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Corridors to China

Why the trade turnover with China is growing, and Russian border crossing points are not being modernized

To ensure further growth of transport between Russia and China, it is necessary to modernize the infrastructure of the Russian border checkpoints, in the first place - the most heavily strained border crossing in the Far East, Grodekovo-Suifenhe. While China is developing its border infrastructure, Russian border crossing points are already operating at the capacity limit. How to increase exports to China, if the border from the Russian side operates as a "bottleneck", was examined by EastRussia.

Corridors to China
The development of transportation was discussed at the panel session "New Perspectives of Cooperation between China and Russia: Prospects for Development" at the St. Petersburg International Economic Forum. As noted by Alexander Misharin, First Deputy Director General of JSCo Russian Railways, the analysis of freight flows by rail shows a positive dynamics of trade turnover between the countries. "If you take the main products and goods that are transported in containers, it can be seen that the volume of container shipments between our countries increased by 55% over the past year. And this year, it grew by another 35%. Even more significant results were achieved within the framework of the Silk Road program, thanks to which last year the volume of transit of goods from China to Europe grew by 80%, "Alexander Misharin said. 

However, the level of traffic between countries, according to the Chinese side, is currently insufficient. "Now more than 95 million tons of soybeans are imported to China, one third of them are supplied by the USA, and only 500 thousand tons are imported from Russia. We need to establish more active cooperation in the agricultural sector. To do this, we must support a larger number of Russian agricultural producers. I believe that in this area there is a very great potential for cooperation between our countries, "said General Secretary of the Chinese Association for the Development of Enterprises Abroad He Zhenwei.

Far Eastern farmers really view the Chinese market as the most promising. "It is logistically convenient to sell soya to China from the Far East. And China is the main soybean buyer in the world. We will produce soybean meal. We understand that our products will be in demand in the markets of the APR countries, where consumption of soybeans is more active, "said Vasily Galitsin, general director of the Amursky oil extraction plant (resident of the Belogorsk TOR).

We are also talking about the expansion of energy supplies. According to Anna Tsivileva, Chairman of the Board of Directors of Colmar Group LLC, at the governmental level the issue of reducing the import duty to China should be resolved, which will activate the transportation. On Russian coking coal today it is 3%, on energy - 6%. At the same time, New Zealand and Australia signed an agreement with the People's Republic of China on duty-free trade. There is also a problem of long customs clearance in China - sometimes terms reach 3 months - and restrictions on imports of Russian coal in a number of Chinese ports.

On the other hand, there are infrastructure constraints. In particular, the prospects of the Grodekovo-Suifenhe border crossing point are associated with the development of foreign trade traffic along the international transport corridor Primorje-1, where this border crossing point is the key link - it opens the Chinese cargo owners a short way to the sea through Vladivostok and Vostochny (Nakhodka) ports.
Currently, China is actively using the capabilities of the Russian infrastructure. The freight turnover of the largest in the Far East transition Grodekovo-Suifenhe last year exceeded the historical limit of 10 million tons. The main traffic falls on Russian exports (from the nomenclatures increased the transportation of coal, iron ore, chemical and timber cargo), but Chinese transit is also growing. Through Grodekovo in transit traffic in 2017 year 7,2 thousand TEU (containers in 20-foot equivalent), which in 2,2 times exceeded the result of the previous year, proceeded.

As Deputy Chief Engineer of the Far Eastern Railroad Alexei Prudnikov said, according to the resolution of the Government of the Russian Federation, the scheme of registration of transit container cargoes at land border crossings was simplified, the main procedures were transferred to the sea border crossing point. This allowed to reduce the average time of the container train from the state border to the port of Vladivostok in 1,8 times - up to 20 hours. In addition, in containers, it is now possible to arrange the transportation of almost any nomenclature of goods, except for animals.

This year the Grodekovo checkpoints continue to work intensively (it consists of four sections: Grodekovo-1 station and Grodekovo-2, Pine tree and Razypnaya Pad). In the first quarter, the cargo flow exceeded 2,6 million tons - this is 13,3% more than last year's result. The infrastructure on the Russian side of the border crossing point is currently operating within the limits of throughput, and the question arises of ensuring further growth. While China in the last period actively invested in the development of its part of the border crossing. The processing capacities of the adjacent side are increased to 38,5 million tons per year, which is more than three times higher than Russian ones. In addition, to ensure the growth of container transportation in Harbin, a specialized terminal with an annual capacity of 5,2 million was created.

To increase the traffic in the coming years, they say in the Far Eastern Railway, it is advisable to extend the receiving and sending route of the Sosnovaya Pad station to the useful length 71 conditional wagon. This will make it possible to build ready-made full-length trains with containers in Suifenhe, take them across the border and transfer to Grodekovo for further shipment to the seaport ports (due to lack of useful length the train has yet to be divided into two groups). As a result of the extension of the Pine Padi at the border crossing, a reserve in capacity will appear. Due to this, the annual turnover of the checkpoint can increase by 4 million tons. 

It is worth mentioning that in order to steadily develop the promising freight flow, the Chinese side proposed to introduce a unified length of trains of at least 65 conditional wagons. "If we carry out transportation on this basis, it will increase the efficiency of our work," said the head of the Harbin Railway, Wang Jinxi.

Undoubtedly, in order to reach higher volumes of cargo turnover, a serious reconstruction of the checkpoint is necessary. On the Far Eastern road they propose to modernize the Grodekovo-2 station with the construction of additional receiving and sending routes. Deputy Prime Minister Yury Trutnev, who held a meeting in Vladivostok in April this year on the development of international transport corridors, spoke in favor of the need to include the modernization of the railway infrastructure related to the ITC in the program of the Eastern RZD JSC.

Meanwhile, the interest of business in this direction was confirmed at the conference tied together by one belt: Russian-Chinese cooperation within the framework of the "Belt and the Way" initiative, held on 22 May in Moscow. According to Alexander Krutikov, deputy head of the Ministry of Economic Development of the Russian Federation, recently, China Communications Construction Company has submitted calculations for the Primorie-1 and Primorye-2 (the latter operates with the Mahalino-Hunchun border crossing and the Zarubino port). The return on investments in their development is estimated at the level of 8% without taking into account the tax benefits and preferences of the free port of Vladivostok and the territories of advanced development.
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