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Road to economic prosperity: Xiamen’s rail, air and sea links strengthen China’s ‘one belt, one road’ initiative

City is set to become a major transport and business centre, linking routes essential to the central government’s trade objectives

PUBLISHED : Tuesday, 26 July, 2016, 2:23pm
UPDATED : Tuesday, 26 July, 2016, 2:23pm

Xiamen is set to become a major stop on the “one belt, one road” network, a central government- driven initiative seeking to further intertwine the trade policies, economies and transport routes of countries from China to Europe.

In August last year, a set of transnational trains departed from Xiamen’s Haicang Railway Station for the first time. The first traversed the 9,826km expanse to Lodz, Poland in 15 days, stopping in Chengdu en route. The second delved into Central Asia in five days, where its cargo was divided up and sent to multiple locations.

“In principle, from China you historically only have two options: you can go by ocean; if that doesn’t work, you need to go by air. And now with the rail connection you have an intermediary solution,” says Ronald Kleijwegt, the logistics manager at HP, which started the first regular trans-Eurasian rail route.

These trans-Eurasian trains allow for cargo to be transported across Eurasia three times faster than shipping by sea for one-fifth of the cost of air. They are typically loaded with value-added merchandise, such as electronics, fashionable clothing, premium food, machines, car parts, and industrial supplies. It has been estimated that the yearly value of products shipped on the Xiamen-Lodz train could top US$6 billion.

This is part of a growing trans-Eurasia rail network that now has 35 routes connecting China with dozens of cities in Europe, Central Asia, and the Middle East.

In principle, from China ... you can go by ocean; if that doesn’t work you need to go by air ... now with the rail connection you have an intermediary solution
Ronald Kleijwegt, logistics manager, HP

Xiamen is also a major hub on the Maritime Silk Road, the sea-based portion of the one belt, one road initiative, which aims to further develop and better help with ocean trade between China and the countries of Southeast and South Asia, the Middle East, Africa, and Europe.

Xiamen is the 17th busiest container port in the world, handling over 8.57 million 20-foot equivalent units per year – a number that is predicted to grow to 12 million by 2018. All 20 of the world’s top shipping companies have operations in the port.

Last year, Xiamen’s exports to 36 other Maritime Silk Road countries grew by 10.1 per cent, topping US$14 billion. Hi-tech merchandise alone accounted for US$1.58 billion of this trade.

Holding the overland and Maritime Silk Road routes together is the Xiamen section of the Fujian Free Trade Zone (FTZ). In April last year, the existing Xiangyu Bonded Zone and Xiamen Haicang Bonded Port in Xiamen were incorporated into the new Fujian FTZ.

The Xiamen portion of the Fujian FTZ combines land and sea ports together with an airport, and can therefore help with all means of trade all along the belt and road.

The Fujian FTZ offers incentives, such as preferential tax policies, reduced import tariffs, simplified customs clearance, two-way investment assistance, liberalised policies for the borrowing and converting of foreign currency, along with a “one-form application” procedure for establishing companies there. It is also directly connected with “Fujian Commodity City” trade centres in Russia, Poland, and Bahrain.

It is predicted that this FTZ will become a catalyst for the growth of Xiamen’s hi-tech, service, transport, and financial sectors, all of which are vital for one belt, one road-related trade.

Xiamen is the place where the land and sea routes under the belt and road come together, forming a transport and business hub unlike any other along the network’s 60 other countries.