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15 Nov, 2012 13:01

Russian Railways plan to set up new ‘Silk Railroad’

Demand from Asian manufacturers has led Russian Railways to embark on a new rail link betwen Asia and Europe.

Thousands of years after the Silk Road was established it will be revived, but this time with rail tracks.

Unlike the original that started in Kazakhstan and finished in Europe, the new transport corridor is planned to begin in China, and have Russia as one of the points along the way, to the final destination Europe, as Vladimir Yakunin , the head of Russian Railways explained  to Business RT.

Given that trade between countries in Europe and Asia is constantly growing, and is set to reach about a $1tln by 2020, transportation has become key for manufacturers in the regions.

The main exporter – China – is spending billions on developing industries in Central and Western provinces, with the rail transportation being the best option for the nation.“As a whole China is still growing in terms of exports, but each region is very different. And what we do see is that given a lot more infrastructure developed inland, Chinese manufacturers are more willing to put plants in inland China, so that they could ship produce out using truck to coastal regions and put it on a boat. But now a lot of people start saying “Hey, if you are inland, might as well think through whether you can use railway. Right now the capacity limit seems to be the limitation,” according to David Lee, a partner at Boston Consulting Group in China.  Currently the sea route through the Suez Canal serves as the main trade artery between Asia and Europe. But the land bridge through Kazakhstan and Russia takes half the time than sea route Yakunin concluded.