China-Kyrgyzstan-Uzbekistan Railway: Opportunities and Challenges for China

After 20 years of negotiations, the construction of the China-Kyrgyzstan-Uzbekistan (CKU) railway is expected to finally start next year. An online meeting between China, Kyrgyzstan and Uzbekistan was held recently, and according to their announcement, the feasibility studies will be completed this year. Kyrgyz President Sadyr Japarov said construction will start in 2023.

In the midst of the war between Russia and Ukraine, the CKU railway presents a number of strategic and economic opportunities for China, especially in the context of overland trade relations with the European Union. In terms of strategic opportunities, it is not surprising, first of all, that the announcement came at a time of heightened international sanctions against Russia. Since the war began, different international companies have decided to stop using Russian territory as transit country, some in response to Russian aggression and others due to the deteriorating business environment in the country. The CKU railway provides China with an opportunity to diversify its trade routes, reduce its dependence on Russian routes and maintain sustainable rail trade with EU countries in the long term.

Second, the new route will create an opportunity for Beijing not only to reduce its reliance on Russian territory, but also to lessen its reliance on Kazakhstan as a transit country. This factor is particularly important because recent Domestic The unrest in Kazakhstan showed that relying on any Central Asian country for rail trade can be risky. In this context, the CKU railway can help China diversify its rail routes and shift freight from one route to another during future crises.

Finally, in addition to diversifying the route, the new railway can contribute to the economies of Kyrgyzstan and Uzbekistan. Not only would they enjoy transit fares, but also rail routes could create new ones. jobs. New trade opportunities in Kyrgyzstan and Uzbekistan are important to China because they help the two Central Asian countries, particularly Kyrgyzstan, maintain resilience and reduce the risk of civil unrest, and thus help China stabilize its borders. Westerners.

The CKU railway will also create economic opportunities for China. First, Beijing could ship its products to markets in the Middle East and Europe through a new route. According to the plan, the CKU railway will be one of the shortest routes to ship cargo to both regions, as it will shorten the cargo trip by 900 km and save seven to eight days on shipping. weather. Along with the Middle Corridor, the CKU railway can help increase the cargo capacity of Central Asian countries through East-West trade. In this context, China can keep its rail trade with the EU sustainable and compensate for its losses in the Northern Corridor that passes through Russian territory.

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Second, the CKU railway can also help Beijing realize its plan for economic growth in the central and western regions of Porcelain. In particular, a new rail route can stimulate new business opportunities and develop the manufacturing industry. Furthermore, increased interaction with Central Asian countries can also help improve the overall economic situation in the central and western regions, which can reduce the risk of social instability.

Despite the different opportunities offered by the CKU railway, there are still political, financial and technical difficulties that can make it difficult to carry out the project. In terms of political issues, in the last two decades, politicians from the government and opposition parties in Kyrgyzstan have questioned the economic benefits of the CKU railway. China and Uzbekistan, in particular, want to use the shortest route through Kyrgyzstan, without stopping at major Kyrgyz settlements. However, Bishkek prefers to build a longer route through the main town. centers because it wants to promote an indirect effect, such as the creation of new employment opportunities and the promotion of the export of Kyrgyz products. recent government approval from a preliminary route of the Kyrgyz section of the CKU railway shows that they still support a route passing through local commercial centers and major population centers. Discussions about the route may delay or hinder the completion of the project as they have in the past.

In addition, public opinion can also affect the realization of the project. The growing anti-China sentiment in Kyrgyzstan may increase pressure on the government. According to the results of a recent Central Asia Barometer (CAB) survey, in Kyrgyzstan only 19 percent of people strongly support Chinese investment in energy and infrastructure projects, while 31 percent strongly oppose the Chinese investment. Additionally, 66 percent of people are “very concerned” that Chinese projects will increase Kyrgyzstan’s national debt to China. The CKU rail project may trigger further anti-China sentiment and lead to new anti-government protests, which could make it more difficult to complete the rail project.

Second, despite Japarov ad Since Russian President Vladimir Putin had agreed to the construction of the CKU railway, the future position of Russia may affect the project. Moscow needs Beijing’s help due to the Russian-Ukrainian war, so acceptance may be a short-term tactical move. However, after the war, Russia could change its position and try to block the project again. Because a new rail route may attract 10 to 15 percent of cargo from Kazakhstan-Russia edge instead, to the CKU railway, it may reduce the importance of Russia as a transit country in the rail trade between China and the EU, resulting in a loss of transit fees.

In addition to political difficulties, financial and technical problems also play a role. Regarding the financial problems, there is uncertainty about the financing of the railway. According to the Kyrgyz state railway company, the cost of the railway will be $4.5 billion. Given past experiences, China prefers to share the burden with member states or international or regional organizations, as it diversifies risks and avoids financial losses. In this context, the Chinese ambassador Jiang Yan emphasis that the railway belongs to three countries and that they must work together shows that China does not intend to finance the project alone.

As for technical issues, there is no common agreement on the track gauge of the CKU railway for the Kyrgyz section. Although China wants to use an international standard to size, which is 1,435mm, Kyrgyzstan prefers to use a wider caliber that dates from the Soviet period and is still in use throughout much of Central Asia. The final decision on the track gauge will also affect the time it takes for the cargo to reach its destination.

Despite the different strategic and economic opportunities that the CKU railway presents for China in the era of increasing unpredictability in the Northern Corridor, there are still challenges that may hamper the construction of the railway and damage the rail trade between China and the EU in the short term. and medium term. . Technical and financial issues are particularly worrying in the short term, with Russia’s possibly changing position and Kyrgyzstan’s internal politics as decisive factors affecting the medium term as regards the future of the CKU railway.

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