China draws Tehran into New Silk Road

Mashhad bridgeNew Silk Road: The China National Machinery Import and Export Corporation (CMC) has been given the go-ahead to start work on the $2.2bn electrification of the 926-km rail line between Tehran and the eastern religious tourism hub of Mashhad, Iran’s second largest city. Part of China’s One Belt One Road (OBOR) initiative, the deal is expected to be finalised within the month and the upgrade to take four years to complete.
Mashhad lies close to Iran’s border with Turkmenistan and the new line will eventually provide a link between China’s manufacturing heartland and the Iranian capital, as Beijing continues its export drive; late last week, a train loaded with 1,000 tons of textiles, electronics and machinery parts pulled out of the northern Chinese city of Baoding bound for central and souther Asia via the city of Kashgar in the Xinjiang Uygur Autonomous Region, from where the goods will be distributed to six countries by road. There are now 20 Chinese cities running international rail services heading toward Central Asia and Europe.
Iranian Economy Minister Ali Tayyebnia Iran’s Economy Minister Ali Tayyebnia paved the way for the project to get under way last month when he met with his counterpart Xiao Jie and the Chairman of China’s Banking Regulatory Commission Guo Shuqing at the New Silk Road summit in Beijing. The idea for this latest strand of the OBOR project – which would begin in Urumqi, and run through Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan – was first mooted last year when the sanctions imposed on Iran over its nuclear program were lifted.
The rail link will ultimately connect up with Iran’s east-west network that runs on to Turkey and eastern Europe and also raises the prospect of a new route to Europe from Iranian’ southern ports via Azerbaijan.
From Iran’s perspective, the electrification of Tehran-Mashhad line is a step towards its goal of upgrading its entire rail network by 2025 and will help the two countries to hit their long-term target of growing annual volumes of bilateral trade to $600bn a year.