NORTHERN SHINE OF THE SILK ROADVLADIMIR KOSOY

RUSSIAN SILK ROUTE: TRANSIT CORRIDOR AND MAJOR INDUSTRIAL HUBS

The high speed transit corridor will boost the development of several large-scale industrial parks and container terminals

THE MAIN REASON TO DEVELOP RAILWAY TRANSIT: CHINESE EXPORT AND IMPORT BECOMES MORE SENSITIVE TO TRAVEL TIME AND

DELIVERY SCHEDULE INTEGRITY THAN TO THE PRICE

Black metals

Steel

Organic chemicals

Electrical equipment and electronics

Reactors , boilers, machinery

Aerospace equipment

Copper and articles thereof

Plastics and plastic products

Optical, photographic and medical equipment

Pearls and jewels

Pharmaceutics

Transportation

0 2 4 6 8 1012

Toys , games , sporting goodsLeather products

Articles of apparel and accessoriesOptical, photographic and medical equipment

Shoes , socks , etc.Black metals

Nuclear reactors , boilers, machineryKnitted clothes

Electrical equipment and electronicsFurniture, lighting products , prefabricated buildings

Ships, boats , etc.Plastics and plastic products

Organic chemicalsSteel

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

Growth of IMPORT from Europe to Chine (2015/2005, times)

Growth of EXPORT from China to Europe (2015/2005, times)

Source: Eurostat, WTO

KEY FEATURES OF THE PLANNED TRANSIT CORRIDOR “CHINA - RUSSIA – EUROPE” IN 2030

• 7-10 days from CHONGGING TO HAMBURG

• High frequency of scheduled transit trains integrated with scheduled interregional container trains

• 98% accuracy of delivery timing due to smooth custom regulation

• $8000 price and no shadow costs• Balanced eastbound and

westbound freight traffic• Isothermic containers • Safety guarantees • Vibration decrease

WHAT HAS BEEN DONE IN RUSSIA TO ENABLE TRANSIT

Changes on TRANSSIB• The transit time via

Kazakhstan and Transsib reduced to 15 days due to less locomotive changes and better schedule for container trains

• Common Transit Tariff helps to reduce costs

• The new CIM/SMGS consignment note enables seamless travel for rail freight transports

• The number of container inspections strongly reduced

Free port of Vladivostok• Duty-free and tax-free mode of free customs zone for all residence:

import, storage, consumption (use) of foreign goods, export of goods (equipment), import of foreign goods (equipment)

• One-stop mode: 24-hour operation of border crossing points• No need to obtain permits to hire and use foreign workers

• Simplified visa regime: obtaining 8-day visa at the border

• Land plot provision without bidding for agreement validity period

• 0% profit tax, land tax, property tax,

• Accelerated VAT refund procedure (within 10 days)

• Reduced salary taxes

WHAT HAS TO BE DONE IN CLOSE FUTURE

INFRASTRUCTURE• High-speed railway development • “Bottlenecks” removing• Increasing the speed of stations passing• Creating the large container ports (on Baltic) and “dry ports” (near Moscow)• Improving the quality of gauge

REGULATION• Applying the free port regulation to the new container ports• Custom regulation change (further reduction of inspections and

implementing electronic declarations)• Tariff discount for 5 years

RESEARCH• Shippers and carriers interviewing • External trade of Chinese provinces forecast• Strategy for railway infrastructure improvements

SHARE OF EACH CORRIDOR IN THE TOTAL TRANSPORT VOLUME BETWEEN EU AND CHINA IN 2016, BOTH DIRECTIONS

FORECAST OF THE SHARE OF EACH CORRIDOR IN THE TOTAL TRANSPORT VOLUME BETWEEN EU AND CHINA IN 2030, BOTH DIRECTIONS

9

FIRST STEPS: SUGGESTIONS FOR THE NEW CONTAINER ROUTS

Thank you for the attention!

Vladimir KOSOYPresident of Infrastructure Economics Centre

e-mail: vvkosoy@infraeconomy.comtelephone: +7 499 340 20 94