Northwest China's Gansu betting on rail network for growth

The northwestern province of Gansu plans to have a railroad of 6,000 kilometers by the end of this year, as it steps up efforts to cash in on trade opportunities arising from the development of the Silk Road Economic Belt, senior provincial officials said on Monday.

Liu Weiping, the provincial governor and deputy to the National People's Congress, said all the 14 cities and autonomous prefectures in the province will be connected through the railroad this year, and give Gansu an edge over coastal provinces in the competition for industrial and infrastructure facilities.

"The railway network development will facilitate Gansu's exports of agricultural, heavy industry and new energy products to Central Asia and Eastern Europe through international rail cargo services," Liu said. "This will create more jobs in the service-related sectors from a long-term perspective."

According to official statistics, about 78 percent of China's 800 billion yuan ($127.7 billion) in investment had been spent in rail construction projects in western and central regions last year, or 86 percent of the country's new rail facilities in 2014.

Gansu started an international rail cargo service between Wuwei and Almaty in Kazakhstan last year. Currently the train takes five days to make the 2,646-kilometer trip.

It can effectively save 80 percent of the cost compared with air shipments, and is about $510 cheaper per container compared with road transportation, which is a major incentive for the Eurasian Land Bridge or the New Silk Road, a rail transport route for moving freight from China to seaports in Europe.

The international rail freight service is expected to reach Rotterdam in the Netherlands via Kazakhstan, Russia, Belarus, Poland and Germany in 2016.

"With many manufacturing companies moving their facilities to both Europe and inland China, there is an increasing demand for logistics and transportation services in these two fast-growing markets," said Yu Haiyan, Party chief of Lanzhou, capital of Gansu province, and also deputy to the National People's Congress.

Gansu sealed 83 major trade and investment deals with countries along the Silk Road Economic Belt in 2014 and its trade volume with these trading partners rose 5 percent year-on-year.

Responding to rising trade volumes, the provincial government set up three business delegation offices in Minsk in Belarus, Teheran in Iran and Horgos, a border city in the Xinjiang Uygur autonomous region to strengthen its regional presence, as well as to attract overseas visitors by facilitating more international airlines and gradually opening international ports of entry at the Lanzhou, Dunhuang and Jiayuguan airports.

After setting up three international passenger air routes between Lanzhou and Singapore, Dubai and Tbilisi of Georgia last year, Yu said the provincial capital will launch air cargo services operated by Air China Cargo Co to destinations in Central Asia and Eastern Europe in the second half of this year, in a bid to diversify its trading methods with countries along the Silk Road Economic Belt.