The Steel Caravan on the New Silk Road

by Hu Yifeng

January 18, 2017, London. The sky cleared after days of drizzle and the sun shone brightly in a blue sky.

At 1 p.m., a lion dance kicked off at Barking Station to pulsating drumbeat and a crowd gathered to welcome a special guest – a train arriving from Yiwu, a city in east China.

The event was broadcast live on BBC, watched by 2.7 million viewers. The International Business Times UK carried a report, saying the modern version of the ancient Silk Road would usher in a new era of East-West trade relations.

A China-Europe freight train (photo by Belarusian Railway)

Complementary Markets and Trade

As early as the Western Han Dynasty (202 BC-AD 8) rule in China, merchants traveled across Eurasia in camel caravans, opening up the Silk Road trade route.

The Xi'an International Trade & Logistics Park on a China Railway Express route

Today, the China Railway Express has added a new chapter to the story of the ancient Silk Road. Since the Belt and Road Initiative was proposed in 2013, this "steel caravan" has traversed the major regions of Eurasia, connecting a hundred cities between China and Europe. A major artery of international trade, it has linked the econ-omies in the Asia-Pacific with Europe's.

Wherever the trains go, they bring trade opportunities, creating tracks for commercial cooperation for local businesses and people, and winning the support of the countries along their routes.

Anita, a Kazakh entrepreneur, runs a cross-border e-commerce business with her Chinese husband, Yuan Zhaohui. Their startup is one of the many businesses that have benefited from the Eurasian railway.

When the couple first began, business was fairly good as Kazakhstan has a large demand for Chinese clothing, suitcases and other general merchandise. But as their business grew, logistics became a growing concern. "The traditional means of logistics are too slow. We used to joke that transport took so long that when a dress bought in summer arrived, it would be autumn," Anita said. "Then we switched to the highways. It was faster but costly – we had to pay RMB30,000 (USD4,418) for a seven-ton truck – and customs clearance was cumbersome."

In November 2013, when the China Railway Express included Xi'an, a large city in central China, in its network, the couple sensed opportunities. When the line began operation, Anita's company became the first e-commerce business in the Xi'an International Trade & Logistics Park to transport cargo abroad using the China Railway Express. Now logistics is no longer a problem. Sending by train a 20-ton container to Almaty, Kazakhstan's largest metropolis, costs only RMB27,000 (USD3,976) and takes less than seven days. Earlier, it used to take a month.

Better logistics helped the couple quickly expand their business to other countries in Asia and Europe. Anita said, "We are lucky to have the China Railway Express, which has reduced both transportation cost and time. Our clients don't have to wait for long for their goods, and we can get our payment sooner. The railway has solved our biggest problem."

At the end of 2016, the couple renamed their online business as Silk Road City and saw a 30-fold surge in export year on year in 2017. The company now has sorting centers in Almaty and Karaganda in Kazakhstan, and in Moscow, Yekaterinburg and Novosibirsk in Russia, further reducing logistics costs and delivery time. Anita said, "The China Railway Express is full of opportunities. We chase our dreams with the trains. We will build our Silk Road City wherever the trains go."

▼ Silk Road City's website lists the major events during its development.

Silk Road City's first store in Karaganda, Kazakhstan. It started business in 2014 selling products from China both online and from the brick-and-mortar outlet.

Silk Road City's first overseas warehouse opens in Almaty, Kazakhstan, January 2016.

Silk Road City begins selling products on leading Kazakh online store, its first overseas e-commerce platform partner, June 2019.

The trains are meant to carry goods both ways, but at first, when they went back to China, there wasn't much cargo. However, today things have changed and more people are using it to transport things from Europe to China due to the convenience it offers. For example, it took Zhang Dong, a car aficionado in Chongqing, only 20 days to get a BMW Beemer delivered to him from Europe after he placed his order.

In 2019, the China Railway Express trains made 1,507 round trips between Chongqing and Europe, carrying 133,000 standard TEUs of cargo in total. Finished vehicles have become a fixture, along with auto parts, maternal and infant care products, food, and health products from Europe.

The Chongqing line is just one example. The number of return trains has increased by 31 times. When the trains first began operation in 2014, only 28 trips carried return cargo. In 2019, they jumped to 872, striking a balance in the number of trains running in either direction. The commodities going to China have also increased in kind – from machinery, wine, vehicles and parts to precision instruments, environmental protection equipment, high-end clothing, cosmetics, fresh milk and dairy products.

Every year before the Chinese New Year, a time when the Chinese make bulk purchases of food and gifts for their families, the trains going back to China are loaded with wine from Spain, chocolate from Belgium, dairy products from the Netherlands, and snacks from Russia. These foreign food and drinks have given more color to the New Year holidays of ordinary Chinese.

According to the manager of a time-honored Spanish wine-maker with a hundred-year history, the company has expanded its sales thanks to the China Railway Express. He now travels a couple of times every month between China and Spain because of the growing business. The manager of a Madrid-based cosmetics company also said, "The huge potential of the Chinese market goes beyond my imagination. I have found the future of our company in China."

Policy Coordination Ensures Smooth Operation

The trains traveling across Eurasia need to change tracks in different countries. They also need government-issued waybills to enter borders.

Getting the passes in time directly impacts the operation of the trains. The China Railway Express follows two international agreements: the Convention Concerning International Carriage by Rail among European countries and the Agreement on the International Goods Transport by Rail among members of the Commonwealth of Independent States. China joined the latter in 1953.

When the trains from Chongqing entered Europe, they had to pass through Marasevich in Poland, where they had to get customs clearance before they could proceed. When going back to China, they also needed to go through clearance at the border stations of Europe.

"For businesses that depend on these trains for cargo transport, constantly changing waybills is a waste of time, labor and money, and affects the operating efficiency. Fewer waybills would make clearance faster and increase punctuality. Even a few hours saved on the way means a big boost to efficiency.

Therefore an experiment began with select goods on the Chongqing line to facilitate their transport with a single waybill that would be recognized by both the international conventions. The new waybills, prepared in Chinese, English and Russian, included all the information needed for fast clearance, thus reducing costs and the time the cargo had to stay at the port.

A chartered train for business-to-business cargo from Chongqing to Europe.

The new waybills are now accepted on other lines too. More reforms have followed. The format of trade documents and the trade procedures have been standardized; a unified trade platform and rules have been created; there is automated customs clearance, and related procedures have been streamlined. With these new measures, the trains are running with greater efficiency between China and Europe, and their example has triggered a waybill reform in international rail transport.

A Lifeline on Tracks

In the spring of 2020, Covid-19 broke out around the globe, spreading across Europe. Many European countries locked down their cities and even the whole country. In the face of a common enemy, China worked with the rest of the world as a responsible major country, fighting side by side with the international community.

The biggest problem for Europe was the shortage of medical supplies. The pandemic hit international logistics hard, especially air transport and shipping. The major economies were more concerned about the safety of their industry and supply chains. According to The Loadstar, a UK-based news source on logistics, the railway was the wisest option to carry cargo from China to Europe. Trains were more reliable, safer and more environment-friendly than shipping and air transport, and the China Railway Express became the top choice for many countries.

On March 21, China's first chartered train carrying medical supplies set out from Yiwu to Madrid. It carried 115,000 masks and 766 protective suits donated by the Yiwu-Xinjiang-Europe line for Spain's Ministry of Health and the Chinese Embassy in Madrid. Sixteen days later, the train arrived in Madrid, bringing the much-needed help for Spain.

By the end of July 2020, the China Railway Express had transported 390,000 tons, or 4.97 million pieces of medical items, to Italy, Germany, Spain, the Czech Republic, Poland, Hungary, the Netherlands, and Lithuania, and from there to more European countries.

Hungary is one of the beneficiaries of the trains. On April 7, a train carrying 41 containers departed from Jinan, Shandong Province in east China. It crossed the Chinese border and passed through Mongolia, Russia and Ukraine to reach Hungarian capital Budapest after 17 days.

A train from Yiwu to Prague

The containers carried laptop bags, color pencils, portable electric drills, fitness equipment, and other usual cargo, as well as heat exchangers for cars, injection molds, laser levels, plastic bottles, and other essential supplies for European manufacturers ready to resume operation. The most popular, of course, was medical supplies.

László Mosóczi, Hungary's Secretary of State for Transport Policy at the Ministry for Innovation and Technology, was in Budapest to welcome the train from Jinan. He said, "In the face of the virus, a common enemy of humanity, China has proved to be a reliable friend with its action. The ventilators, protective suits and masks from China have armed us up against the virus."

On the day the vehicle arrived, another train set out from Zhejiang in east China, carrying much-needed medical supplies and engineering equipment to the China-Belarus Industrial Park in Minsk, Belarus.

China's railway ports speeded up customs clearance for the trains to facilitate international cooperation to combat Covid-19. The China Railway Express has transported large quantities of supplies to Europe, becoming protector of lives in Eurasia. With air and sea transport crippled by the pandemic, the railway paved the way for a Silk Road of health for all, which helped Europe with medical supplies and daily necessities.

The trains carry friendship and hope between China and Europe, sowing the seeds for a good life in the civilizations across Eurasia. They have brought people together and been ardently welcomed wherever they went.

A well-known Spanish performing artist of the dance troupe Norte Flamenco considers the trains as a cultural messenger. He said, "This is like one of those trains that come once in a lifetime. You hop on it to go forward. The China Railway Express is a train I must get on."

These expressive words speak volumes for the significance the trains hold for the people along the routes – they have gone beyond the realm of mere transport to become a symbol of friendship.


Project Overview:

The China Railway Express is a transcontinental cargo service of China Railway running on fixed routes and schedules between China, other Asian countries and Europe. The express has provided a new choice for transporting commodities, as well as a new mode of transport and industrial agglomeration.

The China Railway Express runs on three major routes (as per the location of the entry port) – west, central and east – from Xi'an, Chongqing, Chengdu, Zhengzhou, Wuhan, Suzhou and Yiwu. A unified logo was adopted in June 2016, shaping a train in motion with a flying silk ribbon. It symbolizes reliability, honesty, inclusiveness and the brand's strength.

In 2019, the China Railway Express made 8,225 trips with 725,000 TEUs of cargo, a 29 and 34 percent increase respectively year on year. Of its containers, 94 percent are loaded with cargo during the journeys. The trains have becoming an internationally recognized brand, covering Germany, Poland, the Czech Republic, France, Belarus, Russia, the Netherlands, the United Kingdom, Italy, Spain, Belgium, Latvia, Austria, Hungary, Finland and Luxembourg.

Between January and July 2020, the trains made 6,354 trips with 574,000 TEUs of cargo, an increase of 41 and 46 percent respectively over the same period last year. In July alone, it ran 1,232 trips to transport 113,000 TEUs of cargo, growing by 68 and 73 percent respectively over July 2019, breaking its own record for five consecutive months.