President Xi Jinping’s vision the ‘Silk Road Economic Belt’ is going to revive the ancient Silk Road, which was once a trade route runs between china’s own borders and Europe but the new economic belt is expended and large comprises on the two new trade corridors – one overland, the other by sea – will connect the country with its neighbours in the west: Central Asia, the Middle East and Europe.
The Silk Road Economic Belt concept was introduced by Chinese President Xi Jinping during his visit to Kazakhstan in September 2013. In a speech delivered at Nazarbayev University, Xi suggested that China and Central Asia cooperate to build a Silk Road Economic Belt. It was the first time the Chinese leadership mentioned the strategic vision. According to the action plan, the Belt will have three routes and the Road will have two routes
The Silk Road Economic Belt:
- China—Central Asia—Russia—Europe (the Baltic)
- China—Central Asia—West Asia—Persian Gulf—Mediterranean Sea
- China—Southeast Asia—South Asia—Indian Ocean
The 21st Century Maritime Silk Road:
- Coastal China—South China Sea—Indian Ocean—Europe
- Coastal China—South China Sea—South Pacific
China unveiled the principles, framework, and cooperation priorities and mechanisms in its Belt and Road Initiative in a bid to enhance regional connectivity and embrace a brighter future together. In this regard action plan, mutually released by the National Development and Reform Commission, Ministry of Foreign Affairs and Ministry of Commerce, offered insight in the China-initiated program’s vision and endeavors. The Belt and Road routes run through the continents of Asia, Europe and Africa, connecting the vibrant East Asia economic circle at one end and developed European economic circle at the other.
The “Five Links” While the traditional Silk Road was primarily a route for trading goods and cultural and technological exchange, the new Silk Road set out the “Five Links” as its goal. The “Five Links” refer to linkages in policies, infrastructure, trade, finance and people. The Asian Infrastructure Investment Bank (AIIB) was formally established in October 2014. As of 29 March 2015, 42 countries had joined or applied to join the AIIB as founding members, including the UK, Germany, France and Italy. In December 2014, Beijing launched its US$40 billion Silk Road Fund along the lines of a long-term private equity venture to improve transport and trade links in countries and regions along the Silk Road. The Fund is expected to be similar to the World Bank’s investment arm International Finance Corp and the African Development Bank’s mutual development fund. Financed by a small group of investors, the Fund targets infrastructure construction, exploration of natural resources, and industrial and financial cooperation.
Titled the “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st Century Maritime Silk Road”, the official document lays out the basic goals of the “One Belt One Road” Initiative: “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 Silk Road Economic Belt focuses on bringing together China, Central Asia, Russia and Europe (the Baltic); linking China with the Persian Gulf and the Mediterranean Sea through Central Asia and the Indian Ocean. The 21st-Century Maritime Silk Road is designed to go from China’s coast to Europe through the South China Sea and the Indian Ocean in one route, and from China’s coast through the South China Sea to the South Pacific.
President Xi also proposed building a close-knit China-ASEAN community and offered guidance on constructing a 21st Century Maritime Silk Road to promote maritime cooperation in October 2013. In his speech at the Indonesian parliament, Xi also proposed establishing the Asian Infrastructure Investment Bank (AIIB) to finance infrastructure construction and promote regional interconnectivity and economic integration. Accordingly, in the Third Plenary Session of the 18th Central Committee of the Communist Party of China called for accelerating infrastructure links among neighboring countries and facilitating the Belt and Road initiative.
The first phase of a logistics terminal jointly built by China and Kazakhstan went into operation in the port of Lianyungang in east China’s Jiangsu Province. The terminal, with a total investment of 606 million yuan (98 million U.S. dollars), is considered a platform for goods from central Asian countries to reach overseas markets.
November 2014 — President Xi announced that China will contribute 40 billion U.S. dollars to set up the Silk Road Fund. During the Beijing APEC meetings, Xi announced that the fund will be used to provide investment and financing support for infrastructure, resources, industrial cooperation, financial cooperation and other projects in countries along the Belt and Road. Chinese Foreign Minister Wang Yi dismissed comparisons of the initiative to the U.S.-sponsored Marshall Plan. The initiative is “the product of inclusive cooperation, not a tool of geopolitics, and must not be viewed with an outdated Cold War mentality,” Wang said, adding that China’s diplomacy in 2015 will focus on making progress on the Belt and Road initiative.
China’s Silk Road Fund makes its first investment in a hydropower project in Pakistan. During China’s President Xi Jinping’s visit to Pakistan, the Silk Road Fund unveiled its investment in the Karot Hydropower Project in Pakistan, the first investment project since the Fund’s establishment in December 2014. The project is expected to cost about US$1.65 billion. it is still not clear how much of the investment amount will come from the Silk Road Fund.)
Even now some scholars in the United States reservation the intention of China’s initiative, suggesting it is part of Beijing’s plan to widen its influence in Eurasia and challenge Washington’s global leadership. A few US scholars have even labeled it the Marshall Plan of China, and adopted a waitandwatch approach, while others oppose it simply because it was proposed by China. By doing so, they are only preventing US enterprises from benefiting from the initiative.
OBOR platform for International Cooperation scheduled for May 14&15 will provide a platform for the participants to share their views about the future development of the initiative. In other words, although launched by China, the initiative can bring great benefits for all the participating countries. And it can help Washington and Beijing to work together in fields such as infrastructure construction in the US, and take measures to boost free trade in the AsiaPacific region. Besides, the initiative can also help deepen Sino-US bilateral cooperation, and promote peace, stability and prosperity in the Asia Pacific. The initiative offers the prospect of fulfilling through peace, rising living standards and improved international cooperation and understanding the goal of making the heartland of the “world island” — the combined continents of Asia, Europe and Africa — the communications heartland, or nerve center of the world.
This the reason forum in Beijing is so important. It offers the peoples of the “world island” a constructive alternative to the sinister gathering clouds of religious fanaticism, usually generated by poverty, fear and chaos, or the advance of menacing military alliances to threaten the national sovereignty of great nations.
Iran, too, has been playing a very significant role in regional cooperation through the CPEC, and it is significant that Chabahar and Gwadar ports, once portrayed as competitors, have now been declared as sister ports. Given the changing scenarios, the Iranian leadership hinted that China, Pakistan, Iran and Russia should cooperate more for regional stability. And China-Russia-IranPakistan cooperation is being discussed in this context. Russia has vital interests in this region as well, as an active partner of both China and Pakistan. The Karachi-Lahore gas pipeline worth $1.7 billion has been pledged by Russia. And Russia, China and Pakistan have decided to work together to restore peace in Afghanistan.
DISCLAIMER:The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the official policy and position of Regional Rapport.