The longest railway line in history connects Madrid with the Chinese city of Yiwu , the biggest shopping area in the world. Its route of 13,000 kilometers, exceeds the sum of the distances of the Siberian and the Orient Express.
Did you know that in Fuenlabrada (Madrid) there is a train station that connects the largest Chinese wholesale market in Europe with the largest market in the world, located on the coast of China and this connection is made through the longest railway ever laid by humans? If you answered no to these questions, do not be alarmed: you are by no means the only person who didn’t know about this great story. In fact, the project has been shrouded in secrecy from the beginning by all parties involved, from the Chinese and Spanish governments to train operating companies, to the business community at both ends of the line. Perhaps, because the project is still on probation, as its profitability is being tested before final implementation. Anyway, the mega-project has already proved technically feasible and has completed a successful return trip loaded with Chinese and Spanish products, respectively. Furthermore, records have been broken and history has been made.
All figures related to this railway line are outstanding. Its route of 13,000 kilometers, exceeds the sum of the distances of the Siberian and the Orient Express put together and the line crosses the most countires (Spain, France, Germany, Poland, Belarus, Russia, Kazakhstan and China). The journey takes about 20 days, during which there are three gauge changes at the border between China and Kazakhstan, Belarus and Poland, and France and Spain (specifically in Irun). In total, there are eight different railway administrations involved and locomotives are changed every 800 kilometers or so. The world’s largest bazaar, at the western end of the line is Cobo Calleja, one of the largest estates of Europe in wholesale, which has its own train station, Abroñigal, specialising in Chinese products. At the eastern end of the line is the city of Yiwu, located in Zhejiang Province, about 300 kilometers south of Shanghai. “Known for the extraordinary development experienced by the trading platform set up in the 80s, it is considered the largest wholesale market in the world,” says Eduardo Euba, economic and commercial councillor of the Economic and Commercial Office of Spain in Shanghai .
This makes this city “the place with the largest small commodities market “ in the words of Tufan Khalaji manager InterRail Services, a major train operating company and promoter of the project. “ The product range is vast, from toys to hairbrushes, ties, decorative objects etc. In short, all kinds of products are delivered to markets of five continents. In Yiwu market, for example, you can find areas devoted exclusively to the sale of electric paddles to kill mosquitoes; or a wholesalers specialising in brass knuckles; or entire aisles where you only see one type of item, such as pens or artificial flowers. In addition to all kinds of decorative textiles, appliances, furniture, electronics and household products, etc. The slogan of the city, not surprisingly, is a sea of products, a paradise for shoppers. In Yiwu activity is particularly intense and during the Christmas season. Although this Christian holiday is not celebrated in China, 60% of decorative items that adorn homes, offices, shopping centers and public buildings around the world are made in Yiwu. Not by accident, the BBC called it “the Chinese city which manufactures and sells Christmas.” Everything about this place is huge. The market has 75,000 stalls in six sectors of five floors each.
In total, it covers an area of 5.5 million square meters and employs 210,000 employees with more than 200,000 visitors a day, at this market you can find 1.8 million items from 26 different categories which are exported to 219 countries. The Government of Zhejiang Province found that a scheduled freight train would open an efficient export of these goods to Europe,” says Khalaji. “This is an initiative that emerged in Yiwu, with support from local authorities and managed by a Chinese operating company, in collaboration with German logistics managers and Spanish operators (Transfesa and Renfe Operadora)”. On arrival at the station Abroñigal, last November, the first train from Yiwu loaded with Chinese goods, stationery, crafts for domestic consumption, was welcomed by an official ceremony attended by the Minister of Development, Ana Pastor, and the Mayor of Madrid, Ana Botella.
However, two months and a half later, the train started back toward Yiwu late and without any official announcement, presumably full of Spanish products, mainly wine, ham and olive oil. The delay in the departure of the train was justified by the harshness of the Russian winter, which could have damaged the delicate products of Spanish food and they were forced to wait for special heated containers from Germany. Despite concerns of the viability of the Spanish products being trasported to China there is little doubt about the economic viability of the line in Yiwu-Madrid sense. There is reasonable certainty that being regularly loaded with a sufficient volume of Chinese products makes it viable. With respects to “harnessing the potential exporter from Spain is still in a feasibility study,” asserts Euba. Apparently, there are concerns that demand for Spanish products is not enough to recoup the direction Madrid-Yiwu. According to Khalaji, the solution would be that: “Some of the containers would go by sea to China and other goods would be exported by rail from Spain to Germany, where again it would be loaded with goods such as automobile parts, for export to China by train.”
Germany has become a vital part in trade logistics networks between China and Europe, both for its geographical location and its export capacity. In fact, according to sources of Transfesa, the operator of the line in the Spanish section, “so far, the only regular services between China and Europe end up in Germany.” They add that “the possibility of establishing a regular line between China and Spain will be evaluated after the end of this test phase”. According to Khalaji, the idea is to have “two trains per month from Yiwu”, although it is not clear “whether the train will arrive to Madrid or, if necessary, it will remain a focal point of Germany as a distribution centre. That’s yet be decided by the Chinese contractors, “ says Euba and he goes onto say that “Most of the Chinese community in Spain is originally from the province to which Yiwu belongs, so it’s a train that has symbolic value in the bilateral relationship. “ Land, sea and air. The main drawback of the freight train is its price.” In competitive terms, such as a mode of transport and in particular against the transporting frieight by sea , the train will reduce the travel time , but the cost will be higher ,” notes Euba. “Shipping is cheaper, but much slower. “ However, the head of interRail Services underlines that rail transport “ is understood not as a competition to maritime traffic, but rather as a very competitive alternative form of transport, compared to the much more expensive air or air &sea.
The main advantage of the train is that the time is reduced, Khalaji says which offers “stable prices and makes for costs which can be more easily planned” as well that “there are now functional supply chains for rail transport.” Further, he said “transport times will also be further reduced in the future”. In short, he summarises, “the rail connection to China has taken a big step towards being accepted, and that customers see it, so take this into account as an option to consider.” A Chinese entrepreneur who is engaged in the import of Spanish wine and oil and prefers to remain anonymous disagrees with this view. “From my point of view, the project’s influence is more political than economical” This anonymous businessman has indicated that the cost is the main drawback of transporting goods by train, but also believes it’s very difficult to control the “stability of all countries through which it crosses”, which in his opinion is an added risk. Yiwu market interests and Spanish products around the world “do not rule out using trains to transport products, the times are reduced, the main advantages of the train, Khalaji says offers “a high price stability, which makes the costs easy to plan” as well that “there are now functional supply chains for rail transport.”
On the other hand, he said “transport times will be further reduced in the future”. In short, he summarises that, “the rail connection to China has taken a big step towards being accepted, and that customers see it, so take this into account as an option to consider.” “Yiwu market interests and suppliers of Spanish products around the world do not rule out using trains to transport products, but we will consider it once we know the exact services and tariffs” said for his part Zhenghao Zhang, general manager of Huxitai SL , a company dedicated to importing Spanish food products (ham , olive oil , milk and wine) in China .
A door to the Chinese market, in any case, the potential that exists for Spanish products in the Chinese market, especially “agricultural products and tourism, at least in the short term” in the words of Zhang, who notes that “The market is increasingly maturing” and the label “Made in Spain” is getting more widely known and respected in China. For its part, the anonymous businessman agrees that “In recent times the Spanish presence in China has grown”, and that “It has much room to grow although the competition from other countries with better marketing is very tough. “ “I do not think a train line can solve all problems,” he remarks. 13,000 foreign companies operate in Yiwu and, in 2014, on the volume of imports and exports only 21,200 million euros was recorded. Of the 40,000 visitors that the market receives each day, 5,000 are foreigners. Gradually, in this way, it is “ forming a scene of buying and selling products in the world ,” according to the website of the market. In fact, it is not uncommon to see posters and advertisements in Arabic.
The market is located in one of the most prosperous areas in China, riddled with major cities and consumption centers such as Shanghai , Hangzhou , Nanjing , Suzhou or the same Yiwu, whose per capita income is 2.5 times higher than the average in China . In short, the Madrid- Yiwu train is a huge gateway and an opportunity for the made in Spain brand to break into China, one of the largest and most promising emerging markets. Retracing the silk routes The Madrid- line Yiwu is one of six railway projects for transporting goods between China and Europe driven by the Chinese that plans to make them operational by 2025. According to Eduardo Euba , director of the Economic and Commercial Office of Spain in Shanghai, “ Chinese authorities are giving increasing importance to transportation corridors and infrastructure projects which are resurrecting the ancient Silk Road “ . Although the longest line is the Madrid- Yiwu, all are colossal. The Chongqing – Duisburg connects the centre of China with western Germany ; the Zhengzhou -Hamburg , East China and Germany area closest to Denmark ; Wuhan – Pardubice railway linking the eastern province of Wuhan with the Czech Republic ; Lodz Chengdu project will link the heart of China with Poland and the Suzhou -Warsaw China Sea line with the boundary between Central and Eastern Europe.