China Update

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China’s belt and road cargo to Europe under scrutiny as operator admits to moving empty containers

  • China Railway admits the existence of the problem in an interview with the state-run Global Times but insists it has improved recently
  • Cities and provinces were looking to benefit from subsidies offered by both the local and national government as part of Xi Jinping’s plan to boost global trade

Widespread waste and fraud associated with China’s Belt and Road Initiative has been unearthed after the country’s state railway group was forced to admit this month that a significant amount of cargo containers shuttling between Chinese factories and European cities were empty.

The admission by the state-run China Railway – the sole operator of the lines – followed an investigation by the Chinese Business Journal, a newspaper supervised by the Chinese Academy of Social Sciences, which found that in one extreme case only one of 41 containers on a particular train actually carried goods.

This led to many local governments rushing to open train services through the vast central Asian territory between China and Europe to show their support for Beijing’s geopolitical strategy, but many exporters actually transported empty containers in order to receive  government subsidies.

[The problem] is consistent with the belt and road’s emphasis on short-term political gains at the expense of longer-term economic fundamentals Jonathan Hillman, Centre for Strategic and International Studies

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Categories: China Update

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