Chongqing: At the heart of China’s logistics ambitions

The megacity of Chongqing in southwestern China with around 32 million people may be the world’s largest city few people really know. Some may view Chongqing as “Shanghai of the west” given its location in the upper reaches of the Yangtze River. Others may be aware of the city for its spectacular Raffles City Chongqing complex developed by CapitaLand, with its horizontal skyscraper, The Crystal, rising to 250m, said to be the world’s second highest.

Chongqing should be known for a few key events in its long history. Chongqing took its name in the Song dynasty in 1188. Centuries later, Chongqing became a treaty port in 1891 and was the nationalist capital from 1937 to 1945.

More recently, Chongqing became a central municipality in 1997, after being under the administration of Sichuan province since 1954. This administrative upgrade turned Chongqing into a regional centre for driving China’s “western development” campaign, launched in 1999. It also prepared Chongqing to surge into a super logistics hub in 2017 when it began to anchor the New Land-Sea Corridor (NLSC), turning a new page in the annals of this great city.

Chongqing’s current logistical centrality originated from a seemingly one-off launch of China’s inaugural freight train to the Rhine River city of Duisburg, Germany, through Kazakhstan, Russia, Belarus and Poland, in 2011, covering over 8,000 kilometres.

While that initial run was followed by only a few trains in the early 2010s, the launch of the Belt and Road Initiative (BRI) in 2013 boosted the cumulative number of Chongqing-based China-Europe freight trains to over 16,000 through October 2024. On 15 November 2024, Chongqing sent the 100,000th freight train to Duisburg, marking a milestone.

Chongqing benefiting from the 0-100,000 boom of the China-Europe freight train did not happen in isolation. As the “Go west” campaign gained momentum in the 2000s, Chongqing attracted growing manufacturing investment from the coastal region and overseas including a large HP production facility that opened in 2010. Since millions of locally-assembled HP desktops and laptops were destined for Europe, Chongqing’s visionary leaders made a geostrategic decision to ship them by an overland train.

Chongqing traditionally moved its exports to Europe by rail, road or on the Yangtze River to a major port on China’s coast for a two-month sea journey. The overland freight train slashed it to 12-15 days. Chongqing has driven a massive expansion of the China-Europe freight train from a single line in 2011 to over 100 routes connecting 125 cities in China to 227 cities in 25 European countries today.

The annual value of freight cargoes rose from US$8 billion in 2016 to US$57 billion in 2023 covering over 50,000 types of goods, with the cumulative number of containers reaching 11 million and cargo value reaching US$420 billion.

A precursor to the NLSC, the Southern Transport Corridor was announced in August 2017 when Chongqing signed a memorandum of understanding with Gansu, Guangxi and Guizhou provinces to cooperate in improving transport connectivity including a special Chongqing-Singapore land-sea shipping link to Singapore.

This transport-oriented alliance expanded in 2019 to all 12 western and Hainan provinces plus the cities of Zhanjiang in Guangdong province and Huaihua in Hunan province, becoming officially known as the 13+2 for its total number of participating members.

The central government raised the NLSC to a national strategy by issuing The NLSC Comprehensive Plan in 2019 for its high-priority development through 2025 toward 2035. The plan legitimised the NLSC as China’s first logistics-focused alliance for overcoming administrative barriers to cross-boundary cooperation.

The NLSC is headquartered in Chongqing via its Operating Co., whose net capital rose from US$1.4 million in 2017 to US$2.3 million by mid-2024. It has built connected digital platforms for joint operation with 11 of the 12 participating provinces and established a subsidiary based in Laos to enhance operational links with the China-Laos Railway (CLR) connecting from Kunming to Vientiane, launched in December 2021.

The NLSC Operating Co. has also set up 17 overseas warehouses in such countries as Laos, Singapore and Vietnam to leverage both overland and rail-sea shipping connections.

The NLSC comprises three inter-modal logistical corridors:
1) the rail-sea shipping between Chongqing, other Chinese cities and international sea shipping, primarily to Southeast Asian ports, via the Beihai and Qinzhou ports;
2) international rail-rail freight between Europe and Central Asia via Chongqing to and from Southeast Asia via the CLR;
3) cross-border road trucking between China and international destinations via Chongqing and Chengdu.

The NLSC today covers 18 of China’s provinces, 72 cities, and 153 freight stations, with direct and trans-shipping links to 523 ports in 124 countries, up from over 200 ports in 88 countries in 2019, carrying around 1,160 types of goods, up from around 80 shipped goods in 2017.

Per its name, the NLSC aims to configure and extend both land and sea logistics while stitching them into a more integrated inter-modal transport network.

Over land, on 27 June 2024, Chongqing sent the first freight train, carrying 40 containers to Kunming where it ran as a CLR service to Vientiane and then onward along the metre-gauge tracks through Thailand before arriving in Bandar Sunway, near Kuala Lumpur, in nine days. On the same day, the ASEAN Express ran in the opposite direction and arrived in Chongqing, also in nine days.

As another example, on 8 November 2024, Chongqing received a freight train of 26 containers with Vietnamese exports like toys from Hanoi destined for the European markets. The train was greeted by the visiting Vietnamese Premier in Chongqing where the containers were sorted and consolidated before being uploaded onto a Chongqing-Xinjiang-Europe freight train heading to Europe. 

Regarding the land-sea connection, the NLSC has stimulated stronger rail-sea shipping links through the growing capacities of Beihai and Qinzhou ports on the Gulf of Tonkin. For the first five months of 2024, these ports processed 12,691 tons of cargo, 4.96% more than the same period in 2023, and 351,300 containers, up 19.11% over 2023.

More importantly, China is busy building the Pinglu Canal, at a cost of almost US$10 billion and to be completed in 2026. The canal will run 134-kilometre long from the city of Nanning to the Qinzhou port. China’s first major man-made canal after the Grand Canal between Hangzhou and Beijing, the Pinglu Canal will allow Chongqing and major cities in Guangxi province such as Nanning to move river cargoes to access sea shipping more directly and quickly.

So far, the NLSC has lived up to its billing. It has elevated the logistical importance and influence of Chongqing as China’s key western city for connecting large numbers of domestic and international cities near and afar through multiple inter-modal shipping routes and links capable of moving greater volumes of goods and commodities. The NCLS has also opened up more shipping capacities at such ports as Qinzhou in Guangxi province as bigger and wider gateways for China-Southeast Asia trade.

Finally, with more construction of logistical facilities and removal of frictions at its access and connective points, the NLSC can become an even longer and wider artery of trans-continental shipping between Europe, Central Asia and Southeast Asia via western China.

Central to this transformed logistical landscape is Chongqing’s new identity and influence as the powerful anchor of the NLSC. 

Related: How Chongqing’s GDP surpassed Guangzhou’s to become China’s fourth largest city | The road ahead for Chongqing (Part II): What surprises will Chongqing bring?