THE NEW YORK TIMES: China is striking deals to cement its role as Asia’s trade hub

HUNCHUN, China — China has made several moves in recent months to advance its ambitious aim to become the trade and transportation hub of Asia.

To its west, China has agreed to build a rail line across Central Asia. Beijing also said it would help Vietnam plan three rail lines leading to the countries’ shared border. China is trying to persuade Russia and North Korea to let it reopen a long-closed port on the Sea of Japan.

If successful, the plans would give China closer ties to the economies of Northeast and Southeast Asia, the Mideast and even the Arctic, the latest steps in its 11-year-old Belt and Road Initiative to create a more China-centered global order.

Each of the efforts, in varying ways, faces obstacles. The nation’s top leader, Xi Jinping, will need close cooperation from border countries, some of which are politically volatile, like Kyrgyzstan, or internationally isolated, like North Korea. Neighbouring countries that have long been wary of China, like Vietnam, will need to be reassured.

A similar venture, a 3-year-old rail line that China has forged into landlocked Laos in Southeast Asia, has been welcomed by some there for bringing an influx of Chinese mining investments and tourism to the country. But others have warned of Chinese domination of the Laotian economy.

“They ended up owning a lot of the land, or at least using a lot of the land, and squeezing out some of the locals,” said Ja Ian Chong, a professor at the National University of Singapore.

The new initiatives would also be expensive, and China has begun emphasizing smaller Belt and Road projects elsewhere.

A central factor in the country’s moves is its geopolitical relationship with Russia, whose invasion of Ukraine in 2022 has both helped and hurt China’s effort to build regional transport links.

Russia now depends on China for trucks, drones and other supplies for the war, and has become less of a counterweight to China in struggles for regional influence. As ties have warmed between the two countries, even including many joint military exercises lately in the Sea of Japan and elsewhere, Moscow has been giving more diplomatic support to Chinese projects, notably on the short Russian border with North Korea.

Yet the war in Ukraine has produced a severe labour shortage in Russia, drawing workers in from Central Asia. Kyrgyzstan, in particular, has been left with too few skilled workers to construct the rail line that China wants to build across its mountains toward Afghanistan and Iran.

“The problem is not just having enough engineers and workers, but enough with the right technical training and background to stay and work in Kyrgyzstan,” said Niva Yau, a specialist on the country at the Atlantic Council, a research group in Washington.

But the collective scope of the projects shows how Xi is wielding infrastructure to cement China’s role as the trade and geopolitical centre of Asia.

China agreed on June 6 to a pact that gave it 51% ownership of the planned rail line, with Kyrgyzstan and Uzbekistan splitting the rest. But while Kyrgyzstan said construction would start in August, it has already been delayed.

The rail line would start in Kashgar, in an impoverished corner of China’s far western Xinjiang region. It would then traverse the nearly roadless mountains of southern Kyrgyzstan to Uzbekistan.

The line’s terminus in Uzbekistan, Samarkand, is the hub of a Soviet-era rail network that crosses Central Asia to link Russia to Afghanistan and Iran, and beyond Iran to Europe. The planned line from Kashgar to Samarkand would give China easier access to Afghanistan and its copper and iron ore reserves. The line would also help China sell cars and other manufactured goods to Iran by rail in exchange for oil, which is shipped to China by sea.

China now consistently buys 90% or more of Iran’s oil exports each month, said Andon Pavlov, senior refining and oil products analyst at Kpler, a firm in Vienna that specializes in tracking Iran’s oil shipments. Most other nations refuse to buy Iranian oil because of international sanctions related to the country’s nuclear weapons program, with the result that Iranian oil sells at a considerable discount to world prices.

More than 2,000 miles away from the planned Central Asian rail line in Kyrgyzstan, three more rail lines are planned to extend from China’s southeastern border deep into Vietnam. They could also produce economic gains.

Multinational corporations and Chinese companies have shifted the final assembly of many products, including solar panels and smartphones, to Vietnam to bypass trade barriers against Chinese goods erected by the United States and other countries. But the chemicals, components and engineering for many of these products still come from China.

That has created demand for closer transportation links between China and Vietnam, beyond the highways and shipping lanes that already connect them. For now, China’s involvement in helping Vietnam construct its train lines is expected to be limited. In a joint statement after Vietnam’s new leader, To Lam, visited Beijing last month, the countries said China would assist in planning for the lines.

The toughest project for China, but one with a potentially big payoff, lies in trying to secure access to the Sea of Japan and the Pacific Ocean via the Tumen River.

In the mid-19th century, Russia seized from China a large area of Siberia, including a coastal strip of land that runs south to North Korea and obstructs northeastern China’s access to the ocean. The Tumen River flows along more than 300 miles of China’s border with North Korea, but the last 9 miles of it lie between Russia and North Korea. A low railroad bridge across the river, which the Soviet Union hurriedly built during the Korean War to haul supplies, has blocked all but fairly small boats ever since.

Replacing that bridge with a taller one that would allow ocean-going ships to use the river has long been the dream of Chinese leaders. The goal is to link the Pacific Ocean with a port in Hunchun, an otherwise landlocked Chinese city a few miles up the river. Some residents of Hunchun, like Zhao Hongwei, a real estate investor, share that dream.

“If there is a port, there can be trade, and we can become prosperous,” Zhao, 49, said.

For Beijing, opening Tumen River traffic would ease trade to Russia, northern Japan and the northeast coast of the Korean Peninsula and even create new shipping lanes to Europe as climate change shrinks the Arctic ice cap.

“The Tumen River, as the only direct passage into the Sea of Japan, has extremely high strategic value,” said Li Lifan, executive director of Russian and Central Asian studies at the Shanghai Academy of Social Sciences.

With Russia expressing a new willingness in recent months to replace the bridge, the big question now is North Korea’s stance. Russian and North Korean officials signed their own agreement June 20 to build a highway bridge over the Tumen River.

Some analysts are sceptical that North Korea will agree to remove the low bridge. The country has long tried to pit China against Russia when it has suited its geopolitical needs. North Korea, which already faces China along almost its entire northern border, may not want to see Chinese influence on the last segment with Russia.

“Even if China and Russia reach agreement, they still have to persuade North Korea,” said Hoo Chiew Ping, a Korea specialist at the East Asian International Relations Caucus in Malaysia.

This article originally appeared in The New York Times.

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