Friday, July 3, 2015

Where Is China's Silk Road Actually Going?

Where Is China's Silk Road Actually Going?
At the Boao Forum, China provided the clearest overview yet of its ambitious Silk Road plans.

By Shannon Tiezzi

March 30, 2015

The Boao Forum for Asia, an annual economic dialogue held in China’s Hainan Province, was an especially high-profile meeting this year; Chinese President Xi Jinping himself delivered the keynote address. The reason for the special emphasis was clear: Beijing selected the Boao Forum as the venue to deliver the first in-depth explanation of China’s vision for the Silk Road Economic Belt and Maritime Silk Road, collectively known as the “Belt and Road.”

During the Boao Forum, China’s National Development and Reform Commission (NDRC), in conjunction with China’s Foreign Ministry and Commerce Ministry, issued an action plan for the Belt and Road. Xinhua provided an English-language translation of the document. Beijing is not shy about its ambitions for the project — “The plan is expected to change the world political and economic landscape through development of countries along the routes, most of which are eager for fresh growth,” Xinhua wrote. Beijing hopes that annual trade volume between China and “Belt and Road” countries will “surpass 2.5 trillion U.S. dollars in a decade or so,” Xi said.

The plan is geographically ambitious as well, envisioning the Belt and Road as encompassing Asia, Africa, and Europe and their near seas. The land route “focuses on bringing together China, Central Asia, Russia and Europe,” the document noted. The Silk Road is envisioned as “a new Eurasian Land Bridge” created by transportation routes, with “core cites” as links in the chain. There were less details on the maritime route, though the plan noted there would be two legs: one linking China to the Indian Ocean via the South China Sea and the other traveling through the South China Sea to the South Pacific. There was no list of concrete projects associated with the Belt and Road, but China held up the $23 billion worth of deals just signed with Kazakhstan as a model for other countries.

The document laid out the basic goals of the Belt and Road:
“It is aimed at promoting orderly and free flow of economic factors, highly efficient allocation of resources and deep integration of markets; encouraging the countries along the Belt and Road to achieve economic policy coordination and carry out broader and more in-depth regional cooperation of higher standards; and jointly creating an open, inclusive and balanced regional economic cooperation architecture that benefits all.”
The Belt and Road are often understood primarily as infrastructure projects. Indeed, that will be the main focus in the early stages, as Chinese leaders have repeatedly spoken of infrastructure as a “bottleneck” preventing further economic cooperation. But there’s more to the Belt and Road than simply the construction of roads, railways, and ports. Even on the infrastructure front, China’s vision to “form an infrastructure network connecting all sub-regions in Asia, and between Asia, Europe and Africa” includes energy and communications infrastructure as well an transportation.

Infrastructure construction is the easy part, as many countries along the planned route are hungry for investment and funding. China’s more ambitious goal is to have countries coordinate their policies to ensure that each individual country’s economic development plan feeds into a larger regional vision. That includes free trade areas, both bilaterally and regionally, as well as broad financial integration. On the financial front, Beijing wants expanded bilateral currency swap deals. Funding for the Belt and Road projects will be carried out through the new Asian Infrastructure Investment Bank (AIIB), China’s own Silk Road Fund, and eventually through a hoped-for financing mechanism administered by the Shanghai Cooperation Organization.

The Belt and Road has political overtones as well, with China using the project as a vehicle to promote its own key foreign policy tenets, the Five Principles of Peaceful Coexistence. The Five Principles are “mutual respect for each other’s sovereignty and territorial integrity, mutual non-aggression, mutual non-interference in each other’s internal affairs, equality and mutual benefit, and peaceful coexistence.” Those principles, laid out in a 1954 treaty with India and Myanmar, celebrated their official 60th anniversary last July.

China envisions the Five Principles as the basis for a uniquely Asian regional foreign policy, one that frowns upon Western-style “interference” in other countries over human rights concerns. Xi was also quite clear in his remarks that the Asian security architecture should leave behind the “Cold War mentality” to explore “new security concepts” — echoing China’s previous calls for a shift away from the U.S.-led alliance structure that currently lynchpins regional security.

China set up a leading group to oversee implementation of the Belt and Road, making it clear that this initiative is a political priority. “Construction of the belt and road is a huge and systematic job … that calls for strengthened leadership and coordination of domestic and foreign affairs,” the leading group said in a statement announcing its formation.

As part of the preparation for the Belt and Road, China will work with other countries “so that they gain a better understanding of the initiative,” Xinhua said. That may be a tacit acknowledgement that some other countries are wary that the Belt and Road is China’s attempt to assert regional hegemony. Xi tried to dispel these fears in his Boao speech, promising that China will not dominate the plan. The Belt and Road “will be a real chorus comprising all countries along the routes, not a solo for China itself,” Xi said.

China’s New Silk Road and Its Impact on Xinjiang
China’s plans for Central Asia are likely to see Beijing take a tighter grip on the restive Xinjiang region.

By Su-Mei Ooi and Kate Trinkle
March 05, 2015

China’s New Silk Road is of interest to the West largely because of the great power rivalry that appears to be once again emerging in the Central Asian region. Some pundits have suggested that China may well be displacing the U.S. and Russia in Central Asia, a region of longstanding geostrategic significance to all parties. Of course, this is not entirely a surprise for those who predicted that U.S. military withdrawal from Afghanistan would leave a power vacuum. While economic integration with Russia holds its attractions, resistance to the geopolitical designs of Russia is finding expression amongst the wealthiest Central Asian countries. The U.S. invariably ties deals to some kind of reform. China, on the other hand, is increasingly seen by many Central Asian governments as a genuine partner for mutual security and development, not least because it does not interfere in their domestic affairs.

However, China’s newly unveiled Silk Road Economic Belt initiative in effect ties Central Asia in with the restive Xinjiang region, which opens up a new angle of interest – namely, what impact the New Silk Road is likely to have on the Uighur minority in Xinjiang. Although this initiative represents China’s primary interest in energy, raw materials, and markets that will continue to drive economic growth, it cannot be understood only in economic terms. The New Silk Road is undeniably related to security issues in China’s Western frontier, beset with what Beijing calls the “three evils” of terrorism, separatism and fundamentalism. The repression of Muslim Uighurs has long inspired fighters from Central Asia (and Afghanistan) to support them. Indeed, Islamic State leader Abu Bakr al-Baghdadi’s recent threat to occupy part of Xinjiang and his message to the Uighurs that “your brothers all over the world are waiting for your rescue, and are anticipating your brigades” appears to have been taken seriously by the Chinese leadershipOne can reasonably infer that Central Asia has become even more significant to the security of China.

The close relationship between security concerns and economic initiatives in Central Asia has had precedent. The Shanghai Cooperation Organization (SCO) was initially established as a means to prevent “foreign jihadists” from instigating violence in the Xinjiang region, and has helped to secure assurances from Central Asian governments that they will never support “militant separatists” on the basis of religious and ethnic commonalities. Although China generally avoids domestic interference, it has used the SCO to pressure the governments of Kazakhstan and Kyrgyzstan to shut down Uighur political parties and newspapers. China’s interest in greater security cooperation within the SCO appears to also have been revived of late, an indication of how important a stable Central Asian region continues to be to security within China’s national borders. Indeed, China has just recently hosted the largest military drill with SCO members since 2004 within its own borders. It has also been working to shore up the security capabilities of its Central Asian member states through intelligence, equipment and resource sharing, in large part for counter-terrorism purposes.

From this security angle, what impact the New Silk Road is likely to have on the Uighur minority in Xinjiang is a warranted concern. Owing to the religious and ethnic commonalities Central Asians have with the Uighur Muslim population, weaving together Xinjiang and the region could conceivably complicate China’s economic relations with the region and constrain the actions Beijing takes to contain what it understands to be foreign-inspired Islamic “terrorism.” Under the tenure of former energy and security czar Zhou Yongkang – whose star has since fallen quite dramatically – violence in the region had been escalating. The increased exercise of hard power is highly visible, not least because the repression of some of the most moderate activists has fuelled local agitation, excited the international media and the “foreign jihadists” that so worry the Chinese government.

From a religious angle, it might behoove the Chinese leadership to take a different tack toward Xinjiang, especially since increased violence in the region suggests that repression is self-defeating. But how realistic is this? Certainly, some have looked to Zhou’s disgraced departure as an opening for change. However, it would appear that the Chinese leadership’s solution to unrest in Xinjiang is just more economic development and more repression in the meantime. If security cooperation within the SCO is any indication of the shared hardline approach to sources of instability in Central Asia, a sea change in China’s approach to stabilizing its Western frontier appears slim. Indeed, the Regional Anti-Terrorist Structure of the SCO issued a strongly worded statement after the April 30 train station attack last year that it “resolutely supports the Chinese government in adopting all necessary measures for fighting various forms of terrorist crimes of violence, striking at the arrogance of violent terrorists, and maintaining public security and stability.” Taking on the role as a force for stability also strengthens China’s position in the Central Asian region, further blunting any pressure that may be exerted on China to change its policies toward the Uighurs. Moreover, China ties economic incentives to security cooperation – Chinese President Xi Jinping recently offered SCO members joint projects worth $5 billion in exchange for a commitment to fight extremism in the region. Indeed, the economic benefits of working with China are too great to lose, any form of extremism would create instability and threaten prosperity, and with the rise of the Islamic State, it looks like there will continue to be little outside support for the Uighurs.

Moreover, as China’s investment and trade along the New Silk Road continue to grow, the region may well become economically dependent upon Beijing. By developing extensive gas and oil pipelines, as well as developing a network of transportation links, China is making itself economically indispensable to Xinjiang and the countries lying within the modern-day Silk Road. The Chinese government also offers generous trade and loan terms, thus creating an environment in which Uighurs will continue to be repressed lest a separatist movement destabilize relations with China and jeopardize economic development. On top of that, by eliminating other major competitors, whether economic or political, countries within Central Asia do not have many other partners to turn to who can offer few of the benefits of working with China. Their investment-led diplomacy and hands-off approach to politics make the Chinese the perfect match for authoritarian governments in Central Asia. This makes for a win-win situation because Chinese trade partners in Central Asia will likely take the same hands-off approach to China’s domestic policy towards the Uighurs. Taken together, China appears to be successfully capitalizing on the economic opportunities within the region, while increasing the isolation of the Uighurs.

Although religious and cultural similarities link the Uighur population in Xinjiang to its Western neighbors, the ties are only so strong when matched up against the benefits that China’s friendship can offer. As former states of the Soviet Union, countries in the Central Asian region are still establishing themselves and it is hard to do so when under the thumb of Russia. China offers itself as a viable alternative and it also allows these governments to use the great powers against one another in order to gain the greatest benefits. Countries in Central Asia are also in great need of stability and security, which gives the governments of the region and China common ground in dealing with the “foreign jihadists.” These security threats also allow for the oppression of political dissidence in Central Asia. It is telling that opposition to growing relations with China are mostly at the grassroots level in Central Asia.

China’s overland prong of the “New Silk Road” is important to China because it helps to wean it from overreliance on maritime routes in the South and East China Seas, where tensions have intensified considerably in recent years. The support that the U.S. has been giving to its Pacific allies in maritime disputes has arguably increased the importance of this economic belt to the Chinese. The consequence of this is likely to be a tightening grip on the Uighurs. The iron grip will continue as economic development and national security form the foundation of China’s pivot.

Su-Mei Ooi is Assistant Professor of Political Science at Butler University and Kate Trinkle was a graduating senior at Butler University at the time of writing.

China to establish $40 billion Silk Road infrastructure fund
Business News | Sat Nov 8, 2014 8:32am EST

China's President Xi Jinping attends a meeting in Caracas, in this July 20, 2014 file picture. REUTERS/JORGE SILVA/FILES
China will contribute $40 billion to set up a Silk Road infrastructure fund to boost connectivity across Asia, President Xi Jinping announced on Saturday, the latest Chinese project to spread the largesse of its own economic growth.

China has dangled financial and trade incentives before, mostly to Central Asia but also to countries in South Asia, backing efforts to resurrect the old Silk Road trading route that once carried treasures between China and the Mediterranean.

The fund will be for investing in infrastructure, resources and industrial and financial cooperation, among other projects, Xi said, according to Xinhua.

The goal of the fund is to "break the connectivity bottleneck" in Asia, state media quoted Xi as saying during a meeting in Beijing with leaders from Bangladesh, Cambodia, Laos, Mongolia, Myanmar, Pakistan and Tajikistan.

The Silk Road Fund will be "open" and welcome investors from Asia and beyond to "actively" take part in the project, Xi was cited as saying, ahead of a separate summit of the Asia Pacific Economic Cooperation (APEC) grouping, also being held in the Chinese capital.

It was not immediately clear precisely how the fund would work, when it would start operations or where it would be based, though in all likelihood it would be China.

But Xinhua said it would focus on China's Silk Road Economic Belt and the 21st Century Maritime Silk Road initiative, which aim to build roads, railways, ports and airports across Central Asia and South Asia.

"Such a framework accommodates the needs of various countries and covers both land and sea-related projects," Xi said, adding China is ready to welcome its neighbors "to get on board the train of China's development."


China will also provide neighboring countries with 20,000 places for training "connectivity professionals" over the next five years, Xi said.

China has sought to address fears in the region - and globally - that its bounding economic growth will inevitably bring about a more assertive, muscular diplomatic and military approach to issues such as territorial disputes.

One of the ways it has done this is to offer large loans to places like Southeast Asia and Africa, to show that China is a benign growing power only interested in helping others escape poverty in the way it has itself over the past three decades.

Last month, Xi unveiled the $50 billion China-backed Asian Infrastructure Investment Bank, seen as a challenge to the World Bank and Asian Development Bank, both multilateral lenders that count Washington and its allies as their biggest financial backers.

China has sought to allay concerns that its new bank aims to undermine the World Bank and Asian Development Bank, saying it wants to learn from their experience and that there are more than enough projects around for all the lenders to fund.

(Reporting by Paul Carsten and Ben Blanchard; Editing by Jeremy Laurence and Ian Geoghegan)

 Colombo Sri Lanka harbor

China Pushes 'Maritime Silk Road' in South, Southeast Asia

The MSR is embraced by Sri Lanka and the Maldives, but may hit a snag over South China Sea tensions.

By Shannon Tiezzi
September 17, 2014

Xi Jinping is three countries into his four country tour of Central and South Asia. After a stop in Tajikistan for the Shanghai Cooperation Organization (SCO) summit, Xi visited the Maldives and Sri Lanka. As Ankit pointed out yesterday, cooperation on the Maritime Silk Road (MSR) was a centerpiece of Xi’s visits to the latter two countries. As island nations in the Indian Ocean, the Maldives and Sri Lanka are both crucial to the initiative and also stand to reap benefits from being situated as stops on a larger maritime trade route.

Accordingly, leaders from both countries were enthusiastic about joining the project. In an interview withXinhua, Sri Lankan President Mahinda Rajapaksa expressed his country’s eagerness to join in the process of building the MSR. Actually, Sri Lanka is already part of the initiative. The island received $1.4 billion from China to build the “Colombo Port City,” part of a bid to mold the island country into a rival to thriving ports in Singapore and Dubai. Xi is expected to attend an inauguration ceremony at Port City during his brief stay in Sri Lanka.

Maldivian President Abdulla Yameen was similarly supportive of the MSR project, telling Xi and reporters that “the Maldives is honored to now feature among China’s partners in building the 21st Century Maritime Silk Road.” The Maldives has not enjoyed Chinese investment on the same level as Sri Lanka has, but that is beginning to change. During Xi’s visit, China and the Maldives signed agreements for China to upgrade the Maldives’ airport and to build a bridge from Male, the capital, to the island hosting the Maldives’ international airport. President Yameen suggested that the new bridge could be called “the ‘China Bridge’ to symbolize the friendly ties between the two countries.”

The Indian Ocean states are interested in the project — even India has expressed interest in joining, although there are few specifics at the point (something likely to be on the agenda for Xi’s visit this week). Ironically, the MSR may prove to be a tougher sell closer to home.

The concept of the Maritime Silk Road first emerged in the context of Southeast Asia. Xi Jinping presented the idea in a speech to Indonesia’s parliament in October 2013. Southeast Asia will be in effect the first stop on the MSR outside of China itself and thus is crucial to the success of the project. But increased tensions in the South China Sea have made the idea of maritime cooperation between China and Southeast Asia a hard sell for Beijing.

Even as Xi toured South Asia, the MSR was on display this week at the China-ASEAN Expo, held in the Chinese city of Nanning. In fact, the theme of this year’s event was “jointly building the 21st Century Maritime Silk Road.” At the expo, Vice Premier Zhang Gaoli noted in a speech that ASEAN is a key part of the Maritime Silk Road. Zhang said that China and ASEAN are considering making 2015 “the Year of China-ASEAN Maritime Cooperation,” which would give China the chance to spend next year rolling out high-profile diplomatic efforts on the MSR.

Interestingly, though, Zhang mentioned increased maritime cooperation in the security realm, not just in trade. According to Xinhua, Zhang “expressed hope in exploring the possibility of exchange and cooperation between maritime law enforcement agencies.” Given that many regional counties use their coast guards and other para-military agencies to enforce their claims in the South China Sea, interaction and cooperation between these law enforcement agencies could be a major step forward in reducing maritime tensions.

While increased maritime cooperation with China may not look appealing to countries like Vietnam and the Philippines, other members of ASEAN are already on board. Cambodian minister Kao Kim Hourn praised the Maritime Silk Road plan as a boon for the entire region. “China and the Association of Southeast Asian Nations (ASEAN) see economic cooperation as a top priority, so it is necessary to build a maritime silk road in order to bolster economic cooperation, particularly in the fields of trade, investment and tourism,” he told reporters in Phnom Penh after attending the China-ASEAN Expo.

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