By: Liu Ying    Source: Global Times    Published:2021-08-12

A report by China's Ministry of Commerce recently described how Xi'an in Northwest China's Shaanxi Province and the North Kazakhstan Region in Kazakhstan had set up a logistic and trade link through the China-Europe freight train service to deliver fresh agricultural produce from the Central Asian country to the dinner tables of Xi'an residents in just 13 days.

The "steel camels" carry Kazakhstan's high-quality wheat, edible oil, milk, honey and mutton to Xi'an. Many agricultural produce were grown on previously unused farmlands in Kazakhstan after orders are received.

Practical agricultural cooperation between localities and enterprises under the Belt and Road Initiative (BRI) is another example of how the initiative helps ordinary people through joint contribution and mutual benefits.

It should be noted that Xi'an and North Kazakhstan Region are just two dots along the Silk Road Economic Belt that have been connected. There are many such dots in between China and neighboring countries that can be connected. Those countries are major agricultural exporters, while China has a big appetite for high-quality agriculture produce.

Mongolia and Russia, for example, have massive agricultural resources and potential for exports to China. Shipping agricultural produce from major exporters to China via the China-Europe rail freight trains has been trailed across several locations, particularly for farming areas in Russia's Far East and Mongolia. But the fully potential has not been realized as it currently only involves small Chinese border towns, where median incomes are lower and market demand is smaller.

This is why the Xi'an-North Kazakhstan Region link offers a great example of what could be achieved in the future. In this link, a major Chinese city with substantial consumption power is connected as one end of this cross-border logistics corridor. The linkage also demonstrated the cross-border rail freight service has the full capacity to provide gate-to-gate services over a distance of several thousand kilometers.

This is a vivid example of the ultimate vision of the BRI being put into practice with the creativeness of market participants. The close cooperation throughout the whole process from initial investment to production to sales also fits into China's "dual circulation" development pattern that takes the domestic market as the mainstay and allows the domestic and foreign markets to boost one another.

Market entrants should embrace the potential to open such corridors for channeling high-quality and competitive agricultural products into the world's largest consumer market. Similar links should be considered as earlier as possible by companies with expertise in managing supply chains into major farming areas in countries such as Mongolia and Russia.

In the first half of 2021, China's trade with BRI countries and regions defied the impact of COVID-19 with a staggering year-on-year growth of 27.5 percent, reaching 5.35 trillion yuan ($0.83 trillion). During the period, China's agricultural imports from these markets jumped by 30.9 percent year-on-year.

If more point-to-point agricultural links between major Chinese cities like Beijing and major farming areas in Mongolia and Russia are formed, they would further boost trade, increase investment into partner countries and help create jobs. They will also enable China-Europe rail corridors to expand its role as an artery of trade.

The author is a research fellow at the Chongyang Institute for Financial Studies, Renmin University of China.

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