China turns its gaze to "Middle Corridor" Anaysis by Caliber.Az

Radical geopolitical changes in the world have increased the strategic importance of transport routes between Europe and Asia, passing through the territory of Azerbaijan. China is seriously interested in the development of the Middle Corridor, promoting its own global industrial and transport project "One Belt, One Road". The day before on his Twitter page Digital Development and Transport Minister Rashad Nabiyev wrote that Baku and Beijing plan to further increase the transit of Chinese goods through Azerbaijan via the Trans-Caspian International Transport Route (TITM). The new prospects were discussed the other day during the visit of a delegation of China's largest port operator Shandong Port Group to Baku.

Almost 30 years after the restoration of state independence, Azerbaijan, located at the intersection of transport routes between East and West, has consistently supported all initiatives aimed at the revival of logistic routes of the ancient Great Silk Road.

Azerbaijan actively participated in the implementation of the Europe-Caucasus-Asia corridor initiated by the European Union (TRACECA) and became one of the initiators of two other routes of the Middle Corridor - ТMТМ and Lapis Lazuli. Now Baku, together with Bucharest, Tbilisi, and Ashgabat, is planning to form a prospective Black Sea-Caspian Sea route.

One way or another, the Trans-Caspian route, which Baku, Astana, Tbilisi, and Ankara established in 2018, is now dominant in the Caspian region, in no small part aimed at serving Chinese and Turkish transit container block trains. Within the framework of the TITM project, Azerbaijan also actively participates in the transport component of China's 'One Belt, One Road' initiative.

Due to the Russian-Ukrainian war that has been going on for more than a year, the Northern Corridor (along the Trans-Siberian and Baikal-Amur Mainlines) has effectively lost its position as a key Eurasian route, and the growing Western sanctions pressure on Russia leaves little hope for a quick revival of the route. In these circumstances, the EU states, Türkiye, the Central Asian republics, as well as China, Japan, the Republic of Korea, and a number of South Asian countries are looking more and more closely at the possibilities of the Middle Corridor.

"Given the difficult geopolitical situation in the world, the strategic role of the Middle Corridor is increasing. At the same time, the situation in the region, especially the new realities after the 44-day war, opens up additional opportunities for the Middle Corridor, given the potential of the Zangazur corridor, which Chinese companies can also take advantage of," said General Director of the Baku International Sea Trade Port (BISTP) Taleh Ziyadov at a meeting with representatives of the largest Chinese port Qingdao.

The CEO emphasised that over the past 10 years, the government of Azerbaijan has implemented a strategy of turning the country into a regional logistics hub. A special role in this direction is given to modernizing and expanding the capacity of the BISCP within the second phase of development of the seaport in Alat.

By the end of this year, the design of the necessary infrastructure is expected to be completed, and a model will be presented, according to which the modernisation of the Baku Port will continue. The planned works for the second phase will be carried out either through public-private partnerships or entirely via budget financing.

In the course of the meeting Ziyadov also said that during the implementation of the second phase, special attention will be paid to container transportation: "Today a huge amount of container cargo is transported between China and Europe, and Azerbaijan plays the role of a regional hub in this process.

Today, our port can handle up to 100,000 containers (TEUs) per year, and after the implementation of the second phase of modernization of Baku Port, this figure will increase to 500,000 TEUs. I would remind you that 62,000 containers were transshipped at BISTP last year, which demonstrates the need to speed up the implementation of the second phase."

Notably, Chinese transport and freight forwarders have been using the TMTM route for over four years to run standard container block trains delivering Chinese manufactured goods to Europe.

Following the launch of the China Railway Express container train in 2019, Chinese container multimodal transit has expanded markedly in terms of cargo mix and the geography of Chinese shipper cities where block trains are formed. Such trains take around 20-25 days to travel, which is noticeably less than the average 40-day journey from China and Southeast Asia via the Suez Canal.

Geographical factors can also be added to the advantages of the Middle Corridor routes: the relatively shorter distance, which speeds up the movement of goods, and the milder climate, which allows for unimpeded passage during the winter period. It should be noted that after the tightening of the sanctions confrontation between the collective West and Russia, i.e. practically since last year, hauliers from China and a number of Asian countries have been taking a very close look at the Middle Corridor.

It is also important that the EU is fully supporting the development of the TMTM route, in particular, the European Commission is analysing various initiatives to provide technical, advisory, and financial support for infrastructure projects in the Middle Corridor.

Not surprisingly, China has recently initiated and already started implementing a new project, the construction of the China-Kyrgyzstan-Uzbekistan railway line. This route is also aimed at the ferrying rail and road freight across the Caspian Sea and onwards through Azerbaijan, Georgia, and Türkiye via the Baku-Tbilisi-Kars (BTC) highway. The new project should be a significant additional freight route of the 'Middle Corridor'.

The negotiations with the delegation of the Chinese seaport Qingdao, through which 1.6 billion tons of cargo passed in 2022, were recently held in Baku as a logical continuation of Azerbaijani-Chinese transport cooperation.

"Baku Port has signed a memorandum of understanding with one of China's largest ports, Qingdao, which plays a huge role in cargo transportation and uses advanced green technology. In 2019, we visited the Qingdao port and discussed joint work. The new agreement will attract more cargo to the Middle Corridor," Taleh Ziyadov said after the meeting.

The Memorandum of Understanding between BISTP and the Chinese port of Qingdao will make it possible to attract cargo not only from China but also from South Korea and other Asian countries to Azerbaijan with further transportation to Europe, as well as to introduce new port technologies.

"During the meetings with the delegation of one of the largest port operators of the world Shandong Port Group, the sides exchanged views on the issue of boosting the volume of cargo transported by China through Azerbaijan on the Trans-Caspian international transport route," Azerbaijani Minister of Digital Development and Transport Rashad Nabiyev wrote on his Twitter page.

It is noteworthy that within the framework of negotiations and signing of agreements the twinning ceremony between Azerbaijani and Chinese ports was held and a stylised lighthouse presented by the Qingdao port was installed in the Alat settlement of Garadagh region of Baku. Today it symbolises the strengthening of centuries-old trade and friendly ties between Azerbaijan and China.