October 25, 2017

China is keen on intermodal transport

I would like to thank the Polish government for the whole engagement in the detailed organisation and exquisite arrangement of the CEEC – China 2nd Transport Minister’s Meeting & Business Forum organised in Warsaw. A year ago, the CEEC – China 1st Transport Minister’s Meeting & Business Forum took place in Riga. The discussions between ministers of the countries present centred on subjects and logistics of the Eurasian cooperation aimed to fully explore the existing potential. During the meeting, the participants shared their opinions and findings very willingly. Today, on the day when a year has passed since the last meeting, we have met again, this time in Warsaw. Our leading topic is “Intermodality – a guarantee of efficient transport for the benefit of the economy”. Our goal is to explore ways of strengthening bilateral relations between China and Central and Eastern Europe that would be beneficial to both parties. Regarding the initiatives of the leaders of the 17 states within the undertakings of the “Belt and Road” Initiative, as well as of the Pan-European transport network and other initiatives within the European Union, China is willing to promote agreement within the integrated transport network in Europe and Asia by working together with the invited states and delegations. Moreover, another important goal is to deepen practical cooperation in the field of transport and logistics under the “16+1” programme, aiming at the co-development of the 17 countries for a better future.

As part of the “16+1” project, a multi-level, comprehensive and extensive model of cooperation between China and Central and Eastern Europe has already been established. In 2016, the value of trade between China and Central and Eastern Europe (16 countries) reached 586 billion dollars, which constitutes a 4.3-percent year-to-year increase. In such case, it is imperative for the fast-growing bilateral trade to be dependably and efficiently supported by the transport system. Intermodality is a modern form of the organisation of transport, which can efficiently and effectively prove its advantages by linking various types of transport, and, simultaneously, positively impacting the quality of transport services. However, the great significance of propagating the effective reduction of logistics costs should not be forgotten. Undoubtedly, the promotion of cooperation to support intermodality between China and Central and Eastern Europe will positively impact the bilateral, dynamic trade development.

Using this opportunity, I would like to share with you the effects and the new political solutions that China has achieved under the development of the intermodal transport.

Thanks to the co-operation of the Ministry of Transport of the People’s Republic of China and transport companies, China has already achieved its first instances of success in the development of intermodal transport. Step by step, the requirements and standards are being improved; there are actions taken to popularise the advanced organisational model, with a great increase in the number of market participants. In brief, we are observing initial beneficial effects of the development of intermodal transport. Six container routes of river and railway transport are under construction, and the first part of the construction plans of 16 routes, intended for purposes of intermodal transport, has been commenced. The capacity of river and railway transport containers increased from 1,410,000 TEU in 2011 to 2,030,000 TEU in 2016, which indicates an average annual increase of 8.5%.

In 2016, the Chinese Government introduced the “13th Five-Year Plan” of China for economic and social development, as well as a “Modern Integrated Plan of Transport System Development” along with other important documents that have positively impacted the faster development of intermodal transport, which was included as one of the main subjects of the above-mentioned documents. In the end of the year 2016, in order to support the sustainable development of intermodal transport, the Ministry of Transport of the People’s Republic of China, together with 18 state departments, issued regulations aiming at encouraging the further development of intermodal transport by improving supervision and creating a suitable urban environment. These regulations outline concrete bases for development and a greater possibility of providing support. While creating an innovative model of transport services and 1 TEU (twenty-foot equivalent unit) – a unit of capacity often used regarding ports and vessels. It is equivalent to the capacity of a 20-feet-long container. promoting the exchange of information and the development of technologies, we should keep in mind the need for deepening the industrial reforms. Improving international cooperation is also an important element, which is supported by the development of the international intermodal market. All of these tasks have been clearly outlined in the publications of the state departments, which have established 18 main priority tasks. Moreover, we strive for increasing the capacity of intermodal transport by 150% in 2020 in comparison with the year 2015.

I would also like to present to you the positive results that China has achieved in the promotion of the “16+1” cooperation.

On the basis of the 2014 agreement between China and representatives of Central and Eastern European countries on the establishment of the “Eurasian Land and Sea Route”, China Ocean Shipping (Group) Company (COSCO) has undertaken to establish a transport line starting in China, leading by sea to the Port of Piraeus in Greece, and then via the Hungarian railway transport network and its branches to the two way railway and river transport line of the areas of Central and Eastern Europe. In comparison to the original line, the new solution, called the “Eurasian Land and Sea Route” allows us to reduce the duration of transport by 7 to 11 days from China to Europe, thus effectively reducing costs as well. During the three years of providing transport in this way, 17 thousand containers have been used since 2014, while, according to the forecasts, their number was to amount to 40,000. Additionally, the possibility of two-way transport makes it possible to transport over 1,000 containers per week. Initially, customer service began with such companies as Hewlett-Packard or Sony and sporadic orders from other large international corporations. As of today, we work with over 420 companies, and the number of our partners is increasing on a daily basis.

The global economy, after a period of collapse, is now in the process of rebirth, and it is facing far-reaching changes. We are currently in a key transition period between the old and the new growth drive. The Chinese reforms from 30 years ago and the opening to the world are proof that China has been successful in its development, in which the transport industry has a fundamental role and is considered to be a priority. Prioritising this domain will certainly have a positive impact on the general development of the national economy. To achieve this, I would like to propose the following suggestions on the relationship of transport and logistics cooperation between China and Central and Eastern Europe.

Firstly, we should focus on creating favourable conditions for the development of intermodal transport. I propose that the Ministries of Transport of representative states take action, starting from a political and legal perspective to an open perspective of innovation. In this way, we will be able to create a better environment for development of intermodal transport. China is ready to engage in dialogue and share its own experience in this field with other countries. In addition, we encourage Chinese and foreign companies to work together on the creation of an intermodal transport service network, to build transit centres, to support the establishment of distribution centres, as well as of business centres. All initiatives by the Central and Eastern European companies to jointly promote, create and develop the “Eurasian Land and Sea Route” in cooperation with Chinese companies are very welcome.

Secondly, we should strengthen dialogue in the field of maritime transport policy and the active exchange of experience. To date, China has signed bilateral maritime agreements with eight Central and Eastern European countries, and 11 Central and Eastern European countries are bound by a maritime agreement between China and the European Union. I propose that the Secretariat for Maritime Issues, in cooperation under the “16+1” project, make good use of all of the maritime agreements, thus actively promoting the bilateral maritime policy dialogue between states. In addition, considering the role of river transport in the transport system of both China and Central and Eastern Europe, I would like to propose carrying out the first round-table meeting for the inland navigation department this afternoon. This meeting would give us a basis on which we could build a future dialogue and develop closer cooperation. Moreover, China is showing initiative to carry out the next round-table discussions on waterway transport management in 2018 as part of the “16+1” cooperation. Simultaneously, I propose that this meeting be part of the works of the Secretariat for Maritime Issues for the year 2018. We invite countries of Central and Eastern Europe to participate in the event in China and jointly promote the ecological, safe and sustainable development of river transport.

Thirdly, we should deepen cooperation in the area of maritime affairs. China is a developing country, as are many countries in Central and Eastern Europe; therefore, such problems as maritime security management, environmental protection and other similar matters are common issues for China and the Central and Eastern European countries. There is also a great possibility of providing training to employees and officials, which would have a positive impact on increasing their qualifications. I believe that there is a need to deepen the genuine bilateral cooperation with the use of the existing potential. In this regard, I suggest that the Secretariat for Maritime Issues, as part of the “16+1” project, take into account the organisation of the meeting of maritime economy directors in order to identify common cooperation projects or to sign a memorandum of cooperation between China and Central and Eastern Europe.

Fourthly, we should support the bilateral cooperation of enterprises for the mutual benefit of both China and Central and Eastern Europe. It is important to encourage and support companies to invest, build and provide management in areas such as railways, motorways, transport and logistics centres and shipping infrastructure, while maintaining, of course, market rules. As the Chinese side, we want to support the Secretariat for Maritime Issues in organising the 2018 meeting as a tool for the exploration and establishment of a deeper understanding of Chinese seaports. All of the leaders of the 16 countries, representatives of enterprises as well as specialists are invited to visit China. We are ready to expand cooperation between two port companies, selecting partners with whom we can move forward together.

The Chinese transport industry has evolved rapidly over the past 30 years, and it has gained a lot of valuable experience. As part of the “One Belt, One Road” cooperation, as well as of the development plan between China and Central and Eastern Europe, China is ready to jointly undertake development activities. By implementing the assumptions of the “16+1” project and by using the potential of the Secretariat for Maritime Issues as well as the Secretariat for Logistics Issues, we want, within the framework of the common transport and logistics policy, to deepen cooperation for the sake of the development of transport facilities. Aspects such as improving dialogue in the fields of policy coordination, joint discussions for preparation of long-term plans, following a winwin policy, pursuing joint agreements and carrying out mutual actions aimed at improving operational efficiency, are also of great significance to us.

Deputy Minister of Transport of the People’s Republic of China, He Jianzhong