eurasian region and the considerable global trade implications of OBOR. Furthermore, both signal a warming relationship between Russia and China. Outside the political realm, OBOR is
already starting to have on-the-ground trade implications. Take Asia-Europe rail freight, for example. A proliferation of new services has recently emerged following investments in railways, special economic zones and dry ports. In Kazakhstan, Khorgos Gateway has
been set up on the Chinese border to act as a rail freight transhipment hub – consolidating rail cars from multiple Chinese cities and sending bloc-trains through Central Asia and Russia to Eastern Europe, or in some cases, Iran and Turkey. Here, the opportunity to cheaply export European goods back to China’s booming consumer markets is also driving investment in improved Eurasian connectivity. Khorgos, which is run by Dubai based
global container port operator DP World, was set up with the same technology and processes as a modern sea terminal – a deliberate lifting of standards for the
78 January/February 2017
typically monopolistic rail industry. Khorgos handled over 70,000 teu in its
first year of operations and is on track to process 500,000 teu a year by 2020. Furthermore, a new line is being built to connect Khorgos with Aktau on the Caspian Sea, while the Kyrgyz leg of the China- Kyrgyzstan-Uzbekistan railway started construction earlier this year. Outside of railfreight, other notable
OBOR transport projects include a number of high-speed rail links and new highways. This includes the China-Pakistan highway, which is part of the wider USD46 billion concept for an ‘economic corridor’, in addition to an oil pipeline between the two countries. Energy connectivity is the second major pillar of OBOR. According to Dr Liu
Qiang, secretary-general of the Global Forum for Energy Security, the goal is to accelerate energy supply and connections from central Asia and Russia to China. “The initiative will also help mitigate the
risks currently inherent in the transport of fuel and other goods through unstable, insecure or unfriendly channels. The result will be strengthened energy and geopolitical security, as well as a more stable regional energy market,” Qiang told HLPFI.
Energy network
Qiang said a more efficient and integrated energy network would be created via upstream projects, oil and gas pipelines, liquefied natural gas terminals, high-voltage power lines, nuclear power and renewable energy. For example, line D of the Central Asia-
China gas pipeline, although currently delayed, will for the first time traverse all five Central Asian nations, and could raise Turkmenistan’s gas exports to China from 55 billion to 85 billion cu m per year. “One of the biggest problems for
development in East and Central Asia is money – they need money for energy projects to improve infrastructure in rural areas. China has the money,” Qiang added. The TPP had in part offered a US-led
alternative to OBOR, or from a trade perspective at least, a very different vision for the next stage in globalisation. Now, however, uncertainty surrounds
Energy connectivity is the second major pillar of China’s One Belt, One Road policy. The goal is to accelerate energy supply and connections from central Asia and Russia to China.
Global Forum for Energy Security – Dr Liu Qiang,
Trump’s economic vision and the impact of global trade for the duration of his upcoming presidency. On the other hand, Trump’s plans to
implement his own China-like domestic infrastructure spending, coupled with his environmental policies, could be a boon for the US energy industry – some analysts are predicting a surge in oil and gas production, relaxed coal regulations, and a lifting of limitations on fracking.
HLPFI
www.heavyliftpfi.com
The Chinese are rumoured to be eyeing the purchase of the Port of Cagliari.
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