Tuanjie Village, located in the heart of Chongqing, China’s largest inland city, has rapidly transformed into a pivotal global logistics hub. Known traditionally for its famously spicy hotpot, Chongqing is now a critical node in international trade, particularly through its rail connections.
Pivotal Hub
The southwestern Chinese metropolis of Chongqing is rapidly transforming into a pivotal hub for international trade, driven by ambitious rail networks that aim to reshape global logistics and China’s trade footprint.
Over the past decade, Chongqing has established itself with the launch of two expansive cross-border rail networks. One extends westward to Germany, while the other stretches south, reaching as far as Singapore. These trade corridors provide China with faster and more reliable access to global markets and offer other countries direct routes into China’s vast interior.
Beyond simply facilitating trade, Chongqing harbors a grander ambition: to become a central node in the global economy through which other countries trade – effectively a rail-based “Suez Canal” connecting Asia and Europe. This vision reflects China’s strategy to deepen its global trade presence amidst rising geopolitical risks, including the potential for a decoupling from the United States.
According to Liu Yizhen, vice general manager of the New Land-Sea Corridor Operation Company, which manages the freight route from Chongqing to Southeast Asia, “Shipping goods from ASEAN to Europe via Chongqing by rail is 10 to 20 days faster than traditional sea transport.” This significant time advantage underscores the transformative potential of these new rail corridors in optimizing global supply chains. The ongoing developments in Chongqing offer a vivid snapshot of how China, the world’s second-largest economy, is strategically enhancing its trade infrastructure to bolster its position in the evolving global landscape.
Critical Player
Chongqing, a sprawling metropolis in southwestern China, is emerging as a critical player in global trade, leveraging its strategic position and innovative rail networks to reshape logistics, a vision that could revolutionize international commerce.
Officials believe Chongqing’s pioneering initiatives could mirror its own experience as the birthplace of the China-Europe Railway Express (CRE), which launched in 2011. This ambitious rail link between China and Europe was initially proposed in 2009 by HP, the American computer and printer manufacturer, as a more efficient logistics solution, faster than sea freight and cheaper than air.
Over the past 14 years, the CRE has expanded into a vast and comprehensive rail network, spanning China, Central Asia, and Europe. This growth has been significantly bolstered by substantial government subsidies, solidifying its status as a flagship project under China’s expansive Belt and Road Initiative (BRI). The BRI, formally launched in 2013, is a global infrastructure development strategy aimed at improving connectivity and economic cooperation across Asia, Europe, and Africa.
Despite Chongqing’s inherent geographical disadvantages for developing an export-oriented economy – its mountainous terrain and over 1,000 km distance from coastal ports – the China-Europe Railway Express has proven to be a “game changer.” As Huang Yiwu, deputy director and research fellow at the Chongqing Academy of Social Sciences, stated, “Chongqing’s original conditions are far from ideal to develop an export-oriented economy… The China-Europe Railway Express has truly been a game changer.” This rail network has transformed Chongqing from a geographically constrained inland city into a vital artery for international trade, demonstrating how strategic infrastructure investment can overcome significant logistical hurdles.
ASEAN Express
A key part of this diversification is the ASEAN Express, a new rail network that complements existing initiatives. This mirrors the earlier success of the China-Europe Railway Express (CRE), which originated in Chongqing in 2011. Initially proposed by HP as a faster and more cost-effective alternative to sea and air freight, the CRE has since expanded into a vast network supported by significant government subsidies under the Belt and Road Initiative. This has been a “game changer” for inland cities like Chongqing, despite their geographical challenges.
Beyond rail, China is also investing in maritime infrastructure to bolster its global trade footprint. An example is Peru’s Chancay Port, launched last year, which is majority-owned by the Chinese state-owned enterprise COSCO. This deep-water port on South America’s Pacific coast offers direct shipping to China in just 23 days, significantly improving connectivity.
Furthermore, China is fostering deeper economic ties through diplomatic channels. In May, a new forum bringing together leaders from China, ASEAN, and the Gulf Cooperation Council (GCC) saw officials sign a joint statement pledging to enhance “seamless connectivity,” spanning logistics corridors to digital platforms. This signals China’s intent to support more infrastructure projects in these regions, as noted by Su Yue, principal economist for China at the Economist Intelligence Unit.
However, these ambitious initiatives are not without challenges. The CRE, for instance, has faced disruptions due to its reliance on Russian territory. The war in Ukraine in 2022 led many European traders to switch back to ocean shipping to avoid sanctions or perceived association with Russia. The rail route only began to regain customers after the Houthi attacks on Red Sea vessels started in late 2023, making sea routes less appealing. More recently, since late last year, Russian authorities’ wave of goods seizures on the China-Europe rail link has caused further havoc, discouraging many traders and freight companies from utilizing the service. These incidents highlight the ongoing geopolitical complexities that can impact China’s efforts to secure its global supply chains.
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Source: South China Morning Post
