New Railway Route from China to Europe Through Russia: Bluff or Tactical Ploy?

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In the plenary session of the XIV Forum of Interregional Cooperation of the Russian Federation and Kazakhstan, held on November 9, the presidents of the two countries, Vladimir Putin and Nursultan Nazarbayev, announced plans for a new railway route from China to Europe via the territories of Russia and Kazakhstan. Putin expressed support for the idea, which was raised by Nazarbayev, and assessed that this railroad "would provide strong impetus to the development of a number of industries, since the project could be very ambitious" (Kremlin.ru, 24.kz, November 9). Coincidentally or not, the announcement was made ten days after the official launch of the Baku-Tbilisi-Kars (BTK) railroad, which bypasses Russia (see EDM, October 16; Trend, October 31).

Up to now, more than 90 percent of container shipments from China to Europe are delivered by sea. But to diversify its transit options, China intends to develop a network of transcontinental land routes, and the Central Asian region plays a special role in this process. Currently, several transport corridors pass through the region as part of the east-west New Silk Road. Of those, four railway routes cross Kazakhstan, including the northern branch of the Trans-Asian Railway (TAR), the central TAR route, the Chongqing-Duisburg corridor, and the Trans-Caspian International Transport Route. The first three also pass through Russia (Riss.ru, March 3, 2016).

The BTK, on the other hand, offers Kazakhstan a railway link to Turkey, Southeastern Europe and the Mediterranean Sea that remains entirely outside Russian control (see EDM, January 14, 2014). Kazakhstan officially supports the BTK and considers it a key element within the broader logistics chain of the Trans-Caspian International Transport Route (Inform.kz, October 30). Moreover, Kazakhstan, together with Azerbaijan and Georgia, established the International Trans-Caspian Transport Consortium and the International Trans-Caspian Transport Association, designed to ship goods from Dostyk, on the border of China and Kazakhstan, via the Caspian Sea (Aktau and Alat ports), across the South Caucasus, to the Black Sea port of Batumi, and further to Turkey and Europe (Inform.kz, April 13, 2016; Premierminister.kz, October 10, 2016).

Uzbekistan is also interested in joining the BTK and becoming an important link within the China-Europe overland corridor network (Uzreport.news, October 31). However, Uzbekistan's participation in the BTK project strongly depends on the completion of a railroad connecting the Caspian port of Turkmenbashi (Turkmenistan) with Navoi (Uzbekistan) (see EDM, October 16). The volume of Chinese investments in Uzbekistan's economy reached $8 billion dollars last year, the highest rate of any country investing directly in this Central Asian republic. The volume of mutual trade reached $4.25 billion in 2016, with Uzbekistani exports to China at $2 billion, and Chinese imports at $2.25 billion (Sputniknews-uz.com, May 13). Moreover, in 2017, the two countries signed 105 agreements worth a total of $23 billion, which covered several sectors including transport (Ozodlik.org, May 15). Despite this growing economic relationship, Russia's influence in Uzbekistan remains strong. The new Uzbekistani president, Shavkat Mirziyaev, endeavors to liberalize the local business environment in order to enhance economic growth. However, to balance the power between local security services (the "siloviki") and his domestic supporters, Mirziyaev has also been strengthening cooperation with Russian-based ethnic-Uzbek oligarchs. Such growing connections inside Russia are bound to further boost the Kremlin's influence over Tashkent, thus eroding Uzbekistan's ability to pursue its geopolitical and economic interests in the region in the face of potential Russian opposition (see EDM, September 12, November 17; Carnegie.ru, November 2).

Both Kazakhstan and Uzbekistan are eager to secure alternative trade routes free of Russian control. However, the two countries are being actively induced by Moscow to join overland transit corridors that traverse Russia. If those projects-including the aforementioned Kazakhstan-Russia railway-become realized, Russia's economic impact on the land-locked Central Asia region will be even further increased.

Currently only China has the political and economic potential to exert influence on Russia in the region. But one of the main pillars of Beijing's One Belt, One Road (OBOR-"New Silk Road" overland corridors and maritime transportation routes) strategy is its versatility. Specifically, this project finds efficiency, security and competition in the fact that it is not a single route but a network of multiple, interconnected trans-Eurasian corridors, including some through Russian territory; and if one corridor goes down for any reason, cargo can simply be shipped to similar destinations via alternative routes (Forbes, March 19 ). Moscow's and Beijing's competition over transregional transit projects (see EDM, November 17) are highly unlikely to reach the level of open conflict in Central Asia because of China's interest to keep all east-west corridor options available. At the same time, however, the ongoing tensions between Moscow and the West over Russia's invasion of Ukraine has pushed Beijing to seriously consider alternative routes that bypass Russian territory. Moreover, speed of freight is another problem. For instance, the average speed along the so-called "northern route," the Trans-Siberian Railroad, is about 12 kilometers per hour (Gazeta.ru, August 8).

Meanwhile, mutual sanctions between the EU and Russia also give impetus in Brussels to politically support the BTK. Moscow's embargos on many European products not only prohibit these goods from being imported to Russia, but they are not even allowed to be transported to third countries across Russian territory (Forbes, March 13). The BTK railroad is therefore important because, in addition to Chinese goods traveling along it in the east-west direction, the railway can also be used to ship goods from the EU to China and Kazakhstan. To date, westbound trains loaded with Chinese goods were coming back to China from Europe half-empty. But after launching the BTK, this problem might be solved-European companies affected by the Russian embargo may now have the chance to regain overland access to the huge markets in East Asia (Republic.ru, October 31).

Geopolitically, Russia seeks to remain the main land transportation corridor in Eurasia. The announcement of the building of a new railway route from Kazakhstan to Russia should thus be seen, at least in part, as designed to neutralize the BTK's advantage in the speed of freight carriages and undermine it based on economic arguments. If Russia succeeds in achieving these goals, the geopolitical and economic consequences will affect not only Kazakhstan and Uzbekistan, but also the other countries in and around the Central Asian region. Russia's domination of Eurasian land routes between China and Europe may further strengthen the Kremlin's influence in Central Asia and the South Caucasus, while also improving its position in relations with the EU.