Logistics facilities are playing a leading role in the construction of the demonstration area and giving Qingdao easier access to SCO-related countries, said Hao Guoxin, a senior official of the demonstration area.

"The demonstration area has an advantageous position as it takes only about 15 minutes to reach the nearest railway, highway, seaport or airport," said Hao, adding that it has become an important hub connecting Japan, South Korea and other parts of the Asia-Pacific region in the east, Central Asia and Europe in the west, South Asia and the Association of Southeast Asian Nations in the south as well as Mongolia and Russia in the north.

This year, China-Central Asia freight train service has made about 100 journeys.

When Andrey Belousov, a Russian businessman, opened a factory in Jiaozhou in 2000, he did not think transportation to his homeland would be as convenient and fast as it is today.

Belousov's company mainly manufactures pipes for air-conditioners and water heating systems, 95 percent of which are exported to overseas markets.

"Thanks to freight trains, our company's sales have increased substantially," said Belousov.

"Our company can go through customs procedures in Jiaozhou and it usually takes 20 days to transport our goods to Moscow and two more days to St. Petersburg," said Belousov. "Previously it took 35 to 40 days by marine transportation."

His company's products are now sold in more than 20 countries and regions including Russia, Kazakhstan, the United Kingdom, Germany, South Africa and the Middle East.

"My business partners are envious of the favorable transportation conditions here," said Belousov, adding that he spends about 70 percent of his time in Qingdao because of his busy schedule.

From January to June, freight trains transported 352,000 standard containers, an increase of 55 percent from the same period last year.

Now the demonstration area's operators are eyeing more business opportunities.

"Trade enterprises have become a dynamic part of the demonstration area, said Wei Xuelun, deputy general manager of the Qingdao center of China Railway Container Transport Corp.

According to Wei, more than 10 enterprises across the country have set up offices there and over 50 market entities are operating freight businesses. The demonstration area has also signed contracts with trading platforms that usually deal with large amounts of commodities.

Currently, the demonstration area is home to 228 trade companies and has encouraged them to invest in SCO-related countries and expand overseas markets. To date, there are 13 investment projects and the value of their exports and imports has reached $1.08 billion.

From January to June, investments recorded an increase of 35.7 percent and exports and imports increased 14.5 percent from the same period last year.

The first SCO Qingdao Forum on Local Economic and Trade Cooperation and the first SCO International Trade and Investment Fair were held from May 24 to 26 in Qingdao.

The demonstration area has a great strategic significance and can improve trade among the SCO countries and intensify mutual trust and benefits, said SCO Secretary-General Vladimir Norov at the forum.

"The economic potential of SCO countries has not yet been fully developed," Norov said.

During the event, a memorandum of understanding was signed between the Qingdao demonstration zone and Kazakh Invest, a national company that aims to attract foreign investment. Both sides vowed to carry out comprehensive cooperation in construction of the demonstration area, project investment and trade expansion.

Six trade representative offices have been set up in SCO-related countries to enhance economic ties with the demonstration area.

At the same time, an international commercial center has been established to attract chambers of commerce and industry from SCO-related countries.