Improve EU-China connectivity across the Eurasian continent
By Ivaylo Gatev |
China Watch |
Updated: 2018-07-09 15:09
Editor's Note: This article is part of Preview Policy Report for the 2018 China-EU Summit, which will be jointly published by China Watch Institute — the new think tank platform powered by China Daily — and Bruges-based EU-China Research Centre of the College of Europe.
The trade in goods between China and the European Union represents one of the largest cargo flows in the world today in both quantity and value terms. According to European Commission trade figures, over half a trillion euros worth of mainly industrial and manufactured goods are shipped between the two trading partners each year. Currently the vast majority of Sino-European trade is by sea. Recent years, however, have seen freight rail links develop between cities in China and Europe. New overland corridors for the transport of high value-added goods have opened across Eurasia, complementing, if not yet competing with, ocean shipping.
Connecting centers of production and consumption situated at opposite ends of the Eurasian landmass is a major logistical challenge. The rail corridors extend across different national technological and administrative spaces. This poses a problem in the form of technical standards and regulatory frameworks that vary not only from one country to the next, but also from one railway corridor to another in the same country. The Eurasian continental rail is a mosaic of varying track and rolling stock gauges, and of different propulsion and signaling systems. There are different regulations governing maximum train load, length and speed. Customs clearance procedures and freight documentation are not uniform, nor are tariff structures and rate setting mechanisms. Even basic understandings of what reliable transport means can vary across the Eurasian continent.
The coexistence of different standards and procedures affects interoperability by complicating the management of traffic flow in the system. It makes the development of a common traffic prediction model difficult and explains the absence of synchronized timetables for rail freight across Eurasia. There are also interoperability and synchronization issues arising from diverging models of the transport sector. Differences in institutional and policy environment between countries involved in Eurasian rail freight are seen at the level of competition and pricing policy. They influence, in the first instance, tariffs and subsidies. Taken together industrial standards, regulations and organizational regimes shape the economic and administrative terrain that commercial operators have to navigate and thereby directly affect connectivity between China and the EU.
Connectivity across the Eurasian continent allows for more efficient trade and exchanges between the EU, China and the lands in between. It expedites freight, increases throughput capacity, and reduces operation costs, thus making overland transport commercially viable. Connectivity also leads to the integration of value chains which facilitates economic expansion and culminates in the creation of regional markets. This in turn leads to increases in economic activity and growth in prosperity. By bringing previously isolated regions and countries into regional or global markets, EU-China connectivity across the Eurasian continent contributes to international development.
For these reasons, improving connectivity across Eurasia is a priority in EU-China relations. Improvements in transport connectivity cannot happen all at once; rather, they would occur gradually through a series of incremental steps. The interlinking of national rail transport systems should thus develop on the basis of common connection standards. The adoption of common standards, or standardization, is a process whereby national rail infrastructures and industries link up and become interoperable. Standardization represents the continuous patching up of differences between national standards until full interoperability is achieved.
Standardized interoperability would involve not only industrial standards, but also work practices, and legal and regulatory frameworks. The aim would be to continuously optimize the Eurasian rail network. For this to succeed, a wide range of actors need to be engaged. They include railway companies, dry port authorities, intermodal operators, forwarders and customers who would advise governments and infrastructure owners on how to advance connectivity and exchanges along a network of Eurasian land ports and hubs. The focus should be on practical cooperation led by people involved in Eurasian rail freight in a technical capacity.
Interoperability of transport systems should also be advanced through dialogue and cooperation between national and regional authorities. The aim would be to align national legislation in the railway sector and, where possible, to enshrine this alignment in international law. Cooperation can take place at multiple venue, such as in and between technical standardization committees operating within regional organizations. Hybrid venues involving government agencies and regional bureaucracies could also be used. An example of this is the EU-China Connectivity Platform for exchange of information on standards, technical regulations and conformity assessment procedures in the rail transport sector, among others. The platform could partner with the CEEC-China 16+1 Secretariat on logistics cooperation based in Latvia. It could also be expanded into a trilateral commission with the participation of officials from the Eurasian Economic Commission.
Improving connectivity between the EU and China should be facilitated by international industry associations, such as the International Rail Transport Committee, which would provide technical expertise and political brokerage. A successful example of such facilitation is the common CIM/SMGS consignment note for rail shipments across Eurasia. CIM/SMGS expedites customs clearance and reduces delays at borders. International organizations with a regional focus, such as the United Nations Economic Commission for Europe, could also be involved. The latter coordinates the Europe Asia Transport Links initiative that seeks to identify the main Euro-Asian rail and road routes for priority development. The initiative prepares the technical groundwork for an international agreement on the development of Eurasian overland transport and as such should be supported by both China and the EU.
The commercial relationship between the EU and China is one of the cornerstones of the world economy. Optimizing the infrastructure that enables the circulation of goods, commodities and, eventually, people between them requires the participation of diverse actors, many of them outside the institutions in Brussels and Beijing. Connectivity across the Eurasian continent is not a bilateral matter between China and the EU. It is an important element of regional and even global governance.
Dr Ivaylo Gatev is affiliated research fellow of the Institute of Asia and Pacific Studies at the University of Nottingham’s campus in Ningbo, China. The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.
All rights reserved. Copying or sharing of any content for other than personal use is prohibited without prior written permission.
Editor's Note: This article is part of Preview Policy Report for the 2018 China-EU Summit, which will be jointly published by China Watch Institute — the new think tank platform powered by China Daily — and Bruges-based EU-China Research Centre of the College of Europe.
The trade in goods between China and the European Union represents one of the largest cargo flows in the world today in both quantity and value terms. According to European Commission trade figures, over half a trillion euros worth of mainly industrial and manufactured goods are shipped between the two trading partners each year. Currently the vast majority of Sino-European trade is by sea. Recent years, however, have seen freight rail links develop between cities in China and Europe. New overland corridors for the transport of high value-added goods have opened across Eurasia, complementing, if not yet competing with, ocean shipping.
Connecting centers of production and consumption situated at opposite ends of the Eurasian landmass is a major logistical challenge. The rail corridors extend across different national technological and administrative spaces. This poses a problem in the form of technical standards and regulatory frameworks that vary not only from one country to the next, but also from one railway corridor to another in the same country. The Eurasian continental rail is a mosaic of varying track and rolling stock gauges, and of different propulsion and signaling systems. There are different regulations governing maximum train load, length and speed. Customs clearance procedures and freight documentation are not uniform, nor are tariff structures and rate setting mechanisms. Even basic understandings of what reliable transport means can vary across the Eurasian continent.
The coexistence of different standards and procedures affects interoperability by complicating the management of traffic flow in the system. It makes the development of a common traffic prediction model difficult and explains the absence of synchronized timetables for rail freight across Eurasia. There are also interoperability and synchronization issues arising from diverging models of the transport sector. Differences in institutional and policy environment between countries involved in Eurasian rail freight are seen at the level of competition and pricing policy. They influence, in the first instance, tariffs and subsidies. Taken together industrial standards, regulations and organizational regimes shape the economic and administrative terrain that commercial operators have to navigate and thereby directly affect connectivity between China and the EU.
Connectivity across the Eurasian continent allows for more efficient trade and exchanges between the EU, China and the lands in between. It expedites freight, increases throughput capacity, and reduces operation costs, thus making overland transport commercially viable. Connectivity also leads to the integration of value chains which facilitates economic expansion and culminates in the creation of regional markets. This in turn leads to increases in economic activity and growth in prosperity. By bringing previously isolated regions and countries into regional or global markets, EU-China connectivity across the Eurasian continent contributes to international development.
For these reasons, improving connectivity across Eurasia is a priority in EU-China relations. Improvements in transport connectivity cannot happen all at once; rather, they would occur gradually through a series of incremental steps. The interlinking of national rail transport systems should thus develop on the basis of common connection standards. The adoption of common standards, or standardization, is a process whereby national rail infrastructures and industries link up and become interoperable. Standardization represents the continuous patching up of differences between national standards until full interoperability is achieved.
Standardized interoperability would involve not only industrial standards, but also work practices, and legal and regulatory frameworks. The aim would be to continuously optimize the Eurasian rail network. For this to succeed, a wide range of actors need to be engaged. They include railway companies, dry port authorities, intermodal operators, forwarders and customers who would advise governments and infrastructure owners on how to advance connectivity and exchanges along a network of Eurasian land ports and hubs. The focus should be on practical cooperation led by people involved in Eurasian rail freight in a technical capacity.
Interoperability of transport systems should also be advanced through dialogue and cooperation between national and regional authorities. The aim would be to align national legislation in the railway sector and, where possible, to enshrine this alignment in international law. Cooperation can take place at multiple venue, such as in and between technical standardization committees operating within regional organizations. Hybrid venues involving government agencies and regional bureaucracies could also be used. An example of this is the EU-China Connectivity Platform for exchange of information on standards, technical regulations and conformity assessment procedures in the rail transport sector, among others. The platform could partner with the CEEC-China 16+1 Secretariat on logistics cooperation based in Latvia. It could also be expanded into a trilateral commission with the participation of officials from the Eurasian Economic Commission.
Improving connectivity between the EU and China should be facilitated by international industry associations, such as the International Rail Transport Committee, which would provide technical expertise and political brokerage. A successful example of such facilitation is the common CIM/SMGS consignment note for rail shipments across Eurasia. CIM/SMGS expedites customs clearance and reduces delays at borders. International organizations with a regional focus, such as the United Nations Economic Commission for Europe, could also be involved. The latter coordinates the Europe Asia Transport Links initiative that seeks to identify the main Euro-Asian rail and road routes for priority development. The initiative prepares the technical groundwork for an international agreement on the development of Eurasian overland transport and as such should be supported by both China and the EU.
The commercial relationship between the EU and China is one of the cornerstones of the world economy. Optimizing the infrastructure that enables the circulation of goods, commodities and, eventually, people between them requires the participation of diverse actors, many of them outside the institutions in Brussels and Beijing. Connectivity across the Eurasian continent is not a bilateral matter between China and the EU. It is an important element of regional and even global governance.
Dr Ivaylo Gatev is affiliated research fellow of the Institute of Asia and Pacific Studies at the University of Nottingham’s campus in Ningbo, China. The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.
All rights reserved. Copying or sharing of any content for other than personal use is prohibited without prior written permission.
