It is not news that for a few years, as the rail freight industry was growing many Chinese cities were contesting to become hubs along the New Silk Road. Many benefits come with being recognised as a hub for the New Silk Road, including rail subsidies. In July, Chinese authorities announced its support for five specific hubs that would be central to New Silk Road and China’s rail freight system. China's National Development and Reform Commission states that the project would effective use of rail freight and reduce costs.
Another reason for this formal announcement was to conclude on cities retaining separate status and giving a better focus to rail freight in general. As more cities have started to develop hubs in China, the competition has increased, affecting transportation prices. This new development has piqued our curiosity, as we understand why these hubs were selected.
Capital of China's Sichuan Province, Chengdu is on its way to becoming a global logistical hub. From January to July, Chengdu has seen a year-on-year increase of 58% so far. One of the most popular routes is the Chengdu-Lodz route, that has transported electronic goods, automobile parts, toys and even clothing. Chengdu has one of the largest rail terminals in Asia, and only growing in capability. The China-Europe rail as transported over 29 billion dollars, since its emergence in 2013.
Located in Henan Province, Zhengzhou is one of the significant cities in China, known for its ancient roots. Zhengzhou has robust rail networks going to different directions in China, with one of the largest rail fleets in Asia. Currently, Zhengzhou is also developing an air-rail distribution centre. Zhengzhou rail hub has a strong connection with the Port of Hamburg with daily operations.
As one of the early flagship investment hubs, Chongqing's geographical location allows for many strategical benefits for this New Silk Road hub. It connects the port cities with the Yangtze Economic Zone, keeping the flow of business between these regions in China. Rail traffic from China to Europe is on a steady increase.
Situated in Northwest China, Xi'an is a vital hub city in the New Silk Road. This erstwhile antique city that played a significant role in ancient silk road has transformed into a modern hub. In November 2013, the landmark China-Europe Chang'an freight train departed from Xi'an, marking a new beginning not just for the rail freight industry but also for the growing connections between China, Central Asian and Europe. The province of Shaanxi in which Xi'an is located is one of the biggest exporters of television screens and other electronic parts. As the Covid-19 pandemic raged through the world, Xi'an's export operations continued steadily, as they emerged unscathed.
The most landlocked city in the entire world, Urumqi heavily depends on rail freight. It is the capital city of Xinjiang, an autonomous region within China, that touches border with Kazakhstan. In recent years, the city has been intensely developed, to accommodate world-class business needs. Urumqi has seen a 16% year-on-year growth in the first quarter of this year. With these statistics in mind, the Chinese authorities have aptly selected Urumqi as one of the New Silk Road hubs.
Apart from just announcing the hubs for the New Silk Road, China's NDRC has also offered monetary support by allocating an amount of 25 million euros in support. Many have raised concerns as to the amount might not be enough to develop these hubs, and there must be critical policy implementation to substantiate the development. At present, the money will be invested to strengthen the connections between these hubs, and digitalising the terminal. There are also no new terminal constructions sanctioned in these hubs, as the focus is to make the current hubs efficient.
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