New Report | The Sino-Russian Land Grain Corridor and China’s Quest for Food Security

May 8, 2024 — Asia Society Policy Institute has published a paper entitled “The Sino-Russian Land Grain Corridor and China’s Quest for Food Security,” authored by Genevieve Donnellon-May, ASPI Research Associate, and Zhang Hongzhou, Assistant Professor at the S. Rajaratnam School of International Studies at Nanyang Technological University. The paper unpacks the implications and challenges associated with the creation of the New Land Grain Corridor (NLGC), the world’s first specialized railway grain terminal connecting China and Eurasian Economic Union countries: Russia, Belarus, Kazakhstan, Kyrgyzstan, and Armenia.

Donnellon-May and Zhang note that, “for Russia, amidst Western sanctions, the grain corridor ensures the continued export of agricultural products to not only China but potentially to other Asian markets while also facilitating more agricultural investment in the country’s Far East.”

An agreement to jointly develop infrastructure for the NLGC was signed between the Russian New Land Grain Corridor Group of Companies and Chinese state-owned China Chengtong International Investment in June of 2022. To maximize the loading capacity of railway vehicles between China and Russia, construction of the Grain Terminal Zabaikalsk (GTZ), a railway transshipment facility and onshore grain terminal at Russia’s border with Inner Mongolia, was completed in September of 2022.

With this improved transport and border infrastructure, Russia and China signed a massive grain supply contract in October of 2023. “Under the agreement, Russia’s EPT grain export company is expected to supply 70 million tons of Russian grain, legumes, and oilseeds to China’s Chengtong over the next twelve years,” write Donnellon-May and Zhang.

According to the report, for China, “the NLGC can contribute to the country’s food security in two main ways: by supporting its food import diversification strategy and avoiding potential food chokepoints.” Growing strategic competition between the U.S. and China has heightened Beijing’s concern that their food supply could be impacted by U.S. embargos, so diversifying supply routes is of high priority. Furthermore, “extreme weather events, including droughts and floods, and the loss of arable land” have compromised domestic wheat production and lead to deficits in recent years.

The NLGC has already strengthened agricultural trade between the two countries: “In 2022, China became the biggest importer of Russia’s agricultural products when the volume reached $7 billion, an increase of 44% compared to 2021,” states the report. However, the volume of Russian grain exports to China remains proportionally small when compared with China’s total grain imports, and there are “significant gaps in understanding between China and Russia over agricultural cooperation.” Russia’s import and export tariff policies, market protection measures, infrastructure limitations, inefficient customs processes, and quarantine inspections will continue to limit the exportation of Russian grain to China.

"Amid the Russo-Ukranian War, the NLGC is another demonstration of Sino-Russian strategic alignments and their ‘no-limits’ friendship”, write Donnellon-May and Zhang.

Read the full report here.