How The New Silk Road Is Stimulating Local Economies And Changing Lives From China To Europe
I travel to emerging markets around Asia and report on what I find.
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With an emerging network of infrastructure, logistics, industrial, and energy projects crisscrossing the expanse from China to Europe, the Belt and Road is a playground for big government and big business. Its land and sea ports, continent-crossing toll roads andrail lines, special economic zones, and power plants are often rising up behind behind high gates without any input from the communities who live in their proximity — one day there is a remote fishing village, the next day there is a remote fishing village with a $1.4 billion Chinese-funded deep sea port in the middle of it.
However, this doesn’t mean that these massive development projects don’t have any local impact or benefit. To the contrary, this new groundwork of improved infrastructure is serving as a catalyst for local employment and economic stimulation in places where both is often lacking.
The Khorgos Gateway dry port has created jobs and an entirely new economy on the China/Kazakhstan border. Image: Khorgos Gateway.
The name of main street of Zharkent translates to “Silk Road,” and as the small, 30,000 person city was once a hub along this ancient trade network this isn’t too far from the truth. Sitting thirty kilometers from the Chinese border, the people there are still traders, making their way to China and carry back goods that they can sell for a small profit. To say that this place is remote would be an understatement — Zharkent sits in the Saryesik-Atyrau desert near the Dzungarian Gate pass, which Herodotus reported to be the origin of the North Wind and a place where lion/eagle hybrids guarded treasure, a tick or two from the farthest point on earth from an ocean.
Zharkent is the kind of place that local talent tends to flee. After high-school, those with broader ambitions go elsewhere for college or for work, and there is often very little reason for them to return beyond customary visits home. Unless you want to work on a farm, grill lamb skewers, or make runs to the Chinese border and back, there really isn’t much in the way of opportunity in this far-flung locale.
To say that Khorgos is remote is an understatement — it is one of the most far-flung places on the planet. Image: Khorgos Gateway.
However, this is something that’s starting to change. Just 30 kilometers to the east of Zharkent, the Khorgos-Eastern Gate special economic zone, a new logistics and industrial center for 50,000 people is rising. Variously dubbed “the place where east meets west” or a “ mini-Dubai,” it is one of the marquee projects of the Belt and Road, attracting interest from companies like BASF, HP, Toyota, DHL, and Alibaba, and unilaterally shifting the paradigm of Zharkent in the process.
Khorgos Gateway sits within this SEZ. It is a 240 hectare dry port that opened at the end of July 2015. This is the main terminal for processing China-Europe cargo trains as they switch rail gauge going in and out of the former Soviet CIS region, and big plans are underway to turn it into a regional logistics powerhouse. By 2020, its CEO Karl Gheysen estimates that over a million TEU will be passing through here, as much as some mid-sized sea ports. The development strategy here is the same as in Jebel Ali in Dubai: establish a key logistics hub and then build a city around it. It is no coincidence that Dubai’s DP World is running the show here.
Although this is a project with broad international implications, this doesn’t mean that the local market is not being impacted. By decree of DP World’s MOU with the Kazakh government, 80% of the staff who works at Khorgos Gateway needs to be local — not just local as in from Kazakhstan, but local as in from Zharkent.