Xi's Deserted Desert Road
By David Fickling
Jul 19, 2016 12:05 PM BST
Think China's plans to build railways across central Asia will be a boon for global trade? Consider this: The mighty Trans-Siberian Railway carried about as much east-west container traffic last year as you'd get on a single boat.
Transit container traffic over the network amounted to 109,000 20-foot equivalent units in 2015, its owner Russian Railways said last month. The world's biggest container ship, the MSC Oscar, can carry 19,224 TEUs and takes about two months to make the return trip from Asia to Europe.
That should be a cautionary tale for those expecting great things from President Xi Jinping's plans to build a revived overland Silk Road between China and the west. Maritime trade may not be sexy, but right now it's a lot cheaper to move things round the world on the high seas than on a train.
China's existing trade is a decent guide. Freight volumes through its major ports comfortably outstrip total rail-freight traffic through its border provinces, according to data compiled by Bloomberg -- and that comparison heavily skews things in rail's favor, given how much of the land-based traffic is domestic.
To be sure, the disparity is recognized by China. Land-based spending forms the 'belt' in Xi's 'One Belt, One Road' policy while the 'road', confusingly, consists of maritime projects such as a planned $10 billion upgrade at Malacca port in Malaysia. The $40 billion Silk Road Fund and $100 billion Asian Infrastructure Investment Bank established by Beijing will be financing both.
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