Silk Road Economic Belt and 21st Century Maritime Silk Road-A Focus on China - Case Study Example

SILK ROAD ECONOMIC BELT AND 21ST CENTURY MARITIME SILK ROAD-A FOCUS ON CHINA Introduction “Silk Road Economic Belt” (SREC) and the “Maritime Silk Road” represent China’s latest strategy to open up more to the rest of the world. Since time immemorial, the Central Asia region has been dominated by two major economic powers comprising of Russia and China. The development of the region therefore has been as a result of several common interests between these two power houses such as fighting political instability in Afghanistan (Egan: 2014). Russia and China have also shared a common discontentment with the continued presence of ‘third parties’ within the region such as the American base in Bishkek. As a consequence of the ‘common interests’, Russia has had to acknowledge China’s rising power for many reasons. First, both share many diplomatic and economic interests globally. Second, Russia discovered that it is more beneficial to co-operate with rather than fight with China (Leach: 2015). The two silk roads are a transport network in the Eurasian region. It is an intensive transportation network that will include highways, air & sea ways, oil and gas pipelines as well as transmission and communication networks. It is expected that industrial agglomeration, construction industry and the need for social and economic services will gradually increase the economic growth and development of the place (COSCO: 2013). The transport network will link the Asia-Pacific region to the European Union. The spill-over effect is that this is intended to create new room for opportunities. Also, this will help build economic zones comprising of East Asia, West Asia and South Asia. This report examines this initiative with the aim of understanding the entire concept and its contribution to the economy. The report examines the opportunities that this initiative will advance, with the objective of analysing such information for a better understanding of this economic development strategy. Components of the Silk Road The “One Belt One Road” initiative comprises of the Silk Road Economic Belt (SREB) and the 21st Century Maritime Silk Road (MSR). The SREB is basically the land-based Silk Road economic belt. The Belt begins in Xi’an (China) and continues meandering to link up the Middle East, Europe, Central Asia and Russia (Bromby: 2013). Also included are countries that were once located on the original Silk Road as well as South Asia and South East Asia. The objective is to link China to Europe through the continents of Europe and Russia as a country including the Persian Gulf and the Indian Ocean. The building of a new Silk Road through the Central Asian states is effectively a substitute alternative transport route for goods destined for the European market (Boulegue: 2013). It is a substitute to the one that passes through Russia. For instance, trade between China and Europe can hit highs of €1 billion daily. The goods are mostly transported by sea along the canals that connect Suez and Shanghai. It takes about 20 to 40 days for goods to arrive at their destination. By contrast, an inland trade route from Xinjiang to Eastern Europe would take just about 11 days. The 21st Century Maritime Silk Road simply complements the SREB by adding sea routes. It purposes to link China’s coastal ports with the ones in Europe through the South China Sea, the Indian Ocean and the South Pacific Ocean History of “One Belt One Road” China’s president Jinping, during his speech in Kazakhstan in September 2013, expressed China’s interest in expanding the economy and development within the Eurasian region by building an economic belt. In October the following month, President Jinping reported during the Asia Pacific Economic Cooperation meeting that the Southeast Asia region had been a prominent centre for the “Maritime Silk Road” since time immemorial. The idea of building a ‘silk road’ is not entirely new: there are countries that have proposed use of similar ideas prior to 2013. In 1998 for instance, Japan proposed a ‘silk road’ whose focus was Central Asia region (Parameswaran: 2013). In 2011, the United States came up with the idea of a ‘new silk road’ whose focus was south and Central Asia. In 2014, India came up with the idea dubbed ‘Mausam Project’ whose objective was to restore past relationships and business connections with countries along the Indian Ocean coast. The main objective of the ‘One Silk One Road’ strategy by China is basically to sponsor development in the region (Zenn: 2013). China’s leverage in this initiative is not as a result of its unique political, military and geographical positioning. Rather, it is mainly because of China’s good diplomatic associations with countries along the silk route. The other leverage is that many countries along this route are desirous of partnering with China for their own economic progress. So, with the ‘One Silk One Road’ initiative, China places itself at favourable grounds to realise this objective. In addition, the Maritime Silk Road and the Overland Silk Road represent economic belts that China can use to create more leverage. This initiative underscores the importance of joint discussion, joint construction. It also underscores the need for frankness and perseverance that is usually manifested in two main ways. First, upon completion, the projects are meant to auger well with existing local cooperation systems. Second, powerful countries such USA Japan, Russia and Europe will be considered rather than excluded (Gandhi: 2015). This is done to underscore the importance of international cooperation. Also, the Silk Road initiative is interwoven together with the power plant at Indonesia, Sri Lanka’s Dream, Russia and Mongolia. The initiative will help turn China’s opportunities into worldwide opportunities. It builds up cooperation with countries that happen to be along the route and create a firm foundation to influence a Global Partner network (Baijal: 2015). China’s infrastructure diplomacy also reflects a diplomatic imperative to build relations with its neighbours especially coming at a time when disagreements over boundaries have had a negative impact on associations with maritime neighbours. The Maritime and Overland Silk Roads initially used to be the only link between China, the East and the West. The new initiative is however superior to the silk road that was there for a long time in the past. It is superior in three aspects: the region, the content and its importance. In terms of the region the present one includes a route to Moscow, south pacific countries, Latin American as well as Germany (BCIM: 2015). In terms of content, it does not merely represent a route for the sale of small goods. Rather, it represents the connectedness of nations in the present global world. It links up infrastructure, policies, encourages trade and business, circulation of currency in addition to increasing people’s social awareness and connectivity with one another. In terms of the importance, the initiative enables Europeans travel to China in search of Chinaware, spices and silk among others (Flynt et al: 2015). Secondly, the initiative is a spill over effect of china’s ‘Open Reform’ policy through which China catapulted itself to the global business scene. It would help mould the Eurasian market and globalization generally. After the Second World War, the US strategized to financially rescue Western European countries as well as get involved in the redevelopment of Europe. The other related strategy involved deployment of forces so strong and vast. This came to be known as the ‘Marshall Plan’ (Friedrich: 2015). As a result, the US was became a fruitful beneficiary of this plan. This Marshal plan and the ‘One Road One Silk’ program bear a similarity. The Marshall plan played an important role in enhancing the US’ image and influence before the world. In the same vein and spirit, these are the things that the ‘One Road One Silk’ strategic plan needs to lead to. Similarities and Differences between the ‘One Road One Silk’ initiative and the Marshall Plan Objective The aim of operationalizing the Marshal plan was to prevent communist parties such as Greece and Italy from taking over power during the crucial period that was characterised by political instability and reconstruction of the economy. The ‘One Road One Silk’ initiative however does not have any military solution within its historical background (Friedrich: 2015). Instead it is a fruit of China’s decision to ‘reform and open’ its boundaries to the global business village in search of economic stability and freedom. The initiative curves out its own designs to achieve productivity competencies and capacity, technological advancement, generation of business capital and achieving economic leverage globally among other things. Content-wise Also named the European Recovery Program, the Marshal Plan was a plan by the US to avail economic support to European countries that had been torn apart by the Second World War. It was an American initiative that was engineered towards assisting with the rebuilding of these countries (Baijal: 2015). The ‘One Road One Belt’ strategy enables China and other countries along the route to share competencies and capacities to ensure high quality productivity. The Marshal plan was a one-way export plan. In contrast however, this one is a joint venture where there are deliberations regarding investments, development of infrastructure as well as share in the success of cooperating with one another. The fruits of such cooperation include road connectivity, enhanced cooperation in the area of trade, circulation of the currency, creation of strategic policies and social networking. It is important to note therefore that the “One Road One Silk’ initiative is a comprehensive strategy that is likely to last longer and be beneficial to many other people in addition to the people of China. Modus Operandi The Marshal plan was operationalized in 1947. It did operate for four uninterrupted years. Within this period, European countries in the West benefitted a total of $13 donated by the US. The donation came in form of actual monetary sponsorship as well as transfer of technology and equipment among other things (Viehe: 2015). This US sponsorship was made possible through involvement and membership with the Organization for Economic Development (OECD). On the other hand, the procedures under the ‘One Road One Silk’ initiative stretch over a considerably long time. As a result, it can actually be seen as the extension the development strategy of China (Flynt et al: 2015). The resultant interconnectedness between the continents of Africa, Europe and Asia will be as a result of active involvement in initiatives such as establishment of economic corridors and offshore ports within Central Asia, the Middle East, Southeast area as well as South Asia and other routes. Objective The objective of the Marshal plan was political in nature. The objective was to assist Europe recover the economy so that it could make it a powerful communication tool against the Soviet Union. In essence however, the plan was to actually fight the Soviet Union. As a result upon operationalised, the US dictated very harsh political statements that resulted in the exclusion of pro-Soviet European countries. Under the strategy, the US came up with rules and standards for everyone that was involved in the plan. Unfortunately, the European countries had to be unconditionally compliant with these rules. Unfortunately also, the plan contributed to the split of Europe. The Marshal plan clearly shows the US’ intention was to empower and strengthen Europe to confront Soviet Expansion. ‘One Belt One Road’ in contrast does not have any intentions of controlling countries within the route in whichever way (BCIM: 2015). The difficulty is compounded by the huge geographical area as well as the many number of countries that are involved. In contrast, it is aimed at transforming China’s opportunities for development into opportunities for other countries as well. In essence the initiative connects the ‘Chinese dream’ to the ‘world dream’. Also, the initiative focuses on the joint development of nations in their different races, beliefs, cultures (Gandhi: 2015). This focus is directed at mutual deliberations, different forms of construction as well as sharing with as many Indian Ocean coastal cities as possible there is also inter-connectivity that is enhanced by the establishment of the Asian Infrastructure Investment Bank that will be responsible for financial services to spearhead and sustain the initiative. Ultimately, the desired development is the provision of more goods for neighbouring countries and to a large extent, regions. The Reasoning behind the Silk Road Economic Belt Initiative In terms of development, China needed to have economic development that was balanced. Before the commencement of the initiative, the Southern and Eastern regions of China had already embraced the Asia-Pacific development agenda (Zenn: 2013). The regions had already started flourishing leading to the huge problem of unbalanced local economic development. China urgently needed to counter this unhealthy imbalance. The solution that was needed at the time was a way to utilize the almost forgotten hinterland of China Secondly, on the global stage the European Economic Zone was gradually developing economically. So Central Asia and China found themselves in a rather awkward position of being geographically between two rapidly developing economic blocks: the Asia-Pacific economic ring on one side, and the European Union development block on the other. The outcome was that the ‘middle’ region (comprising China and other countries) had not as yet attained economic freedom and development and hence was a stumbling block. As such, what was needed was an urgent uplifting of the economic status of China specifically. It soon became necessary that China had to come up with a way to initiate economic co-operation at the regional level which would go beyond the Shanghai Co-operation Organization (SCO). The answer came in the form of the most formidable and ambitious project that China had ever thought of; the Silk Road. This was a culmination of China’s decision to catapult itself into the global business arena by adopting the “Opening and Reform” policy (Parameswaran: 2013). Implementation of this policy eventually saw the creation of Special Processing Zones (SPZs) which turned out to be very successful. The Silk Road initiative dubbed “One Silk One Road” was ambitious enough a project, that it involved three continents at the very least. The Silk Road Economic Belt and the 21st Century Maritime Silk Road initiative would influence trade between China and like-minded partners. The Chinese Economy has therefore brought opportunities for trade, growth, investment and co-operation for other countries. In the coming five years, it is estimated that China will import goods worth more than $10 trillion, and that foreign investment by China will have exceeded $500 billion (Boulegue: 2013). The 21st Century Maritime Silk Road is an ambitious project that forecasts a very extensive yet open-ended coverage which includes Southeast Asian countries, West Asia, as well as some European and African countries. What the ‘One Belt One Road’ Initiative means for China and Europe When China initiated this strategy, the European Union (EU) also came up with the European New Silk Road Project. The project was focussed on creating a free trade zone from Lisbon to Vladivostok. The leverage created here was to the effect that Moscow and Brussels were eliminated from the reach of shareholders (Bromby: 2013). Also it means Europe and China are linked together as it would involve both overland and maritime Silk Roads. The project would link Central Europe with Central Africa, and then connect the Pacific Ocean, Indian Ocean and the Eastern region of the Mediterranean. In addition to enhancing global connectivity, the project would promote the joint growth of China and India and merge the growth of Asia. In the beginning of globalization, coastal towns were the earliest to see ‘civilisation’. This left most of the interior land lagging much behind in development. Unfortunately then, a regional wealth gap was formed. To try and correct this, the ‘One Belt One Road’ initiative seeks to open up the West under the philosophy and theme of inclusive development. This ensures that no land-locked country is disadvantaged merely by virtue of not having access to a coastline. The initiative gives momentum to the growth of Western regions. The opportunities offered to Europe by the ‘One Belt One Road’ initiative are many. To begin with, this initiative gives impetus required to revive the European market and civilisation. It is an opportunity for China and Europe to re-discover their potential. Before then, the Eurasian market had grown steadily especially after the fall of Egyptian civilisation (COSCO: 2013). But even then, the Silk Road connected the East and West civilisations. The rise of Turkey’s Ottoman Empire effectively cut the Silk Road connection forcing Europe to look at other alternatives towards the sea, which coincidentally was also aided by China’s invention of the compass. The Silk Road declined and the Eastern civilisation became reserved and Western-centred. When the United States rose, the Western Centre shifted from Europe to America. This initiative is the much needed economic saviour for China and Europe. Second, this initiative reflects China’s second ‘reform and opening’ decision as well as according Europe an opportunity to integrate regionally. In order to ‘save’ Europe generally, the solutions cannot come from within, hence the relevance of the ‘One Belt One Road’ initiative (Leach: 2015). China’s first opening and reform program saw the establishment of Special Economic Zones (ESZs) among other economy-centred initiatives. The current initiative confirms China’s commitment to establish its supremacy within the Asian continent and in the world. Third, it provides an opportunity for both Europe and China to build relations with Russia. The mending of relations between EU and Russia is the key to stability within the region. The ‘One Belt One Road’ initiative provides a good opportunity for this important reconciliation as it operates in such a manner as not to ‘push Russia away’. Fourth, it provides an opportunity for China and the EU to freely participate in issues related to the region. The initiative allows Europe to connect with China via land and via sea. This makes it quite easy for China and EU to finally ‘stamp’ their authority within the Asia-Pacific regions. Fifth, it is an opportunity for China and Europe to once again sustaining global influence around the world. On the part of Europe, it gets even the more difficult because many of the countries along the route happen to be former colonies (Viehe: 2015). That explains the essence of stressing the link with EUs’ peripheral strategy. China and Europe in gene will have the opportunity to develop and operate from third party markets like West Africa. Sixth, it is an opportunity to transform the China-EU strategic partnership. China and the EU have enjoyed diplomatic relations for about 40 years. In the past, since China and the EU strategic partnership, there have been numerous opportunities for cooperation. Lastly, it provides an opportunity to balance the growth of the trans-Atlantic relationship. Since the Second World War, the EU has had to rely on these relations. The initiative therefore is guided by the principle of inclusivity and openness (Egan: 2014). Because of that, it does not seek to gain influence over anything nor engage in military expansions. It emphasizes on the Silk Road safety procedures in building trans-Atlantic relations. Conclusion This paper has discussed China’s ‘One Belt One Road’ economic strategy. The strategy has been dubbed the present second “opening and Reform” policy. From the discussion, it is apparent that this initiative is not only meant to benefit China alone. It is a representation of EU and China coming together to promote the great Eurasian market. Also, we have seen that the initiative increases the potential for economic cooperation amongst the Asian block countries. The theme of world influence is clear because of strategies such as joint development and the growth of markets. Also the initiative is aimed at achieving regional integration through partnering with other coastal countries to create, support and sustain regional integration and inclusive growth all over the globe. The ‘One Belt One Road’ initiative, more especially the 21st Century Maritime Silk Road opens up many opportunities for exploitation by China and Europe. This is because both share many similar interests that easily lead to maritime cooperation between them. One of the key concerns is maritime security. In order for China’s initiative to work, there is need for political and economic goodwill from like-minded partners. By linking their development strategies, China and EU can work together to ensure the safety of sea ways. Bibliography Egan, C. (2014). China helps fill African port infrastructure vacuum. Journal of Commerce Online 22(7), 33-56. Leach, P. (2015). Hutchison ports to develop Fos Terminal. Journal of Commerce Online, 29-40. COSCO. (2013). Pacific. 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