"Or bring multiple benefits to China", after Russia announced China | Corridor | Russia
According to the website of the South China Morning Post in Hong Kong on June 8th, experts believe that the grain corridor is bringing a win-win situation for China and Russia.
According to reports, last month Russia announced that it will increase its grain exports to China through the New Land Grain Corridor. This corridor was proposed in 2012 with the aim of developing infrastructure and increasing food production, connecting Russia's Far East region with Inner Mongolia in northern China.
In June 2022, the Russian New Land Road Grain Corridor Group and Zhongchengtong International Investment Co., Ltd. signed an agreement to jointly carry out the project, with a focus on settling transactions in domestic currency.
The construction of a grain railway hub transfer facility in Transbaikalsk near the Russia China border, which was put into operation in September 2022, has solved the problem of different railway gauge between the two countries.
Previously, it was impossible to transport trains from one railway network to another without interruption, so Russian grain exports had to be shipped to China, which took several months.
This transit hub reduces transportation time to 2 to 3 weeks, with an annual transportation volume of up to 8 million tons, enhancing the competitiveness of Russian agricultural products and promoting trade between China and Russia.
The new food corridor may bring multiple benefits to China, especially in terms of food security.
Firstly, this corridor contributes to China's diversified agricultural product import strategy, which has become crucial in the context of domestic climate shocks and tense relations with major food suppliers such as the United States.
Secondly, this corridor can attract more agricultural investment from China in the Russian Far East region. Despite joint plans such as agricultural cooperation parks and free trade zones, issues with agricultural transportation infrastructure and regulatory barriers make it difficult for China to invest in Russian agriculture. However, the prospect of shortening transportation time in the grain corridor is expected to attract more investment from China in Russia, especially in the Far East region.
Thirdly, corridors can help China avoid potential bottlenecks that may affect domestic and international food supply and prices. Against the backdrop of promoting greater self-sufficiency, Beijing regards the Strait of Malacca and other vital arteries as a key issue.
The trade of agricultural products between China and Russia has enormous potential. China's increased imports of Russian agricultural products and fertilizers may lead to major agricultural exporting countries such as Australia and the United States losing their advantage over Russia. In addition, the new grain corridor can not only allow more Russian wheat and other agricultural products to enter China, but also enter other Asian markets through China.
This food corridor provides China with the opportunity to strengthen agricultural trade, ensure food security, and further diversify supply routes, while reducing risks related to bottlenecks in global trade.
Looking ahead, Russia and Central Asian countries are expected to expand their exports of grain and fertilizers to China, while China's role in global and regional food trade and security will strengthen.