Tibet Railway_Economic Boost
- From: PaPaPeng <PaPaPeng@xxxxxxxxx>
- Date: Mon, 30 Apr 2007 16:45:31 GMT
Railway transforms Tibetan trade
By Daniel Allen
May 1, 2007
http://www.atimes.com/atimes/China_Business/IE01Cb01.html
BEIJING - Just how much difference can 1,100 kilometers of train track
make? For better or worse, the vaunted Qinghai-Tibet Railway, opened
just 10 months ago, is already having a major impact on the Tibetan
economy. Government sources report that Tibet's trade turnover jumped
more than 18% to US$140 million in the first 11 months of 2006,
resulting in a threefold increase in the region's trade surplus over
2005.
While the figures may seem small, they signify the very beginning of a
long and carefully considered development process. Newly prospected
mineral deposits have turned Xizang, as Tibet is called in Mandarin,
into a truly expansive western treasure house, ready to bankroll
Chinese industry's continued breakneck development. According to the
Xinhua news service, production output could surpass 10 billion yuan
($1.25 billion) and account for one-third of the region's gross
domestic product (GDP) within five to 10 years.
For decades, social and economic progress in Tibet has been hampered
by its poorly developed transport infrastructure - the result of
sluggish investment and challenges posed by the region's remoteness
and unaccommodating geography. Although the Chinese government likes
to tout the benefits that the new railway will bring to the Tibetan
people, the railway has overt economic objectives - to stimulate trade
between Tibet and the rest of China, and to allow more tourists to
experience life on the "rooftop of the world".
The Qinghai-Tibet Railway is just one piece of an infrastructure
jigsaw slowly but surely being put together by the Chinese government.
Beijing's "western development plan", designed to stimulate
inter-regional and cross-border trade, is resulting in an ever wider
network or roads and rail lines across Tibet.
Last July, an ancient trade route across the 4,300-meter-high Nathu La
pass leading to the Indian state of Sikkim, closed since the 1962
Sino-Indian border war, was dramatically reopened for commercial
activity. This year construction work will begin on 21 highway
projects and nine other major roads in Tibet, while the highway to the
neighboring Himalayan country of Nepal will simultaneously be
upgraded. And, according to Xinhua, work on a three-year rail project
connecting Lhasa with Shigatse, Tibet's second city near the Nepalese
border, will begin next year.
In 2006 Tibet received more than 2.6 million tourists, up 44% on 2005,
with tourist revenue surging 45% to 2.8 billion yuan ($350 million).
The Chinese government is projecting that this figure will exceed 5
billion yuan ($700 million) per year by 2010, with the number of
annual visitors rising to 10 million by 2020. In anticipation of
rising tourist numbers, the daily entry quota into Lhasa's Potala
Palace, former chief residence of the Dalai Lama and now a state
museum, has already been raised from 1,500 to 2,300.
Most of the passengers now arriving at Lhasa railway station,
including workers, business people and officials, are ethnic Chinese.
Many of Lhasa's taxi drivers, most of whom are Han, see a profitable
future ahead. "Everything is changing here very quickly, mostly due to
the new train. This is only the beginning," said Wang, 29, who came to
Lhasa in October with his family from Hebei province.
After investing in a Lhasa brewery three years ago, Hong Kong
businessman Wallace Yu saw beer sales rise steadily. When work began
on the railway back in 2001, Yu decided to embark on an ambitious new
project - selling bottled spring water sourced at more than 5,000
meters. The key to making the project work is that the site is now
just 23km from a train station.
Now another partner in the brewery, Denmark's Carlsberg Group, is
exploring opportunities to make the water available outside Tibet. By
making use of the railway, bottles are soon set to hit Beijing
shelves, and there are plans to begin exporting Lhasa's very own Ice
Beer to other Asian countries this year.
Some native Tibetans are also benefiting from the railway. Jeep driver
Pasang, who regularly ferries tourists overland from Lhasa to Everest
Base Camp, is happy to see the numbers of tourists increasing.
"Before, I never used to work five days a week, especially in the
winter season. Now I'm really busy - I take tourists from other places
in China and from all over the world."
Tibetan rug seller Dorjay has also been doing a brisker trade since
the train came to town. "I'm now selling twice as many rugs and
souvenirs as last year," he said. "I've also been contacted by various
companies in Beijing who want to stock my products. The railway has
really helped my business grow."
The growing influx of tourist dollars is just one part of Tibet's
changing economic picture. The new railway has also lit a fire under
the region's mining sector, as individuals and national and overseas
corporations look to participate in an increasingly frenetic
Tibetan-style gold rush.
Until last year, few of Tibet's mineral deposits had been exploited.
Fewer than 1% of discovered mines had been prospected, only 10% of
mining companies had officially approved resource assessments, and
only 15% of mines in commercial operation had completed full surveys.
However, the lower cost of train travel has now turned the quiet
trickle of prospectors and miners arriving in Tibet into a full-scale
stampede.
The new overland route between Lhasa and Golmud, Qinghai province, has
slashed mass transport costs by more than a third. This has made the
export of Tibetan raw materials, once effected by truck over high
mountain roads, potentially affordable. "The railway has made
transport of large quantities of metallic ores and other mineral
products out of the region an economic reality," said a mining lawyer
who asked to remain anonymous. "Now they can actually access these
places and remove whatever's extracted."
The China Tibet Information website reported recently that over the
past eight years more than 1,000 researchers have been scouring the
Qinghai-Tibet Plateau, looking for mineral deposits to feed China's
burgeoning economy. To date, 16 major new deposits of copper, iron,
lead, zinc and other minerals worth an estimated $128 billion have
apparently been located in only 50% of Tibetan territory.
If confirmed, the new reserves make Tibet one of the richest regions
in China. This could drastically decrease the country's reliance on
imports of copper and iron, affecting international commodity markets
across the globe. Tibet is now estimated to contain as much as 40
million tons of copper - one-third of China's total reserve - 40
million tons of lead and zinc, and more than a billion tons of
high-grade iron.
"Just going by the reports I've seen and accepting them at face value,
the size of these finds is enormous," Alan Heap, Citigroup's managing
director for global commodity analysis, commented recently. "For
copper, zinc and lead these reserves would double the size of Chinese
deposits."
For the Chinese government, the mineral finds come at a hugely
critical time. Over the past several years legions of Chinese
businesses have been engaged in a global mission to acquire the raw
materials needed to feed an increasingly voracious Chinese economy.
"Lack of resources has caused a bottleneck," admitted Meng Xianlai,
director of the China Geological Survey.
China is currently the world's largest importer of iron ore - 326
million tons last year - much of which ends up in the 24-hour steel
mills that drive the country's construction and auto industries.
Partly as a result of China's insatiable demand, prices of high-grade
iron ore have more than tripled in the past two years, driving up
development costs worldwide.
Among the Tibetan discoveries is China's first sizable iron deposit, a
seam called Nyixung. It is estimated to contain as much as 500 million
tons, which would be enough to put 20% of Chinese iron importers out
of business this year alone. Estimated reserves of 760 million tons of
high-grade iron ore have also been found in the Kunlun Mountains on
the western Qinghai-Tibet Plateau and in southern Xinjiang Uygur
Autonomous Region.
Commenting on the new reserves, China Geological Survey's vice
director, Zhang Hongtao, said, "They may relieve the country's
three-decade-long dependency on iron imports. Once Tibetan mines are
developed, they will greatly relieve the strain on China's existing
resources."
Newly discovered Tibetan copper reserves are equally important. A
400km seam has been mapped along the environmentally sensitive Yarlung
Tsangpo (Brahmaputra) Gorge. According to Xinhua, one mine along this
seam, the Yulong mine, is estimated to hold as much as 18 million
tons, and could soon become the largest copper mine in China. Easier
access to Yulong and other mines along the Yarlung Tsangpo seam will
be provided by the proposed extension of the railway from Lhasa to
Shigatse.
In all, three new Tibetan finds have increased China's total copper
reserves by a third, according to the international mining industry
website Mineweb. Once production comes online they will decrease
imports by the same amount. China, which until now has imported much
of its copper from Chile, is estimated to hold 5.6% of the world's
copper, and is the seventh-largest producer.
Metals are not the only natural resources that Tibet has locked away
beneath the ground. According to Zhang Hongtao, there may be
"super-large" crude-oil and gas reserves in Tibet's far-western
Qiangtang Basin, as well as large oil-shale deposits in areas west of
the existing train line. China has invited multinational oil giants
such as BP and Shell to explore for oil and gas in Tibet after
realizing that its own companies lacked the experience and expertise
required to drill in areas renowned for their challenging geology.
Daniel Allen is a freelance writer and photographer from London who
has lived in China for the past three years. This article was written
after his recent trip to Tibet.
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