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Ukraine Likely to Miss Out on China's 'New Silk Road'

The Ukrainian part of the new ‘Silk Road’ turns out to be unprofitable

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This post first appeared on Russia Insider

The Сhinese government channeled $100 billion and $40 billion respectively through the Asian Infrastructure Investment Bank and the Silk Road Fund for a new ‘Silk Road’ super project. With the additional private money, the total amount for “China-European Union” road infrastructure could easily amount to $1 trillion. 

The Ukraine is listed among the states wishing to become a transit country. 

<figcaption>Ukrainian train stuck in China</figcaption>
Ukrainian train stuck in China

In fact, under President Victor Yanukovich, considered to be pro-Russian by the Chinese, a five year agreement on strategic cooperation between the People's Republic of China and the Ukraine was signed in December 2013. The Celestial Empire promised Kiev a share of the goods transported, for a total amount of $10 billion over 5 years. At the same time, multi-billion investments by Chinese companies would come to the Ukraine. After Maidan, China reviewed its plans. According to the Ukrainian Embassy in Beijing, Chinese investments in Ukraine amounted to a ridiculous $22.6 million over 9 months of the last year.

Despite this, in January 2016, Ukraine media happily announced that China would route a freight train from the Ukraine to the People’s Republic of China through Kazakhstan, by-passing Russia. 

The freight train, called ‘Silk Road’ departed from the Black Sea port of Illichivsk for Georgia, then Azerbaijan, Kazakhstan, reaching the Kazakhstan-China border in fifteen days, including ferrying across the Black Sea and the Caspian Sea for a total of 5.475 kilometers.

Liu Jun, an official in China’s Kiev embassy noted that “we [China] will support the project if it is economically feasible”.  Ukrainian freight trains were expected to begin operating on the route starting on March 8. But according to Zammler logistics, the Illichivsk-China run launched in the Ukraine as part of the“New Silk Road” project never came back for lack of clients.

“There was nothing to be delivered, that’s why it didn’t leave China”, — Zammler states, although according to the director of Ukrainian Railways, Alexander Zavgorodny, the first train should have returned on March 15th-17th.  Kiev had promised China that the trip would take 11-12 days, but it turned out to be 15.5 days. 

Zammler experts who are still developing the project emphasized that Russia had a natural advantage in the railroad on its own territory, whereas on its way to China, the Ukrainian train would stop four times and be loaded onto ferries. Sea transits are practically impossible in winter, due to unfavorable weather conditions. 

The biggest factor, however,  is Ukrainian Railways price of $5,559 per forty-ton container, one and a half to two time the cost of road delivery across Russia. 

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