Central Asian states are striving to develop rail and road links that would connect their states with China. They hope to turn Central Asia into a transit hub for intercontinental-trade. There does not appear to be sufficient demand to make such a route economical. However, new transport networks could help China boost its regional influence.

Slow progress is being made on a variety of projects. In Kazakhstan, officials are working to expand operations of the Druzhba rail transport facility near the Chinese border. Meanwhile, Kyrgyzstan and Uzbekistan are discussing the construction of a rail link between the Ferghana Valley and China via the Osh region. At the same time, Uzbekistan has started building a highway linking Tashkent with Osh, with a planned extension to Kashgar in China. Kazakhstan already has a road linking with China, and Tajikistan is also building the highway through Pamir Mountains.

Central Asian officials hope the infrastructure improvements will translate into increased trade. Some envision the transport projects as a modern-day Silk Road that strengthen links between China and Western Europe. New transit links would certainly help Central Asian states find new markets in China for their commodities, including oil and gas. Already, Kazakhstan and China have explored building a 3,000-kilometer pipeline between the two countries. But construction prospects are dimmed by a daunting price tag estimate at around $3 billion.

Indeed, many observers suggest that officials in the region harbor unrealistic expectations about the economic benefits of transport projects. Some say that Central Asian nations are overestimating demand for a new, overland trade route with China.

The bulk of trade between China and Western Europe now consists of durable goods, including home and office goods, automobiles, appliances and textiles. The balance of trade tilts heavily in favor of China, and ships are the primary mode of transport. The main benefit of new rail and road routes would be a reduction in the time it takes for goods to travel from the Far East to the West. But given that most trade is in durable goods, the potential time savings are at present not particularly attractive to China.

A new Central Asian road-rail network would also face stiff competition from the Russia's Trans-Siberian railway. The Trans-Siberian route, which has been operating for almost a century, is relatively well developed, with dual tracks running almost the entire length of the route. Russia, with an eye on preempting competition from a Central Asian rail network, is already pushing new transit options involving India and Iran.

Instability in Central Asia also has damaged the region's trade and investment potential. Uzbekistan has been the scene of an insurgent campaign waged by the Islamic Movement of Uzbekistan. At the same time, Tajikistan continues to grapple with the after-effects of a 1992-97 civil war. Central Asian states have also wrangled over such issues as water-use rights and borders. Even if the sources of instability are addressed, concerns about financing and the ability of Central Asian states to maintain transit networks would remain.

Despite the apparent disadvantages, observers believe that the various road and rail projects will be completed. China, they add, has a considerable geopolitical interest in expanding its links with Central Asia. While China already has a sizable economic presence in Central Asia, the lack of infrastructure is hampering its ability to expand its influence. An improvement in road and rail access to Central Asia could ultimately help China replace Russia as the dominant economic power in the region.