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    China Business
     May 1, 2007
Page 1 of 2
Railway transforms Tibetan trade
By Daniel Allen

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

Continued 1 2 


China's 'magical road of heaven' (Jul 13, '06)

China's workin' on the railroad (Jun 17, '05)

 
 



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