China draws Tehran into New Silk Road

New Silk Road: The China National Machinery Import and Export Corporation (CMC) has been given the go-ahead to start work on the $2.2bn electrification of the 926-km rail line between  Tehran and  the eastern religious tourism hub of Mashhad, Iran’s second largest city. Part of China’s One Belt One Road (OBOR) initiative,  the deal is expected to be finalised within the month and the upgrade to take four years to complete.
Mashhad lies close to Iran’s border with Turkmenistan and  the new line will eventually provide a link between China’s manufacturing heartland and the Iranian capital, as Beijing continues its export  drive; late last week, a train loaded with 1,000 tons of  textiles, electronics and machinery parts pulled out of the northern Chinese city of Baoding bound for central and souther Asia via the city of Kashgar in the  Xinjiang Uygur Autonomous Region, from where the goods will be distributed to six countries by road.   There are now  20 Chinese cities running international rail services heading toward Central Asia and Europe.
 Iran’s  Economy Minister Ali Tayyebnia paved the way for the project to get under way  last month when he met with his counterpart Xiao Jie and the Chairman of China’s  Banking Regulatory Commission Guo Shuqing at the New Silk Road summit in Beijing.  The idea for this latest strand of the OBOR project – which would begin in Urumqi, and run through Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan – was first mooted last year when the sanctions imposed on Iran over its nuclear program were lifted.
The rail link will ultimately connect up with Iran’s east-west network that runs on to Turkey and eastern Europe and also raises the prospect of a new route to  Europe from  Iranian’ southern  ports via Azerbaijan.
From Iran’s perspective, the electrification of Tehran-Mashhad line is a step towards its goal of upgrading its entire rail network  by 2025 and will help  the two countries to hit their long-term target of growing annual volumes of bilateral  trade to $600bn a year.