In June, China’s CITIC Ltd., a state-owned conglomerate, announced that its banking, securities, trust and construction divisions will invest more than C¥700bn ($112.79bn) to support China’s “One Belt, One Road” initiative.
According to Reuters, the investments will involve about 300 projects from Singapore to Turkmenistan. Examples of projects will include the building of networks for railway, highways, oil and gas pipelines, power grids, internet networks and ports.
Rail is proving an integral part to the Silk Road initiative as well as linking China to Europe. According to China’s news agencies, China recently launched the world’s longest freight train route which, at 9,820 km long, links the city of Harbin in north east China with the German city of Hamburg. The first train on the route set off on June 13. The journey takes 15 days, passing through Mongolia, Russia, Belarus and Poland.
According to Chinese sources, the route will be used to transport electronic equipment, automotive parts and clothes manufactured in north and north east China. German auto manufacturers Mercedes Benz and Audi as well as Taiwan’s electronics manufacturer Foxconn are said to be planning to use it.
Additional rail cargo services that pass through Russia via its Trans-Siberian Rail to Europe run from a growing number of Chinese cities, including Chongqing, Chengdu and Changsha.
Among logistics providers utilizing these networks has been DHL Global Forwarding. Recently, it extended its reach by signing a memorandum of understanding with Kazakhstan Temir Zholy Express (KTZ) to increase rail connectivity and trade between China, Kazakhstan, the Commonwealth of Independent States (CIS) countries and Europe. According to the press release, DHL plans to develop its overland rail routes as an alternative to traditional sea and air freight. Additionally, DHL will also provide value-added services such as temperature controlled containers.
According to the CEO of DHL Global Forwarding China, “By partnering with KTZ Express, we hope to provide China-Europe trade expanded services in the pivotal Central Asia region, through investment in both new and traditional trade route infrastructure, like rail enhancements along the South Silk Road – in line with China’s ‘One Belt, One Road’ initiative.”
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)