Foreign companies set course for 'journey to the west'

In the second in a series on China's 'new normal' economy, Zhong Nan reports that overseas firms are cashing in on government initiatives.

After 35 years of rapid revenue growth in China, foreign companies are broadening their business networks by expanding in the western part of the country. There, they aim to take advantage of the country's drive to revitalize the ancient Silk Road and upgrade its industrial base.

Many of these opportunities arise from China's initiatives and national strategies such as the Silk Road Economic Belt and the Yangtze River Economic Belt, which are intended to put the nation's economic growth on a firmer footing after two years of slowing expansion.

The Silk Road Economic Belt is to be established along the ancient Silk Road trade route, stretching northwest from China's coastal area through Central Asia, the Middle East and on to Europe. The Yangtze River Economic Belt spans nine provinces and two municipalities, starting in Southwest China's Yunnan province and terminating at the coast in Shanghai.

Gefco Group, the international arm of Russian Railways specializing in automotive and industrial goods logistics, is preparing to cooperate with a Chinese State-owned infrastructure construction provider to transport giant project machinery and equipment to its worksite in Belarus through the Silk Road Economic Belt before the second half of this year.

The company launched a door-to-door route between China and Europe in 2014, aiming to expand into more industries.

The service allows overland cargo and ocean freight collected at China's major ports to be delivered via Alataw Pass or Manzhouli, in China's Xinjiang Uygur and Inner Mongolia autonomous regions, to countries like Russia, Belarus, Poland, Hungary and Germany.

Christophe Poitrineau, Gefco's Asia president, said the Silk Road Economic Belt will create new market growth points for foreign companies in China.

"With trade volume rising between China, Central Asia and Europe, China is rebuilding the ancient Silk Road and pursuing a new trading model that is focused on product quality and logistics efficiency - a shift away from the previous speed - and quantity-centered model with slow delivery," said Poitrineau.

It takes about 15 days from China to Europe by rail compared with up to 45 days by sea, so rail cargo service is a better choice for high-value products.

With investment of 40 million euros ($42.39 million), consumer goods giant Unilever Plc, the Anglo-Dutch company, completed the construction of a manufacturing facility to produce laundry detergent in Sichuan province at the end of January.

The factory will have an annual capacity of nearly 200,000 metric tons, and its products will be mainly shipped to markets in China's western regions. The factory will eventually manufacture the full product line of Unilever China.