Rail deal to fast-track Europe trade

China signed a massive deal yesterday to finance a high-speed bullet train between Budapest and Belgrade, a key link in Beijing’s expanding network to get its goods to European markets.

“This will put in place a corridor between China and Europe,” Premier Li Keqiang told reporters after signing the deal in Belgrade.

Local media reports estimated it to be worth 1.5 billion euros (US$1.9 billion) but the cost has not been officially confirmed.

“Development of this railway line will contribute to both Hungary and Serbia,” Li added.

He said he was confident the project would be completed within the next two years.

The signing was the centerpiece of a summit in Belgrade of 16 central and eastern European leaders designed to cement Beijing’s plans for new transport links to funnel exports into Europe.

The railway project fits with a Chinese plan to turn Greece’s main port of Piraeus — where Chinese shipping giant Cosco Pacific holds a 35-year concession to upgrade and run two container cargo piers — into a regional hub for trade with Europe.

Before signing the agreement, Li met Hungarian Prime Minister Viktor Orban and his counterparts from Macedonia and Serbia, Nikola Gruevski and Aleksandar Vucic, to discuss details of the project.

“We are dedicated to this project,” Vucic said following talks with Orban. “Our aim is for the feasibility study and all plans to be completed by June next year so that the railway could be built by June 2017.”

Vucic said the upgrade would cut train travel times between Belgrade and Budapest from eight hours to under three.

Orban hailed the deal as showing “China and Europe have found the possibility to cooperate to their mutual benefit in decades to come.”

The Serbian prime minister pledged to “employ the utmost efforts and energy to see it completed.”

Macedonia, which lies on the path of the north-south corridor linking Hungary with Greece through Serbia, plans to join the project later.

Infrastructure and transport were top of the agenda at the two-day talks, which also discussed wider Chinese trade and investment in the region.

On Tuesday, Li said China was to create a US$3 billion investment fund for central and eastern Europe.

China said it was interested in investing in energy, agriculture and industry as well as infrastructure projects.

Trade between China and the region has expanded fivefold since 2003.

Chinese Commerce Minister Gao Hucheng said it could exceed US$60 billion this year, up US$4.9 billion on 2013 figures.