China considers rail expansion into Asia and Eastern Europe

Out-Law News | 09 Jul 2014 | 3:34 pm | 1 min. read

China is considering a 3,000-kilometre railway line linking Yunnan province in the country’s far southwest to Laos, Thailand, Malaysia and Singapore, according to a report in China Daily .

China Daily said Zhao Xiaogang, the former chairman of China South Locomotive and Rolling Stock Company and an adviser to the China Institute for Innovation and Development Strategy, estimated the project would cost around $75 billion.

Zhao reportedly said the proposed project could be “largely finished in 2020 and fully completed in 2025”.

A separate 6,000km high speed railway rail link, proposed between China’s Xinjiang Uygur autonomous region and Eastern Europe, needs “further negotiations on issues including geopolitics, technological standards and funding”, according to China Daily. Zhao reportedly told the publication that the railway was expected to pass through Kyrgyzstan, Tajikistan, Uzbekistan, Turkmenistan, Iran and through to Turkey and Bulgaria.

Zhao, who reportedly described the link as a “new Silk Road”, said: “Passenger train speeds will reach 200 kilometres per hour and freight trains 160kph.” Investment in the line, which could be fully completed by 2030, will be about $150bn, Zhao said.

However, details still under discussion to expand international rail links include reconciling differences in track gauges among nations, China Daily said.

Chinese president Xi Jinping promoted increased rail links as part of a wider initiative to boost international trade when, as vice-president, he visited Central and Southeast Asia in 2013.

In the 2013 annual report of the China Railway Construction Corporation Limited (387-page / 5.78 MB PDF), chairman Meng Fengchao said the “high-speed rail diplomacy” advocated by China’s leaders presented “huge opportunities” for the company. He said overall infrastructure investment would remain high throughout 2014 with “more opportunities than challenges... to optimise strategy, deepen reform and speed-up structural adjustments”.

In 2013, the company recorded a net profit in excess of 10bn renminbi ($1.6bn) for the first time. The company was also placed in the top 100 in the Fortune Global 500 list of firms ranked by revenues for the first time, the report said.

Earlier this year China announced that foreign investors will have more opportunities to invest in Chinese state projects and state-owned enterprises, including those in the oil, transport and telecoms sectors, as the government pushes the development of a mixed-ownership economy.

Last March, the World Bank approved a total of $600 million in loans to China for projects including improvements to public transport services and an expansion of railway capacity along a key transport corridor in the country’s northeast.