Putin’s war has killed China’s Eurasian Railway dream

Andreea Brinza | 1 March 2022

When he was welcomed to Beijing’s Great Hall of the People on Feb. 6 for the Olympics, Polish President Andrzej Duda talked to Chinese President Xi Jinping about the long-standing vision of transforming Poland into China’s “gateway to Europe.” Duda was the only European Union head of state, save for Luxembourg’s grand duke, who participated in Beijing’s opening ceremony of the 2022 Winter Olympic Games, widely scorned for concerns over China’s human rights abuses. Thus, his optimism was shared by Xi, who also hopes to transform Poland into a logistic hub along the China-European Union supply chain.

But Russian President Vladimir Putin has likely put an end to that dream. Poland is home to train routes connecting China to Europe along the New Eurasian Land Bridge. This railway corridor that crosses all of Eurasia—running through Kazakhstan, Russia, and Belarus—has become an important branch of the Belt and Road Initiative (BRI), dubbed the iron silk road. The image of Chinese trains crossing Eurasia and bringing Chinese goods to European consumers has been intensely promoted by Beijing and has become an important part of the BRI brand. But almost half of those routes pass through Russia—and could be massively impacted by European sanctions following Russia’s invasion of Ukraine.

In 2017, around 40 freight routes connected China to Europe. Today, the number has almost doubled to 78 lines, reaching 180 cities in 23 European countries. Not only has the number of routes and cities increased but also the number of trips. In 2016, there were only 1,900 trips; in 2021, that number reached almost 14,000 trips. As this number skyrocketed during the pandemic, so did the value of goods transported by these freight trains—from $8 billion in 2016 to $74.9 billion in 2021. The trend was ascendent even during the pandemic, rising by 50 percent in 2021 from around $50 billion in 2020. This was a big boost to the railway routes China has tried hard to support, promote, and make profitable.

It’s not clear if they actually hit profitability. There’s been a lot of boasting about how the trains, which once ran mostly empty on their way back home, are now full in both directions—but there’s also still substantial subsidies. Yet there’s signs that things were genuinely going well. As China-Europe freight trains became the BRI’s successful image, China boasted that the service provided “continental supply chain stability” over the past few years. Supported by lots of Chinese government subsidies during its first years of operation, China is now considering whether to end them in 2023, after reducing them from $3,000 to $5,000 per container to $1,000 per container.

With more than 50,000 trips now made (in 2021, a train was leaving every 30 minutes), half of them during the pandemic period, China-Europe freight trains also developed new hubs. Although Poland hopes to strengthen Lodz’s status as one of them, Russia’s St. Petersburg has already become an important commercial hub that mediates China-Germany trade flows, due to the time saved by offering fewer border transits or gauge changes.

But that was before the Russian army invaded Ukraine and the West decided to impose harsh sanctions on Russia. Companies like DHL, Volvo Cars, or Ligne Roset may no longer be allowed to or may choose to no longer ship goods via Russia, a sanctioned country.

Sanctions on Russia will reverberate over one of Russia’s few allies: China. Without a direct condemnation of the invasion and with its media largely amplifying Russian propaganda but without offering direct support for it, China remains in a gray zone with regard to Ukraine. Tacitly accepting Russian aggression, China also accepts that its exports to Europe may plummet, and with it, China’s economic growth may suffer too. All these developments will happen in an important year for Xi, a year that will host the Chinese Communist Party’s national congress—which must be perfect for Xi’s image as a great Chinese leader during his march to achieve the great rejuvenation of the Chinese nation.

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This article has been previously published in Foreign Policy. You can read the full article on Foreign Policy’s website.

Photo Credits:  DHL containers in Switzerland (Flickr/Deutsche Post DHL); Railway tunnel (Pixabay/Tama66)

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Andreea Brinza

Andreea Brinza is a researcher and the Vice President of RISAP. Her interests are related to the geopolitics, geostrategy and geoeconomics of the Asia-Pacific region and especially China. Her research focuses on the Belt and Road Initiative.

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