Published 01 October 2024
With Russia locked in sanctions and maritime trade disrupted at chokepoints, the sense of urgency to secure supply chains is fueling the re-emergence of an ancient trade route. Traffic along the Middle Corridor, an overland route that links China’s southeastern seaboard to European markets via resource-rich Central Asia, is booming. But how real is the promise it holds?
In a globalized world, certain things were taken for granted. Rising economic integration meant that multinationals assumed that trade routes would remain open. Cost and efficiency were, therefore, the key drivers not only of industry location but also of trade routes. Standardization of container shipping contributed to the massive expansion in merchandise trade. Port infrastructure and liner connectivity were both determinant and reflections of globalized industry location. The underlying assumption was that shipping lanes would remain open – largely due to the willingness of the world’s leading superpower to police them, at least for critical commodities such as oil, for much of the post-Second World War era.
For landlocked countries, participation in maritime trade is more difficult. The war in Ukraine and the recent Houthi attacks on shipping in the Red Sea have, however, brought the fragility of seaborne transportation routes into sharp focus. In addition, geopolitical confrontation in the South China Sea, the risk of a US-China clash over Taiwan, and military escalation in the Middle East all add to the sense of urgency around diversifying transportation routes to ensure the security of supply chains.
Download The Middle Corridor: Competing for influence in Central Asia by Stewart Paterson:
It is against this backdrop of geopolitical threats to transportation routes; the escalating use of economic statecraft, and the evolution of a multipolar world, that the Middle Corridor, or the Trans-Caspian International Transport Route, is taking shape. Mooted in November 2013 as part of Astana’s New Silk Road Business Forum, the corridor is envisioned as a multimodal transportation route that links China’s seaboard all the way to Poland and Romania in Europe, threading through the Caspian Sea, Azerbaijan, Georgia, and Turkiye to the Black Sea.
There are conflicting statistics on the traffic volume using the existing Middle Corridor. This is largely due to the fact that not all freight passes entirely through it, and the fact that spurs to the route lead to diversion from the "core" route, muddying a measurement of its usage. What is not in dispute, however, is the fact that traffic volume is growing very fast, albeit after a slightly shaky beginning. According to the Trans-Caspian International Transport Route Association, volume declined from 1.3 million metric tons in 2017 to 586,000 tons in 2021 before growing rapidly to about 1.5 million tons in 2022; 2.8 million tons in 2023; and is on course to exceed 3.2 million tons in 2024.
In this paper, Hinrich Foundation Research Fellow Stewart Paterson examines the evolution of the Middle Corridor, its relevance and potential from the perspective of world and regional powers, as well as the countries through which the corridor travels. In the absence of overt American presence, Central Asia’s development provides a glimpse into what the world will look like if, as many suggest, US power continues to wane and we continue to move into a multipolar world.
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Stewart Paterson is a Senior Research Fellow at the Hinrich Foundation who spent 25 years in capital markets as an equity researcher, strategist and fund manager, working for Credit Suisse, CLSA and most recently, as a Partner and Portfolio Manager of Tiburon Partners LLP.
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