Lianyungang:A Maritime and Overland Channel for China-Kazakhstan Trade

CRANES are hard at work in the Sino-Kazakhstan International Logistics Base in Chinas eastern port city Lianyungang， hoisting containers of various colors bearing such logos as KTZ， UNICO， China Railway Express， and International Logistics， alongside the railway tracks laid specifically for block train transport.

At the end of the railway line is Kazakhstan， the worlds largest inland country. Its trade mainly comprises large imports and exports of grain and iron ore to and from Japan， South Korea and Southeast Asian countries. Lianyungang Port， the starting point of the Longhai-Lanxin railway， with Japan and South Korea just across the water， is now Kazakhstans most convenient and economic eastward import and export harbor.

First Facility Launched by Heads of Two Nations

Chinese President Xi Jinping and Kazakhstan President Nursultan Nazarbayev jointly witnessed the launch of the firstphase project of the Sino-Kazakhstan International Logistics Base on May 19， 2014 via online video， during the Shanghai Cooperation Organisation （SCO） Summit in Shanghai.

The base is believed to be the first facility built since President Xi first proposed the Belt and Road Initiative during his state visit to Kazakhstan in September 2013. In the speech he gave at Nazarbayev University on that occasion Xi proposed building a Silk Road economic belt.

“Hundreds of workers were cheering at the inauguration cerenomy of Lianyungang logistics base， as they waved the national flags of China and Kazakhstan，” recalled Liu Bin， general manager of Lianyungang China-Kazakhstan Interna-tional Logistics Co.， Ltd.

Liu Bins company， a joint venture between Lianyungang Port Group Co.， Ltd. and Kazakhstan Railway Express Co.， was set up on June 24， 2014. Hanging on the walls of the companys exhibition room are photographs and maps recording the birth and growth of the Sino-Kazakhstan International Logistics Base.

“Construction of the Sino-Kazakhstan International Logistics Base began on May 19， 2014， and it was up and running， and profitable just a year later.” Liu Bin said. He participated in every step of construction and progress at the logistics base.

The facility is located in Lianyungangs Miaoling operating area， adjacent to the container terminals bulk grain berths. Equipped with convenient transport and distribution facilities， this area is regarded as Lianyungang Ports prime plot.

The logistics base was built with a total investment of over RMB 3 billion， of which RMB 606 million was earmarked for the first-phrase project. This involved construction of the 200，000-sq-m container yard with 1，763 slots and a 3.8-km-long railway line. It has the capacity to handle 10.2 trains daily， and an annual handling capacity of 410，000 TEU. The base provides international cargo transport business services， such as international multimodal services and warehousing.

Starting Point of the New Eurasian Continental Bridge

Lianyungangs advantageous geographic location is the reason why it was chosen as the site for this logistics base.

Lianyungang Port is the eastern starting point of the New Eurasian Continental Bridge. It neighbors Japan and South Korea across the Pacific Ocean to the east， and westward it links Central and West Asian countries via the new continental bridge. Lianyungangs strategic location has made it the crux of both the Silk Road Economic Belt and the 21st-Century Maritime Silk Road， and also SCO membersbest sea gate to Southeast Asian countries.

In November 2013， in the wake of President Xis proposing of the Belt and Road Initiative， at the 12th SCO Prime Ministers meeting held at Toshkent， capital of Uzbekistan， Premier Li Keqiang raised the suggestion： “China would like to provide logistics and warehousing services for SCO members at Lianyungang Port – the eastern starting point of the New Eurasian Continental Bridge.”

“The Sino-Kazakhstan International Logistics Base is of great significance to Kazakhstan， and also an important platform for the transit and warehousing logistics of five Central Asian countries along the continental bridge，” remarked the former president of Kazakhstan Temir Zholy （KTZ） and current First Deputy Prime Minister of Kazakhstan， Askar Mamin. KTZ is Kazakhstans biggest national railway company.

The SJ Logistics Group in Lianyungang is a Korean company whose main business is importing transport machinery， equipment， auto parts， and electronic products from South Korea to Kazakhstan， and exporting ores， wheat and cotton to South Korea and other Asian countries. “The reasons why we chose Lianyungang as the import and export harbor for transporting goods between South Korea and Kazakhstan are its proximity， rapid turn-around， reasonable prices， and reliable security，” the companys General Manager Ni Ruiqian told China Today.

In early 2015， the first China-Asia freight train set out from the Sino-Kazakhstan International Logistics Base. The one-way trip takes just six days. Lianyungang China-Kazakhstan International Logistics Co.， Ltd. has thus become the exclusive agent of KTZs container business.

On December 13， 2015， the first China-Europe freight train （Lianyungang Port–Kazakhstan–Europe） pulled out from the Sino-Kazakhstan International Logistics Base. Liu Bin recalled that the “Kazakh Prime Minister Karim Masimov was there. He took out his cellphone and posed for a picture to record this exciting moment.” The train ran 11，000 kilometers through six countries and arrived at its terminus in Germany 12 days later， nearly one fourth of the time the journey would have taken by sea freight.

Six Days to Transport Kazakh Wheat to Lianyungang

On February 5， 2017， Lianyungang was nominated as the sole port of departure in China for the transport of Kazakh grains. The first 720-ton shipment of wheat in 32 containers traveled from Almaty to Lianyungang logistics base in six days. And in just two hours all floating goods were loaded and ready for shipment to Southeast Asian countries.

“Through Lianyungang Port， Kazakhstan wheat and other cargoes can be directly transported to other countries. This will help to enlarge the scale of trade between Kazakhstan and China， and also have a positive impact on the two countries transit transport potential，” said Saule Nurgaliyeva， counselor of the Kazakhstan Embassy in China.

Thanks to real-time data exchanges between the logistics base and the container terminal， operations at the two sites have been seamlessly coordinated to reduce waiting times for containers moving between them. Workers at the information management center conduct real-time monitoring of vessels in the harbor through an information command and control platform， which also features real-time exchanges with Kazakhstan of remote monitoring information on containers in transit. “The moment the freight sets off， information is shared with our Kazakh counterpart， and both sides can easily check the position of the vessels online，” Liu Bin explained.

With an annual production of 20 million tons， two thirds of which is exported， wheat is Kazakhstans primary agricultural product. Transiting through China can lower the price of Kazakh wheat to US $45 less， per ton， than Australian wheat of the same quality. The time saved also enhances the competitiveness of Kazakh wheat on the global market. It is predicted that in 2017， nearly 500，000 tons of Kazakh wheat will transit through Lianyungang Port on its way to Southeast Asian countries. Currently， the second-phase project is under construction， and is expected to go into operation in June. When completed， it will handle outbound transport from China of Kazakhtsans 700，000 tons of wheat.

The transit of Kazakh wheat through Lianyungang Port marks the establishment of a logistics circulation system from Central Asia via China to other countries. This will boost economic cooperation between China and Kazakhstan， and also between Central Asian and Southeast Asian countries.

Logistics Passage Brings People Closer

“Our next task is to sign a share transfer agreement with our Kazakhstan counterpart so as to buy 49 percent of the shares of the dry port in the Khorgos-Eastern Gates SEZ， and to further develop the two express lines to Almaty and Tashkent respectively， transporting cargoes back and forth， thereby making Lianyungang Port a logistics passage brand，”Liu Bin said. He added that construction of the dry port was also a major cooperative program launched during the Belt and Road Forum for International Cooperation， held in Beijing in May.

According to the plan， the second-phase project of the Sino-Kazakhstan International Logistics Base will see an investment of RMB 400 million to build bulk grain berths and warehouse yards to provide stevedoring and warehousing services for Kazakhstans agricultural products. The thirdphase project will involve an investment of RMB 2 billion to build a logistics base for SCO members， featuring rail transport， logistics， warehousing， international trade， and export processing.

“A lot of changes have taken place in three years. The number of import and export containers annually handled at the logistics base has increased， and both the throughput and handling capacities have risen steadily. We believe trade flows between China and Central Asian countries have improved， and that people-to-people bonds， exchanges of funds and information， and communication of advanced management ideas have increased. Although we are distant geographically and speak different languages， our hearts are close，” Liu Bin said.

Six Kazakh staff members from Lianyungang ChinaKazakhstan International Logistics Co.， Ltd. now work in the Lianyungang Port area. Workers from both nations get on well. Nabira， a young， tall， blonde Kazakh woman who graduated from Shanghai Foreign Languages University， having majored in international economics and trade， is now deputy chief of the accounting department at Lianyungang ChinaKazakhstan International Logistics Co.， Ltd. She said， in standard Mandarin： “Chinese and Kazakh accountants work in different ways， so I act as a bridge between them.”