28.08.2015 Author: F. William Engdahl

China Rails Linking Eurasia

67562333China has become the world’s leading makers of modern railroads and equipment. It has done so as part of a long-term strategy to weld a new economic space, build entirely new markets where none before existed. They studied the European rail-makers, studied the German ICE high-speed railways, engaged Siemens and a German consortium to build the world’s first magnetically levitated (maglev) train to link Shanghai’s international convention center to its new international airport at speeds between 300-400 km per hour. Now they are working on an entire new concept of fast rail as well as negotiating with some 28 countries to build high-speed conventional rail lines. China has become the address when it comes to rails and it is changing the world as we know it.

I first moved to Germany in the mid-1980’s from New York to work as a journalist. In those days there were bleeding edge technologies under development with positive German government financial backing. One of them was what was called the Magnetic Levitation or maglev rail system. I was able to make a ride at the Maglev experimental test track in Emsland north Germany, an impressive experience. There was great optimism that Germany could be an export world leader in Maglev with a concept that was claimed to be far superior to a rival Japanese design.

Cost overruns, bureaucratic infighting within the German state railways between the Maglev lobby which was small and the traditional ICE high-speed lobby which was established, worked a slow death to the promising new German rail project. Concrete plans to build the first maglev link between Hamburg and Berlin after German unification died on the bureaucratic vine. The same with plans to build a maglev link between Munich city and its new international airport. Maglev in Germany was rendered to the dustbin as globalization moved to pressure European economies with its ruthless logic of manufacturing outsourcing, of “buy cheap, sell dear,” tied to the Wall Street-fostered notion that “shareholder value” is the only reason corporations should exist. The Wall Street world of Gordon Gekko gradually spread its poison to Germany and maglev died there. German ICE trains are widely in use and generally comfortable, but German industry is no longer the center of transport innovation. That role has been earned by China.

China’s Own Maglev

Rather than import more of the Siemens Maglev technology from Germany, Chinese engineers carefully studied the design features of the model they bought for Shanghai Airport and set about to make their own improved version. Last month China’s huge railroad rolling stock manufacturer, CRRC Corp. at its Zhuzhou Institute in Hunan province announced successful testing of a cutting-edge permanent magnet synchronous traction maglev system that will take high-speed trains to an ultrafast 500 kilometers per hour (311 mph). It uses an advanced new traction system that is lighter and more powerful than the Siemens Transrapid system or others. Ding Rongjun, head of the institute said CRRC will begin mass production of the maglev train. The Zhuzhou Institute has been working on perfecting their own maglev system since 2003. Plans are to begin equipping trains with the new traction system in three years. It has been successfully tested on a subway line in Shenyang since 2011. 

That will be a strong development but what is already underway around Chinese rail projects is literally awesome.

China builds and develops

What is most impressive to me in my many visits to China over the past years is the extraordinary sense of doing things, of their countless building projects, something we in the West long ago had forgotten about in our post-industrial fantasy world. This drive to change their physical surroundings is emerging with impressive scale around President Xi Jinping’s highest-priority, the so-called One Belt, One Road Eurasian high-speed rail project.

China today has the world’s longest High-Speed Railway network with over 16,000 km (9,900 mi) of track as of December 2014, more than the rest of the world’s high speed rail tracks combined. China’s high speed rail system also includes the world’s longest line, the 2,298 km (1,428 mi) Beijing–Guangzhou High-Speed Railway. In short, China knows what it is doing in railways more than pretty much anybody and they are acting on that knowledge.

In previous articles I’ve discussed the huge geopolitical advances that are developing with the agreement in Moscow in May between Russian President Vladimir Putin and China’s President XI. There they agreed to integrate the development of the Chinese One Belt, One Road infrastructure project, also known as the New Silk Road Economic project, with the newly-established Eurasian Economic Union which includes Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan. That, by the way, was the economic union that Ukrainian democratically-elected President Viktor Yanukovich decided to join over the far more paltry offer from the EU. That decision triggered a Washington-led neo-nazi coup d’etat that forced Yanukovich to flee for his life in February 2014 as Victoria Nuland and friends installed an anti-Russian cabal in Kiev to wage a war against Putin’s Russia. That was a bad decision by Ukrainian oligarchs which they must be starting to regret.

Already earlier this year Russia and China decided to complete a 7,000 kilometer high-speed rail link from Beijing on China’s east coast to Moscow, via Kazakhstan, a journey that will then take just thirty hours instead of five days, at a cost of some $ 240 billionThe rail link follows on the heels of last year’s Russia-China agreement for Gazprom to provide China with natural gas in the largest energy deal in history. It’s pretty clear that the emerging Russia-China partnership over the past several years has become long-term and for both, highly strategic. For both great Eurasian nations their land route is a geopolitical outflanking of Washington’s domination of the seas, at the same time providing the transport arteries for emergence of a new economic center of gravity of our world, namely, Eurasia.

Over the past decade China has carefully built up its railway industry with the aim to make it a leading world exporter of railway construction technology as well as the rail equipment, “Made in China.”

Ironically, it is similar to the path taken after the 1870’s by Germany which then built the world’s most advanced industrial economy, using a national bank, the Reichsbank, not a private central bank like the Federal Reserve to do it. British industry forced German imports to bear a stamp of assumed inferiority, “Made in Germany.” That sign soon became a hallmark of quality, not of cheapness.

So today with China. The image of millions of Chinese sweating away in low-paid textile labor for cheap exports is rapidly passing as the government’s current five-year plan aims to make China an exporter of high-net-value-added industrial and technology products. Rails are at the center of that strategy. It’s in many ways the same strategy that brought Japan after the 1950’s from a war-ravaged defeated country to one of the world’s leading industrial nations in just two decades.

Linking South East Asia by High-Speed Rail

In preparing for the ambitions New Silk Road, the largest infrastructure project in history, China has been engaged in rail construction abroad. In 2014 China was involved in 348 overseas railway construction projects, more than double the number a year before. Total contract value was three times greater than 2013 at almost $25 billion and annual turnover was $7.6 billion. Since 2001, China’s exports of locomotives have grown from less than $80 million to $ 3.74 billion in 2014. And central to their strategy, China’s rail industry has shifted the exports from low-end products to exporting high-tech and high value-added products including Electric Multiple Units and double-decker carriages. Their exports go to more than 80 countries and regions in six continents, with the main export markets in the ASEAN countries, Argentina, Australia.

Among the foreign projects China has signed is construction of a high-speed railway line from Kunming in China’s southern Yunnan Province along a 3000 km route to Singapore, passing through Laos, Thailand and Malaysia. Because of the divided colonial history of those South East Asian countries, variously with French colonial occupation in Laos, British in Singapore and Malaysia and independent Thailand skillfully maintaining its independence, the countries until now have poor or no interconnecting modern transport infrastructure.

Beijing estimates that that one project alone will increase the GDP of China and of the involved South-Asian nations by $375 billion. That’s vastly more than the silly Washington “free trade” Trans-Pacific Partnership would bring to its region.

China Railway Corporation says the Kunming-Singapore line will be constructed in four stages: from Kunming to Vientiane, Laos; from Vientiane to Bangkok, Thailand; Bangkok to Kuala Lumpur, Malaysia and from Kuala Lumpur to Singapore.

Construction of the Thai rail lines is planned to begin this year as part of the Thai government’s new eight-year $23 billion infrastructure development project connecting Bangkok and other key cities with airports, seaports, border areas and cargo depots. In Thailand some 106 new trains added to the existing fleet. Six dual-track railway lines will also be constructed under the same scheme. The entire Kunming-Singapore rail network is due to be finished in seven years, by 2022.

On to Kathmandu…

The Chinese government is now also exploring the feasibility of construction of a modern rail line from Lhasa in China’s Tibet Autonomous Region to Kathmandu, the capital of Nepal.

The Qinghai-Tibet railway already links the rest of China with the Tibetan capital, Lhasa. An extension from that Lhasa railway is planned at Nepal’s request according to a railway expert at the Chinese Academy of Engineering cited by the China Daily. That project is expected to be completed by 2020. The plan is to extend the China-Nepal rail link to forge a vital link for the first time between China and India. In a December 2014 visit to Kathmandu, the Chinese foreign minister, Wang Yi, mentioned the possibility. That would require a likely tunneling through the world’s highest mountains including Mt. Everest according to Chinese railway expert Wang Mengshu

Notable in this context is the conclusion of the annual meeting of the Shanghai Cooperation Organization, SCU, in Uta, Russia. There the SCO members agreed to accept full membership status for both India and Pakistan, the latter a traditional close ally of China. India is also a member with China of the BRICS which has just formally opened its BRICS infrastructure bank, officially called the New Development Bank on July 21 in Shanghai. The NDB also announced it will work closely with China’s new Asian Infrastructure Investment Bank (AIIB), also to be headquartered in China. Recent estimates are that the larger Asian region requires $8 trillion to be invested from 2010 to 2020 in infrastructure for the region to continue economic development.

The NDB in Shanghai and the AIIB in Beijing will finance much of this infrastructure and clearly China’s One Belt, One Road will be in the center of those infrastructure investments. Washington, which has defiantly refused to join the AIIB, views both banks as a mortal threat to their control of global investment flows via US Treasury control of the IMF and World Bank. They are right. The world is moving forward as the would-be hegemon stands helpless to more of the world.

F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook”.


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