Since BRI was launched, in 2013, China has sunk hundreds of billions of dollars into ports, railways, and energy projects across Asia, Africa, and Europe. The goal is to not only expand infrastructure, including in many developing countries, but also win over local populations and governments by funneling investment, jobs, and economic growth in their direction. The path forward has been bumpy, though. Questions regarding the commercial value of certain projects and concerns over the initiative being a backdoor for more sinister geopolitical ambitions have undercut Beijing’s official rhetoric of “win-win” cooperation and illustrated the uncertainty surrounding its plans.
As Beijing marks the 70th anniversary of the founding of the People’s Republic of China, questions over the implementation of BRI are among several facing the country regarding the limits of its power—from protests in Hong Kong to the escalating trade war with the United States.
“There is a reason that lots of these gaps in global infrastructure that China is trying to fill exist in the first place,” Andrew Cainey, a China expert and an associate fellow at Chatham House, a London-based think tank, told me. “It’s because they are not so commercially appealing.”
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This tension—between the expectations surrounding BRI and the challenges of fulfilling them—is on display here in Khorgos.
The project has posted impressive overall growth numbers, and Kazakh officials are keen to talk up plans to develop the area. The dry port processed 44 percent more cargo, as measured by so-called 20-foot-equivalent units, in 2018 compared with the previous year, according to data provided by the authorities here. Kazakh officials were also keen to point to the area’s potential for growth. A 2017 study commissioned by the International Union of Railways estimated that trade volume between China and Europe via rail would increase sharply over the next decade, with Kazakhstan becoming the key crossroads. Similarly, officials mentioned new investments from Chinese companies to build facilities and factories in the special economic zone on the Kazakh side as a sign of the area’s growth.
“Khorgos is about turning Kazakhstan into Central Asia’s transit hub,” Nurlan Toganbayev, the director of the commercial department at the Khorgos Gateway, told me. “We know this is no easy task, but we’re growing, and we take great pride in that.”
Yet even these touted successes point to future problems for the project. Rail transport is still only a small percentage of global trade; sea and air routes, which are cheaper and faster, respectively, form the bulk of goods moved between China and Europe. The land route has also been criticized for waste and fraud. Many of the cargo containers returning by rail from Europe to China through Kazakhstan are empty, officials admit, due to a trade imbalance, but the problem may run even deeper. The Chinese government provides significant subsidies to encourage use of the rail links, and a recent report by the Chinese Business Journal found that many exporters transported empty containers from China to Europe just to receive those subsidies. China Railway, the government operator of the rail line, admitted to the state-run Global Times that the problem existed, but said that it has been eradicated. Not only does the episode illustrate the commercial limits of large-scale shipping by train, but it calls into question the viability of the Khorgos project.