China Rail Targets Russian Far-East as a “Priority Market”

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Chinese SOE China Railway Corporation (CRC) has stated that Russia’s Far Eastern Federal District is currently one of the priority markets for expanding the company’s core operations as part of the Belt and Road Initiative. The region requires a developing net of railroads and motorways, as well as new bridges and other transport infrastructure, according to the CRC CEO Zhang Zongyan, who says that China is ready to participate in the projects to give a boost to its global shipping routes strategy.

Zhang stated in comments to Tass that “China Railway is looking at the Far East as one of most important destination markets for extending its principal activity. Chinese enterprises are ready to deploy their own advanced technology, equipment, and engineering to take part in the construction of infrastructure in the Far East. This will contribute to the implementation of the Belt and Road Initiate and the development of cooperation between northeastern China and Russia’s Far East.”

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According to Zhang, CRC has been in negotiations with the Russian Ministry of Transport and the Ministry for the Development of the Far East and this was further discussed on the sidelines of the recent Eastern Economic Forum in Vladivostok. CRC is reportedly planning to participate in the reconstruction of the region’s international transport corridors Primorye-1 and Primorye-2, which connect the Chinese provinces of Heilongjiang and Jilin with the Far Eastern Russian region of Primorye.

China Railway Group, founded in 1950, is in charge of railway passenger and cargo transportation services in China. The Beijing-based corporation has reportedly built 90,000 km of roads so far with over 10,000 km of these being to high-speed network standard.

Chris Devonshire-Ellis of Dezan Shira & Associates comments: “Russia needs to open up its Far East as there are a huge amount of resources in the ground there. Global warming is also making it easier to access these. China also has the expertise in building rail on permafrost through the engineering techniques it learned through the Beijing-Lhasa rail, which also covers complex territory. All that remains is the agreement over financing: China also needs access to those same commodities and Moscow will be aware of this. How the proposed Far Eastern Rail Network will develop is really a matter of how much money China is prepared to throw at it. They have the need more than Russia does.”

 

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Dezan Shira & Associates provide professional services to international companies in Asia, including corporate formation and related services. Please contact us at russia@dezshira.com or visit us at www.dezshira.com

 

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