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On Sunday 25 May, a goods train from the Chinese city of Xi’an arrived at the dry port of Aprin, near Tehran. According to the Iranian newspaper Tehran Times, it was carrying Chinese solar panels and had been travelling for around 15 days. This first official trade on this route marks the start of the corridor linking China and Iran, more than 4,000 kilometres long from the city of Yiwu to the city of Qom. Mir-Hassan Mousavi Dizaji, Deputy Director of Railways of the Islamic Republic, emphasised that the establishment of the Aprin customs facility played an important role in facilitating international trade for the country. He also added that other similar trains had arrived on the same day, and that he was optimistic that trade with China would increase, enabling imports and exports in key sectors of the economy. This event follows an inauguration ceremony in July 2024, when the two governments approved the launch of the route through Kazakhstan and Turkmenistan.
But what does this new trade route really mean for Beijing and Tehran? What are the commercial and political stakes involved in the launch of trade between the two countries?
A crucial trade issue for China and Central Asia
As part of the project launched by the Chinese President in 2013, a land route through Iran represents a major asset for ensuring trade with target markets in Europe, the Middle East and Africa. Indeed, Iran’s geographical position makes it indispensable for transporting goods quickly and without the risk of bottlenecks. Overland routes offer the advantage of not being subject to blockades, and considerably reduce the potential for disruption due to regional conflicts. Since the end of 2010’s, the Chinese Ministry of Transport and the Iranian Ministry of Roads and Urban Development, along with their counterparts in the transit countries concerned, have finalised agreements to build the infrastructure needed to increase the volume of trade via this corridor.
From a logistical point of view, the road represents a considerable time saving for Iran and China. While a sea journey between Yiwu and Qom would take 40 days, goods can be transported in just 15 days by rail. For China, this time saving means it can enhance its competitiveness in exporting time-sensitive products such as electronics and consumer goods.
For Iran, exporting its crude oil by land is a way of circumventing certain constraints linked to seaports: against a backdrop of ongoing regional conflicts in the Middle East, the straits and seaports in the area are facing blockade attempts and are a factor of uncertainty for exporting states.
Financing and logistics for the corridor
From a financial point of view, the funds allocated to the various projects linked to this route come from Chinese investment banks such as the China Development Bank and the Export-Import Bank of China, as well as from the sovereign wealth funds of the States participating in the project. The total investment for the infrastructure and all the upgrades required for the smooth running of the line exceeds 3 billion US dollars. These investments are enabling railway organisations to organise the expansion of their national railways and adapt them to international standards. Here, Chinese investment banks are playing a leading role in supporting railway organisations. This is the case of Kazakhstan Railways (KTZ), which has been supported by Chinese banks with loans and subsidies.
To supplement the funding needed to build the necessary infrastructure, China’s partner countries have set up customs cooperation protocols, as well as mechanisms for harmonising rail safety standards to speed up freight transport times. So China is both a partner and an investor in ensuring that its roads run smoothly.
Geographically speaking, the road starts in the town of Yiwu, providing access to the highly industrialised regions of China, before heading north-west to the Kazakh routes. After passing through Kazakhstan’s modern rail network, the corridor continues on to Turkmenistan, providing access to strategic trading areas such as the Caspian Sea. From this area, the corridor enters Iranian territory from the north-east, passing through the city of Mashhad before reaching its final destination, Qom.
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