A rail route to prosperity
Aregular weekly rail delivering freight from Lanzhou in Gansu province to Kathmandu in Nepal began operating on October 31. Of course, for the moment the railway itself only runs as far as Xigaze in Tibet. After that, the freight needs to be transported by truck.
Even taking into account logistical difficulties, the London- based Railway Gazette reported that the route is 35 days shorter than the sea route via Kolkata, India. At a duration of just 10 days the connection massively accelerates transport between the Nepalese capital and Lanzhou.
The new trade link is a positive demonstration that what has long been deemed impossible – quickly transporting goods through the Himalayas – is now technologically feasible. There is also a good chance, given the shorter time and distance of the overland route, that it will eventually become economically viable.
The actual rail connection between Tibet and Nepal is still in the planning stage, but could be up and running by the early 2020s. A road through the mountains has recently been reopened between Gyirong in Tibet and Rasuwaghadi, Nepal. This path was once an ancient trade route which was in operation until 1960, and re- established in 2014.
The fact that the Gyirong mountain pass is open again means that a railway could possibly be built without needing to tunnel through the Himalayas. Such a tunnel would be a mega- project which would be hugely expensive, technologically demanding and internationally controversial. If the Tibet- Nepal railway is indeed constructed, it could mean a game- changing development for trade between East and South Asia. Clearly this would include increased interaction between China and India. Up to now, China- India trade has been limited by geography, and smaller in scale than the two countries’ huge populations and rapid economic development would seem to indicate.
However, political considerations have been a seemingly insurmountable obstacle to improving Sino- Indian trade. This remains the case in 2016, but clearly the Chinese side is hopeful that establishing a regular trade link with Nepal will be the first step towards building trust and increasing trade with India as well.
India seems to be as suspicious of China’s activity on the Nepalese border as it is of Chinese presence on its own frontiers elsewhere in the Himalayas. It has reacted to China’s recent overtures about improving trade connectivity and infrastructure with a distinct lack of enthusiasm.
Perhaps, New Delhi’s failure to seize the baton proffered by Beijing also has to do with the relative imbalance in Sino- Indian trade. The Indian government evidently believes that it is China which will benefit the most from increased transactions, and that this will adversely affect India.
China therefore needs to reassure New Delhi of the win- win economic synergies achievable as overland connectivity improves. This includes ensuring that the Bangladesh- ChinaIndia-Myanmar trade corridor, another new overland route being developed, continues with India’s involvement. Another potentially complicating factor is the China- Pakistan Economic Corridor. This aims to connect the Persian Gulf with Xinjiang via new transport infrastructure beginning at the port of Gwadar. The overland route would have to pass through rather sensitive regions, some of which are disputed by India and Pakistan, to reach China.
This means that Beijing needs to persuade New Delhi that the overland trade link and the projected rail connection to Kathmandu are of benefit not just to China, but also to the whole region.
One mitigating factor is likely to be the pending membership of India and Pakistan in the Shanghai Cooperation Organization ( SCO). The six- member SCO, which includes four Central Asian states, has been highly successful in smoothing relations between China and Russia. It is therefore likely that SCO membership for Pakistan and India can create a setting for better dialogue between the two neighbors. There are grounds for optimism as China goes forward with its plans to improve transport and trade infrastructure across Asia within the Belt and Road initiative. The projected rail link from Xigaze to Kathmandu is just one link in this chain, but it is a crucial one. It is also a connection which has considerable implications for the development of economic ties and enhanced overall relations between China and India as well as Nepal.