All aboard China's gravy train...
The East Wind is due in London on Wednesday, bearing not only low-cost trinkets but the Chinese government's high hopes for its New Silk Roads project
When the 34-wagon East Wind train rolls into London this week after its 12,000 kilometer journey from the mega-market city of Yiwu in China’s eastern Zhejiang province, it will be carrying more than low-cost consumer goodies.
This train — said to be running along the world’s longest scheduled rail route, more than 2,000 kilometers longer than the Trans-Siberian Railway — will also be bearing the transcontinental ambitions of the Communist Party of China’s “One Belt, One Road” trade policy.
The train’s journey links China and the UK via Kazakhstan, Russia, Belarus, Poland, Germany, Belgium, France and the tunnel below the English Channel, and is scheduled to arrive at the Barking rail freight terminal in London’s eastern suburbs on Wednesday. It is intended as the first of a weekly service but it also, says one Asian shipping expert, most likely driven more by policy than the bottom-line.
“While China’s yoking of continents via trade and transport infrastructure is hugely impressive, there needs to be some perspective on it all,” said Sam Chambers, editorial director at Asia Shipping Media. “While train volumes are growing dramatically they are still nothing compared to what is moved by sea. … Train freight might compete with air cargo, but shipping lines have nothing to worry about because they offer such enormous scale.”
The East Wind service, named after Mao Zedong’s famous saying that “the east wind will prevail over the west wind,” will get from China to the UK in 16 days — roughly half the time it takes a ship. However, a standard container on the new rail route costs about US$5,000, more than four times the equivalent on a ship, Chambers said.
Trains do have their uses, he conceded. When South Korea’s Hanjin Shipping went bust in August, billions of dollars worth of goods were stranded at sea, he said. Among the worst hit was Samsung Electronics. “Interestingly, as Samsung went about reviewing its supply chains … it decided to sign up with Russian Railways to shift a portion of its goods via the Trans-Siberian, as a safety net,” he said.
The biggest question mark Chambers sees hanging over the new service is what he described as the “backhaul” from Europe to Asia. The Yiwu-Madrid line that first ran in 2014 is said to take olive oil from Spain to China. The London route’s managers aim to fill their empty wagons with luxury fashion goods. “Is there really enough worthwhile ‘stuff’ to go rather expensively from Europe back to China?” Ships factor in this cost but a train simply cannot afford to go empty in one direction all the time, he said. “That has been a stumbling block with other rail initiatives from China to the west so far.”