China-Southeast Asia corridor keeps growing, a chance for other markets?

Source: RailFreight 
Date: 5th July 2023

The intermodal corridor connecting China and Southeast Asia has increased its volume by 10.5 percent this year, amounting to 424.000 TEU. The corridor, officially known as the New International Land-Sea Trade Corridor, connects inland western Chinese cities such as Chongqing with Southeast Asia. However, it could also function as a cord connecting to other markets, including Central Asia and further Europe.

Regarding southbound traffic, the corridor mainly accommodates agricultural products and car parts produced in western China and exported to Southeast Asian countries. However, the route does not solely serve the demand from Southeast Asia but also caters to other markets. For example, one of the latest shipments from Chongqing was a freight train carrying containerised new electric vehicles to Qinzhou Port. Through Qinzhou, the cars will be delivered to Kuwait.

Northbound traffic is dedicated to the Chinese market. Of all the shipped products, fruits have gained popularity. In this sense, the highlighted products are Cambodian rice, Thai coconut and mangosteen, and Vietnamese passion fruit and durian. They are first transported via ships to Qinzhou Port in Guangxi province and then reloaded onto rail for the rest of China. However, for Southeast Asian countries, this route has a greater significance, as it could extend Southeast Asia’s market beyond China into Central Asia.

To Central Asia and beyond
As more factories move from China to Southeast Asian countries such as Vietnam, the global supply chain landscape is reshaping. Countries with close trade ties with China are now eyeing extending their connections to Southeast Asia, and Kazakhstan is one of them.

In an interview with Bloomberg last month, Kazakh deputy prime minister and minister of trade and integration stated: “We are reviewing our potential as a transportation and logistical hub. We are looking to new markets-for example, Southeast Asia has huge potential in terms of the export of different goods to Europe”.

Some action has already been taken. For example, on 25 January, a train loaded with Vietnamese home appliances departed from Guangxi province and headed to Almaty, Kazakhstan. The products were first shipped via sea to Qinzhou Port. Microwave ovens, refrigerators, electric ovens, hoovers, and TV sets could be spotted in the containers.

Moreover, in late May, the Xi’an International Land Port group started collaborating with Qinzhou Port to promote this intermodal corridor, focusing on the synergy with Central Asia countries. As a result, the potential of Southeast Asia to find a steady rail extension to markets beyond the Chinese border via this intermodal corridor is becoming all the more realistic.

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