China keen on Kunming-Kolkata Highspeed Rail to give boost to Bangladesh-China-India-Myanmar Multimodel Corridor

Kunming: China is keen to establish a high speed rail link between Kunming and Kolkata as part of its efforts to revive the ancient silk route, traversing through Myanmar and Bangladesh.

The proposal, which found a mention at the recently held Greater Mekong Subregion (GMS) meet here, seeks to give a boost to the Bangladesh-China-India-Myanmar (BCIM) multi-model corridor project initiated by China.

New Silk Rail Route“We are in favour of it. The high speed corridor would help the economies of Myanmar and Bangladesh as well, apart from connecting Asia’s giants i.e. China and India” said Li Ji Ming, Vice Secretary of Yunnan provincial government while indicating funding from multilateral bodies such as Asian Development Bank.

The 2800 kilometer rail route could be a critical component for the BCIM corridor that seeks cross border trade and flow of people.

China has pledged $40 billion for the silk route, having a trade potential of USD 132 billion. China has been endeavouring for a revival of the silk route with a visionary plan to establish wide ranging connectivity from Kunming to Kolkata.

Yunnan enjoys crucial geographical location, involving in GMS and BCIM regional cooperation. It is one of the major provinces engaged in construction of China-Indo-China peninsula economic corridor and BCIM economic corridor.

As part of efforts to strengthen connectivity, Ming said Shandong Airlines would start flight services between Kunming and New Delhi from next month.

Currently Kunming, capital of Southwest China’s Yunnan province, is only connected to Kolkata.

Talking to reporters following the just concluded China south Asia trade fair here, Ming sought “active participation” from India in taking ahead the BCIM and China-India peninsula corridor projects.

“We are glad to know that after Indian Prime Minister Narendra Modi assumed office, the look east policy has substantially moved ahead. We hope we can join our efforts together. We are big partners and influential in the region,” he said.

Talking about the expo, Ming hoped there would be more representation from India in next edition in comparison to just 10 companies this year.

The inauguration of the fair was attended by Minister of State for External Affairs V K Singh last week.

“We need more Indian companies participation as there is a vibrant private sector,” Ming said.

He also talked about an Indian night event organised on the sidelines to promote economic and cultural ties between India and China.

Talking about the entertainment sector in particular, he favoured screening of more and more Indian films in Chinese theaters and joint collaboration in movie making.

The recent release of Aamir Khan starer PK has been a hit in China, Ming, who plans to catch the movie soon, said.

Bangladesh–China–India–Myanmar Forum for Regional Cooperation

The Bangladesh–China–India–Myanmar Forum for Regional Cooperation (BCIM) is a sub-regional organisation of Asian nations aimed at greater integration of trade and investment between the four countries. The Bangladesh China India Myanmar Economic Corridor is an initiative conceptualised for significant gains through sub-regional economic cooperation within the BCIM. The multi-modal corridor will be the first expressway between India and China and will pass through Myanmar and Bangladesh.

These advantages are envisaged to accrue from greater market access for goods, services and energy, elimination of non-tariff barriers, better trade facilitation, investment in infrastructure development, joint exploration and development of mineral, water, and other natural resources, development of value and supply chains based on comparative advantages, by translating comparative advantages into competitive advantages, and through closer people to people contact.

The proposed corridor will cover 1.65 million square kilometres, encompassing an estimated 440 million people in China’s Yunnan Province, Bangladesh, Myanmar and Bihar in Northern India through the combination of road, rail, water and air linkages in the region. This interconnectedness would facilitate the cross-border flow of people and goods, minimize overland trade obstacles, ensure greater market access and increase multilateral trade.

Historical Background

The concept of economic cooperation within the BCIM region was first developed by Professor Rehman Sobhan who advocated that multi-modal transport connectivity and supported by other initiatives and infrastructure development could significantly reduce transaction costs, stimulate trade and investment and consequently accelerate growth and poverty alleviation in this region.

Professor Sobhan’s pioneering ideas would eventually lead to the development of the platform in the 1990s which came to be known as the ‘Kunming Initiative’. The first meeting of the Initiative was convened in 1999 in Kunming; presided by a number of representative organisations such as The Centre for Policy Dialogue (CPD) from Bangladesh, Centre for Policy Research (CPR) from India and Yunnan Academy of Social Sciences in Kunming, China; from the Myanmar side it was the Ministry of Trade which represented the country.

The ‘Kunming Initiative’ evolved into the BCIM Forum for Regional Cooperation during its first with the objective to create a platform where major stakeholders could meet and discuss issues in the context of promoting economic growth and trade in the BCIM region; identify specific sectors and projects which would promote greater collaboration amongst the BCIM nations; and strengthen cooperation and institutional arrangements among the concerned key players and stakeholders to deepen BCIM ties.

Over the years, the Kunming initiative developed into what came to be popularly known as the BCIM Forum. Successive BCIM Forums were held annually making a seminal contribution in raising awareness about the potential benefits accruing from the BCIM cooperation. BCIM cooperation also started to feature in intergovernmental discussions, at highest political levels, as was recounted above. The initial vision of the Kunming initiative was to gradually steer the endeavour from an essentially civil society (Track II) to an intergovernmental (Track I) one where political buy-in and intergovernmental ownership would be key to realising the vision and the objectives of the initiative.

Current State of Affairs

One of the most recent developments to the BCIM came to fruition during the meeting between Chinese Premier Li Keqiang and Indian Prime Minister Manmohan Singh in 2013. Li’s visit marked the first time high-ranking officials had discussed the trade corridor. Furthermore, earlier in the year, the first ever BCIM car rally was held between Kolkata and Kunming via Dhaka to highlight road connectivity in the four countries.

On December 18, 2013, the four nations drew up a long discussed plan, emphasising the need to quickly improve physical connectivity in the region, over two days of talks in the south-western Chinese city of Kunming— the provincial capital of Yunnan, which borders Myanmar— on Wednesday and Thursday. This marked the formal endorsement on the BCIM-EC by the four nations, whereby it was agreed that the corridor will run from Kunming to Kolkata, linking Mandalay in Myanmaras well as Dhaka and Chittagong in Bangladesh.

Benefits of the Corridor

The economic advantages of the BCIM trade corridor are considerable, most notably: access to numerous markets in Southeast Asia, improvement of transportation infrastructure and creation of industrial zones.

The construction of industrial zones will have a twofold benefit. Firstly, it will lead to industrial transfer boosting industries such as processing, manufacturing and commerce logistics. Secondly, as labour costs rise in China, labour-intensive industries such as textile and agro processing will eventually be shifted out of China. These industries will need to be transferred to new regions with lower labour costs. Companies operating in China will likely give priority to the trade corridor region given its established infrastructure, improved logistics and ease of access.

India’s isolated eastern and north-eastern states also stand to gain by higher trade and connectivity with China and the rest of Asia.

Priority Sector

The eleven BCIM Forums, organised in rotation by the aforesaid institutions in the four countries, have highlighted the potential benefits of closer cooperation among the four countries in such areas as connectivity, trade, investment, energy, water management, tourism and other areas. The four countries also agreed to encourage greater cooperation and exchanges in the BCIM region in the areas of education, sports and science and technology.

Leadership and Representation

During the last held session in 2013, India was represented at this week’s talks by Joint Secretary (East Asia) at the Ministry of External Affairs Gautam Bambawale, who was joined by the Deputy Planning Minister of Bangladesh, the Vice Chairman of China’s National Development and Reform Commission, and a Senior economic affairs official from Myanmar.

Cooperation

Through linking the ASEAN Free Trade Area, ASEAN-China Free Trade Area and the ASEAN-India Free Trade Area, the corridor would constitute as one of the largest free trade areas. Bangladesh, China, India and Myanmar hope to create a corridor that would effectively combine road, rail, water and air linkages in the region. This will also bolster foreign trade of the BCIM countries and empower bilateral trading.

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