Nikola Mikovic

Opinion | China and the EU have a logistics problem. Central Asia stands to benefit

Given the wars in the Middle East and Ukraine, a safer trade route might be the one through Central Asia and the Caucasus

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A view of Almaty in Kazakhstan in 2023. The Middle Corridor, a trade route connecting China and Europe via Kazakhstan, Azerbaijan, Georgia and Turkey, has become more important as China seeks to minimise risks from instability in the Middle East and Russia. Photo: Xinhua

Nikola Mikovic

Published: 4:30pm, 23 Oct 2024Updated: 6:30pm, 23 Oct 2024

For China, Europe is one of the most important markets. In 2023, the European Union and the world’s second largest economy traded goods worth €739 billion (US$799 billion). Despite the EU’s decision to impose stiff taxes on imports of Chinese electric vehicles, China and European countries are expected to maintain a large trade volume. What could represent a serious challenge in their relationship is logistics.

Traditionally, Chinese goods have been coming to Europe mostly by sea. But as tensions in the Middle East – particularly near the shores of Yemen – threaten major sea routes, Beijing is actively looking for a sustainable alternative.

Although the Red Sea and the Suez Canal are still crucial gateways for international shipping and commerce, many companies have diverted their ships via the Cape of Good Hope in South Africa. But this leads to longer transit times and higher costs for Europe-bound Chinese goods. Under the current geopolitical circumstances, a land corridor may be the best route. But which one?

For many years, the Northern Corridor – connecting Europe and Asia, especially China, via the Russian railway network – has played an important role in Beijing’s transport strategy. But as a result of the war in Ukraine, and the spillover effects in the border regions of Russia, this route has also become problematic.

Beijing is now looking to increase the use of another network – the Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor. This route includes about 4,250km (2,640 miles) of railway and 500km of seaway, making it faster and easier for China to ship cargo to Europe – 10 to 15 days, compared to 35 to 45 days via maritime routes. It connects China and Europe via Kazakhstan, Azerbaijan, Georgia and Turkey.

It is therefore no surprise that China Railway Container Transport Corporation recently confirmed plans to participate in the Middle Corridor Multimodal joint venture with Kazakhstan, Azerbaijan and Georgia. Beijing is also looking to build a deep-sea port in Anaklia, on Georgia’s Black Sea coast. Such a facility should be capable of handling large volumes of container and other cargo. Moreover, the port would likely strengthen the role of Georgia along the Middle Corridor.

03:21

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