China and Europe are connected by two railway lines. One passes through Russia, the other goes south through Kazakhstan with transshipment to one of Georgia’s Black Sea ports. By developing the Turkish railways, it may be possible to save a second sea transhipment of the containers.
China is interested in railway developments in Turkey, said A. Burak Daglioglu, chairman of the state agency that promotes Turkish investment opportunities, according to the SCMP portal. If a high-speed rail connection were to be established between the eastern and western ends of the country, the southern route in the China-Europe land transport connection could be a more realistic alternative to the northern route crossing Siberia.
The Turkish plans are ambitious. They include electrification of the country’s railways, the construction of new domestic routes, a new bridge at Istanbul between Asia and Europe, and the construction of a high-speed railway between Ankara and Istanbul. All this would cost a hell of a lot of money. Experts estimate the cost at 60 billion dollars, which is thirty percent of Hungary’s annual GDP.
Daglioglu mentioned the Chinese CRRC Zhuzhou Electric Locomotive Company, which already has a plant in Turkey and recently debuted as a railway developer with its first project, the fastest metro line in Istanbul. This company would also gladly manage railway developments, but more applicants are expected in the tender that will start soon.
The opportunities are huge, according to the Turkish government
“They are interested in the projects,” the head of the organization that promotes investment opportunities said at the Asian Financial Forum in Hong Kong, referring to the Chinese company. According to Dalioglu, if they come up with a competitive offer, they welcome the company with open arms to future railway tenders. There is a huge business opportunity in these investments.
Beijing’s leadership hopes that Turkey’s rail network can help improve freight flow between China and Europe, said Jayant Menon, a Singaporean investment expert. The Russian-Ukrainian war, which has been going on for three years, is turning European carriers, freight forwarders and their customers away from the obvious route through Russia.
Even though there are no Western sanctions to prohibit use of the Northern Corridor, companies are obviously careful and they often do not want their business activities linked in any way to transiting their commodities via Russia.
The big disadvantage of the southern railway line is that goods are reloaded twice to ship. From China Kazakhstan the trians first cross the Caspian Sea, then through the Caucasus, they arrive at the port of Poti, Georgia, at the Black Sea then they travel to Constanza in Roumania.
The importance of Serbian-Hungarian rail transport could increase
However, this second transhipment slows down the southern rail transport too much, essentially making it similar to the ocean route. Menon said the disruption of the track near Turkey would pull the magic carpet out from under rail transport through the Middle Corridor. Still, many logistics companies choose this just to avoid Russian transit.
Transport traffic on the China-Kazakhstan-Azerbaijan-Georgia-Europe route reached the equivalent of 1.9 million TEUs in 2023, according to data from market research of Statista. More than ten years earlier, in 2011, only 1400 containers traveled this route.
Daglioglu sees a positive omen for railway development in the fact that Chinese companies have made a number of investments in Turkey in recent years, mainly in the energy industry, but they are also plan to produce electric cars there. A total of 1300 companies have brought six billion dollars to the country by mid-2024.
In addition, tourism is booming. It is estimated that 300,000 Chinese guests visited Turkey in 2024, up from 250,000 in 2023. Before COVID, this number reached half a million.
The experts draw attention to the fact that if rail transport were to accelerate thanks to the railway developments in Turkey, it would also increase the value of Serbian-Hungarian transit. This is the route that allows Chinese goods to reach the heart of Europe.
Daglioglu sees a positive omen for railway development in the fact that Chinese companies have made a number of investments in Turkey in recent years, mainly in the energy industry, but they are also plan to produce electric cars there. A total of 1300 companies have brought six billion dollars to the country by mid-2024.
In addition, tourism is booming. It is estimated that 300,000 Chinese guests visited Turkey in 2024, up from 250,000 in 2023. Before COVID, this number reached half a million.
The experts draw attention to the fact that if rail transport were to accelerate thanks to the railway developments in Turkey, it would also increase the value of Serbian-Hungarian transit. This is the route that allows Chinese goods to reach the heart of Europe.
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