China’s spicy city takes lead in global commerce

China’s largest inland city known for its spicy hotpot is fast emerging as a vital crossroads in global trade. 

Leveraging new rail corridors connecting Southeast Asia to Europe, China's Chongqing city is transforming into a bustling logistics hub that promises to reshape international shipping routes - offering faster, more reliable alternatives amid shifting geopolitical landscapes.

Every day, hundreds of containers pass through the expansive 82,000-square-meter yard, exporting electric vehicles and components while importing cars, meat, wine, and dairy products.

Just minutes away, a yard marked by blue cranes unloads tropical fruits and raw materials arriving from Southeast Asia. Over the past decade, Chongqing has rapidly evolved into a vital international trade center, propelled by two major cross-border rail networks: one stretching west to Germany, the other south to Singapore. These corridors offer China faster, more reliable access to global markets and provide partner countries direct routes into China’s vast interior.

Chongqing’s ambitions go beyond trade facilitation; the city aims to become a strategic “Suez Canal” of rail, linking Asia and Europe. This development highlights how China, the world’s second-largest economy, is broadening its global trade reach amid mounting geopolitical tensions and potential economic decoupling from the United States.

“Shipping goods from Asean to Europe via Chongqing by rail is 10 to 20 days faster than traditional sea transport,” said Liu Yizhen, vice general manager of the New Land-Sea Corridor Operation Company, which manages the freight route to Southeast Asia.

The inaugural train on this high-speed route, the Asean Express, launched in October last year, departing Hanoi and reaching Chongqing in five days before continuing to Malaszewicze, Poland. The service now runs weekly, simplifying logistics by allowing clients to ship goods directly between Southeast Asia and Europe with a single order. By April, it had moved cargo worth 1.65 billion yuan ($229.6 million).

This initiative echoes Chongqing’s earlier success as the starting point of the China-Europe Railway Express, launched in 2011. Initially proposed by American tech giant HP in 2009 as a faster and cheaper alternative to sea and air freight, the rail network has since expanded across China, Central Asia, and Europe, supported by government subsidies under the Belt and Road Initiative.

Despite Chongqing’s challenging mountainous terrain and distance from coastal ports, the city has thrived industrially. It produces a third of the world’s laptops, according to the 2024 mayor’s report. Local brands like Seres Automobile—partnered with Huawei Technologies - and state-owned Changan Automobile have capitalized on the rail network to boost exports. Changan’s EV assembly plant in western Chongqing produces 50 cars per hour, many destined for right-hand-drive markets such as Thailand. Finished vehicles head straight to Tuanjie Village for shipment.

“In Chongqing, for every four cars exported, one is shipped internationally from Tuanjie Village,” said Han Chao, vice-president of Chongqing International Logistics HubPark Construction. Officials hope the city’s manufacturing strength will increase the Asean Express’s attractiveness by adding value to goods in transit. Han explained how bonded zones enable companies to refurbish imported machinery before exporting it to Southeast Asia, providing a cost-effective alternative to buying new equipment.

China’s strategic focus on routes like the Asean Express also reflects efforts to reduce reliance on the US amid trade tensions sparked by the Trump administration. Recent infrastructure projects include Peru’s Chancay Port - South America’s first Pacific deep-water port - majority-owned by Chinese firm COSCO, facilitating direct shipments to China in 23 days.

In May, a forum of China, Asean, and Gulf Cooperation Council (GCC) leaders signed a statement pledging to enhance “seamless connectivity,” reinforcing China’s commitment to infrastructure development linking Asia, Southeast Asia, and the Gulf region.

However, challenges persist. The China-Europe Railway Express’s main routes pass through Russia, and the 2022 Ukraine war led many European traders to revert to sea freight amid fears of sanctions. The rail link regained some business after late 2023 attacks on Red Sea vessels by Yemen’s Houthi group. Yet new Russian cargo seizures targeting dual-use items in October further disrupted trade, catching many freight companies off guard.

Official data shows westbound cargo volume on the China-Europe Railway Express dropped 22.1 per cent from January to April compared to last year. “Recently there has been some recovery in the freight traffic,” said Hu Ting, a Chongqing station employee. “But the ongoing war and sanctions are still bound to have a certain impact.”

To mitigate risks, China is developing the Middle Corridor, a hybrid sea-and-rail route bypassing Russia via the Caspian Sea. At the June China-Central Asia Summit, Kazakhstan’s President Kassym-Jomart Tokayev proposed building a joint cargo terminal at Kuryk port. The route faces hurdles like strong winds, logistical bottlenecks, and lengthy customs checks, driving up costs and transit times. With subsidies reduced or cut, profitability concerns loom large.

“Whether our goods train services can turn a profit largely depends on overseas suppliers keeping their prices competitive,” said Han. Still, he remains optimistic: “Any new endeavour undergoes a growth process. The old northern corridor, too, has taken over a decade of development to reach its current scale.”

Chongqing’s rise as a rail hub underscores China’s strategic drive to reshape global trade networks in a complex geopolitical era, aiming to strengthen its economic resilience and connectivity across continents.

By Naila Huseynova