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China and Russia forge strategic partnership to build massive grain hub

30 September 20233 min reading

In a groundbreaking move aimed at enhancing food security and strengthening bilateral trade ties, China and Russia have agreed to collaborate on the construction of a colossal grain logistics hub at their shared border. The project, known as the “Grain Terminal Nizhneleninskoye-Tongjiang,” will be located between Russia’s Vladivostok in the Far East and China’s northeastern province of Heilongjiang, with a substantial investment of US$159 million.

The agreement was announced during the Eastern Economic Forum, held in Vladivostok from September 10 to 13, 2023. The forum witnessed the presence of high-profile leaders, including Russian President Vladimir Putin and Chinese Vice-Premier Zhang Guoqing, along with several prominent business representatives. The signing of multiple agreements during the event underscores the growing economic cooperation between China and Russia, especially in light of tensions with Western nations.

The collaborative effort is spearheaded by the New Russia-China Land Grain Corridor, a consortium of companies tasked with developing grain production and infrastructure across Russia’s Ural Mountains, Siberia, and the Russian Far East. They will partner with the state-backed China Chengtong International Investment to establish the grain hub.

The Grain Terminal Nizhneleninskoye-Tongjiang is poised to become a pivotal point for the efficient transport of Russian grain to China, catering to the soaring demand for agricultural products like grains, soybeans and rapeseed oil. China’s commitment to ensuring food security for its 1.4 billion population has driven a significant increase in imports of Russian agricultural goods.

LAND-BASED GRAIN FLEET SET TO TRANSFORM RUSSIAN GRAIN TRANSPORT

Chinese President Xi Jinping reaffirmed the importance of grain security during his visit to Heilongjiang, emphasizing the region’s role as a key gateway in China’s “northward opening-up” strategy. This new land grain corridor aligns with China’s food security goals and contributes to stabilizing the international grain market, particularly in light of challenges such as the Ukraine crisis, climate change, rising food prices, and export bans imposed by some countries like India.

Under the New Land Grain Corridor initiative, the Trans-Baikal Grain Terminal, an affiliated facility, secured a contract with China’s Guangdong BestCon Intelligent Equipment firm to develop Russia’s first specialized land grain fleet. This fleet will provide an alternative to traditional sea routes and consists of 22,000 specialized grain containers capable of transporting up to 600,000 tonnes of grain annually, with a maximum storage capacity of 8 million tonnes per year.

China’s insatiable appetite for food, coupled with its limited arable land, makes the country heavily reliant on imports. Despite achieving self-sufficiency rates exceeding 100 percent for staple foods and 95 percent for grains, China’s vast population continues to pose challenges to food production. 

The new land grain corridor not only bolsters China’s food security but also streamlines bilateral grain trade by offering a faster, more flexible, and reliable land transport option compared to traditional maritime and air routes. Additionally, diversifying food transport methods aligns with China’s strategy to reduce import risks, lower food prices, and expedite the importation process.


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