As envisioned by Beijing, the new Silk Road Economic Belt and Maritime routes will comprise two distinct transportation corridors: a land route that connects Xi’an in West China to Duisburg in Germany and Rotterdam in the Netherlands by way of Central Asia, and a sea route that connects South China to North and East Africa by way of Vietnam, Malaysia, Indonesia, Sri Lanka, Myanmar and India. China is prepared to invest hundreds of billions of dollars in making this happen over the course of the next few decades. It is the largest diplomatic and infrastructure effort ever put into place. In the words of President Xi Jinping, it will create the world’s biggest single market.
It is already known that China spends 8.5 percent of its total GDP on infrastructure, the highest percentage in the world. Getting to grips with accessing that in the form of infrastructure projects is an issue right at the top of every major manufacturer and contractor involved in infrastructure development worldwide. In my new book “China’s New Economic Silk Road”, I outline how this can be done, the countries involved, and the problems as well as the opportunities in becoming part of these plans.
This issue of China Briefing outlines the fundamentals of China’s proposed new Silk Road Economic Belt. It begins by highlighting the overland route that encompasses Central Asia, and then details plans behind maritime and overland routes through South-East Asia. I hope you find this issue a useful primer for your on-going China development knowledge. The Silk Road Economic Belt will affect all businesses operating in China – now is a good time to start thinking about its implications.
The Great Game Reinvented
The Great Game of bygone times was a near 100 year battle of wits between the British Empire, then at its strongest, and Imperial Russia. At the game’s heart lay the prize of controlling India and parts of China. Taking place between 1813 and 1907, the period shaped in part the Soviet Union, and established trade routes across the Russian, Central Asian, Greater Indian and Chinese territories. Many of these routes, now modernized, are very important highways and rail links today. The new Silk Road Economic Belt has origins in previous diplomatic adventures.
Today, the development of the Eurasian land mass as described by China as part of the Silk Road Economic Belt could also be described as a similar venture. Audacious, yet with the exception of a now retired Great Britain from these adventures, the major players remain the same, but this time led by China. However, Russia has a large say in this as well. It built the Trans-Siberian rail route that connects Moscow to Vladivostok in 1916. That original route – still very much in use today – sprouted multiple spurs running off into Central Asia constructed during the Soviet era to better unite the Union. These routes remain the essential spine of contemporary Chinese ambitions in building overland Eurasian links. China intends to help bot h fund and build upgrades to existing routes as well as to develop entirely new routes throughout Central Asia.
It should be remembered that China has some of the best contemporary engineering in the world. The Golmud-Lhasa rail route, which linked Tibet by rail for the first time to China’s national rail network, was only completed in 2005. Controversial at the time, it nonetheless provided Chinese engineers with extensive technical knowledge of dealing with tough terrain – permafrost, hard rock, and steep inclines, all under the thin air of the Himalayas at altitude. It is largely this experience that has given China both the technical expertise and confidence to carry out significant engineering works in remote and hard to access areas.
China’s diplomats have also been hard at work to unite neighboring countries in Central Asia and push them to cooperate. For example, a recent agreement between the heads of state of Pakistan, long a China ally, Tajikistan, and Afghanistan will modernize parts of Tajikistan’s rail system to allow more trade between these Central Asian nations and allow China direct rail access from Kashgar, currently the Westernmost rail station in China, through to the oil fields of Iran. Additional plans were signed off for a regional railway designed to link China with Iran via Kyrgyzstan, Tajikistan and Afghanistan at the end of 2014. This railways connection project, agreed upon by representatives of transport ministries and railway departments from the five countries, is expected to start from China’s Kashgar to Afghanistan’s Herat, then run through Kyrgyzstan and Tajikistan before finally connecting with the Iranian railway system.
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Originally published by Dezan Shira & Associates, a fellow LEA Global member.