On September 2, a freight train loaded with export goods departed from Tuanjie Village Station, Chongqing, to mark the first attempt of land-sea intermodal freight services through the New Western Land-sea Corridor (“the New Corridor”). The shipment, composed mainly of auto parts and electronic products, is scheduled to arrive at the Port of Qinzhou, Guangxi in railway containers, where it transfers by sea to some Southeast Asian countries, such as Vietnam, Thailand and Indonesia.
On August 15, the National Development and Reform Commission (NDRC) released the General Plan on New Western Land-sea Corridor (hereinafter referred to as “the Plan”). Many western Chinese cities have started to study and implement the Plan.
Wang Ming, Director General of the NDRC Institute of Comprehensive Transportation, is one of the core developers of the Plan. He said in an interview with the 21st Century Business Herald that the New Corridor is an economic link between the Silk Road Economic Belt and the 21st Century Maritime Silk Road. The burgeoning free-trade zones in the west will lead to further development and opening up of the region.
Free-trade zones incubate new forms of trade.
According to the Plan, the New Corridor will give full play to the role of western China as a link between the Belt and the Road, deepen its sea-land two-way opening-up and development, bring about a new pattern of western development, and promote high-quality regional economic progress.
On September 2, Deng Changjin, Deputy Director General of Sichuan Provincial Development and Reform Commission, addressed the Press Conference on Economic and Social Achievements of Sichuan on the Occasion of 70th Anniversary of the Founding of the People's Republic of China. He said, the government of Sichuan will implement the Plan, building grand passageways based on integrated traffic. Also, empowered by eight corridors in all of the four directions, a land-sea strategic transportation network and an economic link with foreign countries will take shape.
According to Deng Changjin, Sichuan will speed up the development of several railways and express roads, including Xuyong-to-Bijie Railway. Accelerated progress will be expected at the early stage of Huangtong-to-Baise Railway project. It will be a grand passage that extends over the shortest distance, costs the shortest travel time, and allows the highest energy efficiency for freight trains that drive from Sichuan to Beibu Gulf Port via Guangxi. There will also be a freight railway route that extents from Chengdu to the central part of Yunnan via Panzhihua-Xichuang region, and links up Bangladesh-China-India-Myanmar and Indochina Peninsula, as well as a high-speed railway route from Chengdu via Yibin to Guiyang, where it connects with Guangdong-Hong Kong-Macao Greater Bay Area through the service of Guiyang-Guangzhou High-speed Railway and with Beibu Gulf Economic Zone through the service of Guiyang-Nanning High-speed Railway.
On August 30, two new free-trade zones (FTZ) were launched in Yunnan and Guangxi, a major step forward to promote further development of the land-sea new corridor between the two places.
Still on August 30, as part of the Guangxi FTZ, Qinzhou Free-trade Port (FTP) was announced open at a ceremony held in Zhongma Qinzhou Industrial Park. The FTP takes up an area of 58.19 square kilometers, nearly half the size of Guangxi FTZ, and involves three State-level open development platforms, i.e. China-Malaysia Qinzhou Industrial Park, Qinzhou Bonded Port Area, and Qinzhou Port Economic & Technological Development Zone. It is noted that, as its “one port and two areas” vision implies, the FTP will step up the development of a portal of the new land-sea corridor for international trade.
Qinzhou FTP strives to become, in five years, a high-caliber trade park that facilitates free trade, easy investment, industrial clustering, open finance, effective supervision, good progress of surrounding areas, and China-ASEAN open cooperation.
Up to now, FTZs have been established in many western places, including Sichuan, Chongqin, Shaanxi, Yunnan and Guangxi.
Li Muyuan, Vice Chairman and Secretary General of China Container Industry Association explained that, with the New Corridor, we shall embark on a path where the logistics industry serves as a new engine for trade and economy. That is to say, we will establish logistics hubs to bring together logistics elements, build logistics industrial clusters, improve logistics distribution, and promote international commodity trade. The logistics market will be driven by both domestic and foreign demands. To that end, we must first create a business environment that facilitates trade activities. The FTZs along the New Corridor will emerge as incubators of new trade.
“An industrial landscape that features coordinated development of the manufacturing sector, trade & service sector and logistics sector has to be observed across cities along this economic corridor.” Wang Ming identified “modernization” as a top challenge for western China, as it moves into the third decade of large-scale development.
“According to the report delivered at the 19th CPC National Congress, we will have a great modern socialist country of China that is prosperous, strong, democratic, culturally advanced, harmonious, and beautiful by the year 2050 through two 15-year plans. But China’s modernization should not be confined along the coasts, nor be called a nationwide success without the presence of a modern western region,” said Wang Ming.
The New Corridor makes China’s western part accessible by land and sea, which facilitates the inflow of international resources and market opportunities to promote the modernization of this region, according to Wang Ming.
Here, land transport refers to the China Railway Express to Europe, while sea transport is enabled by southward channels that make sea-rail intermodal services possible via the ports in Guangxi and Hainan.
We should strengthen the division of labor and collaboration among western cities.
The Plan assigns different purposes to different cities. To be specific, Chongqing, Chengdu, the Port of Beibu Gulf (Guangxi), and the Port of Yangpu (Hainan) are end hubs; Nanning, Kunming, Xi’an, and Guiyang are route hubs; Fangchenggang (Dongxing), Chongzuo (Pingxiang), Dehong (Ruili), Honghe (Hekou), and Xishuangbanna (Mohan), among others, are border hubs.
Sheng Yi, a research fellow from Sichuan Academy of Social Science, recognized the role of the New Corridor as an east-west and north-south passageway. It has to be supported with traffic hubs, industrial parks and functional zones which serve as the management, logistics and service centers with agglomeration and dispersion functions.
Taking Sichuan as an example, a backbone transport network would be built based on the two major airports of Chengdu, the railway container terminal of Qingbaijiang, and Yibin Shipping Logistics Center in the upper reaches of the Yangtze River. We would also expect a manufacturing and modern service base to emerge around national high-tech development zones and national economic & technological development zones.
“In particular, we would integrate southward transport channels that have taken basic shape in Sichuan, and present an optimized and upgraded network of roads in alignment with the New Corridor development. Besides, we would expect a better role of node cities in facilitating the development of surrounding areas and build up the strength of key industrial and functional zones to form a multi-tier structure of commodity distribution centers, manufacturing service centers, transport corridors and industrial corridors,” said Sheng Yi.
Wang Ming acknowledged the high importance attached to each of the key nodes in the Plan. As the development of modern industry requires a fair amount of collaboration across the supply chain, industrial chain and value chain, the New Corridor works well if all of the node cities could join hands in fostering and tapping the consumption potential of the western market.
According to Wang Ming, the New Corridor hosts a population of 350 million. Unlike coastal cities that feature an export-oriented economy, the western region is driven by domestic demands. As the consumption potential is growing and expanding gradually in the west, we should look forward to the future where the New Corridor thrives. Now, we have to explore a proper division of labor and cooperation between Chongqing, Chengdu, Guiyang and Hainan to meet the domestic consumption needs.
The division of labor and cooperation is the paramount issue that faces western cities like Chongqing, as new opportunities come their way.
Wang Ming said, the western region enjoys an edge over the coastal areas as it stays closer to the expanding inland consumption market. The future of the west lies in domestic consumption rather than exports. In terms of domestic demands and overall logistics costs, Chongqing and Chengdu boast an advantage, because they are hub cities located nearer to the market and to the raw materials.
“Metropolitan areas and industrial cooperation seem very important to the inland region. We must embark on the path of intelligent manufacture, intelligent logistics and intelligent business trade to tap the massive market potentials,” Wang Ming said. Metropolitan areas, and then city clusters, have to be formed along the New Corridor. Chongqing and Chengdu used to compete only for existing resources; now, the two cities shall join hands for mutual benefits over additional resources. Chongqing and Chengdu have exceeded RMB 1 trillion worth of GDP, which is made possible under the powerhouse of domestic demands rather than exports.
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