China’s Belt & Road Initiative – Blog #7

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(Image credit: srilankabrief.org)

This is the seventh Blog in a series based on The Geopolitical Significance of the Chinese Belt and Road Initiative and What it may Mean for Supply Chain Operations Worldwide, a Whitepaper (45 pg, 230 endnotes) researched and written for RAAD360 LLC (raad360.com). The goal is to alert supply chain managers worldwide to the complex risks inherent in BRI. RAAD360 provides RAAD™, a cloud-based supply chain risk management platform.

Worldwide Supply Chain Risk Series

China’s Belt & Road Initiative

Blog #7 – China-Mongolia-Russia Economic Corridor

 

Source: ESCAP (From Presentation by Binyam Reja, Ph.D., The World Bank at the 2018 Annual Meeting of the Transportation Research Board, Washington, D.C.)

The China-Mongolia-Russia Economic Corridor, first proposed by Chinese President Xi Jinping in September 2014, emphasizes development of interconnected rail systems that will fully integrate Mongolia with its neighbor to the south—China—and its neighbor to the north—Russia.  The infrastructure development follows the characteristic “Belt and Road” model of connecting ports and foreign markets to extractive industries.  The map below shows Mongolia’s major coal basins and coal mine locations.  Existing rail lines connect the port of Tianjin to Mongolia and to the famed Trans-Siberian Railway which extends to Khabarovsk and the port of Vladivostok in far-eastern Siberia, and to the Trans-Manchurian secondary line, to Harbin, China.  Mongolia’s rail policy envisions two major north-south lines that will pass into Russia.  A link under construction will connect the north-south rail lines through southern Mongolia and another planned one will connect the north-south lines in the north.[1]

President Xi envisions Mongolia as a ‘transit corridor’ linking the Chinese and Russian economies and, along with President Putin, he regards the economic ties and integrated infrastructure as means of weakening Mongolia’s bonds with the U.S.[2]  (Since the late 1980s, the U.S. and Mongolia have had close bilateral defense arrangements).  Development plans also include the creation of a transnational power grid.

The connectivity benefits to Mongolia are obvious.  The benefits to China of better access to mining sites in Mongolia are also obvious.  The port-to-port connections between Vladivostok in far-eastern Siberia to Tianjin in China may be less obvious but are also important, particularly to Russia, which may find access to Tianjin shortens some key commercial routes for its own trade.

EXISTING AND PLANNED RAIL ROUTES IN MONGOLIA

www.unuudur.com/wp-content/uploads/20150731-Project-Location-and-Rail-Policy.jpg, Accessed 9 August 2018

 

Questions –

Where does my supply chain intersect with China’s “Belt and Road” transportation network?

What about my supplier’s supply chain?

Can China’s monopoly power increase transportation times in my supply chain?

Can China’s monopoly power increase transportation costs in my supply chain?

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BRI Blog next Monday will be:

China-Central Asia-West Asia Economic Corridors

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There is a wealth of information in the end notes to each Blog article.  Click the URLs to bring the sources onto your computer screen for review.

[1] Wikipedia.  “Mongolia-United States relations.   https://en.wikipedia.org/wiki/Mongolia–United_States_relations . Accessed 9 July 2018.

[2] The BRICS Post “China, Russia, Mongolia to create economic corridor.”  21 September 2014.  www.thebricspost.com/china-russia-mongolia-to-create-economic-corridor/#.W0J6D_ZFxRQ

 

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© Shirley M. Loveless, Ph.D. 2018

Dr. Loveless is a consultant, author, and educator in transportation systems, supply chain risk analysis, emergency management, and economic development.  She is a Member of the Transportation Research Board of the National Academies of Sciences, Engineering and Medicine, and an appointed member of several TRB Standing Committees.  She works with RAAD360 LLC as a supply chain transportation consultant.