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Northwest Logistics Overview
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Northwest Logistics Overview



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  • 1. Northwest China General OverviewThe provinces that comprise northwest China occupy a large chunk of China’s land territory yetconstitute only a small fraction of the country’s population; its population density resembles that ofneighbouring Siberia and Mongolia far more than the crowded eastern half of China. A scatteredpopulation, combined with a hardscrabble landscape, have presented enormous logistical challengesto northwest China in the past. In terms of per capita GDP, the residents of Xinjiang, Tibet, Gansu,Ningxia, and Qinghai Provinces significantly lag behind their coastal Chinese counterparts. Yet theregion’s abundant natural resources and proximity to several foreign countries have made it asignificant component of China’s overall economic strategy.The northwest region plays a pivotal role in China’s relationship to its central Asian neighbours tothe west. Beijing has signed accords with Kazakhstan to build an oil pipeline and Turkmenistan topump natural gas into China. Both will traverse northwest China and head into more populousmarkets to the east. Much of China’s domestic reserves of these vital energy resources lie in thenorthwest, only adding to the region’s role in supplying the country’s energy needs. Logistical OverviewLogistics and transport networks have much room for improvement in northwest China. WithinXinjiang, the region’s largest province, the use of third party logistics providers is anaemic, andcomprehensive service and information networks are lacking. The situation elsewhere in the regionis scarcely better, though government investment in modern logistics centres in Ningxia and Tibetare positive signs that capabilities will increase in the future.Transport links within the region are also improving; of particular interest here are links to CentralAsian countries to the west. At present, only one rail line exists between China and Central Asia.Feasibility studies and plans exist to rectify this situation. Kashgar, home of China’s westernmostrailway station, may soon have direct rail links to destinations in Kazakhstan, Uzbekistan, andPakistan, allowing for cheaper transport of vital goods across the region.Likewise, the railway line linking Golmud, Qinghai with Lhasa, Tibet has already brought somelogistical development to China’s poorest region. A new logistics centre in Nagku County, Tibet—theworld’s highest in elevation—could stimulate Tibet’s economy and well as provide access toQinghai’s mineral reserves.The importance Beijing places on its relationship with central Asia underscores northwest China’spotential for economic development. In order for this to happen, though, the region has to realisegreater logistical efficiency. Key Dynamics Economic cooperation with Central Asia; China’s thirst for natural resources means that the northwest is poised to become the nexus of an increasingly important trade relationship
  • 2.  New investment in logistics centres could significantly reduce logistics costs in a region beset by great distances and inhospitable terrain Kashgar, a historically significant trading centre along the Silk Road, could become a major central Asian rail hub linking China to emerging markets to its West New rail links emanating from Qinghai Province could unleash its economic potential after centuries of isolation