The past two decades of booming China have turned it into a superpower. With the advent of the new leadership, led by Xi Jinping, China ceased to hide its foreign policy ambitions. The New Silk Road project is a logical continuation of China’s policy in recent years. The first steps to realize the dream have already been taken: financial resources have been allocated, agreements have been worked out with key countries. The plan also has several opponents from among the major world powers. Having implemented the project, China will solve not only a number of internal problems, but also globally affect the economic picture of the world. How will the New Silk Road go?
Grand plan
Not so long ago, Foreign Minister Wang Yi defined the concept for China’s foreign policy, “One Belt, One Dream,” according to which the construction of the New Silk Road from Asia to Europe is planned. In early 2014, Chinese President Xi Jinping presented a plan for creating the Silk Road. The project plans to form a giant single economic belt, consisting of infrastructure facilities in many countries. The New Silk Road will pass through Central Asia, Russia, Belarus, Europe. The sea route will follow the Persian Gulf, the Mediterranean Sea and the Indian Ocean. The option with routes to African countries is being considered.
China intends to invest in the project more than $ 40 billion from a special fund. $ 50 billion has already been allocated by the Asian Bank. The funds will be directed to the construction of railways, ports and other facilities, to the development of relations between the countries participating in the project. Resource Wantchinatimes estimated the total investment of China at 22 trillion dollars.
Attempts to revive the Silk Road have already been undertaken by Europe and the United States. China turned to this idea last, but did much more to implement it. Thanks to impressive financial opportunities and “soft economic aggression”, it will be possible to form a safe transit that will be used by many states. Today, China is actively discussing infrastructure construction projects with participating countries. A more specific outline of the new Silk Road and the results of lengthy negotiations will be announced in late March at the Boao Forum (Hainan, South China).
Silk Road Concept
Today, China supplies machine tools, equipment, electrical and high-tech products to the world market. By the length of high-speed highways (16 thousand km), the country ranks first in the world. The ancient Silk Road was exclusively a Chinese transport corridor. Today, China announces the creation of an international economic platform.
The initiative to unite the Economic Belt and the 21st Century Marine Silk Road is being implemented as part of the One Belt - One Road program. The concept of the New Silk Road is to implement the plan using five interconnected elements:
- unified infrastructure;
- political coherence;
- currency and financial flows;
- trade relations;
- humanitarian communication.
On this basis, full-scale cooperation is being promoted, strengthening mutual trust between countries, developing economic integration and cultural tolerance. The project as a whole was planned along three routes:
- "China - Central Asia - Russia - Europe".
- "China - Central and West Asia."
- "China - Southeast Asia - South Asia."
New Silk Road. Route
The scope of the project is impressive not only in terms of investment, but also in terms of geography. The entire "path" is divided into two routes (by land and by sea). The land begins in Xi'an (Shaanxi province), passing through all of China, follows to Urumqi, crosses such countries of Central Asia as Iran, Iraq, Syria, Turkey. Further, through the Bosphorus Strait, it follows to Eastern Europe, to Russia. The New Silk Road, the route of which will pass through the territory of several European countries, will follow from Rotterdam to Italy.
A no less ambitious sea route begins in Quanzhou (Fuzian Province), follows through large southern Chinese cities, through the Strait of Malacca, entering Kuala Lumpur. Crossing the Indian Ocean, stops in Calcutta (India), Colombo (Sri Lanka), in the Maldives, comes to Nairobi (Kenya). Further, the route passes through the Red Sea through Djibouti, through the Suez Canal to Athens (Greece), to Venice (Italy) and merges with the land Silk Road.
The economic challenges of the “way”
As the largest exporter, China has a large influence on the global economy. According to forecasts, within the framework of the Silk Road, $ 21 trillion is expected in goods turnover per year, which may increase the share of China in world GDP to 50%.
It is assumed that the New Silk Road, the construction of which is already in full swing, will redirect flows of exports of goods and capital to regions that, until recently, have remained overboard with international trade. In recent decades, China has been actively cooperating with Asian countries. The investment made by Chinese state-owned companies is perhaps the only opportunity for many developing countries to maintain independence among the great powers.
From an economic point of view, the profitability of the project for China is to reduce logistics costs. For countries participating in the Silk Road - in raising additional funds. An example of such cooperation based on PRC investments is the iHavan project in the Maldives (in the future, this is one of the important points on the map of the Sea Silk Road).
Regional Tasks
The presence of China in Central Asia and Africa is not purely economic in nature. At the regional level, the PRC remains the priority political and economic stability of the border regions: East, Central and Southeast Asia. The main barrier to the spread of the Chinese economic phenomenon was the factor of the "Chinese threat." It is planned to reduce the threat to “no” with the help of the “soft power” strategy, strengthening the cultural influence of China. The number of students in the Asian region studying in universities of the PRC reflects the degree of penetration of Chinese culture.
The energy security of the Celestial Empire largely depends on its control over the sea and land Silk Roads. As the world's largest importer of energy resources, China is 100% dependent on marine supplies. The threat of the "oil embargo" is constantly hanging over the state. The US used this tactic against Japan before the war.
The New Silk Road will unite many countries, including US opponents (Russia, Pakistan, Iran). States participating in the journey can become a powerful political force. An important task related to the creation of the Silk Road is the protection of Chinese investment. Through trading points controlled by the PRC, it is possible to realize not only commercial, but also anti-terrorism goals. From time to time, information appears in the media about negotiations on the creation of the Chinese network of Pearl String military bases in the Indian Ocean.
The impact of the project on the domestic policy of China
Major international projects are becoming a paramount task in China's domestic policy. The new Silk Road will contribute to the solution of several internal problems.
- The pro-China economic belt is a profitable investment project with high payback and long-term profitability.
- Passing through Western China, the belt will contribute to solving the problems of uneven development of the country, cultural and economic integration of the western regions.
- The construction of infrastructure is a source of new jobs for state-owned companies in China, which have substantial human resources.
Central Asia and Russia
The territories of Russia and Central Asia, combining the West and the East, are significant transit arteries for China. Today, China is a world factory. They considered the idea of using Central Asia in the interests of the economy since the collapse of the Soviet Union. At the same time, systematic work began in this direction: the Shanghai Cooperation Organization, raising the issue of economic cooperation. It was important not only to smooth out the domestic economic situation, but also to prepare a corridor to Europe through Central Asia and Russia.
It is not so important where the New Silk Road will pass: in any case, it will become a large-scale “shake-up” infrastructure of Central Asia and will significantly expand cargo flows from China. The success of unification tactics and stability, the only possible on the Silk Road, has been proven historically. Coups, wars between nations led him to sunset, and navigation - to lack of demand. Subsequent attempts to resume the route without regional integration did not lead to anything.
Central Asia has always been a sphere of interest for Russia. The rapprochement between China and the Russian Federation is a rather complicated issue. It is not yet clear how the Silk Road will affect the Customs Union and the SCO. Much depends on the position of Kazakhstan, the regional center of Central Asia.
The role of Russia in the project
On the ancient Silk Road, China was the only exporter. The modern path from its predecessor is distinguished precisely by the desire for integration. At negotiations in Moscow, China first proposed to Russia to use the infrastructure of the economic corridor for trade purposes. Russia, apparently, will gain access to ports on the New Silk Road and take part in the transit of goods. Of course, in this way the PRC solves one of the important tasks - to give impetus to the development and inclusion of the western territories in the international economy.
Russia on the New Silk Road so far is only an accomplice, a supplier of raw materials, a transit country. For development within the framework of the “path” a holistic strategy is needed. Government and corporate plans of individual companies are not enough for this; a single strategic plan is required . Thanks to China, we have formed a positive image of this project, but there are not many really positive aspects for Russia.
After the collapse of the USSR, we left Central Asia and solved internal problems. In order to integrate, China has created the Shanghai Cooperation Organization. Small states were afraid of China, so security was on the agenda. China raised economic issues related to free trade, opening borders. The SCO would be a monopolist in the region if it were not for the formation of the Eurasian Economic Union, which showed that Russia has the will and strategic plans for Central Asia. Today, the SCO and the EAEU are the only projects in Central Asia, and the second has more prospects for development, so China is negotiating.
Xi Jinping voiced several proposals to unite the future economic belt and the EAEU. The idea was supported by V. Putin. The President expressed the opinion that both projects together will become a powerful impetus for economic activity in Eurasia. Projects will be united on the basis of the SCO, which also puts China on the leadership position.
Project Prospects in Russia
The New Silk Road project will contribute to an increase in trade and the development of Russia's own land and sea transport network. To do this, you need to create a paired infrastructure. Today, the Russian government is saving the budget, including cutting funds allocated for construction.
Russia's connection to the route as a whole depends on the degree of development of the domestic railway infrastructure. It was planned that the New Silk Road through Russia will go through the Middle, Southern Urals and northern regional territories, where the construction of the Northern latitudinal railway is underway. The possibility of extending the highway through the Midnight - Obskaya line to Kazakhstan and China is being considered. The Northern Urals could be integrated into the “route” by sea or by land, but only by fulfilling the conditions for the modernization of the railway network.
Minister of Transport of the Russian Federation Sokolov raised the issue of modernizing the Baikal-Amur Mainline and the Trans-Siberian Railway, which would allow the creation of the Moscow-Beijing high-speed railway, but no money is expected. In 2015, according to the plan, the financing of BAM and the Trans-Siberian Railway was to amount to at least 21 billion rubles. In fact, 16 billion were allocated
One of the options for including Russia in the New Silk Road was rejected along with the termination of the project for the construction of the Crimean port. Crimea could become a strategic trading base and a new entry point for the trade route to Europe. In any case, the Silk Road by land will go through one of the European countries, where it is easy to provoke a change of power and block transit. For example, the South Stream stop in Bulgaria. The presence of a trading base in the Crimea will allow redirecting the movement of goods through any of the countries.
New Silk Road bypassing Russia
Ukraine announced its intention to participate in the Silk Road project as an intermediate link for the cargo flow from China to Europe. According to Mikheil Saakashvili, it is more profitable to direct trade flows to the seaport of Ilyichevsk, since the logistics through it will be no more than 9 days, and through Russia - 30 days. Saakashvili stressed that work is already underway on the construction of roads in the EU, a large bridge is being built across the Dniester estuary.
China has already made significant progress in implementing the basic version of the path: Kazakhstan - Azerbaijan - Georgia - Turkey. The Nomadexpress test container train left China bypassing the territory of Russia; it traveled 3500 km in five days - through Kazakhstan, the Caspian Sea to the Kishly station (near Baku). The second route of the New Silk Road passes through Iran, the third (across Russia to Moscow and St. Petersburg) is still under discussion. The latter route is more advantageous: it is shorter than the other two. In addition, Russia, Belarus and Kazakhstan are members of the EAEU. The issue of the participation of the Russian Federation in the project was resolved for a long time, a declaration of consent was signed in May 2015.
The option with an “independent” PRC considers it quite acceptable. The Chinese ambassador said that China's banks are ready to invest $ 20 billion in Ukrainian infrastructure. Does this mean that there will be a New Silk Road bypassing the territory of the Russian Federation? Wait and see. It is quite obvious that China is considering several route options at once, as in antiquity.
The direction “Kazakhstan-RF-Belarus” is most profitable for China, but Russia has not joined the concept of the “New Silk Road” and is defending its own interests related to the EAEU. Ukraine is really convenient for organizing transportation, but not suitable for large investments due to its instability. The game of the PRC with the “independent” strengthens the Chinese position in negotiations with the Russian Federation. Of course, the route Kazan - Moscow - Petersburg ... on the Silk Road will still be discussed.