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A cargo train laden with the products of some of China’s most advanced factories has begun an epic journey west from the gargantuan city of Chongqing – marking the official opening of a trade corridor designed by the Chinese Government to reroute the flow of global commerce, according to The Australian.

Some 13 days and 11,179km later, the containers of LCD television screens and laptop computers will arrive in Duisburg, Germany, extending the logistical reach of Chinese industry deeper into the heart of Europe than ever before.

Economists at the China Insider research group believe that as the new rail route begins to shift more cargo directly to customers in Western Europe, Chongqing and western China will become correspondingly more important engine rooms of the world’s second-biggest economy.

With the inaugural voyage came a blunt warning to British business from the former European Trade Commissioner, Lord Mandelson: act now, or miss the opportunity of a lifetime, the report said.

“The emergence of Chongqing as the industrial and financial nexus of western China – and even central Asia – creates very significant demand for Britain’s service sector,” Lord Mandelson was quoted telling The Times during a visit to Chongqing with members of the Institute for Public Policy Research.

“This is a city that is soon going to be producing a fifth of the world’s laptops. Chongqing has become a place that needs legal services, financial services, accountancy, advertising. Nobody can afford to miss it by moving too slowly.”

The track linking China and Duisburg – and soon Antwerp – has been technically useable for nearly a decade but hampered by stalled talks with the countries that it passes through. Beijing spent last year plunging huge diplomatic capital into opening the route and striking the customs deals with Moscow that made the project viable.

Five territories – the Xinjiang Uygur Autonomous Region, Kazakhstan, Russia, Belarus and Poland – will be crossed as the train makes its way between China and Germany, shifting goods in about a third of the time they would take by container ship, and at a far lower price.

For China, which is locked in a battle with structural inflation and the erosion of the “China price” advantage of low-cost labour, the line should ensure that Chongqing’s manufacturing base remains competitive with rivals in Vietnam and Bangladesh.

Chongqing, now the largest municipality in the world, has been marked out by the government as the city destined to spearhead China’s economic ambitions over the next decade. Central government aspirations now focused on the western city include reversing the migration of workers to coastal China by establishing manufacturing centres inland.

Hewlett-Packard is among the foreign technology groups that have opened vast factories in Chongqing. The US company is understood to have made its investment conditional on the construction of a cargo runway near the factory. A new runway was duly built in record time. – Source: The Australian

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