Chapter 10 - On impacts of Pakistan Railways Main Line 1 on “North China-EU” export transit—Taking export transit between Beijing and UK as an example

Abstract

With the development of “The Belt and Road Initiative,” Pakistan's Railways Main Line (ML-1); one of the main channels that connects the land and maritime silk road, once completed, will inevitably play a pivotal role in promoting trade and economic exchange between China and other countries along the routes, especially between China and Europe. Based on the historical trade data between China and Europe over the past 12 years, we set up a new multi-logit model by introducing variables such as freight rate, time economic value and corresponding time preference coefficients. This study emphasizes on exploring the characteristics of the export transport pattern from China to Europe and also the impact of expansion and operation of Pakistan's ML-1 railway line on the choices of transportation route, especially on the shipping channel. We first analyze the influence of different control variables on the distribution of routes, including time preference coefficients, freight rates of channels in Pakistan and sea. Secondly, it is assessed that the impact of the Pakistan channel on the freight pattern through the indicators such as probabilistic route assignment and changes in freight volume, and provides a comparison between different channels at price levels. Finally, the study applies the freight rate of Pakistan channel and sea channel as variables to establish the income functions of Singapore and Pakistan and analyzes the pricing game and its Nash equilibrium solution.