Hungary’s place on Eurasian rail land bridges and the eastern opening 3Z. Farkas, A.–Pap, N. and Reményi, P. Hungarian Geographical Bulletin 65 (2016) (1) 3–14.DOI: 10.15201/hungeobull.65.1.1 Hungarian Geographical Bulletin 65 2016 (1) 3–14. Introduction In 2010 Hungary saw the start of a signifi - cant restructuring in foreign policy. The main reasons behind it – among others – were the FIDESZ forming a new government that year, the global fi nancial and economic crisis at the end of the previous decade, its consequences in Hungary and the specifi c economic and political reactions to it. The new foreign policy and economic relations brought a change in the orientation of Hungary to the East (Magyarország Külügyminisztériuma 2011). In addition to developments in diplo- macy a number of concrete, practical steps are also needed, including the development of the physical transport infrastructure links between Hungary and the target countries of the “eastern opening.” One of the links which are currently under-utilised for vari- ous reasons is continental rail corridors. Signifi cant transformations started in glo- bal communication and transport sectors at the end of the 20th and early 21st centuries, which have been fundamentally infl uencing sea and land transport possibilities. During Hungary’s place on Eurasian rail land bridges and the eastern opening1 Z. Andrew FARKAS2–Norbert PAP3 and Péter REMÉNYI2 Abstract In the early 21st century the global fi nancial crisis changed the economic position of many states, including the EU, which is only slowly recovering, and the quickly emerging economies of Asia. Several factors in global transportation have driven countries to fi nd alternative transport links and methods, including between Europe and Asia. Since 2010 government of Hungary has shift ed the focus of Hungarian foreign policy towards “the East”, which can be perceived as an interest-based real policy. The above factors and Hungary’s landlocked position gave a renewed impetus to the so-called Eurasian land bridge issue, which intends to connect Central and Eastern Europe and East Asia on land. As the authors argue, aft er comparing foreign strategies of CEE countries, “eastern opening” of Hungary is not a unique move in the region, neither is the renewed interest in rail land bridges. However, aft er examining all the possible land routes towards East Asia, the authors agree with those who see these routes as unsustainable in the short run. On the other hand, the moves of Chinese private and state-owned companies in Southeast Europe and CEE, the “New Silk Road” concept of the Chinese diplomacy and expansion of the Suez Canal may foresee the establishment of micro land-bridges from SEE ports via Hungary towards Western Europe, signifi cantly shortening the routes and avoiding congested northwestern ports. In this regard Hungary may play an important role on these alternative routes providing economic and geopolitical benefi ts. Keywords: transportation, rail land bridges, foreign policy of Hungary, China, Southeast Europe, 1 Supported by the Think Visegrad Fellowship program of the V4 Think-Tank platform and the Publication and Research program of the Pallas Athéné Geopolitical Foundation within the framework of the research project Hungary and the 21st century political world order. 2 National Center for Transportation Management, Research and Development, Morgan State University, 1700 E. Cold Spring Lane, Center for Built Environment and Infrastructure Studies 327, Baltimore, MD 21251, E-mail: andrew.farkas@morgan.edu 3 Department of Political Geography, Development and Regional Studies, Institute of Geography, Faculty of Sciences, University of Pécs, H-7624 Pécs, Ifj úság út 6. E-mails: pnorbert@gamma.tt k.pte.hu, remko@gamma. tt k.pte.hu Z. Farkas, A.–Pap, N. and Reményi, P. Hungarian Geographical Bulletin 65 (2016) (1) 3–14.4 the 1980s a new competitive order in the mar- itime industry and railway speed, effi ciency and deregulation diverted some international container shipments to North American rail land bridges. While all-water transport from Asia to the United States East Coast contin- ues to cost less than land bridge service, land bridges are typically faster (Talley, W. 2010). In addition if networks and rolling stock can be used more effi ciently, the costs of railway transport over long distances can be reduced signifi cantly (Ilie, E. 2010). Land bridges operate in Canada and the U.S. and att empt to operate in Eurasia, but geography, policies, and infrastructure are very diff erent between North America and Eurasia (Vassallo, J. and Fagan, M. 2007). One major innovation that facilitated land bridge development in North America is double-stacking of shipping containers on rail cars, which essentially doubles rail car ca- pacity. No signifi cant double-stacking occurs in Europe, because weight limits, bridge/tun- nel heights and overhead electric wires are too low. North American rail densities (mul- tiple tracks) and unifi ed private ownership of rights-of-way and terminals are not likely to occur in Europe for quite some time, which makes it diffi cult for European railroads to increase freight market share (Rodrigue, J.- P. and Notteboom, T. 2010). In Asia insuffi - cient investment in infrastructure and rolling stock; incompatible systems, gauges, and op- erations; and numerous border crossings add to the challenges of land bridges (Rodrigue, J-P. et al. 2013; Islam, D. et al. 2013). Despite the challenges interest in Eurasian land bridges continues to grow. Almost all of the trade between China and Europe travels by sea and can take up to 40 days, resulting in high in-transit inventory costs (Vellenga, D. and Spens, K. 2006). Only 3.4 percent of Chinese exports reach the European Union (EU) by land (Bajor, T. and Erdősi, F. 2013). Many seaports in North Europe are highly congested, and Central and Eastern Europe (CEE), strategically located between Western Europe and China, could provide links, origins, and destinations for land bridges. CEE countries have implemented national investment programs for railway infrastruc- ture and rolling stock development to ensure connections to the Trans-European Railway Transport Network (TEN-T). Countries in Central Asia and in the Caucasus region have tried to invest similarly (Ilie, E. 2010). China has invested in transport and distri- bution networks and logistical and assembly facilities throughout CEE. Its New Silk Road concept (presented in 2013), a network of var- ious sea and land routes from China to the West, includes CEE as a potential gateway to Europe (Kaczmarski, M. 2015). Recently, China has agreed to fi nance upgrades to the Budapest–Belgrade railway line. It is also in- vesting in Greek ports and national railway’s land-side infrastructure as a way to open a gateway to European markets and reduce shipping times (Kakissis, J. 2014). The authors’ objectives are to summarise the transformation of Hungarian foreign policy since 2010 that has been in conjunction with changing global economic and transpor- tation processes and describe and assess the opportunities for inland rail corridors linking Hungary with the Far East. Eastern opening in Hungary Hungary is a relatively small country with an open economy, where international trade plays a signifi cant role in the creation of gross national product. In addition, from 2007 for- eign trade has generated a surplus, and its volume has been growing steadily (except for 2009). In the foreign trade of Hungary, the EU Member States own a share of more than two-thirds of the total volume, while the share of the rest of the world is between 20–30 percent (KSH 2014). The economic crisis in Hungary brought – as in other countries – a decline in the volume of foreign trade, followed by, as a response, the intentional and unintentional transfor- mation of the geographic dimensions of for- eign trade. Because the European economic space was slowly emerging from the crisis, 5Z. Farkas, A.–Pap, N. and Reményi, P. Hungarian Geographical Bulletin 65 (2016) (1) 3–14. Hungary was looking for other directions to- ward seemingly more dynamic economies (Éltető, A. and Völgyi, K. 2013). In 2011 the foreign policy strategy offi cially formulated the then-called “global opening” as a new foreign policy direction. The idea was that Hungarian foreign policy should not be confi ned to the mostly nearby traditional partners – in part because of more interde- pendent systems as a consequence of glo- balization, the rapidly increasing economic importance of some previously neglected geographical areas in the world economy, and should open towards less traditional partners (Magyarország Külügyminisztériuma, 2011). According to the original idea, the East was only one direction of global opening; howev- er, in practice it became the primary direction. Both the media att ention and practical diplo- matic activity were concentrated here. Key target countries were the eastern developed and developing states, China, Russia, India, Japan, South Korea, Vietnam, Kazakhstan, Georgia, the Gulf States and Turkey. The opening toward the East was born fi rst of all as a classic, hypothetic foreign policy strategy, building on a perceived ancient, common na- tional origin (based on the supposed Eastern or Asian origin of the Hungarians), where economic considerations were of secondary importance or did not appear as the responsi- bility of the apparatus for foreign aff airs. From the summer of 2012 (the change of the Minister of State in charge of the inter- national relations of the Prime Minister’s Offi ce), and more prominently from the fall of 2014 (starting with the change of the lead- ership at the Ministry of Foreign Aff airs), the global opening policy has been fully trans- formed to an eastern opening. Parallel to the above, the abstract and sophisticated diplo- matic goals and means have been replaced by short-term economic interests, diplomatic goals have been subordinated to them, and instruments have been adjusted to accom- plish them. This change has been received ambivalently both in Hungary and among its allies. The most common critique reproached Hungarian diplomacy for the transformation from a value-based approach to an interest- based approach. In this new direction, above all, China, Russia, other post-Soviet republics and some Gulf States were included in the priority group. The reception of the Hungarian eastern opening policy in the target countries is controversial. In Russia, because of its in- volvement in the Eastern Ukrainian crisis (Karácsonyi, D. et al. 2014) and the inten- sifi ed international isolation as a result, the Hungarian “opening” earned a positive re- ception, which has or had tangible economic results (South Stream, Paks II etc.). However, this positive reception may carry serious po- litical risks for Hungary, since for Russia it is fi rst of all a tool used to evade political isola- tion maintained by Hungary’s allies. Thus, Hungary has found itself in between its “old” (allies) and “new” (Russia) friends. To meet the expectations of both is very diffi cult. In Turkey the Hungarian aspirations were similarly well received. They are also linked to the strategic depth concept coined by Ahmet Davutoglu (Prime Minister of Turkey, then Minister of Foreign Aff airs) and the neo- Ott omanism which aims to increase the infl u- ence of the Republic of Turkey in Southeastern Europe (Fekete, J. 2014). The increased inter- est and openness from Hungary fi t well into this concept. Turkey, however, is expected to show a signifi cantly lesser “hard” (trade/in- vestment) activity, but rather focuses shift s on “soft ” diplomacy, strengthening cultural relations and renovating Ott oman heritage in Hungary, which has been manifested in many places in the form of tangible projects (Budapest, Szigetvár, Pécs) (Pap, N. 2014). The att itude of other major target countries towards the opening eff orts of Hungary is also ambivalent. The primary geopolitical objective of the Chinese pragmatism is to move towards a multi-polar world order in which the EU is interpreted as an important partner. In these eff orts Hungary is necessar- ily perceived as an EU member and a CEE state, and not individually as a country of 10 million with a small and open economy. Furthermore, CEE (despite several multilat- Z. Farkas, A.–Pap, N. and Reményi, P. Hungarian Geographical Bulletin 65 (2016) (1) 3–14.6 eral meetings of China and CEE countries) plays a subordinate role in the China–EU re- lations. However, it is undeniable that from 2003 on Hungarian–Chinese relations are moving on an improving track (Matura, T. 2012), Hungary traditionally describes itself as the center and gateway for Chinese inter- ests in CEE. This gateway eff ect appears to be supported by both the signifi cant Chinese diaspora in Hungary; the established formal and informal Chinese institutions, structures and networks; the growing volume of trade; and the planned Chinese investments and acquisitions in Hungary (Chinese schools and media, railway construction contracts, acquisition of BorsodChem, Bank of China, etc.). As for the other major powers in Asia (India, Japan), Hungary and its eastern open- ing policy is not signifi cant to their scope of strategic directions and partners. These pow- ers have other and fundamentally regional types of commitments. Eastern openings in Central Europe and the geopolitical constraints of Hungary Aft er the economic crisis a turn towards the economies less aff ected by the crisis has been observed not only in Hungary. The other post-socialist CEE countries (among others) introduced “eastern openings” similar to that of Hungary’s, directed towards the same re- gions as the ones in the Hungarian global opening strategy. In Poland, the “eastern dimension” has al- ways been one of the most important parts of foreign policy; relations with Russia and Polish minorities living in neighboring coun- tries are important elements of it. Poland’s openness to the east, its historical experiences and being in the neighborhood of great pow- ers are all underpinning Poland being one of the main brokers of the Eastern Partnership within the EU (Gács, O. 2009). In addition the Tusk government (2007–2014) implemented a policy of rapprochement in both the German and Russian directions. Poland is in a key geostrategic location regarding inland rela- tions between Western Europe and the East, as much as (or even more than) Hungary, since the shortest route between Moscow and Berlin (which has repeatedly caused disasters in Polish history) leads through Warsaw. In 2011 Slovakia – similarly to Hungary – adopted a new strategy of foreign aff airs with a clear focus on “global” opening (in the directions of China, India, South Korea, Japan, Indonesia, Mexico, Brazil, Argentina) (Ministry of Foreign Aff airs of Slovakia with- out year). Also, the Czech Republic in 2011 adopted a new concept of foreign policy, which, along with the EU and NATO obli- gations, envisaged the strengthening of rela- tions with Russia (Ministry of Foreign Aff airs of the Czech Republic 2010). The Romanian strategy of foreign aff airs (adopted in 2009 for ten years) aligns its eff orts in the Caspian and Black Sea region to the EU’s strategy on Central Asia. However, one can observe here, due to the Romanian inhabited regions of Moldova and Ukraine, a kind of detachment as well. A common feature of CEE “eastern open- ings” is that instead of accepting a European economy in crisis, they have turned att ention to other directions to fi nd trade partners and investors. Apparently, they fi nd more or less the same target countries and thereby a sense of rivalry for eastern markets and investors. A further common feature is that the wide social support of the new foreign policy di- rections can be questioned. While in some of the Slavic countries (e.g. Slovakia) there is a kind of pan-Slavic sense of common in- terests regarding the relations with Russia (Marusiak, J. 2013), Hungary is experiencing a renaissance in referencing its East Asian roots when improving relations with Asian states. However, in reality these ideas are rarely suitable to infl uence decisions of real economic or political benefi t. For Hungary – which may be true for Slovakia and the Czech Republic as well – the new inland dimensions of eastern relations have an additional signifi cance which can be explained by the country’s land-locked position. Hungary’s international trade with 7Z. Farkas, A.–Pap, N. and Reményi, P. Hungarian Geographical Bulletin 65 (2016) (1) 3–14. the Far East uses today the European tran- sit ports. They are either on the North Sea or the North Adriatic or to a lesser extent, can be found on the Black Sea. Creating and operating a direct, active connection of in- land routes with the Far East is, therefore, not only of economic, but also of geopoliti- cal/geo-strategic signifi cance (Pap, N. 1999; Pap, N. et al. 2012). Maritime transport According to Rodrigue and Notteboom North American and Eurasian land bridges are being challenged by increasing econo- mies of scale in maritime shipping. Over the past 20 years, the number and average size of container ships has increased signifi cant- ly, and fl eet capacity is expected to expand further (Rodrigue, J.-P. and Notteboom, T. 2012). Rising maritime fuel prices provided the incentive for building much larger ships to reduce fuel costs per unit. The impact of this expansion in capacity will be a reduc- tion in shipping rates in general, until small ship capacity is reduced (Garratt, M. and Teodoro, A. 2013). The growth in number and size of contain- er ships has encountered the physical con- straints of the Panama Canal. The maximum capacity of ships that can currently transit the canal is about 5,000 TEUs (Twenty Foot Equivalent Unit containers) and the size class ranging from 4,000 to 5,000 TEUs is desig- nated as “Panamax”. Ships have been built to realise economies of scale on routes that did not include the Panama Canal – in particu- lar, the East Asia–Europe and East Asia–U.S. West Coast routes. The potential economic advantages of even larger container ships (Suezmax) coupled with U.S. rail land bridge operations have been major factors behind a Panama Canal expansion program (Panama Canal Expansion Study 2013). Once the world economic recovery and Panama Canal expansion are complete, larger container ships and supply chains may impose competitive challenges on long distance rail service, but there are divergent opinions on the extent of competition. Global freight distribution, trade fl ows, shipping network confi gurations and transshipment, strategies of maritime shipping companies and terminal operators, and supply chain management have become so complex and interrelated that it is unclear what the canal expansion will ultimately do to transport cost structures and trade routes (Rodrigue, J.-P. and Notteboom, T. 2012). The maximum-sized ship that could tran- sit through the expanded Panama Canal will have a capacity of up to 13,000 TEUs or more (Post-Panamax). A major U.S. Department of Transportation study found that although only 12 to 14 additional vessels per day can be accommodated in the new canal lock sys- tem, the increased size of vessels will result in doubling Panama Canal throughput from 300 million tons to 600 million tons (Panama Canal Expansion Study 2013). Aft er Panama Canal expansion, there may be opportunity for more “round-the-world” liner services. Some global carriers may de- ploy Post-Panamax ships eastbound from East Asia through the Panama Canal to the U.S. East Coast, to a few Mediterranean ports, through the Suez Canal and then across the Indian Ocean back to East Asia (Panama Canal Expansion Study 2013). Such services may also run westbound from East Asia to the Suez Canal and one or two Mediterranean transshipment ports, then across the Atlantic to the U.S. East Coast, and return to Asia via the Panama Canal. The Suez Canal in any case already dominates container ship traffi c between East Asia and Europe and has abundant capacity to accom- modate Post-Panamax ships. Yet, as container ship sizes grow above the 13,000 TEU limit of an expanded Panama Canal and as economic growth in Southeast Asia leads to more con- tainer cargo along a westbound route, the Suez Canal will likely become even more important (Panama Canal Expansion Study 2013). Two factors besides transport costs are generally considered to be the prime deter- minants of how and which way goods are Z. Farkas, A.–Pap, N. and Reményi, P. Hungarian Geographical Bulletin 65 (2016) (1) 3–14.8 moved: reliability and transit time. Transit time is important in determining how goods move, because high-value, “just-in-time” car- gos typically demand faster shipping, while low-value cargos do not. An important con- sideration in defi ning costs is load imbal- ances by direction. For example, there may be a huge imbalance in direction for ship- ping cargo between two locations. Staging of vehicles at route origins and destinations is more problematic. Excess capacity in one direction must be compensated by the cargo shipped in the other direction. Given all the variables in the geography and economics of maritime and rail transport, could Eurasian land bridges succeed over the long-run? Eurasian land bridge issues One rail corridor often comes to the fore when Eurasian land bridges are discussed. While the Trans-Siberian Railroad has pro- vided rail service between Vladivostok and Moscow since 1916, the development of a true Eurasian land bridge began in the late 20th century. Geopolitical considerations and the collapse of the Soviet Union in the early 1990s created instability within Russia and its former republics, as well as a lack of in- vestment in and maintenance of facilities, so the corridor as an international trade route was essentially abandoned (Rodrigue, J-P. et al. 2013). The Trans-Siberian in the 1980s carried over 11 percent of container traffi c between Asia and Europe, but by the early 2000s, it carried only 1–2 percent (Vellenga, D. and Spens, K. 2006). The beginning of the 21st century has brought renewed interest in the Trans- Siberian Railroad, especially because of the booming Asian trade with Europe and the increasing pressure to ship containerised freight in a time sensitive manner over long distances (Rodrigue, J-P. et al. 2013). The „Beij ing–Hamburg Container Express” was initiated and tested in 2008 to avoid conges- tion at Chinese coastal ports. The 10,000 km service can take 15 days to link the Chinese capital to the German port city, traversing Mongolia, the Russian Federation, Belarus and Poland, a duration half that of the mari- time trip of 30 days (Rodrigue, J-P. et al. 2013). A variation of this service, the “Antwerp Chongqing Rail Freight Service,” tested at the end of 2011, takes 20 to 25 days. Yet, ser- vice as of June 2014 is from East to West only with no goods shipped West to East, so prof- itability is doubtful (Rail off ers… 2014). As in previous years, there are continuing impediments to the Trans-Siberian Railroad: excessive bureaucracy, government ineffi cien- cy and corruption; insuffi cient investment in transport systems; limited rolling stock; and poor customer service (Vellenga, D. and Spens, K. 2006; Bajor, T. and Erdősi, F. 2013). In addition, several countries on a Eurasian route, including Russia, apply discriminatory fees to international rail shipments. Islam, D. et al. (2013) compared three oft en discussed Eurasian land bridge alternatives: 1) Trans-Siberian Corridor with various al- ternative routes, 2) Central Corridor and 3) TRACECA Corridor with two alternative routes (Figure 1). Each corridor could have branch lines that originate or terminate in CEE, but the technical capabilities vary sig- nifi cantly (Table 1). The authors found that the Trans-Siberian has shortages in container and handling capacity. The central corridor through Kazakhstan, Romania and Hungary has diff ering electrical systems, obsolete roll- Table 1. Technical capabilities of the three routes Corridor, route Distance km Double tracked and electrifi ed Average speed km/h Loco changes Trans-Siberian corridor with 3 routes Central corridor TRACECA corridor with 2 routes 9,288 3,930 5,000 Most part One-eighth Less than half part 76 40 40 3 3 2 or 4 Source: Islam, D. et al. 2013. 9Z. Farkas, A.–Pap, N. and Reményi, P. Hungarian Geographical Bulletin 65 (2016) (1) 3–14. Fig. 1. Trans-Siberian, Central and TRACECA corridors with railway routes between China and Europe and major maritime routes. Source: Islam, D. et al. 2013. Cartography: Nagy, B. ing stock, and insuffi cient cargo handling equipment. The TRACECA corridor does not yet exist as an integrated system and has the least reliable transit time. Islam, D. et al. (2013) conclude that despite the diffi culties, the Trans-Siberian Corridor off ers the most advantages to compete with maritime service. The second best route is the Central Corridor and TRACECA has the least potential. Bajor, T. and Erdősi, F. (2013) seem to agree with this ranking. Yet, all three corri- dors are characterised by gauge changes, “… unreliable transit time, higher transport cost, loss, damage, and theft of cargo…” (Islam, Z. Farkas, A.–Pap, N. and Reményi, P. Hungarian Geographical Bulletin 65 (2016) (1) 3–14.10 D. et al. 2013). Another study concluded that new rail lines for international freight traffi c through Ukraine or Russia ”…would be very risky ventures, and doubts should be raised as to whether those services could ever be economically viable without massive subsi- dies” (Combined Transport Group 2010). The recent geopolitical confl ict in Ukraine calls into question for the near future reliance on a Trans-Siberian Corridor. Hungary’s railways Hungary has been innovative in seeking new management and ownership models for in- ternational rail service. It has participated successfully in the establishment of private sector rail service through the EU-sponsored RETRACK demonstration project, consist- ing of viable service between Hungary and the Benelux countries (van Rooij en, T. et al. 2012). The demonstration focused on bulk freight, such as grain and chemicals, not in- termodal containers, but lessons learned can be applied to other product shipments. All main railway lines in Hungary have suffi cient capacity now and in the future. The highest capacity use rates are 60 to 70 percent, while most are 30 to 50 percent (Combined Transport Group 2010). Hungary has suffi ciently high height limits to allow high cube containers and semi-trailers on fl at cars (but not double stack). However, most of Hungary’s railways have train axle load limits of up to 20 tons, which limits shipping of cargos heavier than maritime containers. Also, there are several sections with speed restrictions resulting from lack of rail mainte- nance (Combined Transport Group 2010). The Hungarian government has focused on expansion of intermodal transport and con- nectivity in an eff ort to improve its railways. It has provided funding for construction of intermodal terminals, invested in logistics centers’ accessibility, and subsidised trans- port services. Most intermodal container traf- fi c in Hungary will continue to be centered on Budapest, but other locations could play a bigger role, as the geography of traffi c fl ows changes (Combined Transport Group 2010). New transport and logistics infrastruc- ture can transform economic geography and initiate development, especially where intermodal transfers (break bulk) occur and particularly in less developed locations. Such is the case historically at the intermodal ter- minal on the Ukraine/Hungarian border at Záhony, where rail gauges change, and ter- minal, trans-shipment and warehousing ac- tivities occur. The Russians have recently suggested building a rail line with their wider gauge all the way to Vienna to facilitate a Eurasian link. Such a rail line could bypass Hungary entirely, if built through Slovakia, for exam- ple, and Bajor, T. and Erdősi, F. (2013) ex- press concern that such an alignment would mean no economic benefi t to Hungary. Even if a wide-gauge line were built through Hungary, it would pass Russian freight ship- ments through the country with perhaps no intermodal transfer and, thus, create litt le economic benefi t beyond transit fees, once construction is complete. Such a proposal also begs questions of who would build it and whether nations crossed by it would ap- prove in light of geopolitical and transport economics concerns. It is expected that intermodal container traffi c will expand greatly in Hungary by 2020, generated by East Asia and Europe trade and freight transport through the Balkans (Combined Transport Group 2010; Ruppert, L. 2011). A signifi cant part of this container traffic could come through the Suez Canal to the ports of the Mediterranean, Adriatic and the Black Sea to be unloaded (Ruppert, L. 2011). Hungary (and Budapest in particular) is well endowed with intermo- dal service providers and its central location within trans-European transport corridors, serving freight trips to the west, northeast and southeast (Combined Transport Group 2010) (Table 2). Yet, Hungary has concerns over the uncertainty regarding the port or combination of ports that would be of most benefi t. Hungarian routes can be by-passed 11Z. Farkas, A.–Pap, N. and Reményi, P. Hungarian Geographical Bulletin 65 (2016) (1) 3–14. and transport infrastructure in the Balkans is currently inadequate (DTZ Research 2008; Ruppert, L. 2011). Southeastern Europe transport links to Hungary Balkan railways have been fragmented, have suff ered from disinvestment and are com- peting with refurbished roads (Ruppert, L. 2011). Disjointed and short lines, many bor- ders, poor infrastructure, and competition with roads are anathema to railways. Yet, as has been noted, Greece is considered as an East Asian gateway to European markets (DTZ Research 2008; Kakissis, J. 2014). Ship- ments through Piraeus and CEE can save between four and ten days compared to all water shipments to northern European ports (Palaiologos, Y. 2015). China Ocean Shipping Company (COSCO) has signed a 4.3 billion EUR agreement to manage the Port of Piraeus for 35 years (Jing, F. 2011). COSCO has decided to spend another 620 million euros on improvements at the port and on construction of a new pier. These in- vestments, management and excellent access to CEE have brought more business to the port (Alkis, J. and Papachristou, Y. 2013). A route that could compete with other Balkan corridors to Hungary or become an integral part would be a new high-speed rail line from Rij eka to Zagreb, including an upgrade of the current line from Zagreb to Botovo on the Hungarian border (Erdősi, F. 2013; Gebrüder Weiss… 2014). Rijeka is a major maritime container port on the Adriatic that can accommodate deep draft ships. However, the current rail connection in Croatia is old, slow and low capacity, so much trucking of containers occurs. The Croatian Government is planning to seek private investment and concessionaires for a railway tender estimated to cost 5 billion EUR (Gebrüder Weiss… 2014). China has expressed to the Croatian government some interest in the port and its railway to Zagreb as an additional gateway to Europe (News staff 2012; Yuhuan, L. 2013). Slovenia and Romania have also att empted to att ract foreign investments to improve and expand the ports of Koper and Constanta, re- spectively (Jing, F. 2011). The port complex of Trieste (Italy) and Koper is already served by double tracked railways and thus has an advantage over Rij eka and good prospects for future container traffi c. Turkish fi rms have developed and operate a roll-on roll-off ter- minal at the port of Trieste for ships hauling vehicles made in Turkey. The vehicles would then be shipped by train and could travel through Hungary. Constanta in Romania also has a major container terminal. China has established a 6.5 billion USD fi nancial ar- rangement with Romania, which could result in substantial investments in infrastructure. Because of the EU’s East–West transport investment focus in the past and the Euro fi nancial crisis in 2008 and 2009, a resulting investment vacuum and Chinese budget surpluses encouraged China to make strate- gic transport investments in Greece and the Balkans (Matura, T. 2014). China has indi- cated through its investments that it wishes to avoid the congested North Sea megaports Table 2. Selected ports’ traffi c and transport links to Budapest in 2011 Port Capacity Capacity utilisation Number of con- tainers, 1000 TEU per year Distance from Budapest by rail, km Rate of double-tracked railways, % Rate of express roads, %million tons per year Trieste Koper Rij eka Thessaloniki Constanta 65 22 25 28 68 52 15 10 16 46 2,650 500 140 273 670 680 650 595 1,104 1,126 70 69 17 11 100 100 100 100 95 36 Source: Erdősi, F. 2013. Z. Farkas, A.–Pap, N. and Reményi, P. Hungarian Geographical Bulletin 65 (2016) (1) 3–14.12 and not rely on the Trans-Siberian Railway partly because of concerns over the geopoli- tics of Ukraine. As noted, a southern railway corridor in Central Asia, while of interest to China, has even more challenges. The Chinese have diff erent investment ob- jectives from the EU and expect that there will be explicit short and long-term returns to their loans and investments. In addition, Chinese transport infrastructure investments promote Chinese consulting and construction fi rms and rail manufacturing exports and increase international market shares for those sectors of the economy (Kaczmarski, M. 2015). Conclusions The challenges to building and operating full rail land bridges across Eurasia are enormous, logistically, economically and politically. Land bridges are being challenged by increasing economies of scale in maritime shipping. The physical and operational constraints in Eurasia, including no double-stacking of con- tainers, are major obstacles to land bridge ef- fi ciency. Full Eurasian land bridges may play a minor role for unique charter shipments, but signifi cant, regularly scheduled common carriage is currently unsustainable. The land bridge corridor which appears to have the most potential for the foresee- able future is the Trans-Siberian Railroad with connections to China. In addition to the huge economic and logistical challeng- es, corruption and the geopolitics of Ukraine interfere with this corridor’s potential. The current sanctions on Russia may preclude initiatives for more container traffi c on the Trans-Siberian to the West. Westbound shipping rates should remain very competitive with alternative overland modes and routes because of overcapacity of large container ships and abundant capacity in the Suez Canal. Expansion of the Panama Canal will create complementarities with the Suez Canal for East Asia originated round-the- world service and the Suez Canal will continue to dominate East Asian traffi c to Europe. If container ships continue to increase in size and Suez Canal capacity remains suffi cient, then there would be opportunities for more intermodal traffi c from Greek, Black Sea, and Adriatic seaports through the Balkans and to the rest of Europe. Indeed, one could expect that more Suez Canal traffi c would create op- portunities for Eurasian micro land bridges from these seaports to locations within CEE, as CEE grows economically. China seems to have made its intentions known by investing in Balkan rail connec- tions and Greek ports and railways, but more railways improvements are required in the southern Balkans. Maritime container ship- ping through the ports of Constanta, Koper, and Rij eka (Croatia) could be alternatives to shipments from Piraeus and Thessaloniki, but signifi cant rail enhancements from all of the ports are necessary. It is obvious that changes in the foreign policy of a state of the size of Hungary are insuffi cient to modify transport routes deter- mined by global economic considerations. Hungary’s ‘eastern opening’ and Eurasian rail land bridges fall into this ‘rule’ too, no sig- nifi cant near future increase in the volume of the goods transported by them are expected. However, leaving the possibility open to op- erate such links, which may end in Hungary, bears geostrategic signifi cance. On the other hand, with the Chinese global economic expansion and the various plans included in the ‘New Silk Road’ concept may increase the signifi cance of Hungary on the Western Europe–East Asia trade, including the increase of the volume of rail transport, since Hungary is also an important land transportation hub on the routes from the Balkans to Western Europe. As the various Chinese investments in the Balkans (port of Piraeus, Budapest–Belgrade high speed railway development, overall upgrade of Serbian railway infrastructure etc.) start to take shape and form an interconnected net- work Hungary would fi nd itself in a similar position as with the Eurasian rail land bridge: becoming an important transit/logistic hub on the East Asia–Western Europe trade. 13Z. Farkas, A.–Pap, N. and Reményi, P. Hungarian Geographical Bulletin 65 (2016) (1) 3–14. Classic ports-based transport development models suggest that when inland transport networks develop, some ports become gate- ways and thrive, while others languish. While it is beyond the predictive powers of Hungary to forecast which Balkan ports will ultimately att ract the needed high speed rail connections and develop the most container traffi c (besides Piraeus, China is interested in Greek ports Thessaloniki and Igoumenitsa, Montenegrin port Bar and other Adriatic ports as well). Hungary and the other CEE countries and Balkan neighbours should coordinate their “eastern openings” and focus on north-south rail links, distributive road networks and intermodal facilities, in order to utilise and benefi t from the supposedly increased transit fl ows in the region. Hungary’s role, furthermore, should be to create an economic and political environ- ment to facilitate investments in North–South land transport infrastructure and networks to raise weight limits and speed. Also, Hungary should monitor transport developments in her neighbours and coordinate policies with them to att ract additional EU and Chinese intermodal transport investment. An impor- tant task for Hungary is to cooperate with its southern neighbours in the facilitation of border crossings, its physical and politi- cal environment, which may be a challenge due to the recent migration fl ows using very similar routes and causing political dissent among states in the region. An elaborating a coordinated and joint ‘eastern opening’ of the relevant CEE and SEE states would also be welcomed since it would give the small European states a somewhat larger lobby power, cost-eff ective ways of developments and more coherent planning.Currently the Chinese planned developments are in line with the aims of the EU, since majority of them coincide with the EU’s TEN corridors (fi rst of all Corridor 10). 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