On September 26, the Henan Provincial Development and Reform Commission stated that the first loan of the Asian Infrastructure Investment Bank (“AIIB”) in Henan Province has been approved by the National Development and Reform Commission. A total of USD 150 million (approximately RMB 967 million) will be invested in construction project of Zhengzhou International Land Port Multimodal Transport Logistics Hub System through which helps Henan Province transform its existing transportation advantage into a hub economy advantage.

The AIIB is an Asian regional multilateral development institution initiated by China. It was established in Beijing in 2015. From the very beginning, the AIIB has been rushing to provide financing services for infrastructure construction in Asia, which prioritizes green development domains and cross-border connectivity facilities.

The construction project of Zhengzhou International Land Port Multimodal Transport Logistics Hub System, as financially supported by AIIB in Henan Province, is an important transportation infrastructure serving the regional trade of the “Belt and Road”, and is highly coinciding with the AIIB’s service objectives.

In addition, the Zhengzhou International Land Port Company (ZIH) planned to build a multimodal transport project mainly for the operation of the Eurasian Freight Train (Zhengzhou). Since the operation of the train, it has established direct cooperation with enterprises from countries along the “Belt and Road”, and simultaneously developed online and offline sales networks. It has formed a positive situation of industrial complementarity of “transportation stimulates trade and trade promotes transportation”.

Regarding the use of this loan, it will be used for construction project of Zhengzhou International Land Port Multimodal Transport Logistics Hub System. The total investment of this project is RMB 1.643 billion, the AIIB loan is USD 150 million and the remaining Counterpart funds are self-raised.

Among them, USD 38.37 million will be used for the second-phase construction of the International Land Port Multimodal Transport Logistic Hub, mainly including domestic highway logistics warehouses, distribution and trans-shipment warehouses etc.; US$72.173 million will be invested to the second-phase construction of the Automobile Import Port, mainly including the construction of import enterprises spare parts warehouses, automobile exhibition turnover warehouse etc.; USD 39.082 million will be deployed to the construction of bonded logistics centers, mainly including bonded exhibition warehouses, distribution warehouses, customs declaration halls etc.; finally, part of the funds will be provided for the construction of a comprehensive service information platform for China-Europe multimodal transportation.

The transportation hub has always been Henan’s business card and advantage, but there are problems such as the essential resources are excessive but non-residential, and those resources are flowing through but not gathering. This is not unrelated to the weak hub-oriented industries in Henan Province.

The relevant person-in-charge of the Provincial Development and Reform Commission introduced that after the completion of the project, it will provide a “stop” for goods imported and exported by Eurasian Freight Train and provide more effective services for import and export enterprises, extend the port economic service chain and promote changes from “traffic flow” to “reserved flow”, which will effectively promote the transformation of Henan Province’s location and transportation advantages into a hub economy advantage.