Kyrgyzstan is also working on other railways. Construction takes place in the area around the large Issyk-Kul lake. The country could connect this railway, which also links up to the capital city Bishkek and neighbouring Kazakhstan, to the CKU line.

“In the future, under favourable conditions, it is planned to extend it to Kara-Keche, and then also to Makmal, guaranteeing an additional rail connection between the north and south”, said Zhaparov. Makmal will be a key location on the CKU line, since China’s standard 1,435-millimetre gauge and the 1,520-millimetre gauge will meet there. Kyrgyzstan has already finished part of the railway to Kara-Keche.

The railway will have significant benefits to Kyrgyzstan and Uzbekistan. Both countries are landlocked and stand to profit from diversified trade routes. There are concerns, however, about the railway’s financial costs and benefits. Particularly Kyrgyzstan will need to take on significant debts. Meanwhile, the railway is expected to have limited capacity in the mountainous terrain.

When logistics follows industry again – this time from China

In 1984, six years after China launched economic reform, Volkswagen established its first joint ventures in China. That marked the beginning of decades of successful European industrial engagement with the Chinese market.

Two years later, in December 1986, DHL Express followed the same path, forming a joint venture with Sinotrans. CEVA Logistics started active operation in China around the same period.

Logistics followed industry. As European multinationals sourced from China and sold into the Chinese market, European forwarders followed their customers. They built networks, navigated regulation and became deeply embedded in their customers’ global supply chains. Over time, China has became one of the most strategically important logistics markets.

A similar dynamic is emerging again. This time, the direction runs from east to west.

Industrial upgrading and the export shift

China’s exports surplus surpassed one trillion US dollars in 2025, underlining its continued central role in global trade. Europe remains a key destination, alongside Southeast Asia, Central Asia, the Middle East and Türkiye.

The structure of exports has changed. Electric vehicles, batteries, renewable energy equipment and advanced machinery now account for a growing share of export value. These sectors were explicitly prioritised in the 2015 “Made in China 2025” strategy. The objective was clear: move up the value chain and reduce reliance on imported core technologies.

A decade later, the shift has become visible, mostly in the automotive sector. China has been the world’s largest car exporter in volume since 2023. In parallel, German carmakers’ combined sales in China have declined markedly from their 2021 peak, with total volumes down by double digits by 2025. BMW was particularly affected, with China sales falling roughly 25–27% over the same period.

In fact, according to Merics, a think-tank Berlin, the number of product categories primarily sourced from the US and EU has halved over the past two decades. This structural transformation has direct implications for logistics.

Outbound freight volumes are reinforced by higher-value industrial exports. On the China–Europe rail corridor, for instance, the imbalance between westbound and eastbound flows has widened since 2023. That year, for every eastbound container to China, roughly 1.8 containers moved westbound. In early 2024, the ratio rose to 4.8. By 2025, it approached 7.

Similar trends can be observed across multiple modes and lanes. Such asymmetry affects pricing dynamics, equipment reposition and corridor economics. If Chinese manufacturing continues to expand in Europe-facing sectors, this imbalance is unlikely to reverse in the near term.

Chinese companies expanding into Europe

Chinese products are not the only ones moving westward. Their producers are expanding into Europe as well. Trade tensions with the United States, EU anti-subsidy measures and intense domestic price competition have accelerated Chinese overseas investment.

CATL and BYD are building factories in Hungary. JD.com has moved to acquire control of Ceconomy, the parent of MediaMarkt and Saturn in Germany. Consumer brands such as Pop Mart have opened retail stores in London, Rome, Berlin and Amsterdam.

As Chinese industries expand into Europe, logistics providers follow. Just as DHL, Kuehne+Nagel and Schenker followed European manufacturers into China decades ago.

Major players such as state-owned COSCO Shipping and Sinotrans, together with Cainiao and JD Logistics, are expanding their European presence. Investments and long-term leases are visible in port terminals, warehousing facilities, distribution centres and last-mile networks. These moves support both market entry and manufacturing setups.

Implications for European rail and forwarding

For European forwarders, this represents a structural shift rather than a temporary market cycle.

In the past, a significant share of freight volumes were controlled by European manufacturers and buyers, particularly in industrial and automotive supply chains. Procurement decisions were made in European headquarters, and European forwarders benefited from established customer relations and alignment.

Today, Chinese companies increasingly drive logistics demand. Procurement power is gradually shifting from European to Chinese headquarters.

In the short term, international forwarders with established pan-European networks remain essential. Regulatory complexity, customs procedures and labour frameworks require local expertise.

Over the medium term, competitive dynamics may evolve. Chinese exporters may prefer logistics partners aligned with their language, digital systems and decision-making speed, particularly when service quality and pricing are comparable.

At the same time, Europe’s fragmented and highly regulated logistics environment creates natural barriers to rapid market capture. This opens space for both competition and cooperation.

Invest early – secure your position

When DHL entered China, it relied on Sinotrans to navigate regulation and build local networks. Chinese logistics companies expanding into Europe now face a similar reality. They bring volume, capital and close ties to headquarters in China. They will need local partners who can provide regulatory depth, network density and established customer relationships.

Those who invest early in understanding China’s industrial strategy, corporate expansion patterns and business culture may secure long-term positioning on both ends of the trade lanes.

Not every European logistics company had the opportunity to enter China in the 1980s. This time, the strategic engagement may happen at home.

For example, the Altynkol-Khorgos border crossing has far surpassed initial expectations for 2025. Over 16.1 million tonnes of freight passed the checkpoint in both directions. This is 9% more than an internationally agreed upon plan within the framework of the Organisation for Co-operation between Railways (OSJD), explains the Kazakh national rail operator KTZ.

Kazakhstan exported 5.3 million tonnes of freight through the border crossing. In the opposite direction, 3,589 trains entered Kazakhstan for transit purposes.

A similar trend further north

At the same time, the Alashankou-Dostyk border crossing saw a record number of China-Europe freight trains in 2025. A total of 8,165 trains passed the location in 2025, 6.3% more than in 2024.

Efficiency improvements have allowed trains to be inspected and cleared immediately upon arrival, a customs officer is quoted as saying in the Chinese publication Xinhua. The measures include the increased use of intelligent inspection systems and image recognition technology.

The overall clearance time at Alashankou was cut by 18.4% compared to 2024. That was highly necessary due to the many delays incurred at both Alashankou/Dostyk and Altynkol/Khorgos in the past years. Now, a freight train can change gauges and complete reloading procedures in around two hours, an operations manager at Alashankou told Xinhua.

In early 2025, Kazakhstan and China decided to double the maximum number of freight trains that can pass through the border crossing each day. At Alashankou, that translated into a maximum of 28 daily trains. At Altynkol, 15 trains were allowed to pass daily.

Similarly, freight trains from China’s Guangxi Zhuang Autonomous Region moved some 37,000 TEU in 2025, which amounts to an 86% increase in comparison with 2024. The Guangxi Zhuang region, and in particular its capital city of Nanning, is a consolidation hub for various freight flows on the way to Vietnam. The trend is clear: China exchanges more and more goods with Laos and Vietnam via the railways.

That is helped by tariff reductions, driven by the so-called Regional Comprehensive Economic Partnership and the China-ASEAN Free Trade Area 3.0 Upgrade Protocol, write Chinese media. These help to reduce the cost of international trade.

Connection to Europe

Due to rapidly growing trade demand, container train services on the China-Vietnam Railway have seen significant expansion since their start in 2017. The number of weekly trains has grown from 3 at the start of operations to 14 in 2025. At the same time, the towing weight for each train has risen from 1,000 tonnes to 1,300 tonnes.

Since the opening of the 1,035-kilometre long China-Laos railway in December 2021, it has carried 72.5 million tonnes of goods and 62.5 million passengers, including over 16 million tonnes of cross-border freight.

Following the footsteps of Vietnam and Laos, Thailand may soon also have a railway connection to China. Construction started in 2017, with the first phase likely opening in 2028.
The railway will link up to the China-Laos line.

While far away from Europe, these Southeast Asian rail projects are not entirely irrelevant to the European rail freight industry. For example, companies like Maersk and Yusen Logistics have previously launched rail freight services from Vietnam to Europe. As of 2024, the overland journey took around 25 days to complete.

While not yet operational, the finalisation of the track-laying process marks a significant milestone towards completion of the railway. Preparations for its inauguration are underway.

The railway will connect the Gara Djebilet iron mine in southwestern Algeria with the national rail network and Mediterranean ports. The mine hosts one of the world’s largest iron ore reserves, with an expected 1.7 billion tonnes of exploitable deposits. China likely eyes access to these resources, allowing it to diversify away from existing suppliers. Algeria, for its part, will be able to diversify away from oil and gas exports.

Success despite geographic adversity

Despite facing harsh desert conditions, construction teams from both nations finished the track-laying in just over 24 months. That was made possible by careful planning and close bilateral coordination, Chinese media write. The project involved the production of 1.1 million concrete sleepers and the laying and welding of over 580 kilometres of rail. CRCC opened an Algerian sleeper factory to support the rail project.

CRCC said that it designed prestressed concrete sleepers suitable for 32.5-tonne axle-load freight trains. The project also saw the first-ever operations of Algeria’s CPG500 track-laying machine and its first automated rail-welding line.

The train is one of few that has a fixed transit time. Duisburg has been the main European destination. The addition of Česká Třebová and the future addition of Budapest as destinations are, in that sense, a bit unique.

Initially, there will be one vessel leaving Italy for China every two weeks. From 2026, the service will see 20 trains between Bratislava and Venice and one vessel to China each week. This will translate into 100,000 vehicles passing through the Italian port every year.

Volkswagen embracing intermodality

The Slovakia-Italy-China intermodal service is not the first initiative of this kind for the German car manufacturer. One year ago, the company started a rail-road pilot deploying EcoDuo trucks, able to transport two semi-trailers. The bigger trucks run between the Volkswagen factory in Wolfsburg to the MegaHub Lerthe. From there, a freight train takes the cargo to Barcelona and EcoDuo trucks are deployed again for last mile deliveries.

European Silk Road Summit

The role of rail and intermodality in connecting Europe and Asia, especially China, will be thoroughly discussed at the upcoming European Silk Road Summit. This year, the event will take place in Milan, Italy, on 19 and 20 November. Check out the programme here and get your ticket here.

China’s state-owned China Civil Engineering Construction Corporation (CCECC) has won the concession to manage TAZARA for the coming 30 years. One billion of the total investment will go to renovation works for the 1,860-kilometre railway, the remaining 400 million dollars is reserved for the purchase of 32 locomotives and 762 new wagons. In total, the project is expected to take two years.

For Beijing, the benefits are manifold: it gets to assert control over a key artery for critical raw material supply chains, commercial benefits and leverage over the hosting countries. What’s more, it counteracts Western investments in the so-called Lobito Corridor in the Democratic Republic of the Congo (DRC) and Angola, which too leads to Kapiri Mposhi.

The US has pledged at least 803 million US dollars to support that 1,700-kilometre railway, which also connects copper (and cobalt) mines to sea ports. According to the Africa Policy Research Institute, Western financing in total could be as high as 6 billion US dollars. The Lobito Corridor is also a counteracting measure: Western countries seek to undermine China’s already entrenched position in African mining.

Railways to resources

There is a new competition for influence and resources, which means that the battle for African railways is on. The late 19th and early 20th centuries echo in modern geopolitics, especially since foreign powers are after Africa’s precious minerals. China has been leading the way in recent years, with rail projects such as the Simandou railway in Guinea. That 600-kilometre railway is supposed to enable maritime exports of iron ore. Other Chinese rail projects have taken place in Nigeria, Kenya and Ethiopia.

It seems that Europe and the US will be playing a game of catch-up while China is upping the stakes. In July, China finished a part of the Algerian Western Railway, having built 135 kilometres of the line to the Gara Djebilet iron ore mine. An agreement for 6,000 kilometres of rail was signed in 2024.

Western countries are responding with not only investments in the Lobito Corridor, but also in the Ressano Garcia Line in Mozambique. A 145 million euro combined investment by France and the EU should help build double tracks and boost capacity threefold, to 44,6 million tonnes per year. Unsurprisingly, this line too connects mines (in South Africa) to a port (Maputo).

A broader effort to counter BRI

These rail investments fall into a broader strategy to counteract China and its Belt and Road Initiative (BRI) programme. For example, the US and EU have responded to China’s African advancements by establishing the Partnership for Global Infrastructure and Investment, of which the Lobito Corridor is the flagship project. African membership of the programme includes Zambia, DRC and Angola.

The EU has its Global Gateway strategy, which seeks to create “strategic, sustainable, and secure transport corridors” and “support value chains, services and jobs”. The EU’s corridor wishlist is long and includes many inland-to-coast routes.

The flipside of the coin

Africa is hoping for lucrative business opportunities, but critics have argued that the investments will lead to resource exploitation akin to that of the colonial era. There may be opportunities, but not all is rainbows and sunshine for African nations as they become a geopolitical battleground.

To illustrate, Kenya has encountered problems with the burden of the infrastructure debt it owes to China. The country failed to repay debts, incurred a penalty fine of a couple of million dollars, and ended up converting the loans from dollars into yuan on 7 October to save on interest payments. It should help save the country 215 million euros a year.

That same railway faced criticism because there was “no real plan for operating the railway” after construction. Mistakes were allegedly made in the acquisition of rolling stock and setting tariffs. The Chinese construction company rushed arrangements for operations on the line, and Kenya missed opportunities “develop national know-how and capability”.

Industry experts and Chinese media, such as the South China Morning Post, have highlighted the Arctic route’s benefits. Some argue that the icy but thawing north could help China and Europe diversify away from conventional but high-risk routes. Moreover, shortening travel times could accelerate capital turnover and speed up the delivery of electronics and pharmaceuticals, for example.

… could it really, though?

However, there are also skeptics. And those skeptics might, at least for the time being, be right. Some of the world’s biggest shipping companies themselves fall into that camp. A representative of Maersk points to the limited time window for Arctic shipping: only in summer is the route ice-free and navigable. Still, it is not possible to know exactly when that time window opens and closes, and even in summer there might still be ice blocking the way.

As a consequence, you’d need ice breakers from the area to be available at all times. Since most of the route runs through Russian waters, that translates into a need for Russian vessels. Yet, because of sanctions, Maersk does not do any business with Russia, making the use of their ice breakers an impossibility.

Even without those sanctions, the remoteness of the Russian north presents a challenge. For safety reasons, you need to have proper infrastructure nearby (also including ice breakers), which is limited in the sparsely populated coastal areas. A structural limitation in the capacity of the Arctic route.

Far away from the existing network

Moreover, the Arctic route bypasses key hubs, such as in Singapore, Oman and Gibraltar. A Financial Times source told the publication earlier this year that that could be a reason why Maersk is uninterested in making the journey across the Arctic. The company heavily relies on its hub network.

“We have for instance in recent years invested more than three billion dollars in infrastructure (ports/terminals) on our Asia-Europe service”, a Maersk representative explains. “It’s an advanced network with transshipment capabilities as well in between the starting and end point of the services.” The Arctic route is not a part of that global network.

Lastly, there are environmental issues. Large shipping companies signed a deal in 2019, promising not to operate on the Arctic route to avoid polluting the area. CMA CGM underlined this at the time: “The use of the Northern Sea [Arctic] Route will represent a significant danger to the unique natural ecosystems of this part of the world, mainly due to the numerous threats posed by accidents, oil pollution or collisions with marine wildlife.”

The shortest possible route

Even if the sanctions against Russia were no issue, the full-length Arctic route would not be the most beneficial route to take. Rail freight consultant Xavier Wanderpepen points out that the shortest way from China to Europe going through the Arctic would be the Shanghai-Mongolia-Arkhangelsk-Europe route. Note that the majority of that route is land-based. It adds up to around 10,000 kilometres, compared to the entire Arctic route passing through the Bering Strait (16,000 kilometres) or around the Cape of Good Hope (26,000 kilometres).

In other words, when purely looking at distance, the Arctic route is most competitive when transiting most of Russia overland. But even that route via Arkhangelsk seems unfeasible. “At first glance, the Arkhangelsk route seems attractive. However, it remains blocked for much of the year due to the freezing of the polar seas”, says Wanderpepen.

Even a shorter maritime leg would still present the same weather problems as the long way around. “Implementing a solution that works only six months a year, and then stopping everything, is unrealistic”, Wanderpepen adds.

Chaotic transit times

Despite the favourable short length of the route, the rail infrastructure is not in place to accommodate freight flows. For example, there are no regular container trains in Russia to Arkhangelsk. “Transit times would therefore be chaotic, as containers are transported mixed with other cargo. The same issue exists for shipping between Arkhangelsk and Europe: there are no established container shipping lines on this route.”

In other words, a Chinese operator would have to charter a vessel for a couple of dozen containers and face that same challenge to book a train in Russia. “Moreover, there would be no return back cargo to balance costs, meaning clients would pay not only for the loaded trip but also for the empty return, both by rail and by sea”, Wanderpepen adds.

The need for specially chartered ships and trains contrasts with regular lines, says the rail consultant. Regular lines offer much more competitive prices.

Haijie Shipping Company’s offer is seasonal, likely until November. That reflects another issue with this route, according to Wanderpepen. If temperatures drop below -10°C or -20°C in winter, which happens every year, some goods cannot withstand the cold. That includes plastics and electronics.

Traditional success and the limitations of the Arctic

“The success of the maritime route between China and Europe is due to regular ship departures – every day – with vessels that can carry 7,000 to 8,000 units of 40-foot containers. This scale keeps prices very low”, explains Wanderpepen.

In other words, weather, politics and infrastructure conditions make both the Arkhangelsk and the Arctic route around Russia unattractive, if not outright impossible. Even if Chinese companies not bound by sanctions start operations, those will be impacted by unpredictable weather conditions and limited infrastructure. The service offering will remain restricted in scope.

The Arctic route is therefore unlikely to be able to compete with the traditional shipping routes and the Middle Corridor. Both offer more reliability, predictability and infrastructure, even if the Middle Corridor is still very much in development.

The train takes high-end parts for various vehicle brands such as Hongqi, Jiefang and Pentrium to Europe. It shortens the travel time from 45 days (by ship) to 18 days. Rail shrinks the cost of logistics operations by 30%, according to the automotive manufacturer. “This significantly enhances the international competitiveness of FAW’s products and will provide overseas customers with a faster and more reliable service experience.”

The only qualified company

In 2024, FAW reported a 36.2% percent year-on-year increase in vehicle exports, reaching a total of 125,000 units. Overall, FAW’s vehicle sales in 2024 amounted to 3,2 million, generating revenue exceeding 550 billion yuan (approximately 66 billion euros). The company says that it is the “only company in the domestic automotive industry qualified to operate the China-Europe Express.”