Revival of Eurasian passage to boost regional trade

China has called for reinvigorating the once-glorious "Silk Road" trade route by stepping up Eurasian cooperation, which is expected to boost regional trade and stability.

The heads of the states and governments, as well as investors, are discussing the prospect of reviving a trade route across the vast Eurasian land, at the ongoing second China-Eurasia Expo in Urumqi, capital of the northwest China's Xinjiang Uygur Autonomous Region, where the Silk Road once threaded through.

"The construction of the grand Eurasian passage is speeding up," Chinese Premier Wen Jiabao said at the opening ceremony of the expo on Sunday.

Seventeen state-level open ports, two international airports and extensive roads and railways link the landlocked Xinjiang, China's westernmost region, to the country's neighbors to the west.

The second cross-border railway between China and Kazakhstan has been linked up and the China-Kyrgyzstan-Uzbekistan highway will soon be launched in full.

"A multi-dimensional 'Silk Road' consisting of roads, railways, air flights, communications and oil and gas pipelines is taking shape," said Wen.

The revival of the Eurasian route came nearly 2,000 years after the 7,000-km "Silk Road" was created by camel-driving merchants who carried silk and porcelain to western Europe and spices to the Far East. The road lost its significance as the age of sailing set in.

But now, more businesspeople have turned to the much shorter Eurasian land passage, avoiding the maritime trade route that makes a wide detour to the south.

"It takes more than one month for a 40-foot container, equivalent to two TEUs, to reach Europe from central or western China through the sea route," Che Tanlai, a senior researcher with China's Ministry of Railways, said on the sidelines of the expo. "But it only takes 14-15 days through the Eurasian land route."

"The shortened transport time will increase the utilization rate of capital and accordingly boost trade along the route," he added.

Che said the cross-continent grand passage will boost regional economic and trade development in the Eurasian heartland.

Kyrgyz Economy and Antimonopoly Minister Temir Sariev said the "Silk Road" and the great Eurasian space are the "link and platform" for the region to further boost trade and economic cooperation for Eurasian countries located along the "Silk Road."

"For example, there is huge potential for cooperation in agricultural product processing of nuts and canned fruit," he said.

It is widely believed that with strong economic complementariness, there lies enormous potential for trade cooperation between the Far East, which is rich in labor forces and boasts advanced processing technologies, and Central Asia, where there are abundant resources.

Albertas Aruna, secretary of the East-West Transport Corridor Association, told a forum on logistics during the expo that he is looking for huge trade potential between the European Union (EU) and Asia on the corridor linking Asia and Europe.

"Today the transport corridor sees only 2 percent of the overall EU-Asia trade. But we are looking for 10 percent," he said.

Not only will the increase in trade bring prosperity, it will also bring stability to the region that is vulnerable to violence and unrest caused by terrorist activity.

"Stability will definitely ensue as the grand Eurasian passage boosts regional trade," said Shi Lan, deputy head of Institute of Central Asia Studies at Xinjiang Academy of Social Sciences.

"The region's stability hinges on its economic development level," she said.

Pakistan's Ambassador to China Masood Khan said at the expo that his country, ravaged by terrorism, will be glad to see more "Silk Roads" being built in the region, because poverty and disparity lead to terrorism and cross-border crimes.

CHALLENGES REMAIN

Insufficient infrastructure and trade and investment inconveniences still present challenges for the Eurasian passage.

"Infrastructure remains unable to meet transportation demands in some countries along the east-west grand route, especially in some central Asian countries," said researcher Che Tanlai.

Premier Wen has urged advanced cooperation in cross-border infrastructure, including the China-Central Asia natural gas pipelines and major railway and highway projects, to accelerate the connectivity process.

"China will continue to provide financing support for cross-border infrastructure construction," he pledged at the expo.

Trade and investment barriers also loom.

"Inconvenience costs" of trade are three to four times higher than the cost of tariffs for international trade, China's Vice Commerce Minister Li Jinzao said at the opening ceremony for Shanghai Cooperation Organization (SCO) Business Day on the sidelines of the expo, quoting a recent survey conducted by the United Nations Industrial Development Organization.

He urged SCO member states, all of which are linked by the Eurasian passage, to further facilitate trade and investment in the region by strengthening coordination in regards to customs and e-commerce.

"When we are talking about the resistance of tariff barriers and protectionism in trade, we should also talk about how to make our trade and investment easier," he added.