The Eurasian rail freight market has developed rapidly in recent years as volumes doubled, new routes developed, and new multimodal options became available. The rise of freight volumes is unlikely to continue in the coming months, even though, unlike much international passenger transportation, rail freight has not been suspended [Pandemic and recession: a double dip for New Silk Road]. The long-term impact of the coronavirus on China-Europe rail transport and other related Belt and Road projects is uncertain. While the pandemic is still unfolding, China attempts to seize the moment by providing humanitarian assistance to many countries. More importantly, in the aftermath of the crisis China may strengthen its position as the economic partner of first resort for many countries.
How the Chinese government adjusts its BRI policies in response to the corona crisis depends on both available resources and its long-term strategic aims. Already prior to the corona crisis, China’s loans and FDI to key BRI destinations had been decreasing. The current situation requires prioritization of investment at home, rather than abroad. Nonetheless, according to a report by Rhodium Group, the two main BRI financiers in the 2015-2019 period, China EXIM Bank and China Development Bank, have sufficient capacity to continue the lending [Booster or Brake? COVID and the Belt and Road Initiative]. Financing of BRI-related activities is likely to be sustained and even reinvigorated as these contribute to China’s ability to handle the economic consequences of the pandemic. For the Chinese government, the BRI remains its main strategic tool to improve China’s supply chain efficiency, and strengthen the role of Chinese commercial actors within those supply chains [How will the international Covid-19 outbreak impact the Belt and Road Initiative?].
Mirela Petkova and Frans Paul van der Putten
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