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'Central Asian economic belt' befits the times

By Lu Ning: 0 Comment(s)Print E-mail China.org.cn, September 21, 2013

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Chinese President Xi Jinping on September 7 proposed China and Eurasian countries join hands in order to forge a Silk Road economic belt. He addressed the proposal in a speech at Nazarbayev University during his state visit to Kazakhstan.

The project may take several decades to be completed, but already reflects China’s vision of effectively implementing the “Westward Strategy” and its profound thinking in terms of geopolitical economies and cultures.

Began during the Han Dynasty (206 BC – 220 AD), the Silk Road flourished during the Tang Dynasty (618 AD-907 AD), yet declined over the following centuries. In the 1980s, the International Road Federation (IRF) actively advocated the building of the Eurasian Land Bridge to cut transportation costs and shorten freight time. This project was still different from China’s New Silk Road Strategy.

Chinese President Xi Jinping (R, front) is welcomed by Kazakh President Nursultan Nazarbayev (L, front) upon his arrival in Astana, Kazakhstan, Sept. 6, 2013. Chinese President Xi Jinping arrived here Friday for a state visit to Kazakhstan after attending a Group of 20 (G20) summit in the Russian city of St. Petersburg.

The IRF Eurasian Land Bridge runs from Lianyungang Port in East China to Rotterdam, Holland. It’s a transcontinental route linking the Pacific Ocean and the Atlantic Ocean. Nonetheless, the New Silk Road as initiated by China in recent years, -- which in Chinese territory follows the same route as the Eurasian Land Bridge -- forks upon entering Kazakhstan from the Alataw Pass in Xinjiang.

The northern line connects the Trans-Siberian Railway at Aktau in Kazakhstan and runs through Russia, Belarus and Poland to Western and Northern Europe.

The central line goes from Kazakhstan and runs through Russia, Ukraine, Slovakia, Hungary, Austria, Switzerland, Germany and France, straight through to the seaports of the English Channel. The other option for it is to run from Aktau to Central Europe through Uzbekistan, Turkmenistan, Azerbaijan, Georgia, Bulgaria, Romania and Hungary.

The southern line then goes from Kazakhstan to Central, Western and Southern Europe, passing through Turkmenistan, Iran, Turkey and Bulgaria.

China’s New Silk Road covers more than 40 countries with a population of 3 billion, creating a wider area which includes more countries and people than that of the IRF Eurasian Land Bridge. It will bring more opportunities to the countries in this region.

Thanks to more than 30 years of reforms, China’s economic power and political influence have carved out a leading role for the nation in this transcontinental project. However, in implementing such a huge project, China has to choose its breakthrough point timely and precisely. The author suggests analyzing the European market first.

Northern and Western Europe, also known as “Old Europe,” are post-industrial societies. They will welcome and enjoy the fruits of the “New Silk Road,” but not spend money or effort on actually building the road.

As for Central, Eastern and Southern Europe, less developed than “Old Europe,” they are in fact very interested in constructing this project with China. Nevertheless, there are some hard nuts to be cracked before these regions can go hand in hand with China.

First and foremost, China’s relationship with Central, Eastern and Southern European countries has not been upgraded to the level of comprehensive strategic partnership of cooperation. Most of these countries have leaned on the U.S. or joined in the NATO for support; their political tendencies do not grant them much power.

Secondly, since the disintegration of USSR in 1991, the social and economic transitions in these countries have yet to come full circle and, in the light of their lingering social instability, their governments have generally adopted opportunistic and pragmatic policies towards China..

On a final note then, expect some political and ideological bias as these countries are short of capital with the ongoing European debt crisis. It’s impossible for them to engage in deep cooperation with China in the near future.

Compared with the far-away Central, Eastern and Southern Europe, there are five central Asian countries which have already established a solid basis for cooperation with China -- Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan and Tajikistan. These form a more suitable market for China to expand cooperation within the “Silk Road economic belt” framework.

In the past 20 years, Chinese companies have made constant efforts there, entering the local markets and industries of transportation, telecommunication, resources, electricity, infrastructure, agriculture, education, medical and culture. China’s influence in the five central Asian countries now only seconds to Russia.

Security is another reason for China to enhance its cooperation with central Asian countries. Natural defenses like the Himalayas are not enough against or in response to any security challenges.

Many people simply take bilateral trade as an alternative to meet China’s growing demand for oil and natural gas, as well as a solution to diversify its energy reserve strategy. Yet after several decades, with the supply of gas and oil in central Asian countries fully drained, if there are no new economic growing points in this region, ethnic tensions will escalate and further stage a comeback of the “Three Evil Forces” -- terrorism, separatism and extremism. Therefore, China has chosen the central Asian region as its breakthrough point in building the Silk Road economic belt.

With the most comprehensive manufacturing industries in the world, China can help the central Asian countries to establish their own manufacturing industries. Meanwhile, China should gradually change its main export to central Asian countries from products to equipment.

Additionally, China should be aware of the geopolitical risks in weaving a central Asian economic belt. On the one hand, complicated domestic political battles during periods of social transition and the influence of big global powers have produced a comprehensive uncertainty across the region. On the other hand, central Asian countries usually adopt pragmatic foreign policies towards China and hedge off between powers. For this reason, many Chinese have their doubts about deepening China’s cooperation with central Asian countries. However, as far as the author is concerned, this fact merely proves the strategic urgency of enhancing China’s economic influence in the region.

With economic, cultural and personnel exchanges growing, the bond between China and central Asian countries intensifies, meaning the costs of a breakup are rising too. Even the interference of big powers like the U.S. or a possible government reshuffle cannot change the fundamentals at this point.

Developing the economic belt requires the actions of both state and enterprises. Governments are responsible for planning and coordination of the economic belt, while enterprises are the major investors, constructors and operators of specific projects. Therefore, Chinese enterprises, strong private companies in particular, should actively involve themselves in forging the central Asian economic belt.

Those who would like to gain from the economic belt, should from now on study the history, culture, laws, infrastructures, resources, industrial structures, market order and access of the central Asian countries. Opportunity favors the prepared mind. And top opportunities for investment and cooperation shall await those best prepared.

The author is the chief opinion writer with Oriental Morning Post and a columnist with Guancha.cn.

This post was first published in Chinese and translated by Li Shen.

Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.