Opportunities and Challenges for China – The Diplomat

After 20 years of negotiations, construction of the China-Kyrgyzstan-Uzbekistan (CKU) railway is expected to finally start next year. An online meeting was recently held between China, Kyrgyzstan and Uzbekistan, and according to their statement, a feasibility study will be completed this year. President of Kyrgyzstan Sadyr Japarov said that construction will begin in 2023.

In the context of the Russian-Ukrainian war, the CKU railway presents a number of strategic and economic opportunities for China, especially in the context of overland trade relations with the European Union. From the point of view of strategic opportunities, it is not surprising, firstly, that this statement was made at the time of the tightening of international sanctions against Russia. With the outbreak of war, various international companies decided to stop using Russian territory as transit country, some in response to Russian aggression and others because of the deteriorating business environment in the country. The CKU railway provides China with an opportunity to diversify its trade routes, reduce dependence on Russian routes, and maintain sustainable rail trade with EU countries in the long term.

Secondly, the new route will create an opportunity for Beijing not only to reduce its dependence on the territory of Russia, but also to reduce its dependence on Kazakhstan as a transit country. This factor is especially important because in recent years domesticated The unrest in Kazakhstan has shown that depending on any one Central Asian country for railroad trade can be risky. In this context, the CKU railway can help China diversify its rail routes and switch freight from one route to another during future crises.

Finally, in addition to route diversification, the new railway could contribute to the economy of Kyrgyzstan and Uzbekistan. They will receive not only transit fees, but rail routes can create new ones. workplaces. New business opportunities in Kyrgyzstan and Uzbekistan are important for China as they help the two Central Asian countries, especially Kyrgyzstan, to remain resilient and reduce the risk of civil unrest, thereby helping China stabilize its western borders.

The CKU railway will also create economic opportunities for China. First, Beijing could send its products via the new route to both the Middle East and European markets. According to the plan, the CKU railway will become one of the shortest routes for sending goods to both regions, as it will shorten the cargo route by 900 km and save seven to eight days on the way. time. Along with the Middle Corridor, the CKU railway can help increase the carrying capacity of the Central Asian countries through East-West trade. In this context, China can maintain the sustainability of its rail trade with the EU and compensate for its losses in the Northern Corridor passing through Russian territory.

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Second, the CKU railway can also help Beijing realize its economic growth plan in China’s central and western regions. China. In particular, the new rail route could stimulate new business opportunities and develop the manufacturing industry. In addition, increased interaction with the countries of Central Asia can also improve the overall economic situation in the central and western regions, which can reduce the risk of social instability.

Despite the various opportunities offered by the CKU railway, there are still political, financial and technical difficulties that may hinder the project. On political issues, over the past two decades, politicians from both the government and the opposition in Kyrgyzstan have questioned the economic benefits of the CKU railway. China and Uzbekistan, in particular, want to use the shortest route through Kyrgyzstan, without stopping in major Kyrgyz settlements. However, Bishkek prefers to build a longer route through the general population. centers because he wants to promote a side effect, such as creating new jobs and promoting the export of Kyrgyz products. authorities recently OK The preliminary route for the Kyrgyz section of the CKU railway shows that they still maintain a route that passes through local trading hubs and major population centers. Debate over the route can slow down or interfere with a project, as it has done in the past.

Moreover, public opinion can also affect the implementation of the project. Rising anti-Chinese sentiment in Kyrgyzstan could increase pressure on the government. In Kyrgyzstan, only 19 percent of the population strongly support Chinese investment in energy and infrastructure projects, while 31 percent strongly oppose Chinese investment, according to a recent Central Asia Barometer (CAB) poll. In addition, 66 percent of people are “very concerned” that Chinese projects will increase Kyrgyzstan’s public debt to China. The CKU rail project could spark increased anti-Chinese sentiment and lead to more protests against the government, potentially preventing the rail project from being completed.

Secondly, despite ad that Russian President Vladimir Putin has given his consent to the construction of the CKU railway, the future position of Russia may affect the project. Moscow needs Beijing’s help because of the Russian-Ukrainian war, so an agreement could be a tactical move in the short term. However, after the war, Russia could change its position and again try to block the project. Because the new railway route can attract 10-15 percent of cargo coming from Kazakhstan-Russia. the border to the CKU railway, this could reduce Russia’s importance as a transit country in China-EU rail trade, resulting in a loss of transit fees.

In addition to political difficulties, financial and technical problems also play an important role. In terms of financial problems, there is uncertainty regarding the financing of the railway. According to the State Railway Company of Kyrgyzstan, Price railroad will amount to 4.5 billion dollars. Based on past experience, China prefers to share the burden with member states or international or regional organizations as this diversifies risks and prevents financial losses. In this context, Chinese Ambassador Jiang Yan accent that the railroad is owned by three countries and that they must work together shows that China does not intend to finance the project alone.

As for technical problems, there is no common understanding of the gauge of the CKU railway in the Kyrgyz section. Although China wants to use the international standard to measure, which is 1435 mm, Kyrgyzstan prefers to use a wider gauge that dates back to the Soviet period and is still in use in much of Central Asia. The final width decision will also affect the time it takes for the shipment to arrive at its destination.

Despite the various strategic and economic opportunities that CKU railway presents for China in an era of increasing unpredictability in the Northern Corridor, there are still challenges that could hinder railway construction and harm rail trade between China and the EU in the short to medium term. . Technical and financial issues are of particular concern in the short term, given the possible repositioning of Russia and domestic politics in Kyrgyzstan as decisive factors influencing the medium term when it comes to the future of the CKU railway.