New trade routes revive China’s ‘Silk Road’

China is working on new trade routes with partners to the West in an effort to reestablish the historic "Silk Road."

In February, two new rail services carrying cargo from China to Iran and Russia began operations. A 3,659 mile route from Harbin, the capital of China's Heilongjiang Province, to the Russian city of Ekaterinburg, is a ten-day trip for the rail service, the Journal of Commerce (JOC) reported. Carrying goods between the two cities by sea could take up to 40 days. A 6,424-mile trip between the Chinese city of Yiwu, in the country's Zhejiang province, and Tehran in Iran, was also completed for the first time in February. This rail route also is faster than moving goods by sea.

"Compared to the sea voyage of the cargo ships from China's Shanghai to Iran's Bandar Abbas port, the travel time of the train was 30 days shorter," Mohsen Pour-Aqaei, managing director of Iranian Railways, told the JOC.

The rail connections to Iran and Russia from China follow the launch of a service between Harbin and Hamburg, Germany in June 2015.

China improving trade ties with Iran
International trade sanctions against Iran were recently lifted, but prior to that China was one of the few countries that did not restrict trade with the Middle Eastern country. With the sanctions now lifted, though, there are plans to extend the China-Iran connection to Europe. This could open up an influx of new money for Iran. Trains passing through on their way to Europe from China could prove valuable to a country long cut off from much of the world. In addition to the new trade opportunities the railway presents for Iran, the country recently agreed to a 10-year, $600 billion trade deal with China.

China expanding its global trade reach
The railways are part of China's $1 trillion "One Belt, One Road" plan, according to Construction Equipment. The land portion of the strategy includes road connections, in addition to rail routes stretching from China to as far as Europe. The plan also includes developing ports to connect China to more harbors in Europe and the South Pacific. The new Silk Road has been allotted $40 billion worth of that money.

The plan to expand China's trade reach has the potential to significantly improve Beijing's influence over other countries along the routes. The project will put Chinese resources and people to work while solidifying its standing as an important global trade partner.

Trade between Europe and China has been growing recently, the JOC noted. Besides the connection with Germany, two-way services between Chengdu in China's Sichuan province and Lodz, Poland, recently increased from two to five trips weekly. The Chengdu-Europe Express Railway Service moves automobile parts, information technology products and cloth materials from China to Europe.

With the money China plans to invest in expanding trade infrastructure in the coming years, there is a good chance other connections could also see trips increase soon. This, some people believe, could substantially alter global trade in the 21st century.