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China’s new £3.7bn railway will shorten route to Europe by 500 miles

China is building a $4.7bn (£3.7bn), 325-mile railway linking three major countries that is expected to shorten the route to Europe by 500 miles, reducing delivery times for goods by up to eight days.

However, experts say it could also be a way for Beijing to evade Western sanctions on trade with Russia.

China, Kyrgyzstan and Uzbekistan agreed this month to collaborate to build the CKU line, after three decades of planning and negotiation.

China agreed to contribute more than half of the project’s total projected cost of $4.7bn and is expected to loan Kyrgyzstan the funds for its portion of the railway.

The railway would later to be connected to Europe via Turkey.

Joe Webster, a senior fellow at think tank the Atlantic Council, told i it was “a hell of a coincidence that the CKU line received Chinese commitments just as Western, particularly US sanctions, on China-Russia trade, are tightening”.

Mr Webster, who advises on trade projects, said he believed China was scared of angering Western powers by supplying Russia with the vital goods and services Mosco needs to keep its war effort going.

“Both Russia and China are looking towards Kyrgyzstan as a useful instrument to trade with each other, without angering the West in the process,” he added.

He noted that trade in some goods in Kyrgyzstan, such as ball bearings, which are used in the production of tanks and heavy artillery, has multiplied 15 times since the start of the war. The trade in vehicle parts has also increased ten times since war broke out, according to Mr Webster.

“The people of Kyrgyzstan haven’t suddenly started to need 15 times more ball bearings. Many of these goods are being shipped directly to Russia as soon as they cross the border, though it’s not a one-on-one thing,” he said.

Almost half of Kyrgyzstan’s exports – 48 per cent – went to Russia in 2022.

Western sanctions do not directly stop China from trading with Moscow. However, Beijing does not want to provoke the West and be sanctioned, and as a result has a strong incentive to be indirect about its trade with Russia, said Mr Webster.

He said it was important that Western nations continues to play “sanctions whack-a-mole” with Russia: “Even if sanctions manage to slow down the Russia war machine for just a short time, by denying them the equipment they need, that is enough to make a difference on the frontlines.

“Trade between China and Russia fell significantly just before the war broke out, and again after the US doubled down its sanctions at the start of 2024.

“Sanctions have been largely very effective at reducing Russia’s access to some goods like semiconductors.”

Mohan Sodhi, a professor of supply chain and statistics at Bayes Business School in London, believes the railway project demonstrates that many developing economies are “scared” of further sanctions from Western countries.

“It makes sense for developing countries, which don’t have close ties to the West, to shore up trade relationships with each other.

“Their diplomatic relationship with the Western-allied countries is extremely uncertain, and Russia and China are already sanctioned. As a result, it makes more sense for countries in the region to develop trade links with each other, rather than with an EU or US that could sanction them at any time.

“Many developing countries may now see investing in trade links with each other as a safer bet than an unpredictable West.”

Mr Webster said the railway might make “some” economic sense, as Kyrgyzstan has historically had bad rail connectivity, but it was unlikely China would have paid for Kyrgyzstan’s part of the deal unless it has an ulterior motive.

“Kyrgyzstan already owes China over half of its relatively small GDP of $10bn. Some I don’t think would want to lend it any more unless it had a very good reason.”

Kyrgyzstan may be acting as more than a conduit for solely Chinese goods. British exports to the Kremlin ally have also risen sharply since the invasion of Ukraine.

According to government trade data, UK goods exports to Kyrgyzstan jumped more than 4,000 per cent in 2022/23.

Over a similar period, Kyrgyz exports to Russia also doubled, leading to concerns that Western goods were being exported into Kyrgyzstan,before being sent on to Russia.

Dr Erika Szyszczak, a fellow of the UK Trade Policy Observatory at the University of Sussex, told i last August that that jump in exports was “very suspicious”.

The role of Kyrgyzstan in evading wartime sanctions has also drawn the attention of senior US officials.

In August 2023, Bob Menendez, then chairman of the Senate Foreign Relations Committee, called on the country to “immediately investigate these serious allegations of sanctions evasion and to establish more reliable, robust processes to prevent the illicit flow of goods through your territory”.

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