28 November 2019

The BRI is breathing new life into the world’s largest inland port

How is one small German town transforming under the BRI?

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Written by Quartz Creative on behalf of HSBC

The Belt and Road Initiative’s promise of transforming the lives of people along its combined routes may be seen as ambitious, but one small German town is a living embodiment of the scheme’s goals.

Welcome to Duisburg, where, every week, between 35 and 40 trains freighted with goods from China arrive in the city’s port after an 11,000-kilometre haul across continents.1,2 A once-prosperous town that suffered high levels of unemployment after the collapse of Germany’s steel and coal industries, Duisburg is once again coming back to life.

Home to “Duisport,” the world’s largest inland port, it’s rapidly becoming a vital rail link connecting the Belt and Road. Duisburg’s connections to megacities like Chongqing and Chengdu have made it a continental distribution hub for Central and Eastern Europe. Four out of five trains from China now make Duisburg their first European stop, with Deutsche Bahn estimating that 100,000 containers were transported along the rail Silk Road in 2017,3 with that number expected to rise to even more.4

In the grand scheme of the BRI, Duisburg’s total impact on European-Chinese trade is relatively small, however its impact has been significant. China-Europe freight trains account for 1% of the total trade between the two regions by weight and 2% by value.5 “The percentage is small, but the absolute value matters,” says Linda Yin-nor Tjai, Assistant Professor at the Department of Asia and International Studies at the City University of Hong Kong. For a city with an aging population and high levels of permanent unemployment, the local community values the chance to diversify the economy. A total of 50,000 jobs, 7,000 directly in the port have been created over the past 20 years.6

China’s relationship with the city has grown closer too. During a state visit to Germany in 2014, Xi Jinping chose to visit Duisburg. More Chinese companies are opening offices in Duisburg, including YXE International Container Train, which operates the train that connects Duisburg to Yiwu, home to the largest small-commodity wholesale market in the world.

In July 2017, real estate investment firm Starhai committed to building a $296 million Chinese business centre in Duisburg, creating a foothold for Chinese firms.7 Germany, too, is encouraging this growth. Essen-Duisburg University has an institute devoted to China’s economic and political development, as well as a team of specialists to help Chinese migrants and investors start businesses. “It shows their interest in retaining Chinese talent in Duisburg,” said Tjia.

Duisburg’s advantage is that it serves as a gateway to Europe’s manufacturing hub, linking the BRI with manufacturers farther inland, throughout Germany and across Central Europe. China was Germany’s largest trading partner in 2018,8 and Duisburg is still the city most likely to receive those goods. “Although it is an inland port, it is a port that people would put side-by-side with Hamburg,” says Tjia, historically Germany’s most important port.

Duisburg is taking steps to secure its central position. Last year, Duisport signed a deal to create a connection to Trieste, Italy, which is expected to become the western end of Beijing’s Maritime Silk Road. Germany is also jointly developing a logistics center outside Istanbul with Turkey’s Arkas Holding to serve as a regional hub for rail and truck transport. In both cases, Duisburg is doing what it can to beef up its connections to China.

 

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