A Look At 7 New Cities Rising Along The New Silk Road

New cities are rising all along the revitalized trade routes of what has been dubbed the New Silk Road — an enhanced network of economic corridors stretching between China and Europe — as participating countries attempt to build new economies based on logistics, manufacturing and cross-border commerce from the ground up.

One statement that I’ve heard repeated over and over again as I’ve traveled these routes is: “X years ago there was nothing here.” From the west of China to the east of Europe, new large-scale infrastructure is being built as the economic dynamics of Eurasia are undergoing a fundamental transition.

“Four years ago, all mountains,” I was told last year as I arrived in Lanzhou New Area, a new urban core 30 kilometers outside of the historic center of Lanzhou, the capital of China’s western Gansu province.

Hundreds of barren, desert-ified loess mountains and hills are being removed with backhoes and dump trucks to create this completely new, 800 square kilometer development that will provide core infrastructure on the China end of the Silk Road Economic Belt. A new international airport, high-speed rail station, central business district, logistics and bonded zone, as well as high-rise apartment complexes for 500,000 people are all at various stages of completion.

The Silk Road West International Business Tourism Culture Comprehensive Eco Industrial Zone — a 20 square kilometer, $1.52 billion conurbation of Silk Road related projects — is at the core of this new development. Located in this area is the Lanzhou Free Trade Park, which contains a bonded area that provides more efficient customs clearance for trucks and trains carrying cargo to Central Asia and beyond, as well as space for an industrial zone that will focus on manufacturing high-value electronics, machinery and bio-medicine. Also included in this zone is theSilk Road Cultural Heritage Expo City — a US$500 to US$750 million exhibition and tourism center — which provides, among other things, facilities for making “Western-China-style” movies.

Although it’s only been a few years since the mountains started being cleared away here, some of Lanzhou New Area’s developments are starting to come to life. Hundreds of 30-story high-rise apartment towers have already been built, and people have begun moving in. Banks, restaurants, and schools are opening along the main drag. The finishing touches were being put on the metro station at the time I visited at the end of last year.

Lanzhou, a city that was once a dynamic trading hub along the ancient Silk Road that has been marginalized by its remoteness in the modern era, is looking to restore its historic relevance through being one of China’s overland gateways to the CIS and Europe. Lanzhou New Area is a key component of this plan, and $3.9 billion has already been dumped into its development.

A colossal epicenter of trade and logistics is emerging in the Saryesik-Atyrau desert that’s about as believable as a mirage. Located right on border of China and Kazakhstan, hundreds of kilometers from any established city and a tick from the farthest point on the planet from an ocean, a new urbanization project is in the works that will not only drastically change the region but will impact how goods are shipped across continents. On the Chinese side the place is called Horgos, on the Kazakh side it’s Khorgos.

“When I came here a year ago it was all sand dunes,” recalled Karl Gheysen, the CEO of the DP World-run Khorgos Gateway dry port told me in 2015. “Literally, there was nothing here.”

Like Lanzhou, Horgos/ Khorgos was once a major market town on the ancient Silk Road, serving as a transshipment hub where traders from China and Central Asia would meet to exchange goods. But when these old trade routes dried up so too did Horgos, and the city eventually dissolved into the desert.

However, both China and Kazakhstan have invested heavily into transitioning Horgos from the “middle of nowhere” to the “center of the world,” and are acting in tandem to resurrected the place to serve pretty much the same role it had in antiquity: a transport hub between the markets of China, Central Asia, South Asia and Europe, albeit one for freight trains and trucks rather than caravans of camels. Dozens of newChina-Europe rail lines as well as the Western Europe-Western China Highway now pass through here, as the region is starting to come back to life.

On the Chinese side of the border is the new city of Horgos, a $3.25 billion New York City-sized slab of fresh urbanization that’s being built for a future population of 200,000. Hardly two years ago this city technically didn’t exist, and was little other than a border post, a village, and some lavender fields on the farthest fringe of Xinjiang.

On the Kazakhstan side is the Khorgos SEZ and dry port, which is a 5,740 hectare area devoted to the country’s emerging logistics economy, which includes a new residential area for 50,000 people.

The economic impact of the Horgos/Khorgos developments is expected to be significant. Dozens of international trains are passing through the Khorgos Gateway each week, while China’s Jiangsu province has already signed a deal to invest US$600 million into a manufacturing operation in the Khorgos SEZ. HP, Toyota, DHL and Alibaba have all shown interest in opening distribution hubs there as well.

Europe, too, is building new cities along the New Silk Road. On the other side of the Central Asian gap another logistics economy is on the rise. Located right on the border of Belarus is Poland’s Terespol municipality — a place of dry ports, free industrial zones, and residential developments that are materializing out of rolling green fields.

Terespol municipality is the European compliment to Khorgos, and has likewise been sparked to life by the revitalized overland transportation routes that run through it — which include most China-Europe trains as well as the E30 expressway, which goes from Berlin to Moscow. The major new projects here include the impending 30,000 person Kobylany New City, a 40 hectare duty free and bonded zone, a massive DHL-invested logistics zone, and a free industrial zone that is near a major road shipping hub, which are in addition to the dry port at Malaszewicze, which is among the most preeminent of the entire Silk Road network.

“Ten years ago this was all nothing, just cows and poor people,” Dato Kodue, the director of development of Anaklia told me during a visit in June.

Anaklia is the site of an emerging resort/ deep sea port/ free industrial zone on the Black Sea coast of Georgia that’s being completely built from the ground up. Eight years ago Russian tanks were in the streets here; the place was a war zone. Today, it’s one of the prime pieces of Georgia’s New Silk Road offerings.

Being part of the shortest overland route between Europe and China, Georgia has gone “all in” on its logistics economy. A big part of this ambition is developing a deep sea port at Anaklia. With a US/Georgian consortium at the helm, this port and its accompanying free industrial zone is expected to eventually handle 100 million tons of cargo each year and create 8,000 jobs.

Meanwhile in Azerbaijan, the next major Silk Road station down the line from Khorgos, a new seaport/ special economic zone combo is being built on a 400 hectare expanse of barren shrub land 70 kilometers south of Baku.

Aiming to be a key hub for regional supply chains and a primary node on the Silk Road network, the New Port of Baku is a fundamental part of Azerbaijan’s national strategy to break free from their reliance on oil and develop a more diverse economy that’s based on transportation and trade. Located at the junction of two major overland transport corridors and right on the Caspian Sea, this new multimodal logistics hub is expected to pull in 21-25 million tons of bulk cargo and 1 million TEUs once it is fully built and put into operation.

Perhaps surpassing even the mountain razing of Lanzhou New Town in terms of making something out of nothing, Sri Lanka’s Colombo Financial City is rising up from where there was only ocean before. Being built on 269 hectares of land reclaimed from the sea, this new international business center extends out from the coastline of Sri Lanka’s capital city and is the largest infrastructure project the country has ever attempted.

Colombo Financial City is to be a place of shining skyscrapers, luxury hotels, high-end shopping malls, and marinas. Its financial center is meant to rival that of Singapore and Dubai, and will even offer its own legal regime to provide investors with more favorable economic policies than are available in broader Sri Lanka.

Like most of the projects along the New Silk Road, Colombo Financial City is an international joint venture. It is mostly being built with $1.4 billion of Chinese money, and is the single largest incident of foreign direct investment in Sri Lanka’s history. Following a long dispute that had big geopolitical implications (this project attracted the ire of India), China will be given a 99 year lease on 110 hectares of the new city, while the the rest of the land will go to the Sri Lankan government.

Five years ago, the government of Sri Lanka began an ambitious project to convert an expanse of jungle on their southern coast into the country’s number two city. Being built up around a new $1.4 billion deep sea port, Hambantota was meant to become a multi-faceted project that would contain a massive industrial zone, an LNG plant, an international airport, luxury hotels, a conference center, a cricket stadium, new highways, and modern housing, in addition to the port.

To varying degrees, much of this infrastructure was built, but the results have been dubious at best. Hambantota’s Mattala International Airport has just two flights per day and is more than likely the world’s emptiest international airport, while the deep sea port is running at under-capacity, the conference center is mostly only used as a venue for wedding banquets, the cricket stadium seldom has any matches, the new highways provide efficient transportation for a severe lack of vehicles, and the much-needed industrial zone hasn’t been built yet.

But while the label “white elephant” has been used by some to sum up the Hambantota venture, nobody has given up on it yet.

“We’re building a new Dubai,” is another common statement spoken by the architects of the New Silk Road. The hallmark of this new political and economic network can be found in its massive new infrastructure projects that are being built where there was no semblance of such infrastructure before.

The model for this style of development is without doubt the JAFZA at Jebel Ali in Dubai, which showed the world that it is possible for an entirely new, diverse, and vibrant economy to be built upon a major transportation hub. And many stations of the New Silk Road are trying to replicate its success.