DEAR READER,
HERE YOU CAN...

… BROWSE
THE ABOUT TRUST
ARCHIVE

OUR ARCHIVE

… DOWNLOAD
THE CURRENT ISSUE
AS A PDF

DOWNLOAD

… ORDER
THE ABOUT TRUST MAGAZINE
FOR FREE

CLICK HERE

Reportage

Asian Embrace

China’s “New Silk Road”— with pipelines, ports and railway lines — is one of the largest investment programs of the past decade and is intended to transform the world into a gigantic marketplace, with the ground rules set by the Chinese. It’s a project in which distances have become practically irrelevant.

Text Thomas Schmelzer Photos Davide Monteleone/laif (train, office, passenger train, train with workers, construction workers); Roman Pawlowski; picture alliance (port of Piraeus Piräus); GettyImages/Patricia Fenn Gallery (detail port of Piraeus) Illustration André Gottschalk

Enormous cranes are carefully gripping one 40-foot container after another from the train, hefting the steel boxes up through the air and placing them onto a stack of containers next to the tracks. An hour ago, the train carrying 41 containers rolled into Logport 1 in the southwest of Duisburg, Germany. “A moment ago in China, now already in Duisburg,” Amelie Erxleben dryly says. Erxleben, 29 years old, is a logistics manager for Duisburg Intermodal Terminal (DIT), a logistics services provider, and is responsible for handling the company’s business in China.

The containers soaring overhead through the air above her sat in warehouses in the Chinese metropolis of Chongqing just a few days ago. They’re filled with many things, including machine parts, electrical appliances and seasonal clothing: “everything that needs to be quickly and reliably transported from one end of the world to the other,” says Erxleben. On their journey to Duisburg they passed through half of China and crossed the steppes of Kazakhstan. They were loaded from one train to another at huge transshipment hubs and finally made their way to Germany via Belarus and Poland. They have more than 11,000 kilometers behind them, 5 country borders, a wide variety of landscapes, 5 climate zones—and needed a total of 13 days for the trip.

 

Sending them over the world’s oceans would have been cheaper, but would also have taken twice as long. By airfreight the distance could have been covered in just a week—at seven times the price. “Rail is the ideal complement for some goods,” Erxleben explains. “Particularly since the train now needs only thirteen days instead of more than twenty.” Erxleben has been hand­ling the business on this new, faster train connection to the Far East for the past eighteen months. Around 35 trains from China arrive each week in Duisburg. “Since 2014, the commodity trade via the railways has been growing exponentially,” she says.

President of the People’s Republic of China Xi Jinping visited the Port of Duisburg in 2014. “They walked along back there,” Erxleben says, pointing in the direction of the kilometers of concrete piled with containers. The reason for his visit was the new train connection. The country regards it as one of the essential components of China’s efforts to redesign globalization with the assistance of an enormous investment program. Photos of the visit show President Xi Jinping with Germany’s Federal Minister for Economic Affairs at that time Sigmar Gabriel, North-Rhine Westphalia’s Minister President Hannelore Kraft and Duisburg’s Lord Mayor Sören Link, all smiling for the cameras and standing behind a banner—printed with the words “New Silk Road” in German and in Chinese.

 

 

The New Silk Road is the generic term for what the Chinese hope will go down in history as the largest infrastructure investment project ever undertaken in the world. A project that reaches from China to Germany, that crosses all of Africa, that touches the polar regions and extends from the Philippines to Peru. It’s an initiative to shrink the world into one gigantic marketplace—with China at its center. One of its necessary components is the new train connection between China and Duisburg. To achieve these ambitious goals, China reports it will be pumping around 900 billion US dollars into the “One Belt, One Road” initiative, as the project is also called. In the 68 participating countries pipelines are being built, as are giant chemical complexes, bridges, wind farms, gas plants, thousands of kilometers of rail lines and dozens of new or modernized port facilities. The windfall from the Far East is turning former desert villages such as Korgas, China, on the border with Kazakhstan, into control centers for world trade and revitalizing nearly forgotten logistics hubs such as the Greek port in Piraeus to newfound strength. It’s turning distant relatives into neighbors and—if everything goes according to plan—will finally fuse our world into a global village.

 

The world is growing together

At the same time, China’s ambitions are challenging old, deep-seated systems. Balances of power that seemed destined to last forever are suddenly up for discussion. New dependencies are being created, and critics fear new divisions in the world. However, there is one thing that everyone agrees on: the New Silk Road will change our world. The project is affecting two-thirds of the world’s population. Wherever it runs, people are hoping for an economic upturn and prosperity. Already once before, the connection between East and West provided undreamt of riches and a lively exchange of goods and cultures. More than two thousand years ago, caravans with hundreds of camels transported treasures such as silk, porcelain, spices and gold along the ancient Silk Road. Ideas, ways of thinking and religions spread along the route as well. The world between the Far East and the Wild West grew together for the first time—even though, back then, the journey across the continents could take up to two years. A trip along the New Silk Road really brings home how dramatically such vast distances have shrunk in the past centuries. You see how rapidly this process is accelerating once again and understand why everything is connected to everything else in today’s world. A trip along the New Silk Road opens up a glimpse into the future of global trade and reveals why a decision in Beijing about a new railway connection to Duisburg, some 8,000 kilometers away, sparks great new hopes in 2019.

 

 

The office where Xiankun Lu works is located in a business complex just a kilometer away from the Port of Duisburg. Two desks, two computers, a sofa and a glass coffee table. Vases with flowers are scattered around the various horizontal sur­faces. “We see all kinds of opportunities here in Duisburg,” Lu says. Lu, 37 years old, in a dark suit and white shirt, is full of optimism. Up to now he’s been earning his money in China with the import of medical products. Now he hopes the New Silk Road will raise his business to the next level. Lu plans to become a producer himself and is currently working on developing a brand. He’ll be sending his product, produced in Germany, along the New Silk Road to China, among other places.

“Here,” he says, pushing a package across the tabletop. It contains fifteen ampules that each hold eight grams of collagen. The box is emblazoned with the word “Biovigo,” the name Lu has chosen. He wants to bring this product, produced for him by a company in Baden-Württemberg, to the huge Chinese market and elsewhere. Lu admits that of course there are already similar products available, but his product is made from high-quality collagen from deep-sea fish. “Aside from which, the label ‘Made in Germany’ still carries quite a bit of cachet in China.”

The man who helped Lu realize his idea in Duisburg has his office just a few doors down in the same building. Jinheng Feng was a sales manager for German tourists in China, studied German language and literature at university in Beijing, then law in Nanjing and Göttingen. He wrote his law dissertation in Australia and most recently worked as a guest researcher at the Max Planck Institute for Innovation and Competition in Munich. When Feng heard about the New Silk Road in 2017 and the train connection to Duisburg, he had an idea.

Feng booked a ticket to Duisburg, made a few appointments and returned with a plan. A few months later he founded Trouver Consulting to advise Chinese investors and businesspeople who want to gain a foothold in Duisburg, providing a first point of contact for anyone who wants to profit from the New Silk Road and who needs advice when it comes to dealing with the local authorities, legal questions and initial contacts. “When I walked through Duisburg back then, there were hardly any Chinese people on the streets,” Feng recalls. But that quickly changed. Feng’s customer base meanwhile totals more than twenty companies. Seventy-seven Chinese companies have opened offices in Duisburg since the railway line opened and Feng thinks the number could triple again. “At least if the infrastructure is right,” he says.

 

“Making it happen”

A bright slice of the future is now shining on the horizon for Duisburg. The once proud city has been considered a negative example of the consequences of structural change. Since the demise of the steel industry, the main direction Duisburg was heading was downward: problem neighborhoods, stagnation, frustration. The unemployment rate is more than double the German average. And now an idea from China of all places, from the other side of the world, is supposed to be the great hope? Kai Yu is certain of it. “The New Silk Road is a huge opportunity for us,” she says. Yu is the China representative for Duisburg’s Economic Development Corporation and a kind of figurehead for the city. She’s been promoting Duisburg in China for the past two years. She regularly posts Duisburg success stories on the WeChat app, connects new companies in the city with one another and organizes conferences for networking, the latter being how Feng and Lu met.

Markus Taube, an expert on China, is not at all surprised by the first success stor­ies from Duisburg. Over the past several years he’s seen very similar processes around the world. At the University of Duisburg-Essen, Taube holds the Chair for East Asian Economic Studies at the Mercator School of Management and returned just a few weeks ago from an excursion to Minsk in Belarus. Just as in Korgas, a huge transshipment center is being built there for one of the railway routes on the New Silk Road. The Port of Duisburg is co-financing the project. Thousands of containers will soon be loaded off the trains from Korgas onto the European trains with their narrower gauges. “When China announced its plan for the New Silk Road six years ago, initially nobody believed it,” Taube says. “Now you can see everywhere that the Chinese are actually making it happen.” Taube explains that the New Silk Road is particularly benefiting those countries that have relatively under-developed infrastructure and haven’t been as integrated into world trade. A study by the Asian Development Bank recently confirmed this once again. The last isolated places in the world are become acquainted with globalization.

 

 

Currently it is mainly Chinese companies that are determining how the new convergence is taking place. They are leading construction projects and are organizing, managing and setting the standards and technologies with which all those wishing to profit from the new trade routes must align themselves in the future. “European and German companies could certainly follow suit a bit,” Taube finds. Otherwise, all the standards will soon be set and become entrenched for a long time by path dependencies. The port in Piraeus in Greece is a good place to see the speed with which China is pushing ahead with the project. COSCO Shipping Taurus, one of the world’s largest container ships, drops anchor here every few weeks. The ship’s four-hundred-meter hold nestles up to the pier. The floating leviathan carries around 20,000 steel containers filled with construction materials, smartphones, electronics, textiles and other wares from the Far East. The five letters emblazon almost every transport: COSCO. The Chinese state-owned company has taken control of Greece’s largest seaport. Back in 2009, COSCO leased two of the three piers in the container port at Piraeus for a period of 35 years. Additionally, it acquired a majority stake in the Piraeus Port Authority in 2016 and is now in charge of operations.

“Piraeus plays a key role in the ‘One Belt, One Road’ initiative, which is aiming to redefine trade routes around the globe,” says Jens Bastian. Bastian works as an independent economic and financial consultant in Athens and has been analyzing the Greek–Chinese economic relationship for some time now. “COSCO has been successfully working for ten years on building the most important port on the Mediterranean,” he says. Over the past decade, container handling under COSCO’s leadership has increased more than tenfold. It created 1,600 new jobs in and around the port. However, the port worker’s trade union and collective bargaining privileges were hobbled.

 

ISOLATION VS. CONVERGENCE

Despite this, Bastian is certain that Greece’s entire economy is benefiting from the upswing in maritime trade in Piraeus. New infrastructure has been built and business networks have been emerging around the port. Simultaneously, COSCO’s anchor investment has attracted additional Chinese companies to the country that are, for instance, investing in the Greek energy sector and IT industry. Describing these developments, Bastian says, “It all makes Piraeus a long-term success story in Greece.”

Other experts are much more skeptical. Bernhard Bartsch from the Bertelsmann Foundation, for example, views the New Silk Road above all as a brutal geostrategic project. China has been offering many developing countries along the route an extremely attractive comprehensive package of programs. “They bring their technologies, their financing and their workers with them as an all-in-one package solution,” he says. Furthermore, China can thereby utilize its overcapacities and maintain a high rate of economic growth.

Bartsch can imagine two scenarios as to how the New Silk Road will transform the world. In the first scenario, a bipolar world emerges: some countries align with trade along the New Silk Road while others resist it. In this scenario, international institutions lose power. The economic blocs isolate themselves from one another. Economic losses arise because the two camps don’t cooperate with one another. As Bartsch explains, “This is the negative scenario.”

 

ECONOMICAL AND FAST

ECONOMICAL AND FAST

The upper bar shows the transport time after construction, the lower the time beforehand.  

In the positive scenario, the international standards converge. A giant global trading network emerges that links China and many other Asian countries even more closely to the economies in the West. Global problems such as climate change are tackled together. Trade grows. Bartsch says, “This scenario is supported by the fact that nobody is interested in a bipolar trade world over the long term.”

In Duisburg, the signs point to the second scenario. Returning to her office, Erxleben tells us about a conference held by the regional chamber of commerce and industry on the topic of the New Silk Road. The organizers had planned on booking a room to hold about fifty people. “They quickly received around two hundred registrations,” she says, and the event eventually took place in a much larger room.