2018 - 2019 Edition of Citi Perspectives for the Public Sector

18 The BRI train arrives in EMEA Since the BRI’s beginning, direct rail services have been a major feature, leveraging China’s expertise in railway construction and improving inter-regional connectivity. In EMEA, new rail services have had a major impact and integrated the region into the BRI. In June 2017, Chinese firms opened a $3.2 billion 470km Nairobi to Mombasa railway that will eventually connect Kenya to Uganda, Rwanda, South Sudan and Ethiopia. The link is Kenya’s largest infrastructure project in 50 years. In Pakistan, the fishing village of Gwadar is transforming into an intermodal trans-shipment facility, both a port and the terminus of a railway from western China. BRI-sponsored rail projects now also link Yiwu, in eastern China, to London and other major cities in Western Europe. Rail services between China and Europe did not begin with the BRI, but BRI has increased their frequency, freight volume and significance. Regular services now connect roughly 35 Chinese cities to a similar number in Europe. A study commissioned by the International Union of Railways found that the volume of goods traveling between China and Europe by rail grew six times between 2014 and 2016, reaching 145,000 twenty-foot equivalent units (a standard measure of capacity for container transportation). 1 The report also estimates that China-Europe rail services could double their share of trade by volume by 2027. Although the levels of rail-based trade between China and Europe are low at only 2% of total trade by value in 2016, greater connectivity will create new opportunities for businesses at either end of the railways and along the routes as well. 2 Expanding rail networks are linking diverse regions, which each play a role in the advancement of BRI. Central and Eastern Europe is strategically significant as the geographic bridge among Asia, the Middle East and Western Europe. The Great Stone Industrial Park in Belarus, which will receive up to $30 billion worth of investment, will be one of the largest industrial parks in the world and is advertised as the “Pearl of the Silk Road Economic Belt.” In Africa, where infrastructure projects will likely deliver the largest developmental impact, China’s investments have focused on power generation. The construction of power plants and transmission lines across the continent will significantly narrow Africa's power deficit. The Middle East plays a pivotal role in BRI as China’s main source of imported oil as well as being a hub for market access to other regions. The Belt and Road Initiative Five Years In: Making the Most of China’s International Investment Program The Middle East plays a pivotal role in BRI as China’s main source of imported oil as well as being a hub for market access to other regions. 1 Roland Berger (2017) “ Eurasian Rail Corridors: What Opportunities for Freight Stakeholders? ” International Union of Railways. https://uic.org/IMG/pdf/corridors_exe_sum2017_web.pdf 2 Hillman, J. E. (2018) “ The Rise of China-Europe Railways. ” Center for Strategic & International Studies. https://www.csis.org/analysis/rise-china-europe-railways#_ftn5