Europe - China freight trains: traffic volumes and infrastructure development Péter Bucsky University of Pécs Doctoral School of Earth Sciences
Eurasian Landbridge numerous alternative routes Source: https://america.cgtn.com/2017/05/13/5000-china-europe-cargo-trains-expected-by-2020#
Belt and Road Initiative Not an infrastructure development plan Rail freight is part of it, but there is no comprehensive strategy, instituion In Europe there are rail freight corridors it involves a lot of cooperation and a long time to try to make rail transport more competitive
Why is infrastructure development importnat for China? 140 000 Road transport 40 000 Rail Transport 120 000 35 000 100 000 30 000 80 000 60 000 25 000 20 000 15 000 40 000 10 000 20 000 5 000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Length of motorway network, km Passennger km on roads (100 million) Freight Ton-Kilometers on roads (100 million) Length of National Electrified Railways (km) Passenger-Kilometers of Railways (100 million passenger-km) Freight Ton-Kilometers of Railways(100 million ton-km)
As trade of China growth in Eurasia, transport routes will be more and more important Trade with the 40 countries along the New Silk Road by partner (billion USD) 2008 2014 Change Change % Yearly average growth rate France 120 106-14 -11.7% -1.8% Germany 333 307-26 -7.8% -1.2% Italy 103 94-9 -8.7% -1.3% Netherlands 86 86 0 0.0% 0.0% Poland 36 38 2 5.6% 0.8% Rest of EU 476 475-1 -0.2% 0.0% China 278 528 250 89.9% 9.6% Source: UN Comtrade database
Financing of OBOR projects in the value of 655 billion USD, transport infrastructure only 91 Stock of loans of financial institutions supporting the OBOR initiative, in million USD, 2016 Total value of loans Value of loans outside China New Development Bank 2 899 2 899 350 Value of loans outside China for transport infrastructure in OBOR countries Silk Road Fund 13 900 13 900 0 Asian Infrastructure Investment Bank 3 709 3 709 1 271 The Export-Import Bank of China 377 118 377 118 28 370 China Development Bank 1 547 722 257 954 61 238 Total 1 945 348 655 580 91 229 Source: own calculation based on annual reports and websites of banks and funds
Regional shift of production within China Inner-Chineese cities are further away from ports Closer to European but even closer to Central-Asian, Iranian and Pakistani markets The distribution of low-tech manufacturing in China GDP growth rate: %, 2007-2016 Source: Jun Hou, Stephen Gelb and Linda Calabrese: The shift in manufacturing employment in china Source: National Bureau of Statistics
Value added by industry by region still no major change 1996 2006 2016
Has China s extensive internal infrastructure development reached it s limits? USA: 77,000 km autópálya Area: 9,147,420 km2 Population: 326,766,748 China: 133,000 km motorway Area: 9,388,211 km2 Population: 1,415,045,928
High speed rail: two third of all lines of the world are in China! The network is almost complete Till 2019 all major cities will be reached For China s railway industry growing exports are vital The continuation of lines to neighboring countries could follow only Vietnam has high population density
High speed rail already very advanced From the total global ~41 thousandd km high speed rail ~27 thousand km in China (65%) The growth in global passenger km for high speed almost solely came from China. Development of passenger km in China (100 million) Billion passenger km 20 000,00 18 000,00 16 000,00 14 000,00 12 000,00 10 000,00 8 000,00 6 000,00 4 000,00 2 000,00 0,00 CAGR -1,3% 13,0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 6,4% Passenger-Kilometers of Railways Passenger-Kilometers of Civil Aviation Passenger-Kilometers of Highways Source: National Bureau of Statistics Source: UIC
The importance of rail is declining with the growth of distance 45,0% 40,0% 35,0% 30,0% 25,0% 20,0% 15,0% 10,0% 5,0% 0,0% The role of railway in trade of the EU with Eurasian countries Value Quantity Source: European Union commercial trade database
Source: European Union commercial trade database How important railway became in rail tranport with trade with China? 1) Quantity 90 000 EU exports thousand tons 1,2% 70 000 EU imports thousand tons 3,5% 80 000 70 000 60 000 50 000 40 000 1,0% 0,8% 0,6% 60 000 50 000 40 000 30 000 3,0% 2,5% 2,0% 1,5% 30 000 20 000 10 000 0,4% 0,2% 20 000 10 000 1,0% 0,5% 0 0,0% 0 0,0% Sea Air Rail Other Share of railway Sea Air Rail Other Share of railway
Source: European Union commercial trade database How important railway became in rail tranport with trade with China? 2) Value 90 000 80 000 70 000 60 000 50 000 40 000 30 000 20 000 10 000 0 EU exports million euros EU imports million euros 1,2% 400 000 350 000 1,0% 300 000 0,8% 250 000 0,6% 200 000 150 000 0,4% 100 000 0,2% 50 000 0,0% 0 1,8% 1,6% 1,4% 1,2% 1,0% 0,8% 0,6% 0,4% 0,2% 0,0% Sea Air Rail Other Share of railway Sea Air Rail Other Share of railway
Within the EU rail transport with China is very concentrated
Number of TEUs is growing, but still low 300 000 250 000 200 000 150 000 100 000 50 000 0 Containers transported through Russia between EU and China 24 216 6 604 17 611 44 000 12 000 32 000 82 000 30 000 52 000 153 000 51 000 102 000 263 000 99 000 164 000 2013 2014 2015 2016 2017 China-EU EU-China Capacity: 21.413 TEU all rail traffic is equal to 3 gigaliners traffic Sanghai port: yearly 40.230.000 TEU containers by rail equals 2,4 days traffic of the port
In cross-border traffic EU-China container traffic is still less important than conventional goods China - Kazakhstan border traffic, tons Poland - Belarus border traffic, tons 16 000 8,0% 7 000 16,0% 14 000 7,0% 6 000 14,0% 12 000 6,0% 5 000 12,0% 10 000 8 000 6 000 5,0% 4,0% 3,0% 4 000 3 000 10,0% 8,0% 6,0% 4 000 2,0% 2 000 4,0% 2 000 1,0% 1 000 2,0% 0 2014 2015 2016 0,0% 0 2014 2015 2016 0,0% China-Kazakhstan Poland-Belarus EU China Containter traffic EU China Containter traffic EU China Containter traffic, share EU China Containter traffic, share
How many trains? The number of China-Europe freight train trips reached a new high of more than 3,000 last year, and is expected to reach 4,000 this year, according to China Railway Corporation. 2018-01-20, Xinhua http://www.xinhuanet.com/english/2018-01/20/c_136911059.htm Own calculation from timetables: in 2014 ~350 trains both direction, in 2017 ~1800 trains both directions 2,5 trains / day / direction
Type of traded goods influences the mode of transport
Costs and subsidies Russia s Trancontainer:...cancellation of, or reductions in the government support may have an adverse effect on rail container transportation on relevant routes. From the 5-6 thousand euros / container costs 1-2 thousand is provided by local governments in China, 20-30% of total costs! Is it worth it for the central government and the provinces?
Thank you for your attention! Questions?