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Golden Sea-Land Route Ties Four Asian Nations
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China, Russia, South Korea and Japan will jointly open a sea to land transport channel this year, announced an official from Huichun City, located in northeast China's Jilin Province on Tuesday.

This eight-hundred-sea-miles conduit starts from Huichun, China and terminates at Niigata, Japan. The route transverses Zarubino Harbor in Russia and Sokcho in South Korea. It will cut shipping time from five or six days to one or one and a half days. The corridor provides a new access to the high seas from northeast China in addition to the original passage via Bohai Sea and Yellow Sea.

Once opened, container transport capacity will increase, with a minimum of 12,000 vessels per year. This figure is expected to double if operations proceed smoothly, according to reports from Japanese media. Passenger liners will also sail on the route.

The Huichun municipal government and relevant parties from Russia, South Korea and Japan signed the route agreement in 2006. The four parties will share in investment, operation and management of the route according to the agreement. China and Japan are responsible for supplying goods. Russia is responsible for customs clearance on its territory, storage, loading, unloading and the transfer of goods. South Korea is responsible for the coordination and management of all ships and carriers.

The route began trial shipping between Huichuan and Sokcho via Zarubino Harbor in April 2000. The trials consist of two voyages a week in winter and three in summer. To date more than 400,000 passenger-times, 500,000 containers, agricultural products and non-staple foodstuffs have been transported along the route. The foreign trade volume has exceeded US$2 billion.

Since last year, 15,000-ton-passenger-cargo vessels have been sailing on the route. They can simultaneously carry 600 passengers and 140 TEUs (twenty-foot equivalent unit) onboard.

To improve its international shipping capacity, China is working together with Russia and North Korea toward integrating transport channels and ports. The countries are enhancing cooperation regarding cross-border inspections and joint-construction projects that create highways to the sea.

Important Roles

A blueprint for the Northeast China Revitalization program, initiated in 2003, was formally released on Monday. Including Inner Mongolia, the regional economy rejuvenation area extends 1.45 million square kilometers. But most of the accesses to the sea in this region are located in Liaoning Province. Not enough sea access exists for local economic growth. Moreover, the booming Sino-Russian trade ties need a port closer than those in Liaoning to transport goods overseas.

For Northeast Asia, although regional countries would benefit from each other economically, inconvenient transportation has blocked any ongoing cooperative development, stated Shen Jiru, a researcher with the Institute of World Economics and Politics under the Chinese Academy of Social Sciences. The United Nations Development Program has sparked new cooperation and development in the Tumen area. Due to increasing passengers and higher freight flow an accessible channel on the Japan Sea rim has become a priority. 

Huichun is viewed as a way to establish the new and necessary access to sea. Once opened, this "golden route" will add fresh fuel to the northeast China revitalization and economic development in the Far East Region of Russia and Northeast Asia, observed Shen.

Frustrating bottlenecks still exist. For example, a major railway connecting China and Russia does not yet work smoothly. The Russian stockholder, doing business as a private company, still can't dispatch or receive trains without authorization from the Russian state railway authorities. To date China and Russia have not established loose and unified systems regarding customs clearance and inspections in ports. These issues have caused the four parties to postpone the route's opening date from early this year to the year's end.

Integration of Northeast Asian Economy

In recent years, Northeast Asia has become one of the most vital regions globally. Statistics from the United Nations Conference on Trade and Development show that the total volume of exports from China, Russia, Japan, Mongolia, South and North Koreas accounts for 21 percent globally. Their imports account for 16 percent globally. From 2000 to 2004, the regional trade volume almost doubled and reached US$320.7 billion, or 40 percent of the internal Asian trade volume.

At this year's World Economic Forum in Davos, a professor of Seoul National University pointed out that the total GDP of China, Japan and South Korea exceeded the EU in terms of purchasing power.

According to a 2006 report released by Clarksons, a leading shipping service group based in London, Hyundai Heavy Industries from South Korea has topped the world shipbuilding list for four consecutive years. All the top 10 shipbuilding yards are located in Northeast Asia.

Economic ties between China and Japan also impress the world. In 2006, Sino-Japanese trade volume exceeded US$200 billion and Japan's investment in China reached US$4.6 billion while China's actual investment in Japan was US$170 million.

However, the Northeast Asia Economic Community is still in discussion stages despite its mighty economic power. Historic problems, energy security, resources competition and environment problems among China, Japan and South Korea have all hindered the integration process. Furthermore, a lack of regional free trade agreements has slowed down the pace.

To accelerate the process, Wu Jianmin, president of China Foreign Affairs University, proposes to establish a single currency for East Asia. He would like to conduct research focusing on an East Asia currency index.

A single regional currency following the pattern of the Euro could shatter the privilege of the US dollar. Risks associated with the dollars' fluctuation would be reduced, observed by He Fan, the assistant director of the Institute of World Economics and Politics under the Chinese Academy of Social Sciences. The success of the Euro has set a prime example for East Asian countries. They need to compromise and establish a system of currency cooperation.

The swap amount under the Chiang Mai Initiative (a network of swap agreements between countries of ASEAN and China, Japan and South Korea) should be enlarged from the present US$79 billion to US$100 billion in 2008, stated Wu. Meanwhile, their supervisory functions should be widened to cover floating capital and policy macro controls in addition to current economic crisis relief functions. A strategy of multilateralization and systematization, if developed, would improve the scope of the East Asia Reserve and Cooperation Fund after 2015, Wu added.

( by Li Shen August 23, 2007)

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