At the end of September, the EU and Japan signed an agreement designed to add a new dimension to these two global economic powerhouses’ joint effort in the field of transport, energy and digital technology. This expansion of ties between the Old World and Japan is seen by Western media as a counterweight to, and even a pushback against China’s One Belt, One Road mega-project. What are the prospects of various projects dealing with the ongoing competition between transport corridors in Eurasia?
The EU-Japan rapprochement itself is symptomatic and by no means accidental. The efforts that the United States has been bending the past 2-3 years to unravel the existing international system, which in the course of the past decades has brought political and economic dividends primarily to the world’s most developed countries have intensified with the US also becoming increasingly self-serving, openly ignoring and even harming the interests of its nominal allies. As a result, the leading countries of Europe and Asia increasingly feel the need to strengthen the “global, multilateral order” that can solve problems that no country can solve on its own, from climate change to free trade themselves, without the US.
Economic integration in Eurasia is just one such area. According to many leading German media outlets, “an expansion of the Eurasian trade zone bypassing the US-controlled shipping lanes spells a disaster” for America. To fend off this threat, Washington relies entirely on sub-regional projects, preferably under its own patronage. In the mid-2010s, the United States unveiled its conceptual vision of a future for the Asia-Pacific region, namely – the Trans-Pacific Partnership (TPP), and the New Silk Road initiative for Central Asia. In Europe, the US plans are primarily of a military- strategic nature, assigning for NATO the role of a re-integrator of the European continent in the event of an EU collapse. Simultaneously, the Trump administration persist with its attempts to drive a wedge between the EU’s western and eastern members by backing initiatives proposed by a number of Central-East European countries, and encouraging the development of local transport corridors and trade communities, leaning on the United States, instead of Europe, let alone Eurasia.
Meanwhile, European experts have been discussing the prospect of the EU leading the camp of supporters of maintaining liberal international trade standards as one of the best strategies for Brussels to go for. A similar view has been gaining traction also in Japan, which is increasingly suspicious of Trump’s “crude protectionism” and arm-twisting in trade negotiations. And, adding to all this, are Washington’s new demands for increasing the cost of maintaining American troops. After the United States withdrew from negotiations on the Trans-Pacific Partnership (TPP), Japan was one of the main proponents of keeping the talks going. No longer instrumental in the US efforts to “contain China,” a new-look TPP is able to more flexibly build its relations with the world’s second biggest economy, all the more so since China is viewed by almost all TPP participants as a key trading partner. Moreover, Japan is actively working on the implementation of the 15-sided free trade agreement in Asia and the Pacific, the Regional Comprehensive Economic Partnership (RCEP), to cover half of the global economy, and where the US does not participate, while China does.
As part of this policy, the EU and Japan announced in July that they were setting up a free trade zone between them. And now, they have also signed an infrastructure deal to coordinate transport, energy and digital projects linking Europe and Asia. According to the leaders of Japan and the EU, this is about building up ties between the Indo-Pacific region and the Western Balkans and Africa, as well as setting up a sea route, “leading to the Mediterranean Sea and the Atlantic Ocean.” However, infrastructure projects should not “create huge debts” and depend on “one country.”
But is the new Japanese-European “corridor” capable of becoming efficient without promoting partnership relations with other countries?
There exist various projects of economic integration in Eurasia – both between individual regions and those covering all or most of the regional states. Integration projects, such as the Eurasian Economic Union (EAEU) and the Customs Union promoted by the Russian Federation are actively developing, both politically and economically. China relies on the Silk Road Economic Belt (SREB), which officially embraces most of the countries of Asia and Europe. Japan, for its part, has come up with a comprehensive strategy of Partnership for Quality Infrastructure, proposed by Prime Minister Shinzo Abe.
In terms of the development of transcontinental transport corridors, Russia is in a favorable position. However, its transit potential for the development of trade between Europe and Asia is currently used at less than five percent of its capacity. Meanwhile, a sizeable share of infrastructure facilities in Eurasia (railways and highways) is oriented to Russia and which, according to RBC, can twice shorten the time of cargo traffic between Asia and Europe. In addition, Russia’s geographical position provides unique opportunities for optimizing existing transport corridors and creating new ones, in both meridional and latitudinal directions. And also for creating temporary and permanent corridors through a combination of rail, road and sea transport infrastructure. “The most promising transport corridors are the Northern Sea Route, the Trans-Siberian Railway and the North-South Corridor.”
Most recently, the Russian authorities finally approved plans for building a highway connecting China with Europe and running across Kazakhstan and Belarus. It is planned that hundreds of millions of rubles invested in this project within the next six years will help modernize and expand the transport routes that run through the territory of Russia and a significant part of the former Soviet Union, including the Arctic region. The highway will prove the viability of a project to successfully pair the Eurasian integration formats promoted by Moscow and Beijing with Russia’s national transport infrastructure modernization project. At the end of October, the head of Russian Railways, Oleg Belozerov, confirmed many leading German companies’ interest in participating in the construction of the St. Petersburg – Moscow – Nizhny Novgorod high-speed railway. Road and rail corridors can become the most cost-effective way of cargo shipment across Eurasia, replacing air transport, and in many cases, existing sea routes. According to the German newspaper Heise, Russia could become the center of the “Eurasian economic space stretching from Portugal to China” and consolidate it, “which can lead to a redistribution of power and to the isolation… of America.”
Another promising long-term strategic project is the 7,200 km North-South International Transport Corridor (INSTC) to combine road and rail routes.
“It will connect the Indian Ocean and the Persian Gulf with the Caspian Sea through Iran, with subsequent access to Northern Europe via Russia.” At the end of 2018, it became known that Russia had released the first tranches of a credit line to finance INSTC. When speaking at the First Caspian Economic Forum in Turkmenistan, held in August, 2019, Prime Minister Dmitry Medvedev called INSTC “a promising area” that reduces by 2.5-fold the time of cargo delivery “from Europe via the Caspian to the Near and Middle East and further on to South Asia and back.” Russia’s long-term partnership with India, (which is the world’s fifth economy), and also with Iran and Azerbaijan, will play an important role here.
On the latitudinal plane, Russia offers potential partners a project for the development of the Northern Sea Route (NSR). In the medium- and long-term period, commercial shipping along the NSR looks more and more attractive, because in some cases northern routes are between 1.5 and 2 times shorter than the main ones. The Chinese are already well aware of this, as they are promoting the concept of connecting the Polar Silk Road, which is designed to provide the People’s Republic with natural resources and alternative shipping routes for export, which, by 2020 will account for 5 to 15 percent of the country’s foreign trade volume, with the Russian NSR. Chinese investors have bought into a number of large industrial and infrastructure projects implemented by Russia beyond the Arctic Circle, including Yamal-LNG. According to Frankfurter Allgemeine Zeitung, “China’s ambitions in the region do not seem to clash with Moscow’s yet.”
Moscow and Beijing are working out the experience of their strategic cooperation primarily when it comes to the economic convergence of the EAEU and the SREB. In June 2018, the two sides completed the Joint Feasible Studies on Completing the Eurasian Economic Partnership Agreement, which envisages liberalization of trade in services and investments, cooperation in the field of electronic commerce, in matters of competition, protection of intellectual property, etc. It is proposed to open the Agreement to all interested states. On October 25, 2019, the Agreement on trade and economic cooperation between the EAEU and the PRC entered into force. Speaking at the plenary session of the 11th investment forum “Russia is Calling!” on November 20 of this year, President Vladimir Putin noted that Moscow and Beijing were working to establish a free trade zone (FTA).
As noted by the Russian Council on Foreign Affairs, this is not just about the integration of transport routes. “The goal is to link production and markets at every stage,” as well as creating an “institutional base” in combination with modernization of infrastructure and development of production “within its framework”. So, the planned construction of a high-speed fiber-optic communication line between Helsinki and Tokyo, which is being handled by the Russian PJSC Megafon and the Finnish Cinia Oy Company, would serve as an example of the digital integration of Europe and Asia. Megafon’s Strategy and Business Development Director Alexander Sobolev noted that “the Russian Arctic offers the shortest physically possible route between Northern Europe and Asia.”
Russia is ready to expand ties with the European Union in other areas too. Indeed, President Putin came up with a long-term plan to create a Russia-EU free trade zone as early as in 2010. Russia continues to propose moving from competition between projects of “European and Eurasian integration” to their integration. To fully participate in Eurasian integration, the EU first needs to figure out the role it is going to play amid the current erosion of transatlantic relations. And secondly, how it intends to confront the growing threat of internal division. As for Russia, in spring 2019, it reiterated through its Foreign Minister Sergey Lavrov its sustained interest in seeing the EU member-states join the Comprehensive Eurasian Partnership.
As we all know from history, the logic of developing mutually beneficial economic ties can help overcome the most deep-seated political and diplomatic contradictions. In the case of Eurasia, it looks like the processes of expanding trade and other economic relations are able to smooth over many geopolitical differences, and even completely resolve some of the existing political conflicts. At the same time, attempts to ignore Russia, or to minimize its role in continental integration, are extremely counterproductive.
From our partner International Affairs
Austerity, corruption, and neglect: How the Greek railway became Europe’s deadliest
“Aren’t trains supposed to be safe?” This was the question on the minds of most Greeks after the fatal collision between a passenger and a freight train that took place on February 28th in the Tempi area of Central Greece. The crash cost the lives of 57 people, mostly young students returning home after the Clean Monday holiday. As it turned out, the trains in Greece were not safe at all. In fact, according to a 2022 report by the European Union Agency for Railways, Greece had the deadliest railway among 29 European nations even before the Tempi catastrophe.
The official inquiry into the disaster concluded that the station master had committed a series of critical errors that night; however it also highlighted that there were no safety systems in place to prevent or correct human errors. In the days following the catastrophe, the phrase “a serious accident was waiting to happen” was used many times by those working at the Greek railway.
Thanasis, 22, a driver for Hellenic Train, had the same opinion. Despite its name, Hellenic Train is a subsidiary of Trenitalia and is responsible for the operation of passenger and freight trains on the Greek railway lines. The state-owned Hellenic Railways Organization (OSE) is responsible for running and maintaining the lines as well as the accompanying infrastructure and systems (signals, stations, etc.).
That fateful night, Thanasis drove the IC62 passenger train from Athens up to Larisa, one station before the disaster. There, he changed shifts with his colleagues, who had to drive the IC62 to Thessaloniki. Approximately one hour later, they died from the collision. Thanasis learned about the accident on his way back to Athens.
“Shortly before we reached Thiva, we learned that something had happened because they called us from the Rentis train depot to ask if we were OK. At first, we did not give it much thought because we were told it was a derailment and derailments happen a lot. Afterwards, we learned that it was a head-on collision and that there were deaths. Shortly before we arrived in Athens, we began to see the first photos and videos [from the place of the accident],”he said.
According to the inquiry report, the absence of the European Train Control System (ETCS) played a central role in the disaster. ETCS is being used by the majority of European countries and it would have automatically stopped both trains after they entered a collision course. ETCS was installed gradually on Greek train engines from 2007 to 2018, but in order for it to be operational, the railway signals on the lines need to work.
However, copper thieves have been stealing cables from the railway lines for years. The theft and selling of copper are predominately dominated by criminal gangs called the “copper mafia”, but in some instances OSE employees have also been implicated. In 2017, a high-ranking OSE director and seven other employees were arrested after they were found to have taken tens of thousands of euros in bribes from these gangs. Due to its limited budget, OSE does not replace the stolen and damaged cables; as a result, the signaling system that is essential for the operation of ETCS is constantly out of order. The lack of signaling has resulted in the Greek railway relying on an obsolete system of station masters. This leaves no margin for human error, especially when all the traffic takes place on a single line, as was the case on the night of the Tempi disaster.
Another railway driver, who spoke on the condition of anonymity due to fear of reprisals, described how vulnerable the Greek railway system really is to criminal organizations taking advantage of it.
“There are extensive copper wire thefts. Even a few days after the accident, wires for the signaling system were installed in Katerini; they were stolen the same night, a few hours after installation. There is a serious problem. The system started to gradually get out of order,” he said. The driver also spoke of human smuggling rings active on the railway.
During the last few years, the Greek railway system has become one of the main means of transport used by migrants and refugees attempting to reach Western Europe. This has attracted human smugglers, creating a dangerous environment for workers and migrants. In August 2022, three migrants were killed in their sleep near Drama after they got hit by a train.
“There is a trafficking problem within the organization (OSE), migrants have inside information such as the train and route numbers, they know each train’s destination and they are prepared. People have come into the cab and offered me 2.000 euros to hide them inside. Obviously I refused because I would be arrested.” stated the driver.
“Migrants sometimes hide even beneath the trains, when we find out, we immediately stop the train and call OSE, but they often tell us “What do you want us to do?”. Even the police do not come. If it arrives, it is usually just one run-down police cruiser with one police officer inside. Sometimes a train may have 90–100 people (migrants) on it,” he added.
Although copper theft and human smuggling are significant issues, the primary factor responsible for the decline of Greek railway is the severe budget cuts that have been implemented on OSE since 2010 as part of wider austerity policies. As a result, OSE gradually became underfunded and understaffed. It is telling that OSE went from employing around 6.000 people in 2010 to less than 1.000 people in 2021. This has led to many stations being left unmanned, while OSE employees sometimes have to work long hours, which makes them more prone to mistakes. Furthermore, the lack of funds means that damaged equipment and infrastructure cannot be easily repaired or replaced.
To make matters worse, the political clientelism that has plagued the Greek public sector for decades has also been present in OSE, with inexperienced individuals being given important positions within the organization simply because of their political ties. According to several reports in the Greek press, the station master charged with causing the Tempi tragedy was a political appointee of the ruling New Democracy party. He had been given the job in 2022 after a few months of training, despite being 60 years old and lacking prior experience.
Moreover, OSE seems to be afflicted by a culture of silence. Every OSE employee we tried to contact refused to talk, with some of them implying their upper-ups had forbidden them to speak publicly. A couple of weeks after the accident, this culture became evident during the visit of the ex-deputy minister of transportation, Michalis Papadopoulos, to the Larisa station. Papadopoulos, while addressing the press, made some inaccurate remarks regarding the station’s control board. When a station master stepped in and corrected the deputy minister, making him visibly uncomfortable, a high-ranking OSE director intervened, tapped the station master on the shoulder and coldly told him, “End it.” The station master complied and stopped talking at once.
A few days after the disaster, Prime Minister Kyriakos Mitsotakis referred to it as a “sacrifice” that would help the state to prevent similar disasters in the future. However, if someone roamed the streets during the almost daily large demonstrations in the weeks following the Tempi catastrophe, the word that he would see mostly written on placards and banners was “murder.” This shows that a sizable part of society did not attribute the accident to the convenient explanation of human error but considered the Greek state responsible for the dreadful condition of the country’s infrastructure, including its railway system.
Following the catastrophe, the Mitsotakis government, which managed to secure reelection in June with an impressive 41% of the vote, increased the OSE’s annual funding from 45 million euros to 75 million euros and accelerated construction work, with the goal of having ETCS and signaling installed on the majority of the Athens-Thessaloniki line by November 2023.
Nevertheless, the disintegration of the Greek state’s capacity after 13 years of austerity makes it impossible to close one gap without opening another. In early September, catastrophic floods in Central Greece washed away the new constructions and destroyed a large part of the old railway infrastructure, once again highlighting the authorities’ lack of preparedness.
As a result, the work now has to start from scratch. “It will probably take us many months to return the railway to the point it was 15 days ago [before the floods],” admitted the newly appointed Infrastructure and Transport Minister, Christos Staikouras, in a recent interview. “The work [on the railway] will have been completed by 2026,” he concluded, attempting to reassure the citizens. However, a lot of them will probably be skeptical of the minister’s reassurances
Nurturing Sino-EU Ties through Multilateralism
Considering the fact that relations between China and the EU are shifting, they will continue since China’s position as a crucial economic powerhouse for the EU cannot be understated, especially as the EU confronts a real and technical economic downturn. In the Eurozone, countries such as the Czech Republic, Lithuania, and Germany are experiencing a deceleration in economic growth, which requires immediate consideration. The primary reason for this is the industry-related crisis caused by the collapse of export operations on both domestic and global markets due to a lack of purchasing power.
If this mild downturn becomes a full-blown crisis, the economies of both the European Union and the United States could stagnate. Because of these challenges, the European Union (EU) must strike a fine balance between resolving the current crisis and accommodating U.S. demands. The recent summit of European Union leaders holds great importance as the EU determined its policy towards China. The EU’s economic prospects are highly dependent on developing strong ties with China.
When combined with China’s growing consumer market and massive expenditures in infrastructure, the European Union’s economy has a once-in-a-generation chance to rebound and thrive. The European Union (EU) stands to gain from closer economic connections with China due to the opportunities it presents for increased collaboration, broader trade, and the infusion of much-needed Chinese investment into the EU’s flagging industrial sectors.
Recognizing this undeniable potential, the EU must priorities capitalizing on the benefits of its partnership with China, whilst likewise making sure that the relationship remains mutually beneficial and sustainable. The path towards achieving such equilibrium, however, is fraught with obstacles, mainly due to external pressures from the United States. Notably, the United States has imposed tariffs and trade restrictions on a number of European products, creating financial challenges for European companies. These actions are frequently used as pressure to influence Europe’s approach to China.
The EU is in a precarious position, compelled to navigate an environment where financial goals, geopolitical issues, and common values intersect. Maintaining a delicate equilibrium is essential. The pressure exerted by the United States highlights the necessity for Europe to assert its own interests and independence in international affairs. It is essential that the EU devise an independent and principled strategy that protects its own interests while approaching China with a productive discussion.
European Council President Charles Michel’s recent statement that it is in the EU’s best interest to maintain “stable and constructive” ties with China has, in a sense, confirmed the continuation of EU-China relations. In a latest commentary, Josep Borrell, the EU’s high representative for foreign affairs, pointed to how the EU could modify its policy towards China. However, he advocated for “vigorous engagement” between the EU and Beijing.
Under the weight of US pressure, maintaining a delicate balance in EU-China relations requires careful handling. European leaders will have the opportunity to define the EU’s position on China at the upcoming EU summit, ushering in a future of balanced, constructive, and mutually beneficial engagement. It is essential that European leaders seize this opportunity and set a course that protects their economic interests and fundamental values. In this manner, the EU can promote stability, resilience, and sustainable growth in the face of changing global dynamics.
At this critical juncture, leaders must engage in exhaustive dialogues that incorporate the many facets of the EU’s relationship with China. The promotion of human rights should be coupled with economic considerations. Considerations such as trade disparities, rights to intellectual property protection, and the development of equitable market practices must be addressed in an open discussion. This strategy will ensure an equitable playing field for EU and Chinese businesses, fostering an environment conducive to healthy competition and long-term economic growth.
The foundation of Sino-EU relations should base on mutual interest and respect, multilateralism, and economic exchanges, and they should be exempt from illicit US interference and pressures. By navigating these complexities and forging a path that safeguards economic interests and fundamental values, the EU can promote stability, resilience, and sustainable growth in the face of changing global dynamics.
China-Germany Win-Win Cooperation
The China-Germany cooperation exemplifies the transformative potential of collaboration based on mutual regard, shared objectives, and complementary strengths. This exceptional partnership has spawned a domino effect that extends beyond bilateral relations, inspiring other nations to pursue similarly mutually beneficial partnerships.
As the world becomes more interconnected, countries can learn from the China-Germany model of cooperation, which fosters economic development, technological advancement, environmental stewardship, and cultural exchange. By adhering to the principles of win-win cooperation, nations can construct a more prosperous, sustainable, and harmonious global community.
China and Germany’s dynamic and mutually beneficial cooperation is a shining example of win-win collaboration on the global stage. Both nations have nurtured strong economic and diplomatic ties over the years, resulting in enormous advances and benefits for their respective societies.
Strong and coordinated global action is needed immediately to combat climate change and advance sustainable development. There is still a lot to be done, but China and Germany have already shown their dedication to environmentally friendly and low-carbon development. By aligning their strategies and exchanging best practices, they can expedite the transition to a low-carbon, sustainable economy.
China’s pledge to peak carbon emissions before 2030 and achieve carbon neutrality before 2060 shows its commitment to a deep low-carbon transformation of its economy and society. Through the International Climate Initiative (IKI) administered by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, the German Federal Government supports Sino-German climate change cooperation.
Collaboration in areas such as energy efficiency, renewable energy, the circular economy, and sustainable transportation can lead the way for a greener future, mitigating the effects of climate change and nurturing ecological equilibrium.
China and Germany have established a strong economic partnership that has benefited both countries significantly. Germany’s main commercial partner is China, and vice versa, and this strong bilateral commerce has led to significant economic growth and employment creation. This collaboration has given German businesses access to the sizable Chinese market.
Notably, the exchange of products, services, and knowledge between the two nations has fostered innovation, productivity, and economic resiliency, thereby laying the groundwork for long-term cooperation. This commitment to cooperation has yielded an array of beneficial effects, strengthening the conviction that win-win partnerships can drive progress and prosperity in an interdependent world.
The dynamic economic partnership that has grown between the two nations is one of the pillars of China-Germany cooperation. Germany, known for its scientific prowess, inventiveness, and precision engineering, found a favourable market in China, with its enormous customer base and rapidly expanding economy.
On the other hand, China’s manufacturing expertise and devotion to infrastructure development have presented German businesses with incredible possibilities to expand their operations and enter new markets. Entrepreneurs from both nations could keep pursuing openness, inclusiveness, and win-win cooperation, as well as keep the stability of industrial and supply chains with high-level practical cooperation. This symbiotic relationship has allowed both nations to capitalize on their respective strengths, resulting in economic expansion and job creation for both countries.
China and Germany have also established cooperation in the fields of innovation and research, recognizing that advancements in these fields are crucial agents of economic and societal progress. Through joint research initiatives, academic exchanges, and institution-to-institution collaboration, both nations have been able to pool their intellectual resources, foster innovation, and address global challenges. This cooperation has not only led to revolutionary scientific discoveries, but it has also set the groundwork for future innovations in technology that will benefit all of humanity.
China and Germany have fostered cultural exchange and people-to-people diplomacy in addition to their economic and technological cooperation. By encouraging education exchanges, cultural events, and intercultural dialogue, both countries have built bridges of appreciation, understanding, and friendship. Not only do these interactions enrich the lives of individuals, but they also strengthen the bilateral relationship as a whole. They facilitate dialogue, eliminate preconceived notions, and set the groundwork for mutually beneficial relationships and respect.
By expanding on these accomplishments and upholding a spirit of mutual respect and shared objectives, the China-Germany partnership can continue to advance progress and inspire global collaboration.
The China-Germany model of win-win cooperation provides valuable lessons for nations seeking to forge prosperous partnerships. It emphasizes the significance of mutual respect, trust, and open communication as the foundations for productive collaboration. It also emphasizes the importance of recognizing and capitalizing on balance in strengths and resources, which allows nations to maximize the positive effects of cooperation.
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