China secures deal for construction of European rail link

China secures deal for construction of European rail link

China secured a deal yesterday to construct a high-speed train link between the Belgrade and Budapest that will cut travel time between the Serbian and Hungarian capitals from eight hours to less than three.

The project estimated by local media to be worth €1.5 billion (RM6.56 billion) is to be financed by the China Development Bank and executed by Chinese state-owned enterprises.

“This will put in place a corridor between China and Europe,” Chinese Prime Minister Li Keqiang told reporters after signing the deal in Belgrade.

“Development of this railway line will contribute to both Hungary and Serbia,” he added.

Li said he was confident the project — whose cost has not been officially confirmed — would be completed within the next two years.

The signing was the centrepiece of a summit in Belgrade with 16 central and eastern European leaders designed to cement Beijing’s plans for new transport links to funnel exports into Europe.

China hopes to turn the Greek port of Piraeus — where the Chinese shipping giant Cosco has a 35-year concession to hugely expand its two container terminals — into a new hub for trade with the continent.

Before signing the agreement Li met with Hungarian Prime Minister Viktor Orban, as well as his counterparts from Macedonia and Serbia, Nikola Gruevski and Aleksandar Vucic, to discuss details of the project.

Macedonia, which lies on the path of the north-south corridor linking Hungary with Greece through Serbia, plans to join the project later.

Infrastructure and transport were top of the agenda at the two-day talks, which also discussed wider Chinese trade and investment in the region.

Orban hailed the bullet train deal Wednesday and said “it shows that China and Europe have found the possibility to cooperate to their mutual benefit in decades to come.”

The Serbian prime minister pledged to “employ the utmost efforts and energy to see it completed”.

Beijing said it was interested in investing in energy, agriculture and industry as well as infrastructure projects in the 16 countries.

Trade between China and the region has expanded fivefold since 2003.

Chinese Commerce Minister Gao Hucheng said it could exceed US$60 billion (RM208.98 billion) this year, up US$4.9 billion on 2013. — AFP

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